Director of Public Prosecutions v Romano

[2015] VCC 1821

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

AT MELBOURNE
CRIMINAL JURISDICTION

CR 13-01213

DIRECTOR OF PUBLIC PROSECUTIONS

v

NICHOLAS ROMANO

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JUDGE:	HIS HONOUR JUDGE MURPHY
WHERE HELD:	Melbourne
DATE OF HEARING:	7 December 2015
DATE OF SENTENCE:	11 December 2015
CASE MAY BE CITED AS:	DPP v Romano
MEDIUM NEUTRAL CITATION:	[2015] VCC 1821

REASONS FOR SENTENCE
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Subject:
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Legislation Cited:
Cases Cited:
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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Mr K. Doyle	O.P.P
For the Accused	Mr R. Lawrence	Stary Norton Halphen

HIS HONOUR:

1Nicholas Romano; you have pleaded guilty to one count of obtaining financial advantage by deception.  The count alleges that over the period 16 June to 26 July 2006 you dishonestly obtained a financial advantage; namely credits in the amount of $250,000 by deception, by falsely representing that you intended to sell Penny Ziakis a half share of the business known as Southbank Liquor.  The maximum penalty is ten years' imprisonment.

Circumstances of the offence

2The circumstances of the offence were set out in the Crown opening which was read in open court on the plea, and which I incorporate by reference.

3The opening is lengthy.  The genesis of the transaction was that you and the complainant met in 2005.  She is a few months older than you, and you became aware that she was involved in purchasing real estate.  You were also involved in the real estate industry; in the land spotting aspect of it.  You and her discussed a number of potential land options, with a view to purchase.  She believed that you had a verbal option relating to the purchase of the Pakenham racecourse site.  She had a wealthy uncle, and she got Macquarie Bank involved to discuss a number of projects, including possible financial backing for development of that site.  You also spoke on a number of occasions to a property valuer; Mr Wales, who was associated with her.

4The Pakenham racecourse deal was discussed at a meeting at which a representative of Macquarie Bank from Sydney was involved.  At a meeting at Macquarie Bank in Melbourne - when the complainant and the valuer and yourself were present - you presented a preliminary financial analysis of the proposal and other projects.  You and the  complainant agreed to establish a joint venture company, Icon,  to be equally owned.  You and the complainant were to contribute $300,000 each to an account as capital, and she believed that the money was to be used to obtain the option to develop the Pakenham racecourse.  The complainant - over the period 4 to 6 July 2006 - deposited a total of $300,000 into a bank account that required your joint signatories.

5You did not provide your part of the deposit, and it became apparent that you would not be able to provide your part of the deposit for the joint venture company.  You then told her that you owned a bottle shop in Southbank trading as Vic Liquor.  The licensee was described as Southbank Liquor Stores Pty Ltd, and a business named Southbank Liquor was registered on
1 December 2004.  You offered a half share in this business and told her it would be used as collateral for the joint-venture company.  You claimed the business was worth approximately $600,000.  She indicated that she was willing to provide you with $150,000 as a loan.  In default she was to have a half share of the business, and an appropriate agreement was drawn up by her accountant.  You then met with the accountant and signed a loan agreement which provided that if the amount of $150,000 was not repaid by 4 July then the complainant would take possession of 50 per cent of the bottle shop known as Vic Liquor.

6The parties to that agreement were in fact the complainant and the Maltz Family Trust.  A business account was established in the name of Michael Adams trading as Vic Liquor, and that name was registered with the business licensing authority.  Mr Adams had established a trust deed for his interest with your brother, Alex.  Adams had no interest in the bottle shop at 12 Power Street, Southbank, but recalls that you told him that you owned the bottle shop with your now partner, Ms Simmic, who was working there.  Mr Adams was unaware of the agreement for the complainant to take a 50 per cent interest in the bottle shop as security.

7At the time you had been disqualified from holding a liquor licence by VCAT.  You provided the complainant with the bank account established in the name of Michael Adams.  The complainant believed that you were the sole owner of Vic Liquor, and you had authority to enter into the loan agreement. and believed that you would transfer a half share to her in the event that you could not raise the $150,000.  She then arranged - over the period 16 to 22 June - to deposit $150,000 into that account.  She arranged for the accountant to register the business name Southbank Bottle Shop Pty Ltd for her share, and she was listed as the holder of five shares with Maltz Pty Ltd.

8Mr Adams was unaware of these transactions and that his trust - nor Vic Liquor - had any association with the bottle shop apart from a mailing address at 12 Power Street, Southbank.  On 4 July you refused to transfer a half share in the Vic Liquor bottle shop, stating that the half share was worth more than the $150,000 loan, or the amount paid by the complainant.  It was the prosecution case that you never intended to do so.

9On 18 July Macquarie Bank provided a letter addressed to the president of the Pakenham racecourse indicating that it had been approached by the complainant and you, of Icon, regarding the acquisition of the land, and that the complainant’s uncle, Mr Apokis, was to become a shareholder and guarantor, and had the relevant financial capacity.  It indicates that Macquarie would be interested in funding the acquisition, or tendering to do that.

10On 22 July a meeting took place between yourself, the complainant, and
Mr Apokis.  The meeting was to discuss the transfer of the half share purchased by the complainant as a result of the earlier loan agreement, and to discuss dissolution of the partnership.  It became apparent that you had no verbal option on the Pakenham racecourse site to secure the site.  It was proposed that icon would be dissolved and the complainant would take her half share of the bottle shop.  You reiterated that the value was more than the $150,000 paid by her.  You said you would not authorise withdrawal of the $300,000 from the Icon account.  The parties then made a verbal agreement that the bottle shop was worth $500,000, and that $200,000 could be withdrawn from the complainant from the Icon account.  The complainant agreed that the remaining $100,000 from the Icon account could be retained by you for her to obtain a half share in the bottle shop.

11She was refunded the $200,000 from the Icon account and the remaining $100,000 was left within that account for you as supplementary monies for the full agreed price for the half share of the Vic Liquor bottle shop.  Subsequently you refused to meet the terms of the agreement to provide the security.  The complainant was paid some monthly payments, but that was all.  You subsequently refused to repay any moneys at all to her.

Seriousness of the offence

12Your counsel did not dispute that this was serious offending.  Over the period of the offending you were negotiating with the complainant to establish a joint venture company.  On the face of the information she had been provided by you she deposited $300,000 into a joint account.  When you could not contribute your share she then loaned you $150,000, which was to be provided on the basis that she would have security in the form of a half share or interest in the bottle shop.  Your dishonesty was that you never intended to transfer her a half share in your liquor business.  Subsequent to that there were further discussions and she agreed to release $200,000 of the original $300,000, leaving you with that $100,000 and $150,000 that she had advanced; again on the basis that she was to have a half share interest in the liquor business.  You never intended to transfer that to her.

13Your counsel submitted that there was close to equality of bargaining power between you and the complainant, as she was an experienced property developer.  I am prepared to accept that, however she relied on assurances made by you as to a verbal option to develop the Pakenham racecourse, and then that you would give her, as security, a half share in the bottle shop; at that point valued at $150,000, and then subsequently asserted by you to be worth $250,000.

14While the offending was not in the nature of a sophisticated Ponzi scheme; in the context of a property development joint venture, and the need for those involved to have adequate security for moneys being contributed, the complainant was prepared to trust you, and trust your assurances that you would provide her with that security, when. on your own plea. you admitted that you never intended to do so.

15The quantum of money involved in this deception as at 2006 was significant, and given that on the plea it was admitted that your business was struggling financially, there was a high degree of culpability on your part, as you sought to obtain funds from the complainant to utilise to assist in saving the business.

16In assessing the seriousness of the offending the impact on the victim is also important.  She has filed a victim impact statement, wherein she states that your deceit has “created a massive financial setback in my life.  I lost confidence in people and in general life.  I stopped trusting people, and even now I am suspicious of everyone I meet.  I lived in shock for many years, and was left tortured until you were finally apprehended."

17She said she began to doubt the legal system, and she was forced to work in a position in Hong Kong to recover five years of lost precious time with her children and family members as she sought to recover financially.  She also says she lost sleep and suffered humiliation when she accepted the deception and permanent financial loss.  She said she became withdrawn from social activities and friends and was embarrassed to tell them of the situation.  She was forced to live with her ageing parents, and that then distressed her parents.

18Overall the impact on the complainant in this matter was, I am satisfied - on the basis of her victim impact statement and sheer quantum of the loss - very significant, and this must be taken into account in assessing the overall seriousness of the offending.

19This is not a case where the complainant is a soulless financial corporation.  Rather, it is an individual, and the sum involved is significant, in any terms, and your conduct has had a major impact on her, as attested in the victim impact statement.

Prior convictions

20You have admitted a criminal record that includes being placed on a community-based order many years ago for handling or receiving stolen goods.  You were also fined a substantial amount for assault offences on
27 August 2004.  I give those matters little weight.

21Most significantly, on 22 April 2002 - on a count of failing to act honestly as a company director - you had been convicted and sentenced to 20 months' imprisonment, to be released after 10 months on entering a recognisance.  That offence carries a maximum penalty of five years' imprisonment.

22The sentencing remarks of Judge Dyett were before the Court, and they indicate that this offending involved fraudulent documents prepared and presented to a bank to induce it to provide credit to cover expenses being incurred by a failing company established by you and your brother to publish a magazine.

23The amounts involved in the offending were well over $1 million, and His Honour confirms in his reasons that you were directly involved in the presentation of the fraudulent documentary material, and were well aware of the gross deception being perpetrated on the bank.

24You were released on a recognisance after serving that sentence in early 2003.  This offending therefore occurred about three and a half years following the completion of that sentence, and is a relevant prior conviction given the similarity of the offending, in that, again, you have made a false representation in the course of a business transaction.

Personal circumstances

25Your personal circumstances were set out in your counsel's plea submissions, and also are contained in the report of Dr Cunningham.

26You are of Argentinian extraction and are the oldest of four children.  You are now aged 51 and arrived in Australia when you were aged 19, when your family immigrated to Sydney.  When you were 21 the family moved to Melbourne and your father worked as a stonemason.  You married in 1986 and now have three adult children from that marriage.  During the 1990s you and your brother were involved in a number of businesses, and it was the publishing business that failed that led to your first serious conviction for the breach of director's duties.

27In around 2000 you became involved in land development and commenced a relationship with Ms Simmic, to whom you subsequently married.  You married her in 2008 and have a daughter, Amelia, who was born that year.  You established a bottle shop business in 2004 and subsequently sold that business in 2009.  In the same year you and your family relocated to North Queensland and became involved in a sugarcane farm.

28You pleaded guilty to serious assault charges that arose in 2006, shortly before this offending, before Judge Tinney in this Court on 17 November 2011, and were remanded in custody by him on 18 April 2012.  On 12 June 2012 you were sentenced to 28 months' imprisonment with a non-parole period of 12 months.  On 17 April 2013 you were released on parole, but you were required to remain in Victoria for the duration of that parole.  In August 2014 you completed that parole sentence.

Plea submissions

29The central thrust of your plea was that due to the inordinate delay in bringing this matter to trial, and to plea, it would be unjust for you to be required to serve any actual sentence of imprisonment.  The submission was that you should be placed on a suspended sentence, or alternatively, a community corrections order.  It was also submitted that there had been substantial rehabilitation, and that due to medical conditions a sentence of imprisonment would be more burdensome.

30It was submitted that you are a different man from when the offending occurred.  You have married, now have a seven year old daughter and have served a sentence of imprisonment, moved to North Queensland, and suffered a number of significant medical conditions that would, it was submitted, make imprisonment more burdensome, and on principles of parsimony, call for a sentence not to be actually served.

31There are a number of aspects to the delay in this matter.  First, you had been advised by the police when they interviewed you that they intended to charge you, and that occurred on 22 November 2007.  For reasons that were never adequately explained other than that there had been a change of investigator, the police did not charge you until 2 November 2012; a period of nearly five years.  Thereafter the matter was the subject of a number of committal mentions until you were finally committed for trial on 22 June 2013.  The matter was the subject of an initial directions hearing on 28 June 2013, followed by further mentions until the matter was to be listed for trial on
4 August 2014.

32The prosecution did not dispute that there had been a number of changes in the way that the charges were put against you, and in particular, that you had been committed on an attempted deception charge associated with the original $300,000 that had been deposited into the Icon account.  Subsequently there was a further charge filed in May or June of 2014 in relation to the original $150,000 deposit; for which the complainant was to get a half share in the bottle shop as security.  It was only as the matter got closer to trial this year that the prosecution combined the two amounts; being the $100,000 balance of the Icon original deposit and the $150,000 loan, into the count to which you have ultimately pleaded guilty.

33The initial delay by the authorities in investigating this matter meant that when you were dealt with by Judge Tinney for the assault matters you lost the opportunity to have these matters dealt with at the same time.  This would have allowed considerations of totality to be addressed such that all your outstanding legal matters could have been dealt with in a single sentence at the same time.  That is a significant opportunity lost, because you have now been released from the sentence imposed by Judge Tinney and must now face a court again.  As your counsel properly submitted that it is a very important matter; that a person who has been released from prison, and subsequently completed a period of parole, to be then required to return to serve a further sentence that could have been imposed some three years earlier.

34In your case the matter is compounded by the fact that in the period since you completed the sentence imposed by Judge Tinney you have had a number of medical conditions which will make a sentence of imprisonment more burdensome than on other offenders.

Consideration: the impact of delay

35I am satisfied that considerations of fairness do call for a significant moderation of sentence as a result of the delay from when you were first interviewed by the police and when you were charged, nearly five years later.  That period, as I said, was apparently attributable to a change in police investigator, and calls for leniency to be accorded to you.  That period of delay was not any fault of your own, even though you effectively made a “no comment” record of interview in relation to critical transactions when they were put to you by the police officer.

36Since you were charged you have had the matter hanging over your head until it was finally resolved in July this year, when you pleaded guilty to the plea indictment.  I give less weight to the period of delay from when you were charged, to when the matter was ultimately resolved.

37First, you contested the committal on the basis that you could not be convicted of attempting to obtain property by deception.  In your defence response to the first trial indictment you denied representing you had a verbal option to purchase the Pakenham racecourse.  You also denied receiving a financial advantage or falsely representing that you owned the business in Southbank liquor and that it was worth $600,000.

38In your defence response to the indictment filed for the second trial, which was listed in August this year, you continued to deny the representation regarding the Pakenham racecourse option, and denied an offer of a half share in the bottle shop, or that it was to be used as collateral.

39You cannot be held responsible for the fact that the trial did not proceed in 2014, as the estimate was inadequate, however at that point you were still contesting any responsibility, and there was no concluded negotiations in relation to the matter.  Ultimately, when the matter was listed in August this year the matter was successfully resolved.  While I take into account the delay since the committal in your favour it has less salience, given that had your legal advisers actively sought to resolve the matter, it could ultimately have been done so earlier; and it only resolved in August this year.

40Your counsel submitted that specific deterrence now has less weight, given the delay. Given that it was only in August this year that you agreed to accept responsibility for your conduct back in July 2006, I do not accept that specific deterrence does not still carry some weight.

41Your counsel did not submit that there was any remorse.  I do, however, give you significant utilitarian benefit for your plea of guilty.  It has obviated the need for a significant trial.

Medical material

42Your counsel submitted a volume of medical material as to various past and continuing conditions.  I will not detail them all, but it is clear that you have had more than your share of the vicissitudes of life.  Those vicissitudes included double surgery on a fractured ankle, a period in intensive care with pneumonia, a relapse, and other significant continuing medical conditions.. You have also had significant spinal problems, such that you are currently on a raft of medications for pain relief, as well as for severe anxiety and other conditions.  You have been referred for management of your spinal condition and you are taking serious painkilling medication for that.  In addition you have a number of chronic conditions including depression, diabetes and hypertension.

43In a report from Dr Aaron Cunningham, psychologist, he found that you currently suffer from a major depressive disorder, which he said has been precipitated by your ongoing stress and legal problems.  There would be further deterioration due to separation from your partner.  He found that if you are not treated then a term of imprisonment will weigh more heavily on you.  A prison term will, in addition - he opines - aggravate your present condition, and you will require psychiatric monitoring.  You will also require long term psychological intervention.

44Your counsel submitted that principles five and six of Verdins are engaged.  I accept that due to your physical conditions, and psychological condition, imprisonment will be more burdensome.  There will also be some aggravation of your underlying condition due to imprisonment, and your separation from your partner and child interstate.

45I have taken into account the letter from your spouse.  Your counsel did not submit that the impact of your offending on her and your child constituted exceptional circumstances.  I do, however, take into account that by reason of any sentence of imprisonment you will be separated from your spouse and your young child, both of whom reside in North Queensland, and this will make a sentence of imprisonment more burdensome; not least because of its impact on studies that your spouse is undertaking, and your continuing relationship with her.

Purposes of sentencing

46     The basic purposes for which a court may impose a sentence are punishment, deterrence (both specific and general), rehabilitation, denunciation and protection of the community.  In sentencing I must have regard to a range of factors such as the seriousness of the offence, your culpability for it, your personal circumstances and those of the victim, if any.  I am required to balance the interests of the community in denouncing criminal conduct with the interests of the community in seeking to ensure that, as far as possible, offenders are rehabilitated and reintegrated into society.

Consideration

47Your counsel accepted that general deterrence is a significant sentencing factor in offences of this type.  I do not accept his submission that it carries less weight given the delay in prosecuting the case and bringing the matter to trial.  It always remains a significant sentencing consideration where a person defrauds another individual in a major financial transaction, as occurred here.  The quantum of the amount that you have defrauded from the complainant - in particular where it is not been repaid, or even an attempt made to repay it - and until very recently you have not even accepted responsibility for your conduct that has caused the loss to the complainant - makes considerations of general deterrence and specific deterrence salient.  Similarly, the sheer quantum of the financial advantage obtained by you in your dealing with the complainant is such that the sentence of the Court must denounce your conduct.

48Specific deterrence, as I said, also remains a factor - notwithstanding the delay - given your failure to take responsibility for your conduct until this year, and the fact that the offending occurred a little under three and a half years after the completion of a sentence for a similar offence.

49Your rehabilitation into the community is a relevant consideration and I regard your prospects as reasonably good, given you have the support of your partner and a young child, and you also have the support of a number of family members who have been present on the plea.

Overall assessment

50Your counsel put a number of weighty matters in relation to the delay in this matter, and submitted a number of cases where delay has been considered inordinate, and as a matter of fairness substantial mitigation of penalty has resulted.  I have considered all those cases but find that considerations of general deterrence, denunciation and specific deterrence in your case still requires a sentence of imprisonment to be served.

51In sentencing you I have had regard to considerations of totality, and as a matter of fairness to you have considered the position had this matter been determined at the same time you were dealt with by Judge Tinney for assault offences.  I am satisfied that notwithstanding the delay at that point, had you been dealt with for this offence at that time there would have been significant cumulation of the relevant sentence, and you would have been required to serve a significantly longer non-parole period.

52Dealing with the matter now, and giving additional weight to your medical condition and the further period of delay, and the burden that you have had of the additional period from the time you had been charged to the present time, and the fact that your physical and psychological conditions will make a sentence of imprisonment more burdensome - and, to a limited extent, will aggravate your condition - I still have reached the conclusion that sentencing considerations call for a sentence of imprisonment to be imposed and to be served.  In doing so I have also considered whether a community corrections order is appropriate, but as I said, I regard the seriousness of the offending here as such that a term of imprisonment is to be served.

53The sentence that I intend to impose is the minimum sentence that considerations of parsimony allow.  I am satisfied that the sentence should not be wholly suspended, as this would not properly serve the interests of general deterrence, and your own deterrence and denunciation, nor reflect the impact of the offending on the complainant and the overall gravity of the offence.

54I have taken into account all of the submissions made on your behalf by your counsel.  The sentence of the court is as follows.

55On the count of obtaining a financial advantage by deception you are sentenced to two years' imprisonment.  I direct that 16 months of that sentence be suspended for a period of two years.  This means that you will be required to serve eight months' imprisonment, and thereafter, for the next 16 months, you will have the balance of the term hanging over your head.

56I declare that had you not pleaded guilty I would have imposed a sentence of 30 months' imprisonment with a non-parole period of 20 months.

57The prosecution have sought a compensation order to the complainant in the sum of $250,000 and I will make the order that the prosecution have sought.  Any other matters, Mr Doyle?

58MR DOYLE:  No, Your Honour.

59HIS HONOUR:  Thank you for your assistance in the plea, Mr Lawrence, and also Mr Doyle in the trial and plea.

60MR DOYLE:  Thank you, Your Honour.

61MR LAWRENCE:  As Your Honour pleases.

62HIS HONOUR:  I thank members of the family for attending and we'll stand down temporarily.

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