Director of Public Prosecutions v Karan
[2018] VCC 1678
•3 December 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-18-00601
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| ANAND KARAN |
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JUDGE: | HER HONOUR JUDGE LAWSON | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 October 2018 | |
DATE OF SENTENCE: | 3 December 2018 | |
CASE MAY BE CITED AS: | DPP v Karan | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 1678 | |
REASONS FOR SENTENCE
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Subject:Criminal law – sentencing – theft – sentencing over five consecutive financial years – gross breach of trust – aggregate sentence of imprisonment imposed.
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Mr M. Roper (for plea) Ms R. Marques (for sentence) | John Cain, Solicitor for the Director of Public Prosecutions |
| For the Accused | Mr A. Lewis (for plea) Ms L. Connell (for sentence) | Stary Norton Halphen |
HER HONOUR:
1 Anand Karan, you have pleaded guilty to five rolled-up theft charges[1].
2 The charge of theft is serious and that is reflected in the maximum penalty prescribed by Parliament and that is, 10 years’ imprisonment in respect to the charge of theft.
3 In summary the five charges represent offending that spans five consecutive financial years from 2011 to 2015. The offending represents a total of 215 occasions involving unauthorised transfers of moneys belonging to Lincom Solutions (the company), an information and communication technology company, to your personal bank account and those funds were then applied for your own personal use.
4 I shall now proceed to sentence you on the basis of the Crown opening that was read at the plea hearing and is an Exhibit marked 1.
5 You are 45 and have qualifications in the information technology area. The offending occurred when you were aged between 37 to 42.
6 Lincom Solutions provided information technology systems to Australian companies, in particular Jetstar. It had annual contracts of up to $10 million a year and employed over 100 people including permanent staff and contractors.
7 You were a director of the company. The company was established together with Chris Tepaske and David Lampkin in 2004.
8 You were chief executive officer and director, and in that role you had authorised access to the company’s bank accounts.
9 The offending concerns you transferring money from the company’s Bendigo Bank account directly into your own personal Westpac banking account.
10 The transfer descriptions listed for each theft varied and were made up by you in order to appear as legitimate business transactions.
11 The total value of the 215 unauthorised transfers over the course of the five-year financial period as set out in the indictment was $2,003,876.54.
12 The 215 unauthorised transactions are set out in the appended schedule to the indictment which shows the individual thefts in terms of the dates and the amounts.
13 Your offending was uncovered in early 2015 by Satya Hornilamm, a junior accountant at the company. She detected irregularities in the company’s banking and accounting systems and spending and payments made by you and reported her findings to her superiors.
14 Ultimately on 29 July 2016, you arranged a meeting with the other co-directors that was attended by both you and your brother, Vinesh Karan, the then operations manager at the company. You admitted to the other directors that you had an addiction to gambling and stated that you had taken in excess of $1.2 million between 2011 and July 2015 without authority.
15 BK Taylor and Co, an accounting firm, was then requested to conduct an independent audit of the company’s banking statements and they did that, and that revealed the full extent of your thefts.
16 On 22 March 2016, the company went into administration and it is now in the process of liquidation.
17 On 9 May 2017, you attended the Melbourne West Police Station where you were arrested and formally interviewed in relation to the thefts from the company.
18 You made full admissions and told police that you had made a large number of online bank transfers from the company’s accounts into your private banking account. You were not aware of the precise amount stolen but you knew it was a large amount. You told police you had a significant gambling addiction and that you were gambling at gaming machines at the Crown Casino. There has been no actual restitution of any of the stolen moneys, however steps are now in place to realise your equity in a property at 4 Villawood Place, Berwick and that is to be utilised to repay the moneys in part.
19 I read from a letter from your solicitors addressed to the court where it is stated that, and I quote, "We write to the court to confirm the resolution has been reached between the liquidators of Lincom Solutions Pty Ltd and Mr Anand Karan in relation to restitution. A settlement deed has been signed and completed which provides that Mr Karan will pay $330,000 to Lincom Solutions. This will be secured by a mortgage to the liquidator over the property at 4 Villawood Place, Berwick. The deed provides that $330,000 is to be paid 120 days after the date of the approval of the deed by the creditors. The deed of settlement also provides for the caveators to remove their caveats allowing for the mortgage to be registered. Whilst this agreement is currently subject to creditor approval, we understand that this approval will be recommended by the liquidator." And then it goes on to ask that the court take into account this agreement by the accused to recompense the liquidator $330,000 from his equity in the property.
20 Mr Karan, your offending has had significant consequences. The company was initially placed in administration but is currently in liquidation. I am satisfied that the theft of such a significant amount of money from the company has been a cause of the company’s demise.
21 A victim impact statement was declared by Chris Tepaske where he sets out the full consequences of how your offending has impacted upon him personally. He has suffered depression, distress and anxiety. He felt that it was a significant breach of trust and deceit and betrayal involved in your offending, and such actions have changed him forever.
22 Financially his future is ruined. There have been significant costs incurred as a consequence of the offending being uncovered.
23 The stress associated with the company’s demise and financial ruin has placed stress on his marriage and relationships with his children.
24 His wife who was formerly responsible for caring for the four children of the marriage and not in paid employment is now required to find a job. He has had some physical impacts as well; he suffers from stress, high blood pressure, heart palpitations, sleeping problems and weight gain.
25 No other victim impact statements have been filed but I am satisfied given the demise of the company, which is in part attributable to your criminal acts, that the impact of the offending would have been far reaching to all associated with the company including the other director, the employees and their families.
26 This is a serious example of theft involving as it does a significant sum of money that was stolen over the course of five financial years. Your actions were in gross breach of the trust imposed upon you as the chief executive officer of the company. Your offending was persistent and has had a deleterious impact upon the viability of the company’s operations and also in the manner that I have already described.
27 In sentencing you, the principles of general deterrence, denunciation and the imposition of just punishment assume considerable importance.
28 Mr Lewis on your behalf conceded that the offending was serious and that a term of imprisonment to be served was warranted. I have had regard to the many mitigating factors that he emphasised on your behalf.
29 I accept that you entered an early plea of guilty. Objectively your plea has significant utilitarian value, saving the community the cost of a trial and also saving the victims of having to come to court to give evidence at your trial. You have facilitated the course of justice and your sentence will be discounted accordingly.
30 I accept that your plea is evidence of remorse and acceptance of responsibility by you for your actions. I consider that you are genuinely very remorseful. You made admissions firstly to your fellow directors and then to the police when you were formally interviewed.
31 You are a person who otherwise is of good character and you are entitled to have that fact taken into account in your favour.
32 You are fortunate in that you continue to have the broad support of your family members and your partner, who have been supporting you both emotionally and financially since your thefts were discovered. You have not worked since leaving the company and family members have been providing you with material support.
33 By way of background, your parents left India to come to Australia to make a better life for their children. They are hardworking and law-abiding. Your actions have brought huge shame on your family.
34 Your parents are now both retired. Your younger brother, a mechanical engineer, has been successful in obtaining alternative employment after his employment with the company ceased.
35 I have had regard to the long period of delay in the proceedings. The offending was first uncovered when you spoke with your directors on 29 July 2016. You were not arrested and interviewed until 9 May 2017 and thereafter the charges were filed and the quantum of your theft was the subject of protracted negotiation.
36 Ultimately the matter resolved at committal proceeding on 21 March 2018 on which date you entered a plea of guilty to the five rolled-up theft charges reflecting the charges as set out in the indictment.
37 You have utilised the time since the disclosure of your offending and made significant strides in dealing with your gambling addiction. You have had extensive treatment with Dr Glen Hosking, clinical psychologist, including extensive counselling up until the time of your remand.
38 Dr Hosking in his report dated 4 October 2018 confirms that you initially met the diagnostic criteria for gambling disorder, persistent and severe; major depressive disorder, severe and recurrent episode; and generalised anxiety disorder.
39 He states that you were using gambling as an ineffective coping strategy to deal with significant work-related stress and your own debilitating mood.
40 You demonstrated persistent and recurrent problem gambling behaviour which led to clinically significant impairment or distress. You demonstrated depressed mood most of the day and more days than not, significantly diminished interest in pleasure in all or most activities; sleep disturbance; agitation; fatigue; loss of energy; excessive feelings of worthlessness; an inability to concentrate; and recurrent suicidal ideations. The symptoms were causing significant distress and impairment in your day-to-day functioning. You also demonstrated excessive anxiety and worry more days than not for a period of greater than six months. You had difficulty controlling your worry; you were irritable, restless and had problems concentrating, with muscle tension and sleep disturbance, all of which symptoms caused you significant impairment.
41 Since August 2015, Dr Hosking has been treating you with cognitive behavioural therapy to deal with your gambling addiction and relapse prevention.
42 His current assessment is that you have normal levels of depression, anxiety and distress and your measure on the problem gambling severity index indicated a moderate level of gambling problems leading to some negative consequences.
43 He notes that you have been abstinent from gambling in entirety since August 2015. He considers this is a credit to your commitment to treatment and your involvement with Gamblers Anonymous which you frequented regularly since July of 2017.
44 You have not indicated any problem gambling behaviour for the past 12 months.
45 Based on his current assessment and clinical interviews, he says you no longer meet the diagnostic criteria for gambling disorder, persistent severe, major depressive disorder, severe recurrent episode; or generalised anxiety disorder.
46 He considers that as a result of your commitment to psychotherapy, you have largely addressed your problem gambling addiction, mood and depressive conditions. You now have a series of strategies that enable you to meet your challenges. With ongoing support he says that you are well-equipped to be able to manage your problem gambling behaviour.
47 I have taken into account the evidence given at the plea hearing by Gavin Hogg, Gamblers Anonymous from Berwick. He formed the Berwick Gamblers Anonymous and he did so two or three years ago. He has chaired the meetings and has known you since June 2017.
48 He attested to your commitment to addressing your gambling problem behaviour and also your abstinence. He said that you were solid and that you have never waned since he has known you. He was aware of your theft to fund your gambling and said that you were extremely remorseful and understand what you did was wrong. He said that you provide great assistance to others who have presented with gambling issues and he noted that your mood had improved from a person who had low esteem to one who is now more confident and helpful towards others.
49 I have also had regard to the bundle of references provided by Kasey Lin, your girlfriend; Eric Bustos, your friend from primary school; Perry Hannah; Gavin Hogg from Gamblers Anonymous and others who each of whom attest to the considerable efforts that you have made since your thefts have been detected to address your underlying offending behaviour.
50 I have also had regard to the letter written by your brother and finally the letter from Damien Cester, who knows you through Gamblers Anonymous.
51 I accept that the context to the offending was that you had been working under extreme stress and that you were using gambling to avoid that stress. Through your gambling addiction you have now lost your job, your reputation, the trust of your business partners and many others. Your future job prospects and your finances are now in ruins, and your offending has impacted greatly upon you personally.
52 However, the discovery of the offending has been a catalyst to achieving recovery from gambling addiction and you have worked hard towards your rehabilitation.
53 I am satisfied that you have taken all the necessary steps to address your underlying offending behaviour and I consider that you have excellent rehabilitation prospects.
54 The delay of over three years between initial admissions and sentencing is not an insignificant matter and I have taken that into account that you have had these matters hanging over your head for some time.
55 The delay is relevant in two ways. Firstly, you have been able to demonstrate your appropriate rehabilitation that has occurred during the delay and that in effect has an impact on specific deterrence. Secondly, the delay is relevant in the sense that you have suffered the anxiety and uncertainty of having the prospect of a gaol sentence hanging over your head during that period and that is itself akin to punishment.
56 I overall am satisfied that in the particular circumstances of your case, there is less need to emphasise specific deterrence in the sentence. Nonetheless, general deterrence remains a significant factor. Overall I consider that the likelihood of reoffending is low.
57 I have noted that you have made arrangements and the settlement deed has now been signed whereby you are agreeing to the equity in your home at 4 Villawood Place, Berwick of $330,000 being made available to the liquidators in restitution and that matter has been taken into account in mitigation of sentence.
58 As I have said a number of times now, general deterrence and denunciation both play a very significant role in your sentence.
59 Mr Roper on behalf of the prosecution emphasised that it was a significant deception and that a head sentence with a non-parole period ought be fixed. That is consistent with the submissions made by Mr Lewis on your behalf.
60 I must formulate a sentence that is just in all the circumstances.
61 In sentencing you, I have had regard to the period over which the offending occurred - namely five consecutive financial years, the quantum of the thefts, the significant breach of trust and the other mitigating factors that I have already highlighted.
62 I have had regard to the principle of totality and also the need to avoid imposing a crushing sentence.
63 In all the circumstances I do consider that a term of imprisonment to be served with a non-parole period to be fixed is the appropriate and just punishment.
64 I will be imposing an aggregate term of imprisonment in respect to the five charges as set out in the indictment as the offending arises out of the same series of offences of the same or similar character.[2] What that means is it is one term of imprisonment to reflect the criminality of all the charged offences, having regard to the gravity of the offences and the other matters that I have already referred to.
[2] S9 Sentencing Act 1991
65 I would ask that you please now stand, Mr Karan. I will announce the formal court orders are as follows:
66 In respect to each of the charges, 1 to 5 inclusive on the indictment, you are convicted and an aggregate term of imprisonment of five years and six months is ordered, and I direct that the non-parole period be fixed at three years and six months.
67 I make the following declaration pursuant to s.6AAA. But for your plea of guilty, I would have imposed a term of imprisonment of seven and a half years to serve five and a half years.
68 I declare that you have spent 59 days in pre‑sentence detention and direct that that be entered into the records of the court.
69 Finally, I make the order pursuant to s.464ZF of the Crimes Act for the taking of a forensic sample. What that means, Mr Koran, is that at some stage you will be asked to undergo a forensic procedure for the taking of a scraping from your mouth and/or a blood sample. I just have to inform you that if you do not consent to that, under the supervision of an authorised member of the police force then the sample can be taken by way of blood sample and the police may use reasonable force to enable that procedure to be conducted. I have made that order having regard to the seriousness of the circumstances of your offending, the fact that the order is by consent, and the granting of the order is in the public interest.
70 So that concludes matters? Here is the order.
71 MS CONNELL: Your Honour, for completeness I have forwarded to the chamber's email address the signed consent orders.
72 HER HONOUR: All right, thank you. That is in relation to the compensation order?
73 MS CONNELL: The restitution, yes.
74 HER HONOUR: Yes, so that is pursuant to s.86 of the Sentencing Act. The amount is $330,000.
75 MS CONNELL: That's correct, Your Honour, yes.
76 HER HONOUR: So a Compensation Order in the sum of $330,00 will be made. I note that is by consent. All right, I think that completes the sentencing remarks? Thank you both for your assistance. Mr Koran may be taken downstairs.
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1 The ‘rolled-up’ charge is a mechanism by which the Crown can charge numerous individual indictment charges in a convenient form. It involves a form of drafting that would ordinarily be bad for duplicity, but with the consent of the offender, may be adopted on a plea.
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