Director of Public Prosecutions v Matthews

[2019] VCC 650

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

AT MELBOURNE
CRIMINAL JURISDICTION

CR 18-02218

DIRECTOR OF PUBLIC PROSECUTIONS

v

ANDREW MATTHEWS

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JUDGE:	HER HONOUR JUDGE QUIN
WHERE HELD:	Melbourne
DATE OF HEARING:	11 April 2019
DATE OF SENTENCE:	13 May 2019
CASE MAY BE CITED AS:	DPP v Matthews
MEDIUM NEUTRAL CITATION:	[2019] VCC 650

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 P. Pickering	OPP
For the Accused	Mr M. Dempsey with Ms L. Thies	Tony Hargreaves & Associates

HER HONOUR:

1Andrew Matthews, you have pleaded guilty to one charge of obtaining a financial advantage by deception and one - no, you can sit down, Mr Matthews.  I will ask you to stand up at the end - and one charge of attempting to obtain a financial advantage by deception.

2Each of the two charges is a rolled up charge.  The first encompassing a period of time and the amount of money set out in the table attached to the indictment.  Charge 1 relates to 129 customers of the National Australia Bank, NAB, occurring between 17 January 2012 and 15 June 2016, where you falsely represented to your employer or NAB that Nicola D'Agostino, your co-offender, was entitled to a commission of $640,938.53. 

3Charge 2 relates to a period between 11 May 2016 and 1 July 2016 when you attempted to obtain $13,013.88 by similar means.

4The maximum penalty for Charge 1 is 10 years' imprisonment and attempt is five years.

5By way of background it's necessary to briefly explain the practice adopted by NAB as part of it's mortgage lending operations involving an introducer program.  The introducer or registered person would refer a customer to a NAB staff member and the remainder of the documentation and communications regarding the loan were then done or completed by that staff member.

6If the introduced loan proceeded the NAB staff member was required to have the customer sign a document acknowledging the role of the introducer, that is the acknowledgment form.  Once the loan was finalised and drawn down the introducer would be paid the relevant commission by NAB, amounting to 0.4 per cent of the loan amount.

7In about May 2010 you were a registered introducer for the NAB scheme under your company name, Brits Enterprises.  you referred a number of customers to NAB staff and received the relevant commission.  You ceased being a registered introducer soon after you commenced employment with NAB.  You began employment with the NAB as a mobile home lender based at the branch in Seaford in October 2011.

8Your co-accused, Mr D'Agostino, was a family friend with no background in the banking industry.  Mr D'Agostino became an introducer for you in November or December, soon after you'd started your job, and entered the relevant agreement with NAB.  It was agreed that you would receive the majority of the funds that Mr D'Agostino received from NAB in his role as introducer, even if he had not introduced the customer.  In each instance he would receive 100 per cent of the fee into his bank account and he was then invoiced 90 to 95 per cent of that fee by you, using the company name, Brits Enterprises Pty Ltd.

9Mr D'Agostino did introduce a number of customers legitimately to the NAB.  However, between 17 January 2012 and 1 July 2016 you falsely represented to NAB that he'd introduced numerous other customers to the NAB and that he was entitled to be paid commission according to the introducer program.  After NAB paid the commission you'd invoice Mr D'Agostino for the bulk of that amount as per your agreement.

10In June 2016 an internal audit by NAB discovered that a disproportionate number of referrals for loans written by you had been referred by Mr D'Agostino during the time of your employment.  Initially for the first six months the commission payments appeared spasmodic though thereafter the monthly commissions paid to Mr D'Agostino dramatically increased.

11As part of the investigation each customer was contacted to confirm whether their loan had been arranged through Mr D'Agostino during the time of your employment with NAB.  After 174 loans were examined, 129 loans were found to have been processed where introducer fees were paid to Mr D'Agostino despite no introduction being made by him.  These are listed in Schedule A of the prosecution opening dated 7 April 2019.  In each of these loans your had the customer sign an authorisation form as part of the other loan papers, indicating the customer had been introduced by Mr D'Agostino.

12Examination of the accounts of Brits Enterprises revealed that you were paid a total of $649,938.53 by Mr D'Agostino through the operation of this scheme.  You also attempted to obtain introducer fees in the sum of $13,013.88 between 11 May 2016 and 1 July 2016 in the same manner.  However, these loans were rejected by NAB.  The four customers all signed authorisation documents at your request which stated that they had been introduced by Mr D'Agostino even though they had never met or had contact with him.

13You were arrested at your house on 19 July 2016.  During a search police seized numerous documents including NAB home loan forms and authorisation forms.  Similar documents were located on your computer.  You gave a no comment interview on the day of your arrest and again were re-interviewed on 15 November 2017.

14Your role was critical and you were the driver of the scheme requiring
Mr D'Agostino's involvement for the scheme to work.  The enlistment by you of Mr D'Agostino as an introducer allowed you to take advantage of your position at the NAB and your knowledge of their system allowed you to exploit it for your own personal gain.  You received a significant amount of additional funds from your employer to which you were not legitimately entitled.

15You were instrumental in the engaging in this fraudulent activity which deceived the NAB and breached the trust your employer placed in you.  I was informed that at the time of this offending your employment contract provided for a base salary of $75,000 per annum, plus superannuation, plus performance based bonuses upon achieving a number of specified key performance indicators.  No actual sum was provided to me.  It has not been suggested the loans were not otherwise legitimate or properly approved.  I will refer to other features of your offending when considering the objective seriousness and context of your offending.

16I was provided with a significant amount of material from defence counsel, including both personal and character references and medical reports.  I have read and considered each of these documents, particularly the report of
Dr Danny Sullivan, consultant forensic psychiatrist, dated 24 March 2019, who summarised information provided from other sources including other medical professionals.  See paragraphs 30 to 39.

17You are currently aged 38.  You were born and raised in Mitcham and your parents, who are both retired, came to Australia in the early 70s.  You are the eldest of four children and remain close to all your family members.  You married in 2009 and have two children, aged seven and four.  Your younger child, George, has recently been diagnosed with an autism spectrum disorder, a matter which I will refer to later in these reasons.

18Your wife has returned to the workforce in the last 12 months as a bookkeeper for her father's business.  Your family remains supportive of you, as evidenced by their attendance at court and the significant amount of material tendered on your behalf.  Your family and friends attest to you being a changed man, both physically and emotionally, since you were charged.

19You successfully completed VCE and obtained a Batchelor of Science at Latrobe University.  in 2005 you began working as a cardiac ultrasound technician at CardioScan, where you remained for two years, hopeful of being able to study medicine.  You then spent 12 months working for a friend as a mortgage broker.  Soon thereafter you were employed by the Commonwealth Bank as a mobile banker, where you remained for about three years.  You then became an introducer for the NAB and in that role introduced clients to NAB on behalf of Aussie Dream Loans.  After several months you signed up as an introducer with the NAB directly, receiving the commission yourself through your company of Brits Enterprises.

20you then took up the job as a mobile banker with the NAB in October 2011.  I accept from the references tendered on your behalf that you were a hardworking and diligent mobile banker, obsessed with your work.  I note that you were awarded in 2014 the retail mobile lender of he year.  However, that assessment was made when you were engaged in this offending.  Similarly, this offending took place in the context of you being driven to succeed and to reap the benefits from that approach.  I accept that you were totally committed to your work and achievement of financial success.  It was this drive that was partially responsible for your offending.

21Dr Sullivan opined that you appeared to have some narcissistic personality traits, that you were somewhat preoccupied with impressions of success and a sense of entitlement.  This, he thought, may have contributed to your catastrophic reaction to being charged and your perception that you individually had been scapegoated for these charges.  Additionally, in my view, such traits assist in explaining to a certain degree why you offended in the manner in which you did.

22You have not found work since you were dismissed from the NAB in July 2016 other than for a short time as a driver in your wife's family business.  I accept that the loss of your career has had a profound effect on you and that your mental health has deteriorated significantly over the period since the discovery of your offending.  In August 2016 you were referred to a psychologist,
Mr Freddie Pareto, suffering depression and anxiety and were placed on a mental health care treatment plan until March 2017.

23In April 2017 you attempted suicide by overdosing on Diazepam.  You were taken to Dandenong hospital and treated by psychiatrist, Dr Vinay Kumar.  At that time Dr Kumar diagnosed adjustment disorder with depressed mood, though he was of the view that over time this diagnosis had evolved into a major depressive disorder.  This diagnosis was confirmed by your psychologist and Dr Danny Sullivan.  Dr Sullivan opined that your major depressive episode was moderate to severe and chronic.

24You have utilised medication in treatment over the years with limited success.  Dr Vinay has recommended you commence ECT though you have declined this type of treatment.  You have had two further suicide attempts earlier this year, both requiring admission to hospital and ongoing intervention by the HAT team.

25Dr Sullivan also indicated in his report, 'Mr Matthews has recurrently expressed suicidal ideation and is now under the care of a public mental health service.  His suicidal expressions have a melodramatic and concerning flavour.  It's unclear whether he is unable to cope with the stress or ignominy of charges or whether consciously or unconsciously he hopes that suicidal threats will prevent him from receiving a sentence of imprisonment.  I consider that his risk of suicidality is markedly elevated and this is reflected in both his treatment by the public health mental health sector and the apparent refusal of private psychiatrists and hospitals to manage him due to perceived risk".

26I was informed that you had attempted to take your life on two occasions,
19 April and 3 May, whilst in custody, the first date some eight days after you were remanded.  Any doubts as to the legitimacy of your presentation and suicidal ideation or the link to your court appearance appear to have resolved.  I accept that your previous suicidality was not related only to the prospect of your incarceration and the social consequences of that.  Rather, that your mental health problems are more deep seated.  As a consequence your imprisonment will be particularly burdensome.

27The imposition of a custodial sentence will weigh more heavily upon you, given your reaction to the prospect of incarceration and your expressed fear of your incapacity to cope in that environment.  A term of imprisonment is likely to be more burdensome to you than a person in normal health.  I also accept there is a serious risk of imprisonment having an adverse effect on your mental health, as evidenced by recent events in custody.  The prosecution conceded limbs 5 and 6 of Verdins had application to you and I take those factors into account.  I accept, and the prosecution conceded, that the health situation of your son imposes a degree of additional hardship on your family and upon you whilst you are in prison.

28I received a report from George's psychologist regarding the significant impact on your family in your absence with George regarding the significant impact on your family in your absence with George having particularly high needs and requiring familiar carers and consistency.  He presents with extremely challenging behaviours and your wife will have a significantly increased burden without you to assist.  You distress and anguish at being unavailable to help in the care of your son will make your time in custody more burdensome.

29You have no prior history or subsequent criminal matters outstanding.  You had previously been employed in positions of trust and had an unblemished record with potential to do very well in business with a successful career in finance.  You were previously of good character.  You and your family contribute and are well regarded in your community.  This is demonstrated by your active involvement with Greek Cypriot community projects such as the Antipodes Lonsdale Street Festival.

30I take into account your plea of guilty and accept that it has a significant utilitarian value.  Your plea has facilitated the course of justice by saving the community the expense of a very lengthy trial and has spared witnesses from giving evidence and being cross-examined.  Although your plea was not at the earliest opportunity a significant amount of material was not in the original brief and you had to request statements from some of your clients and other bank employees.

31Mr D'Agostino's statement was prepared and served the week prior to the committal.  I was informed that ultimately the issue in dispute was the quantum and it was apparent at an earlier stage that the matter would resolve.  Your plea is also indicative of remorse.  As previously indicated, your family and friends have observed changes in your personality, including you being ashamed and embarrassed about your offending and predicament.

32Your remorse is also demonstrated by you agreeing to repay all the relevant funds to the National Australia Bank.

33Your counsel also submitted that the delay in this matter being finalised has led to anxiety and uncertainty over an extended period.  Some of the delay was attributable to police agreeing with the NAB to wait until all the loan clients had been spoken to by the bank before a formal statement was taken.  Additionally, you were not charged by police until about a year after you were interviewed.

34Although it is not unusual that there are delays in the prosecution of matters relating to fraud, and there was not what could be described undue delay, I accept that the period of time for these matters to be finalised has had a detrimental effect on your mental state and the delay is a matter I take into account.

35Your counsel submitted that your case involved some unique features, including:  (1) the culture and environment that existed at the NAB during the relevant time; and (2) the legitimacy of all the loans including those the subject of the offending and consequential profit to NAB.

36A significant amount of material was tendered on your behalf regarding evidence before and findings of the Royal Commission into banking relating to NAB, particularly the introducer scheme.  I have considered this material but I do not propose to go to it in detail save to say that the scheme has been strongly criticised.  It was described as ill-conceived, exploitive for the benefit of individuals prepared to engage in fraudulent behaviour and open to abuse, given the structure of NAB incentive programs and the lack of proper governance, policies and procedures within NAB.

37It was submitted that it was in this context where both personal and organisational profit and enrichment were incentivised and rewarded by NAB that you were driven to succeed.  I was informed that you consistently worked at least six days a week in excess of 12 hours a day and consistently met personal targets.  You generated significant revenue for NAB and there existed both an expectation and encouragement that you seek out additional business for the bank and that you would be financially rewarded.

38Additionally, as is apparent from the material, much of the NAB's business or loans through the introducer scheme involved fraud relating to the legitimacy of the loan and resulted in significant losses to NAB.  Your offending was not of that nature.  You generated significant profit for the bank by the provision of finance to many customers.  The loss to the bank was the amount of commission that you were not entitled to receive but would have been paid by NAB if a legitimate introducer had been utilised.  The loans themselves were not fraudulent and there were no additional acts of dishonesty beyond the deception in relation to the introduction itself.  You properly and duly assessed each potential customer's eligibility for a loan and accurately represented to the bank their position.  As a result those customers were genuinely assessed as suitable for the loans being sought and it is understood they have continued to bank with NAB.

39Your counsel highlighted other features, including that there was no default on any of these loans and no money otherwise lost by NAB.  NAB made an estimated $150 million in interest payments from the loans and NAB was prepared to reward spotters given the potentially significant commercial benefit to them.

40That your company, Brits Enterprises, paid tax on amounts received as a commission, although this is a light unusual with the proceeds of your criminal offending, it does not serve to legitimise your entitlement to the funds.  It may, however, be reflective of you considering that the funds were the product of your income or associated with your work.

41Your counsel submitted that you had by your plea acknowledged your personal responsibility for your offending.  However, he submitted your culpability must be tempered with the reality that you were a product of the culture in which you worked at the NAB at the time.

42The gravamen of your offending stems from the breach of trust bestowed in you by your employer.  You participated in this simple and effective scheme for a significant period, four years.  You had a working knowledge of the scheme due to your involvement in it prior to being employed by NAB.  You did not cease your activities until you were discovered by the internal audit.  Your offending gradually escalated in frequency.  You obtained for your own personal gain a significant amount of funds which enabled you to maintain a lifestyle, including the purchase of a luxury vehicle that you could ill-afford.  You engaged in this activity fully aware that you were obtaining funds from a large business, NAB, to which you were not entitled.

43It is not to the point that NAB benefitted or would have paid the amounts to legitimate introducers or that you attracted these customers for NAB, confident of the efficacy of the loans.  You deliberately exploited the system for your own personal gain and the breach of trust involved was significant.  You have suffered significantly as a result of your offending in that you have lost your position at NAB and a career in banking and finance.  Your mental health has been affected and you now have a very limited ability to earn an income.  Your family has been placed under significant financial pressure.  These matters constitute a significant and heavy penalty of themselves and contribute substantially to the deterrent effect upon you and others.

44It was submitted your rehabilitation prospects were excellent given your lack of prior convictions and no outstanding matters, your previous good character, your family and peer support, your plea of guilty and the impact of your involvement in the criminal justice system and your mental health.

45The prosecution did not dispute that you had good rehabilitation prospects, though this, it was submitted, was with a degree of caution given that
Dr Sullivan's opinion regarding your personality traits linked to your offending.  I accept that you have good rehabilitation prospects.

46Specific deterrence has limited application given your rehabilitation prospects. However, has some role to play given the frequency and duration of your offending.

47General deterrence in cases of white collar offending carries particular significance in the exercise of sentencing discretion.  This kind of offending is often difficult to detect and confidence and trust in employees is essential for the workings of any business, whether conducted on a large or small scale.  I was provided with a number of authorities related to similar offending, though they provide some guidance they are of limited assistance.

48There are features in this case that are unusual, as I have attempted to illustrate in these reasons.  Neither counsel suggested the principles of parity were applicable in respect of Mr D'Agostino.  There are various differences including he has received less funds, had a lesser role and ultimately cooperated with authorities.

49Your counsel properly conceded that this offending that involved a deception of his quantum by an employee over this duration warranted some term of imprisonment to be served.  It was submitted that given the time at which this offending occurred that the option of a partially suspended sentence was available as an appropriate disposition.  Alternatively it was submitted a term of imprisonment combined with a community correction order would adequately meet all sentencing considerations.  The third alternative was the imposition of a head sentence with a non-parole period.  It was this latter alternative, particularly because of the objective seriousness of your offending, that the prosecution submitted that I should impose.

50Your offending continued over a four year period.  Your financial benefit was significant and you obtained a substantial amount of money.  The fraud perpetrated by you involved a significant breach of trust with your employer.  You played an essential part and were the driving force behind the fraud.  Even accepting that your offending occurred in a profit driven and reward like business environment where scant attention was paid to the workings of the scheme, you actively and continuously exploited it for your own financial benefit.

51I have taken into account your current mental health and the recent events that have occurred since you were remanded on the day of the plea.  General deterrence and just punishment are important sentencing considerations.  These must be balanced against matters in mitigation including your plea, good rehabilitation prospects, mental health and personal circumstances.

52Could you please stand, Mr Matthews?

53In all the circumstances I propose to sentence you as follows.  In respect of Charge 1 you are convicted and sentenced to a term of imprisonment of three years.  In respect of Charge 2 you are convicted and sentenced to a term of imprisonment of two months.  In respect of the sentence imposed I propose to partially suspend that sentence.  You will be required to serve a period of eight months.

54The compensation order has already been made.  I understand the 464 is not opposed; is that correct?

55MR DEMPSEY:  That's correct, Your Honour.

56HER HONOUR: Pursuant to s.6AAA of the Sentencing Act, if you had not pleaded guilty to this matter I would have imposed a sentence of four and a half years with a non-parole period of two years.

57I will just try and do the maths.  So it is a term of imprisonment of three years with 28 months suspended?

58MR DEMPSEY:  Yes.

59HER HONOUR:  Which means that you are required to serve a period of eight months.  Mr Matthews, you need to be aware that upon your release at that period at the end of the eight months if you commit a further offence in that 28 month period the matter will come back before me and I will be required to resentence you on this matter and you may face additional penalty for breach of the suspended sentence.  Do you understand that?

60ACCUSED:  Yes, Your Honour.

61HER HONOUR:  Thank you.  Yes, PSD, please.

62MR DEMPSEY:  Today is the 33rd day, Your Honour.

63HER HONOUR:  I declare pre-sentence detention of 33 days.  That sentence will be suspended for a period of two years.

64MR DEMPSEY:  So can - sorry to do this.  Can I just make sure that I have got it right?

65HER HONOUR:  Yes.

66MR DEMPSEY:  Three years.

67HER HONOUR:  Yes.

68MR DEMPSEY:  Eight months to serve.

69HER HONOUR:  Yes.

70MR DEMPSEY:  Twenty-eight months suspended for a period of two years.

71HER HONOUR:  Yes.

72MR DEMPSEY:  Thank you.

73MR PICKERING:  And I take it Charge 2, Your Honour, is concurrent.

74HER HONOUR:  Yes, that is right.

75MR PICKERING:  Yes, Your Honour, thank you.

76HER HONOUR:  All right, anything else?

77COUNSEL:  No, Your Honour.

78HER HONOUR:  Thank you.

79MR DEMPSEY:  Your Honour, sorry, Your Honour, compensation order.  I did not - I thought Your Honour said - - -

80HER HONOUR:  I made it the other day, did I not?

81MR DEMPSEY:  I am not sure that you did.

82HER HONOUR:  No, I thought I signed it.  Did not that fellow from CORS come here and I signed it?

83MR DEMPSEY:  He did and then he left very quickly.

84HER HONOUR:  Because it was not a compensation order.  It was not put in the correct form.

85MR DEMPSEY:  It was a - that is right.  It was more in the form of restitution.  In any event, we consent to the orders if Your Honour wants to make them now or in chambers.

86HER HONOUR:  Look, I will formally make the compensation order now for the sum of - what was the sum?

87MR DEMPSEY:  Thank you.  $583,743.41.

88HER HONOUR:  All right.  I will make an compensation order with the National Australia Bank being the recipient of the compensation order for the sum just indicated by Mr Dempsey.

89MR DEMPSEY:  Thank you, Your Honour.

90HER HONOUR:  Thank you.

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