Director of Public Prosecutions v King

[2016] VCC 379

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

AT MELBOURNE
CRIMINAL JURISDICTION

CR 15-01249

DIRECTOR OF PUBLIC PROSECUTIONS

v

KERRIE MARIE KING

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JUDGE:	HER HONOUR JUDGE QUIN
WHERE HELD:	Melbourne
DATE OF HEARING:
DATE OF SENTENCE:	5 April 2016
CASE MAY BE CITED AS:	DPP v King
MEDIUM NEUTRAL CITATION:	[2016] VCC 379

REASONS FOR SENTENCE
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Subject:
Catchwords:
Legislation Cited:
Cases Cited:
Sentence:

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Mr D. Porceddu
For the Offender	Mr A. Pyne

Pages 1 - 14

 

 

HER HONOUR:

1Kerrie Marie King, you have pleaded guilty to five charges of obtaining property by deception, Charges 1 to 5 and two charges of obtaining a financial advantage by deception.  You can sit down and stand up at the end of the sentence, please, Ms King.

2Two charges of obtaining a financial advantage by deception, Charges 6 and 7.  These charges carry a maximum penalty of ten years.  However, as a consequence of Charges 4, 6 and 7 involving amounts greater than $50,000, you are to be sentenced as a continuing criminal enterprise offender and liable to a maximum penalty of 20 years on each of those charges.

3Additionally your status as a continuing criminal enterprise offender will be noted on the record.  I will refer to all of these charges as the fraud offences.  You have also consented to me dealing with a number of summary matters that are not related to this offending.  Between 3 January 2014 and 17 September 2015, there are a total of six charges of driving whilst suspended and one charge of failing to state your name and address.  These offences were committed after the fraud offences.

4Additionally you have consented to me dealing with a breach of a community corrections order and the offences for which that was imposed.  I will refer to all of these matters as the driving offences.

5The circumstances of your offending or the fraud offences are set out in Exhibit A, a summary of prosecution opening.  Briefly your offending was as follows.  You were introduced to Mr and Mrs Vagitis in March 2006 and were recommended to them as a financial adviser.  You visited their home and were told various financial details.  On your advice they purchased about $20,000 in shares but also purchased a townhouse in Point Cook.

6In April 2008, you advised Mr and Mrs Vagitis to set up their own self managed super fund.  They accepted that advice and you assisted in setting up the Vagitis Family Super Fund, that is the super fund and a bank account in that name.

7In November 2008, AXA received an application to transfer $13,477.14 from a fund in the name of Mr Vagitis to the super fund.  You prepared all the documentation, including forging Mr Vagitis' signature on the application.  These funds were deposited into the super fund, then unbeknown to Mr and Mrs Vagitis, you transferred those funds into an account in the name of Equus Capital, a company which was registered to you and of which you were a director.  You withdrew $14,000 from that account in December 2008, Charge 1.

8In December 2008, Australian Super received an application to transfer $29,875.19 from a fund in the name of Mr Vagitis to the super fund.  You again prepared all the documentation, including forging Mr Vagitis' signature on the application.  These funds were deposited into the superfund, then unbeknown to Mr and Mrs Vagitis, you transferred $29,500 into an account in the name of Equus Capital, that is Charge 2.

9In January 2009, AXA received an application to transfer $7810.70 from a fund in the name of Mrs Vagitis to the super fund.  You prepared all the documentation, including forging Mr Vagitis' signature on the application.  These funds were deposited into the super fund, then unbeknown to Mr and Mrs Vagitis, you withdrew on three separate occasions funds totalling $7870, that is Charge 3.

10On 27 February 2009, Mr and Mrs Vagitis sold their home for $575,000.  You were authorised by them to arrange for the conveyancing.  You contacted the solicitor for the purchaser and had them organise the following cheques on settlement: 

i)     $220,148.94 to Equus Capital, Charge 4; 

ii)    $20,000 to Adonis Super, Charge 5; 

iii)   $1771.90 to Equus Capital, again part of Charge 5; and,

iv)    $275,000 to Mr and Mrs Vagitis' ANZ account.

11As previously indicated, Equus Capital was a company connected to you.  Adonis Super was also a company related to you.  Neither of these companies were entitled to any of the funds, nor were they authorised by Mr and Mrs Vagitis to receive any funds.

12In 2010, Mr and Mrs Vagitis purchased a property in Doreen and proposed to build a house on it.  You advised them to use the funds from the ANZ account to pay for the land and then to refinance all their debt with another bank.  In September 2010, you arranged for and lodged an application for finance on behalf of Mr and Mrs Vagitis with NAB.

13You forged their signatures on the loan application and also provided false documentation in support of the loan that indicated that Mrs Vagitis was employed by, and earning income from, Equus Capital.  The loan for $731,000 was approved without their knowledge and you  then drew down that amount, Charge 6.

14It was not until Mr and Mrs Vagitis discovered that their mortgage repayments were significantly more than they expected that they confronted you.  At that time you admitted that you had taken their money but said that you had always intended to pay them back.  Despite these promises, no repayments were made by you.

15On 7 March 2011, NAB received an application in your name for a loan of $1.1 million.  This was for the purchase of the property in Lyonville.  As part of the application you provided documents indicated your income was $194,307 for the year 2009.  This information was false.  This is the conduct re Charge 7.

16On 11 April 2011, you transferred $66,160.07 of these funds to another account controlled by you.  As at 2 January 2014, the loan was in arrears and NAB was owed $1.2 million.  I was informed today that the loss in respect of this loan is $615,859.86.  The total value of the deceptions is therefore $1,383,243.30.

17AXA decided to reinstate Mr and Mrs Vagitis' accounts, the subject of Charges 1 and 3.  The loss therefore to AXA is $21,287.41.  Mr and Mrs Vagitis lost amounts in Charges 2, 4 and 5 in the sum of $271,796.03.  In addition to the loss from Charge 7, that is $615,859.86 the NAB lost $474,300.

18When you were interviewed in relation to the fraud offences, in respect of the super fund you maintained that all the activity was authorised and consented to by Mr and Mrs Vagitis.  You denied you had used any of the funds, that is in Charges 1, 2 and 3 for your personal use.  In respect of the proceeds of sale from the Vagitis property, you denied transferring the $220,000 to Equus Capital or any other amounts to related companies.  You conceded that Mr and Mrs Vagitis lost money and that they were listed on your bankruptcy notice as people to whom you owed money.  You claimed however you felt morally obligated to them.

19As to the loan on behalf of Mr and Mrs Vagitis, you admitted that you prepared the documentation, including the false pay slips regarding Mrs Vagitis' employment.  As to your loan with NAB, Charge 7, you admitted that you provided the documentation in support of the loan though you could not recall if it was false.

20I received victim impact statements from both Mr and Mrs Vagitis.  Your conduct has had a significant effect on them, particularly their sense of financial security and increased stress on their familial relationships.  Mr Vagitis has also had health issues with increased blood pressure and he remarked in his statement:

"It bothers me a great deal that she has caused my health to deteriorate through her greed and deception.  When someone causes your family harm, it causes you to doubt yourself, feel inadequate and you start to wish this person as much grief as they caused you."

21Mrs Vagitis states:

"Kerrie was supposed to help us make our lives a little easier as we have struggled for many years living on a shoe string.  Instead of helping us to get ahead just a little, she has put us back at least five years if not more.  Now we are left with no investment, no savings and no retirement plan, just debt because of her greed and deception."

22Your actions have caused anger, frustration, worry about the future and significant stress on this family.

23As to the driving offences and the CCO breach, the facts in respect of the driving offences are set out in the summary of agreed facts in relation to unrelated summary charges, that is Exhibit A2.  In addition you are before me on a breach of a community corrections order imposed on 18 June 2013 at Melbourne Magistrates' Court.

24By way of background to the driving offences, your licence was suspended between 14 October 2011 and 13 January 2012 due to loss of your demerit points.  It was suspended on 26 June 2012 indefinitely due to you not complying with a medical driver licence review.

25The CCO was imposed for three charges of drive whilst suspended committed on 5 December 2011, 4 July 2012 and 25 April 2013 and on one charge of using a mobile phone whilst the car was stationary.  As to the current driving offences, on six different occasions you were observed by police to be driving between 3 January and 17 September 2015.

26On each occasion you ultimately admitted to police that you were aware your licence had been suspended and provided various reasons as to why you were driving on that specific occasion.  On 3 January 2014, you also failed to state your correct name and address to police when they spoke to you, with you provided the details of your sister.  The commission of three of these matters occurred whilst the CCO was operational between June 2013 and March 2014. 

27As to your personal circumstances, I was provided with a report from Dr Patrick Newton, clinical and forensic psychologist, dated 4 December 2015 and I take that material into account.  You are currently aged 56 years and have no relevant criminal history in respect of the fraud offences.  You are the eldest of three children and grew up in south-eastern Melbourne.  You completed VCE and tertiary studies in accountancy at RMIT.  You have worked primarily in the field of financial planning.

28You have been gainfully employed with various jobs, including at the ATO and National Mutual.  You remain close to your parents who are now elderly and not in good health.  I was provided with documentation regarding each of their medical issues and you assist with their care, living with them in their home.

29You were married from 1996 until 2001 and have two children who are aged in their twenties and you are in regular contact with them.  You have not had other significant relationships since your divorce.  You have had issues with your health since childhood.  You developed epilepsy and suffered a number of grand mal seizures as a child.  You required medication to control your seizures but have not required it for a number of years.

30As a consequence of your poor health as a child, you were bullied and harassed at school and developed low self-esteem.  Newton reports that your offending conduct is linked to your low sense of self-worth and poor self-esteem.  He notes:

"… longstanding sub-clinical symptoms of depression.  These included poor self-esteem and a general pessimistic outlook as well as a tendency towards physical malaise."

31You reported that you became severely depressed in the period leading up to the end of your marriage.  You have been highly dependent on your success at work to bolster your sense of identity and with the advent of these charges, your self-esteem has collapsed.  You are constantly on the verge of being overwhelmed by circumstances.  You are pessimistic and feel hopeless with regard to your future prospects and you are isolated socially.

32Your counsel conceded that your condition or mental functioning was not such at the time of the offending as to evoke Verdins principles, however relied on sixth limb, submitting that your condition would make prison more burdensome for you.  I accept the opinion of Newton that your pre-existing emotional distress is such that you would be at an elevated risk of experiencing deterioration in your mental state if you were to receive an immediate custodial disposition.

33Your counsel relied on the following matters in mitigation.  (1) plea and remorse including significant regret and trying to pay back the money.  (2) delay.  (3) good rehabilitation prospects.  You are intelligent and have no behavioural issues such as drug abuse, alcohol or gambling.  You have stable accommodation and good work skills.

34You have pleaded guilty, though not at the first opportunity after the committal.  Your plea has saved the expense and inconvenience of a trial and also demonstrates some remorse.  You have taken responsibility for your actions.  I accept that you have no relevant prior convictions for the fraud offences.

35However, the lack of relevant priors and good character has less significance in these kind of offences when a breach of trust is involved.  Often having these features allows a person to obtain a qualification, as you did, and puts you in a position on which others rely for trusted and professional advice.  In those circumstances, this factor is given less weight in the sentencing exercise.

36As to delay, your counsel submitted you have had this matter hanging over your head for an extended period.  You were interviewed in December 2013 and not charged until 2015.  You have, in this period and until now, been required to care for your elderly parents.

37The Crown submitted that, given the volume of material and the necessity to analyse much of it, that this delay was not inordinate.  Additionally you did not plead at the first opportunity so some of the delay was attributable to you.  I accept that the delay in this matter coming to court was not inordinate.  However, I take into account, the stress and changes occasioned to your life from the time of interview until this matter came to court.

38I accept that you have good rehabilitation prospects in the sense that you are unlikely to commit other fraud offences.  Frequently those who commit these kind of offences have reasonably good prospects for rehabilitation.  Good rehabilitation prospects for white collar crime has limited weight and general deterrence is an important sentencing consideration.

39Additionally, I do note your continued disregard for the law in respect of the driving offences.  You have an appalling driving record and I am not so confident that you will, when you ultimately get your licence back, be able to abide by the road rules.

40There was no suggestion that you lived an extravagant lifestyle or evidence of betterment. Rather it appears that you invested the money and made very poor decisions resulting in losing the funds and lacking the capacity to repay any of the money.  I was informed you have lost any inheritance and have significant debts in respect of other personal property.

41It would appear your financial affairs were chaotic and that you were seriously misplaced in thinking that your investments would succeed and the money would be returned.  You have been declared bankrupt since the commission of the fraud offences. As to aggravating features, the fraud offences involved a significant breach of trust.  You were licensed by ASIC as a financial adviser and because of that state, were trusted by the Vagitises to provide good investment advice and guidance.  It is clear that they unquestionably followed your advice and you exploited that dependence of them on you to gain funds for your own use.

42This offending was not an isolated act.  There were a number of separate acts of dishonesty and fraud involving substantial sums of money between December 2008 and April 2011.  Your victims were both individuals and large banking institutions.  I have already referred to the significant effect on the Vagitis family.

43The provision of finance is an essential feature of the economy and your conduct in providing false information relied on by financial institutions, including in this case NAB and AXA, strikes at the integrity of the system that relies on customer honesty. The increased maximum penalty pursuant to the continuing criminal offender provisions in relation to Charges 4, 6 and 7, however, I do not propose to impose a disproportionate sentence as I am empowered to do under the SentencingAct.

44Your counsel submitted I could serve all sentencing purposes by the imposition of a combined imprisonment term with a community corrections order to be completed upon your release.  I had you assessed to determine your suitability for a CCO.  I am mindful that under the SentencingAct, this option is only available if the term of imprisonment imposed is less than two years (see s.44(1) of the SentencingAct).

45The prosecution submitted the fraud offences were serious and that a term of imprisonment was the only appropriate sentencing disposition.  Reliance was particularly placed on the principle in Bulfin and the deterrent effect of a prison term with offending of this nature, recently affirmed by the Court of Appeal in Dyason (2015) VSCA 120 at 33.

46The prosecution submitted that the gravity and duration of this offending, the quantum involved and the breach of trust together with the need for denunciation were such that a term of imprisonment alone was warranted.  Taking all relevant sentencing considerations into account, including all matters in mitigation, the gravity and nature of the offending and general deterrence, I consider that a term of imprisonment alone is the appropriate disposition.

47If you could stand up please, Ms King.  First in relation to the indictment:

48In respect of Charge 1 you are convicted and sentenced to a period of four months' imprisonment.

49In respect of Charge 2 you are convicted and sentenced to a period of six months' imprisonment.

50In respect of Charge 3 you are convicted and sentenced to a period of one month imprisonment.

51In respect of Charge 4 you are convicted and sentenced to a period of three years' imprisonment.

52In respect of Charge 5 you are convicted and sentenced to a period of one year imprisonment.

53In respect of Charge 6 you are convicted and sentenced to a period of two years' imprisonment.

54In respect of Charge 7 you are convicted and sentenced to a period of two years' imprisonment.

55What I propose to do, Ms King, is in respect of Charge 6, one year of that is cumulative on the sentence imposed on Charge 4; also, in respect of Charge 7, one year is cumulative on the sentence imposed on Charge 4 which gives you a total effective sentence of five years.

56Now, in respect of the summary matters, what I propose to do is convict and sentence you to a period - an aggregate sentence of six months' imprisonment and in respect of the community corrections order I find the breach proven and I convict and sentence you in relation to those matters again to a period of six months' imprisonment aggregate.

57The sentence imposed in respect of the breach of the community corrections order and the matters for which that community corrections order was imposed and the summary offences, those sentences are to be concurrent with the sentence imposed on the indictment which means that ultimately you have a total effective sentence of five years with a non-parole period of three years.

58Can I just please check though with the prosecutor in respect of the failing to state the name in the summary offences and also in respect of using the mobile phone which was one of the breach offences for the community corrections order. Am I able to incorporate those as part of that aggregate sentence or are they only matters for which you could not impose a term of imprisonment?  You can sit down, Ms King.

59MR PORCEDDU:  My first reaction is, Your Honour, they are only by way of a fine therefore ‑ ‑ ‑

60HER HONOUR:  Yes, all right.  What I will do in respect of those matters, that is Charge 2 in the summary matters of which McDonald is the informant, I will convict and discharge.  And in respect of the charge of using a mobile phone on the breach of the CCO I will convict and discharge Ms King.  So that is what should appear in the records.

61As I indicated in the course of the reasons, Ms King will be noted as a continuing criminal enterprise offender in respect of Charges 4, 6 and 7.  In relation to the summary matters, I propose to disqualify Ms King from obtaining a licence for a period of three years.  Are there any other matters that I have missed out, apart from the forfeiture issue.

62MR PORCEDDU:  Nothing, Your Honour.  In relation to the disqualification of the licence, Your Honour, does that run from today?

63HER HONOUR:  Yes.

64MR PYNE:  And the issue of pre-sentence detention, I don't know whether the was a declaration of that?

65HER HONOUR:  No, I haven't done that, you are right.  Pre-sentence detention, what is it please, Mr Porceddu?

66MR PORCEDDU:  Your Honour, 18 days excluding today.

67HER HONOUR:  I declare PSD of 18 days and also pursuant to s.6AAA if you had not pleaded guilty to these matters, I would have sentenced you to a period of imprisonment of seven years with a minimum of five years.  Now, the forfeiture issue, Mr Porceddu.

68MR PORCEDDU:  Your Honour, just before we move to that, in respect of the 464 application, Your Honour, that was a live application that I made concerning a forensic sample.

69HER HONOUR:  Yes, did you provide the documents to me for that?

70MR PORCEDDU:  Yes, they were e-lodged, Your Honour, in accordance with the requirements under the practice note.

71HER HONOUR:  Have you got another set there and I can do that now?

72MR PORCEDDU:  We do.

73HER HONOUR:  That's not opposed.

74MR PYNE:  No, Your Honour, it is not.  I am sorry, Your Honour, I have made an error in relation to pre-sentence detention just when I was counting then and it should be 20 days.

75HER HONOUR:  20 days, all right.

76MR PYNE:  Excluding today.

77HER HONOUR:  We will correct that.  PSD is declaration of 20 days, thank you.  Now, have you got some of those orders and I can just sign them now.

78MR PORCEDDU:  Yes, Your Honour.

79HER HONOUR:  All right, there are those orders.

80MR PORCEDDU:  Yes, Your Honour.  In relation to the forfeiture application, the application is still maintained by the prosecution.  I can tell you this, Your Honour, I have confirmed that there was an affidavit of service upon the registered operator who is a person by the name of Angela Kavadias.  Your Honour, there was ‑ ‑ ‑

81HER HONOUR:  Is she the owner of the car?

82MR PORCEDDU:  Yes.  Registered operator is the definition, Your Honour, under the Act.  Your Honour, that was served on 13 October 2015 advising that originally the matter would be heard at the Ringwood Magistrates' Court on 2 December 2015.  Ultimately the matter has been transferred here.  Your Honour, I am instructed that the informant sent a letter to the registered operator, Ms Kavadias on 1 April 2016.  Again there has been no response to that letter.

83HER HONOUR:  That is only on Friday though.

84MR PORCEDDU:  Yes, Your Honour.  But the requirement is that the operator of the vehicle be told or advised that an application is being made and the requirement was that it be made 28 days prior so in fact that's what did occur, Your Honour, because we have the service as on 13 October 2015.

85HER HONOUR:  Yes, I understand but that’s what is troubling me is that it was only on Friday that she was told that it was here and so I have concerns about considering that application at this time, given the very short period of time to which she would have been able to consider it.

86MR PORCEDDU:  I understand, Your Honour, would Your Honour be minded if we just adjourn it off?

87HER HONOUR:  Yes.  What I will do is adjourn this application effectively indefinitely and you can contact my associate to have that matter ultimately resolved.

88MR PORCEDDU:  Yes, Your Honour.  We are very happy with that, Your Honour.

89HER HONOUR:  Thank you.  You can remove Ms King, thank you.

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