Director of Public Prosecutions v Zerihun

[2023] VCC 170

IN THE COUNTY COURT OF VICTORIA

AT Melbourne

CRIMINAL DIVISION

Revised
Not Restricted
Suitable for Publication

Case No. CR-20-01450

DIRECTOR OF PUBLIC PROSECUTIONS

V

ESAYAS ZERIHUN

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JUDGE:	HER HONOUR JUDGE CHAMBERS
WHERE HELD:	Melbourne
DATE OF HEARING:	24 January 2023
DATE OF SENTENCE:	14 February 2023
CASE MAY BE CITED AS:	DPP v Zerihun
MEDIUM NEUTRAL CITATION:	[2023] VCC 170

REASONS FOR SENTENCE
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Subject:Criminal law - Sentence

Catchwords:              Plea of guilty – three charges of obtain a financial advantage for others by deception – total quantum of deception just in excess of $200,000.00 – role in deception involved a breach of trust as an employee – amounts repaid in full by beneficiaries of deception – young man with no relevant priors – strong prospects of rehabilitation

Legislation Cited:      Crimes Act 1958; Sentencing Act 1991

Cases Cited:Worboyes v. The Queen [2021] VSCA 169; R. v. Verdins (2007) 16 VR 269; Boulton v. The Queen [2014] VSCA 342; DPP v. Dalgliesh (a pseudonym) [2017] HCA 41; Matamata v The Queen [2021] VSCA 253; R. v. Merrett (2007) 14 VR 392

Sentence:                  Three-year Community Correction Order

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APPEARANCES:	Counsel	Solicitors
For the DPP	Mr M. Cookson	Office of Public Prosecutions Victoria
For the Accused	Ms L. Nguyen

HER HONOUR:

1Esayas Zerihun, you have pleaded guilty to three charges of obtaining a financial advantage by deception contrary to section 82 of the Crimes Act 1958 (Vic.), the maximum penalty for which is 10 years’ imprisonment.

Circumstances of Offending

2The circumstances of your offending are set out in the Summary of Prosecution Opening dated 19 July 2022[1] which is the agreed basis upon which you are to be sentenced. Your offending can be summarised as follows.

[1]Exhibit A

3You commenced employment with the Stoddart (Victoria) Pty Ltd (‘the Stoddart Group’), a metal fabrication company, in July 2015 as its Roofing Contractor.  The Stoddart Group supply building materials within the construction industry, and your role was to assign work contracts to various subcontractor roof plumbers.

4In your role as Roofing Coordinator, you had access to the Stoddart Group contract management system, known as “Contract Plus”.

5In the normal course, after the roofing work was completed, your role was to review the contracts on Contract Plus to ensure the contract reflected the scope of works depicted on the invoice. If it did, you would then complete an invoice cover page and email the invoice and cover page to the payroll department of the Stoddart Group for payment. The invoice would then be reviewed, processed, and authorised for payment by the Stoddart Group payroll team which was based in Queensland.

6Your offending relates to instances where, instead of following the usual procedure, you accessed the Contract Plus system to identify roofing contracts that had been completed but in respect of which the legitimate subcontractors had yet to lodge an invoice. You then facilitated false invoices being sent to the payroll team to be processed, knowing they were not legitimate.

7Somewhat unusually, you were not the direct beneficiary of your deceptive conduct. Rather, it was others known to you who benefited from your deceptions: namely Justin Steeper, Lewis Corker and Giordano Lupo, who each ran their own roof installation companies. They, in turn, paid you approximately $20,000.00 for your involvement in these deceptions.[2]

[2]That this was the case is accepted by the prosecution, although not referenced in the Summary of Prosecution Opening.

8Having identified invoices not yet rendered, the beneficiaries would provide you with false tax invoices, following which you inserted their company details into the accompanying cover page and forwarded the documentation to the Stoddart Group’s payroll department for payment. You did so in the knowledge that none of tax invoices provided by the beneficiaries was for work undertaken by them or their companies.

9Charge 1 on the indictment relates to twenty-eight occasions between 24 January 2019 and 19 June 2019 where you altered legitimate sub-contractor details to that of Justin Steeper’s company, Aqua Roof Plumbing Pty Ltd, despite knowing the work had not been performed by either Justin Steeper or his company. The total value of the contacts paid to Aqua Roof Plumbing Pty Ltd over that period totalled $49,516.36.

10Charge 2 on the indictment relates to the nineteen occasions between 18 April 2019 and 10 July 2019 where you altered the original sub-contractor details to those of Lewis Corker’s company, LJC Metal Roofing Pty Ltd. You did so on each occasion despite being aware that the tax invoices received from Lewis Corker or LJC Metal Roofing Pty Ltd were not genuine claims for work or services performed by that company. The total value of the contracts paid out to LJC Metal Roofing Pty Ltd over that period was $42,917.54.

11Charge 3 on the indictment relates to the sixty separate occasions where you altered the legitimate sub-contractor details to those of Giordano Lupo’s company, GCL Roofing, despite being aware that the tax invoices were not for work actually performed under those contracts. You inserted GCL’s details on the cover page to accompany the falsified invoices on sixty occasions between 1 May 2019 and 25 September 2019, to a total value of $116,422.47.

12Your deceptive conduct spanned a period of nine months between 24 January 2019 to 25 September 2019. The quantum of the deception  totalled $208,856.37. Although each of the three beneficiaries were interviewed by investigators, neither they nor their companies were charged with any offences arising from their involvement in the deceptions.  However, the beneficiaries have since reimbursed the Stoddart Group in full for the financial benefit they enjoyed due to the deceptions.

Investigation and Arrest

13Your offending was detected on 11 October 2019 when Gregory Pryde, an audit manager with the Stoddart Group, discovered that you had twice invoiced the company for work performed in August 2017 but which had never been invoiced by the legitimate subcontractor. Instead, on 4 April 2019, you authorised the amount of $4,329.60 owing under that contract to be paid to Justin Steeper’s company and for the same amount to be paid to Giordano Lupo’s company on 11 October 2019.

14Mr Pryde then conducted a further audit of the Stoddart Group’s business records which uncovered 107 further incidents in which you had reassigned work contracts to the corporate entities managed by the three beneficiaries.

15The Stoddart Group engaged external investigators, AusAssess Pty Ltd to conduct a further investigation, during which you supplied the investigators with your work diary, which contained entries listing contracts relevant to your offending.

16The matter was reported to Victoria Police on 25 November 2019. Your interview with police was delayed as you were overseas. On your return, you contacted the informant directly and arranged to attend Sunshine Police Station where you were interviewed on 8 May 2020, electing to make no comment in accordance with your rights.

Nature and gravity of the offence

17The maximum penalty of ten years’ imprisonment marks the serious nature of the offence of obtaining a financial advantage by deception. Mr Cookson, for the prosecution, characterised your offending as a serious example of a dishonesty offence, which fortunately did not result in ongoing financial loss for the company.

18You were entrusted with responsibility for managing contracts on behalf of your employer, and in engaging in these deceptions, you breached the trust reposed in you by the Stoddart Group. Moreover, this was not an example of isolated offending. You repeatedly engaged in deceptive conduct on 107 occasions over a nine-month period. You had time to reflect on the wrongfulness of your conduct over this period and to desist, but you did not do so. I accept the prosecution submission that this offending involved a degree of planning and was a persisting breach of trust.

19The quantum of loss sustained by the Stoddard Group, totalling just over $208,0000, was substantial. However, as was accepted by the prosecution, this amount is not at the upper end of financial loss often seen in dishonesty cases heard in this court.

20Your offending was motivated, at least in part, by a sense of grievance with your employer’s workplace practices. However, no grievance could provide any justification for your unlawful conduct.

21The amount has now been repaid by the beneficiaries in full. In the event, the Stoddard Group has not sustained an ongoing financial loss.

22Whilst there are serious features of your offending, I consider it to be a mid-range example of offending of this type. Your moral culpability for the deceptions is significant, but is also informed by your personal circumstances to which I now turn.

Personal Circumstances

23Much of your personal history was detailed in the written submissions filed on your behalf, and are outlined in the forensic psychiatric report of Dr Anthony Cidoni dated 6 September 2022.

24You were born in Sudan in September 1992 and have an older sister and younger brother.

25As a young child, your family lived in a small room in a remote rural area in Sudan. During the civil war, you report recalling your father hiding you and your siblings under the bed.

26During your assessment with Dr Cidoni, you described your father as an alcoholic, and say you witnessed him being violent towards your mother at times.

27At the age of six, you came to Australia with your family and settled in the suburb of Oxley in Brisbane. You were raised in a Catholic household with strong religious traditions. Your father was a strict disciplinarian.

28You struggled at school in Australia in your first few years, and were suspended once for fighting with another student.

29You attended various local schools in Brisbane, and were identified as a gifted soccer player at an early age. You were awarded a scholarship to play soccer in years 10-12 at Brisbane State High School and had ambitions to pursue a soccer career. You played at the highest level in the Queensland for Brisbane Olympic in the Brisbane Premier League. However, after experiencing various setbacks you ultimately decided against pursuing this goal.

30After finishing high school you attended Griffith University for two years to study a degree in Town Planning but did not complete this course. After deciding to leave university you have maintained a continuous employment history. You first worked in various casual warehousing jobs, before accepting a full-time role with the Stoddart Group in 2015. This was your first professional job.

31Your initial role with the Stoddart Group was based in Brisbane, working as an estimator. In March 2017, you were promoted to the role of Operations Coordinator, based in Tullamarine, Victoria where you were responsible for coordinating roofing works. You describe the workplace environment as ‘toxic’, citing instances of racism, harassment, and poor pay. At the time you relocated to Melbourne, you were paid an additional $5000.00 but found this was insufficient to meet your relocation expenses.

32During your assessment with Dr Cidoni, you disclosed a history of heavy alcohol use, drinking up to 12 beers or half a bottle of spirits on weekends. You told Dr Cidoni that your alcohol use increased around the time you were charged. At this time, there were other stressors in your life, including your parent’s divorce and the situation confronting your father’s extended family, who remain in war-torn Sudan and with whom the family have experienced difficulty contacting.

33Dr Cidoni states your mental health deteriorated significantly after you were charged with this offending in May 2020. In June 2021, your local GP diagnosed you with a major depressive disorder resulting in low moods, difficulty sleeping, low concentration  and panic attacks. In Dr Cidoni’s opinion, after being charged, you suffered from a major depressive disorder with anxious distress requiring psychological treatment. You have since engaged in treatment with psychologist, Mr Jerry Wang, whose reports confirm your ongoing treatment.

34You are currently employed by Just Metal Roofing, a company owned by former employees of the Stoddart Group, Mr Aaron Donnelly and Mr Joshua Gates. Both worked with you at the Stoddart Group and are aware of these charges. Nonetheless, both remain strongly supportive of you. You are employed as their Operations Coordinator on full-time basis, working from 6am to 2pm. As an indication of their confidence in your abilities, you have also assumed the role of site supervisor from time to time.

35In a reference provided to the court, Mr Donnelly writes that he offered you employment with Just Metal Roofing in November 2020. He states he did so whilst being “fully aware of his offending” and in the knowledge you were remorseful for your actions. Having known you for over six years, he describes you as trustworthy and says you are an integral part of his business. He describes you as a young man of integrity, and expresses the opinion that your offending was out of character.

36As a further indication of your strong work ethic, you are also engaged in casual employment outside of these hours, working as a dock hand for a logistics company.

37Finally, having now acquired skills as an estimator in the building industry, you have also taken early steps to establish your own business, ‘Estimating AUS’, and work online ten hours a week to build up this work.

38Your only prior criminal matter relates to an assault for which you received a non-conviction bond in July 2014. Notably, you have no history of engaging in dishonesty offences. Your limited prior history, now dated, is of no relevance to the sentence I impose for this offending.

Matters Relevant in Mitigation

39In detailed submissions made on your behalf, Ms Nguyen highlighted a number of matters relevant in mitigation of your sentence.

Guilty plea

40Significantly, you have pleaded guilty to these charges, thereby acknowledging responsibility for your offending. This is to your credit. In doing so, you saved any witnesses from having to give evidence in court and you have facilitated the course of justice. As the Court of Appeal has explained, an offender who pleads guilty at present is entitled to an additional sentencing discount given the lengthy delays in the justice system that continue as a result of the pandemic.[3]

[3]Worboyes v The Queen [2021] VSCA 169 (“Worboyes”)

41After a summary jurisdiction application was refused in the Magistrates’ Court, you indicated an intention to plead guilty when committed on the charges on 5 November 2020. Subsequent court events related to difficulties in securing funding for your legal representation. Once these were resolved, the plea was able to proceed. You are entitled to and will receive a significant sentencing discount by reason of your guilty plea.

Delay

42Delay also has a part to play in moderating the sentence to be imposed for this offending. It is now close to three years since you were charged with these offences.

43The prosecution tendered a chronology of events that I have relied upon in assessing the extent to which delay plays a role in your case. As stated, you indicated an intention to plead guilty in November 2020. Between March 2021 and March 2022, the plea could not proceed due to difficulties in securing funding. An application for legal aid funding was refused and you ultimately secured additional funding for your legal representation. I accept that you were suffering from deteriorating mental health - depression and anxiety - and isolation from your family at this time. However, it is notable that at no stage during this period of uncertainty did you waiver in your acceptance of responsibility for the offending as reflected in your early indication to plead guilty.

44In April 2022, the matter was listed for a plea hearing on 22 September 2022, but could not proceed that day owing to the declaration of that date as a public holiday to commemorate the Queen’s passing. The plea was ultimately listed before me on 24 January 2023. This additional delay was through no fault of yours.

45I accept that you have experienced significant anxiety and stress while awaiting sentence. It is this effect that warrants some modest moderation of the sentence I impose.

46The other effect of this delay is that it assists in my assessment of your prospects of rehabilitation. You have not offended since this time. To the contrary, you have secured ongoing employment within the industry, with an employer whose confidence you enjoy. You have no past history of dishonest offending. These factors, combined, evidence your good prospects of rehabilitation and lessen the need for the sentence I impose to specifically deter you from future offending.

Mental health

47In his report, Dr Cidoni concludes that you were not suffering from any mental health impairment at the time of your offending. Rather, he describes you being under increased stress due to the workplace situation, leading to poor decision-making on your part. Whilst he does diagnose you with an alcohol use disorder at the time, he does not consider this contributed to your offending.

48However, Dr Cidoni is of the opinion that your subsequently diagnosed major depressive disorder with anxious distress would be adversely affected if you were to be imprisoned, stating:

‘Mr Zerihun would be vulnerable if imprisoned. In my opinion, imprisonment would significantly adversely affect his mental health. He would be removed from the support of his family, employer and GP and his anxiety would undoubtedly escalate…there is no doubt that his depression would deteriorate, which may be associated with increased suicide risk.’

49Dr Cidoni’s conclusion that your diagnosed depression would make imprisonment more burdensome for you enlivens limb 5 of the principles in Verdins[4] and operates to further moderate your sentence.

[4](2007) 16 VR 269

Youth and prior good character

50On your behalf it was submitted that your youth remains relevant in mitigation. You were 26 years old at the time of this offending. Whilst you were a relatively young man, your youth is not a significant sentencing consideration here. Indeed, there is no basis for me to conclude that you were a particularly immature 26 year old. To the contrary, you had been appointed to a position of responsibility within the Stoddart Group, although I accept that workplace stress, and your sense of grievance against your employer, contributed to your ill-judged decision to engage in this deceptive conduct.

51Of greater significance to your plea is the fact that you have no relevant prior history, and are still a young man with much of your life to live and who has, in my assessment, very strong prospects of rehabilitation. You have ongoing family support, a strong work ethic and are a valued and trusted employee with your new employer. Your employer’s support for you was well-demonstrated by the attendance of both directors of Just Metal Roofing at your plea hearing.

52I have also had regard to the wealth of references provided on your behalf by family, friends, work colleagues and community leaders who have known you a long time, and who all speak positively about you and your future prospects.

53Your sister and mother speak of you as a person who is kind, responsible and hard-working, and both express shock that you engaged in this type of offending. Both say it was out of character when they consider the personal values and beliefs that were instilled in you by your family.  Your sister, in particular, refers to other charitable work you have undertaken in helping flood affected families for which you were recognised by a Premier’s certificate, and in providing ongoing financial assistance to extended family living in refugee camps in Ethiopia. The President of the Tigrian Community Association in Victoria states you are a much valued member of their community, engaging in youth activities and in ‘steering our youth and young adults’ through your leadership.

54I am satisfied that you have otherwise been a community-focused, hard-working young man and that this offending was out of character.

Other Sentencing Purposes

55In cases such as these, the principal sentencing considerations are general deterrence, just punishment and denunciation. Others must be deterred from taking advantage of the trust reposed in them as employees to secure a financial benefit for themselves or others.

56On your behalf, Ms Nguyen’s sentencing submissions urged the court to impose a community correction order (‘CCO’) arguing that such a sentence met all relevant sentencing considerations. Ms Nguyen referred to the guideline judgment of the Court of Appeal in Boulton[5] where the Court recognised that a CCO “is punitive in nature, and is intended – and expected – to operate punitively for every day of its operation”.[6] It was submitted that such a sentence could effectively operate to deter others, whilst recognising the weight that attaches to your early plea, your lack of relevant priors, and your strong future prospects.

[5]Boulton v the Queen [2014] VSCA 342

[6]Ibid, at [138]

57The prosecution submits that the objective gravity of your dishonest offending, involving multiple transactions over a nine-month period, warrants the imposition of an immediate custodial term. The prosecution accepts that a combination sentence of imprisonment followed by a CCO would meet all relevant sentencing factors.

58In further written submissions, Mr Cookson who appeared for the prosecution, acknowledged that other comparable cases have resulted in either ‘straight’ CCO’s or, in some cases, a combination sentence. Fairly, Mr Cookson’s submissions also accept that most comparable cases were determined prior to 2019, which therefore exclude any weight that ought to attach to an early plea entered in the wake of the pandemic. The prosecution accepts that the application of the principles enunciated in Worboyes are an additional consideration that ‘looms large in this plea exercise’.

59I have considered the table of comparable cases provided by defence counsel and to the other cases to which the prosecution referred in its supplementary written submissions. There are certainly many instances where dishonesty offending involving either greater or lesser amounts, and over a relatively lengthy period involving persistent breaches of trust, have resulted in non-custodial dispositions. In many of these cases, the offender had no relevant prior criminal history, had pleaded guilty and was found to have excellent prospects of rehabilitation.

60Cases falling within this category include the following:

·         Ashley Wilson was a case involving a single count of theft involving a sales specialist employed by Bosch who stole phones and accessories over a period of three years, nine months which she then sold online for $155,797 and for which the offender was sentenced to a three-year CCO with 150 hours of unpaid community work. In that case, whilst the offender had no priors, she had been convicted and sentenced to a CCO for 12 other theft charges involving a further $115,000 worth of items stolen from her employer;

·        Shane Chapman was a case where the offender pleaded guilty to three counts of theft over a two and a half month period whilst employed by a not- for-profit organisation in an accounts role. The offending involved 21 transactions totalling $253,280.30 of which there had been partial repayment. In that case, the offender was sentenced to a  three-year CCO with 300 hours of unpaid community work;

·        Elizabeth Kirakopoulos was a case where the offender pleaded guilty to three counts of theft where, whilst employed in accounts, she transferred a total of $144,434.47 to her own bank account on 91 separate occasions. The offender was sentenced to a three-year CCO with 100 hours of unpaid community work and other conditions;

·        Jaison Deo was a case where a voluntary treasurer at a pre-school stole $181,440.81 by writing 134 cheques to his company or himself over a period of two and a half years and was sentenced to a three-year CCO with 300 hours of unpaid community work.

61The prosecution also highlighted cases where the gravity of the dishonesty offending was found to warrant the imposition of a custodial term, such as that of Catherine Campesato[7] where the offender was employed to undertake accounts in the business of a friend, and stole $232,107.18 in 287 separate transactions over a four-year period. The offender there was sentenced to one year, six months’ imprisonment with a non-parole period of nine months. There too, the offender pleaded guilty at the earliest opportunity, had no prior convictions and excellent prospects of rehabilitation.

[7][2019] VCC 992

62The prosecution also referred me to the more recent case of Matamata,[8] where the offender by was resentenced by the Court of Appeal to 10 months’ imprisonment combined with a two-year CCO for offending that involved seven counts of obtaining a financial advantage by deception resulting in a loss of $130,211.51 for which he received between $65,000 and $117,000 for his part in the deception. The prosecution correctly noted that this appeal involved a sentence originally imposed in May 2019 and therefore Worboyes considerations did not feature in that case.

[8][2021] VSCA 253

63I have had regard to each of the comparable cases to which I was referred which, whilst informative, are only one sentencing consideration and are not determinative.[9] Each case must turn on its own facts and circumstances, including relevantly, the additional utility that a plea entered at this time warrants for the reasons highlighted in the authority of Worboyes.

[9]DPP v Dalgliesh (a pseudonym) [2017] HCA 41

64You have been assessed as suitable for a community correction order and have consented to such an order being made. Ultimately, having regard to your early plea and the additional utility of such a plea entered at this time, the absence of any relevant prior criminal history, the impact of delay and your excellent prospects of rehabilitation, I consider that all relevant sentencing considerations can be met by an appropriately conditioned community correction order.

65In reaching this conclusion, I have had regard to s 5(4C) of the Sentencing Act 1991, and also the observations Maxwell P in R v Merrett[10] where, referring to the Court of Criminal Appeal of Western Australia in Duncan v R, his Honour stated:

'Where prior to sentence there has been a lengthy process of rehabilitation and the evidence does not indicate a need to protect society from the applicant, the punitive and deterrent aspects of the sentencing process should not be allowed to prevail as to possibly destroy the results of that rehabilitation.'

[10](2007) 14 VR 392 at [35]

66Accordingly, balancing each of the matters to which I have referred, whilst having regard to the maximum penalty for the offence of obtaining a financial advantage by deception, you are convicted on Charges 1, 2 and 3 and sentenced to a three- year community correction order subject to the following conditions:

·        That you be supervised for the duration of the order;

·        That you undertake 200 hours of unpaid community work; and

·        That you participate in ongoing mental health treatment, as directed.

67In addition to the conditions that I have imposed, there are standard conditions of the community correction order.  First and foremost, you must not commit any other offences punishable by imprisonment during the life of the three year order.  You must report within two working days of today to your nearest community corrections office.  You are required to advise your supervising Corrections officer of any change of your residential or work address and you must do so within two clear working days. 

68It is a term of all community correction orders that you must submit to visits as directed, and you must obey all instructions and directions of your Corrections officer.  You are not able to leave the State of Victoria without the prior permission of your supervising Corrections officer. 

69You should be aware that the order can be breached if you do not comply with either the conditions of the order or if you offend whilst it is in place.  If you do so, you will return before me for breaching the order.  I may have to re-sentence you on these charges, and I may have to sentence you for breaching the order. 

70Finally, pursuant to s6AAA of the Sentencing Act 1991, I declare that but for your plea of guilty, the sentence I would otherwise have imposed is a term of two years, six months’ imprisonment, with a non-parole period of one year, nine months. As indicated I have given considerable weight to your early plea entered at this time.

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