Director of Public Prosecutions v Likki

[2019] VCC 255

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

AT MELBOURNE
CRIMINAL JURISDICTION

CR-18-02070

DIRECTOR OF PUBLIC PROSECUTIONS

v

THARUN LIKKI

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JUDGE:	HIS HONOUR JUDGE HIGHAM
WHERE HELD:	Melbourne
DATE OF HEARING:	27 February 2019
DATE OF SENTENCE:	5 March 2019
CASE MAY BE CITED AS:	DPP v Likki
MEDIUM NEUTRAL CITATION:	[2019] VCC 255

REASONS FOR SENTENCE
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Subject:  CRIMINAL LAW

Catchwords:  Sentence – plea of guilty – attempt to obtain financial advantage by deception – deal with proceeds of crime valued at $100,000 or more – Commonwealth offences – general deterrence – denunciation – no prior convictions – remorse – positive prospects of rehabilitation

Legislation Cited:     Criminal Code (Cth); Sentencing Act 1991 (Vic)
Cases Cited:

Sentence:Total effective sentence of two years and three months’ imprisonment, to be released on a recognisance release order after serving eight months.

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APPEARANCES:	Counsel	Solicitors
For the Commonwealth Director of Public Prosecutions	Mr A Sharp	Office of the Commonwealth Director of Public Prosecutions
For the Accused	Mr M Cookson	Balot Reilly Lawyers

HIS HONOUR:

1Tharun Likki, you have pleaded guilty to one charge of attempting to dishonestly obtain by deception a financial advantage from the Commonwealth, for which the maximum penalty is a term of imprisonment of ten years, and one charge of dealing in proceeds of crime valued at $100,000 or more, believing the same to be proceeds of crime, for which the maximum penalty is a term of imprisonment of 20 years.

2The prosecution tendered and relied upon a summary of prosecution opening on the plea, which is Exhibit 1.  I incorporate that document in its entirety into these reasons for sentence, including the annex to that document.

3In relatively brief compass, your offending involved a scheme to fraudulently claim refunds from the Australian Taxation Office (“ATO”) in respect of non-existent franking credits.  Franking credits refers to the tax credit available to shareholders to whom dividend payments have been made so as to avoid double taxation of company profits that would otherwise occur.  Such credit can be used to offset tax liability on other earnings.  If the franking credit is greater than the shareholder's taxpayers other tax liabilities then a refund will be made.  In order to claim the refund, the shareholder must have an Australian tax file number and lodge an income tax return with the ATO.  Refunds were payable only to persons in Australia.  Temporary residence on a student visa was sufficient status to enliven the payment of refunds.

4Your older brother, Varun Likki, and his associate, Ranjith Goli, had both arrived in Australia from India on student visas in June 2008.  Both left Australia in 2010.  You arrived in Australia from India on 10 April 2012.  At some point, a criminal scheme was devised by persons including your brother Varun and Mr Goli whereby income tax returns containing fraudulent claims for franking credit refunds were submitted.

5On 2 July 2013 an online order was placed on the ATO website for 15 income tax return forms for the 2013 financial year to be sent to Mr Goli at the Hoppers Crossing address where you were then living.  Using the ATO's individual auto registration scheme, visa information for Indian nationals residing in Australia on temporary visas was obtained from websites in India.  This visa information was then submitted to the ATO to generate fictitious tax file numbers.  These fictitious tax file numbers were then used in the lodging of income tax returns, in which refunds were sought from the ATO for non-existing franking credits.

6The students whose identities have been appropriated were unaware that their names had been used in the fraudulent schemes.  Whilst the refund claims were subject to some validation checks, there was no system in place to reconcile credits claimed with credits issued.  In consequence, there was a loophole in the system.  The scheme in which you played an integral role sought to criminally exploit that loophole for financial gain.

7A tip off was received by the ATO in May 2016 and during the course of the subsequent investigation, your offending was revealed.  Charge 1 relates to four income tax returns completed by you.  They related to the 2012/2013 financial year and were lodged between 2 July 2013 and 31 July 2013.  The total value of the claims on the four income tax returns comprising Charge 1 was $22,180.  The key details are set out in the first table in Annexure 1 of Exhibit 1.  The claims were rejected and so did not result in payment of any refund.

8Charge 2 comprises the receipt into accounts controlled by you of $117,540, which sums represented monies obtained from the ATO pursuant to the lodging and approval of fraudulent claims.  The refunds resulted from the lodgement of 22 false income tax returns for the financial years 2012 to 2015.  The income tax returns were lodged between 18 July 2013 and 7 September 2015.

9The submitted income tax return forms included provision for the taxpayer to nominate accounts into which refunds were to be paid by electronic funds transfer.  The nominated accounts were held in the name of either Mr Goli (three accounts) or your brother Varun (one account).  Refunds were paid between 6 October 2014 and 7 September 2015.  Once received into the nominated account, the fraudulently obtained tax refunds were then electronically transferred into one of the two accounts held in your name, often in a series of amounts of $1,000.  Once in your account, monies were then transferred by you directly, or on your instructions, to India, primarily via the Raffles foreign exchange centre in Elizabeth Street, Melbourne (see Exhibit 6TL).

10Full details of the 22 income tax returns which generated the proceeds of crime and the movement of those funds are set out in the second table in Annexure 1 of Exhibit 1.

11On 29 March 2018, a search warrant was executed at your then residential address in Footscray.  You provided passwords and account details to enable access to your electronic devices and social media accounts.  Four 2016 income tax return forms that were blank save for entries in the dividends sections were located, as was an ATO product delivery advice dated 2 July 2013, relating to the 15 income tax returns requested electronically on that date.

12Subsequent examination of your electronic devices and your email account located documents clearly establishing a connection to the fraud, including photo files depicting visa grant notices for various persons other than yourself or your associates, tax file number notification letters addressed to various persons sent to addresses where you had been resident, and photographs of blank income tax return forms containing the relevant labels for inputting dividend details.

13On 1 June 2018 you were formerly interviewed by ATO investigators.  You read a prepared statement in which you made partial admissions to your involvement in the criminal enterprise, the responsibility for which you laid firmly at the door of your brother Varun and Mr Goli.  You sought to paint yourself as someone who was manipulated and exploited for the dishonest financial purpose of others.  I make no adverse finding in consequence of those partial admissions.

14The committal was scheduled for 10 October 2018, and following negotiations on this date, the matter resolved as a guilty plea to the charges currently before me.

15I turn now to your personal circumstances. 

16You were born on 9 October 1987 and you are now 31 years old, and you were aged between 25 and 28 at the time of the offending. 

17You were born in Warangal in southern India and your first language is Telugu.  Your parents worked as civil servants and you have two siblings.  You grew up in a supportive, middle class Hindu family, and you were not exposed to trauma, conflict or abuse.  You attended a local school and described your education in positive terms.  You were surrounded with friends and enjoyed maths, physics and science.

18After completing a Bachelor of Electronics and Communication you struggled to find employment in India.  You arrived in Australia in 2012 on a student visa and enrolled in a Master of Networking at the Melbourne Institute of Technology.  You completed this degree in 2015 and are now studying a Master of Business Administration at the Boston Institute of Technology’s Melbourne campus.  Whilst studying in Australia you worked in 7-Eleven convenience stores part time to support yourself.  You struggled to find work in IT in Australia and you felt that your status as a temporary resident deterred employers from hiring you.

19You had returned to India for holidays whilst based in Australia, including to enter into an arranged marriage which took place in August 2016.  You last saw your wife almost 18 months ago and you do not yet have any children.

20You report no issues with alcohol or illicit drugs and there is no evidence that they present any challenges for you.

21Tendered on your plea was a report from Ian Mackinnon, consultant psychologist dated 17 February 2019 (Exhibit 3TL).  Mr Mackinnon detailed your family background and your education achievements and professional skills.  He found no psychological disorders and no antisocial traits to your character.  You presented to Mr Mackinnon as an individual,

"Who is genuinely somewhat shy and anxious.  His aptitude lies in intellectual spheres, particularly IT".

22You appear to have led a conscientious and law abiding lifestyle, one that usually revolves around your family, studies and employment.  Mr Mackinnon posited that you were,

"Probably completely naive when he was first enlisted by his brother Varun and their family friend, Mr Goli.  Primarily, Mr Likki was acting under the influence of traditional cultural values that meant he, as the younger brother, had to acquiesce in his eldest brother's authority and demands".

23Mr Mackinnon further observed that you appear to be exceptionally remorseful for your role in these offences and,

"In my opinion he is unlikely to become involved with anything similar again".

24Mr Mackinnon concluded that in an Australian prison context you would be completely naive and vulnerable, and likely to be targeted.  He also pointed to the cultural and socially isolation that you would experience.

25In his submissions to the Court, your counsel, Mr Cookson, described your loving and education-focused family and upbringing.  He pointed to your educational achievements and how you arrived in Australia intending further study. 

26Of your offending in Charge 1, your counsel submitted that you had been given six tax returns for completion and lodgement, but in fact only submitted four.  You knew that the information was false.  Mr Cookson submitted that you had been pressed into providing assistance to the scheme by your older brother Varun, someone who you are unable to disobey.  You became involved reluctantly, against your better instincts and against your sense of values.  Throughout the period of offending of Charge 2, you continued to act under your brother's instructions.

27Mr Cookson submitted that your offer in June 2018 to give evidence against your brother Varun in any potential proceedings represented a significant commitment by you and should be viewed as a powerful repudiation of your brother, running contrary to your cultural norms. 

28He submitted that you had not benefitted materially from the deception and that all the monies were sent by you overseas, as per Varun’s instructions.

29In August 2016 in India, you married your wife; this was an arranged marriage, as was traditional in your family.  However, since being charged in this matter you have not been able to visit India and your wife has not been able to come here to visit you.  Thus you have not seen each other since September 2017 and you are acutely aware of the separation.

30You have had no contact with your brother Varun, and you have only spoken to your family in the most general terms of your legal difficulties in this country, so as to avoid distress on their part. 

31In the three and a half years since the offending, you have kept out of trouble and sought to continue with your education, having completed a Master’s degree and worked in Perth for a 12 month placement.

32Mr Cookson urged that your plea should be viewed as having great utilitarian value and is indicative not only of your willingness to facilitate the course of justice, but also indicative of your remorse. 

33He submitted that there had been a delay, which delay has impacted upon you in terms of your reactive depression and your inability to see your wife.  He conceded, however, that such delay has also given you an opportunity to demonstrate rehabilitation.  I make it clear that I do not regard the delay in this matter as in any way exceptional.

34Mr Cookson submitted that you would be vulnerable in prison, echoing there the observations of Mr Mackinnon.  He contended that you should be sentenced by means of a suitably structured community correction order or alternatively to a term of imprisonment with an immediate recognisance release order.

35Mr Sharp, learned counsel for the prosecution, submitted correctly that deterrence and just punishment are to the fore in offences of this nature.  A fraud on the taxation office is a fraud upon the community as a whole. 

36From the outset, he made clear that Mr Goli and your brother Varun were the architects of the fraudulent scheme and that your role was secondary to theirs.  This is, in my view, a significant concession that is made by the prosecution in your case.

37In Charge 1, you lodged four tax returns on instructions.  On Charge 2, knowing the funds had been obtained unlawfully and were therefore the proceeds of crime, you were integral in moving the funds out of the jurisdiction.

38Mr Sharp submitted that your actions constituted money laundering, a crime which because of its close connection to and relationship with the enterprise that generated the original proceeds of crime will always be viewed as serious offending by the courts.  As I made clear in the course of the plea, I regard such a submission as a mischaracterisation of your role.  In my view, this was not a case where you leant yourself to laundering dirty money.  The money remained dirty in your hands and was not laundered, but rather was merely electronically transferred out of the country.

39The learned prosecutor was not able to say what benefit you personally derived from the scheme put in place by others.  He submitted that specific deterrence may be given less weight in light of your absence of prior convictions, the circumstances of your involvement in the offending and your history since the end of the offending period.

40He submitted that your statement to the police in the course of your interview on 1 June 2018 was neither full nor frank and that I should be cautious in viewing them as a demonstration of remorse.  I give little weight to that submission. 

41Mr Sharp submitted that I should have regard to the strength of the prosecution case in assessing the weight to be given and credit to be afforded to your plea of guilty. 

42In conclusion, he submitted that the objective seriousness of the offending and the sentencing principles of denunciation, general deterrence and just punishment thereby engaged demanded a head sentence with a non-parole period.

43As correctly submitted by Mr Sharp, a fraud upon the revenue, that is upon the taxation office, is a crime against the community at large.  It is a basic and fundamental duty of all citizens to pay their tax liabilities.  This is a fundamental part of the social contract that we make as members of the community.  Monies paid as tax revenues are then used to make provisions in essential areas, such as health, education, transport and infrastructure, for those citizens who do not have the means to make such provision themselves.  It is a basic contract which binds us all and that is why any fraud upon the tax revenue is a crime against the community at large.  Because the tax system within Australia relies heavily on self-assessment and self-report of the individual taxpayers’ affairs, it is a system that is built upon trust.  As the scheme in which you played a part makes clear, it is a system which is open to abuse.  Tax evasion is not a game and it is not a victimless crime, but rather it is a form of corruption which debases the community at large, and that principle applies to an even greater extent to those such as you and your criminal associates, who steal from the common purse by practising a deceit upon it.

44The scheme to which you leant yourself clearly required some forethought and some planning, as is evidenced by the sourcing of visa details from websites in India and applications made to the ATO for blank income tax forms.  Thereafter, it seems, the forms were completed, they were approved and monies paid to nominated accounts.  I do not regard the scheme for obtaining refunds as being particularly sophisticated, contrary to the submissions of learned counsel for the prosecution.  In the course of the plea I expressed surprise at the apparent lack of any internal reconciliation within the ATO, which thereby enabled the false refunds to be made.  The monies went through accounts nominated by your brother Varun and Mr Goli into your own accounts and generally in small amounts.  The prosecution argued that transactions in those amounts was designed to put the ATO off the scent, thereby revealing an aggravating level of sophistication to the criminal enterprise.  However that process may be described, it is clear that once the funds were in your account, your task was simply to get the proceeds of crime out of the country and into the hands of the architects of the criminal scheme.  That was the task that you performed.  As such, your role was important and it was essential to the success of the operation.

45I am prepared to accept that your initial involvement was due to your brother Varun exercising some form of family influence over you.  Whether or not you were reluctant at the outset to assist your brother in his criminal enterprise, your involvement extended over a two year period.  At any time you could have said no, but you did not.  You knew full well what you were doing and, in my view, you knew full well that it was wrong.

46Mr Likki, I must pass upon you a sentence that is appropriate, having regard to all the circumstances of your offending.  In arriving at an appropriate sentence, I must have regard to a range of different factors.  I must give effect to principles of both general deterrence and specific deterrence, that is, I must deter others from behaving like you did and I must deter from you from any repeat of such behaviour.  I accept that the need for specific deterrence in your case is reduced, although in my view, it is not eliminated.  I must express the community's denunciation of your conduct and I should promote, if possible, your rehabilitation. 

47Clearly, principles of general deterrence and denunciation are primary sentencing considerations in this case.  I give full effect to all of the mitigatory factors to which I have been referred and argued so ably on your behalf by your counsel, Mr Cookson.  For the avoidance of doubt I have regard to:

i.Your plea of guilty, which has a utilitarian value and is indicative of remorse.

ii.Your prior good character and antecedents.

iii.Your expressed remorse. 

iv.Your prospects for rehabilitation, which I accept are positive and which mean that you are unlikely to trouble the courts again. 

v.The enforced separation you have experienced from your family in India and your new wife whilst awaiting determination of these matters on a bridging visa. 

vi.The cultural isolation that you will experience in custody.

vii.The nature and circumstances of the offending and my findings as to your role within it.

48Nonetheless, Mr Likki, I am satisfied that no other sentence than a term of imprisonment is appropriate in all of the circumstances of the case. 

49If you would stand please, Mr Likki.

50On Charge 1, attempting to obtain a financial advantage by deception from the Commonwealth, you are sentenced to a term of imprisonment of six months. 

51On Charge 2, dealing with proceedings of crime valued at $100,000 or more, you are sentenced to a term of imprisonment of two years.

52I direct that the term of imprisonment on Charge 1 should begin today.  The term of imprisonment on Charge 2 shall commence on 5 June 2019. 

53This makes a total effective sentence of two years and three months’ imprisonment. 

54In respect of that total effective sentence you are to be released upon a recognisance release order on 4 November 2019, that is, eight months from today.  The recognisance release is in the sum of $2,000 and the operational period is nineteen months.

55Pursuant to s.6AAA of the Sentencing Act 1991, had you not pleaded guilty, you would have been sentenced to a total effective sentence of three years and nine months’ imprisonment with a non-parole period of two years and three months.

56Custody management issues, Mr Smith?

57MR SMITH:  I think the issues were essentially aired by counsel on the plea.  But, yes, first time in custody.

58HIS HONOUR:  Shall I send Mr Mackinnon's report?

59MR SMITH:  I'd be grateful for that, yes, thank you, Your Honour.  Obviously English is his second language.  Other than that I'm instructed that there's no ‑ ‑ ‑

60HIS HONOUR:  He's not in receipt of any medication?

61MR SMITH:  No, I'm instructed he's not.  He has been ‑ ‑ ‑

62HIS HONOUR:  No, I think I raised that on the last occasion, didn't I?

63MR SMITH:  You did, Your Honour.  He has been in the past, but he's not been for some months.

64HIS HONOUR:  All right, thank you very much.  Now, if you've got the recognisance release order ready, Ms Loh, I’ll sign it.  Mr Smith, Ms Murphy is going to take the order to be signed by Mr Likki, if you want to go with her please.

65MR SMITH:  Sure, thank you.

(Community-based order signed and acknowledged.)

66HIS HONOUR:  Ms Loh, Mr Smith, thank you for your attendance today.

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