DPP v Akkala

[2020] VCC 120

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

AT MELBOURNE
CRIMINAL JURISDICTION

CR 19-01028

DIRECTOR OF PUBLIC PROSECUTIONS

v

RAMA AKKALA

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JUDGE:	HER HONOUR JUDGE WILMOTH
WHERE HELD:	Melbourne
DATE OF HEARING:	12 December 2019
DATE OF SENTENCE:	19 February 2020
CASE MAY BE CITED AS:	DPP v Akkala
MEDIUM NEUTRAL CITATION:	[2020] VCC 120

REASONS FOR SENTENCE
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Subject: Criminal law - sentence        

Catchwords: Pleas of guilty to two rolled up charges of obtaining a financial advantage by deception -      Mortgage introducer for ANZ bank – continuing criminal enterprise -  3 co- accused – undertaking to give evidence against co-accused if called upon -  no psychological disorder – 2010 imprisoned for similar offence – specific deterrence.

Sentence: 6 months imprisonment with 3 year Community Correction Order without     conditions.

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Mr J. Singh	OPP
For the Accused	Mr N. Coburn	Rothwell Lawyers

HER HONOUR:

1Rama Akkala, you have pleaded guilty to two charges of obtaining a financial advantage by deception.  These are rolled up charges arising from a period of about eight months from October 2014 to July 2015 when as director of a company and as a loan or mortgage introducer for the ANZ Bank you were obtaining false documents and information to enable the bank to grant loans.

2Both the charges are continuing criminal enterprise charges which attract double the available sentence, although the prosecution is not seeking any departure from the usual sentencing regime.  The usual maximum sentence is ten years' imprisonment.

3The broad picture of the offending is that by the means just described loans were granted enabling people to buy a house subject to mortgages they could not afford.  As a result of your role you received a total of $38,195.95 from the ANZ for introducing the mortgagees and various cash introducer's fees from the customers.

4You also received four watches and $5000 directly from the co-offender, Anand, the bank employee with whom you dealt in relation to the transactions.  You also received an indirect benefit from the sale of your house at 47 Stewart Street, Rockbank.

5Mr Anand's role was to interview customers, collect supporting documentation and submit suitable applications to the ANZ lending department for credit assessment.  He was paid a salary and a bonus if sales targets were reached.

6The co-accused, Sheree Becker and Erden Hassan, are real estate agents and are each involved in private companies which at the time of the offending involved what are known as rent-to-own contracts.  Such contracts typically involve brokering agreements between homeowners in financial trouble and buyers with low incomes who struggle to qualify for bank loans.

7Under the terms of rent-to-own agreements a prospective buyer would pay a portion of money in rent and a portion of the periodic payment would also be effectively saving towards a deposit.  Finance could then be obtained to purchase the property outright.

8This resulted in many rent-to-own occupiers who were usually of low socio-economic status paying periodic amounts in excess of mortgage rates whilst still not being the owner of the property, leaving them no legal recourse in the event of defaulting on the payments.

9For these reasons the ANZ Bank began a policy of refusing to accept rent-to-own contracts for loan applications.  Becker and Hassan began to look for ways to get rid of their rent-to-own contracts by providing their occupiers with loans.

10In September 2014 Becker met you and in effect told you this.  Hassan and Becker approached their rent-to-own occupiers and told them they had a loan arranged for the purchase of the property, whereupon they would be referred to you and you would require a cash payment for an introducer fee.

11The three of you would then obtain false documents and information, including false documentation of earnings and false contracts of sale, with a view to obtaining an ANZ loan.  You would then present that false documentation to Anand who would submit the fraudulent application without checking any of the details for accuracy.

12He would then arrange for the rent-to-own occupier to meet with him at ANZ Highpoint to sign documentation without explanation or in some instances without values being filled in.  The false information on the documents would invariably include false financial particulars and would falsely indicate that the transactions were arm's length deals between real estate agents, would falsely indicate that deposits had been paid and would falsely inflate sales prices.

13ANZ then would grant the application and a loan facility would be extended to the rent-to-own occupier.  You would also meet with Anand to learn of the specific requirements for a successful loan and would pass it onto Hassan and Becker to assist them in supporting the fraudulent applications.

14Twenty-three loans were granted to individuals under this scheme for a total value of $7,667,276.75.  The applicants achieved home ownership but subject to mortgages they could not afford.  You benefited from these deals as I have already described as did the other co-accused.

15Charge 1 relates to eight mortgage transactions between 24 October and
17 December 2014. The total amount was $4,983,755.65. Each transaction exceeded $50,000, hence Clause 1E of Schedule 1A of the Sentencing Act applies and the offence is deemed a continuing criminal enterprise as I have already mentioned.

16Each transaction involved a house in the west or north of Melbourne or in one case near Shepparton.  In each case the occupier was offered a loan and variously supplied with false payslips or signed a form falsely claiming assets.

17In one case false figures for the purchase price and the deposit were supplied, with the also false information that the deposit had been paid.  Becker created a second mortgage as mortgagor resulting in monthly deductions paid to her at an interest rate of 27 per cent.

18Charge 2 involved a rolled up charge relating to 15 mortgage transactions each of which exceeded $50,000 between 7 and 15 January 2015.  The total amount was $4,983,755.65.  All the houses were in the western suburbs and the occupiers signed personal statements of financial position containing false information organised and implemented by you and the co-accused.

19In one case the 20 year old son of the occupier was asked to apply for the home loan resulting in him signing a statement claiming that he had savings of $109,000 plus $2000 in shares and $50,000 in superannuation.  None of this was true but the loan was advanced.

20In another case a purchaser's 19 year old son was asked to apply for a personal loan to meet a shortfall in funds for the purchase of a house owned by the co-accused, Anand.  In addition the name of the estate agent as the selling agent was used falsely to ensure the bank would approve the home loan.

21The same strategy was used in other cases as well.  The gravity of your offending is indicated by the two rolled up charges representing 23 separate transactions involving a very large amount of money and arguably a breach of trust placed in you by the ANZ Bank employing you through Anand as an introducer.

22The seriousness of the offending is aggravated by the fact that you have a prior conviction for the same offence.  On 26 November 2010 you were convicted of one charge of obtaining a financial advantage by deception and after an appeal you were sentenced to prison for three years and six months with a non-parole period of one year and nine months.

23While working for Bankwest you had taken $312,000 from the bank for your personal use and bought a house in order to impress your parents who were about to visit from India.  Your role in this offending was as go-between, facilitating the arrangements and necessary documentation for the loans between the real estate agents and the bank.

24Your counsel, Mr Coburn, described it accurately in his written submissions on sentence as  'a circle of greed led by the ANZ lending manager and fuelled by the real estate agents to get false loans over the line'.

25Mr Coburn also characterised the ANZ introducer scheme as a referral scheme with the referrer receiving a .5 per cent up-front commission for a customer who qualified for a loan.  Referral was intended to be just that, with no need for documents supporting the loan application to be provided.

26Despite promising support for introducers no training or legal advice or compliance oversight was provided by the bank.  Thus the possible breach of trust is considerably weakened by this aspect of the arrangement and the breach by the bank of its own protocols.  Indeed Mr Coburn and the counsel were at odds over the issue of trust.  Mr Coburn submitted that you were not in a position of trust as an introducer while Mr Singh asserted that there was an element of trust which you utterly disrespected.

27Insofar as you purported to act as a professional person dealing with applications for large loans, trust was involved to some extent.  There appears to have been no actual loss to the bank which still maintains security on all the loans.  The effect of making unaffordable loans to occupiers lacking assets and adequate income has been the need to reduce the repayments, making loans longer but without any direct loss to the bank.

28I turn now to the mitigating factors which apply in this case.  On 6 October 2019 you made a voluntary statement in which you explained in considerable detail your role in the offending and the roles of the co-accused, Hassan, Becker and Anand.

29You stated that you knew that what you were doing was wrong but you had not known that Becker was taking out large second mortgage loans to fund the purchases, disguised as deposits.  You admit having received cash payments when you assisted with providing fraudulent payslips.

30You explained that real estate agents were listed as agents in order to avoid ANZ doing an independent valuation of the property, enabling Hassan to charge above market value to his client.  You described Hassan and Becker as having benefited most from the transactions.  You were the go-between for Anand on the one hand and Becker and Hassan on the other.

31Anand pleaded guilty and was placed on a CCO while Becker and Hassan are awaiting trial.  You did receive a significant financial benefit of, in total, $47,151.71.  Your statement was tendered at the plea hearing as Exhibit B.  You made an undertaking to give evidence if called upon in accordance with the statement and said that you understood that if you did not do so you could be re-sentenced.

32The prosecution conceded the significance of your statement and undertaking as an indication of remorse and intention to assist, to which full weight should be given in the process of sentencing.  Three colleagues have provided written references describing your frank disclosure to them of your prior criminal history and the recent charges.

33One writer, Kelwyn Hough, is also a friend with whom you have begun to establish a hospitality business venture in India.  All three writers consider you to be remorseful and embarrassed and already rehabilitated.  Your remorse is also reflected in the report of Dr Lester Walton, a psychiatrist who saw you for the purposes of an assessment in December. However, there would appear to have been some degree of minimisation on your part given that you told Dr Walton that you simply passed on information to the bank and said you had not realised that what you were doing was actually illegal.

34You described yourself as an idiot, not having realised it could blow up the way it did.  I should add that Dr Walton did not identify any psychological disorder other than anxiety arising from your present circumstances and considered there is no psychological barrier to you being effectively deterred from re-offending. He thought your prospects for rehabilitation are mixed because of your prior criminality and having experienced prison before. 

35Your plea of guilty is also a mitigating factor in that it has avoided a trial.  Credit is due for this as well as for the assistance you have indicated you will give the authorities, as I have already noted.

36The plea means you are entitled to a considerable discount on your sentence. 

37As for your personal circumstances you are aged 41 and have had a long term de facto partner until recently.  There are two children aged 11 and nine who remained living with you after your partner left you following the disclosure of the charges.

38As at the time of the sentencing hearing your partner was visiting your home several times a week to look after the children and you are hoping for a reconciliation.

39You came to Australia from India about 20 years ago where you had grown up in relatively privileged circumstances.  Here you qualified with a master's degree in business management and information technology systems from Monash University and a banking career followed until 2009 when you started your own business in the entertainment field and in management consultancy. That is the source of your income of $85,000 a year with which you support your partner and children. 

40When considering an appropriate sentence the two most important factors are the need for general and specific deterrence.  The public is entitled to protection from exploitation such as that to which you resorted and others must be deterred from dealing with often vulnerable loan applicants in this way.

41Specific deterrence has a role to play in your sentence because of your previous offending, although your remorse and the impact of the charges on your reputation and your personal life might have already deterred you considerably from offending again.

42Parity with the co-accused is also a consideration.  Only Anand has been dealt with so far.  He was charged similarly and received a Community Correction Order and had no criminal history.  His offending was more serious than yours in that he was in effect managing the scheme and you were the go-between.

43Accordingly his sentence is of limited use as a measure of parity but I do not disregard it.  There is no doubt that a Community Correction Order is available in the circumstances of your offending.  A serious case of dishonesty and exploitation which you executed despite being a man of intelligence and equipped with tertiary qualifications.

44The submission made by Mr Coburn on your behalf is for a Community Correction Order possibly with a fine as well, but without the need for imprisonment.  The prosecution's submission is that imprisonment is called for by reason of the need for specific deterrence in view of your previous offending. However, it is also the prosecution view that your promised assistance to the authorities warrants a sentence of imprisonment short enough to allow it to be combined with a correction order. 

45Would you stand now please?

I sentence you to four months' imprisonment on each charge. 

Two months of the sentence for Charge 2 will be served in cumulation upon the sentence for Charge 1 resulting in a total effective sentence of six months.  I also impose a Community Correction Order which will commence on the day of your release and will last for three years.

46Taking into account the recommendations of the officer who assessed you, there will be no need for supervision or any other conditions apart from the core conditions.  The sting of this order is to be found in the fact that should you offend again in any way you will have breached the order and you could be re-sentenced.

47You must attend the Sunshine office of Corrections by 4 pm within two working days of your release. 

48Do you agree to be bound by the conditions of the order, Mr Akkala?

49OFFENDER:  Yes, Your Honour.

50HER HONOUR:  If you had pleaded not guilty to these charges I would have sentenced you to 16 months' imprisonment with a non-parole period of ten months. 

51Mr Singh, there was an application for a s.464ZF order?

52MR SINGH:  Yes, Your Honour.

53HER HONOUR:  I will explain that to Mr Akkala.  That application is for a sample of saliva to be obtained by the police from you and the police have the power to use reasonable force to obtain that sample, if necessary, but I trust that will not be the case.  Do you consent to that order, Mr Akkala?

54OFFENDER:  Yes.

55HER HONOUR:  Mr Coburn, I have not had a chance to ask you about that consent.

56MR COBURN:  Yes, Your Honour, I consent to that order.

57HER HONOUR:  Thank you.  I will make that order.  First of all, Mr Singh, are there any matters I have neglected?

58MR SINGH:  Just pardon me a moment, Your Honour.

59HER HONOUR:  Perhaps while that is being considered my associate can approach the dock and, Mr Coburn, would you like to go with my associate while the CCO is signed?

60MR COBURN:  Yes, please, Your Honour.

61HER HONOUR:  She has got the document there.

62MR SINGH:  Thank you, Your Honour, that is the only order sought.

63HER HONOUR:  Thank you, Mr Singh.

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