Director of Public Prosecutions v Kelly

[2020] VCC 736

IN THE COUNTY COURT OF VICTORIA Revised
Not Restricted
Suitable for Publication

AT MELBOURNE
CRIMINAL JURISDICTION

CR 19-02003

DIRECTOR OF PUBLIC PROSECUTIONS

v

SHAUN KELLY

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JUDGE:	HIS HONOUR JUDGE LYON
WHERE HELD:	Melbourne
DATE OF HEARING:	12 May 2020
DATE OF SENTENCE:	22 May 2020
CASE MAY BE CITED AS:	DPP v Kelly
MEDIUM NEUTRAL CITATION:	[2020] VCC 736

REASONS FOR SENTENCE
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Subject:
Catchwords:
Legislation Cited:

Cases Cited:DPP v Bulfin [1998] 4 VR 114; Dyason v The Queen [2015] VSCA 120; Shiel v The Queen [2017] VSCA 359; DPP v Caulfield [2019] VSCA 131; Liemonitis v The Queen [2018] VSCA 198; DPP v Gregory (2011) 34 VR 1; Rowson v Department of Justice and Corrections Victoria [2020] VSC 236; DPP v Masange [2017] VSCA 204

Sentence:                 TES of 5 years and 6 months; NPP of 3 years and 5 months

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Mr A. Sprague	Office of Public Prosecutions
For the Accused	Mr A. Furstenberg	Furstenberg Law

HIS HONOUR: 

1Shaun Desmond Kelly, you have pleaded guilty to eight charges of obtaining property by deception.  Charge 1 carries a maximum penalty of 10 years' imprisonment.  Charges 2 to 8 are charged as continuing criminal enterprise offences and each carries a maximum of 20 years' imprisonment. 

2You have no prior convictions and no matters outstanding.

3The prosecution tendered the Agreed Summary Of Prosecution Opening as Exhibit A.  A very brief summary of your offending is as follows. 

4You commenced work as a contractor, working as a property manager and office assistant for the Mondous Group in August 2016.

5The Mondous Group is a family-owned business and is part of a conglomerate of entities which specialise in land subdivision, commercial building and farming activities.  The parent company (or similar) of the Mondous Group is the S&N Super Fund Pty Ltd (which I will now refer to as ‘the company’). 

6Your role as property manager included updating rental invoices for tenancies, managing expenses for tenants and invoicing them accordingly. Although you had access to bank accounts and the power to write out cheques, you had no power to sign cheques.  A director of the company would sign the cheques and post them.  Similarly, you were not a signatory to any company bank account. 

7You commenced defrauding the company seven to eight months into your employment from 28 March 2017. 

8Charge 1 is a rolled up charge involving the fraudulent deposit of 11 cheques, each individually under the value of $50,000 into your private company bank account. These 11 cheques were deposited between 28 March 2017 to 11 December 2017 and totalled $154,399.81. 

9The other offences are as follows:

·charge two occurred on 7 June 2017, a deposit of $53,256.56;

·charge three occurred on 17 July 2017, a deposit of $66,428.70;

·charge four occurred on 31 July 2017, a deposit of $160,386.48;

·charge five occurred on 7 September 2017, a deposit of $145,682.10;

·charge six occurred on 8 November 2017, a deposit of $220,534.38;

·charge seven occurred on 12 January 2018, a deposit of $338,948.80; and

·charge eight occurred on 16 March 2018, a deposit of $343,532.05.

10In total you fraudulently deposited $1,498,281.88 from the company into an account controlled by you.

11Your offending was discovered in March 2018.  When confronted you admitted to your offending in respect to four transactions but did not admit to or volunteer as to the full extent of your criminal conduct. 

12You have repaid $345,000.  You repaid $200,000 immediately.  It appears that you had previously placed this amount in an investment fund about a week before your offending was discovered.  I was not told where the remaining money came from. 

13You were arrested and interviewed by police on 19 February 2019 and made admissions to your offending.  You told police that you used the money to pay gambling debts, pay off vehicle leases, credit cards, and money spent on consultants for your farming business.

14On the plea hearing before me your lawyer provided the following breakdown:

·$345,500 was repaid;

·$350,000 was placed into your business venture;

·$300,000 was spent on gambling;

·$150,000 was used to pay outstanding GST; and

·$350,000 was spent on debts and living expenses. 

15There is no evidence that any of the money was spent on identified lavishments or luxury items.

16Psychologist Graeme Lewis concludes from what you told him that your offending occurred on two levels:

·First, money stolen to address the anxiety-making aspects of your life, that is the debt matters that I have just addressed; and

·Second, you then used significant sums for gambling and lifestyle. 

17Whereas you stole in the first place to assuage the anxiety you felt about the financial situation that you endured, you also stole significant sums of money for the pleasure of gambling, to fund your lifestyle and to fund the agribusiness which you had just commenced. 

18At one point in the interview, you seemed to point to resentment and jealously as a partial motive.  You stated that you lost respect for your employers because of the quality of the work you were given and you were jealous of the amount of money that they had.  At some point, you had to take up work as an Uber driver to help make ends meet. 

19By the end of the interview, you took responsibility for your conduct and stated that you had gone about it all the wrong way, concluding that there were no excuses and that you could have walked away from your offending at any time.

20You were not remanded in custody at the time of your arrest and you have served no pre-sentence detention. 

21I turn now to your personal circumstances.  You are 48 years of age and you were born on 19 October 1971.  You are the oldest of four children and you were raised in Queensland.  You described your parents as very conservative Catholics and you lived a humble lifestyle.  Your father was strict with high expectations of your behaviour.  You were closer to your mother and your three younger sisters.  That is not to say, however, that you were poor.

22You left home at age 18 and completed a Bachelor of Agricultural Science with honours at the University of Queensland.  For a number of years, you operated a family farm in the Gold Coast Hinterland which focused on breeding horses.  The business was successful until the outbreak of equine influenza in 2007 and then those financial difficulties were compounded by the GFC in 2008.  You battled on with the farming business until 2015 when it ceased operations. 

23After the GFC in 2008, you lost your family home after your stock market portfolio collapsed during the GFC.  You attributed those losses to your now ex-wife.

24In 2016 you moved to Melbourne and commenced employment with the Mondous Group.  You told psychologist Mathew Barth that you were astounded by their wealth and the level of disorganisation with their administrative practices. 

25At the time you came to Melbourne you commenced an agricultural/property business focusing on strategic property planning and on-site farm agricultural management.  This business has been your main focus since your contract with the Mondous Group was terminated in March 2018 when your offending was discovered.  It appears that you have had some initial success with your new business and you have secured one or more significant investors. 

26You married at age 30 and you have three children ranging in ages from 15 to 18 years.  Your ex-wife and children still live in Queensland.  As I have stated, the marriage deteriorated under the financial pressure from 2007/2008.  Until this pandemic, you travelled to the Gold Coast on a fortnightly basis to see the children. 

27You commenced a relationship with another woman, Lisa, in 2016.  It appears that Lisa was based in Melbourne and this partly prompted your move to Melbourne in that year.  You describe your relationship with her in positive terms to Dr Barth.  Nevertheless you miss the family relationship that you previously had with your three children.

28In his report, Dr Barth states that you had no particular difficulties with either alcohol or drugs.  He reported several periods of emotional stress during your adult years due to environmental/personal stressors such as those I have already described. 

29In particular, you found the last few years of financial problems very distressing.  You consulted a psychologist for about four or five months from the time you commenced work at Mondous Group but then stopped attending.

30You commenced gambling on a regular basis from about 2017.  It escalated in early 2018.  You told Dr Barth that in this period you lost between $200,000 to $300,000 betting on horse racing on the Gold Coast.  You told Dr Barth you stopped gambling when you were arrested in March 2018 and you have no urge to gamble now. 

31On Dr Barth's assessment, you experience ongoing symptoms of moderate emotional distress underpinned by your guilt and shame for your offending and your worry and anxiety about your future.  Nevertheless, the symptoms are not sufficient to meet the criteria for any disorder, nor is there any indication you were affected by a disorder at the time of your offending conduct.

32Dr Barth concludes that your thought process is normal and you suffer from no cognitive impairment.  He estimates you to be of above average intelligence.

33Dr Barth considers you are in the early phase of gaining insight into your offending behaviour.  To your credit, you accepted full responsibility for the conduct and you have expressed a strong willingness to participate in treatment to reduce your risk of recidivism.  Dr Barth considers that you have good prospects for your rehabilitation.  He states that:

·     First, you are an intelligent man;

·     Second, you value prosocial connections;

·     Third, you have had a good employment record;

·     Fourth, you do not abuse drugs or alcohol;

·     Fifth, you have no significant personality pathology or cognitive impairment;

·     Sixth, you have until this offending had a lifelong history of stable behaviour in the community; and, finally

·     Seventh, you have a positive attitude towards psychological intervention.

34Dr Barth considers that your good prospects for rehabilitation are conditional upon you receiving solid psychological intervention. 

35After providing counselling to you over a number of sessions, the report of Graeme Lewis provides further insight into your condition. 

36In the first place, Mr Lewis reported that as at the date of your last counselling session with him, you had not reported the fact of your offending or that you were facing court to your family, children or current partner.  I add to this, on discussing the matter with your lawyer, it is apparent that you have not told the current major investor or investors in your business.  Mr Lewis considers you use denial and avoidance as a coping mechanism whilst maintaining a veneer of calm.  I will return to this in a few minutes.

37Secondly, Mr Lewis considers that at least at the time you had initially first started misappropriating money, you may have been suffering from an adjustment disorder with mixed anxiety and depressed mood.  However,
Mr Lewis considers that once those financial stressors were removed, there is no justification to continue to conclude that you suffered from such a disorder.

38In his assessment, Mr Lewis agrees with Dr Barth that you suffer from no other disorder or cognitive impairment.  He also agrees with Dr Barth that you will require ongoing psychological treatment.

39Neither psychologist addresses your gambling as being either uncontrolled or posing a problem into the future.  Dr Barth makes a precautionary recommendation at paragraph 47 of his report that it may be advisable to include some address of gambling in your psychological intervention in the future.  It appears, however, that you have no previous history of gambling and I can only conclude that you gambled away the money for the pleasure and for the thrill of it.

40I turn now to the objective gravity and the moral culpability for your offending:

·     First, your offending occurred over a 12-month period;

·     Second, the offending on Charges 2 to 8 is all the more serious for the fact that you come to be sentenced as a continuing criminal enterprise offender.  In order to do so the value of property you misappropriated must exceed $50,000.  The fact that you did so on seven occasions and for the fact that the last three transactions alone netted you over $900,000 in a four-month period up to the date of discovery for your offending, speaks of the objective seriousness of your conduct;

·     Charge 1 is a rolled up charge comprising 11 transactions.  A rolled up charge is constituted by identifiable single instances of offending.  When sentencing on a rolled up charge, the court must consider all of the circumstances of the offence and the offender, including if the offending was carried out over an extended period.  And I must consider the totality of the harm described in the charge.  While the court may consider all of the relevant circumstances of a rolled charge, the plea of guilty must still be treated as entered to a single formal charge.  The maximum penalty is therefore limited to the maximum for a single charge;

·     overall your offending involved 18 separate transactions;

·     you committed the offences from a position of trust, with access to bank accounts and cheque books;

·     I note that there is no victim impact statement.  Unlike many instances that come before this court, you did not prey on small investors.  That does not mean that your offending is less serious, it simply means that the often present aggravating feature of small investors is not present in this case;

·     there is no application for compensation.  I was told that compensation had been made by the bank.  I assume because your offending involved fraudery on cheques, the issuing bank indemnified the victim.  This, however, does not lessen your moral culpability;

·     Your offending involved planning including the use of cover up emails to disguise your conduct;

·     Your offending involved a degree of calculation with at least $200,000 being placed into a solicitor's investment account. Although it was not made clear where it came from, there was another $145,000 which you had available to you for the purpose of repayment.  This factor is not to be underestimated.  You had provided yourself with cash reserves of $345,500 from the money you misappropriated;

·     You had also spent, I was told, $350,000 on debt and lifestyle.  It may be true that it was not spent on a lavish lifestyle or luxury items but it is difficult in the absence of any further material to conclude that you could spend $350,000 in a single year on debt and lifestyle and be labelled anything but criminally greedy;

·     You made admissions to the offending, though these were certainly not full at the time of discovery; but thereafter full admissions were made; and 

·     As I have referred to earlier, psychologist Graeme Lewis distinguishes between aspects of your offending which were driven by anxiety, that is the repaying of debts and financial hardship, and the money you stole after that.  Even on the most benevolent view of the motives for your conduct, your moral culpability is extremely high. 

41Your criminal conduct must be met by the principles of deterrence, denunciation and just punishment. 

42I turn now to consider the submissions made on your behalf.  Principally, Mr Furstenberg referred to the potential consequences of the coronavirus pandemic on the prison population.  Specifically, he referred to Rowson v The Department of Justice and Corrections Victoria, especially at paragraphs 10, 11, 97 and 100. Relying on that case, Mr Furstenberg submitted that there was a 'not insignificant risk' that the virus may gain entry to the prison and, if it does, it will spread more rapidly than in the wider community because of the congregational nature of a prison.  Mr Furstenberg referred to the fact that you have asthma and submitted that mercy should be extended to you because you were unable to manage your own health risk in prison due to its congregational nature and due to the response of Corrections Victoria (which is found in the paragraphs of Justice Ginnane's judgment to which I have just referred).

43Mr Furstenberg then referred to the Court of Appeal decision in Masange in relation to the principles for the exercise of the discretion of mercy. 

44Ultimately, Mr Furstenberg submitted that the current pandemic, the fact that you suffer from asthma and the conditions in Victorian prisons referred to in Rowson militate towards the exercise of the discretion of mercy such as to allow “a downward departure from the principal of proportionality outside the principles of mitigation”.  The result of this, Mr Furstenberg submitted, was that a prison sentence should not be imposed in this case.

45As I stated to Mr Furstenberg in unequivocal terms at the time he made that submission: I do not agree.  In fact, I find it laughable.  Mr Furstenberg agreed that there was nothing extraordinary in your personal circumstances; no extraordinary or exceptional history of hardship or the like which attracted the exercise of the discretion in this way, rather it arose only from the fact of the COVID pandemic and your purported increased susceptibility to suffering a more severe infection if you became infected.

46I was told that you suffer from asthma and that you have a Ventolin pump and another form of medication.  I was not provided with any information whatsoever about your asthma history or your current state of health. 

47I am prepared to find that you suffer from asthma and as such you have an increased vulnerability to the severity of the infection if you are infected.  Further, your initial reception into prison would be made more difficult for the fact that you must go into 14 days' isolation because of the COVID-19 lockdown. Thereafter you will not be able to receive visits.  Your movements will be restricted.  You will not be able to undertake work and your opportunity to commence educational programs in offender-specific treatment will be severely limited.  I accept that the pandemic will make your initial time in custody, assuming the restrictions last a little longer, more difficult in what will already be a confronting time for you in your first time in gaol.  I accept these matters should play some limited part in mitigating the sentence I impose upon you.

48Mr Furstenberg then referred to the case of Dyason where the offender in that case stole some $1.4 million over a three-year period in her position of trust with Anglicare.  Her appeal against the severity of the sentence was refused and a sentence of five years with three to serve remained unchanged. Mr Furstenberg submitted that the sentence to be imposed upon you should be less than that in Dyason by reference to:

·First, the level of trust reposed in you and that which you breached was lower than that in Dyason;

·Second, the duration of your offending (one year as opposed to three years) was less;

·Third, your offending was not carefully calculated;

·Fourth, the number of your transactions was less; and

·Fifth, your attempts to disguise your conduct were rudimentary compared to those in Dyason.

49The court in Dyason referred back to the 1998 decision of Bulfin and then to the more recent case of Gregory.  The court in Dyason left open the potential for a sentencing court to impose a CCO or combination sentence of imprisonment with a CCO for white collar offending, in the appropriate case. 

50In this case, however, and after considering the principles enunciated in Bulfin and then in Gregory and in Dyason, I consider that this offending is so serious that nothing short of an immediate term of imprisonment with a non-parole period is appropriate to satisfy the requirements of just punishment.

51Mr Furstenberg also submitted that I should consider adjourning this matter for six months to enable you to attempt further restitution.  I was earlier told that you had “invested” $350,000 in your business venture and that you had a significant investor.  Now, surprisingly, I was not provided with a single word of detail let alone any evidence as to the nature of this business, how it operated, whether you employed staff, the identity or the nature of the investor in your business, the size or the nature of the entity’s investment, how a return was expected, when a return was expected, the size of the return, or the tax implications on the return.

52Mr Furstenberg correctly submitted that there is no principle that restitution enables an offender to buy their way out of prison.  Rather, where restitution is made, it may be used as an indicator of remorse, the desire to make true amends and to restore the victim back, at least to some extent, to its pre-offence status. 

53It is somewhat difficult for me to come to this conclusion in this case in relation to your hope to make further restitution in this case.  I have been provided with nothing but the words uttered by your lawyer.  In this case it is not enough for me to conclude that you have any realistic hope or desire to make restitution.

54Mr Sprague on behalf of the prosecution submitted that, taking into account the factors I have outlined earlier, the offending was objectively serious and must attract a term of imprisonment with a non-parole period.  He emphasised the fact that as a continuing criminal enterprise offender, the maximum penalties for charges 2 to 8 doubled.  Mr Sprague submitted that whilst there must be some taking into account of the principle of totality, orders for partial cumulation should be made between offences.

55The Crown conceded your plea of guilty was made at the earliest reasonable opportunity and that your good character is a mitigating factor, although I note that cases such as Bulfin give only a little weight to this.  Mr Sprague provided a number of comparable cases.  In addition to Dyason, the Crown referred to Sheil, Caulfield and Liemonitis.  I have also considered a number of sentences imposed by judges of this court, the case summaries provided by the Judicial College of Victoria, and the principles contained in the Judicial College of Victoria Sentencing Manual. In the end, however, I must consider the individual circumstances of this case and reach the sentence appropriate in all of the circumstances. 

56In the end, I consider that you have some prospects for your rehabilitation.  But it must be apparent from all that I have said that I consider there are some real concerns that must be addressed.  And when it comes to the issue of your avoidance and your denial of reality, I must address the elephant in the room.  You were due to be sentenced on Wednesday, 20 May 2020.  With no opposition from the Crown, I extended your bail from the sentence hearing, on 12 May, to a date to be fixed for sentence.

57I told you in the presence of your lawyer that sentence would be sooner rather than later; a matter of days, or a week or weeks, not months away.  You chose in that time to drive to Queensland.  You told your lawyer on Monday, 18 May that you were in far north Queensland.  By Tuesday night you were at the Queensland/New South Wales border and you were tired, so he advised you not to drive any further that night.  The following morning, you attended on an orthodontic appointment on the Gold Coast in Queensland.  An email produced to the Court and dated 13 May states the appointment date of 20 May was held for you.

58I was told that you went to Queensland by car so you could see your children and make some arrangements for your business affairs.  To that I can safely add that you also intended to receive orthodontic treatment.  Many issues come to mind, Mr Kelly.  The issue that you decided to drive to a state whose borders were closed during a pandemic. The issue that as at the evening before the sentence you were still some 1800 kilometres from Victoria, with only a car available to enable you to return.  The issue arises, when did you leave Victori]?  None of these issues and the answers to them are essential to this process.  What is important is that I can only draw the conclusion that either the gravity of your situation has still not sunk in or you still prefer to satisfy your own selfish priorities over the law.

59Now, I recognise that your bail conditions did not prohibit you from travelling interstate.  But your bail said you had to be available to attend court.  Now, given that your lawyer handed up a report from Dr Barth that said that you were in the early phase of gaining insight, that there were grounds for optimism for your rehabilitative prospects, that you were intelligent, you have prosocial values and that there are positive indicators, I can only conclude that you gave your return to Victoria for your sentence a low or no priority.

60The only positive out of this is that you did return to Victoria voluntarily and presented at court this morning by an arrangement made by your lawyer and the police.  You did so, however, entirely on your own terms, and rather than present at a local station and risk spending the weekend or longer in a local lockup, it was arranged without any intervention of the court that you would turn up to the County Court and hand yourself in with the expectation of your lawyer that I would proceed to sentence.  More fortunately for you I was prepared to do that rather than have you kicked around watch house cells for a week or two weeks.

61But it smacks of a breathtaking arrogance on your part or alternatively a massive denial of the reality of this situation.  And either way, it smacks of a contempt for the criminal justice process.  Mr Kelly, I conclude you are a long, long way from rehabilitation for your offending. 

62The overall sentence that I have reached will enable you the opportunity for a period of parole.  Given the concerns that I have expressed, I conclude that you will need to do a huge amount of work whilst in prison to ensure that you have a prosocial network into which you can be received upon release.  If you are able to secure your release on parole, the structure and support it provides will give you a framework for your reintegration back into the community. 

63Now, just bear with me a moment.  I will proceed to sentence as follows:

·On Charge 1, which is the rolled up charge in the sum of over $154,000, you are convicted and sentenced to 24 months' imprisonment;

·On Charges 2 right through to 8, you are sentenced as a continuing criminal enterprise offender and sentenced as follows:

·On Charge 2, a sum of over $53,000, you are convicted and sentenced to 20 months' imprisonment;

·On Charge 3, a sum of over $66,000, you are convicted and sentenced to 24 months' imprisonment;

·On Charge 4, a sum of over $160,000, you are convicted and sentenced to 31 months' imprisonment;

·On Charge 5 a sum of over $145,600, you are convicted and sentenced to 30 months' imprisonment;

·On Charge 6, a charge involving over $220,500, you are convicted and sentenced to 36 months' imprisonment;

·On Charge 7, a charge involving over $338,900, you are convicted and sentenced to 40 months' imprisonment; and

·On Charge 8, the charge involving over $343,500, you are convicted and sentenced to 41 months' imprisonment. 

64Now, I declare Charge 8 to be the base sentence and I cumulate the following amounts on that charge and on each other as follows:

·     On Charge 1, I cumulate one month;

·     On Charge 2, two months;

·     On Charge 3, two months;

·     On Charge 4, four months;

·     On Charge 5, three months

·     On Charge 6, six months; and

·     On Charge 7, seven months. 

65The total effective sentence is therefore one of 5 years and 6 months.  I fix a non-parole period of 3 years and 5 months before you are eligible for parole.

66The 6AAA declaration is but for the plea of guilty, I would have fixed a sentence of s7 years with 5 years to serve. 

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