Director of Public Prosecutions v Paglianiti
[2019] VCC 1972
•28 November 2019
IN THE COUNTY COURT OF VICTORIA
AT MELBOURNE
CRIMINAL DIVISION
Revised
Not Restricted
Suitable for PublicationCase No. CR-19-00886
DIRECTOR OF PUBLIC PROSECUTIONS v CONNIE PAGLIANITI ---
JUDGE:
HER HONOUR JUDGE GAYNOR
WHERE HELD:
Melbourne
DATE OF HEARING:
5 September 2019, 13 November 2019
DATE OF SENTENCE:
28 November 2019
CASE MAY BE CITED AS:
DPP v. Paglianiti
MEDIUM NEUTRAL CITATION:
[2019] VCC 1972
REASONS FOR SENTENCE
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Catchwords:
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APPEARANCES:
Counsel Solicitors For the Director Ms S. Naimo Office of Public Prosecutions For the Accused Ms J. Willard DTCH Lawyers HER HONOUR:
1 Connie Paglianiti, you have pleaded guilty before me to nine charges of theft. They were committed between 24 February 2015 and 18 September 2018. You have no prior convictions. The facts underlying your offending are as follows.
2 According to the prosecution, this was a sophisticated fraud that was committed over a number of years involving misappropriation of many millions of dollars. On a hundred occasions between 26 February 2014 and 18 September 2018, which is a period of four years and seven months, you made transactions from company accounts to your personal and business bank accounts without authorisation. You misappropriated a total of $6,320,230.48. The victim of the fraud was the company Eastern Ocean Proprietary Limited, which is a company situated in Derrimut which undertakes importing and wholesales gifts and homeware for retailers across Australia.
3
William Qi is the Managing Director of the company and you worked as bookkeeper for that company for a period of 20 years. Indeed, according to
Mr Qi's victim impact statement, you began working for him soon after he set up that business. You had a long standing connection with, and an intimate knowledge of, the company. Your role was to prepare and process payments of the company's payroll as well as the monthly Business Activity Statements. It was through the monthly Business Activity Statements, that is the BAS statements, that the company's liabilities for the Goods and Services Tax and Pay As You Go Tax were reported and remitted to the Australian Tax Office.
4
During the course of your employment as a contractor, you attended the company office on a fortnightly or monthly basis and would send an invoice to the company detailing the hours you had worked and the payment you were owed. Those invoices requested that funds be deposited into your bank account with the ANZ. Each fortnight you processed all the company's payroll for the employees and payments of your invoices for your work were made by
Mr Qi or another staff member. The company made GST payments to the ATO on a monthly basis and the amounts paid were significant, at times more than $100,000 a month.
5 Regularly, short-term finance was arranged to cover the large ATO payments. Each month, you processed a payment to the ATO in relation to both GST and PAYG, and you titled the transaction 'ATO'. With every payment with the title ATO, an amount was paid by the company to the ATO, while the balance was paid into your personal bank account. If the online banking was ever to be verified, it would only depict the group transaction of ATO or payroll. If each individual payment was accessed, a different story would have to be revealed.
6 Because Mr Qi had a strong and protractive relationship with you, he felt no need to review any of the banking that you did. In other words, he had a level of trust and confidence in you and your ability to honestly perform the bookkeeping service.
7 On 17 September 2018, the company contacted the Commonwealth Bank of Australia to obtain short-term financing for GST that would be owed at the end of that month. On 19 September 2018, Mr Qi accessed the company's CBA account to check the status of that short-term financing. He noticed that two payments had been made, one to the ATO and the other to a bank account in the name of an events company that you ran.
8 He then made further enquiries through the online bank statement and discovered that on every GST statement, one or two payments had been made into your “Eventcepts” bank account or your personal bank account. Not one of those payments had been authorised. On 25 September 2018, Mr Qi went to the Sunshine Police and made a statement and began civil proceedings against you and the company Eventcepts. He also engaged a forensic accounting service to investigate what had been going on.
9 As a result of that forensic investigation, it was revealed that you had engaged in widespread and long-standing misappropriation of funds from Mr Qi's company. Two modus operandi, or in other words, two methods that you used, were identified in terms of how you misappropriated the funds. Firstly, you appropriated funds into your personal and business account under the title ATO and group within the GST payments to the ATO and secondly, you appropriated funds into your personal bank account under the title Payroll, or a similar title and grouped within the group, the payroll payments to company employees.
10 The unauthorised payments made by you and depicted as ATO totalled $6,113,339.27. They consisted of 52 transactions, between 18 July 2014 and 5 September 2018. The specifics of those transactions were detailed in the prosecution opening which is annexed as an exhibit to the sentencing remarks.
11
On 11 December 2018, police executed a search warrant at your home in
Blythe Street, East Brunswick. You were present and were arrested. On a search of the house, police discovered numerous documents relating to your finances which were photographed, and they also seized your Apple laptop and Apple desk computer and a number of USB sticks as well as bank account statements. They also executed a search warrant at the Eventcorp office in Carlton. At the office, police found numerous documents in relation to your finances which were photographed and which included ANZ bank statements, payment history documents and a desktop computer. You were taken to the Melbourne West Police Station where you participated in a formal record of interview, and made no admissions but spoke of a gambling addiction and regularly attending gambling venues across Melbourne.
12 Ultimately, as the result of further search warrants being executed, large numbers of documents were obtained and they revealed that you appropriated funds from the company and deposited those funds into the Eventcepts and your personal bank account. Police obtained a Patron Detail Report from Crown Casino, which you had held since 2016 and they also obtained a Patron Activity Account. It showed that between March 2014 and October 2018, you spent an average of six days a month at Crown Casino and that your losses for that period were $1,499,994.
13 The maximum penalty for theft is 10 years' imprisonment. Where the value of the property stolen is $50,000 or more and where a person is found guilty of three or more continuing criminal enterprise offences, these are what is called a continuing criminal enterprise. The accused person is then deemed to be a continuing criminal enterprise offender for the purposes of s 6H the Sentencing Act.. A continuing criminal enterprise offender is liable to a maximum term of imprisonment two times the length of the maximum term ordinarily prescribed for continuing enterprise offences, or 25 years, whichever is less. You were released on bail on 12 December 2018 and have remained on bail. The matter resolved at committal mention date on 7 May 2019 and it is accepted by the prosecution that this was an early plea of guilty.
14 I received a victim impact statement from Mr Qi. In it, he mainly spoke about the personal effect that your dishonesty had upon him. He said he regarded you as a close and trusted friend. He said he was absolutely shattered to discover that you had been so dishonest, that you had so grossly breached his trust and this was something that affected him to the present day.
15 He did not write a particularly long victim impact statement, but what he did write about is his personal reaction to your dishonesty and also said that it had very much undermined his confidence as a businessman. It did seem to me from reading the victim impact statement that to some extent Mr Qi is still struggling to come to terms with the fact that someone who worked with him for such a long period of time, could have behaved as you did. And it is clear that your offending has had a very grave effect upon him, both personally and financially. He also said he felt embarrassed and humiliated, as he put it, “Being taken advantage of”, for the period of time that he was when you were offending against him in that way.
16 I now turn to your personal circumstances. You are 61 years of age. You are the eldest of five children. Your family emigrated from Italy to Australia when you were 11. Your counsel told me that your family lived in very poor conditions in a one bedroom house in Italy. On arrival in Australia, your father worked as a labourer and your mother worked in a factory. You were given from a young age very onerous responsibilities in relation to your younger brothers and sisters. You were expected to care for them, to cook, to clean and you continued in that heavy parental role for many, many years.
17 That was a difficult position for you I accept, but in addition it appears your father, who was an extremely strict Catholic man, was also a tyrannical parent who was extremely cruel to you, both emotionally and physically. He violently assaulted your mother and he violently assaulted you. He hit you with his fist, his belt, with extension cords, with sticks. He would assault you for something as small as a meal you cooked being too salty. Additionally, he was very emotionally abusive of you. He told you that you were ugly, that no man would ever want you and yet according to the written reference I received from your sister, you always managed to maintain a positive attitude and she regarded you as very much a sort of semi-parent in the years that you were growing up. She witnessed a great deal of the violence that was perpetrated on you. She believed that to some extent it diverted violence that might have been doled out to her and her other siblings because of the fact that you seemed to be singled out.
18 You completed Year 11 at Preston Girls' School. You wanted to go on and do Year 12 and attend university, but your father said he would no longer support you and so you were forced to leave school. You then began what was a very strong employment history. For three years, between 1976 and 1979, you worked in accounts and performed secretarial work at Waldron's Teenage Junior shop, where you had also worked part-time while at school. You then worked as a customer service representative for Telstra. In 1980 you moved into the accounts area and you worked for five years for Hooker Construction, working for that company in accounts payable. Then you worked for two years as a payroll officer for Rend Glass, another construction company.
19 You began an accounting degree at university, which you paid for. When you were 23, unable to tolerate the abuse from your father, you left home. You became engaged and that engagement was ongoing until you were 28, but ended in very unhappy circumstances when you developed the belief that your fiancé had been unfaithful to you with your best friend and this appears to have had a devastating effect upon you. In 1987, you moved to London for two years, where you worked as a payroll officer for the Bank of London and then for Chef Engineering. You returned to Australia and worked as human resources payroll officer at the Buttercup Bakeries from 1989 until 1991.
20 In 1991 you began your own bookkeeping company which you ran from home and in which you employed your sister. The business prospered and ultimately you had 21 clients including Mr Qi. They also included restaurant owners, wholesale business owners, nursing and aged care home owners. You also developed business management software which you trained your clients to use. You ran that business for 17 years. Since 1981 you have been very involved in the arts and charity work, primarily in the field of fundraising for various charities. You have raised money for the Spastic Society of Victoria, the AIDS and Arts Committee, the Alannah and Madeleine Foundation, Bully Zero, The Royal Women's Hospital, the Hobson Bay Council, and Next Step Organisation. You have held committee memberships positions on the Australian Arts Elizabethan Trust, the AIDS and Arts committee, and you, for 19 years' worked on the Melbourne North police community consultative committee. You have raised thousands of dollars for hospitals, disadvantaged youth, the disabled and so on.
21 In 2001, you became a board member of the Carlton Traders' Association, which is a voluntary position where you represented other traders for seven years. And you also, as I have said, became involved on a police consultative committee in 2011 as their communication and marketing officer. In 1994 you met your husband David Roberts, who is a national IT manager for the Salvation Army. That has been a happy and successful marriage and you have one child, a son aged 17, who is currently undertaking Year 12.
22 You were always interested in events management. In 2008, you set up your company Eventcepts, in order to develop that side of your business. Its main aim was to celebrate and promote Italian culture. In 2012, you met and formed a business alliance with an Italian chef, Dario D'Agostino. He told you that he had many contacts in Italy, that he had contacts with many celebrities and he organised large, elaborate events, promising to commit resources and ensure attendances which did not eventuate. In 2013, he walked away leaving you with debts in excess of $440,000. Eventually you travelled to Italy and discovered that he was in fact a fraud.
23 It was soon after that the gambling on poker machines, which you had undertaken as a sort of recreational activity and as a pleasurable past-time with your sister from time to time, became a problem for you. It was the opinion of Psychologist Bernard Healy, whose report was tendered on the plea and who gave evidence at a further plea hearing, that the treatment by your father caused you chronic low self-esteem and depression from an early age. IQ testing that he conducted on you revealed an above average intelligence, but you were never given the opportunity to achieve the higher education that you wanted.
24 Mr Healy diagnosed you as having a pathology of marked inadequacy, very low self-esteem, poor self-image and related depression. He said that the work that you had undertaken as a bookkeeper, even with your own company, was '… relatively routine and not really stimulating and there was little to boost her low self-esteem and little to demonstrate to herself and others, that she could do something of greater significance, to show she could really be much better than she had been made out to be.' In other words, what I take him as saying, is that you had a continuing low self-esteem, low opinion of yourself based on how your father treated you. And that developed an unhealthy desire to shine in some way. It would seem that Eventcepts was going to be that opportunity for you and particular, when you met Mr Agostino, that was going to be the launching pad for what you hoped would be something which showed you – showed the world that you are not the sort of person that your father had said you were, if I can put it that way.
25 It was in the context as I am saying, of these ongoing psychological difficulties and the humiliating debt, because it was a very public debt, arising from the failure of your events business, that you began to gamble in an addictive fashion. I am satisfied that you did develop a pathological gambling addiction and indeed it was the opinion of Mr Healy that you had developed such an addiction. According to Mr Healy you hoped to win back money that you had lost, but gambling also provided what he termed, 'Escape and dubious solace and also a magic solution.'
26 He stated, 'She probably believed that she just may be able to solve the financial losses in the event enterprise by investing more from the theft of money, for the elusive big win.' It is quite clear that the vast majority of what you stole from Mr Qi went into poker machines and was simply lost. Indeed, Mr Healy noted that at one stage you won $76,000 and simply ploughed it back into the machines. You kept losing and this vicious cycle kept going until the activity of theft was discovered by Mr Qi. There is no evidence of enrichment and indeed, it is quite clear from the records obtained from the Casino by police, that of the $6 million plus that you stole from Mr Qi, vast amounts of that went into gambling.
27 You and your husband own your home. You also own an investment property which was purchased with your husband's superannuation and which is now on the market in the hope that some of the moneys can be paid back to Mr Qi. Of course on your arrest, all of this came out. No one in your family knew about your gambling addiction, including your husband and son. You would tell them that you were attending a particular committee meeting or a sporting event or something of that nature. It came as an enormous shock to them.
28 You have attended on Mr Healy 12 to 14 times and you have attended on Gambler's Anonymous. I received a raft of references from family and friends, all of whom were astounded to discover firstly that you had this gambling addiction, but even more so that you had behaved in this extraordinarily dishonest way towards Mr Qi. Now I do accept this was very much out of character and I do accept that it was your gambling addiction that drove you to offend in this way. Unfortunately a gambling addiction is not a mitigating factor that can be used by a judge when sentencing for crimes such as yours.
29 The case of R v Grossi, a decision of the Court of Appeal reported at [2008], VSCA 51, makes this very clear at paragraph 51, that as with drug addiction, gambling can be proffered up as an explanation for why large scale offending has occurred, particularly in someone who, like you, has never offended in the past, but it does not provide an excuse.
30 I do take into account in sentencing you however the underlying reasons for that offending, that is, the almost pathological low self-esteem and suffering that has been ongoing in your life as a result of the way you were treated as a child. I do accept that you have worked extremely hard in your life, that you have been a very honest woman, that you overcame very great difficulties as a child and young woman to go on and achieve what you had, that the low self-esteem led to an unhealthy desire for some sort of recognition in the community, perhaps to replace your own father's lack of regard for you. That led to an unwise association with Mr D'Agostino and a humiliation and humiliating explosion if you like, into the failure of your business.
31 I accept that that then led you to gamble in the way you have as I have said, both to block out the reality of your life and perhaps to make back the moneys that you owed and of course as this court has seen time and time again, the hole you dug yourself into simply became deeper and wider.
32 At the end of the day, however, no matter what the factors were that drove you, no matter how sympathetic a court might be as to the personal factors that made so much of your life difficult and unhappy, you engaged in very large scale dishonesty. $6 million is an enormous amount of money to steal from anyone. It was particularly egregious because of your close personal relationship with Mr Qi over a period of two decades. Not only were you in breach of trust because of the professional association that you had with him and the trust that that went insofar as your knowledge and involvement in the finances of the company were involved, but to some extent, normal processes which might have revealed earlier the frauds that you were perpetrating, were concealed because of the more informal relations and more in fall set-ups that Mr Qi allowed to exist because of his personal trust in you.
33 This was a breach of trust, not only on a professional but on a personal basis. It is quite clear, and the authorities make it very clear, that a gambling addition has very little effect on the operation of the principle of general deterrence, which is where the court imposes a sentence which sends out a message to the community that people who offend as you have offended will be dealt with in a very stern manner. It was not submitted to me that any other disposition other than a sentence of imprisonment is the appropriate sentence to impose in your case.
34 In sentencing you, I take into account your early plea of guilty. I do accept that you are remorseful for your actions. It was quite clear from all the references that I received that you have been entirely honest with your family and friends about both your gambling addiction and your dishonesty. Many of them wrote about you contacting them saying, I need to sit down with you, I need to tell you precisely what I have done. For someone who kept all this a dead secret for so many years, I regard this as a significant turnaround.
35 The fact that you have been honest, the fact that you are now acknowledging your gambling addiction, the fact that you have received some treatment for it, the fact that you have saved the community and Mr Qi the time and expense and trauma of a contested hearing, these facts are matters that I take into account in mitigation and also take as proof of your remorse for your offending. I accept that you have good prospects of rehabilitation. Your husband is standing by you. Your family and friends are standing by you. It is quite clear to me that they will stand by you throughout and after the gaol sentence that I will impose upon you.
36 I accept that you have no prior convictions and at the age of 61 have spent most of your life as a hardworking and indeed, more than usually contributing member of society. As I have said, you have engaged in an enormous amount of voluntary work which has benefited charitable organisations, the disadvantaged, the homeless. You have been a more than normally contributing member of society and an otherwise highly law-abiding member of the community.
37 The very fact that I must gaol you and gaol is usually, as the Sentencing Act dictates, only to be imposed if it is the only appropriate sentence after all other dispositions have been considered, reflects the gravity of your offending. That is even though you have no prior convictions, although I am satisfied you have good prospects of rehabilitation and that I am satisfied there are a number of protective factors in your life, such as the recognition of your gambling, the continuing support of a very pro-social and law-abiding group of family and friends, despite all these factors, it is quite clear that your offending was so wide-ranging, so serious, such a breach of trust that only gaol can be the appropriate sentence in this case.
38 It was submitted to me that this was sophisticated fraud. I do not accept that it was sophisticated fraud, it was fairly straightforward fraud, but the gravity of your offending in my view lies not in the fact as to whether or not it was sophisticated offending, but because it was such a breach of trust. You were so trusted and so personally regarded as a friend by Mr Qi that you, as I have said, were able to take advantage of informal guidelines that had been set up for you to carry out the work that you were supposed to do for Mr Qi. That's the gravemente of it. And because of that informal arrangement, it may be in my view less likely that your offending would be discovered. So the fact that I find it was not particularly sophisticated offending does not really assist you a great deal.
39 It is the great breach of trust, as I have said a number of times, both personally and professionally, that is the problem here and which allowed you to steal such an extraordinary amount of money from Mr Qi. In my view the principles of general deterrence, condemnation of your actions and just punishment dominate the sentencing exercise before me, whilst at the same time of course, I do take into account the mitigatory factors that your counsel eloquently laid out to the court. I therefore sentence you as follows. Could you stand up please? Thank you.
40 On Charge 1, you are sentenced to 12 months imprisonment.
41 On Charge 2, you are sentenced to 18 months imprisonment.
42 On Charge 3, you are sentenced to 18 months imprisonment.
43 On Charge 4, you are you sentenced to 18 months imprisonment.
44 On Charge 5 you are sentenced to six months imprisonment.
45 On Charge 6, you are sentenced to 18 months imprisonment.
46 On Charge 7, you are sentenced to nine months imprisonment. .
47 On Charge 8, you are sentenced to 12 months imprisonment.
48 On Charge 9, you are sentenced to nine months imprisonment.
49 The base sentence will be the sentence imposed on Charge 2, 18 months imprisonment.
50 I order that six months of the sentence imposed on each of Charge 3, 4 and 6. That three months of the sentence imposed on Charges 1 and 8 and two months' of the sentence imposed each on Charges 5, 7 and 9, be served cumulatively to the sentence imposed on Charge 2 and to all other sentences. This gives us a total effective sentence of four years. I order that you serve a minimum term of two years' and six months before becoming eligible for parole. Could you have a seat please, have a seat thank you.
51 Pursuant to s. 6AAA, I declare that had you not pleaded guilty, I would have sentenced you to a term of five and a half years imprisonment with a minimum term of four years. I should also note that I was referred to a number of authorities both by prosecution and defence in this matter. I have had regard to them all. I found in particular, the case of Gianello VR to be of most use; most applicable both in terms of the amounts of offending and the kind of offending. Thank you very much. What is the PSD?
52 MS NAIMO: Yes Your Honour, 16 days PSD.
53 HER HONOUR: I declare that 16 days of your sentence have already been served by way of pre-sentence detention.
54 MS NAIMO: An application was also made as a plea for compensation and a 464 order, Your Honour.
55 HER HONOUR: Yes thank you. Do you have the – do I have it, or - - -
56 MS NAIMO: They've been e-lodged, Your Honour - - -
57 HER HONOUR: Have they?
58 MS NAIMO: Okay. They have.
59 HER HONOUR: That means I've lost them then - - -
60 MS NAIMO: They haven't?
61 HER HONOUR: Have I got them here?
62 MS NAIMO: I've updated them with today's details Your Honour. Yes.
63 HER HONOUR: All right, can we just print them out and sign them before you.
64 MS NAIMO: As Your Honour pleases.
65 HER HONOUR: Thank you very much.
66 MS NAIMO: And a 464.
67 HER HONOUR: I'm not going to order the 464.
68 MS NAIMO: As Your Honour pleases.
69 HER HONOUR: This is not the sort of case where DNA will assist, she is a first offender, in my view, she has good prospects of rehabilitation.
70 MS WILLARD: As Your Honour pleases.
71 HER HONOUR: I probably should add as well, I regard it – Ms Paglianiti, I regard you as having – if you attend to the gambling addiction properly and to in particular the psychological problems underlying it, you do have very strong prospects of rehabilitation. So that the principle of community protection is not one that in my view has a large part to play in the sentencing exercise before me. Thank you very much. All right. And I order that you compensate Eastern Ocean Proprietary Limited, in the sum of $6,322,900 and – actually this is wrong, sorry Annamiek. It's got six million, three - it works out to be six billion. Actually if you just give it to me I'll just sort it. Thank you. Sorry, it should be $6,322,926 is that correct?
72 MS NAIMO: That's correct, Your Honour.
73 HER HONOUR: Yes, all right. I've got an extra 796 in there so I'll just cross that out and initial it, all right? What's the date today, it's the - - -
74 MS NAIMO: Twenty-eighth.
75 HER HONOUR: Thank you. Yes thank you. Yes counsel are excused thank you very much.
76 MS NAIMO: Thank you Your Honour.
77 HER HONOUR: So sorry, Ms Pagliatini can be taken down, thank you very much. Thank you very much. Thank you, you are excused, I've got a judicial monitoring, thank you very much.
- - -
Indictment No: J13205353
IN THE COUNTY COURT CR-19-00886
IN THE STATE OF VICTORIA
AT MELBOURNETHE DIRECTOR OF PUBLIC PROSECUTIONS
v
CONNIE PAGLIANITI
SUMMARY OF PROSECUTION OPENING
Date of document: 18 August 2019
Filed on behalf of: The Director of Public Prosecutions
Prepared by:
JOHN CAIN Solicitor’s code: 7539
Solicitor for Public Prosecutions Telephone (03): 9603 7777
565 Lonsdale Street Direct: 9603 2553
Melbourne Vic 3000 Reference: 1806957
This case is about a sophisticated fraud that was committed over a number of years and involved the misappropriation of many millions of dollars. On 100 occasions from 26 February 2014 to 18 September 2018 (a period of 4 years and 7 months), the accused made transactions from the Company accounts to her personal and business bank accounts without authorisation. In doing so, she misappropriated a total of $6,320,230.48.
The victim of the fraud is Eastern Ocean Proprietary Limited (“the Company”), a large company that is situated in Derrimut and is responsible for importing and wholesaling gift and home wares for retailers across Australia. William Qi is the Managing Director of the Company.
The accused was born on 14 January 1958. At the time of her arrest, she was 60 years old and lived in Brunswick East with her husband and 16-year-old son. At the time, she was the owner of an event management business known as Eventcepts Propriety Limited (“Eventcepts”).
The accused had a longstanding connection with and intimate knowledge of the Company. As an alternative source of income, she provided bookkeeping services to the Company as a contractor for about 20 years. Her role was to prepare and process payments of the Company's payroll as well as the monthly Business Activity Statements. It was through the latter that the Company's liability for Goods and Services Tax (GST) and Pay As You Go Tax (PAYG) were reported and remitted to the Australian Tax Office (ATO).
During the course of her employment, the accused attended the Company office on a fortnightly or monthly basis to perform her duties. Subsequently, she would send an invoice to the Company detailing the hours she had worked and the payment she was owed. Those invoices requested that funds be deposited into her Eventcepts ANZ Bank Account (BSB 013 259 and account number 21812519).
Each fortnight, the accused processed all of the Company’s payrolls for the employees. Payments of her invoices for her work were made by QI or another staff member.
The Company made GST payments to the ATO on a monthly basis. The amounts paid were significant, at times being in excess of $100,000 per month. Regularly, short term finance was arranged to cover the large ATO payments.
Each month, the accused processed a payment to the ATO in relation to GST and PAYG. She entitled the transaction as “ATO”. For every payment with the title “ATO”, an amount was paid by the Company to the ATO while the balance was paid into the accused’s personal and Eventcepts bank accounts.
If the online banking was ever to be verified, it would only depict a group transaction of “ATO” or “PAYROLL”. If each individual payment was accessed, a different story would have been revealed. However, as Qi had a strong and protracted relationship with the accused, he felt no need to review any of the banking. In short, he had a level of trust and confidence in the accused and her ability to honestly perform the bookkeeping services.
On 17 September 2018, the Company contacted the Commonwealth Bank of Australia (CBA) to obtain short term financing for the GST that would be owing at the end of that month. On 19 September 2018, Qi accessed the Company’s CBA account to check the status of the short term financing.
Qi checked the GST payment and noticed two payments had been made. One payment was to the ATO and one payment was to a bank account name of Eventcepts. Qi then made further enquiries through the online bank statement. Consequently, he discovered that on every GST statement, one or two more payments had been made to an Eventcepts bank account or the accused’s personal bank account. Not one of those payments had been authorised.
On 25 September 2018, Qi attended the Sunshine Police Station and made a statement to the police about the matter. He also commenced civil proceedings against the accused and Eventcepts. As part of that, he engaged the services of McGrath Nicol to conduct a forensic accounting investigation.
As a result of that forensic investigation, it was revealed that the accused had engaged in a widespread and longstanding misappropriation of funds from the Company. McGrath Nicol identified that the accused used the following two modus operandi to misappropriate the funds:
a. the accused appropriated funds into her personal and business bank account under the title “ATO” and grouped within the GST payments to the ATO; and
b. the accused appropriated funds into her personal bank account under the title “PAYROLL” (or a similar title) and grouped within the payroll payments to Company employees.
The unauthorised payments made by the accused and depicted as “ATO” had a total value of $6,113,339.27. These payments consisted of 52 transactions between 18 July 2014 and 5 September 2018. The specific details of these transactions is as follows:
18 July 2014 - transaction from the Company's bank account number 354110715988 of $81,353.00 into Eventcept’s bank account 2118125199;
18 August 2014 - transaction from the Company's bank account number 354110715988 of $89,965.00 into Eventcept’s bank account 4217-84376;
17 September 2014 - transaction from the Company's bank account number 354110715988 of $93125.00 into C Paglianiti bank account 10019158;
17 October 2014 - transaction from the Company's bank account number 354110715988 of $105,029.00 into C Paglianiti bank account 10019158;
21 November 2014 - transactions from the Company's bank account number 354110715988 of $96,315.00 into Eventcept’s bank account 211812519 and $35,215.00 into C Paglianiti bank account 10019158;
16 December 2014 - transactions from the Company's bank account number 354110715988 of $54,356.00 into Eventcept’s bank account 211812519 and $70,189.00 into C Paglianiti bank account 10019158;
16 January 2015 - transaction from the Company's bank account number 354110715988 of $212,850.00 into Eventcept’s bank account 211812519;
18 February 2015 - transaction from the Company's bank account number 354110715988 of $142,850.00 into Eventcepts bank account 211812519;
18 March 2015 - transaction from the Company's bank account number 354110715988 of $142,850.00 into Eventcepts bank account 211812519;
16 April 2016 - transactions from the Company's bank account number 354110715988 of $190,891.00 into Eventcepts bank account 211812519 and $97,657.00 into C Paglianiti bank account 10019158;
21 April 2015 - transaction from the Company's bank account number 354110715988 of $94,406.00 into Eventcepts bank account 211812519;
19 May 2015 - transactions from the Company's bank account number 354110715988 of $64,100.00 into Eventcepts bank account 211812519 and $25,000.00 into C Paglianiti bank account 10019158;
7 June 2015 - transaction from the Company's bank account number 354110715988 of $119,747.00 into C Paglianiti bank account 10019158;
17 July 2015 - transaction from the Company's bank account number 354110715988 of 110,000.00 into C Paglianiti bank account 10019158;
19 August 2015 - transaction from the Company's bank account number 354110715988 of $102,326.00 into C Paglianiti bank account 10019158;
17 September 2015 - transaction from the Company's bank account number 354110715988 of $77,893.00 into C Paglianiti bank account 10019158;
18 October 2015 - transactions from the Company's bank account number 354110715988 of $121,975.00 into Eventcepts bank account 211812519 and $9,500.00 into C Paglianiti bank account 10019158;
19 November 2015 - transaction from the Company's bank account number 354110715988 of $130,012.00 into Eventcepts bank account 211812519;
16 December 2015 - transaction from the Company's bank account number 354110715988 of $136,363.00 into Eventcepts bank account 211812519;
13 January 2016 - transaction from the Company's bank account number 354110715988 of $159,989.00 into Eventcepts bank account 211812519;
17 February 2016 - transaction from the Company's bank account number 354110715988 of $104,739.00 into Eventcepts bank account 211812519;
16 March 2016 - transaction from the Company's bank account number 354110715988 of $105,989.00 into Eventcepts bank account 211812519;
13 April 2016 - transaction from the Company's bank account number 354110715988 of $105,189.00 into Eventcepts bank account 211812519;
18 May 2016 - transaction from the Company's bank account number 354110715988 of $115,989.00 into Eventcepts bank account 211812519;
17 June 2016 - transaction from the Company's bank account number 354110715988 of $120,700 into Eventcepts bank account 211812519;
15 July 2016 - transaction from the Company's bank account number 354110715988 of $135,989.00 into Eventcepts bank account 211812519;
17 August 2015 - transaction from the Company's bank account number 354110715988 of $86,225.00 into Eventcepts bank account 211812519;
(xxviii) 19 September 2016 - transaction from the Company's bank account number 354110715988 of $102,356.00 into Eventcepts bank account 211812519;
19 October 2016 - transaction from the Company's bank account number 354110715988 of $174,405.27 into Eventcepts bank account 211812519;
18 November 2016 - transaction from the Company's bank account number 354110715988 of $108,071.00 into Eventcepts bank account 211812519;
19 December 2016 - transaction from the Company's bank account number 354110715988 of $79,275.00 into Eventcepts bank account 211812519;
18 January 2017 - transaction from the Company's bank account number 354110715988 of $154,967.00 into Eventcepts bank account 211812519;
(xxxiii) 17 February 2017 - transaction from the Company's bank account number 354110715988 of $103,719.00 into Eventcepts bank account 211812519;
(xxxiv) 17 March 2017 - transaction from the Company's bank account number 354110715988 of $127,635.00 into Eventcepts bank account 211812519;
19 April 2017 - transaction from the Company's bank account number 354110715988 of $131,225.00 into Eventcepts bank account 211812519;
(xxxvi) 17 May 2017 - transaction from the Company's bank account number 354110715988 of $106,459.00 into Eventcepts bank account 211812519;
(xxxvii) 18 June 2017 - transaction from the Company's bank account number 354110715988 of $120,970.00 into Eventcepts bank account 211812519;
(xxxviii) 19 July 2017 - transaction from the Company's bank account number 354110715988 of $153,960.00 into Eventcepts bank account 211812519;
18 August 2017 - transaction from the Company's bank account number 354110715988 of $98,090.00 into Eventcepts bank account 211812519;
19 September 2017 - transaction from the Company's bank account number 354110715988 of $139,564.00 into Eventcepts bank account 211812519;
18 October 2017 - transaction from the Company's bank account number 354110715988 of $163,210.00 into Eventcepts bank account 211812519;
17 November 2017 - transaction from the Company's bank account number 354110715988 of $170,350.00 into Eventcepts bank account 211812519;
18 December 2017 - transaction from the Company's bank account number 354110715988 of $154,068.00 into Eventcepts bank account 211812519;
17 January 2018 - transaction from the Company's bank account number 354110715988 of $119,316.00 into Eventcepts bank account 211812519;
19 February 2018 - transaction from the Company's bank account number 354110715988 of $96,760.00 into Eventcepts bank account 211812519;
19 March 2018 - transaction from the Company's bank account number 354110715988 of $89,650.00 into Eventcepts bank account 211812519;
18 April 2018 - transaction from the Company's bank account number 354110715988 of $122,000.00 into Eventcepts bank account 211812519;
18 May 2018 - transaction from the Company's bank account number 354110715988 of $108,000.00 into Eventcepts bank account 211812519;
20 June 2018 - transaction from the Company's bank account number 354110715988 of $85,670.00 into Eventcepts bank account 211812519;
(l) 18 July 2018 - transactions from the Company's bank account number 354110715988 of $58,250.00 into Eventcepts bank account 211812519 and $8,750.00 into C Paglianiti bank account 10019158;
18 August 2018 - transactions from the Company's bank account number 354110715988 of $74,225.00 into Eventcepts bank account 211812519 and $6,435.00 into C Paglianiti bank account 10019158; and
18 September 2018 - transaction from the Company's bank account number 354110715988 of $104,225.00 into Eventcepts bank account 211812519.
18. The unauthorised payments made by the accused and depicted as “PAYROLL” had a total value of $206,891.21. These payments consisted of 48 transactions between 25 February 2014 and 5 September 2018. The specific details of these transactions is as follows:
26 February 2014 - transaction from the Company's bank account number 354110715988 of $5356.59 into C Paglianiti bank account 10019158;
16 December 2015 - transaction from the Company's bank account number 354110715988 of $1,995.00 into C Paglianiti bank account 10019158;
13 January 2016 - transaction from the Company's bank account number 354110715988 of $2,359.15 into C Paglianiti bank account 10019158;
4 May 2016 - transaction from the Company's bank account number 354110715988 of $2,113.00 into C Paglianiti bank account 10019158;
29 June 2016 - transaction from the Company's bank account number 354110715988 of $2,315.00 into C Paglianiti bank account 10019158;
13 July 2016 - transaction from the Company's bank account number 354110715988 of $3,300.00 into C Paglianiti bank account 10019158;
27 July 2016 - transaction from the Company's bank account number 354110715988 of $3,876.00 into C Paglianiti bank account 10019158;
30 November 2016 - transaction from the Company's bank account number 354110715988 of $2,100.00 into C Paglianiti bank account 10019158;
14 January 2016 - transactions from the Company's bank account number 354110715988 of $6,123.00 into C Paglianiti bank account 10019158 and $2,651.00 into C Paglianiti bank account 10019158;
11 January 2017 - transaction from the Company's bank account number 354110715988 of $2,125.00 into C Paglianiti bank account 10019158;
22 February 2017 - transaction from the Company's bank account number 354110715988 of $2,104.00 into C Paglianiti bank account 10019158;
8 March 2017 - transaction from the Company's bank account number 354110715988 of $2,200.00 into C Paglianiti bank account 10019158;
22 March 2017 - transaction from the Company's bank account number 354110715988 of $2,356.00 into C Paglianiti bank account 10019158;
5 April 2017 - transaction from the Company's bank account number 354110715988 of $4,000.00 into C Paglianiti bank account 10019158;
3 May 2017 - transaction from the Company's bank account number 354110715988 of $2,980.00 into C Paglianiti bank account 10019158;
31 May 2017 - transaction from the Company's bank account number 354110715988 of $2,134.00 into C Paglianiti bank account 10019158;
14 June 2017 - transaction from the Company's bank account number 354110715988 of $3,100.00 into C Paglianiti bank account 10019158;
27 June 2017 - transaction from the Company's bank account number 354110715988 of $3,100.00 into C Paglianiti bank account 10019158;
11 July 2017 - transaction from the Company's bank account number 354110715988 of $5,213.00 into C Paglianiti bank account 10019158;
26 July 2017 - transaction from the Company's bank account number 354110715988 of $4,326.00 into C Paglianiti bank account 10019158;
9 August 2017 - transaction from the Company's bank account number 354110715988 of $3,876.00 into C Paglianiti bank account 10019158;
22 August 2017 - transaction from the Company's bank account number 354110715988 of $3,677.38 into C Paglianiti bank account 10019158;
6 September 2017 - transaction from the Company's bank account number 354110715988 of $4,200.00 into C Paglianiti bank account 10019158;
20 September 2017 - transaction from the Company's bank account number 354110715988 of $4,200.00 into C Paglianiti bank account 10019158;
4 October 2017 - transaction from the Company's bank account number 354110715988 of $4,200.00 into C Paglianiti bank account 10019158;
18 October 2017 - transaction from the Company's bank account number 354110715988 of $4,803.54 into C Paglianiti bank account 10019158;
1 November 2017 - transaction from the Company's bank account number 354110715988 of $5,230.00 into C Paglianiti bank account 10019158;
(xxviii) 15 November 2017 - transaction from the Company's bank account number 354110715988 of $4,800 into C Paglianiti bank account 10019158;
26 November 2017 - transaction from the Company's bank account number 354110715988 of $4,400.00 into C Paglianiti bank account 10019158;
13 December 2017 - transaction from the Company's bank account number 354110715988 of $11,250.00 into C Paglianiti bank account 10019158;
10 January 2018 - transaction from the Company's bank account number 354110715988 of $5,235.00 into C Paglianiti bank account 10019158;
24 January 2018 - transaction from the Company's bank account number 354110715988 of $4,652.00 into C Paglianiti bank account 10019158;
(xxxiii) 7 February 2018 - transaction from the Company's bank account number 354110715988 of $5,250.00 into C Paglianiti bank account 10019158;
(xxxiv) 21 February 2018 - transaction from the Company's bank account number 354110715988 of $5,300.00 into C Paglianiti bank account 10019158;
7 March 2018 - transaction from the Company's bank account number 354110715988 of $5,123.00 into C Paglianiti bank account 10019158;
(xxxvi) 21 March 2018 - transaction from the Company's bank account number 354110715988 of $5,124.45 into C Paglianiti bank account 10019158;
(xxxvii) 4 April 2018 - transaction from the Company's bank account number 354110715988 of $5,100.00 into C Paglianiti bank account 10019158;
(xxxviii) 18 April 2018 - transaction from the Company's bank account number 354110715988 of $5,320.00 into C Paglianiti bank account 10019158;
29 May 2018 - transaction from the Company's bank account number 354110715988 of $5,110.00 into C Paglianiti bank account 10019158;
16 May 2018 - transaction from the Company's bank account number 354110715988 of $5,100.00 into C Paglianiti bank account 10019158;
13 June 2018 - transaction from the Company's bank account number 354110715988 of $4,800.00 into C Paglianiti bank account 10019158;
11 July 2018 - transaction from the Company's bank account number 354110715988 of $3,700.00 into C Paglianiti bank account 10019158;
25 July 2018 - transaction from the Company's bank account number 354110715988 of $4,125.00 into C Paglianiti bank account 10019158;
8 August 2018 - transaction from the Company's bank account number 354110715988 of $5,252.00 into C Paglianiti bank account 10019158;
22 August 2018 - transaction from the Company's bank account number 354110715988 of $5,126.00 into C Paglianiti bank account 10019158;
19 September 2018 - transaction from the Company's bank account number 354110715988 of $5,252.00 into C Paglianiti bank account 10019158; and
5 September 2018 - transaction from the Company's bank account number 354110715988 of $5,200.00 into C Paglianiti bank account 10019158.
19. On 11 December 2018, police executed a search warrant (pursuant to Section 465 of the Crimes Act 1958) at 139 Blyth Street, Brunswick East. The accused was present at the house and she was arrested by Detective Senior Constable Holt.
20. Upon conducting a search of the house, police discovered numerous documents in relation to the finances of the accused. Those documents were photographed. Police seized an Apple laptop with charger cord, an Apple desktop computer, a box of multiple usb sticks, an Eventcepts ANZ bank statement and Condavi SuperFund documents (regarding NAB and ANZ accounts).
21. Police also executed a search warrant (pursuant to Section 465 of the Crimes Act 1958) at the office of Eventcepts (Level 1, 113-118 Lygon Street, Carlton). The accused was taken to this address by police after her arrest and she was present during the execution of the search warrant.
22. Upon conducting a search of the office, police discovered numerous documents in relation to the finances of the accused. Those documents were photographed. Police seized ANZ Bank statements, payment history documents and a desktop computer.
23. The accused was taken to the Melbourne West Police Station where she was participated in a formal Record of Interview (DVD). During the Interview, the accused made no admissions, however, she spoke about a gambling addiction and regularly attending gambling venues across Melbourne.
24. Subsequently, search warrants were granted in relation to various bank accounts of the accused and Eventcept. Specifically, those accounts were an Eventcepts ANZ Bank Account (BSB 013259, account number 211812519), a CBA Bank Account (BSB 083898, account number 10019158) and a Bank of Melbourne Account (BSB 193879, account 421784376). The latter two accounts were in the name of the accused (Connie Paglianiti).
25. Consequently, numerous bank statements were obtained in relation to those accounts. They revealed that the accused appropriated funds from the Company and deposited those funds into the Eventcepts and her personal bank accounts.
26. In addition, police obtained a Patron Detail Report from Crown Casino. That Report revealed that the accused had held a Crown Casino Membership since 2016. Police also obtained a Patron Activity Report from Crown Casino. That Report revealed that from March 2014 until October 2018, the accused spent an average of six days per month at Crown Casino. Her total losses for that period were $1,499,994.00.
27. The numerous bank statements that were photographed at the home of the accused revealed that the accused appropriated funds from the Company and deposited those funds into her personal bank accounts.
28. It is obvious and trite to state that the actions of the accused were premeditated, planned and they constituted a gross breach of trust.
Maximum Penalties
29. The maximum penalty for the offence of Theft is 10 years imprisonment pursuant to section 74 (1) Crimes Act 1958.
30. Where the value of the property stolen is $50,000 or more and where a person is found guilty of three or more Continuing Criminal Enterprise (CCE) offences, they are a ‘continuing criminal enterprise offender’ for the purposes of the Sentencing Act 1991 (s 6H), item 1 (a) of Schedule 1A.
31. A Continuing Criminal Enterprise offender is liable to a maximum term of imprisonment two times the length of the maximum term ordinarily prescribed for a continuing criminal enterprise offence, or 25 years (whichever the lesser) (s 6I Sentencing Act 1991).
32. Therefore, the accused falls to be sentenced as a continuing criminal enterprise offender.
Prior Convictions
33. The accused does not have any prior convictions.
Victim Impact Statement
34. A victim impact statement has been prepared by William Qi, Managing Director of Eastern Ocean.
Compensation Order
35. A compensation order will be sought
Forensic Sample Order
36. The offender is not DNA profiled. A Notice of an Application for a Forensic Sample Order was served on 8 May 2019.
Sentence Discount for Guilty Plea – s 6AAA
37. This matter resolved on 7 May 2019 at committal mention stage.
Pre-Sentence Detention
38. The accused was arrested and remanded on 11 December 2018 and released on 12 December 2018. Accordingly, the accused has served 1 day of pre-sentence detention.
Chronology
Event Date Offending Between July 2014 and September 2018 Arrest and Charge 11 December 2018 Record of Interview 11 December 2018 Filing Hearing 11 December 2018 Committal Mention #1 2 April 2019
Adjourned for plea negotiationsCommittal Mention #2 10 April 2019
Adjourned for plea negotiations and further materials to be obtainedCommittal Mention #3 7 May 2019
Matter resolved. Proceeded SHUB PG.
Plea date listed.Matt Fisher
Counsel for the Crown
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