Director of Public Prosecutions v Poljakovic
[2014] VCC 969
•24 June 2014
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-14-00380
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| BRANISLAV POLJAKOVIC |
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JUDGE: | HER HONOUR JUDGE DAVIS | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 30 May 2014 | |
DATE OF SENTENCE: | 24 June 2014 | |
CASE MAY BE CITED AS: | DPP v Poljakovic | |
MEDIUM NEUTRAL CITATION: | [2014] VCC 969 | |
REASONS FOR SENTENCE
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Subject: Criminal law – plea - sentence
Catchwords: Obtaining a financial advantage by deception – attempting to obtain a financial advantage by deception – written notice of intention to plead guilty
Legislation Cited: Sentencing Act 1991 (Vic)
Cases Cited:DPP v Linda Trigilia [2014] , DPP v Alan Acosta [2014], DPP v Kylie Thompson [2014] VCC 970
Sentence: Aggregate term of imprisonment of 12 months wholly suspended for 3 years
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Mr D Porceddu | OPP |
| For the Accused | Mr S Anger | Cameron Marshall & Associates |
HER HONOUR:
1 Brian Poljakovic, you have pleaded guilty to 58 counts of obtaining a financial advantage by deception, which carries a maximum penalty of 10 years imprisonment, and two counts of attempting to obtain a financial advantage by deception, which carries a maximum penalty of 5 years’ imprisonment.
2 The prosecution tendered an agreed summary which ran to some 37 pages. I note that some of the charges as outlined in this summary do not correlate directly with the charges as charged in the indictment. However, I accept that the summary correctly outlines the factual matrix of the offending.
3 Your plea of guilty was made by written notice of intention to plead guilty dated 3 March 2014 which was filed on that day prior to the commencement of the trial of 6 remaining charges. You were acquitted by a jury of all of these charges on 13 March 2014.
4 The plea was originally scheduled as a lengthy contested plea, but after an adjournment and some negotiations the plea proceeded largely undisputed. There was disagreement about the compensation order sought by the prosecution, and, given your counsel’s objection, as well as the uncertainty of the basis upon which the amount was calculated, I declined to make the order sought.
5 It is convenient to briefly set out the background to the charges. You held yourself to be a registered builder who had completed a number of domestic construction projects in Melbourne. In around 2006 you attended a Trade Fair in Melbourne where you met Frances Fernandez, Director of Breez Finance and Managing Director, at the time, of Jacaranda Cooperative Housing Society Limited (Jacaranda). You needed financial assistance for several construction developments and approached Ms Fernandez for assistance. You could only service a loan of $250,000 on your income but ended up securing a number of loans with Ms Fernandez’ assistance. In one case, her husband, Antonio Fernandez, took out a loan of $270,000 to enable purchase of land known as Lot B in Greensborough, upon which you intended to build 8 units. You needed up to about $1 million to construct the units. You borrowed another $400,000 and persuaded Mr and Mrs Fernandez to take out further loans themselves with Jacaranda, to the tune of $670,000. Your wife, Ljiliana, also applied for two further loans totalling around $260,000, on your behalf. In February 2008 you asked Mr and Mrs Fernandez to provide further financial assistance, but they declined. There were delays in obtaining a valuer for the project and Ms Fernandez sought confirmation from you and from tradesmen photographs and invoices which would prove progress of the construction of the units. At the same time as units were being built on Lot B, you were also building a double storey semi-detached unit at Lot 40 also in Greensborough.
6 Ms Fernandez became suspicious after one particular invoice was submitted to Jacaranda in relation to Lot B, and launched an investigation into all invoices received from contractors and suppliers and found a number of invoices had been submitted which were either completely false, or had been altered, or were in fact for services and/or materials provided for other projects you were undertaking at the same time you were constructing the units at Lot B. Inquiries were also made in relation to the original loan applications you and your wife submitted, including the supporting documentation provided by you. The issues relating to the original loan applications were the subject of the charges you faced at trial and of which you were acquitted, and it is not necessary for me to refer to that any further.
7 However, you remain indebted to Jacaranda to the tune of over $2 million, and your wife remains indebted to Jacaranda for sums totalling more than $370,000. After the expiry of Default Notices, Jacaranda became mortgagee in possession of Lot B and eventually secured a builder to complete the development.
8 The prosecution agreed that all of the charges largely fall within two broad categories.
9 The first is false invoices that were rendered in advance of work being done. I note that within this first category there are a number of what could be called sub-categories. There were those invoices submitted which were plainly false and where the supplier did not exist or never performed the work specified. It is apparent that when these invoices were submitted the bank account details provided were those either of yourself, your wife or your daughter. An example of this is Charge 4 where an invoice from AUW for $21,366.98 was sent by you to Mrs Fernandez for materials purchased for Lot B. Mrs Fernandez authorised payment of this invoice to the bank account details detailed on the invoice. These details were actually the bank account details of your daughter Kristina’s account to which you had access. The second subcategory is invoices submitted where the amount submitted was falsified. For example in the case of Charge 3 you sent an invoice for $18,269.79 to Mrs Fernandez for work performed at Lot B by Precision Scaffolding with a request for reimbursement. You held out to Mrs Fernandez that you had paid this amount. Precision Scaffolding did perform work at Lot B but the amount of the correct invoice was $8,269.79. Furthermore, the cheque that you provided to Precision Scaffolding in payment of the invoice for the amount of $8,269.79 was dishonoured.
10 The second broad category is invoices submitted for work allegedly performed or goods allegedly supplied in relation to one property, Lot B, when in fact that work was performed or those goods were supplied in relation to a different property. Most of the time this was for work allegedly performed at Lot B but in fact performed at Lot 40. Although I note that there are a number of instances where the work performed was at various locations (Charges 45 and 54).
11 The prosecution relied on an overall figure of $474,966.55 for all 60 counts. Leaving aside the two counts of attempt, the total figure involved was alleged to be $446,164.00.
12 The prosecution says that the gravamen of the offending is that you falsified documents in order to have access to funds where, if Jacaranda had known that funds were being misapplied or that the documents were false, the funds would not have been released to you. The prosecution says that the not guilty verdicts relating to the manner in which you obtained the loans from Jacaranda are not relevant to your plea on the 60 counts in that by your plea you admit to obtaining financial advantage by deception in relation to 58 of the charges, and to attempting to do so in relation to charges 6 and 58. The prosecutor submitted that the business community expects that when documents are submitted and representations are made that those documents are genuine and that the representations are correct. It was submitted that the quantum involved is significant, that your offending occurred repeatedly over a two year period, and that the offending only ceased after Mrs Fernandez raised concerns, caused investigations to be carried out, and determined that documents had been falsified. It was relevant that but for the detection of your offending, the offending could have continued.
13 It was submitted that there was no evidence that all of the funds received by you from Jacaranda were paid to tradespeople engaged in the construction of Lot B and/or Lot 40 or engaged in the supply of materials to those sites. It was submitted that it can be inferred that you must have used the loan funds to survive because you worked exclusively as a builder.
14 It was conceded that your level of offending was relatively low, but that the principles of general and specific deterrence and just punishment were paramount in that a clear message has to be sent to the business community and the building business, that funds cannot be generated through a process of reliance on false documents. It was conceded that you have no prior convictions, but it was submitted that on the authorities this carries less weight as a mitigating factor in white collar crimes because it is often the case that people from good backgrounds are in positions of trust from which they can offend. It was conceded that you pleaded guilty, although not at the first available opportunity, and agreed that negotiations began just before the trial began. It was conceded that some moderation of sentence should flow from the utilitarian value of the plea in that considerable time and expense has been saved by the avoidance of the trial. Having regards to the principles of totality and proportionality, the prosecution did not agitate in favour of cumulation, and submitted that it was open to the Court to impose an aggregate sentence. It was submitted that some account could be taken of the hardship you would suffer in jail as a result of being unable to care for your autistic son who lives with you during the week. Given the amount involved, the period of time involved, the fact that the offending might have continued but for the detection of it, the abuse of trust involved, it was submitted that a term of immediate imprisonment was appropriate and that given the extent of the offending the Court should not wholly suspend that term of imprisonment.
15 The prosecutor handed up a table of cases involving comparable quantum, but conceded that many of the cases therein related to theft from employers. The prosecutor also handed up three sentences from judges of this Court. The case of DPP v Linda Trigilia [2014] concerned theft of over $200,000 from an employer while the accused was on bail on other matters; she had significant prior convictions; some of the money was repaid; she had significant personal issues including a child with a disability. She was sentenced to 3 years’ imprisonment with a non-parole period of 30 months. The case of DPP v Alan Acosta [2014] VCC concerned 139 false invoices totalling over $500,000 which were authorised by the accused and paid into accounts operated by his co-accused. The offending was found to be extremely serious and involved a gross breach of trust, a large amount of money, continued over a protracted period of time, on an important public company providing health services. He was sentenced to 4 years imprisonment with a non-parole period of 18 months. The case of DPP v Kylie Thompson [2014] VCC 970 involved 6 counts of obtaining property by deception and 5 counts of obtaining financial advantage by deception, totalling nearly $350,000. The victim was an employer, the offences occurred over a long period and were hard to detect; about a third of the funds were repaid, and there was mitigation due to pre-existing depression. Ms Thompson was sentenced to a total effective sentence of 3 and a half years with a non-parole period of 18 months.
16 I turn to your personal circumstances as outlined by your counsel. You are 46 years old and were born and educated in the former Yugoslavia, trained as an electronic engineer and as an air force pilot, suffered a shrapnel injury during the war, married there, and migrated to Australia in around 1992. You have two daughters, aged 24 and 22, and a son, aged 15, who is autistic. You separated from your wife in 2012 because of these proceedings, but your son lives with you during the week. You worked in Australia as testing engineer for four years before being retrenched; then worked in another company in a similar position at night while working part time in sales during the day for a housing development company. You then worked full time with that company before starting your own business in early 2000, building homes. As a result of the matters surrounding these charges, you are a bankrupt and are receiving disability support benefits due to a number of medical conditions including a left shoulder problem, arthritis and psoriasis. You live with your aunt and your autistic son lives with you during the week. Your counsel tendered reports which identify your son’s disability and your own medical problems and I have read them.
17 Your counsel relied on a number of matters in mitigation. First of all, you were frank during your record of interview and agreed that you had falsified invoices. You pleaded guilty, and the contest on the matters which went to trial was undertaken on legal advice, and resulted in acquittal. Second, there were special circumstances surrounding your offending in that it was never your intention to evade debts or loans you incurred, there was no evidence of personal enrichment, there was no straight out theft or defalcation. Rather, it was submitted, you acted in accordance with the culture of the building industry, where corners are cut so that developments can be completed. In this case, it is clear that many of the amounts invoiced were ultimately paid to suppliers of goods or tradesmen who worked on Lot B and/or Lot 40. For example, it was submitted, that in relation to Charge 1 (involving the sum of $47,649.00), all but $3000 of the monies were applied to the construction on Lot B. In relation to Charge 2, while the original invoice was falsified, and the sum of $20,000 was added to the invoice, it was submitted that the extra money went to the constructions at Lot 40 and Lot B. In relation to charge 55, it was not disputed that the stairs were installed at Lot B and at the price stated; rather, the invoice was raised falsely in advance in order to receive a drawdown from the relevant loans.
18 In relation to Lot B, it was submitted that charges 15, 35, 40, 42 and 52 reflected amounts which were ultimately paid in full for work done at Lot B; the problem was that you rendered invoices in advance of the work being done, and before invoices had been rendered to you by tradesmen for work completed by them, and you were effectively obtaining cash in advance. You were under pressure to get work done and at times tradesmen would only work if they were paid in cash.
19 In relation to the works undertaken at units which were completed on Lot B, and which are the subject of charges 5, 21, 30, 31, 34, 39, 46, 50 and 51 it was submitted in mitigation that those units were in fact rendered and insulated and did in fact have kitchens installed; although it was conceded that the invoices in relation to these works were false, the suppliers did not exist, and the work performed was not actually the work stated in the false invoices. Similarly, in relation to charge 56, although carpets were ultimately installed in units on Lot B, the money was obtained in advance of any invoice being rendered for the supply and/or installation of the carpets.
20 It was conceded on your behalf that not all of the drawdowns attributed by you to works on Lot B in fact were applied by you to Lot B, and that in fact the goods and monies obtained pursuant to the loans referable to Lot B were applied by you as between Lot B and Lot 40 as you saw fit. It was submitted, however, that as Ms Fernandez was the source of the finance for the construction at both sites, any diversion by you of funds earmarked for one property to another property was in effect movement between related interests, and was not akin to taking the money for your own use.
21 Thirdly, you have already suffered personally and financially in that your marriage has broken down, you have been bankrupted and can never run a business again. Finally, incarceration would be difficult for you because of your health problems and because of the hardship you would suffer in not being able to care for your son during the week. Your counsel conceded that a term of imprisonment should be imposed for your conduct, but submitted that in the unusual circumstances of this case, such a sentence should be wholly suspended.
22 I acknowledge that your offending occurred over a substantial period, comprised numerous acts of falsification by you involving a total sum which is substantial, and that it continued until it was detected. However, I accept that this is not a case of theft from an employer or of defalcation, but rather that it represented very poor business practice by you as you tried to generate cash to pay tradesman in a timely fashion and to keep your construction projects at Lot 40 and Lot B progressing. Whilst I accept that overall the funds to which the falsifications relate were in fact applied to either one or the other of these two projects, both of which were being funded by loans from the same building society, and that your moral culpability is thereby somewhat reduced, it is not clear that all of the funds obtained were so applied and that you retained none of the funds. In any event, I accept that the purpose of the falsification of documents in relation to each charge was not that of personal enrichment but rather to enable you to run your building business.
23 The principal mitigating factors in this case are your early cooperation with police, your plea of guilty and the absence of prior convictions. You admitted the falsification of invoices when interviewed by police. You did not plead guilty on legal advice as the original indictment included an additional 7 charges of which you were ultimately acquitted at trial. Your plea of guilty to today’s charges occurred the day before the trial on the remaining charges. Although it was not made at the earliest possible opportunity, I regard your plea of guilty as a true indication of remorse. I accept however, that your personal circumstances have vastly changed since your offending in that you have been bankrupted, are separated from your wife, and now live on a disability support pension.
24 The sentencing considerations of general and specific deterrence and just punishment are highly relevant in this case. You obtained finance to the tune of over $447,000, which was explicitly tied to the construction of specific projects. It was your obligation to draw down funds from those loans on the basis of genuine and accurate representations. It is fundamental to the smooth running of business transactions that people engaged in business be able to rely on the accuracy and genuineness of a written representation such as an invoice. If every invoice had to be verified, there would be chaos. You repeatedly took advantage of the unlikelihood that any individual invoice would be verified.
25 I take into account that you are 46 years old and have no prior convictions. Your plea of guilty was not made at the earliest opportunity but only shortly before the commencement of the trial.
26 The Crown conceded that while the offending for which you stand to be sentenced falls generally into 2 main categories, the offences form part of a series of offences of the same or a similar character. In light of this I am satisfied that it is appropriate in this case to impose an aggregate sentence as per s 9(1) of the Sentencing Act.
27 Would you please stand Mr Poljakovic.
28 In all the circumstances, I consider that the principles of general and specific deterrence and just punishment are appropriately satisfied by the imposition of an aggregate term of imprisonment of 12 months.
29 However, I consider it appropriate in the unusual circumstances of this case, to wholly suspend that sentence for a period of three years. You are a middle aged hardworking and devoted family man with no prior convictions who has had a solid work history but who adopted very bad and dishonest business practices in your construction business. I consider that the circumstances of your offending are such that you do not present a danger to the community and that you are unlikely to reoffend. I acknowledge that as a result of your conduct, which did not involve any personal enrichment, you have suffered greatly: you have been bankrupted, your marriage has broken up, you have become dependent on the disability pension, and you now live with an aunt and still have the care during the week of your autistic son. The care that you provide him is a further sign of your good character. I consider that you have good prospects of rehabilitation if you are not sent to prison.
30 I am obliged to tell you that should you breach the law by committing an offence during the next three years, punishable by a term of imprisonment, even though the court may not imprison you for that offence, you would be brought back before me and, on the face of it, would be in breach of the suspended sentence which I have imposed today.
31 That would mean this: If you breach your suspended sentence during the next three years, you will be back before this court with the overwhelming probability that you will go to gaol to serve your 12 month sentence of imprisonment. Do you understand this?
32 OFFENDER: I do understand this Your Honour.
33 HER HONOUR: All right. Pursuant to s.6AAA of the Sentencing Act I indicate that if you had pleaded not-guilty to these charges I would have sentenced you to two years imprisonment with a minimum period of 12 months to be served immediately. Are there any other matters?
34 MR PROSECUTOR: No Your Honour.
35 MR DEFENCE: No Your Honour.
36 HER HONOUR: All right, I'll just sign the orders.
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