Director of Public Prosecutions v Phillipou

[2015] VCC 1118

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

AT MELBOURNE
CRIMINAL JURISDICTION

CR 14-00406

DIRECTOR OF PUBLIC PROSECUTIONS

v

CHRISTINA PHILLIPOU

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JUDGE:	HER HONOUR JUDGE COHEN
WHERE HELD:	Melbourne
DATE OF HEARING:	27 July 2015, 28 July 2015, 29 July 2015, 30 July 2015 (for trial); 7 August 2015 (for plea)
DATE OF SENTENCE:	18 August 2015
CASE MAY BE CITED AS:	DPP v Phillipou
MEDIUM NEUTRAL CITATION:	[2015] VCC 1118

REASONS FOR SENTENCE
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Subject: Sentencing – plea of guilty – obtaining financial advantage by deception.

Catchwords:         Deception against employer/principal – multiple transactions over several months- late plea of guilty – whether conviction necessary.

Legislation Cited: s6AAA Sentencing Act 1991
Cases Cited:         R v Verdins [2007] VSCA 102
Sentence:             Community Correction Order with conviction – unpaid community work.      

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Fiona Skepper, OPP (on sentence) Mr B. NIbbs (on plea)	OPP
For the Accused	Mr J. Dounias	Simon Parsons and Co

HER HONOUR: 

1Ms Phillipou, I have to give reasons for the sentence I am going to impose.  You can remain seated while I explain my reasons and I will tell you when I want you to stand. 

2Christina Phillipou, you have pleaded guilty to a charge of dishonestly obtaining financial advantage by deception.  The maximum penalty for this offence is ten years' imprisonment.  Although you will not be receiving a term of imprisonment in this case, I have taken that maximum penalty into account as reflecting the comparative seriousness of offences of this nature. 

3Your offence covers a period from May to December 2010.  At that time you were working as practice and business manager for two associated companies, Breast Unit at Mercy Hospital Pty Ltd (“BUMP”) and Breast Imaging Victoria Pty Ltd (“BIV”), both of which operated from the same premises in East Melbourne.  You had worked for those companies for three separate periods over approximately seven years, had twice been invited to return after leaving, and were regarded as very competent and efficient in your work.  You were also regarded as a personal friend by the principals of those two companies, Dr Suzanne Neil, who was a director of BUMP, and her husband, Mr David Kanat, who was the director of BIV. 

4By the time of this offending, you were no longer a direct employee but contracted your services to one or both companies.  However, that did not absolve you of a duty to act honestly and not to abuse your access to financial records and information of those companies. 

5The specific conduct giving rise to this charge is that on eight separate occasions, between May and December 2010, amounts of some thousands of dollars were transferred from a BIV account into a bank account in your name, which amounts were entered into the business accounting records of BIV as payments to four named radiologists, who regularly performed services for that company.  The total of the eight transfers was $30,710.00.  There is no explanation offered for any of these dishonest transfers.

6I have read a victim impact statement from Dr Neil and one from Mr Kanat.  I have only taken into account those parts admissible and relevant to the offence on which I sentence you.  As I am aware through the history of this proceeding that there were many more acts of dishonesty originally alleged, and a much greater total, I have only taken into account the consequences from the limits of the offence before me now.

7Nevertheless, I accept from those statements that both Dr Neil and Mr Kanat felt personally betrayed by you as you had been trusted in your roles with both companies, BIV and BUMP, and had been treated as a friend by them, and a friendship extended to your husband.  I accept that discovering the betrayal of trust by you, and the investigation process and the criminal justice process, have been personally stressful for both Dr Neil and Mr Kanat.

8I must assess both the objective and subjective seriousness of your offending.  The betrayal of an employer, or principal, especially after longstanding service by a person entrusted with handling the day-to-day financial affairs of that employer, or principal, must always be viewed as objectively serious.  To put a person in a position to operate bank accounts for a business is always dependent on a degree of trust, and when that occurs in a relatively small business, the abuse of trust is a serious betrayal of both the business and the actual people involved – principals and fellow workers.

9In your case this was not a single, isolated occurrence but sustained offending over a period of seven and a half months, and included eight separate deceptions, at one stage approximately fortnightly.  Each involved the creation of false entries to make it look as if the money were being paid to other people, those being people whom you well knew were medical practitioners providing services regularly to the company, BIV, and whose legitimate invoices were regularly paid.  Your deception therefore included disguising payments to you personally by misusing the information you had about those other people who were regular contractors to BIV.

10Although the total amount involved, namely $30,710, is by no means as high as many other cases this court sees of dishonest misappropriation from an employer or principal, the fact of it involving repeated deceptions over a sustained period of months puts it, in my view, well above the lowest end of the scale of seriousness for an offence of this nature.  On the other hand, the total keeps it in the lower range of that scale. 

11There is a need for just punishment, taking into account that the punishment must be proportionate to the seriousness of the offence, so I have had regard to its objective seriousness but also the comparatively limited amount of money dishonestly obtained. 

12I regard specific deterrence, that is to deter you from future offending of this type, as of lesser importance in this case because I believe this whole experience has been hugely embarrassing and will have been a salutary lesson for you.  However, general deterrence is a significant factor, indeed in my view, the most important in this case, to send a message to others tempted to offend in a similar manner, that they can expect serious punishment. 

13You come before the court with no prior convictions.  However, that is of relatively less importance because offences of this nature are usually committed by people with no prior criminal history, that being the reason for their having been trusted by the employer as you were. 

14I have read the several personal references, which all speak of your good character, and how surprised each writer has been to learn of this offending.  I accept that those are the genuine views of the writers of those references.  None refers to any reason being offered by you for why it occurred. 

15You have pleaded guilty to this charge.  That occurred on the fourth day of a trial and is conceded to be at a relatively late stage.  By then one witness had been called to be cross-examined on a voir dire, having not been available at the time of the committal hearing, and two juries had been empanelled but had each been discharged, although through no fault of yours. 

16The timing of your plea did save the witnesses having to be called to give evidence before a jury and saved at least two, if not up to three, weeks of further court time for a trial.  It therefore still carried real utilitarian value.  It also reflects that you have at least formally accepted responsibility for this offence.  However, although a plea of guilty can also indicate remorse, I have seen little to indicate that in your case. 

17The one feature which reflects real acceptance of responsibility is that on the morning of your plea hearing you provided, and there was handed to the prosecution, a bank cheque for a substantial sum of money, being a little under 20 per cent of the total amount dishonestly obtained. As you have not been employed for almost two years, I accept that it would not necessarily be easy to provide substantial sums of money on little notice.  The payment towards the compensation order that I will be making is a sign that you have indeed accepted responsibility for this amount and have made a real effort to show that, albeit only very recently. 

18You will receive some leniency for your plea of guilty, taking all these aspects into account, although by no means as much as would have followed had you pleaded guilty at a much earlier stage and shown genuine signs of remorse.

19I turn now to your personal circumstances, both before and since this offending.  You are now aged 39.  You live in Moe where you were raised and have spent much of your life, as did your parents.  I am told that your father passed away when you were a teenager and your mother is now in poor health.  Indeed, you live with her as her full-time carer. 

20You completed high school in Moe and then attended Monash University, taking four years to complete a Bachelor of Business course, majoring in economics and management.  You then worked in the Moe area as a medical receptionist, for approximately two years.  You then wished to move to Melbourne, where you obtained work at a sports medicine unit and where you rose from being reception manager to practice manager. 

21In 2002 you applied for and obtained the position of practice manager at the company abbreviated to BUMP, where you worked for approximately a year until choosing to move to a different employer for some years.  You were then approached by Mr Kanat to return to your work for BUMP and BIV, where you remained until mid-2008, when you resigned to be with your then boyfriend in the USA.  You apparently returned some six to eight weeks later, having been contacted by Dr Neil. 

22It was clear from the evidence of the one witness that I did hear, at the commencement before the trial began, that your competence and experience was much missed, and that witness, who was your replacement, was unable to fully replace your skills in the six or so weeks that he was there. 

23You eventually resigned from working for BUMP and BIV in March 2011, when you said you were moving to the USA with your husband, who was returning to work there.  You apparently did go overseas at that stage, but returned to Australia within a couple of months, moved back to Moe and obtained work at the Warragul Hospital.  Your husband accepted full-time employment in the USA, and I am told that the plans for you to move there again did not come to fruition.  Further, in mid-2012 your mother, who had already been ill, developed a more serious illness, and with you remaining in Australia to care for her, your marriage faltered. 

24I have been provided with material about your mother's ill-health, for which by August 2012 you were being paid a carer's allowance, and in 2013 applied for and obtained the carer's benefit, which was of higher value and reflected the long-term nature of your mother's condition.  Your mother remains in poor health with the need for extended care, although she is not totally physically or mentally dependent.  I am told, and a reference from your sister-in-law indicates, that you have taken over the role as full-time carer for your mother and that your brother and sister-in-law cannot give substantial assistance. 

25On returning to Australia in mid-2011, you obtained employment at Warragul Hospital.  When you learnt that you were being investigated by police for alleged offending at your previous job, you apparently notified the CEO, who maintained your employment until charges were formally laid, which meant that they would appear on a police check and you decided to resign.  Apparently you then, overlapping with that other work, worked for a surgeon whom you informed of the pending charges but eventually resigned from there also. 

26I accept that you have shown integrity by informing these employers of the pending charges.  I accept that loss of income has impacted on your life over the intervening period.  I am unclear, however, whether you would have been able to continue in such employment after your mother's health declined, especially from 2013. 

27You had heard rumours of the police investigation into your suspected offending from late 2011.  The reality was that after you left, the replacement business manager began questioning some entries in the business accounts.  Some were reported to police and this led to an extended investigation, which covered a much more extensive period than is the subject of this charge.  You were arrested in February 2013, at which stage you made a 'no comment' record of interview.  You were charged in August 2013, the extent of charges being much more numerous and for greater amounts over the extended periods than the offence for which I sentence you.

28I take into account that there has been delay between the commission of the offence for which I sentence you, that is in 2010, and this matter coming to a plea hearing in August 2015, and that that has impacted on you to a considerable degree.  Until late 2011 there would have been no impact at all, but you seem to have been aware from late 2011 that your conduct was being investigated.  You have had extensive charges hanging over you for some two years, which were only reduced in quantity in stages.  In fairness, you are entitled to some leniency for having had the prospect of these charges hanging over you for so long. Indeed, I accept from the report of a psychologist, whom you consulted from the end of 2012, that you were suffering considerable anxiety and depressive symptoms over an extended period with the worry of these charges. 

29During the intervening period, you have undertaken further study; an accounting degree which you have been doing by online study, now through University of South Australia, having been given credits for some subjects completed through other institutions.  To undertake that study has obviously been your choice.  I will say a little bit more about that later.

30Since December 2012, you have been seeing a psychotherapist, a qualified psychologist, Ms Cheryl Russell.  She reports that on initial presentation you were very hesitant about trusting her and overall have found it difficult to disclose details about your situation and your feelings.  You displayed affective symptoms, such as emotional numbing, and a lack of emotional responsiveness, and became fearful of leaving your house, not wanting to see friends due to rumours about your pending charges.  She felt you also displayed symptoms of an anxiety disorder.  If there was more contributing to that condition than your reaction to the investigation and charges, their impact on your employment and your mother's illnesses, as is suggested in Ms Russell's report, I do not have evidence that would support my making any such finding.  There is nothing in Ms Russell's report to support that you were suffering any psychological condition at the time of your offending which may have contributed to your commission of this offence.  It is not suggested that anything in her report enlivens the principles in Verdins case to diminish or cause the need for modification of sentencing factors in your case. 

31Ms Russell gives the opinion that once you have been sentenced and find it difficult to obtain work, you may experience more significant depression and need some ongoing treatment.  If that occurs, hopefully you will be able to access such treatment.  However, it is my understanding from what I have been told that you will be remaining as a full-time carer for your mother for the foreseeable future. 

32It was submitted on your behalf that due to the situation with your mother's ill health, and you being the only readily available person to act as her carer, I should reduce your sentence on the grounds of extraordinary hardship.  As the total monetary value of your offence, in my view, is not serious enough to require no sentence short of imprisonment, the principle of requiring exceptional circumstances to invoke leniency for family hardship do not have much practical application in this case.  If they had, I would not be persuaded that the situation is one truly so exceptional as to warrant enlivening such principle. Unfortunately, there are very often serious implications for the family of people who commit offences, and sometimes those cause considerable hardship.  As I am not intending to imprison you, I do not consider I need to say more about that in this case.  You will be able to live in the community and continue to live with and care for your mother, to the extent that that is required. 

33I have been urged to impose a penalty without conviction.  I am satisfied that the impact of recording a conviction on you is likely to decrease your employment prospects, to the extent that you might seek employment involving financial management or being entrusted with the accounts of an employer.  I note that since being charged with these matters, you have enrolled for a degree in accounting.  That, of course, was your choice.  You have done that knowing you face these charges and have chosen to strengthen or expand your credentials and qualifications in that field.  Self-employment would be open to you, unaffected by a criminal conviction for dishonesty, but a conviction might impact on membership or registration with accountancy professional organisations, not that I have any specific evidence going to that issue.  I am satisfied that employment prospects for you in the accountancy field would be significantly impacted by the recording of a conviction.  Nevertheless, I consider that the nature of your offence here, which involved eight separate acts of deception over several months, takes it beyond the category of offence of this nature for which the non-recording of a conviction might have been open. 

34You betrayed the trust by your principals in your integrity at the time of this offending.  This was not one isolated and instantly regretted occasion, but rather, a course of deceptions over some months to which you did not plead guilty until your trial had actually started, notwithstanding that as separately framed charges the acts that constitute the now rolled-up charge could have been admitted. 

35In my view, protection of the public is a significant factor on this issue.  Potential employers, or people who place their trust in you to the extent of giving you access to their funds or banking information, are entitled to know of this offending. 

36A conviction will not totally prevent you from obtaining future employment.  Indeed, it is clear that you have experience in office or business management, and management of staff, beyond merely book keeping related, or being in charge of financial transactions.  Several character references from people who have worked with you indicate that you have a reputation for being hard-working, highly competent and that you have worked and engaged well with other staff, be they junior or senior to you.  All of those qualities clearly equip you for a wider field of work than just those involving access to funds. Indeed, those who know you seem to think that, notwithstanding this offence on your record, they would still trust you in employment.

37I do accept that employment in public institutions or organisations which require police checks will limit the types of role that you might be offered.  Nevertheless, in my view, it is important that the record does reflect that you have committed this offence.  I therefore intend to record a conviction.

38Taking all of these considerations into account, I have decided that a Community Corrections Order, with the only condition, apart from the standard terms, being unpaid community work, that being as a penalty, is the most appropriate sentence in your case.  Taking into account that I shall also be ordering compensation payable to BIV of the full amount dishonestly taken, and that I am recording a conviction which may impact on your employability, I have moderated the number of hours of unpaid community work as the penalty component.

39The order will have more extended duration than it might have done to give you a flexible amount of time to complete that work, and taking into account that as you live in a regional area, there might not be suitable work available as often as in the metropolitan area.  Once the work component is completed, the CCO expires.  This will mean that you can make the order last a much shorter time if you perform the work earlier during its operation.  Please stand now, Ms Phillipou.

40Christina Phillipou, on the charge of dishonestly obtaining financial advantage by deception, you are sentenced to a Community Corrections Order with conviction, the order to last for 15 months.  In addition to the standard terms, which I shall explain shortly, the only further condition is that you perform 150 hours of unpaid community work. 

41The standard terms are that you must report to the nearest Community Corrections office within two clear working days of today.  That appears to be the Morwell office.  The address will be on the order you are given.  The order will say, because the computer sets the timing, that you must report by 4.00 pm this Thursday.  There is an argument that that is not as long as two clear working days but that is what the order will say and if you want to take up the argument, that is up to you.  It is probably advisable to report by 4.00 pm this Thursday and not have that argument.

42Other terms are that you must notify any change in address of your residence or of work, including if you start work, within two clear business days of that occurring.  You must submit to visits as required by Community Corrections officers and you must not leave Victoria while the order is in operation without prior permission from Community Corrections officers.  You must obey all lawful instructions of Community Corrections officers.  Finally, but most importantly, you must not during the operation of the order commit any other offence which could be punished by imprisonment. 

43If you fail to comply with any of these terms, or the condition, or obviously if you commit any further offence, you can expect to be brought back before me for breaching this order and you may be dealt with for that contravention of the order as an offence in itself, as well as if there were any other offence.  You may be re-sentenced for the offence for which I now sentence you.  Another option would be having the terms of the CCO varied.  All of that would depend on the circumstances of what had occurred to constitute a contravention, and on your personal circumstances at that time.  But it is likely you would be brought back in front of me if you breach this order.

44As I have said, if you complete the unpaid community work sooner than 15 months, the order will have been completed and it is held to have expired at that time.  Do you understand the conditions of this order?

45OFFENDER:  Yes.

46HER HONOUR:  Do you agree to comply with the terms of the order? 

47OFFENDER: Yes.

48HER HONOUR:      All right.  In addition, I make an order for compensation.  I think it is appropriate to make the order for the full sum the subject of the charge, that is $30,710.00, in favour of Breast Imaging Victoria Pty Ltd and the ACN has to be on the order.  I understand that a bank cheque for $5,700 has been tendered so far, which will obviously be deducted from that total, but the order I sign will be for the total. 

49Finally, I state pursuant to s.6AAA of the Sentencing Act that if you had not pleaded guilty but had been found guilty by a jury on charges equivalent to the eight acts of deception rolled up into this single charge, the total effective sentence I would have imposed would have been a Community Corrections Order with conviction to last for 18 months duration and 200 hours of unpaid community work.

50You can take a seat now, Ms Phillipou, while that order is prepared and checked. 

51COUNSEL:  If Your Honour pleases.

52HER HONOUR:  Have I overlooked anything?

53COUNSEL:  No, Your Honour.

54HER HONOUR:  Thank you.  I'll have the Community Corrections Order shown to counsel on both sides to check that it complies with what I've said.  The issue of the reporting within two clear working days only comes up in those terms on the order but the CLMS order system records the date as 4.00 pm this Thursday.  You can have that argument on behalf of your client, Mr Dounias, if you wish with Community Corrections.  I agree that's less than two clear working days, as I was taught what clear working days means, but the computer is our Big Brother. 

55We'll have this printed out and then Ms Phillipou has to sign the CCO.  If you want to approach and explain it to her, Mr Dounias, that's fine.  My Associate will bring it to her and you can approach her if you want to.  I have signed that order.  Also, there will be a copy for Ms Phillipou and a copy for the prosecution.  There should be a copy of the compensation order for each side also.  Ms Phillipou can be released from the Dock. 

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