Director of Public Prosecutions v Kotsifas
[2020] VSC 347
•11 June 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
CRIMINAL DIVISION
S ECI 2019 0185
| DIRECTOR OF PUBLIC PROSECUTIONS | Crown |
| v | |
| JOHN JAMES KOTSIFAS | Accused |
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JUDGE: | CHAMPION J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 4 February 2020 |
DATE OF JUDGMENT: | 11 June 2020 |
CASE MAY BE CITED AS: | DPP v Kotsifas |
MEDIUM NEUTRAL CITATION: | [2020] VSC 347 |
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CRIMINAL LAW – Sentence – Guilty plea – Multiple charges of causing a trust account deficiency (18 charges) – Charges of theft (5 charges) – Offending by a legal practitioner over a three year period – Causing, without reasonable excuse, a deficiency in a trust account s 3.3.21 Legal Profession Act 2004 – Dishonesty offences – Breach of trust – Total effective sentence of six with a non-parole period of four.
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APPEARANCES: | Counsel | Solicitors |
| For the Crown | Miss M. Mahady with Ms A. Hando | Office of Public Prosecutions |
| For the Accused | Ms N. Karapanagiotidis | Stary Norton Halphen |
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HIS HONOUR:
John Kotsifas, on 4 February 2020 you pleaded guilty to an indictment that contained 23 charges, being 18 charges of having caused, without reasonable excuse, a deficiency in a trust account in the total amount of $1,493,236.50 when you were not authorised to do so, and 5 charges of theft in the total amount of $267,062.
Your plea of guilty proceeded by way of a written plea signed by you on 4 February 2020 pursuant to s 216 of the Criminal Procedure Act 2009.
Your offending occurred between 17 January 2013 and 20 October 2015 when you were a legal practitioner operating from your own firm, J Kotsifas & Associate Lawyers and Consultants in Northcote, Victoria.
On 1 July 2015, the Legal Profession Act 2004 (the ‘Act’) was repealed and replaced by the Legal Profession Uniform Law Application Act 2014 (the ‘Uniform Law’).
For the charges relating to conduct prior to 1 July 2015, s 3.3.21(1) of the Legal Profession Act 2004 applies. The offence of causing a deficiency in a trust account carries a maximum penalty of 15 years’ imprisonment.
For the charges relating to conduct after 1 July 2015, s 148 of the Legal Profession Uniform Law Application Act 2014 applies. The offence of causing a deficiency in a trust account carries a maximum penalty of five years imprisonment.
Section 114 of the Sentencing Act 1991 states that, for offences occurring before the date of a change of penalty, I must sentence you in accordance with any reduction in maximum penalty and must not consider any increase in maximum penalty.
The maximum penalty for the offence of theft is ten years’ imprisonment.
Background to the offending
As above, the offences you committed took place while you were a legal practitioner. You were admitted to practice as a barrister and solicitor of the Supreme Court of Victoria on 7 April 1993. You held an employee practising certificate from 7 April 1993 until 31 December 1998. You then held a Victorian principal practising certificate with authorisation to receive trust money from January 1999 until October 2015.
You operated as a sole practitioner at “J Kotsifas & Associates Lawyers & Consultants” between January 2000 and July 2002. You were then a partner at Mingos Kotsifas from July 2002 until June 2004. Thereafter, you were a sole practitioner at “J Kotsifas & Associates Lawyers & Consultants”, from July 2004 until October 2015.
Circumstances of the offending
I will now briefly summarise each of the charges on this indictment. Each offence occurred in circumstances where you were practising as J Kotsifas & Associates Lawyers and Consultants. Further, each offence that involved causing a deficiency in your practice trust account occurred without reasonable excuse or authorisation. It will not be necessary to repeat these two matters in respect of each offence I summarise.
Charge 1
On 17 January 2013, you caused a deficiency in your practice trust account in the sum of $185,000.
On that day, acting in her capacity under an enduring power of attorney on behalf of her parents, Rosa Giannos retained your law practice to represent her parents in respect of a civil debt, as well as the transfer of two properties. You told Ms Giannos she would need to pay you immediately for you to commence working on her instructions. You required $185,000 in addition to $11,400 that she brought to an interview with you. You told Ms Giannos that $20,000 would have to be in cash and the balance in a cheque made out to you. Ms Giannos paid you as you requested, with two cheques instead of one.
The $165,000 in cheques were presented by you on 17 January 2013, however only $13,000 of the cash amount was deposited into the practice trust account. The $13,000 amount was then immediately transferred from the trust account to the office account.
There is no record of the remaining $18,400 being deposited into either account.
The sum of $196,400 ($165,000 by cheque and $31,400 in cash) received by you was not allocated to a trust ledger for Mr or Mrs Giannos—on whose behalf it was entrusted. Consequently, you caused a deficiency in the trust account or a trust ledger account. These circumstances reflect Charge 1 on the Indictment.
Charge 2
On 20 August 2013, you caused a deficiency in your practice trust account in the sum of $15,000.
In August 2013, Ms Karen Bridges engaged you to act for her over a building dispute in the Victorian Civil and Administrative Tribunal. On 12 August 2013, you wrote to Ms Bridges and requested the sum of $15,000 in advance of anticipated costs. On 20 August 2013, Ms Bridges paid $15,000 into the trust account.
You failed to allocate these funds to a trust ledger for Ms Bridges, thereby causing a deficiency in the trust ledger account.
These circumstances reflect Charge 2 on the Indictment.
Charge 3
Between 21 March 2014 and 15 October 2014 you caused a deficiency in your practice trust account in the sum of $409,774.06.
In December 2013, Ms Christine Fousketakis retained you act as a conveyancer for the sale of her property located in Mason Street, Northcote.
On 20 March 2014, the practice received $31,508.90 deposit monies from the estate agent acting in the sale of the Northcote property.
On or about 2 July 2014, the practice received $757,852.26, being the balance of the purchase price due to Ms Fousketakis after the mortgage on the Northcote property was discharged.
The Northcote property trust ledger records numerous deductions for this matter, which include payments unrelated to Ms Fousketakis, such as payments related to the settlement of properties she had no connection with. A deduction was also made in relation to personal expenses for your golf club green fees.
The trust ledger entries also show payments purportedly made to third parties or Ms Fousketakis, allocated against the monies held in the trust account from the sale of the Northcote property. Ms Fousketakis identified 27 transactions between 21 March and 15 October 2014 that she did not authorise—those amounts adding to $409,774.06.
These circumstances reflect Charge 3 on the Indictment.
Charge 4
Between 1 April 2014 and 16 December 2014, you caused a deficiency in your practice trust account in the sum of $10,470.
In or around late March 2014, Mr Lee Dwinger engaged your practice to represent him in civil litigation.
Between March and December 2014, Mr Dwinger paid you $10,470. You failed to provide any receipts to Mr Dwinger for these payments.
Of the $10,470 that Mr Dwinger paid, $1,470 was intended to be forwarded to the lawyers acting for the other party in respect of ‘costs thrown away’. You represented that the funds were paid to the other party but you did not make the payment. You recorded the receipt of $1,470 in Mr Dwinger’s trust ledger account but subsequently withdrew it, failing to deliver it to the other party, thereby causing a deficiency in the trust account.
These circumstances reflect Charge 4 on the Indictment.
Charge 5
On 13 June 2014, you caused a deficiency in your practice trust account in the sum of $166,652.
In or around April 2014, Mr George Tzouramanis retained you on behalf of his company, Giant Developments Group Pty Ltd, to act as conveyancer for the sale of his property located in Hansworth Street, Mulgrave.
You recorded 17 transactions on Mr Tzouramanis’s trust ledger, none of which were authorised by him. You thereby caused a deficiency in the trust account ledger.
These circumstances reflect Charge 5 on the Indictment.
Charge 6
On 18 June 2014, you caused a deficiency in your practice trust account in the sum of $148,630.
On or about 18 June 2014, you created a credit entry in the trust ledger account of Giant Developments Proprietary Limited. This entry was created without the knowledge of the directors of Giant Developments Proprietary Limited and should have been allocated to other trust ledgers. You thereby caused deficiencies in the trust account.
These circumstances reflect Charge 6 on the Indictment.
Charge 7
Between 1 August 2014 and 15 September 2014, you stole $20,000 belonging to Christine Fousketakis by misappropriating $20,000 from Christine Fousketakis’ trust account in three transactions, namely:
| Date | Amount | Notation in trust ledger | Real Reason for payment |
| 1/8/14 | $5000 | payment to Westernport Vic PL as directed by client | Earthmoving works relating to the construction of a swimming pool at 53 Longview Road Balwyn North |
| 12/9/14 | $5000 | payment to Invogue as directed by client | Part payment for costs associated with construction of swimming pool at 53 Longview Road Balwyn North |
| 15/9/14 | $10,000 | payment to Hocking Stuart Glen Iris as directed by client | Regarding purchase by Kotsifas and his partner of property at 24 Salisbury Street, Balwyn |
You used these funds to pay for your personal expenses, associated with a property you owned, and one you were purchasing.
These circumstances reflect Charge 7 on the Indictment.
Charge 8
On 29 August 2014, you caused a deficiency in your practice trust account in the sum of $100,000.
In or around July 2013, Mr Aristotellis Manikas retained your practice to represent him in a litigation matter.
On 29 August 2014, Mr Manikas arranged for you to receive $100,000 to be held in trust on his behalf in respect of anticipated costs.
You failed to record this amount in the trust ledger for Mr Manikas, instead recording this credit to the ledger of Tideluck Pty Ltd, a client unrelated to Mr Manikas.
These circumstances reflect Charge 8 on the Indictment.
Charge 9
Between 1 September 2014 and 12 September 2014, you caused a deficiency in your practice trust account in the sum of $8,988.50.
In or around August 2014, Mr Gerry Fourniotis retained your practice to act on behalf of his company, Tideluck Pty Ltd, as conveyancer for the sale of his property located in Flinders Lane, Melbourne.
Between August and September 2014, you recorded five transactions on Mr Fourniotis’ trust ledger that he did not authorise and did not relate to his company.
Accordingly, you caused a deficiency in the trust account.
These circumstances reflect Charge 9 on the Indictment.
Charge 10
On 10 October 2014, you stole $187,500 belonging to Christine Fousketakis.
On 10 October 2014, you misappropriated $187,500 from Ms Christine Fousketakis’ trust account.
You used these funds to part-pay for purchase of a property at 24 Salisbury Street, Balwyn.
These circumstances reflect Charge 10 on the Indictment.
Charge 11
On 14 October 2014, you caused a deficiency in your practice trust account in the sum of $80,000.
On or about 18 June 2014, you created a credit entry in the trust ledger account of Christine Fousketakis. This entry was created without the knowledge of Ms Fousketakis and should have been allocated to other trust ledgers. By doing so, you caused deficiencies in the trust account.
These circumstances reflect Charge 11 on the Indictment.
Charge 12
On 20 October 2014, you caused a deficiency in your practice trust account in the sum of $1,000.
In or around October 2014, Ms Hariklia Panagiotopoulos retained your practice to attend to the probate and administration of her late father’s estate.
On 8 October 2014, Ms Panagiotopoulos paid $1,000 to your practice in anticipation of fees.
On 20 October 2014, you debited $1,000 toward costs without issuing an invoice for professional services to Ms Panagiotopoulos, thus causing a deficiency in the trust account.
These circumstances reflect Charge 12 on the Indictment.
Charge 13
On 3 November 2014, you caused a deficiency in your practice trust account in the sum of $1,000.
In or around July 2014, Ms Diane Gabriel engaged you to act for her in relation to the sale of her property located in Bulleen.
Shortly before settlement, a boundary wall on the property collapsed. You retained $1,000 in trust, as guarantee, to ensure that the wall was repaired. You allocated these funds to a trust ledger for Ms Gabriel and particularised as it being for the fence issue.
On 3 November 2014, you transferred the funds to a costs ledger, in circumstances where there was no invoice and the funds were held for the repair of the wall, causing a deficiency in the trust account.
These circumstances reflect Charge 13 on the Indictment.
Charge 14
Between 20 November 2014 and 13 February 2015, you caused a deficiency in your practice trust account in the sum of $20,359.94.
In or around November 2014, Mr Gerry Fourniotis retained you to act on behalf of his company, Strand Management Pty Ltd, as conveyancer for the sale of a unit in The Strand, Chelsea.
Examinations revealed eight unauthorised transactions on the client trust ledger as follows:
| Date | Amount | Notation in trust ledger |
| 20/11/14 | $6500 | legal costs and disbursements as per invoice date |
| 24/11/14 | $2500 | payment to Westpac Bank with bank cheque as directed by client |
| 5/02/15 | $2500 | payment to A Philpot as directed by client |
| 10/02/15 | $2500 | payment to Accounting Associates as directed by client |
| 10/02/15 | $2150 | payment to the State Revenue Office being for fees incurred |
| 12/02/15 | $998 | payment to TCS as directed by client |
| 13/02/15 | $3211.94 | legal costs and disbursements as per invoice |
These circumstances reflect Charge 14 on the Indictment.
Charge 15
Between 28 November 2014 and 3 March 2015, you caused a deficiency in your practice trust account in the sum of $10,000.
In August 2014, Ms Christine Fousketakis retained you to act for her in relation to an intended purchase of property in Waterdale Road, Heidleberg Heights.
On 15 August 2014, Ms Fousketakis executed the contract of sale for the property. Settlement was due to take place on 14 November 2014, but the settlement was delayed.
On 28 November 2014, Ms Fousketakis provided a cheque for $10,000 to you, being funds requested by you for anticipated costs relating to settlement of the property.
The property client trust ledger records three deductions against the $10,000 received. These occurred on 28 November 2014, 5 December 2014 and 3 March 2015. Ms Fousketakis did not authorise any of the three transactions.
These circumstances reflect Charge 15 on the Indictment.
Charge 16
On 4 February 2015, you stole $4,550.06 belonging to The Strand Management Pty Ltd.
Gerry Fourniotis was the director of The Strand Management Proprietary Limited. The Strand Management Pty Ltd engaged your practice to act in respect of various real estate conveyances.
On 4 February 2015, you misappropriated $4,550.06 from The Strand Management Pty Ltd’s trust account. The trust ledger records ‘being payment requested by client’. The payment was made to a Phillip Parente. The payment was not authorised by Mr Fourniotis.
Mr Parente was the vendor of 24 Salisbury Street, Balwyn. You and your partner had agreed to purchase the property from Mr Parente and lease the property until settlement.
The payment of $4550.06 was received by Mr Parente as a lease payment.
You used these funds to pay for your personal expenses.
These circumstances reflect Charge 16 on the Indictment.
Charge 17
Between 3 March 2015 and 29 May 2015, you caused a deficiency in your practice trust account in the sum of $218,862.
In or around January 2015, Mr Gerry Fourniotis retained you to act on behalf of his company, Stoluda Pty Ltd, as conveyancer for the purchase of a property in Argyle Street, Traralgon.
Prior to settlement taking place, you asked Mr Fourniotis to pay the sum of $248,000 to the practice because of anticipated stamp duty and other costs. On 3 March 2015, Mr Fourniotis paid $248,000 to the practice.
Prior to settlement, it was agreed that $50,000 would be held back after settlement in the trust account on behalf of the vendor, pending the production of a replacement certificate of title and discharge of mortgage. The $50,000 was included in the $248,000 paid to the practice.
Despite receiving the sum of $248,000 from Mr Fourniotis, you did not pay the stamp duty arising from this transaction for Stoluda Pty Ltd. As a result, on 9 November 2015, Mr Fourniotis paid the stamp duty arising from the purchase, in the sum of $167,750 from his personal account.
The property trust ledger records numerous debits which were allocated against the trust ledger for this matter. The payments were purportedly made to third parties or Mr Fourniotis.
Upon receiving the trust ledger for this matter, 21 transactions between 3 March 2015 and 29 June 2015 were identified, which were not authorised, as follows:
| Date | Amount | Notation in trust ledger |
| 3/03/15 | $5000 | payment to Stoluda PL being return of part trust monies as requested by client |
| 5/03/15 | $37,000 | payment to Stoluda PL being return of part trust monies as requested by client |
| 6/03/15 | $5000 | payment to Spiro XXX as directed by client |
| 10/03/15 | $15,000 | legal costs and disbursements as per invoice issued 4/3/15 |
| 13/03/15 | $10,000 | payment to Stoluda PL being return of part trust monies as requested by client |
| 27/03/15 | $6470 | payment to State Revenue Office being stamp duty costs |
| 30/03/15 | $603 | payment to Land Titles Office for payment of disbursement cost |
| 31/03/15 | $10,000 | payment to J Fourniotis as requested by client |
| 1/04/15 | $4116 | payment to C Fulton as directed by client |
| 10/04/15 | $1000 | payment to Goldsmith PL as directed by client |
| 17/04/15 | $88,500 | payment to Stoluda PL being return of part trust monies as requested by client |
| 20/04/15 | $10,000 | payment to Stoluda PL being return of part trust monies as requested by client |
| 20/4/15 | $5000 | payment to Bank of Melbourne as directed by client |
| 24/04/15 | $3873 | payment to C Fulton |
| 30/04/15 | $2500 | payment to Infotrack PL as directed by client |
| 5/05/15 | $8000 | legal costs and disbursements |
| 29/5/15 | $6800 | legal costs and disbursements |
These circumstances reflect Charge 17 on the Indictment.
Charge 18
Between 5 March 2015 and 21 April 2015, you stole $24,398.94 belonging to Stoluda Pty Ltd. Stoluda Pty Ltd’s trust account records show the following transactions which were not authorised:
| Date | Amount | Notation in trust ledger | Reason for payment |
| 5 March 2015 | $7418.97 | Payment to Parente being for rent as directed by client | Payment of rent owed by Kotsifas and his partner, to Parente |
| 6 March 2015 | $5007.50 | Being payment to John Kyrgios PL as directed by client for engineer costs | Payment of engineering report by John Kyrgios & Assoc P/L by Kotsifas – proposed building at 53 Longview Road, Balwyn North |
| 30 March 2015 | $5500 | Payment to Andrew Young & Assoc. being insurance payment as directed by client | Payment of construction insurance – J Kotsifas – 53 Longview Road, Balwyn North |
| 20 April 2015 | $4572.50 | Being payment to P. Paraler as directed by client | Payment of rent owed by Kotsifas and his partner, to Parente |
| 21 April 2015 | $1900 | Payment to Braoudakis Design as directed | Architectural drawings for 53 Longview Road, Balwyn North |
None of payments were authorised by the director of Stoluda Pty Ltd, Gerry Fourniotis.
You used these funds to pay for personal expenses predominantly linked to the construction of a property in Balwyn that you owned.
These circumstances reflect Charge 18 on the Indictment.
Charge 19
On 1 May 2015, you caused a deficiency in your practice trust account in the sum of $10,000.
During July 2014, Ms Jenny Mandragona engaged you to act for her in relation to a civil dispute with her neighbours.
You asked Ms Mandragona to pay you $10,000 to represent her. On 1 May 2015, Ms Mandragona paid $10,000 into your office bank account. She did not receive a receipt for this payment. You failed to allocate this payment to a trust ledger for Ms Mandragona and instead allocated this deposit to a trust ledger for Ms Angela McCook.
Ms Mandragona did not instruct you to allocate the funds to Ms McCook’s trust ledger, therefore you caused a deficiency in the trust account.
These circumstances reflect Charge 19 on the Indictment.
Charge 20
On 17 June 2015, you caused a deficiency in your practice trust account in the sum of $3,000.
In or around June 2015, Mr Angelo Phillipou retained your practice to provide legal services in a personal legal matter.
On 17 June 2015, Mr Phillipou transferred $3,000 to the practice for anticipated legal costs associated with the matter.
You failed to allocate this amount to a trust ledger for Mr Phillipou, thus causing a deficiency in the trust account.
These circumstances reflect Charge 20 on the Indictment.
Charge 21
On 18 June 2015, you caused a deficiency in your practice trust account in the sum of $1,000.
In or around 18 June 2015, Freda Kondarios, Triana Boubis and Arthus Biamis engaged you to arrange a grant of probate and the administration of their deceased mother’s estate.
On 18 June 2015, Ms Kondarios paid $1,000 to the practice in respect of anticipated costs.
You received the $1,000 on behalf of the estate but failed to allocate this amount to a trust ledger, thereby causing a deficiency in the trust account.
These circumstances reflect Charge 21 on the Indictment.
Charge 22
On 29 June 2015, you caused a deficiency in your practice trust in the sum of $3500.
In or about June 2015, Mr Anthony Calleja engaged the practice to issue proceedings against his mechanic. You requested $3,500 to represent Mr Calleja.
On 29 June 2015, Mr Calleja paid you $3,500 in cash for anticipated costs. You did not create a trust ledger for this matter to reflect this deposit, thereby causing a deficiency in the trust account.
These circumstances reflect Charge 22 on the Indictment.
Charge 23
Between 6 August 2015 and 20 October 2015, you stole $30,613.30 from the trust account of J Kotsifas & Associates Lawyers and Consultants, as follows.
| Date | Amount | Payment to |
| 6/8/15 | $4987.95 | Network Scaffolding – 53 Longview Road Balwyn North |
| 7/9/15 | $7700 | Skylift Crane Services – Logview (sic) Road Balwyn |
| 7/9/15 | $4987.95 | Network Scaffolding – 53 Longview Road Balwyn North |
| 29/9/15 | $2937.40 | Nicholson Wright Pty Ltd – building permit 53 Longview Road Balwyn North (payment of two invoices) |
| 22/10/15 | $10,000 | Apaiser Pty Ltd – bathroom fittings – to “John & Angelina” |
You used these funds to pay for personal expenses predominantly linked to your building construction at the property in Balwyn, previously discussed.
These circumstances reflect Charge 23 on the Indictment.
The investigation
You have a history of disciplinary proceedings that date back to 2006 but with most of the matters occurring from 2011 onwards. From around this time you were experiencing financial and marital problems. In July 2015 you pleaded guilty in VCAT proceedings brought against you for causing deficiencies in a trust account.[1] As a result, you were ordered to undertake a course in relation to the conduct of trust accounts along with being fined $20,000 with a condition placed on your practising certificate.
[1]Victorian Legal Services Commissioner v Kotsifas (Legal Practice) [2015] VCAT 1117.
Your Counsel submitted that it was at this time that you engaged a mentor and an accounting bookkeeper. It was submitted that you were trying to get your practice back up and running however your substantial offending had already taken place. In October 2015 you were required to leave your offices and cease practising altogether.
On 27 October 2015, the Legal Services Board (the ‘Board’) refused to grant you a practising certificate for 2015/2016 year, on the basis that you were not a fit and proper person to engage in legal practice. It was by this time, that your law practice had become insolvent. At this point Dr Neil Hannan was appointed by the Board to assume control of your law practice.
Dr Hannan identified that the law practice had a number of trust accounting irregularities, including:
(a)The practice appeared to not keep proper client records;
(b)The practice trust account had not been reconciled since March 2015;
(c)Trust cheques did not necessarily contain sufficient information to identify the matter to which they related; and
(d)The practice did not have sufficient funds to pay debts and staff wages.
Dr Hannan consequently commissioned an independent forensic accountant to reconstruct the trust account. The accountant established a number of deficiencies concerning considerable sums of money. On receipt of the trust account reconstruction report, Dr Hannan wrote to a number of clients requesting that they confirm the transactions recorded and identify any deposits or payments that should not be recorded on their client trust ledgers. Several clients identified unauthorised third party transactions recorded on their client trust ledgers as well as unauthorised amounts taken by the practice for legal costs. In addition, your clients provided evidence to Dr Hannan of instances where they had paid the law practice trust money, sometimes in cash, however their trust ledgers did not reflect these payments.
Further, it became apparent to Dr Hannan that a number of clients paid money to the law practice for anticipated legal work, however, no client trust ledger was created for them.
In November 2015, Dr Hannan applied to Supreme Court for the distribution of the remainder of the trust account funds pursuant to the Trustee Act 1958. At this time, there was a total sum of $483,859.96 held in a trust account and 29 clients with funds recorded against their ledger.
On 18 December 2015, this Court ordered that the funds in the trust account be distributed to relevant clients identified, with clients of the law practice who had a positive balance recorded against their trust ledger receiving 47 cents in the dollar.
In or around December 2015, The Board commenced an investigation into the law practice to determine whether the law practice or any person had contravened Part 3.3 of the Act or Part 4.2 of the Uniform Law. The Board’s investigation revealed numerous occasions of deficiencies in the trust account in breach of s 3.3.21 of the Act.
Traces conducted on unauthorised transactions from the trust account revealed that at least $372,200.33 of money was used to pay for your own personal expenses which were persistently linked to the construction at your property at Longview Road, North Balwyn.
You were arrested interviewed and charged on 8 August 2018, with a first filing hearing on 27 August 2018. The committal hearing resolved on its first day, with no witnesses cross-examined, and you being committed to this court on 26 August 2019.
Victim impact statements
The Court received six victim impact statements, all of which I have carefully read and considered. These statements express the emotional and financial impact of your offending.
Christine Fousketakis
Ms Christine Fousketakis states that you had no regard for the consequences of your actions and were driven by your own greed which left her in debt. Ms Fousketakis feels very let down for what you have done and believes that you preyed on her vulnerability. Your offending has destroyed her financially, cost her family relationships and she now finds herself on the brink of homelessness. Ms Fousketakis describes that prior to her engaging you, she was trusting, outgoing, full of laughter and enjoyed life. She is now being treated by a clinical psychologist for her severe depression and feels broken. She adds that she feels that the legal profession, which is an upstanding and honest profession, has been tarnished by your actions.
Sophie Fourniotis
Mrs Sophie Fourniotis made a victim impact statement on behalf of her and her late husband Gerry Fourniotis, who was diagnosed with multiple myeloma in September 2000. She described how for 20 years you attended to numerous matters as their solicitor, with Gerry being the primary contact. Mrs Fourniotis describes how her husband was very trusting of you and when he questioned you about bills that appeared excessive you would respond simply with “don’t worry, I will sort this out”. When you would speak to Mr Fourniotis, you would speak about several matters in the same discussion, as a way to confuse Mr and Mrs Fourniotis about facts or figures that related to each other. Mrs Fourniotis describes how her husband was “gutted” to learn that someone he thought that he could trust could steal from him, knowing he was so gravely ill. She describes how sometimes you would visit their home with your children and that you invited them to your birthday party. This only added to the betrayal they felt by your offending. Your offending caused unnecessary stress to the Fourniotis’ family when they were doing everything in their power to nurse Mr Fourniotis and manage his illness. Mrs Fourniotis says although the Fidelity Fund did reimburse them for the losses it has eroded any trust that she has with professional people, especially solicitors.
Lee Dwinger
Mr Lee Dwinger, described how he engaged your services to help guide him through a process he had no knowledge of, only for him to realise that you were not committed to assisting him and did not act in his best interests. Mr Dwinger had to sell his property to cover the extra costs of engaging a second lawyer. He described your offending as the worst time in his life and he hopes and prays that he never has to deal with a lawyer again.
Anthony Calleja
Mr Anthony Calleja states that he is not sure how he will ever trust another solicitor. When he thinks about your offending in these matters it makes him very tense and anxious. He describes how he had to borrow money from his friend to pay for your services and that the Fidelity Fund has only returned less than half of what was originally borrowed from his friend.
Karen Bridges
Ms Karen Bridges says that at the time she instructed you, she was already in dispute with her builder and under considerable emotional pressures due to other factors in her life. Ms Bridges had to borrow money from her father to pay for your services which added additional stress to her and her father’s relationship. Ms Bridges was devastated by your offending. She describes how the mere thought of her having to give evidence in this matter and possibly see you caused her to be very anxious and stressed.
Aristotellis Terry Manikas
Mr Aristotellis Terry Manikas describes the period of his life related to your offending as going through “hell” and states that he will never forgive you for what you put him and his family through.
The statements reveal examples of people who were vulnerable and looked to you for assistance. They reveal people who express a sense of betrayal by a professional person who was trusted; examples of stress and anxiety brought about by your actions; and a loss of faith in the honourable profession of which you were a member. It is clear from these statements that the impact of your crimes has been very significant, and has affected people deeply.
Personal circumstances
You were born on 4 March 1965 and are presently 55 years of age. You have a younger sister who is married with two children. You live with your mother, as do your sister and her family. You were raised by two immigrant parents, who migrated from Greece in the 1960s and were hard working. Your father worked as a barber and your mother a machinist. Your father died in 1998 of a heart attack.
You were educated at Silesian College and graduated in 1982. You commenced studying at Monash University in 1983, first completing a double major in biochemistry and microbiology in 1985 . You then completed an undergraduate degree and in 1988 were offered admission into law. Later, you practised as a solicitor as I have already described.
You married your first wife in 1996 with whom you share two children, a daughter aged 23 and a son aged 21. You and your wife divorced in 2004. Your two adult children live with their mother.
You maintained regular contact with your children, having custody every second weekend and during half of the school holidays when they were school-aged. Over the years, you paid for your children’s schooling and contributed to their care. Now that they are adults, you continue to see them regularly and have a close relationship with them.
In or about 2006, you bought a house in Balwyn. You lived there with a partner for some years but that relationship ended in 2010. In 2010 you met your second wife, an Australian citizen, though at the time was living overseas with her children. In 2011 she returned to Australia to live with you. You have two sons with your second wife, aged seven and four years. You separated from your second wife in 2017. Your two young sons live with their mother in Mont Albert.
You maintain regular contact with your young children, seeing them every Tuesday and Thursday, and on weekends. When you are financially able, you continue to provide financial support to help with their schooling.
On your behalf it was submitted that during the relationship with your second wife, you experienced considerable financial pressure from what you perceived to be your wife’s increasing expectations to provide a material life beyond your means and capacity.
In 2013 you sold the Balwyn home purchased in 2006. In the same year you bought another property in Longview Road, North Balwyn for $1.2 million, with plans to renovate the house and accommodate your collective four children with your second wife. A loan amount was approved but only part of it was released so various expenses and payments connected to the renovations could not be met.
Renovations of the Longview Road house commenced in March, 2015. You had a large mortgage on this property, and a second mortgage for the renovations. The interest on the loans compounded to a point where you were unable to service the loans on Longview Road and you went into default, with the property selling in 2016.
In October 2014, you had purchased an English Tudor house in Salisbury Street, Balwyn for $2.4 million. Settlement was to take place in October 2015. Your intention was to complete renovations on the Longview Road home and then sell the property within the period of settlement on the Salisbury Street home. However, settlement on the Salisbury Street house was unable to be completed and the deposit of $247,000 was lost.
In addition to the expenses relating to the purchase of the homes, you were struggling to meet your credit card and car loan debts and financially struggling to provide for your four children.
At the time of the offending, it was submitted on your behalf you were under significant financial pressures and strain. While these pressures were a consequence of your choices, they contributed to you losing your focus on your legal work and your professional responsibilities. At this time, your accounting processes were in disarray, leading to shortfalls in the trust account and then to the cycle of offending already described.
In 2015, following the disciplinary proceedings and orders described above, you engaged a mentor and an accounting bookkeeper for a period of time. However, by this time, most of your offending had already taken place. As states, in October 2015 you were required to leave your offices and cease practising.
In 2016 you saw a psychologist for four sessions and more recently have seen a psychiatrist twice more. You were declared bankrupt in 2016. Your relationship with your second wife ended in 2017. You left that family home, renting for a short time until you moved back in with your mother.
Since losing your practising certificate, you have worked in various capacities. From 2016-2019 you drove a limousine. You have had occasional work assisting a friend relocating company computers. You have also undertaken gardening and other casual labour work and have actively looked for paid work.
Sentencing factors
Nature and gravity of the offending
Your offending is inherently serious due to the consequences of misusing your trust account, and in some instances loss of monies entrusted to you. As well as causing pain and loss to victims, your offending has brought the legal profession into disrepute. The amounts of money involved ranged from large amounts of your clients’ money, to significantly lesser sums, with a total approximating 1.7 million dollars. While the combined amount of money involved is not necessarily the factor determining the degree of seriousness, it is nevertheless an important factor to be taken into account. It is also significant that your offending involved repeated transactions over a period of years, and some of your offending involved stealing money from your clients, resulting in actual loss to them, as well as causing deficiencies in trust accounts.
The offending you carried out should be regarded as serious examples of the offences of theft and causing deficiencies in your trust account. You engaged in significant and sustained acts of betrayal of trust and dishonesty.
Culpability
As your offending occurred with multiple transactions over a period of years, you had plenty of time to reflect on your conduct. In your role as a solicitor you were well aware that your conduct was wrong. Your offending was calculated and did not occur on the spur of the moment on one or a handful of occasions. Instead, it endured on multiple occasions over a significant period of time.
Moreover, in some instances, your position as a solicitor and confidante of your clients meant that you were on friendly terms with some of them while you stole their money, or manipulated their money across bank accounts. Some of your clients regarded you as a friend and in at least one instance you engaged with them on a social basis. These actions result in your conduct being all the more reprehensible and increase the level of your moral culpability. Moreover, you applied some of these monies you stole for your own personal benefit, thus increasing your level of culpability.
Furthermore, your offending conduct did not concern larger institutions which might have been better placed to endure financial hardship brought about by such actions, but rather you exploited individuals. Your actions deeply hurt people who trusted you to act in their interests. You abused the trust of these people, and you abused the trust of the broader community. In the cases of Ms Fousekatis and Mr Fourniotis you offended against each of them multiple times, not just once. Your offending was blatant and disgraceful.
I note your offending does not appear to have underlying factors such drug dependence and gambling. It appears you offended in significant part, to enhance the lifestyle of you and your family, and to augment your asset wealth. You were provided an easy opportunity to so in your role as a trusted solicitor.
In my opinion your moral culpability for this offending is high. I am unable to discern any redeeming explanation for this conduct that was directed towards your personal betterment.
Plea of guilty and remorse
It is to be clearly acknowledged that you entered pleas of guilty to the charges on the indictment. Your plea of guilty was entered on the day on which your plea was heard. However, based on the submissions made, you indicated from 26 August 2019 onwards that you would plead guilty. Your counsel submitted that no complainant or witness has ever been cross examined. This has saved public resources and has facilitated the administration of justice. Your plea of guilty has considerable utilitarian value. As a result your victims have been spared the trauma of having to endure a contested trial, and the community has been spared the time and cost of lengthy proceedings. Your pleas of guilty must result in an appropriate reduction in the sentence that would otherwise have been imposed had you not entered them in the circumstances I have described. I accept that in all the circumstances you should be regarded as having entered or at least indicated an early plea of guilty.
It was also noted by your counsel that you did not resist the application that came before J Forrest J in this Court to have your name removed from the roll of solicitors.
You maintain support from your community. I received six character statements from people who have expressed opinions about your positive attributes, your remorse, and potential for rehabilitation. These were, Ian Hone, Sam Gosios, Dr Theo Mantamadiotis, Terence Komis, Sue Davey and Amelia Gardiner. I have considered them all.
You also provided a brief letter to the Court dated 31 January 2020. You expressed a sincere apology to the Court and to the legal profession for the disrepute you have caused. You also apologised to your clients, expressing sorrow for your actions, and acknowledging the shame you feel.
I am prepared to accept that you are now sorry for your offending and realise the impacts that it has had, but at the same time acknowledge this has taken some time to evolve. Your Counsel conceded that some of your offending occurred at a time when you were engaged in proceedings involving complaints before the Legal Services Board, and VCAT, and to some extent your approach in dealing with issues concerning the way in which you carried out your practice was an example of somebody trying to delay the proceedings. It was conceded that it could not be argued on your behalf that you have ‘in every way cooperated or made admissions’.
At the same time I accept there has been some delay in the finalisation of these matters. The Legal Services Board appointed a manager to the law firm in October 2015 and the investigation into your affairs then commenced. You were first arrested in August 2018. I take the delay into account and accept that over this period you have experienced the anxiety and burden of having these matters unresolved for a period of almost five years.
Sentencing purposes
Section 5 of the Sentencing Act 1991 sets out a series of matters I am required to take into account in forming a decision about the appropriate sentence to pass in this matter.
General deterrence, denunciation and community protection
General deterrence, denunciation and protection of the community are important considerations in cases involving solicitors who steal client’s money, and cause deficiencies in trust accounts. As Warren CJ observed in The Queen v Linacre,[2]
Lawyers hold a position of trust. They are officers of this Court and have a paramount duty to it. Lawyers are entrusted by the community to act with integrity. They are often relied on in times of crisis and tragedy. The community must have faith in the legal profession in order for the legal system to operate effectively
Moreover, other lawyers and the community must be aware that this type of gross misconduct will result in very serious punishment. Lawyers must comprehend that the courts uphold the highest standards for lawyers in this State. Lawyers are not above the law.[3]
[2][2014] VSC 615.
[3]Ibid at [58]-[59].
It follows that the sentence to be passed on you must give significant weight to the factors of general deterrence and community protection in order to send a clear message that those who contemplate similar conduct should expect stern consequences to follow. Your behaviour in carrying out this offending must be strongly denounced, and will result in you being punished for your offending.
Rehabilitation and specific deterrence
I note the submissions made by your counsel that you have good, reasonable prospects of rehabilitation, based on the fact that you have no prior convictions, your offending is not related to any gambling or substance addictions, you maintain regular contact with your four children and wish to continue to financially support them where possible.
In all the circumstances I am satisfied that you have good prospects for rehabilitation. You have pleaded guilty and admitted your conduct. You clearly understand the impact of what you have done. The material placed before me also persuades me you are unlikely to offend again in the future. Accordingly, the need to pass a sentence with a significant component directed towards specific deterrence is of lesser importance in your case. The prosecution conceded this to be so.
Comparative sentences
The Court was provided with a table of previously decided cases involving legal practitioners who have offended in similar ways to you. Such examples assist in providing guidance in the assessment of a just and appropriate sentence. Consistency of sentencing is an important objective to be kept in mind. However, it is to be borne in mind that there is limited utility in these past cases to establish a comparative range of sentences that might apply in your case, as there are significant variations in the facts and circumstances of each case. It may be observed however, that analysis of these cases reflects a consistent application of sentencing principles to be applied.
I have taken these examples of past cases into account, and examined each of the cases referred to in the table.[4]
[4]DPP v Bouhalis [2019] VSC 684; DPP v Sidaoui [2019] VSC 225; The Queen v Munt [2015] VSC 132; The Queen v Linacre [2014] VSC 615; DPP v Penny [2012] VSCA 203; The Queen v Blackberry [2019] VSC 279; The Queen v Maloney [2014] VSC 641; The Queen v Tansey [2012] VSC 221; R v Andre Vincent Di Cioccio [2012] VSC 28.
The impact of COVID-19
Since your plea of guilty and the plea conducted on your behalf, COVID-19 has emerged with its effects now having wide and devastating impacts worldwide. As a result, at the invitation of the Court, your counsel sought to place before this Court written submissions in relation to the impact, if any, of COVID-19 on the sentence to be imposed upon you. The prosecution responded with a written submission.
On your behalf it was submitted that the situation created by COVID-19 is a further relevant and mitigating factor as it will increase the burden of any prison sentence due to restrictions operating within the prison system, including the suspension of personal visits, and the impact on programs. Furthermore, it was pointed out by way of a letter from your general practitioner that due to a heart condition diagnosed in 2014 that you have an elevated health risk, if infected with COVID-19.
The prosecution concedes that the Court can take into account the additional hardship of your incarceration caused by measures taken in response to the COVID-19 pandemic and particularly noted restrictions on visits as a relevant sentencing consideration. The prosecution further noted that the risk of contracting the infection may be a source of anxiety making prison more burdensome, particularly where the prisoner may be at higher risk from COVID-19.
It has been widely accepted that those incarcerated are particularly susceptible to the rapid spread should the virus enter those institutions.[5] It is not possible, nor appropriate, to predict the course of prospective events, or speculate about future possibilities. However, I am prepared to accept that the impact of COVID-19 while you are in custody will likely cause additional subjective stress and concern for you, your family and friends.
[5]Rakielbakhour v DPP [2020] NSWSC 232.
Tinney J recently observed that those in custody are not in a position to control their own exposure to the virus and the measures taken to mitigate the risk of exposure.[6] That observed, on the present state of the evidence I am not prepared to act on the basis that you are at greater risk of contracting COVID-19 as compared to any other member of the population because you are in custody.
[6]R v Sharif [2020] VSC 226 at [81] and R v Abdi [2020] VSC 225 at [ 109].
Each case must be resolved on the particular facts of any individual case.[7] I take into account the increased level of anxiety you will be exposed to as a result of being in an environment that you are less likely to be able to control. I also take into account the added related stress on you of the heart condition you suffer, as well as until now you have been on bail and on being received into the prison system you will be subject to a significant period quarantine protection. I accept these matters will be an additional burden, and I take them into account. You have not been in custody before and I accept these matters will all weigh heavily upon you.
[7]Brown v The Queen [2020] VSCA 60.
Conclusions
You are 55 years of age, with four children, two of whom are adults, and two of whom are still school aged. You have an elderly mother with whom you live. Having practised in the respected profession of solicitor for many years, you now face the prospect of imprisonment for abusing the trust of your clients. You have never been in custody before.
Your actions have caused pain and misery to your clients, the people who trusted you. As a result of your offending, your career as a practising lawyer is finished, and you are in disgrace. In 2018 your name was removed from the roll of legal practitioners. While I regard specific deterrence as a less significant sentencing factor in your case, general deterrence remains an imperative sentencing factor for the reasons I have discussed.
Lawyers that are tempted to breach the trust of their clients for their own financial gain need to understand that the punishment they will face when their crimes are discovered will be significant and substantial. The community’s expectation of those in the legal profession is an important element in the overall trust in the legal system, and important to maintaining the rule of law. The reputation of the legal profession is essential to the stability of our society. These reasons go to some considerable distance in explaining why courts have consistently expressed abhorrence and condemnation of theft by solicitors from their clients. The commission of these types of offences reduces community trust in the legal profession as a whole.
Sentence
After considering all relevant factors and purposes, the applicable maximum penalties, and keeping in mind the principle of totality, I sentence you as follows:
On the charges of theft:
(a) 3 years’ imprisonment on charge 7
(b) 4 years’ imprisonment on charge 10
(c) 2 years’ imprisonment on charge 16
(d) 3 years’ imprisonment on charge 18
(e) 3 years’ imprisonment on charge 23
On the charges of causing deficiencies in your trust account:
(f) 12 months’ imprisonment on charge 1
(g) 9 months’ imprisonment on charge 2
(h) 18 months’ imprisonment on charge 3
(i) 9 months’ imprisonment on charge 4
(j) 12 months’ imprisonment on charge 5
(k) 12 months’ imprisonment on charge 6
(l) 12 months’ imprisonment on charge 8
(m) 9 months’ imprisonment on charge 9
(n) 9 months’ imprisonment on charge 11
(o) 9 months’ imprisonment on charge 12
(p) 9 months’ imprisonment on charge 13
(q) 9 months’ imprisonment on charge 14
(r) 9 months’ imprisonment on charge 15
(s) 15 months’ imprisonment on charge 17
(t) 9 months’ imprisonment on charge 19
(u) 9 months’ imprisonment on charge 20
(v) 9 months’ imprisonment on charge 21
(w)9 months’ imprisonment on charge 22
I order the base sentence is four years’ imprisonment on charge 10 (theft). I direct that all other sentences are to be served concurrently with the base sentence save for the following sentences (theft) which are to be served cumulatively on the base sentence and upon each other:
·Charge 7 – 6 months’ imprisonment
·Charge 16 – 6 months’ imprisonment
·Charge 18 – 6 months’ imprisonment
·Charge 23 – 6 months’ imprisonment
For reasons which I have detailed above, I therefore impose on you a total effective sentence of 6 years’ imprisonment.
I order that you will serve 4 years before being eligible for parole.
6AAA of the Sentencing Act 1991
Pursuant to s 6AAA of the Sentencing Act, I declare that had you not pleaded guilty to this indictment, the sentence I would have imposed upon you would have been eight years’ imprisonment with a non-parole period of six years.
Since you have remained on bail until today there is no pre-sentence to be taken into account.
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