Director of Public Prosecutions v Dooney
[2014] VCC 1989
•27 November 2014
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised (Not) Restricted Suitable for Publication |
Case No. CR-14-01071
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| CHRISTOPHER MATTHEW DOONEY |
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JUDGE: | HER HONOUR JUDGE PATRICK | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | ||
DATE OF SENTENCE: | 27 November 2014 | |
CASE MAY BE CITED AS: | DPP v Dooney | |
MEDIUM NEUTRAL CITATION: | [2014] VCC 1989 | |
REASONS FOR SENTENCE
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Mr A. Dhillon | |
| For the Accused | Mr R. O'Neil |
HER HONOUR:
1 Christopher Matthew Dooney, you have pleaded guilty to one charge of dishonestly obtaining a financial advantage by deception from a Commonwealth entity. The maximum penalty for that offence is 10 years' imprisonment.
2 The prosecution sought an order for reparation in the sum of $567,237.28 to be paid to the Commonwealth of Australia. The making of that order was not opposed.
3 The circumstances of your offending are set out in detail in the Prosecution Opening for Plea Hearing which was tendered as Exhibit A. The amount that is sought as the subject of the reparation order was obtained by you from the Australian Taxation Office in the following circumstances.
4 On 15 September 2009 a company called CC Earthmovers Pty Ltd was registered with the Australian Securities & Investment Commission. On 27 October 2010, you, as the public officer of the company, lodged with the ATO a business activity statement for the period 1 July 2010 to 30 September 2010 on behalf of that company. The statement declared that the company was intending to make a capital purchase to the value of $6,333,112. The GST component payable on that purchase would be $575,737.
5 On 4 and 5 November 2010, ATO auditors requested additional documents because CC Earthmovers had not previously filed any documents with the ATO. On 5 November 2010, in response to that request, the ATO received by facsimile an invoice from Emeco International Pty Ltd confirming the purchase of earthmoving equipment by CC Earthmovers for $6,333.122.50 (inclusive of GST of $575,737.50); a letter from Hepburn Kirby Financial Pty Ltd to Emeco International, confirming approval of a loan for the purchase of equipment and the establishment of a business; a loan deed between CC Earthmovers and Hepburn Kirby, dated 1 November 2010, for the loan amount purporting to create a charge over the equipment and signed by you on behalf of CC Earthmovers; and a lease agreement for the earthmoving equipment between CC Earthmovers and a Mr Norman Lewis Frost, who was to pay a monthly amount for the hire of the equipment.
6 On 12 November 2010 a GST refund of $567,237.38 was paid into your bank account in your name. On 26 November 2010 $500,000 was transferred out of your bank account.
7 No equipment was sold to CC Earthmovers by Emeco International. The invoice date of 1 October 2010 was incorrect as Emeco International had first been contacted by Mr Frost, an associate of yours, on 15 October 2010. You and Mr Frost attended at Emeco International’s premises on 26 October 2010 to discuss pricing and availability of equipment. About 25 November 2010 Emeco International cancelled the invoice because a deposit had not been received and they had not been able to contact you, Mr Frost or Mr Peter Damatopoulos who had been named as another contact. Mr Damatopoulos is also known as Peter Damas.
8 It is apparent from your admissions to the investigators and other statements that there was never any intention to purchase the equipment. Mr Damas had been assisting you in relation to financial difficulties relating to your farm. Mr Frost was also associated with Mr Damas. I accept that Mr Damas, with some involvement of Mr Frost, suggested a scheme whereby the three of you could falsely claim GST refunds for the purchase of equipment and apply those funds to commence another business. You told investigators this was intended to be done on several successive occasions and that, ultimately, GST refunds would be repaid to the ATO from the earnings of the new business which would be operated legitimately.
9 On 1 February 2011 you transferred $446,738.70 from your account to purchase a business called Melbourne Seafoods which I gather was a wholesale seafood supplier. You operated that business. Mr Frost assisted you for a very short period of time in the operation of that business. That business failed in 2012.
10 For the purposes of sentencing you, I accept that at some point you provided Mr Frost with $10,000 in relation to his legal fees but that otherwise none of the money you obtained was given to Mr Frost or Mr Damas. You told investigators that no money had been obtained from a lender and that it was Mr Damas who drew up finance documents to submit to the ATO including a false loan deed. You told investigators you had agreed with Mr Frost and Mr Damas that you would split the proceeds of the Melbourne Seafoods business three ways. There is support for this proposition in the documents tendered as Exhibit 5 in relation to a charge over Melbourne Seafoods to Mr Frost. For the purposes of this sentence, I accept that your intention was that ultimately the proceeds from the Melbourne Seafoods business would be split three ways between you, Mr Frost and Mr Damas.
11 You were first interviewed by investigators on 1 May 2013 and denied knowingly participating in the scheme. On 30 May 2013 a second interview was conducted during which you made full admissions. On 28 May 2014 you provided the informant with a statement describing your involvement with Damas and Frost in relation to this offending. On 14 July 2014 you indicated your plea of guilty to the charge on the indictment at a committal mention which proceeded by way of straight hand-up brief.
12 Mr Damas was the owner of Hepburn Kirby Financial Services and it is intended that separate proceedings will be instigated against him. The prosecution’s position is that Mr Damas was involved in wider illegal activity at a more serious level.
13 In sentencing you I take into account your personal circumstances. Your personal circumstances were described by your counsel and are also set out in a chronology which was tendered as Exhibit 1 and a report from Mr Steven Gault, psychologist, dated 12 October 2014 which was tendered as part of Exhibit 2. You also gave evidence at the plea hearing and made an undertaking of future assistance.
14 You are now forty-four years old. You were born and raised in New Zealand. You had experience working in fish filleting and also in dairy farms. You commenced a share milking venture in 1990. In 1991 you married and then moved to the South Island of New Zealand. Your farm there failed in 1995 and you returned to contract milking. In 2004 you moved to Australia and bought a farm near Buffalo in eastern Victoria. You and your wife initially successfully operated that property as a dairy farm.
15 You and your wife have five children aged between nine and twenty-four. You have a close and supportive relationship with your wife and children.
16 Between 2006 and 2008 you faced a number of problems which affected the viability of your farm. There was a drought and as a New Zealand citizen you were not entitled to drought relief. The dairy cooperative reduced the price of milk and did not provide bonus payments because of the Global Financial Crisis. In addition to this, the company from which you had borrowed to finance the farm was liquidated. You could not secure a loan and debts against you started to mount up. Mr Damas contacted you and gave you advice on how to manage your debts. With his assistance, you were able to continue farming until September 2009. You had put the farm on the market but it did not sell. You were working long hours and drinking a considerable amount of alcohol.
17 In September 2009, Mr Damas suggested to you that you move your cows and equipment to a property owned by Mr Frost. After about a month, the finance company discovered that the cows had been moved and had them sold. You continued to do work around the farm and coached and played social cricket. During this time you and Mr Frost would meet with Mr Damas from time to time. Mr Damas then suggested to you the idea of submitting a false BAS to the Taxation Office to claim GST.
18 After Melbourne Seafoods failed you obtained casual work and in more recent times been employed at a fish shop full time cutting fish.
19 You told Mr Gault that your drinking decreased markedly after you lost the cows and that you currently drink at a low to moderate level. Mr Gault reports that you have no history of anxiety or depressed mood or significant medical history.
20 You have no prior criminal history. There is one subsequent matter which I do not consider to be relevant for the purposes of this sentence.
21 Mr Gault says that you have suffered from specific learning disorders in the areas of reading and writing. Mr Gault does not believe this has any relevance to your offending. Mr Gault says you may have been depressed during the period 2009 to 2010 and, in any event, were clearly demoralised. Mr Gault refers to your claim that you did not realise that the scheme was illegal at the time and says that you have no cognitive or other difficulties that could explain this failure. Mr Gault says you admitted that it was obvious in retrospect. Mr Gault says:
“Mr Dooney’s statement that he had told Mr Damos that he would not be part of the scheme unless the GST was to be repaid appears to indicate a consciousness of at least the potential illegality of the scheme.”
22 It is Mr Gault’s opinion that Mr Damas had obtained an influence on you at a particularly vulnerable and stressful period and that the positive prospect of having something for the future combined with a misplaced trust in Mr Damas may have clouded your judgment as to the illegality of the scheme at the time.
23 It is Mr Gault’s opinion that your prospects of rehabilitation are favourable. Mr Gault refers to your plans for the future which he describes as realistic. It appears that you have the idea of starting a home handyman business.
24 In sentencing submissions your counsel relied on a number of factors, including:
(a) your previous good character;
(b) the circumstances of your offending;
(c) the involvement of others in your offending;
(d) your work history;
(e) your lack of subsequent offending;
(f)your willingness to agree to a Reparation Order and enter a payment plan;
(g)your past assistance to the police;
(h)your undertaking of future assistance;
(i)the delay in this matter;
(j)your good prospects of rehabilitation;
(k)the likely impact on you in prison in respect of your concern for your children and family;
(l)the risk of deportation;
(m)your plea of guilty at the first opportunity; and
(n)your remorse.
25 Your counsel submitted that general deterrence would be a relevant sentencing factor but that your situation was different from that of the situation with other white collar crimes where a person had taken advantage of their professional position. Your counsel submitted that specific deterrence ought to be given reduced weight in your sentence as you are, according to your counsel, a pro-social person. Your counsel said that once it became clear to you that Mr Damas and Mr Frost were not going to engage in any further obtaining of any further funds, then you were very concerned that the police or other authorities would catch up with you.
26 The prosecution submitted that general deterrence should be a prominent sentencing consideration in this matter. The Crown submitted that GST fraud is easy to commit and difficult to detect as the claim forms are generally accepted by and processed without supporting documentation being produced.
27 The prosecutor said that it was not clear when the offending was detected by the ATO but that the matter was transferred into the Criminal Investigation Section of the ATO about a month prior to you being spoken to by investigators. The prosecutor tendered as Exhibit C a table of cases setting out circumstances in sentences imposed in a number of cases involving fraud on Commonwealth institutions. The prosecutor submitted that this was an unusual case of fraud in the Commonwealth involving such a large amount but only one charge.
28 The prosecutor accepted that you did not devise the scheme but submitted that you were instrumental in its execution as you caused the BAS to be lodged in your own name. The prosecutor submitted that the amount of money involved was a significant matter when considering the objective gravity of your offending. The prosecutor submitted that a sentence of imprisonment would be the only appropriate sentence.
29 A letter from the ATO Investigation Section was tendered as Exhibit 3. Your statement was described as being of great assistance in respect of a proposed future prosecution.
30 Christopher Dooney, your offending is clearly serious. The amount involved is very large. I accept that you did not think of this scheme and would have been unlikely to engage in any such fraud but for the suggestion by Mr Damas, with some involvement of Mr Frost. That said, you were involved in what you knew was a pretence that you would be buying a very large piece of equipment. You were absolutely instrumental in the GST refund being obtained. You used virtually all of the proceeds for your own purposes. This is clearly a serious and significant fraud on the taxpayers of Australia. The amount you obtained remains outstanding with none of it having been repaid. I accept that you intended that ultimately the ATO would be repaid. Even accepting that it is clear that any repayment would be considerably delayed and that you were engaging in a false pretence in order to obtain a very large amount of money from the ATO and the taxpayers of Australia.
31 Whatever your views about the illegality of the matter, it must have been absolutely clear to you that you were obtaining a very large amount of money to which neither you or your associates were in any way entitled. You used that money to further your own interests. This was not merely a matter of retaining your farm but a matter of enabling you to get back on your financial feet. In my view this amounts to serious and significant dishonesty and your moral culpability is high. A sentence must be imposed which is severe enough to appropriately punish you for your offending.
32 It appears that GST refunds are easy to obtain and that fraud is difficult to detect. It would impracticable and costly for the ATO to check every GST refund application. In my view general deterrence must be given very great weight in sentencing you. It is of importance to the protection of the operation of businesses and the tax system in Australia that others be deterred from using this method to obtain funds for themselves. It is my view that the only sentence which would adequately reflect those sentencing considerations would be a sentence of imprisonment. That is my conclusion, even after taking into account a number of matters which operate in mitigation of sentence.
33 You are entitled to a significant discount for your plea of guilty. You indicated during the second interview that you would plead guilty and have cooperated with the authorities since that time.
34 I accept that you are remorseful for this offending and for the impact that it will have on your family. I accept that you are ashamed of what you have done and that you acknowledge that you have done the wrong thing. I accept that you wish to repay and would be prepared to do that insofar as you are able within your means.
35 Your past cooperation and undertaking of future assistance is of significance in terms of your remorse. You have undertaken to assist in future even though you have some concerns about your own personal safety. It is significant that you have been prepared to make the undertaking of future assistance in those circumstances. It is also of significance that your assistance has been described as being of great value.
36 I have also taken into account in mitigation that there has been some delay between this offending and when the investigators first spoke to you. I accept for a period of time the matter was hanging over your head when you realised that the ATO were not going to be repaid the GST amount.
37 I accept that you are a person who is of otherwise good character. You are entitled to credit for your lack of prior offending and your positive past contribution to the community. The many references provided speak highly of your commitment to your family and the community. They speak highly of your involvement in rugby, particularly in the coaching of rugby sides. It also appears you have also been positively engaged in cricketing activities. You were described in the references as having provided support to your family and also to other individuals. You have a history of hard work. It is also clear from your evidence given during the plea hearing that the detection of this offending and prosecution has had a significant impact on you. I consider that your prospects of rehabilitation are very good. I accept that specific deterrence should have reduced weight in any sentence to be imposed on you.
38 I accept that imprisonment will be more burdensome on you because of your concern about the effect of your imprisonment on your wife and family. I also accept that the prospect of deportation will weigh heavily on you.
39 The comparative sentence chart provided by the Crown has been of assistance. It is clear that this case is unusual in that such a large amount of money was obtained but from only one claim. In other cases where significant amounts have been obtained, there generally has been offending over a much longer period of time with multiple false claims provided. I have taken into account the amount of money involved in assessing the objective gravity but also that the amount was obtained essentially with one false claim. I have taken into account that the false claim was supported with other documentation. I have also taken into account that, whilst there was some sophistication involved, you were carrying out the scheme as suggested by Mr Damas rather than thinking of the scheme or the machinations of the scheme yourself.
40 Christopher Matthew Dooney, on one charge of obtaining financial advantage by deception, you are convicted and sentenced to a term of imprisonment of 24 months to commence today. You are to serve 12 months of that sentence prior to being released on a Recognisance Release Order to be of good behaviour for 12 months. The amount of the Recognisance is $1,000. There are no other conditions to the Recognisance Release Order, other that you be of good behaviour for the 12 months.
41 But for your plea of guilty, I would have sentenced you to a term of imprisonment of 54 months with a non-parole period of 36 months.
42 Pursuant to s21E of the Crimes Act 1914, I declare that but for your undertaking of future assistance I would have sentenced you to a term of imprisonment of 36 months with a non-parole period of 24 months.
43 Mr Dooney, I need to explain to you that when you are released on the Recognisance Release Order, you must be of good behaviour for the period of 12 months after your release. If you breach the Recognisance Release Order, then you can be brought back to court. There are a number of options that the court has when you are brought back to court. There are a number of sentencing options. The court may take no action or may, for example, impose a fine or other order against you. The court may also reimpose that sentence on you. So you need to take it into account that if you breach the Recognisance Release Order, and there is any further offending, that it is very likely that you will be sentenced to serve the 12 months of imprisonment that is outstanding.
44 I order that you pay reparation to the Commonwealth of Australia in the sum of $567,237.28. The reparation order is not a condition of the recognisance release order.
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