Director of Public Prosecutions v Delianov
[2015] VCC 1916
•17 December 2015
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for Publication |
AT MELBOURNE
CRIMINAL DIVISION
Case No. CR-15-00306
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| LORETTA DELIANOV |
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JUDGE: | HER HONOUR JUDGE HOGAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 8 and 14 December 2015 | |
DATE OF SENTENCE: | 17 December 2015 | |
CASE MAY BE CITED AS: | DPP v Delianov | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 1916 | |
REASONS FOR SENTENCE
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Subject:
Catchwords: 10 charges of obtaining a financial advantage by deception from employer involving $4,141,546.12 over a period in excess of 6 years – breach of trust as defendant was payroll officer – prior convictions for similar offending against earlier employers – early pleas of guilty – restitution – evidence of anxiety and depression and personality disorders
Legislation Cited:
Cases Cited:
Sentence: TES 6 years and 4 months – NPP 4 years
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Ms S Thomas | Solicitor for Office Public Prosecutions |
| For the Accused | Mr A Lewis | Zolis Lawyers |
HER HONOUR:
1 Loretta Delianov, you have pleaded guilty to 10 charges of obtaining a financial advantage by deception. Charges 1, 2, 3, 4, 5, 7, 8 and 10 are rolled-up charges, each of which carries a maximum penalty of 10 years' imprisonment. Charges 6 and 9 are continuing criminal enterprise offences, each of which carries a maximum penalty of 20 years' imprisonment.
2 The circumstances of your offending are summarised in the Prosecution Opening (Exhibit “A”). It is a lengthy document containing considerable detail which I do not propose to repeat in its entirety and I append it to these sentencing remarks. In essence, your offending involved defrauding your employer of a total of $4,141,546.12 over a period in excess of six years from 2005 to 2012. You had been employed by VISY Group in 2003 and, during the period of your offending, worked in the position of Payroll Administration Officer. You had access to VISY’s on-line banking system and all relevant software, which was accessible from only one computer located in the office of your superior, the Payroll Manager’s office. Your offending involved a total of 220 transactions whereby you transferred your employer’s money to various accounts. One account was in the name of your mother, Helen Velov, as trustee for yourself. A second account was in the name of P & E Vasilov Pty Ltd, trustee for the Velov Superannuation Fund. A third account was in your own name. Your employer had a system whereby all transactions were required to be verified by documentation being presented to another payroll officer, who would authorise the transaction. You created fraudulent documentation for every one of your unauthorised transactions and used false names, which misled other VISY payroll officers to believe that the payments were legitimate payments on behalf of VISY and, thus, to authorise the transaction.
3 The money taken from VISY was used by you in a variety of ways:
· You and your husband had four unencumbered investment properties (Units 1, 2, 3 and 4 at 2 Woodland Avenue, Kew). A number of the unauthorised transactions involved payments to the Australian Taxation Office relating to these properties.
· You have a brotherm who suffers paranoid schizophrenia and has his affairs managed by the State Trustees. A number of payments were made into his account with the State Trustees.
· You and your husband purchased a commercial property at 470-472 Little Lonsdale Street for $3 million in 2011. A deposit of $300,000 was paid by your husband using his own funds, but the balance of the settlement money was paid by you using moneys stolen from VISY via a bank account in your name
· You used VISY funds to finance a “Pie Face” franchise, which was purchased and run by a family member and to make wages payments to employees of that franchise.
· On some 17 occasions between 2009 and 2011 you incurred expenses on VISY’s behalf totalling $133,942.50 to companies which organise corporate leisure events.[1] These payments were for the purpose of entertaining your family and friends at horse racing or AFL games in corporate suites. In 2010, you also billed VISY for your private use of a helicopter, totalling $2,376, and a stretch limousine, totalling $1,250.
[1]Exhibit “A”, paragraphs 27, 32, 51 and 54
4 It is trite to say that your offending involved a gross breach of trust on hundreds of occasions over many yeasrs and, obviously, you defrauded your employer of an amount in excess of $4 million. You also earned a substantial amount of interest on the stolen money, however, the prosecution has been unable to quantify this amount with any precision.
5 In late 2011, VISYwas first alerted to the fact that something was amiss. On 29 December 2011, you had entered into the computer system three unauthorised payments totalling $4,742.53 relating to your relative’s Pie Face franchise. You produced false documentation in relation to the unauthorised payments, which you presented to your manager, Grant Bell. He authorised the payments and you printed on-line confirmation reports, which you left on the desk of another VISY payroll employee, Betty Tancevski. Ms Tancevski detected some anomalies with the reports and, over the following days, Mr Bell endeavoured to contact you in relation to them. You eventually admitted to making the false payments in December 2011 but falsely claimed that this was the first occasion on which you had ever done this.
6 In January 2012 an internal investigation was conducted involving VISY’s corporate solicitor, a representative from VISY’s risk management and assurances services and an IT specialist employed by VISY. You had several meetings with the investigators, but misled them regarding the amounts stolen and the process that you had used to commit the offences. On 4 January 2012 you repaid a sum of $199,434.54 to VISY. You told another lie, claiming that this was the total amount that you had stolen.
7 Later, on 30 January 2012, you admitted to stealing $991,769 from VISY. This was clearly misleading in that it grossly understated the amount of your fraud.
8 On 2 February 2012, you were scheduled to meet with VISY investigators, but cancelled the meeting and made a number of excuses for being unable to do so. Those in charge of the investigation concluded that, unless legal proceedings were issued, it was unlikely that you would give a full and frank account of the actual amount which you had stolen. Accordingly civil proceedings were issued against you by VISY in the Supreme Court on 2 February 2012.
9 On 7 February 2012 you made a further repayment to VISY in the sum of $250,000. However, it was not until March 2012 that the full extent of your fraud became clear to VISY. An application for summary judgment against you was made on 27 April 2012. On 18 June 2012 the civil proceedings were settled by you, your husband and a family company entering into a Settlement Deed with VISY. By that stage, the total amount of verified unauthorised transactions, less what you had repaid, amounted to $4,099,393.54. An amount of $852,877.91 was recovered from various bank accounts into which you had paid the stolen money. Also, the commercial property, which you and your husband had purchased in the CBD for $3 million, was sold on 12 March 2013, with VISY as the mortgagee in possession. This resulted in recovery of a net amount of $2,647,857.52 to VISY.
10 The prosecution allege that, taking into account legal and forensic costs incurred by VISY, there has been recovery from you of all but $149,223.57. Your counsel, Mr Lewis, took issue with this figure, stating that there had been full restitution by you. The prosecution indicated that it did not propose to press for restitution of the claimed balance. As I have not been provided with proof of the alleged outstanding sum of $149,223.57, I sentence you on the basis that there has been full repayment of all moneys which you stole from VISY. This is a significant factor in your favour.
11 You are presently aged forty-eight years, having been born on 16 December 1967. You come before the Court with a prior criminal history for similar offending. This involved defrauding an employer, Skilled Engineering, by using your position as Payroll Supervisor, and defrauding another employer, McPhee Transport, by using your position as Accounts Payable Supervisor.[2] On 30 November 2001 you pleaded guilty in the County Court at Melbourne to one charge of dishonestly obtaining property by deception from Skilled Engineering Ltd, in the sum of $242,111.62 between 16 February 1994 and 3 June 1997. You pleaded guilty to a second charge of dishonestly obtaining a financial advantage by deception from Skilled Engineering Ltd in the sum of $323,082.30 between 19 November 1994 and 1 February 1997. You also pleaded guilty to a third charge of dishonestly obtaining a financial advantage by deception from McPhee Transport, totalling $41,178.64 between 29 January 1998 and 5 October 1998. You were convicted and sentenced to a total effective sentence of 2 ½ years' imprisonment. You were ordered to serve six months immediately and the balance was suspended for a period of two years. You completed your suspended sentence on 30 November 2003. The offending for which I must sentence you commenced 18 months later, on 5 August 2005.
[2]Exhibit “C”
12 Following the settlement of the civil proceedings with VISY, Ms Michelle Fidler, VISY lawyer and investigator, provided all documents relevant to the civil proceedings to the Fraud Squad on 13 July 2012. On 11 September 2013 she made a 177 page statement which outlined the entirety of your offending and produced all relevant exhibits. On 18 December 2013 Fraud and Extortion Squad investigators executed a search warrant at your address and you were arrested and interviewed. You made a “no comment” Record of Interview, with your solicitor, Mr Zolis, being present. Charges were not laid against you until 26 September 2014. Thereafter, committal mention hearings were held on 18 December 2014, 6 February 2015, and on 25 February 2015. At the last of these, you indicated your intention to plead guilty to the charges. Your plea hearing was initially listed in June 2015, but was adjourned by you due to issues with your legal funding. When the matter came before me on 8 December 2015, you pleaded guilty to the charges.
13 In a plea on your behalf, Mr Lewis urged that the delay in you being charged should be regarded as mitigatory. He submitted that by 13 July 2012 the full extent of your offending was known and all relevant documents had been handed over to the Fraud Squad by VISY, but there was a delay of two years and two months before you were charged by police on 26 September 2014 and further delay until June 2015 before your plea hearing was listed. Mr Lewis submitted that you have now had the likelihood of criminal proceedings hanging over your head for a considerable period and, as you have a vulnerable psychological state, the delay, itself, has been an extra layer of punishment to you, as you have waited anxiously to know the outcome of your serious offending.
14 On the face of it, a delay of approximately three years from 13 July 2012, the date when Ms Fidler, on behalf of VISY, handed relevant documents relating to the civil proceeding to the Fraud Squad, until June 2015, the date when your plea hearing was originally listed in the County Court, seems a significant delay.
15 The informant, Detective Senior Constable Farley, gave evidence on the issue of delay at the plea hearing. He stated that the original file of instructions from VISY, which comprised documents relevant to the civil proceeding, contained only approximately 15 to 20 per cent of the ultimate full brief of evidence which he was required to prepare to prosecute this matter. He stated that on 19 December 2013, Detective Acting Sergeant Jodi Greaves had sent an email to your solicitor, Mr Zolis.[3] This stated that, after meeting with the Fraud and Extortion Squad Detective Inspector following your “no comment” Record of Interview, it would be necessary to prepare a full brief and compile charges that reflected each unauthorised transaction. It was indicated that this would take place over the coming months, however, you were offered an opportunity to take part in a further interview. Mr Farley said that there was no response to that offer and, accordingly, he had no option but to prepared a full brief for trial. He stated that this took him approximately 18 months. Although a number of statements already had been taken from relevant VISY personnel prior to you being interviewed, he had to issue eight warrants to the Commonwealth Bank in order to obtain bank statements. Also, for each unauthorised transaction, he was advised by the police forensic accountant, Mr Douglas Brboric, that it would be necessary to obtain trace details from the bank and this took a considerable amount of time for the Bank to investigate and provide the relevant paperwork. He also had to obtain warrants on bank accounts of your husband and other family members, in particular, your parents and brother, as well accounts relating to the Pie Face franchise and three family companies. He stated that the original material provided by VISY comprised three lever-arch folders, each of which was about 5 centimetres thick. By the time he delivered the full details of his investigation to the Director of Public Prosecutions, it comprised 12 such volumes. These were subsequently re-organised into seven thicker lever-arch folders, which were served as the prosecution brief of evidence against you. He stated that, had you taken the opportunity to cooperate with a Record of Interview and made admissions to transactions, the whole process would have been speeded up by, at least, six months.
[3]Exhibit “D”
16 The higher courts have stated that caution should be exercised where an offender claims a right to some automatic discount in every case of asserted delay.[4] They have made it clear that, if an accused who pleads guilty has cooperated fully with prosecutorial authorities, but is still subject to an inordinate delay, which is beyond his or her control, then that delay will be a “powerful mitigating factor to be given due recognition in the sentencing disposition.”[5] However, it has been made equally clear that, if an accused causes delay by refusing to provide any assistance to prosecutorial authorities, then delay as a mitigating factor will be significantly reduced, even if there is a plea of guilty. In particular, it has been observed as follows:
“As a matter of principle …, given that one of the significant informing considerations in allowing a discount for delay is that the offender has had the prospect of punishment hanging over his head for an inordinate period, and has to that extent already been punished, it would be both illogical and contrary to ordinary notions of justice and fairness if a sentencing judge were precluded from taking into account the extent to which the offender has stood by declining to do whatever he or she could do to bring the matter to fruition.”[6]
[4]Ormiston JA in R v Nikodjevic [2004] VSCA 222 at paragraph 22
[5]Chernov JA in R v Cockerell [2001] 126 ACR 444 at 447, paragraph [10]
[6]Nettle JA in Day v R {2011] VSCA 243 at paragraph [18]
17 Although a person accused of a crime is entitled to maintain his or her silence, it is not tolerable that he or she should profit by a reduction in sentence where it is the offender’s lack of cooperation with an investigation which has led to the delay. This is largely the situation that applied to the delay between police receiving the file relating to the civil proceedings from VISY on 13 July 2012 and 26 September 2014 when you were charged with the offfences, except for perhaps a few months beyond the 18 month period which Mr Farley estimated it took him to complete the investigation. Once the charges had been laid on 26 September 2014, a committal mention hearing was held on 18 December 2014. As I understand it, this hearing and another one on 6 February 2015 were adjourned to enable you to have discussions with the prosecution, then, on 25 February 2015 you indicated your intention to plead guilty to the charges. Thereafter, the matter was listed for plea hearing on 12 June 2015 and that hearing was adjourned at your request to 8 December 2015 in order for you to put funding in place for legal representation. In all of the circumstances, I consider that only a very moderate allowance for delay should be made in your favour. It was not submitted by your counsel that delay could be taken into account other than as having weighed heavily upon you, that is, he did not rely on you having made significant rehabilitative gains in the period between the end of your offending and the hearing of your plea.
18 Tendered at the plea hearing were reports from Dr Walton, forensic psychiatrist, dated 19 November 2015 (Exhibit “1”) and Mr Cummins, forensic psychologist, dated 3 November 2015 (Exhibit “2”), together with an earlier report of Mr Cummins, relating to your prior offending, dated 14 December 2000 (Exhibit “6”). Mr Cummins also gave oral evidence at the plea hearing.
19 On your behalf, Mr Lewis invited the Court to accept Mr Cummins’ opinion that you suffer very significant and genuine mental health problems, which include psychiatric conditions which he diagnosed as an Other Specified Dissociative Disorder and Other Specified Depressive Disorder, as well as an Avoidant Personality Disorder and symptoms of an Obsessive-Compulsive Personality Disorder. Your counsel urged that the psychiatric conditions diagnosed by Mr Cummins were linked to your offending and attracted the application of the principles in R v Verdins.[7] He particularly relied upon Mr Cummins’ view that you suffer two identities, one where you feel depressed and harbour resentment about being exploited, which is the identity under which you were operating when you were offending, and the other which is characterised by you being hardworking, loyal and submissive and perfectionistic, which identity causes you to feel guilty about your offending. Your counsel submitted that the Court should accept Mr Cummins’ opinion to find that this dual identity, which is a product of your diagnosed Other Specified Dissociative Disorder, had a relevant connection with your offending such that it should reduce your moral culpability for the offending, as Mr Cummins stated that it impacted upon your capacity to make rational judgments. Further, your counsel submitted that it should moderate the emphasis upon general deterrence and the Court should take into account that a sentence of imprisonment would weigh more heavily upon you than a person in normal health, as well as carrying a risk that your mental health will be adversely affected by imprisonment.
[7][2007] 16 VR 269
20 Mr Cummins had seen you on seven occasions between November 1998 and March 1999, prior to providing his report dated 14 December 2000 in relation to your earlier offending. At that stage, he diagnosed you as suffering from Reactive Agitated Depression superimposed upon a longer term Depressive Disorder and noted that you were probably also diagnosed with an Avoidant Personality Disorder. After you were sentenced on 30 November 2001 he had no further consultations with you, as far as he was aware, until you attended his rooms on 5 June 2014 for treatment, and you subsequently attended a further seven consultations with him. In his oral evidence, Mr Cummins confirmed his opinion in his most recent report that the Other Specified Dissociative Disorder involves a disruption of identity characterised by the two distinct personality states to which I have earlier referred. He gave an opinion, that when you are in the identity state where you feel resentful about being exploited, you still know that you are offending but you have an inability to accurately appraise just how wrong your offending is and state that you are unable to control that part of your personality which had a obsessive-compulsive aspect to it. He stated that a normal functioning person would expect that their offending would be detected on the basis of the quantum of it and that it would lead inevitably to them being incarcerated and harshly judged by their employer, but your appreciation of those matters was impaired. He also stated that your Other Specified Dissociative Disorder had an impact on your ability to make rational and clear decisions throughout the offending period because you were feeling worthless and generally feeling obsessed with being depressed and unhappy and that frequently impacts on a person’s perception and judgment.
21 He considered that other examples where your conflicting identities were present were in relation to a home which you had built but, because your parents-in-law had moved in nearby, you never moved into the home because you felt resentful, but then felt guilty about it. Further, your parents and parents-in-law had an expectation that you would produce a child but, you had decided to pursue your career. Mr Cummins said you felt resentful about the pressure on you but, also, felt guilty about letting your parents or parents-in-law down in this respect. He stated that you report feeling genuinely resentful about many aspects of your life, however, he opined that this resentment went beyond being just a feature of your personality and was part of a psychiatric condition.
22 Mr Cummins’ opinion that you suffer from two psychiatric disorders, namely an Other Specified Dissociative Disorder and Other Specified Depressive Disorder, which impacted upon your ability to reason and judge appropriately at the time of offending, is in conflict with that of Dr Walton. Although Dr Walton took a history that you “felt ripped off and underpaid by (your) employer, accompanied by a fairly strong sense of entitlement, which would contrast with other feelings where (you) felt guilty and unworthy”, he opined that your difficulties reside principally within your personality, rather than being a meaningful imposed psychiatric illness as such. He stated that you had suffered a longstanding mood disturbance, with underlying miserable self-esteem and anxiety, which manifested itself as obsessive thinking and rather compulsive behaviour, including hoarding. However, he considered that you suffered minor cognitive impairment secondary to mood disturbance and had no major cerebral dysfunction and were of normal intelligence. He stated that, despite engaging in behaviour “which might be described as quite bizarre, (you) are not actually affected by deluded thinking and there was no other evidence of psychosis.” He considered that you had a background of significant psychological problems and your offending seemed to be a vain attempt to offset your poor self-image and low self-esteem rather than more conventional criminal greed. (Although, I here, interpolate that Dr Walton seemed to think that the stolen funds “largely remained available to be repaid to the victim.” He did not mention that they had been expended on an investment property, paying debts to the Australian Taxation Office, paying amount’s to your relative’s Pie Face business and taking friends and family to corporate suites for entertainment.)
23 He stated that “psychiatric factors have no relevance to the offending compared with a near-miss mental impairment defence.” He saw you “as falling somewhere in the middle ground.”
24 In his oral evidence, Mr Cummins conceded that his diagnosis of Other Specified Dissociative Disorder was a diagnosis made after excluding other psychiatric conditions. He conceded that you were not a very reliable historian. He had noted that he had administered personality tests and, on one, the profile was of questionable validity because you provided numerous contradictory answers and, on another, he concluded that your responses could have been reflective of significant confusion and/or of reporting exaggerated symptoms. He seemed prepared to give you the benefit of the doubt on the personality test in which you obtained a profile of only marginal validity because of the extreme nature of your symptoms, but this seemed to me to be rather a circular argument in that it necessitated an acceptance that your symptoms were extreme.
25 Mr Cummins contradicted himself in his evidence. At one stage, he stated that, because of the inconsistencies on personality testing, “That is specifically why I had her complete the – PDS, the Paulhus Deception Scale, ah, but both of her scores on that scale were within the acceptable range,”[8] Later, he stated that that was not why he had had the Paulhus Deception Scale test administered. It was because he was seeking further diagnostic information.[9]
[8]Transcript 14 December 2015, page 13
[9]ibid pages 31 – 32
26 I was troubled that, in parts of his evidence, Mr Cummins did not appear impartial but, rather, somewhat adversarial. He expressed his opinion that the two aspects of your personality are so extreme as to warrant a diagnosis of a psychiatric disorder. At one stage he stated, “Your Honour, I'll stick my neck out and say this, I am aware there have been significant issues about this woman, whether this was woman was fit to – to plead guilty to the charges. I don’t know if that information has been put to your Honour. At times her – her mental health problems have been so severe that has been a live issue.”[10]
[10]Transcript 9 December 2015 at page 15
27 Mr Cummins tended to excuse unreliable histories you had given him on the basis that you were talking about emotional matters. When differences in history given by you to Dr Walton and to Mr Cummins were pointed out, Mr Cummins stated that it did not surprise him because you are “someone who is fully of contradictions.” He went on to say that he considered his opinions were borne out by your presentation when you come to see him quite shabbily dressed,[11] but conceded that that may be consistent with someone who is depressed. Further, he accepted that part of your depression is reactive to the serious legal situation in which you find yourself, albeit that he said that there was also an overwhelming element reflective of background long term depression.
[11]Ibid page 25
28 Mr Cummins stated, “I would not be at all surprised if at some point she makes a disclosure that she has been specifically traumatised in your childhood.” He described this as “a clinical hunch”.[12] I found this unhelpful. Notwithstanding that Mr Cummins had stated in his report that you “chronically present as being confused and puzzled regarding your mental health,”[13] he stated in oral evidence that he had placed considerable weight on your perception of your own mental health problems as provided in some typed notes which you had given to him recently about the extreme aspects of your personality.[14] He went on to state, “I have observed her talking as though, on occasions, she is one personality and, on occasions, as though she is a different personality.”[15] This observation had never been recorded in his report and, indeed, he conceded that his diagnosis of Other Specified Dissociative Disorder had never been recorded in his notes and was first committed to writing in his report. Mr Cummins ultimately accepted that a great deal of the evidence which he had given to the Court about your diagnosis of Other Specified Dissociative Disorder was reliant upon your reports,[16] despite having earlier stated that it was not a fair comment to say that his conclusion about this diagnosis was largely, if not totally, reliant upon your report to him.[17]
[12]Ibid page 26
[13]Paragraph 48, page 8 of Mr Cummins’ report dated 3 December 2015 (Exhibit “2”)
[14]Transcript 14 December 2015 at page 12
[15](ibid) page 22
[16](ibid) page 29
[17](ibid) page 22
29 I find that I cannot be satisfied on the balance of probabilities that you do have an Other Specified Dissociative Disorder or an Other Specified Depressive Disorder as diagnosed by Mr Cummins. Indeed, Mr Cummins acknowledged that there was considerable overlap in the symptoms of both of these psychiatric disorders and his other diagnosis of an Avoidant Personality Disorder. Mr Cummins accepted that there was a lot of data suggesting that your range of expressed symptoms and the severity of those symptoms is an unusual pattern of expressed symptoms.[18] He also stated, “I don’t shy from the fact that this woman’s personality difficulties are relevant to the picture and I'm also of the opinion that her specific mental health problems are complex. She is not, in my opinion, an easy person to diagnose.”[19]
[18]Transcript 14 December 2015, page 13 – 14
[19]Transcript 14 December 2015, page 15
30 Mr Cummins acknowledged that he could not rule out the possibility that the two parts of your personality, which you describe as being quite extreme, may be a rationalisation provided by you in the light of your very serious legal predicament.[20] He stated that you have “now done a lot more soul searching in terms of attempting to unravel (your) own mental health problems” compared to when he had seen you for his report back in 2000,[21] yet he acknowledged that you have apparently been seeing a private psychologist for the last two years, but not told that psychologist anything about your criminal offending.
[20]Transcript 9 December 2015, page 11
[21]Transcript 9 December 2015, page 12
31 I accept, as Dr Walton opines, that you do have a longstanding mood disturbance with poor self-esteem and some symptoms of depression and anxiety, which fall short of a psychiatric disorder. I also accept that you have psychological issues relating to your personality which probably justify Mr Cummins’ diagnosis of Avoidant Personality Disorder with some obsessive-compulsive symptoms. I cannot accept Mr Cummins’ view that you have two distinct psychiatric conditions, diagnosed by him only very recently in 2015, which enable him to say that, as long ago as 2005 through to 2012, they impaired your judgment and capacity to fully understand your wrongdoing when committing this offending. Accordingly, I am not satisfied on the balance of probabilities that you suffer from a serious psychiatric condition causing impaired mental functioning at the time of your offending such as to attract the principles in Verdins case. Nor am I satisfied that any personality disorder you suffer impaired your mental functioning at the time of offending. The facts are that you appear to have been able to function successfully in a demanding job with VISY, and year after year you made a series of fraudulent transactions for which you created false documents to conceal your offending. You were apparently in a successful marriage and had a good relationship with your parents. According to the history taken by Dr Walton, you enjoyed recreational pursuits, cooking, walking and contact with friends, but these had been substantially diminished subsequent to this offending because you took on a caring role for your parents.[22]
[22]Report of Dr Walton 19 November 2015, page 4
32 I am satisfied that your indication in February 2015 that you intended to plead guilty represents an early plea of guilty, in all the circumstances of your case. There was no contested committal and the necessity for what would have been a fairly lengthy and complex trial, ultimately, has been averted. I accept that your plea is a utilitarian one for which you should be given a significant discount. The issue of whether your plea is indicative of remorse is somewhat more complex given that you continue to blame VISY for not paying you enough as a reason for your offending, I find there is some limited remorse, however, Dr Walton and Mr Cummins both express the view that you do not have a fully developed expression of remorse.
33 Although you were less than frank and forthcoming concerning the extent of your offending behaviour when asked about the first detected irregularities in December 2011, and January 2012, you ultimately conceded it in its entirety of after the issue of civil proceedings by VISY and you signed a Deed of Settlement on 18 June 2012. It is a factor in your favour that, once the civil proceedings were issued by VISY in February 2012, you consented to a freezing of your assets, including the contents of bank accounts, and the commercial property, which had been purchased by you and your husband. By reason of that cooperation, I am satisfied on the balance of probabilities that VISY was able to recover the entire amount of $4,141,546.12 by approximately June 2013, after the sale of the commercial investment property. This is a significant mitigatory factor in your favour.
34 The evidence before me is that you have some complex personality difficulties which cause you to feel exploited and have a sense of entitlement. You also appear to have suffered from poor self-esteem and, at least part of your offending, in relation to the amounts spent on entertainment for family and friends, may well have been an attempt to address this issue. Thus, it is appropriate as part of your personal circumstances to take into account your complex psychological state in that it explains your offending conduct, to some extent. However, it cannot give rise to the same extent of mitigation that would be the case had the principles in Verdins case been applicable.
35 It was argued on your behalf that there were circumstances of exceptional hardship relating to your having been a carer for your parents, which should be taken into account in mitigation of sentence. Tendered as Exhibit “3” was a letter from your mother, Helen Velov, which mentions that your father suffered head trauma in truck accidents in 2007, which resulted in diminished capacity to work. At that stage, your parents insisted that you take over responsibility for administering their finances, which included a family company and trusts. She states that your father’s capacity has continued to diminish such that he has become totally dependent upon you caring for him and that, as she suffers debilitating arthritis, she can no longer manage her domestic duties and relies upon you for transport and to coordinate all their medical needs, including attendance at medical appointments.
36 Part of Exhibit “3” included documents confirming that your father suffers vascular dementia. An Aged Care Record indicates that he suffers regular short term memory problems, depressive symptoms and confusion and that he cannot manage shopping or preparing meals and needs assistance with continence issues. He has restricted mobility requiring a four-point stick or wheeled walker and has reduced insight into his potential risk of falls. He had suffered a fractured hip following a fall in July 2013 and, after a period of seven months’ treatment and rehabilitation at the Austin Hospital, it was the strong recommendation of the treating medical team that your father be transferred to permanent residential care upon discharge due to reports of weekly falls, cognitive impairment, frequent episodes of impulsiveness, lack of insight into physical capabilities and diminished critical judgment.
37 It was considered that your mother did not have appropriate ability to be the sole carer of your father due to her own significant health issues. Your father refused to accept a transfer to a residential facility and the Hospital discharged him to resume living at his own home upon you undertaking to reside with your parents and assume full responsibility for your father in the role of full time carer.
38 The report notes that he is totally reliant upon you for all domestic support and that your mother assists with the daily dispensing of medications. It states that your father’s frequent impulsive behaviours expose him to high risk situations, which require you to provide 24 hour supervision and monitoring to ensure his personal safety. It is also necessary for you to transport him to hydrotherapy and psychiatric consultations. It notes that your father often objects to assistance from your mother and you are the one to be able to successfully manage and engage the cooperation of your father in order for him to maintain a level of quality living within his own home. It notes that, in the absence of your support and care, your father would have to be taken into permanent residential care.
39 That report is dated February 2014. There is no up-to-date medical material relating to your father’s condition. The test of exceptional hardship is a high one. Unhappily, many people who commit criminal offences for which a sentence of imprisonment is imposed create hardship for family members. The fact of the matter is that you took on the care of your father in 2013 after you had committed the offences against VISY knowing that you faced serious charges and a likely sentence of imprisonment.
40 Reliance upon family hardship is, in itself, a plea for mercy. It would be somewhat paradoxical if mercy granted for the sake of another innocent person resulted in a more lenient sentence for the offender. Also, to treat an offender who has needy dependents more leniently than an equally culpable offender who has none, would appear to be patently unjust. That is why it is only in an exceptional case that the plea for mercy on the basis of family hardship will be heeded by a court. Moreover, given that the report of your father’s condition is nearly two years old, there is no indication as to whether your father’s dementia is progressing such that it would become inevitable that you would no longer be able to manage him and he would have to be placed in permanent care in any event. Thus, although I take into account that the position of your father and of your mother will weigh heavily upon you and cause you anguish in custody, I am unable to find that it meets the test of exceptional hardship such that it should be regarded as substantially mitigatory.
41 Ms Delianov, your offending is very serious, indeed, because of the quantum in excess of $4 million and the fact that it was perpetrated for a period in excess of six years. As I have stated, it constituted a gross breach of the position of trust which you held with VISY whereby you had access to its banking system. This type of offending can be difficult to detect and you succeeded for so long because you created false documents to disguise your offending. I here note for the sake of clarity that Charge 10 is said to have been committed in April 2012. This is subsequent to your employment having been terminated with VISY in January 2012. It relates to $9,230 of debt which you had incurred in VISY’s name in relation to sporting events with St Kilda and Hawthorn Football Clubs whilst you were still employed. Apparently VISY was being pressed for payment, and following the termination of your employment, felt compelled to pay the bills incurred in its name.
42 I have already referred to the psychiatric and psychological evidence before the Court. Although I have not been satisfied that you suffered a severe psychiatric condition which should attract the principles of Verdins, I have accepted that you do have a complex of psychological issues consisting of a mood disorder and some symptoms of anxiety and depression with obsessive-compulsive traits and low self-esteem.
43 Your mother’s letter to the Court, which comprises part of Exhibit “C”, refers to you having endured a great deal of abuse, physical pain, suffering and torment at the hands of your brother. He is 13 years younger than you and had manifested behavioural difficulties since the age of seventeen. He was ultimately diagnosed with paranoid schizophrenia in 1990. He is presently an involuntary patient in a mental health unit. Your mother states that, despite the anguish and abuse caused to you by your brother, you remained steadfast in your resolve to provide care and support for him. She also notes that you harbour intense guilt that your own episodes of obsessive and compulsive behaviours during your teenage years may have significantly contributed to your brother’s mental illness. (Dr Walton commented in his report that such thinking on your part was a measure of your pathological guilt and your behaviour was in no way causative of your brother’s psychotic condition.)
44 It may well be that this is a factor which has contributed to your low self-esteem and mood disorder, although maltreatment of you by your brother is not mentioned in your histories to Dr Walton or Mr Cummins. In part, it would seem that your offending has been motivated by your psychological issues of mood disturbance and personality traits and, in that sense, yours does not appear to be offending motivated only by greed. However, I consider that greed is also a motivating factor, coupled with your deep resentment of your employer. It seems that your job as a Payroll Officer was a demanding one, which involved processing salaries of hundreds, if not thousands, of employees and your salary was not a particularly handsome one.
45 Exhibit “E” tendered by the prosecution showed that Mr Castellis, who was your predecessor, in the role of Payroll Administration Officer, was being paid a salary of $66,666 in 2003, however, your counsel stated that Mr Castellis was also provided with a car and other benefits which increased the value his overall remuneration to a figure in excess of $100,000. In contrast to this, when you started in the role in 2004, you were paid considerably less, $54,000 and, only after some three or four years, did your salary approach the figure $66,666 paid to your predecessor, but without a car or other benefits. It may well be that you were comparatively poorly remunerated by VISY and that your grievance towards your employer had some basis in fact. However, this could never justify your very serious serial defrauding of your employer and, of course, this sense of grievance was something which was present in relation to your earlier offending against your former employers, Skilled Engineering and McPhee Transport.
46 There can be no doubt that the only appropriate sentence is a substantial term of imprisonment for this serious breach of trust in your position as Payroll Administration Officer. In sentencing for your offending, the Court must denounce your conduct and place emphasis upon general deterrence and just punishment.
47 In the light of your earlier offending and the length of the period of your offending against VISY, there must also be emphasis upon specific deterrence. However, this is a somewhat difficult issue, as is the assessment of your rehabilitative prospects. This is because Dr Walton states that objectively your prognosis is “rather gloomy and there has been a previous failed attempt at counselling.” He notes that, from time to time, your mood disturbance may be sufficiently severe to warrant the introduction of mood stabilising medication but, in the past, trials of antidepressant medication, Zoloft, were found not to be of assistance. Dr Walton states, “Fundamentally (your) condition is not curable.” He notes that your are a psychologically immature woman and a fully developed expression of remorse has seemingly not been forthcoming, consistent with this proposition.
48 Mr Cummins noted in his report that, “At interview she (you) did express remorse for (your) offending, although clearly (your) concept of remorse is complicated by the fact (you) still hold (your) employer, VISY, partly responsible for (your) offending. This perception is clearly reflective of misguided and ‘delusional’ thinking on (your) behalf.” In his oral evidence, Mr Cummins stated that he would not express it as strongly as saying that you cannot be cured, but he stated, “My opinion is certainly in that direction and a major stumbling block is getting her to commit to receiving treatment on an ongoing basis.”[23] He considered that you needed not only antidepressant medication but, also, insight-oriented psychotherapy. He said you need to receive cognitive behaviour therapy so that a number of your erroneous thoughts are challenged. He accepted that, in the light of you having seen a psychologist for the past two years, but not disclosing this offending to him, it was difficult to see how any such treatment could be effective. He considered that your depressive symptoms need to be tackled in conjunction with your personality problems, but the fact that you have been prescribed antidepressants in the past, but had not remained on them, was a difficulty. He conceded that when he saw you 15 years ago, you knew, at a level, that you definitely had mental health problems, but you had done very little about them in the ensuing period.[24]
[23]Transcript 14 December 2015, page 17
[24]Transcript 14 December 2015, pages 7 – 9
49 Unhappily, I do not view your prospects of rehabilitation with optimism. You have shown yourself to be capable of serious and serial dishonesty and deception over many years now. When confronted with it, you avoided accepting responsibility and, as was the case with your former employer, Skilled Engineering, VISY had to institute civil proceedings before you finally acknowledged the full amount that you had stolen. In relation to your past and current offending, you manifested a sense of grievance towards your employer and there appears to have been a compulsive element in your behaviour, accompanied by avoiding facing up to the circumstances. Dr Walton took a history that this compulsive behaviour, accompanied by increasing social avoidance, had been a feature of your behaviour as far back as Year 9, when you would avoid attending school if you could not present your homework as perfectly completed.
50 The other factor that tells against your rehabilitation, is the fact that you acknowledge having mental health issues, but have demonstrated an inability to actively seek appropriate treatment for them. In the past you have been placed on antidepressant medication, but not persisted with it, and, as previously mentioned, you have been seeing a psychologist for the last two years without revealing anything about your offending behaviour. This shows a very concerning inability to face up to the reasons for your offending. Clearly, any treatment by a psychologist who is not aware of the huge burden of these criminal proceedings is unlikely to be effective in alleviating any mental health symptoms that you suffer.
51 It is regrettable that a person like you, who not only has significant work skills, but, also, a compassionate nature as shown by your care for others, like your family members, should have so blighted your own life. It seems to me that your only hope of avoiding offending like this in the future is to ensure that you are never in a position where you have access to someone else’s finances, particularly that of an employer or anyone towards whom you have some sense of grievance. In the meantime, I have no option but to sentence you to a fairly lengthy term of imprisonment. In determining its length, I have taken into account the mitigatory factors in your favour, particularly your early pleas of guilty, the fact that all the stolen money ultimately was restored to VISY and that your complex psychological makeup may well make the service of a term of imprisonment more burdensome for you, than for someone without those problems. I also acknowledge that your psychological state may well be exacerbated whilst in prison, particularly by the guilt and grief that you will most likely experience because of no longer being able to care for your parents, in particular, your father, and the worry that you will have about their welfare.
52 In sentencing you on Charge 1, 2, 3, 4, 5, 7, 8 and 10, it is necessary to make plain that each one of these is a rolled-up charge, which involves multiple acts of obtaining a financial advantage by deception within the one charge. In imposing a sentence on each such charge, I must take into account all of the circumstances reflected by the particular offence, including the period over which it has been committed, the number of transactions and the total amount of money which was the subject of deception.
53 Charges 6 and 9 each comprise only one transaction, however, as it was in excess of $50,000, each one of these offences comes within the definition of a continuing criminal enterprise offence pursuant to Part 2B of the Sentencing Act. The provisions of s6I of that Act prescribe a maximum penalty which is twice that of the maximum term prescribed for the offence. Thus, in this case the maximum penalty is 20 years' imprisonment. In sentencing for each of those offences the penalty imposed must be informed by the greater maximum penalty.
54 On Charge 1, which involved seven transactions totalling $70,280.48 between the period of 5 August 2005 and 21 December 2005, you are convicted and sentenced to a term of imprisonment of 9 months.
55 On Charge 2, which involved 12 transactions totalling $176,862.70 between the period of 18 January 2006 and 28 December 2006, you are convicted and sentenced to a term of imprisonment of 18 months.
56 On Charge 3, which involved 21 transactions totalling $252,108.68 between the period of 17 January 2007 and 31 December 2007, you are convicted and sentenced to a term of imprisonment of 18 months.
57 On Charge 4, which involved 49 transactions totalling $1,075,877.90 between the period of 10 January 2008 and 30 December 2008, you are convicted and sentenced to a term of imprisonment of 3 years.
58 On Charge 5, which involved 39 transactions totalling $1,025,200 between the period of 2 January 2009 and 30 December 2009, you are convicted and sentenced to be imprisoned for a period of 3 years.
59 On Charge 6, which is a continuing criminal enterprise offence involving one transaction of $50,978.89 on 9 April 2009, you are convicted and sentenced to be imprisoned for a period of 18 months.
60 On Charge 7, which involved 43 transactions totalling $693,672.60 between the period of 4 January 2010 and 30 December 2010, you are convicted and sentenced to a term of imprisonment of 2 years and 6 months.
61 On Charge 8, which involved 122 transactions totalling $721,803 between the period of 29 January 2011 and 29 December 2011, you are convicted and sentenced to a term of imprisonment of 2 years and 6 months.
62 On Charge 9, which is a continuing criminal enterprise charge involving one transaction of $65,531.05 on 30 December 2011, you are convicted and sentenced to a term of imprisonment of 18 months.
63 On Charge 10, which involved two transactions totalling $9,230 which had been incurred by you prior to your employment being terminated and which were paid by VISY on 11 and 18 April 2012, you are convicted and sentenced to a term of imprisonment of 3 months.
64 The sentence of 3 years' imprisonment imposed on Charge 4 is the base sentence. I direct that one month of the sentence on Charge 1, three months of the sentence on Charge 2, three months of the sentence on Charge 3, ten months of the sentence on Charge 5, four months of the sentence on Charge 6, seven months of the sentence on Charge 7, seven months on Charge 8, four months of the sentence on Charge 9 and one month on the sentence on Charge 10 be served cumulatively upon the sentence imposed on Charge 4 and upon each other. Save for such cumulation, all sentences are to be served concurrently.
65 The total effective sentence is thus 6 years and 4 months imprisonment. I direct that you serve a period of 4 years' imprisonment before becoming eligible for parole.
66 I declare a period of 9 days pre-sentence detention to be time reckoned as already served under the sentence imposed this day.
67 Pursuant to s6AAA Sentencing Act, I stated that, had it not been for your pleas of guilty, the total effective sentence would have been 9 years with a non-parole period of 6 years.
68 Pursuant to s6J Sentencing Act, I cause to be entered in the records of the Court in respect of Charges 6 and 9 that you have been sentenced for a continuing criminal enterprise offence.
69 Pursuant to s464ZF(2) of the Crimes Act, I order that you undergo a forensic procedure for the taking of a scraping from the mouth in accordance with Sub‑division 30A of Part 3 of the Crimes Act 1958 until a sample of sufficient standard is obtained for placement on the database. I consider that the making of this order is justified by reason of the seriousness of the circumstances of the offending. You need to understand, Ms Delianov, that if you do not cooperate with the police in having a saliva sample swabbed from inside your cheek, then the police may use reasonable force to enable that forensic procedure to be conducted.
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