Director of Public Prosecutions v McGraw

[2023] VCC 1247

IN THE COUNTY COURT OF VICTORIA

AT Melbourne

CRIMINAL DIVISION

Revised
Not Restricted
Suitable for Publication

Case No. CR-22-01233

DIRECTOR OF PUBLIC PROSECUTIONS

v

SIMON MCGRAW

---

JUDGE:	Her Honour Judge Ellis
WHERE HELD:	Melbourne
DATE OF HEARING:	30 May 2023
DATE OF SENTENCE:	20 July 2023
CASE MAY BE CITED AS:	DPP v McGraw
MEDIUM NEUTRAL CITATION:	[2023] VCC 1247

REASONS FOR SENTENCE
---

Subject:CRIMINAL LAW

Catchwords:              two charges knowingly deal with proceeds of crime – plea of guilty – no relevant prior criminal history – knowing but minor participant

Legislation Cited:      Criminal Procedure Act 2009 (Vic); Crimes Act 1958 (Vic); Sentencing Act 1991 (Vic)

Cases Cited:Worboyes v The Queen [2021] VSCA 169; DPP v D’Agostino [2018] VCC 1568; DPP v Isagbah [2020] VCC 435; DPP v Newton [2021] VCC 603; Boulton v The Queen [2014] VSCA 342; (2014) 46 VR 308

Sentence:                  Community correction order for a period of 2 years and 6 months, with 150 hours unpaid community work

---

APPEARANCES:	Counsel	Solicitors
For the DPP	Ms F. Holmes	Office of Public Prosecutions
For the Accused	Mr C. Terry	Marcevski Lawyers

HER HONOUR:

1Simon McGraw, on 30 May 2023 after receiving submissions at an earlier hearing, I granted your application for a sentence indication. I indicated that, should you plead guilty to two charges of knowingly dealing with proceeds of crime, then pursuant to s207(1)(a) of the Criminal Procedure Act 2009 (Vic) I would impose a sentence of a specified type, that being a non-custodial sentence with no immediate term of imprisonment. You then pleaded guilty later that day on arraignment.

2Mr McGraw, you have pleaded guilty now to two charges of knowingly dealing with proceeds of crime, contrary to s194(2) of the Crimes Act 1958 (Vic) which carries a maximum penalty of 15 years' imprisonment. Each of these charges are rolled up charges.

Circumstances of Offending

3The circumstances of your offending were set out in a Summary of Prosecution Opening, tendered on the plea as Exhibit A. This offending took place between 22 May 2016 and 22 June 2017, when you were aged 33-34 years.

4By way of background, the charges relate to payments derived from the 'Back to Work Scheme' and the 'Back to Work Programme'. These programs are run by the State Revenue Office of Victoria ('SRO'), and the Department of Employment, Small Business and Training of Queensland State Government ('DESBT') respectively, and provide financial payments for the hiring and training of Victorian and Queensland employees.

5Under the SRO scheme, the SRO provides financial relief to employers who hire 'eligible employees' in Victoria, that being unemployed or retrenched workers. Payment from the SRO can be obtained through two components of the scheme, either:

(a)the hiring component; or/and

(b)a training reimbursement component.

6Under the Hiring Component, 'Eligible Employers' can hire 'Eligible Employees' for 'Eligible Jobs'. The financial incentive available ranges between $3,750 and $12,000 per employee and is paid in two instalments.

7Under the Training Reimbursement Component, hiring an eligible employee and incurring costs in providing that employee with accredited training entitled an employer to a reimbursement of up to $3,000 for part-time employees and up to $4,000 for full-time employees.

8Under the SRO scheme, employers are required to use an online application process to make a claim. The application process required the user to provide information pertaining to the employer and employee ('Online Back to Work Claim Form'), during which an applicant is required to make a declaration as to the truthfulness and correctness of the claim. Once submitted and approved, the employer is paid the first of two payments. After nine months, the applicant can then provide additional documentation, such as payslips or employment contracts, in order to receive the second payment.

9Under the DESBT scheme, payments are available to eligible employers who hire a previously unemployed Queensland resident who has experienced a minimum period of unemployment directly prior to commencing work with the eligible employer. Employers wishing to utilise the scheme are required to use an online application process to make a claim for payment. During the application, the employer is required to provide supporting documentation, such as payslips and employment contracts, and is required to declare that the claim is true and correct.

10Both schemes required the applicant to provide details pertaining to the employer, included the ABN/ACN, trading names, Bank Account details, as well as details of  the employee such as their name, date of birth and average annual salary.

11Turning now to the offending. During a routine compliance check, the SRO identified three 'Back to Work Scheme' applications for two different employers made out to a bank account owned by Ms Elizabeth Wun Yeen YAU between 16 July 2016 and 30 July 2017. Ms Yau is a co-offender who has been charged with different offences.

12It is alleged that Ms Yau utilised employee details that were either false, or legitimate details of people that had no association to the relevant employer, in order to make a number of dishonest applications under the government programs. In doing so, it is alleged that Ms Yau made false representations that the companies were entitled to the payment under the schemes, and that the persons listed were employees when they in fact were not. It is alleged that Ms Yau utilised false documents to support the claims that were made.

13Upon further investigation, it was discovered that a total of 14 payments, from either the State Revenue Office of Victoria or the Department of Employment, Small Business and Training of Queensland State Government, were deposited into one of seven separate financial accounts held in the name of Mr Simon McGraw, in connection with the applications made by Ms Yau.

14Between 22 May 2016 and 7 April 2017, you received five separate payments from the SRO under the 'Back to Work Scheme'. As a result of these payments, the SRO paid $36,000 into financial accounts held in your name (Charge 1 – Knowingly Dealing with Proceeds of Crime - rolled up charge).

15Between 9 April 2017 and 22 June 2017, you received nine separate payments from the DESBT under the 'Back to Work Programme'. As a result of these payments, the DESBT paid $54,000 into financial accounts held in your name (Charge 2 – Knowingly Deal with Proceeds of Crime - rolled up charge).

16Each payment to you appeared within the financial statements of your bank accounts with the descriptor 'SRO [Claim Number]' or 'QGRANTS [Claim Number]'. All of the payments that you received were either transferred into other bank accounts held in your name on the day they were received, or used to pay bills. The total amount paid into accounts in your name was $90,000.

17On 15 October 2020, Victoria Police executed a search warrant at the residence of Ms Yau and seized a number of electronic items. Amongst those items, a number of text messages between you and Ms Yau were identified which span the duration of the offending, namely referring to:

(a)   Completing SRO applications;

(b)   Receiving emails from the SRO;

(c)   Receiving payments from the SRO; and

(d)   The completion of an application with DESBT.

18You were arrested and interviewed by police on 9 February 2021 at the Melbourne West Police Station. You provided an account to police that you knew Ms Yau as a friend, and that you had stayed at her house for a few months to complete some work that she had requested. You said that money had been paid to you by Ms Yau as payment for helping her work on her house. You told police that you were interviewed by the SRO in regards to some of the payments you had received, and that you did not know anything about the claims.

19When you were assessed by Corrections you reported that you were 'blissfully unaware' that the funds that were being transferred into your multiple bank accounts was as a result of illegal activity, stating that you should not have been so naive. It seems that you were less than candid with Corrections on this point. By your plea of guilty you accept however that you dealt with these payments knowing they were proceeds of crime. You reported to Corrections that you believe you received approximately $30,000 from the offending and that you used the funds to support your business at the time.

20It is agreed between the parties that Ms Yau was the architect of the offending to obtain money but that you were a knowing but minor participant. You were not one of the organisers nor did you carry out any fraudulent actions. Whilst there is evidence that you were aware that Ms Yau was doing something fraudulent you did not know the specifics of it. There were communications between the two of you indicating some degree of collaboration. These communications also indicate that the relationship with Ms Yau deteriorated and became acrimonious, both during and post the offending.

Co offender

21Your co-offender, Ms Yau has pleaded guilty to 3 charges of obtaining financial advantage by deception. She is yet to be sentenced. I understand that she is said to have received over $500,000 by fraudulent means. Whilst ordinarily it would be appropriate for the same judge to sentence both co-accused, I have not been asked to hear the plea of Ms Yau. However, I understand that her offending and her role is said to be considerably different from yours and there is no dispute from the prosecution that she is described as the architect of the fraud.

Procedural History

22You were subsequently charged with these offences in October 2021. A contested committal hearing took place in 2022 and in July that year you were committed to stand trial. You entered a plea of guilty to these charges at a sentence indication hearing on 30 May 2023, after I indicated that you would receive a sentence of a specified type, that being a non-custodial sentence if you were to plead guilty to these offences. You have not spent any time in custody for this offending.

Prior Criminal History

23Although the court has heard you admit your prior criminal record, you have no relevant prior criminal history. You were prosecuted for unrelated offending in 2012 for which you received an adjourned undertaking.

Personal Circumstances

24Turning now to your personal circumstances. These were canvassed at the sentence indication hearing and again on the plea. You are now aged 40 years old. You were born and raised in Moorabbin, before later moving with your parents to Chelsea. Your father worked as a warehouse distribution manager for Linfox. Your parents separated when you were 10 years old. Your father was violent towards your mother and you witnessed serious incidences of violence and sexual offending perpetrated by him against your mother. When you were about 12 years old your mother re-partnered with another man; he was a good role model and father figure to you. Sadly when you were aged around 25 years he took his own life which had a considerable impact upon you.

25You completed high school at Frankston High and achieved a respectable ENTER score. You then successfully undertook a Bachelor of Multimedia (Honours in User Interface Design). Whilst you were at university you worked two jobs - as a sales assistant with David Jones and also working with your stepfather as a Boilermaker.

26Since graduating from university, you have had a number of professional jobs including: working at Penguin Books doing book cover design [which ceased during the global financial crisis in 2008]; working at Calbista - again working on cover design and poster art, and; working at CSL as a digital content specialist, which involved you working in the United States for a number of months.

27In 2015 you started your own business, RS-R Australia, importing springs and suspension for Japanese model cars. This was a franchise operation overseen by a head office in Japan. Your business was successful for a number of years however your business came to an end not long after your arrest. The Japanese head office was sent newspaper articles which referred to these charges, and shortly thereafter head office withdrew its support of your business, and the company ceased operations.

28At present you are not working. In 2018 you were involved in a serious motorbike accident whereby you were struck by a driver, who then left the scene. You were hospitalised for approximately three months followed by a further three months in a rehabilitation facility. You sustained significant injuries and underwent 14 surgeries. You suffered a fractured skull, broken ribs, broken bones in your right leg and ankle, and you also sustained a ruptured bicep. As a result you have been unable to work in any meaningful capacity since. This has led to you being housebound and you found yourself drinking more regularly in an effort to manage your boredom. Although you did receive some TAC payments for a period of time, these have ceased and you are now in receipt of a Disability Support Pension. You currently have a TAC serious injury claim on foot.

29A referral was made by your GP for a mental health plan in October 2022. You then underwent a number of counselling sessions.  I have received no other information about this.

30You are now in a stable, happy relationship with a woman who you met approximately two years ago. She has two children aged four and 10 and you consider them to be your stepchildren. Your current partner, and also your former partner of five years with whom remain close friends, have each prepared character references. Your former partner, Ms Brazil, was in a relationship with you which came to an end just before your accident, but she remained with you to support you post-accident and she notes the significant impact this accident had on your outlook on life.

31Each of your referees describe you as a caring, kind-hearted person with good humour. You are said to be a positive role model to your stepchildren. According to one of your referees, Ms Mao, you have in the past exhibited signs of depression but you are keen to work towards your own rehabilitation. You have expressed your remorse for your offending, which she says is a source of intense regret and embarrassment. You have told her that you wish to become a better person.

32You have had a history of using cannabis which commenced during your teenage years and it was only upon you commencing your current relationship that you ceased daily cannabis use. Your incentive is said to be that you did not wish to consume drugs around your stepchildren.

Nature and gravity of offending

33Knowingly dealing with proceeds of crime is a serious offence. This is particularly so when the proceeds dealt with is money that is designed to facilitate employment. The prosecution case is that the deception that led to the payment of monies into your account was carried out by the co- offender, that you knew this money was the proceeds of criminal activity by Ms Yau.  I accept that you were not the mastermind or architect of the scheme, but you nevertheless played an important role in providing the means for the payments to be transferred. You did derive some benefit, albeit that you are not charged with, nor are you to be sentenced for any fraudulent conduct. Your offending warrants the courts condemnation, and it is important that the sentence that I impose deter both you, and others who may be inclined to behave in a similar way. Your counsel has submitted that part of your motivation for engaging in this was due to the financial situation in which you had found yourself at the time.

Delay

34The offending occurred during the period between May 2016 and June 2017. It was not detected until October 2020 and you were not charged until 2021. In the six years since the end date of the charge period, you have not re-offended and I take this into account. I accept that these proceedings have in effect been hanging over your head for some period of time, since you were interviewed. I note however that some of the delay is partly attributable to you electing to contest the charges, as is your right.

35I take into account the fact that as a result of publicity surrounding these charges, you were unable to continue with your business, which has resulted in some ongoing financial hardship. However, I also note that part of the reason why you have been unable to work is due to the injuries that you sustained in the motor vehicle accident in 2018.

Plea of guilty

36I take into account your plea of guilty. This was not a plea of guilty entered at an early stage. The matter proceeded with a contested committal. It was only upon an indication from the court that you would receive a sentence of a particular type and one which did not involve imprisonment.

37However, the fact that it is not an early plea, does not detract from its significance. It is still relatively early. Your plea of guilty demonstrates a willingness to facilitate the court of justice and is of considerable utilitarian value. You have spared the community and witnesses the time and expense of having to give evidence at trial.

38Furthermore, given that your plea was entered at a time when the court has faced a considerable backlog of jury trials, it has an additional utilitarian value. As the Court of Appeal articulated in Worboyes v The Queen,[1]  your plea is worthy of greater weight in mitigation than a similar plea entered at a time when the community and courts are not afflicted by the pandemic's effects. As a result, your plea should result in a perceptible amelioration of sentence.

[1] [2021] VSCA 169.

Prospects of rehabilitation

39Although you come before the court with a limited prior criminal history, I accept that that past offending has little or no relevance. Although you have been assessed as a medium risk of reoffending by Corrections, and I am concerned that you have sought to minimise to Corrections your level of knowledge, having regard to your limited history, plea of guilty and  stable family environment, I consider that with the right supports in place, your prospects of rehabilitation are good.

Sentencing Purposes & Principles

40I have had regard to the basic purposes for which a court may impose a sentence namely just punishment, both specific and general deterrence, rehabilitation, denunciation and protection of the community. In determining an appropriate sentence, I am required to take into account these objectives as well as various matters including the gravity of the offending, your culpability and your personal circumstances.

41I have also had regard to current sentencing practises. I was referred to a number of County Court cases during the sentence indication hearing although self‑evidently, every case is different. Those cases do not concern a charge of knowingly dealing with proceeds of crime, but rather the lesser offences of recklessly or negligently dealing with proceeds of crime. Nonetheless those cases have been illustrative of the way in which similar cases involving similar quantities  have been dealt with in this court.[2]

[2] DPP v D’Agostino [2018] VCC 1568; DPP v Isagbah [2020] VCC 435; DPP v Newton [2021] VCC 603.

42Both charges are rolled-up charges. Accordingly, when sentencing, the court must consider all of the circumstances of the offence but the plea of guilty must be treated as entered into a single formal charge – here this applies with respect to both Charges 1 and 2. 

43The prosecution submitted that the offending here warranted a custodial sentence, having regard to the amount of money involved, and the duration of the offending - specifically, that this was not a one-off transaction, but multiple deposits over an extended period. Ms Holmes submitted that a combination sentence would be open. Your counsel Mr Terry submitted that a community correction order is open to the court having regard to your role in the offending, your lack of relevant prior criminal history, your strong work history, your stable family supports and your prospects of rehabilitation.

44Having considered these matters, I was prepared to indicate at the sentence indication hearing that I would have you assessed for suitability for a community correction order alone should the matter resolve to a plea of guilty.

45You have been assessed for suitability for a community correction order. According to a report prepared by Corrections, you are suitable. Although the pre‑existing injuries from 2018 may impact on your ability to participate on certain work sites, it is not anticipated that your injuries would prohibit you from undertaking unpaid community work. Corrections have assessed you as being a medium risk of reoffending. Accordingly, it is recommended that a supervision condition be included as part of the order so that Corrections can monitor your progress against the conditions of the order.

46As I indicated back in May, I have concluded that a community correction order is appropriate in this case, for the matters identified by your counsel. You were not the architect of the fraud, and nor are you to be sentenced for the fraud. Your offending relates to you operating the bank accounts and being the recipient of the payments, albeit over a lengthy period of time. Having regard to your plea of guilty, the fact that you have good family supports, a strong work history until being injured during a hit and run, and your lack of relevant priors, I am prepared to place you on a community correction order.

47Whilst your offending was undoubtedly serious, given its protracted nature and the payments which you dealt with were considerable, I must also have regard to what the law says about imposing a custodial sentence.  The starting point is that the law says that a court must always regard imprisonment as a disposition of last resort and may consider, even in cases of serious offences, that a community correction order is a punitive disposition which is capable of addressing all relevant sentencing considerations.[3]  Ultimately, the community is best served in this case by having you sentenced in a way that does not involve immediate imprisonment.  Would you stand up please, Mr McGraw.

[3] Boulton v The Queen [2014] VSCA 342; (2014) 46 VR 308. 

Sentence

48On Charges 1 and 2, you are convicted and sentenced to a community correction order for a period of 2 and a half years. There are a number of conditions that are attached to the community corrections order.

49You must perform 150 hours of unpaid community work over that 2 and a half year period.

50You must be under the supervision of Corrections for a period of 18 months.

51You must be assessed for and engage in rehabilitation for drug and alcohol issues, as directed.

52Those are the specific conditions of your community corrections order. 

53There are also a number of core conditions which attach to all community corrections orders which I will now go through.

(a)   You must not commit, whether in or outside Victoria, during the period of the order, an offence punishable by imprisonment.

(b)   You must report to and receive visits from the Secretary of the Department of Justice, or his or her nominee, during the period of the order.

(c)   You must report to the Community Correction Centre, which I believe is Cranbourne, within two clear days from today. I suggest that you make contact with them as soon as you have left court.

(d)   You must notify the Secretary, or his or her nominee, of any change of address or employment within two clear working days after that change.

(e)   You must not leave Victoria except with the permission of the Secretary to the Department of Justice, or his or her nominee.

(f)    You must comply with any direction given by the Secretary that is necessary for the Secretary to give to ensure you comply with the order.

54So those are the mandatory core conditions that attach to any community correction order, in addition to the orders that I have made regarding unpaid community work, rehabilitation and supervision.

55Now in a moment you are going to be asked to sign the community corrections order and indicate that you understand what your obligations are. I need to let you know that if you were to breach any conditions of the order; if for example you were to decide that you were unable or you could not do the unpaid community work component or if you decided not to engage in rehabilitation as directed, or if you were to commit any further offences, then it is likely that you would be brought back before me on a breach and I would need to re-sentence you for this offending.  There may also be a separate charge in relation to breaching the community correction order.

56Now I understand that you have some injuries which may make certain aspects of unpaid community work difficult, but the unpaid community work is a condition of your community corrections order, so if you are cleared medically then you are required to undergo that community correction work. 

57I am going to make a condition that the rehabilitation component, that is the order that you undergo an assessment and treatment for rehabilitation for drug and alcohol issues, that that component can account for up to 60 hours of the unpaid community work condition.  So the unpaid community work is 150 hours, but I would allow up to 60 hours for rehabilitation to be attributed to that 150 hours.  So just to make it clear to you, the unpaid community work is not an optional aspect of the order.  It is a condition of the order and as I understand it, and I understood from the sentence indication hearing, you do have the ability to do light duties and that was a factor that I took into account when determining whether or not the appropriate disposition would be a community correction order.

58Now if there are difficulties with you completing the unpaid community work component of it, you need to get in touch with your legal representatives and let them know and a formal application would need to be made before me to vary the conditions of the community correction order.  Do you understand everything that I have just told you about that?

59OFFENDER:  Yes, Your Honour.

HER HONOUR:  Yes, all right.  So you are going to be provided with a document in a moment that you will need to sign indicating your agreement to abide by the conditions of the community corrections order.

S 6AAA

60I indicate at this stage pursuant to s6AAA of the Sentencing Act1991 (Vic) that but for your plea of guilty, I would have sentenced you to a term of imprisonment for this offending for a period of 12 months, with a non-parole period of 6 months.

- - -