Director of Public Prosecutions v Khouri
[2015] VCC 1956
•15 December 2015
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for Publication |
CR-14-01174
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| RAYMOND KHOURI |
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| JUDGE: | HIS HONOUR JUDGE MISSO |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 9 December 2015 |
| DATE OF SENTENCE: | 15 December 2015 |
| CASE MAY BE CITED AS: | DPP v Khouri |
| MEDIUM NEUTRAL CITATION: | [2015] VCC 1956 |
REASONS FOR SENTENCE
---Subject: CRIMINAL LAW
Catchwords: Sentence – plea of guilty - obtaining financial advantage by deception – falsification of loan documents to support loan applications – unsuitable candidate for Community Correction Order – creditworthiness.
Legislation Cited: Crimes Act 1958 (Vic); Sentencing Act 1991 (Vic)
Cases Cited:R v Verdins [2007] VSCA 102; DPP v O'Neill [2015] VSCA 325; Tran v R [2014] VSCA 85
Sentence:Convicted and sentenced to 6 months imprisonment, wholly suspended for 2 years. S6AAA declaration: 12 months imprisonment with 9 months suspended for 2 years.
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APPEARANCES: | Counsel | Solicitors |
| For the Director of Public Prosecutions | Ms R. Champion | Solicitor for the Office of Public Prosecutions |
| For the Accused | Mr C. Farrington | Stary Norton Halphen |
HIS HONOUR:
1Raymond Khouri, you had pleaded to a single charge of obtaining financial advantage by deception, contrary to s.81(1) of the Crimes Act 1958, which carries a maximum penalty of ten years' imprisonment.
2You agree that the prosecution opening on the plea represents an accurate account of your offending. I do not propose, therefore, to set out much of what is in the prosecution opening, save for the following, and only for the purpose of allowing my sentencing remarks to be properly understood.
3You commenced employment with the National Australia Bank on 1 June 2010. You were employed as a mobile banker. Your principal task was to visit individuals who had made loan applications to the bank. You were then to process the individual applications. There were three applications for loans referred to in the prosecution opening that constitute the offending relevant to the single charge of obtaining financial advantage by deception.
4The first applicant intended to make an application for a home loan on 8 July 2010. The amount to be applied for was $283,400. The loan application was submitted by the first applicant, but he did not sign the application. He does not know who did. You falsely endorsed on the loan application that the first applicant was employed by a particular company at a particular address, and that the first applicant commenced employment with that company in 2006. You falsely endorsed on the loan application that the first applicant had a cousin living at a particular address. You falsely created payslips purporting to be those of the first applicant, which identified an employer and a place of employment.
5The second applicant made an application for a home loan on 22 September 2010. The amount applied for was $288,000. You falsely endorsed on the loan application that the second applicant was employed by a particular company at a particular address, and the second applicant commenced employment with that company in 2006. You falsely created a letter purporting to be from the second applicant's employer, signed by a fictitious person, and that the second applicant worked for a particular company at a particular address. You falsely created payslips purporting to be those of the second applicant which identified an employer of the second applicant. You falsely created a statutory declaration in the name of someone, likely to be a fictitious person, witnessed by someone you know, in support of the loan application.
6The third and fourth applications are husband and wife. They made an application for a home loan on 17 November 2010. The amount applied for was $300,000. You falsely created a letter from the husband's employer on a letterhead not used by the employer and signed by a fictitious person. It falsely represented the husband's salary and a mobile phone said to be that of the author of the letter, when in fact it was your brother' mobile phone number. You falsely created a second letter from the husband's employer on a letterhead not used by the employer and signed by a fictitious person. However, the content of the letter is true.
7Part of the methodology you used was to rely upon the business structure of a businessman for whom you had facilitated four loans from the bank. The businessman conducted his businesses through four companies. He conducted a service station business at a particular address. One of the female employees of the businessman was someone you knew. You had in fact entered into a relationship with her, which persisted between 2004 and 2011.
8It was your familiarity with the businessman, the companies through which he ran his businesses, the place where he ran his principal business, and his female employee, which gave you the base upon which you falsified documents in relation to the loan applications and accompanying documents of each of the applicants. It was perhaps your attempt to introduce some identifiable truth into the structure of your fraud, to represent to the bank that the content of the loan applications and the accompanying documents were likely to be true, and therefore a reliable basis for the bank to assess whether the loan application should be approved.
9Each of the loan applications were approved. The first applicant was granted a loan application of $283,400; the second applicant was granted a loan of $288,000; the third and fourth applicants were granted a home loan of $300,000.
10Despite the fraud being uncovered, the bank honoured the loans to each of the applicants. The prosecutor informed me that there is no evidence which suggests that the applicants would have been unsuccessful in their loan applications if they were based upon representations which were true. Furthermore, the prosecutor informed me that the bank does not allege any financial loss incurred by it in honouring the approval of the loan applications.
11The following is the plea made on your behalf by your counsel on 9 December 2015. I have set it out separately, in order to demonstrate the contrast between the plea made on that date, and the reason why I listed this matter for further plea and sentence today.
12You were born on 2 August 1984. You are now 31 years of age. You are the youngest of three children. Your father passed away in 2006. You subsequently resided with your mother in order to look after her, at a time when she was no doubt grieving, and was in need of emotional and financial support.
13You were educated in a Catholic regional college to year eleven. You left school at the end of that year because your academic results were such that you were advised not to proceed any further with your secondary education. You subsequently attended the Sunshine TAFE, where you completed a Certificate IV in Information Technology.
14You were subsequently employed by the Commonwealth Bank in its call centre, and later in positions with greater responsibility, involving personal lending and mobile banking. You were then employed by Prime Choice Home Loans briefly, before taking up employment with the bank. You were employed with the bank until January 2011 when your employment was terminated. Your employment with the bank was terminated because of your criminal conduct.
15You subsequently obtained employment with Foxtel for about 14 months, and then as a furniture removalist briefly, but you have otherwise struggled to obtain and maintain employment since you were arrested for this offence on 6 July 2011. You were aged between 25 and 26 years of age during the period that you committed these offences.
16Your counsel submitted that the work you were doing as a mobile banker was stressful. You were required to meet sales targets, and by implication I took that to mean that you felt the need to create turnover of work. It was conceded that one of the advantages of turnover for you was that you would earn bonuses. The total bonuses which were available to you during the period of your employment amounted to $10,903. In relation to the three loans which are the subject of the charge, your counsel submitted that you stood to receive a bonus of $1,045 only.
17Your counsel submitted that I should release you on a Community Correction Order with a number of conditions, which I will return to later. The prosecutor submitted that I should sentence you to an immediate term of imprisonment.
18Your counsel submitted that there are a number of factors which should moderate the sentence I must impose on you. Firstly, you have no prior criminal history, although you have been subsequently charged with a number of offences. I will return to those later.
19Secondly, there has been a significant delay between the time of your offending, which is between 8 July of 2010 and 4 January 2011, and your final arraignment and plea before me on 9 September 2015.
20Thirdly, you have expressed remorse in at least two ways. Firstly, your plea of guilty, and secondly by expressing remorse when you were interviewed by Dr Cunningham, psychologist. I will return to what you said to Dr Cunningham later.
21Fourthly, you entered a plea of guilty, saving the state the cost of a trial and the witnesses the trauma of undergoing the process of a trial. However, your formal plea of guilty was entered relatively late in the piece. You were formally charged on 1 May 2013. Further charges were filed against you on 24 April 2014. There was a contested committal hearing on 30 June 2014, when a number of witnesses were cross-examined. On 4 September 2015, you agreed to plead guilty to this charge. On 6 September 2015, you were arraigned in short form and you entered a plea of guilty to this charge.
22Fifthly, you are entitled to a moderation of the sentence in accordance with the fifth and sixth ways in which the Court of Appeal considered that impaired mental functioning is relevant to the process of sentencing in R v Verdins [2007] VSCA 102.
23Dr Cunningham assessed you on 18 November 2015. I do not propose to set out the lengthy history recorded by Dr Cunningham. His assessment involved the use of assessment tools in addition to his interview with you. He concluded that you are suffering from a major depressive disorder, to which you were predisposed because of the environment in your home. The disorder was triggered by the death of your father. He considered that imprisonment would weigh more heavily on you than it would on a person who was not labouring under that disorder. He also considered that you require treatment. I note that there is no evidence to suggest that you have undergone any treatment.
24In evaluating the submission made by your counsel that the sentence should be moderated in this way, I considered what the Court of Appeal has recently observed in DPP v O'Neill [2015] VSCA 325. I note in particular that the Court of Appeal referred to the need for rigorous evaluation of evidence of the presence of impaired mental functioning, and the careful attention which a judge must give in determining whether you have established the necessary basis for the application of the relevant Verdins principles.
25Furthermore, I note that the Court of Appeal has also emphasised the important role which the Crown has to play in assisting the judge regarding the adequacy or inadequacies of the opinion of someone like Dr Cunningham. The prosecutor very properly and very fairly did not contest the opinion of Dr Cunningham, but submitted that it was based upon self-reporting by you, and that I should exercise caution in being too readily persuaded to apply the relevant Verdins principles.
26Sixthly, I should not sentence you to an immediate term of imprisonment unless I am satisfied pursuant to s5(4)(c) of the Sentencing Act 1991 that the purpose or purposes for which a sentence of imprisonment is imposed cannot be achieved by a Community Correction Order.
27Your counsel referred me to Tran v R [2014] VSCA 85, which he submitted is comparable to your circumstances, in which the accused was resentenced to a Community Correction Order by the Court of Appeal. The offending of the accused in that case was between May 2011 and August 2012. He was involved in 16 loan applications, which he knew that mortgage brokers had overstated the income of the applicants for loans. There had been no default under any of the loans, and no moneys had been lost by the lenders. The benefits derived by the accused were not significant.
28The prosecutor referred me to the sentencing remarks of two very experienced judges of this court. I have carefully read each of the judge's sentencing remarks. They are not comparable to the circumstances of your offending, whereas the facts of Tran appear to me to be comparable, relatively speaking, and of significant assistance.
29I do note that one distinguishing factor between Tran and your circumstances is that Tran did not have any subsequent criminal history, and gave a large degree of unconditional assistance to the relevant authorities in an investigation into the scheme of criminality, of which he was a part player.
30Seventhly, your counsel submitted that you have good prospects of success. I thought so too, until near the end of your counsel's plea, when I was informed that you were arrested on 2 July 2013 and charged with one count of trafficking cannabis. You appeared before the Magistrates' Court on 25 October 2013. You were released on a Community Correction Order for a period of 18 months, with the requirement that you undertake 200 hours of community service.
31Your counsel informed me that you had breached the community service condition by unacceptable absences, which occurred when you took up employment with Foxtel. I was also informed by your counsel that the authorities are awaiting the outcome of this plea hearing to determine how you are to be dealt with for the breach.
32I expressed a view at that time that your subsequent offending impinged upon the likelihood that you have good prospects of rehabilitation. However, drug use does not appear to have been a part of your life before this offending. According to the history recorded by Dr Cunningham, it was something that came into your life subsequently, and possibly because of the emergence of the symptoms of your major depressive illness, the loss of employment, and the fact that you are facing this charged, and the possibility of being imprisoned.
33Lastly, I read the references of Dr Luca, general practitioner, dated 8 March 2015; Ms Rebecca Dawson, special education teacher, dated 20 November 2015; and Mr Stewart Perrera, financial advisor, dated 2 December 2015. Each of those persons are prepared to speak for you. They speak of you with respect and consider you to be a decent man. They have also referred to your expressions of remorse. They are impressive references, but they make no reference to your subsequent offending.
34I ordered that you undergo a Community Correction Order assessment. It was conducted at 9 am on 11 December 2015. There were some very troubling revelations in the report of the assessor, which are, and I quote in full:
"Mr Khouri has a pending contravention of a Community Correction Order. This CCO was imposed in the magistrates' jurisdiction in October 2013, to run until March 2015. According to the Community Correctional Services records, this contravention has resulted from 53 absences from all conditions over the 18 months, as well as two instances of further offending which were found proven during the CCO.
"This contravention indicates that Mr Khouri was given an extremely high number of chances to improve his compliance over the period of the CCO, before contravention proceedings had to be initiated. This contravention was first listed in July 2015, and is listed in the magistrates' jurisdiction on 8 January 2016."
35Understandably, the assessor did not consider that you are a suitable candidate for a Community Correction Order, and nor do I. What you failed to do cannot be described as a contravention of the Community Correction Order, but rather an utter abandonment of it. It seems to me to demonstrate a could not care less attitude on your behalf, and the treatment of the Community Correction Order as if it was a get out of gaol free card.
36I want to make it clear that I am sentencing you for the offence on indictment, not for your contravention of the Community Correction Order, nor for what I have been informed this morning are a further drug offence, which you committed on 24 April 2014, being possession of methylamphetamine; and criminal damage arising out of the circumstances of domestic violence on 24 July 2014.
37I do not consider that your prospects of rehabilitation are good. I think they are poor. The contraventions of the Community Correction Order and the subsequent offending demonstrate that with abundant clarity. Furthermore, you failed to instruct your counsel to inform me of the contraventions and the other offending referred to in the assessment. That hardly lends itself to your credit-worthiness. Reluctantly, I am now not sure whether there is much in your plea that I should accept without corroborative evidence.
38The relevant sentencing principles which apply to you are general deterrence, specific deterrence, denunciation and just punishment. Your offending was relatively easy for you to undertake. You had the trust of the bank, and that must be evident by the fact that it considered you to be an appropriate person to occupy the important position of a mobile banker. The bank relied on you to be honest in your dealings with it and customers of the bank, so that the bank could make a reasonable assessment of the risk in granting a loan to an individual applicant for a loan.
39I have little doubt that fraud of this level is likely to be difficult to detect if someone like yourself is particularly careful in the planning of the fraud and its execution. My assessment of what you did was that it was hopelessly unprofessional. A surface level of enquiry by someone auditing your work would have uncovered the serious irregularities in the material required to support the applications for the loans.
40However, what you did was undoubtedly premeditated, with an expectation on your part that you would succeed undetected. It was your desire to reach two conclusions. You wanted to meet your sales targets, which would no doubt enhance your position with the bank, and you wanted to net bonuses. I agree with the submission made by the prosecutor that you were driven by a sense of greed.
41All of this must mean that the sentencing principle of general deterrence figures very prominently. People like yourself must be punished so that others who can manipulate and misrepresent with ease have the message sent to them in no uncertain terms that they will be dealt with sternly.
42The principle of specific deterrence is less relevant, but nonetheless you must be specifically deterred from engaging in this conduct, particularly because you did so over a six month period of time, which suggests that you are a person who is prepared to continue to be dishonest in your dealings with an employer until your fraud is detected.
43Your conduct must be denounced in the sternest terms. Fraud of this kind, which is difficult to detect, comes at a significant cost to financial institutions, and to the community, which has to bear the brunt of making good any losses which occur as a result of your conduct. Engaging in business transactions with banks can only be made harder for honest people because of your dishonesty.
44I am not satisfied that the Verdins principles apply to you. Firstly, because it is all based on self-reporting, and as I noted earlier, you have a major depressive order apparently, for which you have never had any treatment, which I find strange. It strongly suggests that you have no such disorder, or not one of such major proportions. Again I repeat, the extent to which I was misled on the plea has reluctantly led me to be less accepting of the material put to me on the plea.
45The sentencing alternatives, which I now have available to me, are to convict and fine you, or alternatively, to sentence you to a term of imprisonment and to suspend it partially or wholly. The conclusions I have reached in the end are that I should not impose an immediate sentence of imprisonment on you, although I gave serious consideration to whether that was a just sentence. I have erred on the side of sentencing you to a term of imprisonment, which will be wholly suspended for a significant period of time.
46I accept that you had an unblemished record before this offending occurred and before your subsequent offending occurred. You appear to me to have been a decent young man who pursued educational opportunities and vocational opportunities without incident. I accept that there has been significant delay between the time you were charged and the time you appeared before me for plea and sentence. It must be remembered that you were in your mid-20s when the offences occurred, and that you are now in your early 30s. The delay has not been well explained. It is not of itself a factor which moderates your sentence in a significant way, but it is another factor which I have taken into account.
47I am not sure that you are remorseful. You made expressions of remorse to Dr Luca, Ms Dawson and Mr Perrera. There was also an element of remorse in your plea of guilty, although it was not an early plea of guilty. It occurred after you had negotiated a plea at a time when you were facing a number of charges, not just this charge. My reasons for being reluctant to accept that you are remorseful is because of your subsequent offending, the contravention of the Community Correction Order, and the fact that I was misled by you regarding the extent of the contravention of the Community Correction Order.
48I am less inclined to accept that your early plea of guilty saved the state the cost of a trial and the witnesses the trauma of undergoing the process of a trial. The trial history, which I set out earlier, points to you having entered a plea of not guilty, and having contested the allegations made against you at committal, and up to 4 September 2015, which is not that long ago.
49I have paid due regard to what was said in O'Neill. I am not satisfied that you do suffer from a major depressive order, and that you are entitled to rely upon the relevant Verdins principles for reasons which I have set out earlier. Despite the distinctions, which are clearly evident in the circumstances in Tran when compared to your circumstances, I do consider it to be of significant assistance to me in undertaking the intuitive synthesis in arriving at a just sentence.
50After giving due consideration to all of these matters which I have set out above, I propose to sentence you to six months' imprisonment, which will be wholly suspended for two years, which I consider proportionate to the gravity of this offence in the light of its objective circumstances. Now you stand, please.
51On the charge of obtaining financial advantage by deception, you are sentenced to six months' imprisonment, wholly suspended for two years.
52If it had not been for your plea of guilty and other matters, I would have sentenced you to 12 months' imprisonment, with nine months suspended for two years. You can now sit down.
53Now Ms Champion, you have other matters you want me to deal with, do you?
54MS CHAMPION: A forensic sample order, Your Honour.
55HIS HONOUR: Do I have that?
56MS CHAMPION: Yes, Your Honour.
57HIS HONOUR: And what do you say, Mr Farrington?
58MR FARRINGTON: I have no objection to that, Your Honour.
59HIS HONOUR: Mr Khouri, an application is made by the prosecutor for the taking of a forensic sample. I am obliged to give you a warning about that, and I propose to do that now, and I want you to listen to this very carefully.
60Application has been made by the prosecution of a forensic sample by taking a scraping from your mouth or a blood sample. Having regard to the seriousness of the circumstance of the offending, I find that the granting of such an order is in the public interest, and I note that you have consented through your counsel to that order in any event. I will make the order, and I have now signed it.
61I am required to warn you that, if at the time you are requested to supply a sample of your DNA by scraping from the inside of your mouth under supervision by an authorised member of the police force, then the sample will be taken in that way. But if, when requested by the officer to provide the sample in that way, you either fail or refuse to provide the sample, the officer is authorised to obtain a blood sample, and to use reasonable force to obtain that blood sample.
62I am just going to leave the Bench for a moment, and I will have that order prepared for me and I will sign it shortly.
63MS CHAMPION: Your Honour, just one matter. I was just checking the Act, but I believe Your Honour has to explain the suspended sentence and the consequences of a breach to Mr Khouri.
64HIS HONOUR: Do I? Yes.
65MS CHAMPION: Did Your Honour want me to check if that's required by the Act?
66HIS HONOUR: If you can take me to it. If I have neglected to that, I will do it now before I leave.
67MS CHAMPION: It will be the Act that applied at the time of the offending, which I have a copy of with me here, and I'll just look up the requirements.
68HIS HONOUR: My associate has found it, Ms Champion. Yes, I have got it, thank you. Mr Khouri, I neglected to do this, and I am obliged to the prosecutor for reminding me. Let me take you back to where this ended. You have been sentenced now to six months' imprisonment, which has been wholly suspended for two years. I am going to give you this warning, and I want you to listen to this carefully as well.
69I am obliged to tell you that, should you breach the law by committing an offence during the next two years punishable by a term of imprisonment, even though the court may not imprison you for that offence, you will be brought back before me, and on the face of it would be in breach of the suspended sentence which I have imposed today.
70That would mean this. If you breach your suspended sentence during the next two years, you will be brought back before this court with the overwhelming probability that you will go to gaol to serve your six month sentence of imprisonment. Do you understand that? All right, I will just leave the Bench, thank you.
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