Director of Public Prosecutions v Trailovic

[2019] VCC 674

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

AT MELBOURNE
CRIMINAL JURISDICTION

CR 18-00224

DIRECTOR OF PUBLIC PROSECUTIONS

v

STEVAN TRAILOVIC

---

JUDGE:	HIS HONOUR JUDGE MCINERNEY
WHERE HELD:	Melbourne
DATE OF HEARING:	30 November 2018, 6 December 2018, 27 March 2019, 1 May 2019
DATE OF SENTENCE:	14 May 2019
CASE MAY BE CITED AS:	DPP v Trailovic
MEDIUM NEUTRAL CITATION:	[2019] VCC 674

REASONS FOR SENTENCE
---

Subject:	CRIMINAL LAW
Catchwords:	Plea of guilty – Deal with money that was the proceeds of crime $100,000 or more
Legislation Cited:	Criminal Code Act 1995 (Cth); Crimes Act 1914 (Cth); Sentencing Act 1991 (Vic)
Cases Cited:	Hassan v The Queen [2010] VSCA 352; Kim v The Queen [2016] VSCA 238
Sentence:	Convicted and sentenced to 3 years’ imprisonment, to be released immediately by way of $10,000 recognisance release bond. Convicted and fined $10,000.

---

APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Ms S. Hurrell	Commonwealth of Office of Public Prosecutions
For the Accused	Mr P. Hayes	Boadicea Legal Services

HIS HONOUR:

1Stevan Trailovic is aged 31.  He was 24 at the time of this offending.  The plea of guilty was taken on 30 November 2018 and, unfortunately, was not completed till 27 March 2018.  This led to a somewhat truncated and rambling circumstance - I do not say that critically, it was a lot to do with Mr Hayes' health and so there was just not much we could have done about that.

2The plea was to the one charge in Indictment CR-18-00224, a charge of money laundering, pursuant to section 400.4(2) of the Criminal Code.  The criminality, of which Mr Trailovic is responsible, was from 9 July 2011 till
28 September 2011, a period of two months and two weeks. 

3As the charge sets out, he recklessly dealt with the proceeds of crime in excess of the sum of $100,000.  The Commonwealth Code has a scheme which has offences which are much more serious, that is dealing with proceeds of crime over $1m, and which are less serious, with proceeds which are maximised at $50,000. 

4The scheme provides for different penalties.  The penalty here is 10 years imprisonment with 6000 penalty units or both.  The higher penalty under this section provides for provides for 25 years and 1500 penalty units or both.  Within the same section there is another higher figure for intentional, providing for a penalty of 20 years and 1200 penalty units, and an offence under section 400.5 capped at $50,000, of which provides for a sentence of 15 years with 900 penalty units, or 3 years.

5The circumstances here are that the parties have agreed that the prisoner can be described as a conduit to allow this money laundering to take place.  That is he created the conduit by way of these accounts.  There was, of course, a much larger criminal syndicate involved, apparently involving one person call Mehta, whom I am told is currently gaoled in the United Kingdom for fraud. 

6The process involved some ingenuity, the proceeds for BAS and GST returns due to companies was interfered with by way of hacking the ATO computer, whereby the directors and addresses and bank accounts of genuine companies were changed and the funds remitted by the ATO were channelled into three particular accounts, each of which had been opened by Mr Trailovic. 

7Somewhat remarkably, this was able to be done by hacking of the ATO computer.  I do not know the full details of this but, quite clearly, it is of concern, especially that this enabled the stealing of company and director details and the substitution thereof. 

8The receiving accounts were one of the Commonwealth Bank, which had been opened by him in 2009, and two ANZ accounts in company names, which he was the alleged director, both of which had been opened in
July 2011.  Each of the companies for which allegedly those accounts were opened, had been detailed by way of Mr Trailovic being the sole director and shareholder. The funds, once hacked from the ATO and transferred to these accounts, were withdrawn quickly.

9The prosecution opening became Exhibit A and the facts in regard to that matter were accepted by Mr Hayes as the facts upon which I was to sentence his client, albeit that he indicated he wished to make submissions in regard to the actual role, and I will come to those in due course. 

10Mr Trailovic withdrew cash of $42,350 from those accounts. Those moneys were, according to him, transferred to unknown persons. There was one withdrawal on 9 July 2011 of $17,350 and two on 15 July 2011, one of $15,000 in Cairns and one of $10,000 at a suburb of Cairns, called Westcourt. 

11The circumstances whereby this was being effected did not, apparently, come to the attention of the ATO until they were contacted by a tax agent of one of the genuine companies, whose returns were being rifled, so to speak.  That person was the tax agent of Provincial Distributors.  Remarkably, according to the prosecution opening, the investigation in regard to these matters did not commence until February 2012. 

12It was accepted in the plea by Mr Hayes that Mr Trailovic had received approximately 10 per cent of the sum processed through these accounts in return for allowing his name and details to be utilised to create the second two accounts, and to allow the three accounts to be utilised for this process of money laundering. The comparison put by Mr Hayes was to a mule in drug matters and it seemed to me that such is appropriate, as are the authorities. 

13Insofar as classifying the role, the learned prosecutor stressed that each of these accounts had been opened by Mr Trailovic, two of the accounts three weeks before the deposits were made.  All of the nine deposits made, but for a sum of $1,494 were withdrawn from the account very quickly.  All of these three accounts were opened in Mr Trailovic's own name.  

14It was submitted that this was a deliberate and calculated fraud and money laundering facilitated by the fraud on the ATO, and that his actions had facilitated the removal of a 90 per cent of the funds from these accounts. 

15It is noted that when he opened each of the bank accounts, in particular, the two in 2011, his personal details were used to pass the 100 point ID test of the bank and, of course, as I will ultimately talk about, that made this criminality clearly traceable to him.  He left for the overseas on 7 August, and thereafter, three payments to these accounts were subsequently made by the ATO. 

16The prosecutor submitted, given the circumstances and the seriousness of this offence, that the only sentence appropriate is one of immediate imprisonment. 

17Insofar as the defence was concerned, submissions were made as to the role of the defendant.  It was submitted that insofar as the funds personally removed by him, to which I have referred, that those funds were given to others in both Sydney and Cairns, and that he retained only $4,235, which he used to travel overseas. 

18The perpetrators of the scheme, put $43,000 directly into Mr Trailovic's account in Serbia and that was set out in paragraph 2 of Exhibit 6A, those funds were used either to fund travel or ultimately, it would appear, to facilitate his heroin addiction. 

19Mr Hayes stressed that this criminality, insofar as Trailovic was concerned, was very unsophisticated.  I accept that to the degree that he was stupid enough to be part of this criminality and to allow his own name to be used in circumstances which were certainly not unsophisticated, but involved very, very sophisticated actions to hack the ATO. 

20I accept that given the circumstances, he was sure ultimately to be caught.  I make the point, however, given that he left for Serbia, before three of the final cheques had been paid, a country that has no treaty with Australia. Whether he was sure to be caught is questionable, certainly back in 2011.  I will talk about him returning to the jurisdiction in due course.

21Given the plea, I do not have to decide precisely what the role was, except that I sentence Mr Trailovic on the agreed fact between the parties that he performed by way of allowing those accounts in his own name, or companies of which he was allegedly the sole shareholder and director, to be utilised to facilitate the scheme which ripped off the ATO, that he allowed those accounts to be facilitated to allow proceeds of crime of the sum, as I indicated, of $450,000 to move through those accounts and clearly, as charged by his recklessness, allowed the proceeds to so move. 

22As to whether he was specifically aware of the predicate offences being committed on the ATO, I am unsure on the materials, nor do I have to be sure.  However, it seems to me unbelievable, as set out in the statement at p.16, being Exhibit 6, dated 24 February 2019, of Mr Trailovic's, that he did not realise the payments were coming from the ATO.  It would have been obvious. 

23He also willingly allowed his name to be used, and the companies of which he was portrayed as a director and shareholder to be used, efficiently and quickly to transfer these proceeds in the order, as I have indicated.

24As is detailed by the comparison to mules in drug cases, the same here, any role in this serious criminality, given the importance of general deterrence in regard to this crime and the statement of the Minister, as referred to in the sentencing remarks of the learned prosecutor, is serious and must be met with a condign penalty.

25Whatever the circumstances of his addiction, this criminality committed by him, reckless as it was, was done for financial gain. It is, of course, important, as indicated in the case referred to by the prosecution of Kim v The Queen [2016] VSCA 238, that one must sentence in regard to this particular crime insofar as it sits within the scheme created by the Commonwealth and, in this case, in particular, this crime, being a crime against s.400.4(2) of the code.

26As the prosecutor said, we are dealing here with a crime which allowed four times the qualifying amount for such a penalty by way of placing it within the scheme, such being 45 per cent of the introduction figure for the next level.

27Insofar as the culpability, I assess it at mid-range for this crime and, that assessment calls, for a sentence of immediate gaol.  Of course, sentencing is a two-stage process, as set out by the Court of Appeal in Hassan v The Queen [2010] VSCA 352.

28This Court is required, firstly, to assess the culpability, which I have just done and, secondly, to assess the factors which may be mitigatory, which have been put to me by Mr Hayes, that I now proceed to do.  Mr Hayes’ sentencing submissions were detailed in Exhibits 3 and Exhibit 3A, and he also provided the chronology, Exhibit 1.

29Mr Hayes stressed the plea of guilty being made at the first occasion, given the production of the current indictment, and I accept that the authorities are such that he is entitled to the maximum discount therefore.  The plea represents utilitarian benefit to the Commonwealth and also evidences the forwarding and assistance of the cause of justice. 

30Mr Hayes stressed the prior good character of Mr Trailovic.  In this regard, it is clear that at the time of these offences and since, he has no other criminal priors and, in particular, he relied on the character references set out in Exhibit 2, which were those of Daniel Maya, Russell Milsome from his work, Pamela Hall, his sister and his mother. 

31He also stressed the issue as to drugs.  There is nothing in the material that would stop me from concluding that heroin played a role.  The very manner in which he is indulged in such serious criminality for the receipt of 10 per cent of the money passing through those accounts, in a manner that could be easily located, subject to the fact that he left the jurisdiction, shows that he was impacted in such criminality by such heroin addiction. 

32I have noted the statements made by his sister, Natalija, in Exhibit 2, confirming the ongoing struggle when she ultimately met up with him in Italy.  It is clear that he still has a problem with heroin today.  It is suggested that despite his excellent references from his work, to which I will refer later, the pressure of these proceedings led to him indulging in his addiction again.

33I note the materials and Exhibit 7 and 8 as to him undertaking the methadone program, the report from Dr Furler from North Richmond Community Health department as Exhibit 7, and Exhibit 12 from the Salvation Army withdrawal program dated 15 April 2019. 

34I further also note the letters from Nick Foster and the emails, Exhibits 10 and 10A, noting that Mr Trailovic has indicated he is prepared to go under a residential program and that such program, when available, will be at Odyssey for a period of some three to four months. 

35As I say, there is nothing before me, and indeed the facts tend to confirm that a person at that stage in his life with no priors whatsoever, must have been in some way impacted to make such a stupid decision. It seems to me that as a person subject to the prevails of heroin, that may well be the reason. 

36However, of course, accepting that as an explanation does not in any way reduce the culpability, it tells me why he was involved, why he was seeking money and why he acted in such a reckless manner whereby he could be easily traced. 

37The next matter relied upon by Mr Hayes was the issue of rehabilitation.  This Court, obviously, and all courts in this country see rehabilitation as a particularly important matter. As Mr Hayes pointed out, his client is still only 31.  In particular, he submitted, from the time he has returned, he has tried to better himself, in particular, since starting the job with Dann Event Hire in August 2017. 

38There are particularly positive references in regard to his work there, set out in Exhibit 2, as I earlier referred to.  Firstly, from the operations manager, Milson, who speaks highly of him in his role as an event team leader.  It would appear Mr Milsome does not and is not aware of these circumstances.  But the other letter, which also offers strong support is from his fellow employee who is, in fact, the event coordinator, Ms Maya, who is aware of these matters and, again, speaks highly of the work done. 

39As I said, he has strong support from his mother and his sister and, in particular, I note insofar as his rehabilitation, the difficulties with his background, detailed by his mother, caused by his father and his father's attitude to his mother and indeed his father's attitude to this children.  I take all those matters into account.

40The next mater relied upon, a matter of some substance, is the delay.  As I said, Mr Trailovic left during the execution of the criminality involved in this matter.  The accounts were, as I said, subsequently used and the period of his criminality is detailed from July 2011 to September 2011.

41He removed himself to a country of which there is no treaty between these countries, and had he wished to stay there, he could have.  It is submitted that he returned to this country to 'face the music'.  Whether that is true or not, I do not know.  But what is true is that he came back here and that is a fact.  What is true is that he has effected rehabilitation, albeit the current drugs issue that he has had.  And I note that he is obviously susceptible in that regard. 

42The voluntary surrender, however, to the jurisdiction is, in the circumstances of this matter, an important matter worthy of discount.  The other matter, of course, that is important, and this comes up generally in all of these principles that have been considered, is the age differential. 

43He has no prior offences, he has no subsequent offences.  He will have a criminal record after today.  The point being made is that this criminality was committed at 24 while he was under the impact of heroin addiction and here he is now at 31.  There is, it seems to me, a significant age difference in those circumstances from the time when he committed this offence to his current age, albeit that he is still dogged by an ongoing heroin addiction. 

44Also relied upon by Mr Hayes was the cooperation.  He provided statements which are detailed by his solicitor, Ms McCauley, in her statement, making up Exhibit 5.  The cooperation related to statements insofar as his knowledge of this particular scheme.  It is accepted at paragraph 20 of the sentencing remarks of the Crown that that offer was genuine.  Again, he is entitled to a discount under the provisions of ss.16A(2)(f) and (h).  

45It is, however, noted that that offer has not been successful in the sense of it has not led to any litigation of arrest of people.  However, he is entitled to a discount for the cooperation given and those matters must be combined with the, in particular, the circumstances of the voluntary surrender to the jurisdiction, the age differential, and they are significant matters, it seems to me, put on his behalf. 

46It was put by Mr Hayes that this is an appropriate matter for me passing a s.20 order, which is essentially a bond to be of good behaviour.  I do not accept that.  As I said, given my determination as to the culpability and the fact that, objectively, this must be a sentence involving immediate imprisonment, I reject the submission. 

47Taking all the circumstances into account, in particular, the mitigatory factors that I have referred to, I am however prepared to make an order under s.19AC, that is a recognisance release order.

48Mr Hayes, I propose to sentence your client to a period of imprisonment of three years.  Despite the submission of the prosecution, in all the circumstances, I have determined that immediate imprisonment is not required and I am prepared to release your client on his own recognisance of $10,000 for a period of three years.  There will, however, be also imposed a fine in the sum of $10,000, to which I am prepared to grant a stay.

49Before I make those orders, however, I want you to see that he is prepared to enter into such recognisance and prepared to pay such fine.  I am aware of his financial circumstances, given the materials I have had from the Dann Events organisation.  You can approach your client, if you like.

50MR HAYES:  Yes.  Sir, before I do, I just wanted to clarify, you said there was one fine of $10,000 ‑ ‑ ‑

51HIS HONOUR:  A fine of $10,000, recognisance release order of $10,000 ‑ ‑ ‑

52MR HAYES:  Yes.

53HIS HONOUR:  ‑ ‑ ‑ that means if he breaches that recognisance, it costs him $10,000, apart from being dealt with back here.

54MR HAYES:  Yes.

55HIS HONOUR:  And the sentence of imprisonment that would be for three years with immediate release today.

56MR HAYES:  Yes, just clarifying that, Your Honour.

57HIS HONOUR: Just, Madam Prosecutor, you will check that, that is all appropriate under s.19AC, is it not? I think the maximum I can sentence under that section is three years, is it not?

58MS HURRELL:  That is correct, Your Honour.

59MR HAYES:  Your Honour, I wonder if might just speak to the prosecutor for a moment?  Will not be much longer, Your Honour.  Your Honour, yes, just needed to clarify with Mr Trailovic and yes, more than happy to accept that offer.  Obvious, he is not - does not have money in hand right now.

60HIS HONOUR:  I understand that - - --

61MR HAYES:  The issue is ‑ ‑ ‑

62HIS HONOUR:  ‑ ‑ ‑ I am prepared to grant a stay of six months ‑ ‑ ‑

63MR HAYES:  We were going to ask for six months, yes, yes.

64HIS HONOUR:  ‑ ‑ ‑ and if he need some further after that, I would want to be - he would have to come and make application to me and I would want to be satisfied he has made appropriate payments in that first six months.

65MR HAYES:  Yes, well we can organise that.

66HIS HONOUR:  Yes.

67MR HAYES:  Thank you, Your Honour.

68HIS HONOUR: Yes, Mr Trailovic, will you stand up please? You will be convicted of this offence. For this offence, you will be sentenced to a period of imprisonment of three years. Pursuant to the provisions of s.19AC of the Crimes Act (Cth), I will order in the particular circumstances of this case, despite their serious nature, your immediate release.

69That release will be upon you entering into a recognisance, to be of good behaviour for the next three years.  That will be a recognisance in the sum of $10,000.  In addition to that, you will be fined the sum of $10,000, of which I will give you a stay of six months. 

70Can I indicate to you that albeit convicted and sentenced to a period of imprisonment, my decision not to impose immediate imprisonment upon you has been because of the exceptional nature of the circumstances in this case.  Can I assure you, if you breach your behaviour and commit any criminal offence in the next three years, you know what would happen; you would come back here and there will be immediate gaol.

71OFFENDER:  I understand that.

72HIS HONOUR: Yes. Pursuant to the provisions that - you can take a seat - pursuant to the provisions of s.6AAA of the Victorian Sentencing Act, assuming that it does apply, to the best that I can do, complying with the requirements of Parliament, Mr Trailovic, and I tell you, had you not pleaded guilty in this matter, you most certainly would have had an immediate period of gaol, do you understand that?  I cannot do better that that in answering the - in complying with the requirements of Parliament, given the totality of the matters that were taken into account in this matter.  Any issues, Mr Hayes?

73MR HAYES:  No, no issues at all.

74HIS HONOUR:  Any issues, Ms Hurrell?

75MS HURRELL:  No issues, Your Honour.

76MR HAYES:  No, Your Honour.

77HIS HONOUR:  Can I thank you both for your assistance ‑ ‑ ‑

78MR HAYES:  Thank you.

79HIS HONOUR:  ‑ ‑ ‑ throughout this long plea?  You will have to just hold on and we will sign the materials before I can let you go.  You do not want me to stand down do you, Madam Associate?  No.  Mr Hayes will explain this document to you.

80MR HAYES:  Yes, I will.  Thank you, Your Honour.

81HIS HONOUR:  I was going to ask you, Madam Prosecutor, are no renumerations sought?

82MS HURRELL:  That is correct, Your Honour.

83HIS HONOUR:  No doubt, unfortunately, the people of Australia have had to pay for this?

84MS HURRELL:  That is correct, Your Honour.

85HIS HONOUR:  There is no doubt the tax department would have had to compensate the companies?

86MS HURRELL:  Yes, I understand that is the case. 

87HIS HONOUR:  Do we know if the hacking has been solved?

88MS HURRELL:  I am not aware, Your Honour, as my learned friend ‑ ‑ ‑

89HIS HONOUR:  Must have been some good minds in action.

90MS HURRELL:  Yes.

91HIS HONOUR:  Not acting in a good manner but good minds, obvious.

92MS HURRELL:  Yes, I understand the Auskey procedure may have been tightened.

93HIS HONOUR:  Let us hope so.  Yes, the effect of that, Mr Trailovic, is that you will - you can come out of the box in due course as long as that cord is with the security.  And thank you, Madam Interpreter for your assistance.  Yes. 

‑ ‑ ‑