Director of Public Prosecutions v Dwayhi

[2009] NSWSC 1025

CITATION:	DPP v Dwayhi [2009] NSWSC 1025
HEARING DATE(S):	28 September 2009
JUDGMENT DATE :	28 September 2009
JUDGMENT OF:	Buddin J
DECISION:	1 I declare, pursuant to s 19(1)(a) of the Crimes (Superannuation Benefits Act) 1989 that Fadi Dwayhi was convicted in the District Court of New South Wales on 1 August 2008 of 4 offences against section 134.2(1) of the Criminal Code Act 1995, being corruption offences within the meaning of the Act. 2 I declare, pursuant to s 19(1)(b) of the Act, that Part 2 of the Act applies in relation to rights of, and benefits paid or payable to or in respect of, the defendant under the superannuation scheme established by the Commonwealth of Australia pursuant to the Superannuation Act 1990 which is known as the Public Sector Superannuation Scheme (the scheme). 3 I specify, pursuant to s 19(4)(a) of the Act, that the amount which reflects the value of the sum of the employer contributions or benefits made by the Commonwealth in respect of the defendant under the scheme that have been paid to the defendant by the scheme as at the day on which this order is made (plus interest on those contributions or benefits accrued under the scheme) is $22,305.73. 4 I order, pursuant to s 19(4)(b) of the Act, that the defendant pay the amount referred to in paragraph 3 to the Commonwealth.
CATCHWORDS:	Application for a superannuation order - defendant convicted and sentenced in respect of corruption offences whilst an employee of the Commonwealth - repayment by defendant of employer contributions to his superannuation scheme
LEGISLATION CITED:	Crimes (Superannuation Benefits) Act 1989 (C’th) Criminal Code Act 1995 (C'th) Superannuation Act 1990 (C'th)
CATEGORY:	Principal judgment
CASES CITED:	Director of Public Prosecutions v Harney [2003] NSWCA 350
PARTIES:	Director of Public Prosecutions (Plaintiff) Fadi Dwayhi (Defendant)
FILE NUMBER(S):	SC 12956/2009
COUNSEL:	C Dobraszczyk (Sol) (Plaintiff)
SOLICITORS:	Commonwealth Director of Public Prosecutions

OF NEW SOUTH WALES
COMMON LAW DIVISION

BUDDIN J

MONDAY 28 SEPTEMBER 2009

2009/12956 – DIRECTOR OF PUBLIC PROSECUTIONS v FADI DWAYHI

JUDGMENT

:

Introduction

By amended summons dated 16 September 2009 the plaintiff seeks a Superannuation Order, pursuant to s19 of the Crimes (Superannuation Benefits) Act 1989 (C’th) (“the Act”), against the defendant. It relates to his entitlements under the superannuation scheme established by the Commonwealth pursuant to the Superannuation Act 1990 (C’th) which is known as the Public Sector Superannuation Scheme (the scheme).

2 Although the defendant has indicated in writing that he consents to the making of the order, which has been calculated in the sum of $22,305.73, it is nonetheless necessary to briefly explain why it is appropriate to do so.

3 The evidence upon which the plaintiff relies reveals that on 1 August 2008 the defendant was sentenced in the District Court by Judge Zahra to an effective head sentence of 5 years imprisonment with a non-parole period of 3 years following his pleas of guilty to four offences of obtaining a financial advantage by deception in contravention of s 134.2(1) of the Criminal Code Act 1995 (C’th). The maximum penalty for the offence is imprisonment for 10 years and/or a fine of $66,000. Four other offences, two of knowingly use a false document, and two of intentionally obtaining access to restricted data without authority, were taken into account when the sentences were passed. The defendant is eligible for release on parole on 31 July 2011.

4 The nature of the defendant’s offending conduct can be discerned from the following passages which appear in his Honour’s Remarks on Sentence:

The offender was employed by the Australian Taxation Office at the Hurstville Tax Office Client Verification Centre. That centre is responsible for verifying Business Activity Statements lodged by clients of the tax office and the offender was engaged to carry out such verifications. The offender had been engaged in that section since November 2002.
The Business Activity Statement verification process involves the tax operative processing claims referred to them usually by an automated work allocation process. Claims are automatically selected for verification by a computer system which identifies using a risk rating engine appropriate claims for examination. A claim for a high refund is a factor which may lead to the selection of a claim for verification.
A client verification centre operative undertakes verification by means of telephone calls, examination of documents, and contact with third parties in order to confirm expenses claimed in a Business Activity Statement. A CVC operative must satisfy themselves from supply documentation and contact with third parties that the expenditure claimed is legitimate. Usually the second operative reviews the verification processes, however at times because of limited resources or for other reasons, a different operative may not conduct such a secondary review .
Subsequent to the verification process an operative collects the documents examined and after completing a cover sheet the documents are ultimately placed in storage.
The charges to which the offender pleaded guilty arise out of the offender verifying four separate claims off a tax refund contained in Business Activity Statements submitted to the Australian Taxation Office. The claims were made by four separate entities known to the offender and were a sham. The entities did not incur the expenditure stated in the activity statements and were not entitled to refunds or tax credit subsequently paid by the Tax Office.
As a result of the four false claims the Taxation Office credited one of the entities an amount of $121,056 and paid refunds to the other entities totalling $736,301 into various bank accounts. The total amount falsely claimed in the process was $857,357.
The false claims were uncovered as part of an audit process referred to as a Quality Assurance Process. …
Bank records of an account held by the offender’s wife reveal that the persons Kertebani and Bechara deposited a number of cheques amounting to $135,000 into her account. A statement of facts indicate that this amount is referable to the offender’s share of the proceeds resulting from the refunds paid as a consequence of the three false claims lodged by Kertebani and Bechara.
Even though the offences occurred over a relatively short period of time, some two and a half months, they were organised and involved substantial deception on the part of the offender. The offender was able to circumvent procedures of the Australian Taxation Office designed to ensure the integrity of the verification process. He was able to improperly access Australian Taxation Office databases with a view to overseeing the lodgement of the claims. Telephone records suggest that he was in frequent contact with those fraudulently submitting the claims at the time of lodgement and at the time engaged in the verification process. The offender was thereby able to ensure that he had total control of the whole of the process of verification. The offender also produced false records and electronic reports facilitating the payment.
The offender breached the trust of his employer, the Taxation Office. He used his knowledge of the processes gained in his employment to fraudulently obtain the monies on behalf of others.
I am of the view that the offender was paid the money he received to ensure that the false claims were processed. The receipt of monies in separate amounts so close to the time of the improper payments support the conclusion that the monies received were repayment for his unlawful acts and not as the offender suggested a loan to him.
The amount of money involved in the false claims was substantial. The total amount fraudulently obtained exceeds $850,000. The amount defrauded is an important factor in assessing the objective serious of an offence and the level of criminality involved. Of the amount claimed a sum has subsequently been repaid and an amount credited to an account has been reversed. An amount of $596,301 remains outstanding.

5 Section 19(1) of the Act relevantly provides that:

…where an application is made for a superannuation order in respect of a person, the court must, if satisfied that the offence to which the application relates is a corruption offence, by order, declare:

(a) that the person was convicted of a corruption offence; and
(b) that this Part applies in relation to the rights of, and benefits paid or payable to or in respect of, the person under any superannuation scheme

6 “Corruption offence” is defined in s 2(1) of the Act to mean:

an offence by a person who was an employee at the time when it was committed, being an offence:

(a) whose commission involved an abuse by the person of his or her office as such an employee; or

(b) that, having regard to the powers and duties of such an employee, was committed for a purpose that involved corruption…

7 As to the interpretation of that phrase see generally Director of Public Prosecutions v Harney [2003] NSWCA 350.

8 “Offence” is defined in s 2(1) to include an offence against a law of the Commonwealth which is punishable by imprisonment for life or for a term longer than 12 months.

9 “Employee” is defined in s 7(1) of the Act to relevantly mean “a person employed…by the Commonwealth or a Commonwealth Authority…whether the person is so employed under a law of the Commonwealth or of a State or Territory, or under a contract of service or apprenticeship”.

10 It is apparent that the defendant committed corruption offences, within the meaning of the Act, in that he committed offences of the relevant kind and that they involved him in an abuse of his office as an employee of the Commonwealth.

11 By letter dated 25 May 2009 the Minister for Home Affairs, being of the opinion that the offences were corruption offences for the purposes of the Act, authorised the plaintiff, in accordance with s 16 of the Act, to apply for a superannuation order in respect of the defendant.

12 Section 17(1) of the Act relevantly provides that:

Where:

(a) the DPP is authorised to apply for a superannuation order in respect of a person who is convicted of 1 or more offences; and

(b) the person is sentenced to imprisonment for…(ii) a term longer than 12 months;

the DPP must make that application to the appropriate court.

13 As I have said the defendant was sentenced to an effective head sentence of 5 years with a non-parole period of 3 years.

14 “Appropriate court” is defined in s 2(1) of the Act to mean “the court of the State or Territory, before which the person was convicted and in addition, where the court is not the Supreme Court of the State or Territory, that Supreme Court”.

15 The plaintiff is required, by s 17(3) of the Act, to “take reasonable steps to give written notice of an application to the person in respect of whom the superannuation order is sought”.

16 The evidence reveals that the defendant was personally served on 16 June 2009 with a copy of the summons in its original form, together with the supporting affidavit of Michelle Maree Bellamy which was sworn on 9 June 2009.

17 If the Court is satisfied, pursuant to s 19(1) of the Act, that the offence in respect of which a superannuation order is sought is a corruption offence, then it must make the declaratory orders that are sought by the plaintiff.

18 In determining the application, the court is obliged, by s 18(1) of the Act “to have regard to the transcript of any proceedings against the person for the offence to which the application relates and to the evidence given in any such proceedings”. Section 18(2) of the Act provides that “any finding of fact made by a court in any proceedings for the offence to which the application relates, is prima facie evidence of that fact”.

19 Apart from the Remarks on Sentence, the evidence before me also consists of the Certificate of Convictions which was issued by the District Court in respect of the offences, copies of the relevant Court Attendance Notices and a comprehensive Statement of Facts which was tendered in the sentence proceedings. I have had due regard to that material.

20 The combined effect of ss 18(3) and 18(4) of the Act is that a certificate signed by the person’s superannuation authority stating specified information concerning the amount of benefits held in, or paid by the relevant superannuation scheme, is prima facie evidence of the matters stated therein. A certificate containing that information has been placed before the court.

21 “Superannuation scheme” is defined in s 2(1) of the Act to mean “a superannuation scheme…under which employer contributions or benefits are paid or payable, or have at any time been paid, by the Commonwealth…in respect of the person…”

22 Section 19(4) of the Act is in the following terms:

(4) Where any benefits have been paid to the person under any superannuation scheme (whether before, on or after the commencing day), the court must:
(a) specify in the superannuation order the amount worked out using the formula:
AB - EC
Where:
AB (amount of benefits) is the amount that the court thinks reflects the value of the sum of the benefits paid by the Commonwealth or Commonwealth authority to the person under the scheme as at the day on which the order is made.
EC (employee contributions) is the amount that the court thinks is equal to the part of AB that is attributable to the sum of the employee contributions paid under the scheme by the person as at that day plus the interest on those contributions accrued under the scheme before that day; and
(b) include in the superannuation order an order that the person pay the amount so specified to the Commonwealth or Commonwealth authority, whichever the court considers appropriate.

23 The certificate, to which I have referred, specifies that benefits have been paid to the defendant in the amount of $27,681.97 and that the amount equal to the employee contributions is $5376.24. It is upon that basis that it has been calculated that the amount which the defendant must pay to the Commonwealth is $22,305.73.

24 The effect of a superannuation order is set out in s 21 of the Act. From the day that such an order is made the defendant will no longer be entitled to the Commonwealth funded superannuation benefits otherwise payable to him upon reaching retirement age.

25 As will be apparent, the defendant is still serving his sentence. He did not attend the proceedings having specifically requested that he be excused from today’s hearing. Notwithstanding the fact that he is in custody, I am quite satisfied on the material before me, that he has been made fully aware of the present application and that the relevant documentation, including the Amended Summons, has been served upon him. I am also of the view, from the correspondence which has been placed before me, that he well understands the nature of the relief which the plaintiff seeks. Furthermore, as I observed earlier, the defendant has expressly indicated that he consents to the order being made. Although not presently relevant, he also indicated that he intended to make repayments of the sum in question by way of instalments upon his release from custody.

Order

26 Accordingly I make the following orders:

1 I declare, pursuant to s 19(1)(a) of the Crimes (Superannuation Benefits Act) 1989 that Fadi Dwayhi was convicted in the District Court of New South Wales on 1 August 2008 of 4 offences against section 134.2(1) of the Criminal Code Act 1995 , being corruption offences within the meaning of the Act.

2 I declare, pursuant to s 19(1)(b) of the Act, that Part 2 of the Act applies in relation to rights of, and benefits paid or payable to or in respect of, the defendant under the superannuation scheme established by the Commonwealth of Australia pursuant to the Superannuation Act 1990 which is known as the Public Sector Superannuation Scheme (the scheme).

3 I specify, pursuant to s 19(4)(a) of the Act, that the amount which reflects the value of the sum of the employer contributions or benefits made by the Commonwealth in respect of the defendant under the scheme that have been paid to the defendant by the scheme as at the day on which this order is made (plus interest on those contributions or benefits accrued under the scheme) is $22,305.73.

4 I order, pursuant to s 19(4)(b) of the Act, that the defendant pay the amount referred to in paragraph 3 to the Commonwealth.

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