Director of Public Prosecutions v Grimm

[2024] VCC 1360

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

CRIMINAL DIVISION

 Revised
(Not) Restricted
Suitable for Publication

Case No. CR-19-01752

DIRECTOR OF PUBLIC PROSECUTIONS

v

BRADLEY JOHN GRIMM

---

JUDGE:	HIS HONOUR JUDGE O'CONNELL
WHERE HELD:	Melbourne
DATE OF HEARING:	14 April 2023, 8 June 2023, 24 July 2024
DATE OF SENTENCE:	5 September 2024
CASE MAY BE CITED AS:	DPP v Grimm
MEDIUM NEUTRAL CITATION:	[2024] VCC 1360

REASONS FOR SENTENCE
---

Subject:CRIMINAL LAW

Catchwords:   Plea of guilty; Three charges of aid, abet, counsel or procure dishonest conduct in the course of carrying on a financial services business; Offender, a licensed financial advisor, dishonestly transferred shares and convertible notes to companies he controlled; No informed consent; Vulnerable victims; Material harm suffered by victims; Some belated restitution; Change of plea application refused; Little evidence of remorse; Delay; Otherwise good character and prospects for rehabilitation; General deterrence; Denunciation.

Legislation Cited:   Corporations Act 2001 (Cth); Criminal Code (Cth); Crimes Act 1914 (Cth); Sentencing Act 1991 (Vic).

Cases Cited:DPP v Bulfin [1998] 4 VR; Weatherburn v The King [2023] VSCA 283; Braun v R (2008) 68 ACSR 539; (2008) 190 A Crim R 497; [2008] NSWCCA 269; Finnigan v R (2013) 233 A Crim R 381; [2013] NSWCCA 177; Higgins v R [2006] NSWCCA 38; Nakhl v R (Cth) [2020] NSWCCA 201; The Queen v Rahul Goel Unrep, [2022] WADC 13/12/ 22; R v Ryan Unrep [2023] VCC  20/5/09.

Sentence:  Total effective sentence of eighteen months’ imprisonment to be released after the service of nine months’ imprisonment upon a Recognisance Release Order in the sum of $5000 to be of good behaviour for a period of eighteen months.

---

APPEARANCES:	Counsel	Solicitors
For the DPP	Mr R. Barry Ms C. Nicholson	Office of Public Prosecutions
For the Accused	Mr R. Backwell	Neil Ogge Lawyers

HIS HONOUR:

1Bradley John Grimm you have pleaded guilty to three charges of aid, abet, counsel or procure dishonest conduct in relation to a financial product or financial service in the course of carrying on a financial services business contrary to ss 1041G(1) and 1311(1) of the Corporations Act 2001 (Cth) and s 11.2 of the Criminal Code (Cth). The maximum penalty for each offence is 10 years’ imprisonment.

Overview

2During 2015 you were working as a licensed financial advisor for a company known as Ostrava Equities (“Ostrava”). Between February and November 2015, you advised and dealt with the money and shares of three of Ostrava clients in a dishonest manner.

3The clients to whom these charges relate were as follows:

(a)   BT, a 74 year old retired hospital cleaner who sought assistance from you on the recommendation of a nurse at her workplace;

(b)   PK, a 60 year old office manager who contacted you through an online referral website looking for help to manage her retirement finances; and,

(c)   JW, a 60 year old switchboard operator who sought advice from you on the recommendation of a friend.

4You provided advice to each of these women and set up a self-managed superannuation fund (“SMSF”) into which their retirement savings were deposited. In so doing you obtained control of the SMSF bank accounts. You then dishonestly transferred money, shares and convertible notes to companies which you controlled without obtaining their informed consent.

5In respect of each charge you gave advice and transferred money, shares or convertible notes as part of your work for Ostrava. You were the senior decision maker at Ostrava and effectively controlled the company. In that way you aided and abetted, counselled and procured the dishonest conduct of Ostrava. Your dishonesty in relation to these clients was therefore both personal and that of the company.

6As an Australian financial services licensee you were well aware of your obligations to act honestly, to act in the best interests of your clients and to disclose relevant information about the financial products the subject of your advice to them. By engaging in this dishonest conduct you abused the position of trust that a licensed financial advisor holds with respect to their clients and their money.

7The following more detailed summary of this offending is largely based on the Further Amended Summary of Prosecution Opening for Plea of 7 June 2023.[1]

[1] Exhibit A on the Plea.

Charge 1 - BT

8In 2014 BT retired from her job as a hospital cleaner. She was 73. She was entitled to $92,000 from her savings in her superannuation fund. Ordinarily her financial affairs had been managed by her husband, LT, however he had become increasingly unwell from asbestosis so BT began to look into her finances herself.

9For that purpose, she spoke to representatives of her superannuation fund but did not find them helpful. A friend from work told her about you and particularly that you would be prepared to come to her house to give her financial advice. BT was attracted to that idea because LT was quite sick at home and she was reluctant to leave him. She told him about you and he contacted you.

10After speaking with LT, you visited their home at the end of 2014. They told you that they wanted to make sure that BT would receive a regular pension. LT was on oxygen at the time and could not stand or talk for long and you were advised that he did not have long to live.

11You told BT that she could make better money with you than what she currently earned through her superannuation fund. You said it would not be a problem for her to receive a pension of $500 a week and that some of her money should be put into an Ostrava account to be invested with other clients’ money. BT and her husband agreed and she signed a number of documents which she did not read. She was not provided with copies. LT was too ill to read the documents.

12You gave BT a document titled “Ostrava Asset Management and Superannuation Investment Summary BT”, but you did not go through the document with her. You did not discuss alternatives to investing with Ostrava or fees or benefits she might receive if she did so. BT did not recall you mentioning a self-managed super fund.

13A few weeks later you met with BT and her husband again. LT was very sick and on oxygen. You asked them both to sign further documents. You did not go through the documents with either party or explain what they were. BT signed the documents as you requested because she trusted you. You did not give them copies of these documents. BT gave you authority to move her money into Ostrava which she believed was a super fund. She did not recall you mentioning a SMSF.

14In January 2015 you arranged for a bank account to be opened with Bank of Western Australia (“BankWest”) in the name of the T Super Fund. BT did not recall you advising her that you were going to open that account and that you would have authority to operate it.

15Mr LT died on 25 January 2015.

16On 30 January 2015 BT’s existing superannuation savings were rolled over into the account which you had set up.

17On 18 February 2015 you transferred $10,000 from the T super fund to the account of Trade BTC Pty Ltd to purchase 10,000 shares in Trade BTC Pty Ltd.

18Other than sending the email extracted below on 11 February 2015 you did not consult with BT about the transfer of those funds. Indeed, apart from the “Trade Notice” in the email she never received documents about the transfer or share purchase until investigators brought it to her attention.

Trade Notice

UNITS	DETAILS	LIMIT	MISC
BUY
45000	OST	100	OSTRAVA FUND
10000	PMC	100	PMC
10000	TBTC	100	TRADE BTC
10000	TL	100	THRIVE LENDING
SELL

*Please note the above trade. If you do not wish to proceed, please let us know within 48 hours of receipt of this email

Ph: 1300663217

Mob: [phone].......

19On the same day you transferred $10,000 from the T super fund to the account of Thrive Lending Pty Ltd. Other than sending the extracted email you did not consult BT about that transfer either. Again, apart from the trade notice in the email, she did not receive any documents about the transfer or share purchase until investigators brought it to her attention.

20Trade BTC Pty Ltd was a company that was registered on 11 February 2015 with you as its sole director and secretary. Its registered office was the same as Ostrava’s. In February 2015, Trade BTC Pty Ltd had no legally protected intellectual property, no cash flow, no assets, no employees and in the liquidator’s opinion there was no identifiable plan for the future of the business. In reality, it had no real market value.

21It reported to have issued 197,600 preference shares, however all but 20,000 of those shares were issued for free. The only shares purchased were those bought by the T Super Fund and the K Super Fund to which I will refer shortly. Each super fund acquired 10,000 shares at $1 per share. Trade BTC’s bank account was opened on 13 February 2015. Its only income was $20,000 - $10,000 from the T super fund and $10,000 from the K super fund. Within five weeks of opening, almost all of the money in the account had been paid to an Ostrava related company for various services and for rent of the office.

22Thrive Lending Pty Ltd was incorporated on 11 February 2015 with you as its sole director and company secretary. Again, the registered address was the same as Ostrava’s. Just as in the case of Trade BTC Pty Ltd, Thrive Lending Pty Ltd had no legally protected intellectual property, no cash flow, no assets, no employees and in the liquidator’s opinion no identifiable plan for the future of the business. In reality, it also had no real market value.

23Thrive Lending Pty Ltd purported to have issued 255,000 shares of the same class, however all but 20,000 of those shares were issued for free. The only shares purchased with those bought by the T super fund and the K super fund -10,000 shares each at $1 per share. Its bank account was opened on 13 February 2015 and the only income received was the $20,000 paid by the K super fund and the T super fund. Within five weeks of opening, almost all of the money in the account had been paid out to an Ostrava related company for various services and for rent of the office. The account was closed on 15 July 2015.

24Had BT been informed by you of your personal interest in Trade BTC Pty Ltd or Thrive Lending Pty Ltd or their market value, she would not have agreed to have invested in them.

Charge 2 - PK

25In mid-2014 PK was working as an office manager and about to turn 60. She was concerned that she did not have a retirement plan in place and so made online enquiries with financial services referral websites seeking advice as to how to maximise her retirement income. She indicated that her available funds consisted of $100,000 together with $55,000 in Superannuation and no other assets.

26The following day, as a result of those inquiries, an employee from Ostrava Equities contacted PK and arranged for her to meet with you on 5 December 2014.

27On that day PK went to the Ostrava office in Collins Street and was introduced to you. She described you as doing all of the talking in the meeting. You informed her you were a financial adviser and director of Ostrava. You asked about her finances which included an annual income of $36,000 and she indicated she wanted to retire at 65 and maximise her retirement income.

28You told her that you establish self-managed super funds for your clients in order to invest in shares on their behalf. PK recalls you saying words to the effect that they were “blue chip” shares. You said that you make really good returns for your clients and that they are all very happy with you. PK recalls you telling her that if you were to buy shares on her behalf you would notify her first and only buy them once she had given permission. She believed you said that it would be as secure as having money in the bank.

29PK informed you that she had previous financial setbacks, that she had no other assets to rely on and needed low to medium risk investments for safety but with some growth because this was her life savings. You told her that is exactly what would happen and she believes that you told her that the money would triple in five years no matter which way the market went.

30PK agreed to become a client of Ostrava and to meet with you again on 21 January 2015 in order to sign the necessary paperwork.

31On 18 December 2014, without PK’s knowledge, you caused a company called GK Holdings Pty Ltd to be registered. On 22 December 2014 you applied for an Australian business number for that entity.

32On 21 January 2015 you met with PK again and she signed a range of papers you provided to her. You told her these were standard documents to set up the super fund. You did not give her copies. She did not read them because she trusted your explanation of the documents. You explained that it would be useful for you to be authorised to operate the account and on the basis of that representation you were provided with that authorisation.

33On 12 February 2015, a large part of PK’s savings was transferred to the new K super fund bank account.

34On 18 February 2015 you emailed PK a “Trade Notice” that related to buying 10,000 shares in each of Trade BTC Pty Ltd, Thrive Lending Pty Ltd and another company. PK took this as a request for instructions to purchase these shares and so she contacted you. You told her words to the effect “I have chosen the shares as I have investigated the companies and they show promise … the shares are a perfect fit to hold for the medium to long term of 3 to 5 years”. Pursuant to that representation she agreed to purchase the shares believing they were companies listed on the Australian Stock Exchange.

35On 18 February 2015, you transferred $10,000 from the K super fund to the account of Trade BTC Pty Ltd and $10,000 from that same super fund to Thrive Lending Pty Ltd. You did not tell PK about your personal interest in these companies or their real value. Had she known those details she would not have agreed to the purchases.

36On 11 March 2015 you sent PK another Trade Notice relating to buying 10,000 shares in Beta Pharmacology Pty Ltd for $10,000. PK contacted you about the notice and asked you if the reasons for the notice were the same as that which you had provided in the 18 February 2015 notice. You said the reasons were the same. PK took this to mean that Beta Pharmacology Pty Ltd was a company listed on the Australian Stock Exchange and so she approved the purchase. That same day you transferred $10,000 from the K super fund to the bank account of Beta Pharmacology Pty Ltd.

37Beta Pharmacology Pty Ltd was registered as a company by you on 23 February 2015 with you as sole director and company secretary. Its business plan, which was dated November 2014, indicated that it proposed to participate in the medical cannabis industry if and when it became legalised in Australia. In particular, it was to operate a website of information about medicinal cannabis. As at March 2015 there was no such website.

38Beta Pharmacology Pty Ltd had no legally protected intellectual property, no cash flow and in the liquidator’s opinion there was no identifiable plan for the future of the business. Like Trade BTC and Thrive Lending it had no market value.

39It purported to have issued 346,225 preference shares, but all but 30,000 of them were issued for free. The only money invested in the company was $30,000 (30,000 shares at $1) of which $10,000 was from PK’s super fund. By the end of March 2015, Beta had only $1110 in the bank. In that month you had paid $25,300 to other Ostrava companies for “professional services”. Its bank account was closed in July 2015 in debt.

40You did not tell PK that you had a personal interest in the company or the real details about its market value. If you had done so she would not have approved the purchase.

Charge 3 - JW

41Around 2012 JW who was in her late 50s, decided she needed to review her retirement finances and seek some professional advice. You were recommended to her by her friend. JW had undergone major surgery in 2012 and wanted some support payments during her recovery. She also had a $10,000 credit card debt which she needed to repay.

42You met with JW a couple of times in late 2012 and in May 2013 she decided to accept your advice to set up a SMSF that you would administer through Ostrava. You provided her with a number of documents which she signed in May 2013. She did not read the documents and you did not give her copies of those documents. She told you that she did not want to invest a lot of money in shares but that she needed her investment to remain available to her as cash to allow for contingencies such as needing to pay for medical expenses.

43In May 2015 JW travelled overseas with a friend; a trip which she had been planning for some months. During the planning she had become concerned about her ability to pay for her travel expenses. She contacted you about using a portion of her superannuation to cover those expenses. You told her that would be fine and just before she left the country you visited her and asked her to sign some papers telling her that she had shares invested that would pay for her trip.

44For a period of about six months after JW had returned from overseas she attempted to contact you through emails and visiting your office about paying off the expenses of $10,000. On 5 November 2015 you visited her at her home and told her that she could obtain the money she needed by selling her shares. In order to do this you asked her to sign some documents and she did so.

45You told her that the documents related to cashing in shares that would enable her to meet her outstanding credit card debt. You did not otherwise explain what those documents meant. In fact, those documents were “off market transfer forms” related to shares and convertible notes owned by the W super fund valued at $72,427.83. In signing the transfers rather than cashing them in, the ownership of those shares and convertible notes was transferred to Equity Capital Partners Hedge Fund Pty Ltd.

46That hedge fund was wholly controlled by you as its sole director and company secretary. Initially its principal place of business was listed as the Ostrava office but was subsequently changed to your home address. At no stage between 5 November and 11 November when the transfers of shares and convertible notes was completed did you tell JW that you controlled Equity Capital Partners Hedge Fund Pty Ltd, that you had a personal interest in that entity and would personally benefit from any investment in that entity. Nor did you tell her that ASIC had sought the winding up of Ostrava Equities and its related entities. Moreover, you did not inform her that you had been restrained from providing financial services by an order made by the Federal Court on 20 October 2015.

47You did give JW $10,000 for payment of her credit card and shares in the hedge fund. However, the shares in the hedge fund were ultimately of no value and she was out of pocket $62,000. One of the documents JW signed was the second page of a two-page investment application form relating to the hedge fund. The fine print on the first page of that document set out an extensive range of ways in which you and your wife would have personally benefited from any investment in the hedge fund. JW was not shown that first page nor was she told of its substance.

48As indicated earlier ASIC sought the winding up of Ostrava and related entities in August 2015. On 20 October 2015 the Federal Court ordered, by consent, the appointment of provisional liquidators to Ostrava and that you be restrained from providing financial services until further order. You also spoke to the liquidators in October 2015. None of that was disclosed to JW.

Victim Impact

49All three victims provided victim impact statements as did BT’s daughter.

50As indicated earlier in these remarks, LT passed away in early 2015. BT therefore had to deal with the threat your actions posed to her financial security very shortly after that loss. She says she trusted you and felt betrayed when this happened. Her daughter described her mother’s state during that time as “an emotional mess”. The process of having to attend court exacerbated her distress.

51PK underwent professional counselling to help her deal with what she described as your betrayal of trust. Her retirement plans were severely disrupted and diminished her enjoyment of life. She says she continues to struggle both emotionally and financially.

52Like the others, JW trusted you to look after her retirement savings. After you breached that trust she was forced to sell her home because she was unable to afford the mortgage payments. She initially lived at the back of a friend’s house for two years but then had to rent what she described as a horrible unit that did not have adequate heating. She had to endure those conditions throughout the pandemic. It was only after a long drawn out process that she received compensation through the Financial Ombudsman Service and was able to buy a new house.

53You should understand that the impact your offending has had on your victims is an important consideration in the formulation of your sentence.

Procedural history

54The procedural history of this matter is lamentable.

55As indicated the offending spans the period February to November 2015. You were not charged until November 2018. There was a two day contested committal in August of 2019 after which you were committed to stand trial in this court.

56Thereafter the matter was listed for trial on four occasions. On the first occasion it was adjourned due to the pandemic. At the next listing in March 2022 it was adjourned to enable the defence to obtain an expert report. Numerous subpoenas were issued on your behalf which provoked protracted disputes. A further application to adjourn the trial was granted in September 2022 to enable finalisation of the defence expert report.

57In December 2022, you made yet another application to adjourn the 18 January 2023 trial listing. That application was refused. On 20 January 2023 you were arraigned and pleaded guilty to the charges on this indictment.

58At the first plea hearing on 14 April 2023 your counsel indicated that there was a dispute as to the factual basis for sentence and the plea was adjourned to 8 June 2023. On that the day the plea proceeded to some extent but adjourned part heard to enable further discussions between the parties. After some further hearings the matter was referred to another judge of this Court to enable you to make an application to change your plea of guilty. That application proceeded over a number of days during the first half of 2024 and was ultimately refused on 27 June 2024.

59The matter returned before me for the final plea hearing on 24 July 2024.

Defence Submissions

60You were born in April 1968 and are now 56 years of age. You have no previous or subsequent criminal convictions.

61You were adopted when you were just one week old. You reported that your adoptive family were caring and that you had a happy childhood. You were told of your adoption when you were seven and apparently adapted well.  Later in life you went on to meet your biological parents. 

62You attended a private Catholic school in Sydney where you completed your HSC and then went on to tertiary study obtaining a commerce degree and a diploma in financial services. You then worked at Macquarie Bank as a futures broker and then a stockbroker. You started your own business in 2004 establishing Ostrava Equities Pty Ltd and later Ostrava Asset Management.

63You married at the age of 32 and there are two children of that relationship now aged 21 and 15. Your wife is supportive of you.

64Your counsel emphasised that you had experienced a devastating fall from grace when these matters came to light. However, it is now nine years since this offending - you had “regrouped”, changed industries, started a successful car rental business and have not reoffended. There was no suggestion of any substance abuse or other such issues that might qualify your prospects for rehabilitation. Your prospects were therefore said to be excellent.

65You have maintained that you are not guilty of this offending. You have however, made full restitution to BT and PK. As I have explained, JW was separately compensated through a scheme accessed with the assistance of the Financial Ombudsman.

66It was submitted that whilst the delay over the last couple of years, which was due to the various applications to adjourn the trial and your change of plea application, should not form part of any mitigation arising from delay, there was earlier delay which should nevertheless mitigate. In particular, there was significant delay in instituting these charges and then as a result of the pandemic. None of that was of your making and was punitive. Moreover, you have used the delay constructively to further your rehabilitation.

67Four personal references written in April 2023 were tendered on your behalf. Each of those referees speak of their professional and personal dealings with you which they describe in very positive terms. This offending aside, it is clear that there were many who valued your professional advice and benefited materially.

68Your counsel submitted that the comparative authorities relied on by the Crown involved criminality of a much higher order. It was submitted that having regard to the fact that the victims have been compensated, your otherwise good character, your rehabilitation and the relatively lower quantum involved in the offending, it was appropriate to impose fines for each of these offences.

Crown Submissions

69In its submissions, the Crown emphasised the objective gravity of this offending which they suggested was high despite the quantum of loss being relatively modest when measured against the comparative authorities. It was submitted each victim was elderly, inexperienced and vulnerable. They trusted you to increase their retirement savings. In relation to the first two complainants you transferred their funds from secure retail superannuation funds to SMSFs and then chose to invest those funds in companies that you knew had little value. You knew the prospects of failure were high and you knew that their loss would have a significant impact on them. In those instances it was submitted that your moral culpability was high.

70In the case of the third complainant the offending was aggravated because it occurred after you had been restrained from providing financial services and winding up proceedings had been commenced in respect of Ostrava. As has been explained, although JW ultimately was compensated through a Commonwealth scheme she did not recover her funds for some years during which she was forced to sell her own home and live in impoverished circumstances. The effect on all of these victims, it was submitted, was enormous.

71The prosecutor accepted that restitution had been made with respect to the first two victims but noted it was made only the day before the plea first began in 2023, eight or so years after the event.

72The prosecution submitted, given what was described as your blatant dishonesty and the breach of trust by a financial adviser, the only appropriate disposition was an actual term of imprisonment for each charge.

Consideration

73The seriousness of these offences is underlined by the fact that they are punishable by a maximum term of imprisonment of 10 years.

74In assessing the gravity of your conduct in many respects the facts speak for themselves.

75At the risk of repetition, in respect of the first two charges you failed to tell your victims that you were investing their money in companies in which you were the sole director and company secretary and failed to tell them that the companies had little market value. As an experienced financial advisor you knew how wrong that was. If those victims could have made an informed choice about those investments there can be little doubt they would not have permitted you to use their money in that way.

76In respect of the third charge, you failed to tell JW that you were transferring her shares and convertible notes into a company which you controlled, in which you had a personal interest and from which you would personally benefit. Moreover, that was done at a time when ASIC had sought the winding up of your company and you were restrained by court order from providing financial services.

77You well understood the personal circumstances of each of these victims and must have appreciated that any loss to their limited retirement funds would be felt acutely. The victim impact statements make it clear that was in fact the case. Your actions constituted a culpable breach of their trust and your professional responsibilities. To have engaged in further such dishonesty when you were restrained from providing financial services by court order, as you did in the case of Charge 3, aggravates your offending.

78It is paramount that when people seek professional assistance in making decisions which materially affect their financial security that they feel they can trust and rely upon the advice they receive. In each of the three instances constituting these charges you betrayed that trust. Whilst the sums of money lost were relatively modest, that money meant a great deal to these victims and they trusted you to keep that money secure.  I therefore have no hesitation in assessing your moral culpability as high. 

79In so far as s 16A(2)(a),(d),(e) & (ea) of the Crimes Act 1914 (Cth) (“the Act”) oblige the Court to take into account the nature and circumstances of the offending, the personal circumstances of the victims, their loss and their victim impact statements, I accept the Crown submission that despite the relatively lower quantum lost, the objective criminality of this offending is high.

80I was referred to a number of cases for the purpose of comparison.[2] I accept Mr Backwell’s submission that those decisions tend to involve greater criminality and their comparative utility is therefore limited. Even so, perhaps unsurprisingly, those authorities do show that generally, behaviour of the kind in which you engaged will attract heavy sentences.

[2]Braun v R (2008) 68 ACSR 539; (2008) 190 A Crim R 497; [2008] NSWCCA 269; Finnigan v R (2013) 233 A Crim R 381; [2013] NSWCCA 177; Higgins v R [2006] NSWCCA 38; Nakhl v R (Cth) [2020] NSWCCA 201; The Queen v Rahul Goel Unrep, [2022] WADC 13/12/ 22; R v Ryan Unrep [2023] VCC 20/5/09.

81Section 16A(2)(f) requires that the extent to which you have shown contrition by making reparation or in any other way, be taken into account as part of the sentencing synthesis. You have made restitution to the first two victims albeit belatedly. That you have done so is to your credit despite its lack of timeliness. An external agency compensated JW.

82Your plea of guilty would ordinarily attract a substantial reduction in the sentence that would otherwise be imposed. Although you unsuccessfully sought to withdraw your plea that is not something to which I will have regard. I take the view that the findings made by another judge of this Court refusing your application are not relevant to the formulation of this sentence. Indeed, I have expressly refrained from reviewing those reasons. However, as your counsel stated, you maintain you are not guilty of these offences. Restitution aside, it is difficult to discern any other basis on which to infer remorse for what you have done.

83That said, s 16A(2)(g) mandates the fact of the plea, its timing and the degree to which it has resulted in utilitarian benefit, be taken into account. Applying that provision to your situation is not without difficulty but it seems to me I must allow some reasonable reduction in sentence for its utilitarian value, particularly in that it meant that your victims were spared the ordeal of giving evidence at trial. That reasonable reduction will flow in spite of your denial of the offending and the protracted procedural history, a significant proportion of which was of your own making.

84With respect to delay, I will have regard to your rehabilitation subsequent to this offending as mitigating sentence. I will also take into account in your favour the punitive effect of delay flowing from the uncertainty you must have felt waiting for this matter to be resolved. That last consideration, however, will be qualified by the period of time during which you had control over the length of the delay, as is apparent from the procedural chronology I have earlier set out.[3]

[3] See Weatherburn v The King [2023] VSCA 283 per McCleish, Taylor and Kaye JJA at [45].

85Section 16A(2)(h) requires that I have regard to the extent to which you had co-operated in the investigation. I will treat that consideration as being neutral in your circumstances. In so doing I should emphasise that you are not to be punished for indicating, as you did for a considerable period of time, that you wished to contest the matter or in seeking to disavow your plea of guilty.

86It has not been alleged that you used your standing in the community to aid the commission of this offence. Were it otherwise that consideration would need to be taken into account pursuant to s 16A(2)(ma), however in your circumstances the sentence will not be aggravated on that basis.

87I must take into account your character, personal circumstances, the probable effect of a sentence on your family and your prospects for rehabilitation pursuant to s 16A(2)(m), (n) and (p). There is no evidence before me as to what precisely motivated you to commit these offences, however, I accept that you are a person of otherwise good character and that your conduct subsequent to this offending demonstrates that you have very good prospects for rehabilitation. I also accept that any term of imprisonment imposed on you will be extremely difficult for your partner and your family.

88That said, in crimes of this kind personal considerations tend to be subsidiary to the necessary emphasis required on general deterrence. Section 16A(2)(ja) now specifically mandates that sentencing purpose to be taken into account as well as the need to ensure the you are adequately punished for the offence.[4] In DPP v Bulfin, a case dealing with serious corporate fraud, Charles JA concisely summarised why that emphasis is required:

The motivation to engage in conduct of the kind here under consideration may spring from many sources: the position of trust and the easy ability to abuse it; the enormous rewards that may be available; a position of high authority in some substantial enterprise and the offender’s assumption the discovery or proof of wrongdoing can be avoided; greed or the burden of funding an extravagant lifestyle; weakness in succumbing to outside pressures to use deceitful means for business ends; and personal or corporate ambition, to name but a few. Whatever the motivation, offences of the kind here in question almost invariably involve a carefully calculated course of conduct over a long period, repeated deliberate acts of dishonesty, substantial amounts of money, and, frequently, losses (often tragic in their impact) to large numbers of small investors. The offender often holds a position making it possible, or has the ability, to disguise or camouflage the conduct in question. Detection is difficult, the investigation of the crime usually lengthy and very expensive, and the problems of trial and proof will frequently be extreme… The result of such considerations, in my view, is that the element of general deterrence will usually carry particular significance in sentencing for crimes such as the present, both in relation to the total effective sentence and the non-parole period; together with the requirement for strong denunciation by the sentencing court.[5]

[4] Crimes Act 1914 (Cth) s 16A(2)(k).

[5] [1998] 4 VR 114, [131] –[132].

89Much, though not all, of what was there said is apposite to your offending. In essence, others in positions of trust similar to yours must understand that their privileged position cannot be abused lest it result in significant punishment. Moreover, not only should that punishment deter, it should also serve to strongly denounce dishonesty of this kind.

90Section 16A(1) of the Act stipulates that a court must impose a sentence that is of a severity appropriate in all of the circumstances of the case. Section 17A further requires that a sentence of imprisonment cannot be imposed unless the court, after considering all of the available sentences open, is satisfied that no other sentences are appropriate.

91I have carefully considered your counsel’s submission that this offending should be dealt with by way of a monetary penalty. I reject that submission on the basis that your offending is simply too serious.

92In turn, I have considered whether or not it might be possible to sentence you to a term of imprisonment with immediate release upon a recognisance release order. Again, because of the findings I have made with respect to the nature and gravity of your offending and the high degree of moral culpability involved, I am not satisfied that such a sentence would adequately reflect the emphasis on general deterrence and denunciation required.

93Ultimately, I have formed the view that in your circumstances no other sentence other than a term of actual imprisonment is appropriate.

Sentence

94Taking all relevant matters into account you will be sentenced as follows:

95On Charge 1, aid abet counsel or procure dishonest conduct in the course of carrying on a financial services business you will be convicted and sentenced to a term of imprisonment of nine months.

96On Charge 2, aid abet counsel or procure dishonest conduct in the course of carrying on a financial services business you will be convicted and sentenced to term imprisonment of nine months.

97On Charge 3, aid abet counsel or procure dishonest conduct in the course of carrying on a financial services business you will be convicted and sentenced to a term imprisonment of twelve months.

98I will further order that the sentence imposed on Charge 3 will commence this day. I will order that the sentence imposed on Charge 1 will commence six months after the commencement of the sentence on Charge 3. I will order that the sentence imposed on Charge 2 commence nine months after the commencement of the sentence on Charge 3 and three months after the commencement of the sentence on Charge 1.

99My sentencing intention is to render a total effective sentence of 18 months’ imprisonment in which three months each of the sentences imposed on Charges 1 and 2 are served cumulatively upon the sentence imposed on Charge 3.

100I will further order that after the service of nine months of that term of imprisonment that you be released upon a recognisance in the sum of $5000 that you be of good behaviour for a period of 18 months.

101I will declare pursuant to s 6AAA of the Sentencing Act 1991 (Vic) that but for your plea of guilty you would have been sentenced to a term of imprisonment of two years and six months and I would have fixed a non-parole period of eighteen months and I will cause that declaration to be noted in the records of the court.