Director of Public Prosecutions v McCormick
[2025] VCC 61
•5 February 2025
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for Publication |
AT MELBOURNE
CRIMINAL JURISDICTION
CR 24-01320
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| KYLE MCCORMICK |
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JUDGE: | HIS HONOUR JUDGE DOYLE |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 3 February 2025 |
DATE OF SENTENCE: | 5 February 2025 |
CASE MAY BE CITED AS: | DPP v McCormick |
MEDIUM NEUTRAL CITATION: | [2025] VCC 61 |
REASONS FOR SENTENCE
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Subject: CRIMINAL LAW - Sentence
Catchwords: Guilty plea - Negligently dealing with the proceeds of crime - 21 years old at the time of the offending - Total amount of funds was $148,462.16 - Drug use played a significant role in deterioration of mental health - Prospects of rehabilitation.
Legislation Cited: Sentencing Act 1991; Crimes Act 1958.
Cases Cited: R v Verdins [2007] VSCA 102; 16 VR 269.
Sentence: 12 month Community Correction Order.
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APPEARANCES: | Counsel | Solicitors |
| For the Director of Public Prosecutions | Mr M. White for Plea Ms L. Pham for Sentence | Office of Public Prosecutions |
For the Accused | Ms E. Oliver | Balmer & Associates |
HIS HONOUR:
1Kyle McCormick, you have pleaded guilty to one charge of negligently dealing with the proceeds of crime for which the maximum penalty is five years' imprisonment. You were 21 years old at the time of the offending. You were born in November 2000.
2On 10 July 2022 you created a Binance account. It was never fully explained what a Binance account is, but it seems to have something to do with cryptocurrency. The account was registered with your name and email address, and you supplied identity documents to establish that account. Two people, Mr James Fearnside and Mr Peter Isaac, were induced by scammers to transfer funds out of their accounts into Commonwealth Bank accounts, one of which was operated by you. Mr Fearnside made six transactions totalling $100,135.70 into your Commonwealth Bank account and Mr Isaac four transactions totalling $48,326.46 into your account. The total amount of funds transferred into your Commonwealth Bank account was $148,462.16.
3On 13 September 2022, Mr Isaac was told by his bank he had been scammed. On 14 September 2022, Mr Fernside was told by his bank he'd been scammed. On 14 September 2022, the Commonwealth Bank sent you a message requesting that you contact them. They locked your bank account because of the receipt of fraudulently obtained funds.
4On that day, you contacted Commonwealth Bank confirming your identify and seeking assistance because your account had been locked. You were transferred through to the fraud team. You told them you thought the funds would be 'like crypto investments and shit'. You said a few other things, none of which amounted to a proper explanation. You were asked why you were receiving the fraudulent funds, and you suggested it had something to do with Discord app. You said you were not aware of having provided anyone with your bank number and password. You were told by the bank employee that the scammers had used your account. The funds deposited into your Commonwealth Bank account were transferred into your Binance account. There were 40 transfers between 12 and 14 September 2022 covering all the fraudulent funds. The funds were converted into cryptocurrency and then transferred to external and untraceable cryptocurrency accounts.
5You provided other unknown offenders unlimited access to your Binance account. Police examined your mobile phone and there were relevant text conversations on 13 and 14 September 2022 with the scammers indicating that they had access to your bank accounts.
6On 2 January, you were arrested and taken for interview at the Mill Park police station. Police recorded a conversation with you when they transported you to the interview. You told them you believed the people you were involved with were from Melbourne and not the United Kingdom and that you communicated with them on Snapchat and via the Binance app.
7You said you ‘owed a mate money’ at the time and these people told you they were going to make money. You set up your account and provided them with your Binance pin. You received notifications that the money was entering your bank account. You did not have a job at that time, and you saw it as a good way to make money. You thought it was all a bit dodgy. You set it up, but you said you did not know what they were doing, and you did not realise what they were going to do.
8In your record of interview, you repeated that you thought it was a bit dodgy, but you thought 'fuck it' and that you needed to get your debt paid off. You said you did not ask any questions, and you probably should have. You said you thought it was like a cryptocurrency-type thing, and you asked whether it was illegal and was told it was not. You said you were a junkie and that you have done a lot of things you regret when you had been on drugs. You said you thought it was a fraudulent scam but not illegal. It is somewhat difficult to know the difference.
9You said you owed money to a person, you feared them, and you were doing this to pay them back. You said you were using significant quantities of methamphetamine daily and you were also using Xanax. Your culpability is based on a criminal negligence, in that a reasonable person would have realised that this money was the proceeds of crime; and that in allowing the accounts to be used, you failed to make any or sufficient enquiries; and that you went along with the scheme even when you thought it was 'dodgy'. In my opinion, this was obviously fraudulent activity and criminal negligence by you is very clear.
10Internet scams and phone scams or frauds are prevalent offending and difficult to detect and you facilitated such conduct. In those circumstances, general deterrence is an important sentencing principle. However, the charge to which you pleaded guilty of negligently dealing with the proceeds of crime is the least serious of the money laundering offences in the Crimes Act that can be dealt with on indictment in this court. It is true your conduct lacked sophistication in that the bank accounts through which the fraudulent money was passed was easily traceable to you being in your own name.
11On the other hand, the offending in this case required a good deal of effort and activity and some sophistication. I infer you stood to gain from your participation in this scheme, and you admitted as much. I accept that at the time of the offending you were under considerable financial stress, and you owed a debt and were subjected to pressure to pay it back. These explanations are dealt with some of the material tendered, including the Mental Health Advice Referral Service report that has been provided after I called for the Community Correction Order assessment report, including mental health. You said that you owed $5,000 essentially for a drug debt and I sentence you on the basis that that was your motivation.
12I was told and I accept that you were in a poor living situation with poor mental health and drug dependency issues. You were a young man at 21 years old when you committed these offences. I accept the submission you had negative peer associations. You are 24 years old now. The offending occurred some years ago.
13Your mother attended court for the plea and is here today to hear these sentencing remarks. You now live with your mother and father and other siblings in Doreen. From your mid-teenage years to your early 20s, you became disconnected from your family because of your substance abuse issues.
14By way of education, you obtained Year 9 in secondary school before you left to go to TAFE. You achieved a VCAL pass. After VCAL you commenced a pre-apprenticeship in plumbing when you worked with your uncle, and you also worked at other labouring roles. However, you have had difficulty sustaining employment because of your substance abuse issues, particularly between the ages of 18 and 23. You have been at times dependent on methamphetamine and prescription medication. At the time of this offending, the material indicates that your mental health had deteriorated, and your substance use was problematic.
15The psychological report from Ms Daniella Kocic dated 3 December 2024 details that you have suffered from ADHD, depression and anxiety. She says in her report that your substance abuse has, at least in part, been related to self-medicating for these conditions. Ms Kocic offered the view that your offending was precipitated by a deterioration in your mental health and an accumulation of stressors. It is apparent drug use played a significant role. It is not submitted the Verdins[1] principles apply, but, nonetheless, your mental health is a significant personal matter that I take into account.
[1]R v Verdins [2007] VSCA 102; 16 VR 269
16I am told, and I accept, that about two years ago you stopped using methamphetamine and you have reconnected with your family and, as I said, your mother has attended court to support you. I was told you are in a new relationship. You also have employment working three days a week in a landscaping and fencing business. Your employer, Mr Aaron Hall, provided a reference confirming your employment. You have prior convictions, but not for dishonesty offending. A common thread is no doubt your ongoing use of drugs, but given the different nature of those prior convictions, they have limited relevance to sentencing in this matter.
17Your guilty plea has significant utilitarian value. You have saved the court and the prosecution the use of the resources required for a trial. I accept your plea indicates a willingness to facilitate the course of justice and is consistent with a level of remorse for the offences in this case.
18Your counsel, Ms Oliver, has submitted you have positive rehabilitative prospects. I accept you have taken steps towards rehabilitation in the period since you offended. You are still a young person. In my view, you do have reasonably good prospects of rehabilitation, particularly if you can continue to curb your drug use.
19Ms Oliver submitted that a Community Correction Order was appropriate in your case. Considering all the matters in mitigation in this case, I accept the submission that I should impose a Community Correction Order. The prosecution conceded this disposition was in range for this offending. In my opinion, given the needs of general deterrence, a Community Correction Order in this case needs to combine both punishment and rehabilitation. Ms Kocic made several recommendations in her report in relation to assistance with substance abuse and your mental health which are mirrored in the MHARS report that I have received.
20You are considered suitable for a Community Correction Order and that is what I intend to impose in this case. I intend to limit the duration of this order to 12 months. You are young man. It seems to me that if you can get through the next 12 months without lapsing back into drug use and re-offending, the best thing for you is to be free of these orders and to get on with your life, so I will limit the duration of the order to 12 months. The order that I will make is that you are convicted and sentenced to a Community Correction Order for 12 months with the following special conditions.
21Supervision.
22Community work – 160 hours. In fixing the number of hours, I have had regard to the fact that you are working and that you indicated that your main availability will be on the weekends. I have limited the hours to an extent there. That will be, in the context of your work, reasonably onerous.
23You are to undergo assessment and treatment for drugs and alcohol as directed, and assessment and treatment for mental health as directed. I will allow 20 hours of rehabilitation conditions to be deducted from the community work, but I want you to do 140 hours of community work. There has got to be some punishment. It should have been pretty obvious to you what was going on here.
24OFFENDER: Yes.
25HIS HONOUR: So I think there is a need for punishment. So that is the order I intend to make. You need to sign the order. We will just get that printed up. Every Community Correction Order has core conditions. I will not read all of them, but they include that within 48 hours you will need to attend at Community Corrections. If you do not do that, that is a breach already. So, you have got to go and attend, check-in with 48 hours. South Morang, that is the nearest Corrections to you, so you have got to go there in the next two days. Okay?
26OFFENDER: Yes, yes, from today too?
27HIS HONOUR: Sorry?
28OFFENDER: Is that from today or just if I get a call, if I get told?
29HIS HONOUR: No, no, you go in.
30OFFENDER: Yes.
31HIS HONOUR: Go in tomorrow, take your documents and go in and say, 'here I am, I am on a correction order'. All right.
32OFFENDER: Yes.
33HIS HONOUR: You have to go in the next two days.
34OFFENDER: Yes, I see.
35HIS HONOUR: All right but go tomorrow. Get it done and then these things can move on. Now that is the first condition. You have to accept all visits from them. You have to obey their lawful instructions. You cannot change your job without telling them. You cannot leave Victoria without telling them. You cannot change your address without telling them. All right? They are all core conditions of any Community Correction Order. There are others, but they are the main ones.
36The other big one is you cannot commit any offence punishable by imprisonment in the next 12 months. If you do, you breach the order. If you breach the order by non-compliance or by re-offending, then you will be charged with contravening the order, it will be brought back before me. One of the options is to go right back and re-sentence you for this charge. You understand?
37OFFENDER: Yes.
38HIS HONOUR: And then all the options are on the table again.
39OFFENDER: Yes.
40HIS HONOUR: All right. So I suspect I will not see you again, but just remember that these are serious orders, and you have to comply. Look I did not ask for judicial monitoring. I do not think it is necessary here. You are not suggesting - - -
41MS OLIVER: I don’t – no I would not be submitting it's necessary.
42MS PHAM: No.
43HIS HONOUR: No. I might have put that down had I thought of it, but it is not recommended. They often do recommend it even if it is not asked for and they have not done so here, so I will not make that a condition. All right, you understand the conditions?
44OFFENDER: Yes.
45HIS HONOUR: All right. We will print that document out and you can sign it. Once you have done that, that is the beginning of the order. All right?
46OFFENDER: Yep. Thank you.
47HIS HONOUR: See, Mr McCormick, if you fail at this by non-compliance and you did not have a good reason, I would not have a lot of options then. Do you understand?
48OFFENDER: Yes, understand.
49HIS HONOUR: Yes. All right. Okay, let us get him to sign that. All right. Done. All right. Thanks to both of you. I will adjourn until tomorrow.
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