DPP v Napoli
[2021] VCC 952
•14 July 2021
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-18-01277 & CR-18-01276
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| CALCEDONIO AGAZIO NAPOLI CARLO SQUILLACIOTI |
---
JUDGE: | HIS HONOUR JUDGE GEORGIOU | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 6, 14,19, 25 August 2020 20 October 2020 | |
DATE OF SENTENCE: | 14 July 2021 | |
CASE MAY BE CITED AS: | DPP v Napoli & Squillacioti | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 952 | |
REASONS FOR SENTENCE
---
Subject: CRIMINAL LAW
Catchwords: Conspiracy to defraud – conspiracy to attempt to pervert the course of public justice – serious examples of offending – conspiracy to defraud well planned and sophisticated – motivated by financial gain – high moral culpability – breach of trust - delay – parity – adverse publicity – loss of career – offer of assistance – family hardship
Legislation Cited:
Cases Cited: Markovic v R (2010) 30 VR 589, Borg v R [2020] VSCA 191, R v El Cheikh [2004] VSCA 146, R v McLeod [2007] VSCA 183, Boulton v The Queen (2014) 46 VR 308, Dyason v The Queen [2015] VSCA 120, DPP v Bulfin [1998] 4 VR 114, DPP v Gregory [2011] 34 VR 1, Ooi v R [2018] VSCA 78, DPP v Oksuz [2015] VSCA 316, R v Pilarinos [2001] VSCA 9.
Sentence: Offender Napoli – total effective sentence three years and 10 months’ imprisonment with a non-parole period of 23 months. Pecuniary penalty order in the sum of $95,000.
Offender Squillacioti - total effective sentence two years and 5 months’ imprisonment with a non-parole period of 15 months. Pecuniary penalty order in the sum of $58,000.
---
APPEARANCES: | Counsel | Solicitors |
| For the DPP | Mr A Grant with Ms K Hammill | Office of Public Prosecutions |
| For the Accused | Dr G Boas Mr J Shaw (to 20/10/20) | Madgwicks Lawyers |
HIS HONOUR:
1 Calcedonio Agazio Napoli, you have pleaded guilty to a charge that between 1 January 2007 and 25 January 2014 you conspired with Carlo Squillacioti, Robert Napoli and Domenica Napoli to defraud the State of Victoria in the payment of goods and services.
2 You have also pleaded guilty to a charge that between
1 January 2014 and 27 November 2014 you conspired to attempt to pervert the course of public justice.
3 Carlo Squillacioti, you have pleaded guilty to a charge that between 1 January 2007 and 25 January 2014 you conspired with Calcedonio Agazio Napoli, Robert Napoli and Domenica Napoli to defraud the State of Victoria in the payment of goods and services.
4 You have also pleaded guilty to a charge that between
1 January 2014 and 27 November 2014 you conspired to attempt to pervert the course of public justice.
Circumstances of Offending
5 Exhibit P1 is the summary of prosecution opening for the plea. It extends for some 43 pages and sets out the circumstances of your offending in detail. A summary of those circumstances is as follows.
6 In September 2013, the Independent Broad-based Anticorruption Commission (“IBAC”) commenced an investigation named “Operation Ord” into alleged corruption in the Department of Education and Training, which later came to be known as the Department of Early Childhood Development. For convenience I shall refer to them both as “the Department”.
7 Between 4 April 2007 and 25 January 2014, you Mr Napoli, participated in a conspiracy that involved you engaging in a course of conduct with other persons to defraud the Department. Those other persons include you, Mr Squillacioti, Daniel Calleja and Stephen Dingley. Robert and Domenica Napoli are also said to be involved. They deny their involvement in the conspiracy and will face trial later this year.
8 The conspiracy the subject of Charge 1 took place over a period of approximately seven years and involved you both colluding to submit a large number of invoices seeking payment for goods and services purportedly provided to the Department by a number of different companies. The invoices contained false information and sought payment for which those involved in the fraud were not entitled, either because the payments related to work that had been improperly awarded to them in breach of the Department’s policies that governed the awarding of such contracts, or on occasions the work was not done.
9 By early 2014 you, Mr Napoli, and you, Mr Squillacioti, became aware of the IBAC investigation and you each then engaged in conduct designed to obfuscate the investigation. This conduct is the subject of Charge 2 on your respective indictments.
10 Charge 2 on your indictment, Mr Napoli, is a rolled-up charge. The particulars of the charge state that you agreed with:
(a)
i. Michael Giulieri to do a series of acts that had the tendency to pervert the course of justice in that you requested Michael Giulieri prepare a letter to you requesting Department of Education funding for a sports skills development program for the Essendon North Primary School;
ii. that you counselled your son, Raphael Napoli (“Ralph”), and Michael Giulieri upon the false versions of events which they were to give to the Independent Broad-based Anti-corruption Commission;
iii. you participated in discussions intended to make the payment of $2310 to Innovating Visuals (IVisuals) appear to be legitimate payment for services rendered when no services had in fact been rendered.
(b) You agreed with Carlo Squillacioti and Daniel Calleja to pursue a course of conduct which had a tendency to pervert the course of public justice in that you all engaged in discussions to formulate false explanations to IBAC and to give false explanations to investigators for payments made by the Department of Education; and
(c) you agreed with Carlo Squillacioti, Robert Napoli and Daniel Calleja to pursue a course of conduct which had a tendency to pervert the course of public justice in that Daniel Calleja would conceal evidence from IBAC investigators.
11 Charge 2 on your indictment, Mr Squillacioti, is a rolled up charge the particulars of which state the following –
(a) that with intent to pervert the course of justice you agreed with Mr Napoli and Daniel Calleja to pursue a course of conduct which had a tendency to pervert the course of public justice in that you all engaged in discussions to formulate false explanations to IBAC, and you all agreed to give false explanations to investigators for payments made to the Department of Education; and
(b) you agreed with Mr Napoli, Robert Napoli and Daniel Calleja to pursue a course of conduct which had a tendency to pervert the course of public justice in that Daniel Calleja would conceal evidence from IBAC investigators.
12 By agreeing to engage in the conduct identified, you both intended to pervert the course of justice by denying IBAC information and evidence about the true state of affairs concerning your involvement in the conduct relevant to Charge 1 on each of the indictments.
13 Throughout the charged period you, Mr Napoli, were a senior employee of the Department. For many of those years you worked closely with high ranking education officials in the finance unit. You were initially employed as a finance officer. Towards the end of the charged period you were the General Manager of the Schools’ Finance Unit.
14 Under Standing Directions issued by the Minister for Finance, the Department was required to have in place various ministerial and secretarial authorisations or delegations for overall financial management. Financial authorisations were transfers of authority from a Minister or Secretary to a financial delegate, for the employee occupying that position to exercise his or her required financial management responsibilities with appropriate authority.
15 Between 2007 and 2015, Mr Napoli, you were the holder of two financial delegations. The first related to expenditure from your branch budget not exceeding $150,000. The second related to limits on payments or grants to schools. The limit on this delegation between 2007 and 2010 was $750,000. In about June 2010 this was increased to $1 million.
16 The procurement framework that applied to the Department for the purchase of goods and services was contained in policies issued by the Victorian Government Purchasing Board pursuant to the Financial Management Act 1994. Those policies stipulated that Departmental purchasing activities must be based on the principles of value for money, open and fair competition, accountability, risk management, probity and transparency.
17 For the period between 2007 and 2014, Department staff were required to comply with obligations in relation to conflicts of interest set out variously in the Public Administration Act 2004 and relevant Victorian Public Sector Codes.
18 The 2003 Code of Conduct contained guidance for avoiding conflicts of interest and directed employees to disclose potential conflicts to management when dealing with relatives, close friends or business acquaintances and to seek guidance from managers about potential conflicts of interest. The 2007 Code of Conduct required employees to declare and avoid conflicts of interest to help maintain community trust and confidence, ensure their personal or financial interests did not influence or interfere with the performance of their role, and advised employees to seek guidance from their manager if they were unsure about a possible conflict of interest.
19 Those codes of conduct applied to you, Mr Napoli. The prosecution relied upon your failure to declare a conflict of interest as evidence you knew you were acting dishonestly.
20 In about 1984 the Department moved from a centralised governance model to a decentralised model in which schools were given financial and operational autonomy. The role of the Department was to ensure accountability through reporting requirements imposed upon the schools. A school in a ‘cluster’ or ‘network’ of Victorian government schools would be designated the Program Coordinator School. Such a school, also referred to as the “Banker School”, had responsibility for the maintenance of Department funds and facilitation of payment by Department executives. Payments made by the Banker Schools were for expenses incurred by one or more of the schools that fell within that Banker School’s cluster. The management and administration of the Banker School was governed by the Program Coordinator School Governance Framework.
21 You, Mr Napoli, held a position of trust within the Department. You were not entitled to any payment or benefit for the work you performed for the Schools’ Finance Unit. You were not entitled to take advantage of your position to award contracts or approve payments which involved an apparent conflict of interest unless you declared that conflict of interest and complied with the Department’s policies.
22 During the period covered by Charge 1 you, Mr Napoli, awarded contracts and approved payments to companies and individuals to whom you were related. At various times you chose a number of companies and businesses as successful vendors and contractors for Departmental contracts and payments. Those companies included:
· Encino Pty Ltd,
· Quill Investments Pty Ltd,
· Customer Training and Consulting Pty Ltd (CT&C),
· Innovating Visuals Pty Ltd,
· RS Media Pty Ltd,
· SD Design and Print, and
· R & D Personalised Printing Pty Ltd.
23 Those entities were owned and managed by family members, including your co-accused, Mr Squillacioti, your brother and sister-in-law, Robert and Domenica Napoli, and your relative Daniel Calleja. You, Mr Napoli, concealed from the Department your interest in or association with those entities and the persons conducting the business of those entities. You awarded Department contracts to those entities and persons without adhering to the procurement protocols. In return, you received various gifts and financial benefits.
24 During the offending period, Mr Napoli, you provided information to Mr Squillacioti, Calleja, Robert Napoli and Domenica Napoli that enabled them to tender or quote for contracts at lower than competitors’ prices. On other occasions, Mr Napoli, you submitted the tenders, quotes and invoices yourself.
25 You both knowingly concealed the breaches of Department procurement protocols by creating the impression the contracts were awarded legitimately on the basis of genuine competition and the application of the processes and procedures required by the Department.
26 Mr Napoli, you also instructed those involved with the relevant companies to issue invoices and send them to certain of the Banker Schools for payment. Those invoices would then be paid by the schools at your direction.
27 All funds obtained from the payment of invoices would then be disbursed to you and the other individuals involved in the fraudulent conduct.
28 You, Mr Napoli, used your position to ensure the invoices submitted to the Department and schools by the other offenders were paid without being scrutinised and without questions being asked as to whether the companies that provided the invoices were legitimately entitled to conduct any works for the Department. You also ensured the invoices would be paid, despite the fact the goods and services referred to in the invoices were not in fact provided by the company that submitted the invoice, and on occasion were not in fact provided at all.
29 With regard to print management services purportedly undertaken by those involved in the conspiracy, none of the work commissioned had been exempted as required by government guidelines.
30 You, Mr Napoli, had been employed by the Department for some 40 years. You advanced through its ranks to become general manager of the Schools’ Financial Unit. In that role, under the supervision and direction of the Departmental Secretary, you were directly responsible for the administration of approximately $5 billion of the Department’s budget, used for the School Resource Program.
31 In addition to your work with the Department, Mr Napoli, you were a certified practising accountant and conducted an accountancy business from your home. You provided accounting services to a number of the companies that provided false invoices to the Department.
32 You, Mr Squillacioti, were a joint owner of Cobra Motors. You were also a director of a number of companies involved in the provision of invoices to the Department, including Encino, Quill and CT&C. The invoices claimed the relevant companies had undertaken printing work and provided IT equipment and consultancy. In fact, none of your companies had the equipment or capability to carry out that type of work.
33 Daniel Calleja is a relative of yours, Mr Napoli. He operated his own business, RS Media, which delivered multi-media and video production services to corporate clients.
34 In about March 2007 you explained to him you could not give printing work directly to your brother, Robert, as you had the same surname. To enable your brother to do printing work for the Department, you asked Calleja if he would create invoices using his business name and subcontract the work to your brother’s printing business instead. Calleja agreed.
35 In late 2007 you, Mr Napoli, contacted Calleja and instructed him to create invoices for printing work that had purportedly been undertaken by R&D Printing. He did and subsequently received payment into his company bank account which he then transferred to Robert Napoli.
36 Between 2007 and 2008 you, Mr Napoli, instructed Calleja to issue a number of invoices seeking payment for work said to have been undertaken for the Department by Calleja’s company, RS Media.
37 Mr Squillacioti, you met Calleja through Mr Napoli, in 2008. You, Mr Napoli, instructed Calleja to send to or receive invoices from a number of companies associated with
Mr Squillacioti despite the fact that at no stage had you,
Mr Squillacioti, or any of the companies associated with you, ever done any Department related work for Mr Calleja. The relevant companies again were CT&C, Encino and Quill.
38 Mr Napoli, you instructed Calleja to forward funds received from the Department to one of the companies controlled by
Mr Squillacioti. The relevant company would then send Calleja an invoice for work purportedly done. On occasion, a portion of the funds received were passed on to you, Mr Napoli.
39 It was accepted by the prosecution that Calleja himself did undertake some work on behalf of the Department. However, between 2008 and 2013, Calleja, at your direction, Mr Napoli, issued a number of invoices in the name of RS Media and IVisuals, also a Calleja company, claiming payment for work undertaken on behalf of the Department that was not in fact undertaken by Calleja. In some instances, the work was done by either Robert Napoli or one of his employees.
40 The majority of the funds received by Calleja from those invoices were forwarded to companies associated with each of you, Mr Napoli and Mr Squillacioti. You, Mr Napoli, provided Calleja with instructions on who to invoice, that is either the Department or a particular Banker School, the description of the work purportedly undertaken, and the cost of that work. Calleja was asked to prepare invoices in this way to avoid any questions being raised about any potential conflict of interest.
41 You, Mr Napoli, and you, Mr Squillacioti, engaged in this course of conduct to deceive those responsible for approving the awarding of contracts and making payments on behalf of the Department. The course of conduct was designed to hide the fact that Departmental work was being conducted by your relatives, Mr Napoli, and that both of you were receiving financial benefits because of that purported work.
42 Approximately 72 fraudulent invoices were sent seeking payment for work purportedly done by one of the companies associated with you, Mr Napoli, and you, Mr Squillacioti. The company that submitted each invoice did not in fact carry out the work outlined in the invoice. This was done to conceal the fact that those who had purportedly undertaken the work were closely related to you Mr Napoli. You both knowingly engaged in that conduct to conceal the fraudulent activity by creating the impression the contracts were awarded legitimately applying the processes and procedures required by the Department.
43 As already mentioned, on some occasions the invoices related to the provision of goods and services that were not in fact provided to the Department or the school invoiced.
44 Once the funds had been paid by the Department or school, the proceeds were disbursed to each of you and other accused through the companies involved in the fraudulent conduct. Some of the proceeds were used to purchase goods and or pay accounts for you Mr Napoli.
45 On one occasion, Mr Napoli, you instructed Calleja to purchase a television valued at $1790 using funds left over from invoices that had been submitted. Calleja did that and delivered the television to your home.
46 On another occasion, in May 2009, you directed him to make a payment of $2000 in relation to your hairpiece. On other occasions you directed him to make payments for wine and for an iPad.
47 The first invoice for payment was dated 4 April 2007. The final invoice was dated 16 December 2013. Fraudulent invoices sent to a Banker School did not necessarily relate to work done at that school, as long as it related to work done for a school within the Banker School’s cluster. You, Mr Napoli, authorised or vouched for the payments on occasions. School principals would pay the money they were asked to pay.
48 Throughout the period the subject of Charge 1, the invoices resulted in a total of over $500,000 being paid to the companies involved. It is accepted by the prosecution that your personal benefit, Mr Napoli, as a result of the offending, was $95,000.
49 Of the approximate 72 invoices paid by the Department, companies associated with you, Mr Squillacioti, submitted 32 invoices, resulting in payment of over $230,000. That amount forms part of the $500,000 to which I just referred. It is accepted by the prosecution the personal benefit received by you, Mr Squillacioti, was $58,000.
50 Exhibit P1 sets out a number of instances of those transactions. They show how the conspiracy was conducted, the companies and persons involved, how payments were made and how they were concealed.
51 I turn now to a summary of the circumstances regarding the conspiracy to attempt to pervert the course of public justice.
52 IBAC installed listening devices in the residential and business premises of a number of persons including each of you. Calls were also intercepted on your telephone, Mr Napoli. Recordings of the intercepted telephone calls and listening devices were made.
53 In approximately March 2014, you, Mr Napoli, spoke with Michael Giulieri, an employee of the Department. He was the principal of the Essendon North Primary School from 1994-2007, and the Keilor Heights Primary School from 2011-2015. As principal he was responsible for management and allocation of his school’s finances.
54 You, Mr Napoli, had known him for a number of years through your respective roles in the Department. In August 2013 you facilitated a grant for Mr Giulieri’s school. In approximately March 2014, you, Mr Napoli, became aware of the investigation into the Department’s finances and discussed the matter with Giulieri. You said you needed paperwork to cover the audit process in relation to some part of the Department’s budget and asked Giulieri to write a letter requesting funding for a project and stating your son Ralph did work at the Essendon North Primary School years earlier. Ralph in fact had never worked for Guilieri and, at that time, had not even met him. Guilieri agreed to assist.
55 A listening device captured you, Mr Napoli, and Ralph discussing the matter at your home on 17 May 2014. You told Ralph you were able to justify every payment made to you, that you did not declare it as income, and you were going to fix it.
56 On 23 May 2014 Mr Napoli, you again requested Guilieri to prepare the letter. The next day Guilieri started work on the letter, submitting drafts for you to check. The final letter was dated 1 December 2003 and requested a grant of $30,000 to develop a physical fitness program for Essendon North Primary School.
57 Guilieri attended your home, Mr Napoli, on 27 May 2014. The conversation between you was recorded. You told Guilieri he needed to do something else for you. You told him you had paid Calleja $2000 in advance for work that had not been done. You asked Guilieri to use the $2000 for a video or posters for Guilieri’s school or for the Schools Governance Australia. You asked him to contact Calleja and to be careful of what he said over the phone.
58 Guilieri again met with you, Mr Napoli, at your home in early June 2014 and together you discussed a letter concerning Ralph working at Essendon North Primary School. You instructed Guilieri to say, if asked, that Ralph had worked at the school between 2004 and 2007. In September 2014 you told Guilieri he should meet with Ralph to discuss the story. On 7 October you, Ralph, and Guilieri met at a coffee shop in East Keilor. The meeting was recorded by IBAC investigators.
59 At that meeting you told Guilieri the investigation being conducted by IBAC was bigger than you thought. You told Guilieri that if investigators spoke to him, he had to say Ralph worked at the Essendon North Primary School between 2004 and 2007, reporting directly to him. During this discussion, Ralph repeatedly said he did not work there. Guilieri told him “we’re trying to cover for your dad here, he’s in a bit of strife”.
60 On 11 November 2014 Guilieri was served with a summons to attend IBAC on 27 November for a private examination. On
17 November he had a further conversation with you at your house, Mr Napoli. Ralph was also present. During the discussion the three of you rehearsed answers that would be given to IBAC. You, Mr Napoli, asked them questions about how they first met, how often they would meet while Ralph was working at the school, and where they would meet. You also reviewed the list of companies and entities that appeared on the summons and discussed those with Guilieri. On
25 November 2014 you again met with Guilieri and said, “we have to get your story right or I am shot, gone”. You requested Guilieri attend your house that night ,which he did. Ralph and your wife were also present. You again counselled Guilieri as to what he should say to IBAC, informing him of the questions IBAC had asked you. The story was again rehearsed and you, Mr Napoli, told Guilieri to say Ralph had worked at the school as a “researcher”. You also told him to say he did not know the companies listed on the summons. After Guilieri left your house, your son Ralph stated that it was “bullshit” but that he had no choice. Your son lamented the situation in which you had placed him and Guilieri. You responded “it’s not like you have robbed a bank. It’s like you have got … a conspiracy thing. The … only little thing is … you and Mick met. Is that so hard?”
61 You also instructed Guilieri to destroy the letter he had prepared at your request earlier in the year. He did not do so, and he later provided the letter to IBAC investigators.
62 In February or March 2014, you, Mr Napoli, visited Calleja to discuss the wine invoices with him. You told him there was an investigation by the Department and they were looking at the wine invoices. You told Calleja to say he bought the wine for his personal use. Calleja told you to calm down and said he would do what you asked.
63 A few weeks later you asked Calleja to say he helped manage CT&C, one of Squillacioti’s companies. You told him Carlo Squillacioti could not do the work that CT&C was supposed to have done and Calleja was to say he did it. You gave Calleja some hard copy printouts he was to discuss with
Mr Squillacioti. Those printouts purported to show what jobs had been done and by which company, including Quill, Encino and CT&C. A short time after this discussion you,
Mr Squillacioti, contacted Calleja and met with him. You both expressed concern at the proposal and Calleja’s ability to remember all the detail on the printouts and notes that you,
Mr Napoli, had provided.
64 On 29 April 2014, at approximately 8 am, search warrants were executed at various locations including premises associated with each of you.
65 In an intercepted conversation, captured at 7.30 that evening, you Mr Napoli, discussed with your brother, Robert, details concerning Steve Dingley. You told your brother you had spoken to Steve and that IBAC had asked him whether he knew you. You rehearsed an account with your brother that might be provided to IBAC.
66 Calleja also attended your home that night and had a lengthy discussion with you and members of your family. During the conversation you told Calleja IBAC had been to “Carlo’s” and “Robbie’s”. You told Calleja IBAC might come to see him and you explained that Steve had said “the right thing” to IBAC which was to acknowledge he knew you but that he did not deal with you. You told Calleja to look through the files at his office and remove or destroy any suspect documents because “if you don’t have it there, they can’t take it”. Calleja agreed to have a look. You told him IBAC go through everything, including having searched your fridge and freezer. You also told him to get rid of his backup hard drive. When your wife, Mr Napoli, told you that you have to keep paperwork for five years, you said “but he doesn’t know that. He could be wrong and only keep paperwork for two or three years.” You told Calleja if he had doubts about the material he had, he should take it to “grandma’s” because they are not going to go to “grandma’s” and it would be safer there.
67 You also told Calleja that if questioned by IBAC he should acknowledge he knew you, but to lie and say he did not arrange any work with the Department through you. You also told him, if asked why he paid money directly into your account, to say he did not know.
68 On 30 April 2014, Mr Napoli, you spoke with Mr Squillacioti and his brother Luigi. You, Mr Napoli, were concerned about a particular spreadsheet that recorded what the Squillacioti’s had received and everything that you, Mr Napoli, had been paid. You said if IBAC seized that spreadsheet, it “puts us in fuckin’ gaol.” That spreadsheet, you said, had to be destroyed. You asked Squillacioti whether he had documents “stashed away", and whether he was “comfortable” with what IBAC had taken.
69 On 9 May 2014 the two of you again spoke about invoicing and reviewed relevant documents. You, Mr Napoli, expressed concern at the number of transactions involving CT&C. You urged Squillacioti to not worry about anything else and to concentrate on what they paid you so that you could come up with a story. You discussed highlighting the documents and discussed the meaning of the highlighting with the Squillacioti brothers so they could see “how the story ties in”. You rehearsed questions and answers that might be put to them by investigators. You, Mr Squillacioti, questioned aspects of the story, including how the two of you could justify invoices sent to the Department, schools and each other’s companies by claiming legitimate work was done in each case. You,
Mr Napoli expressed regret you had not planned it properly.
70 On 11 May 2014 you both collected Calleja from the Melbourne airport. You told him he had to make sure they had stories to cover the invoices. Calleja stated he could not make up stories for jobs he had not done. You, Mr Napoli, told Calleja to go home and think of an explanation for the invoices. On another occasion in May or June that year you, Mr Napoli, requested Calleja to meet with the two of you to discuss the invoicing. The three of you met at premises in Tottenham. You both had a large box of printed power-point presentations. You, Mr Napoli, tried to collate every job to match invoices that had been paid by Calleja. You told Calleja that if interviewed, he had to say he was invoiced by Encino and Quill for storage and logistics and that any invoice he received from CT&C was for scanning he had subcontracted to them. In fact, Calleja had never used any of those companies for the work suggested.
71 You, Mr Napoli, discussed with Calleja the amounts he paid to Encino and Quill on other occasions. You told him to say he had paid about $250 per week for transport. You impressed upon him the need to “get (his) numbers right.”
72 On 14 May 2014 you, Mr Squillacioti, discussed with your brother how you could justify invoices totalling $80,000 to Calleja in relation to transport and storage services. On
27 May you again discussed the amount invoiced to Calleja. You, Mr Napoli, expressed concern at the amount purportedly paid for storage. You said Calleja had been paying the Carlo Squillacioti entities about “80 grand a month”. You suggested he claim it was partly for storage and partly for scanning because that made better sense than saying it was all for storage. You also told Carlo Squillacioti to justify the money he paid to Calleja by saying it was for “presentations”. You added that although the paperwork was sloppy, if he, Squillacioti, and Calleja said the same thing there would be “nowhere for investigators to go.”
73 In mid-June 2014 you, Mr Squillacioti, sent Calleja two invoices for storage, cartage and travel. Calleja took items to Cobra Motors’ premises for storage. Calleja paid the invoices because you, Mr Napoli, said it would make things “look real”.
74 On 26 June 2014, following the execution of a search warrant at Calleja’s business premises, in accordance with your instructions, Mr Napoli, Calleja told investigators a virus had caused damage to his computer system and he had lost all quotes, invoicing and other data that was more than 12 to 18 months old.
75 On 2 July 2014, IBAC executed a search warrant at the home of your mother, Mr Napoli. Relevant items were found in the garage and roof cavity of the house. You hid those items at your mother’s house in an attempt to conceal them from investigators. You discussed this with your son, Ralph, saying they took everything you wanted to hide, including emails that incriminated you.
76 You both became aware by at least 7 July 2014 that Calleja had made a statement to investigators. On 18 July 2014 you, Mr Squillacioti, discussed with your brother the invoices received from Calleja and the payment of those invoices. You both compared the answers you would give to a “prosecutor”.
77 On 27 August 2014 a second search warrant was executed at your house, Mr Napoli. On 1 September 2014 you discussed with your wife the records that had been seized and others that had not and you gave instructions for certain things to be destroyed and others to be put in a place where they would be safe.
78 You, Mr Napoli, were interviewed by IBAC investigators on
29 October 2014. On 3 November 2014 you asked Mr Squillacioti whether he was holding anything from Encino or Quill and whether they could be defended. You,
Mr Squillacioti, said they could because “Quill’s jobs were done” but they may be questioned because you did not have expenses for the jobs. You, Mr Squillacioti, suggested an answer but you, Mr Napoli, said that before you answered you had to do your sums first and that you might justify any difference through “scanning” work and in other suggested ways. You also discussed how you, Mr Squillacioti, could obtain a copy of Mr Napoli’s recorded interview with investigators. You, Mr Napoli, instructed Mr Squillacioti how he should answer any question concerning the holding of some $61,000.
79 Mr Napoli, you were interviewed by investigators on
29 October 2014. Approximately two months later you met with a fellow Department employee. That meeting was recorded. During that meeting you said you had been interviewed for 12 hours and that you had told “a few little porkies on a few things”.
80 You, Mr Squillacioti, declined a request for an interview.
Background and personal circumstances – Calcedonio Napoli
81 Mr Napoli, you were born in Italy in 1956. You are now 65 years of age. You came to Australia with your mother in 1959. Your father travelled to Australia ahead of you. In Australia, your father worked as a fitter and as a carpenter throughout his career. Your mother was engaged in home duties.
82 You are the eldest of three brothers. You attended Sunshine High School and completed your HSC in 1974. Upon finishing secondary school you began working as a payroll officer at the Victorian Education Department. You remained with the Department as already mentioned for the next 40 years. You progressed through various roles within the Department and in 2004 you became Director of School Resources.
83 While working full time with the Department you completed a Bachelor of Commerce degree with a major in accounting at the Footscray Institute of Technology. In 1982 you became a Certified Practising Accountant and Registered Tax Agent. You had your own accountancy practice whilst you also worked for the Department.
84 You married in 1982. Your wife is a bookkeeper and was responsible for the accounting practice. You have two adult sons both of whom are in employment. You have two grandchildren.
85 From 2005 you were responsible for developing and implementing the Department’s School Resource Package. This was a system used to allocate funds to Victorian government schools. I was told the system revolutionised public school funding. The package tied funding directly to the individual needs of students and schools. It is still in place today. You were very much the architect of this system. The success of your efforts is well set out in the reference of James Spinks, which is part of Exhibit D4. However, as your then counsel, Mr Shaw, accepted, it was the fact that you knew this system so well that enabled you to offend in the manner you did.
86 You became the registered carer of your elderly mother in 2016. It is clear your mother suffers from a number of health issues. You also provided care to your mother-in-law up until her death in March 2020.
87 You suffer heart problems and in early 2014 you underwent major bypass surgery. You also suffer from diabetes. A letter from your cardiothoracic surgeon, dated 10 February 2014, is part of Exhibit D4. It confirms you were to undergo coronary artery bypass graft surgery in mid-February 2014. Other documentation confirms you in fact underwent the surgery.
88 I have had regard to each of the references in Exhibit D4.
Dr Mazzoni, who has known you for 20 years, considers that the charges are uncharacteristic aberrations. He confirms the care you provide to your elderly mother and the care you provided your late mother-in-law. He also speaks of your community involvement including voluntary work with your local church and other charitable organisations. He has discussed your offending with you and notes it is a source of intense regret and embarrassment to you.
89 Your parish priest, Reverend Carabott, confirms the voluntary work you have undertaken on behalf of St Bernadette’s Parish. Reverend Peake wrote of your contributions over the last seven years to community development projects and assistance given to refugees and long-term unemployed youth.
90 Mr Evans, an education consultant and former colleague of yours, states you were an outstanding administrator and innovator in the Victorian government school system. He states the Student Resource Package model of funding is world renowned. It is clear from the other referees with whom you worked in the development of the Student Resource Package that you were strongly committed to the task of improving student outcomes through well targeted needs-based funding.
91 The references speak of you as fully committed to the work you did at the Department, and as a very community minded individual who has contributed generously your time and skills to those less fortunate in the community. They also speak of your remorse and shame for your offending.
92 You have no previous criminal convictions or findings of guilt and there are no subsequent charges, convictions or findings of guilt.
93 Mr Shaw conceded the fact that you have no prior convictions is not a matter of great weight in a case such as this. It was put you have had a spectacular fall from grace, and you agreed to resign formally on 28 April 2015, thus ending a 40-year career with the Department. You acknowledge you have brought this “fall from grace” upon yourself.
94 Mr Napoli, you gave evidence before me in relation to your mothers age and health. She is 93 years of age. She is blind in her left eye and has only 30% vision in her right eye. Your mother continues to live in her home in North Sunshine. She finds it difficult to live independently. You and your brothers arranged for her to go to a nursing home but after a short period there, with the concern of her contracting COVID-19, she returned to her home. You said she needs to be there instead of your home because her house has been modified to cater for her ailments and she is familiar with it. You stay with her each night to make sure she is okay and takes her medication. Your brother, Gus, usually relieves you at
8 am for a few hours each day. A professional carer arrives around 10 am each day and stays for three hours. You then return at 1 pm. At about 3.30 pm your brother Robbie arrives and relieves you until approximately 8 pm. Your brothers tend to put in more time on the weekends, as do other family members. In essence, you said, your mother cannot be left alone. If you are sentenced to a term of imprisonment, you said it would probably mean your mother would return to a nursing home.
95 Under cross-examination by Mr Grant, who appeared with Ms Hamill on behalf of the Director of Public Prosecutions, you accepted your brother Gus could stay at your mother’s house at night time. Your brother Robert who runs his own gardening business also has flexibility to provide care for your mother. It was put to you by Mr Grant there are other members of your family who could look after your mother and give her the necessary care in the event you were unable. Whilst you did not say it was impossible, you said that on the week-days it would be extremely difficult.
Background and personal circumstances – Carlo Squillacioti.
96 Mr Squillacioti, you are the cousin of Mr Napoli.
97 You were born in 1957 and are now 63 years of age. You are the youngest of six siblings and grew up in the western suburbs of Melbourne. You completed Year 12 at Sunshine North Technical College in 1975. Since leaving school you obtained a number of qualifications in motor mechanics, heavy vehicle mechanics, and air-conditioning.
98 In 1982 you joined your brother Luigi’s business. You and he operate a motor mechanics and transport logistics company.
99 You married in 1986 and together with your wife you have two adult daughters aged 30 and 28. Your daughters live together and both are employed. The youngest daughter works full-time in the family business.
100 I was told by your then counsel, Mr Shaw, you care for your wife who in 2018 was diagnosed with Alzheimer’s disease. You are with her almost constantly although you do receive some assistance from your daughters and a sibling.
101 I have also received a bundle of references in relation to you and I have had regard to each of them. You are described by Ms Richards as a hard-working, dedicated family man who is very loyal to his friends and family. She considers you understand the seriousness of the position in which you find yourself and that you are extremely embarrassed, ashamed and remorseful for the pain caused to your family and business. Mr Akerly states you have been a passionate business owner who has contributed proudly to society by providing career opportunities for many young persons in the field of motor mechanics and truck driving. He states you are deeply remorseful and accept responsibility for your transgression against society, family and work colleagues. He also writes of the emotional difficulties you have suffered as a result of your daughter’s depression and your wife’s illness. He confirms you are your wife’s constant and main carer. The other references tendered on your behalf are to similar effect. They are all set out in Exhibit D4.
102 You have no criminal history nor any subsequent or pending matters. But for this offending, it was submitted you are a person of good character.
103 Mr Squillacioti, you also gave evidence before me.
104 You said your wife is aged 62 and was diagnosed with Alzheimer’s in 2018. You gave evidence that your wife can take basic care of herself with regard to dressing and grooming; does not drive because it is unsafe for her to do so; and no longer goes out walking by herself - the last time she did she got lost. It is your opinion it would be unsafe to leave her alone.
105 Your work hours you said are flexible. You generally work Monday to Friday and the occasional Saturday morning. Although your wife used to work in your business and attends work with you each day, you said you did not give her anything of a challenging nature. Your daughters you said provide some assistance in the care of their mother. You also receive assistance from your wife’s siblings.
106 Asked by Mr Shaw how well you think your wife would manage if you were not around, you stated that she would probably be distraught, she could not manage on her own, but “everyone would have to pick up the pieces". Your daughters would fill the void and do whatever needs to be done.
Submissions
107 I turn now to the submissions made by your counsel, Mr Shaw. In respect to each of you, Mr Shaw relied largely on the following matters:
(i) Delay;
(ii) Your pleas of guilty;
(iii) The impact of adverse publicity;
(iv) In your case, Mr Napoli, your loss of career, and in your case, Mr Squillacioti, the adverse impact on your business;
(v) Family hardship and mercy;
(vi) The fact that pecuniary penalty orders are to be made and that payments have already been made;
(vii) The impact of significant assets having been restrained;
(viii) Previous good character;
(ix) Remorse; and
(x) Prospects of rehabilitation.
108 Mr Shaw submitted delay was a powerful mitigating factor in both your cases. He submitted you both became aware of the IBAC investigation in late 2013. You were not charged until late December 2016. A contested committal hearing, involving only you, Mr Napoli, was held between 24 May 2018 and
31 May 2018. On 19 June 2018 you were both committed for trial. There was further disclosure of prosecution material throughout 2019. A pre-trial hearing occurred on 23 March 2020. On 19 May 2020 you were both arraigned and pleaded guilty. The plea hearing commenced on 6 August 2020 and extended over a number of days.
109 Mr Shaw submitted a good deal of the delay occurred because of discussions with the prosecution as to the amount of money defrauded, and the prosecution changing its case in significant respects at key times during the process, particularly as to whether or not any work was in fact done.
110 Mr Shaw accepted the investigation was complex and time consuming. He also accepted that delay was occasioned by steps you each took to cover your criminal conduct. The real delay he complains of is that occurring from the filing of the charges on 28 December 2016 and the commencement of the plea hearing in August 2020. He said the blame for that delay was entirely the fault of the prosecution because of the charges laid, lack of disclosure and a change in prosecution allegations.
111 Mr Grant accepted the IBAC investigation spanned a substantial period and there was delay in the progress of the criminal proceedings. He submitted such delay is not unusual in cases of complexity such as yours. Mr Grant submitted the investigation was rendered more difficult by reason of you both seeking to conceal your criminal conduct.
112 Your intention to plead guilty was notified on 4 May 2020. Your pleas were entered on 19 May 2020. Mr Shaw submitted your pleas of guilty were entered at an early stage following the lengthy negotiations, particularly as to the way in which the prosecution case was being put.
113 Mr Shaw further submitted your guilty pleas were indicative of your remorse, willingness to facilitate the course of justice and are of significant utilitarian benefit. A trial he said would have taken some six to eight weeks and would have involved calling many witnesses. The pleas, he submitted, take on the added utilitarian benefit given the long delays caused to trial listings by reason of the COVID-19 pandemic.
114 In your case, Mr Napoli, Mr Shaw also relied upon your offer to assist in the investigation of Mr Rosewarne, the then Department Secretary, as a further indicator of your willingness to facilitate the course of justice. This offer of assistance was not accepted.
115 Mr Shaw submitted you have both expressed genuine remorse. Mr Napoli, you gave evidence of your remorse. Your remorse is also evident in the references tendered on your behalf and your consent to and payment of the pecuniary penalty order.
116 Mr Shaw submitted your remorse, Mr Squillacioti, is also evident in the references tendered on your behalf and your consent to and payment of the pecuniary penalty order.
117 The actual payment of the orders was also relied on as demonstrating a willingness to facilitate the course of justice.
118 Mr Grant did not accept that your pleas of guilty were entered at the earliest opportunity. The charges, he said, resolved in May 2020 after a committal hearing which you contested,
Mr Napoli, and following an adjournment of the original trial date. Whilst there were earlier offers to plead guilty, it was not accepted that either of you offered to plead guilty on a similar basis to the pleas finally entered in May 2020. There was no offer to plead guilty to the charge of attempting to pervert the course of justice until May 2020. Mr Grant also submitted that the pleas of guilty were finally entered in respect of an overwhelming prosecution case supported by incriminatory recordings and email correspondence.
119 Mr Grant took issue with the submission that the prosecution had been “dragged kicking and screaming” to this resolution. The way the case is now put, he submitted, is how it has been put since October 2018.
120 It was accepted by Mr Grant that your pleas have utilitarian value and a trial would have been lengthy and complex.
121 Mr Shaw submitted that by reason of adverse publicity you have both suffered damage to your reputations, particularly you, Mr Napoli. It was submitted media reports of the amounts allegedly defrauded were grossly exaggerated. Media reporting at around the time of the IBAC hearings suggested that you, Mr Napoli, had run a $2.5 million fraud ring for the benefit of yourself and your relatives. At other times it was reported that you, Mr Napoli, were one of five persons facing charges over an alleged $6 million state schools rort. Mr Shaw submitted that you, Mr Napoli, had been humiliated by the reporting and had received threatening letters.
122 Exhibit D4 contains three examples of such adverse publicity. The articles in the main report on the findings of the IBAC inquiry into the fraud alleged to have been perpetrated against the Department. This adverse publicity, it was submitted, amounted to extra curial punishment.
123 Mr Grant submitted, in relation to the publicity, IBAC’s investigation was broader than your conduct, Mr Napoli, constituting the charges before the court. However, it was accepted the three articles in Exhibit D4 do suggest you were involved in a fraud on the Department at a greater level than the $500,000 agreed before me.
124 In July of this year, further submissions were received from your solicitor, Mr Napoli, in which it was submitted that a civil claim filed against you by the Department, seeking damages, and news of that claim, amounted to extra curial punishment. I heard further submissions this morning concerning this matter and will return to them later in my reasons.
125 As a result of your offending, Mr Napoli, you lost your employment with the Department. It was, however, acknowledged by Mr Shaw that it was your employment with the Department that enabled you to commit the offence in Charge 1. Mr Shaw properly referred to the case of Talia,[1] which he accepted did not greatly assist your position.
[1] R v Talia [2009] VSCA 260
126 Your prospects for future employment are also limited if you lose your accreditation as a certified public accountant and registered tax agent. Mr Shaw submitted it is likely you will lose your accreditation upon conviction. You have, in recent times, received correspondence from the Tax Agents’ Board concerning the withdrawal of your registration. Mr Shaw submitted your offending did not occur in the course of your accountancy business.
127 In your case, Mr Squillacioti, whilst you have not lost your employment in the family business, it was submitted by
Mr Shaw the business itself suffered greatly as a result of your offending.
128 He submitted that as a result of the adverse publicity your business lost customers, including a contract with the RACV. The loss was not quantified. No evidence was called on the issue. Mr Shaw added that the adverse publicity impacted on your reputation as a business person in the community.
129 Mr Grant disputed that your loss of employment with the Department, Mr Napoli, should be considered extra curial punishment. He submitted your offending, particularly in relation to Charge 1, is directly related to your employment. If it is to be taken into account, he submitted, it should be in a modest way only.
130 With regard to your loss of ability to work as a tax agent
Mr Grant conceded there should be a modest reduction in penalty on that account.
131 Regarding your claimed loss of business, Mr Squillacioti, Mr Grant submitted I would need to be satisfied on the basis of evidence of any financial loss. He also submitted you were using your business to commit the offences. That is, the companies you were involved in enabled you to submit the false invoices relevant to Charge 1. At best, he submitted, it should receive only minimal weight.
132 Mr Shaw next submitted that should you both be sentenced to a term of imprisonment it would cause exceptional family hardship calling for the exercise of mercy in the sentence to be imposed. Mr Shaw relied on the decisions of Markovic[2] and Borg.[3]
[2] Markovic v R (2010) 30 VR 589
[3] Borg v R [2020] VSCA 191
133 In your case, Mr Napoli, Mr Shaw relied on your role as your mother’s carer. He submitted other members of your family have their own responsibilities. Whilst it would not be impossible for other arrangements to be made, this it was said, would be extremely difficult. Mr Shaw submitted the hardship is “exceptional” in the sense that it is not a common thing for a person to face sentence when they are the primary carer for a 93-year-old woman who is nearly blind.
134 In your case, Mr Squillacioti, Mr Shaw ultimately accepted your position was different because it was clear that should you be incarcerated your daughters would be able to help.
135 In both your cases, it was submitted a term of imprisonment would be rendered more onerous in the knowledge of your mother’s difficulties in your case, Mr Napoli, and in your case, Mr Squillacioti, your wife’s Alzheimer's. It was submitted this knowledge would weigh heavily upon each of you.
136 Mr Grant accepted that sentencing you to a term of imprisonment would have a detrimental impact on both your family members. However, he disputed that your circumstances are exceptional as to warrant the exercise of mercy.
137 Mr Grant submitted in your case, Mr Napoli, that whilst it would be inconvenient, other members of your large family network can assist your mother. In your case, Mr Squillacioti, Mr Grant relied on the fact that your daughters will take on the responsibility for the care of their mother in the event you are unable.
138 It was accepted the state of your mother's health Mr Napoli, and of your wife’s health, Mr Squillacioti, and your inability to care for them, will be a matter that will weigh heavily on each of you.
139 The Court has recently been provided with further information as to the state of your wife’s condition, Mr Squillacioti. A letter from Dr Hanna dated 7 July 2021 reports that he has noticed a deterioration in your wife’s condition over the last few months and that her dementia is not improving. The letter was tendered and marked Exhibit D7.
140 The Director seeks pecuniary penalty orders against you,
Mr Napoli, in the sum of $95,000 and against you,
Mr Squillacioti, in the sum of $58,000.
141 As I have already mentioned, you have each consented to the making of the orders and you have both in fact already paid those amounts into the Department of Justice Fund. Mr Shaw relied on those payments in two ways. First, as demonstrating a willingness to facilitate the course of justice and secondly, as warranting mitigation pursuant to s5(2A)(c) of the Sentencing Act 1991.
142 Mr Shaw pointed to the fact that paragraphs 91 to 93 of the prosecution opening used the word “benefit” to describe the amounts of $95,000 and $58,000 received. He submitted the defence agreed to the use of that word in the opening for the reason that it is a benefit and not necessarily a profit that was received by the two of you. Accordingly, he submitted, the fact a Pecuniary Penalty Order is to be made and you have already paid the amounts sought under the Order mitigates the sentence to be imposed.
143 Mr Grant submitted the expression used in the opening was “personal benefit” and disputed that those sums did not reflect a profit. He relied on the decisions in R v El Cheikh[4] and R v McLeod.[5]
[4] [2004] VSCA 146.
[5] [2007] VSCA 183.
144 Mr Grant submitted it was accepted by you, Mr Napoli, you were not entitled to any of the $95,000 you received. Accordingly, he submitted, every part of that sum was a personal benefit to you in the form of a profit.
145 In your case, Mr Squillacioti, Mr Grant submitted I would need to be satisfied on the basis of cogent evidence that the $58,000 personal benefit was to some substantial extent funded by you.
146 In March 2017 there was a restraining order against you,
Mr Napoli, in relation to property owned by you and the entirety of your superannuation fund. In August 2018 and November 2018 there were variations to those orders.
147 Mr Shaw submitted the amount restrained was in excess of that required. He said this placed an imposition on you,
Mr Napoli, as you had need to access your superannuation but were precluded from doing so for some time. Mr Shaw stated it was only through the intervention of your solicitor that the Confiscation Department eventually saw fit to reduce the amount restrained. Reliance was placed on this imposition in mitigation of penalty.
148 The next matter relied upon by Mr Shaw in respect of you both is your good character. Neither of you have any previous convictions or findings of guilt or any subsequent convictions or findings of guilt. Your character is also attested to in the character references tendered on your behalf.
149 Mr Shaw submitted that you both have excellent prospects of rehabilitation and you are unlikely to re-offend. Mr Grant accepted you both are unlikely to offend in a similar manner in the future.
150 As to the issue of sentence, Mr Shaw submitted that having regard to all of the matters pleaded in mitigation, it was appropriate in both your cases that you be sentenced to a Community Correction Order. He relied in particular to the decision of Boulton[6] and referred to a number of sentencing cases in support of his submission.[7] I have had regard to each of the cases relied upon by Mr Shaw.
[6] Boulton v The Queen (2014) 46 VR 308
[7] DPP v Goodland [2016] VCC 1694, DPP v Haywood [2016] VCC 123, DPP v McMahon [2017] VCC 734, DPP v Feltham [2018] VCC 1187, DPP v Yildirim [2016] VCC 1742, DPP v Roach [2017] VCC 1626. Reliance was also placed on the unpublished decision of Judge Marich in DPP v Fraser.
151 I have already referred, in part, to the prosecution’s submissions in response to specific matters raised by
Mr Shaw. The prosecution submissions are more fully set out in Exhibit P2, the outline of written submissions.
152 Before me Mr Grant submitted that an important distinguishing feature of your case compared to some of the sentencing cases relied on by Mr Shaw is that you each face two serious charges. It is also significant, he submitted, that Charge 2 is a rolled-up charge intended to represent a number of discrete acts on each of your parts. Mr Grant submitted there needs to be appropriate cumulation of penalty to reflect the seriousness of both charges.
153 Mr Grant submitted that for offending of the kind in charges 1 and 2, general deterrence, denunciation and just punishment are significant sentencing considerations. He relied on the decision of Dyason[8] and the other cases referred to at footnote 7 of Exhibit P2. It is clear from the decision in Dyason that the principles referred to in DPP v Bulfin[9] and DPP v Gregory[10] remain relevant to sentencing.[11]
[8] Dyason v The Queen [2015] VSCA 120
[9] [1998] 4 VR 114
[10] [2011] 34 VR 1
[11] Dyason at [40]
154 On the question of parity, Mr Grant submitted that as between you and Mr Squillacioti, yours, Mr Napoli, was the more serious offending. The sentences imposed on the other accused, it was submitted, are clearly distinguishable by the scope of their involvement and their assistance to the authorities.
155 Mr Giulieri pleaded guilty to a charge of conspiracy to attempt to pervert the course of justice and a summary offence of wilfully making a statement which is false or misleading to IBAC. He was sentenced to a two-year adjourned undertaking. He gave an undertaking to give evidence against any co-accused. Mr Calleja pleaded guilty to seven charges of obtaining property by deception, one charge of knowingly dealing with proceeds of crime and one charge of attempting to pervert the course of justice. On 7 September 2017 he was sentenced to a two-year Community Correction Order. He gave an undertaking to give evidence and did so at your committal hearing, Mr Napoli.
156 Mr Grant also relied on a number of sentencing decisions. I have had regard to each of the decisions on which reliance was placed.[12]
Sentencing Considerations
Nature and Gravity of Offences
[12] Ooi v R [2018] VSCA 78; Wells v The Queen [2018] VSCA 79; DPP v Bulfin [1998] 4 VR 114 ; Zaia v R [2020] VSCA 9; Peters v The Queen (1998) 192 CLR 493; DPP v Oksuz [2015] 47 VR 731; Pantazisv The Queen [2013] VSCA 59;
157 In my opinion, you have both engaged in serious offending warranting a term of imprisonment. I have come to this conclusion mindful of the principle of parsimony. I consider that the purposes for which the sentences are to be imposed cannot be met with the making of Community Correction Orders. In each of your cases your offending is too serious and the need, in particular, for general deterrence, denunciation and just punishment cannot be achieved with the making of a Community Correction Order or even a combination order pursuant to s.44 of the Sentencing Act 1991.
158 The offence of conspiracy to defraud carries a maximum penalty of 15 years’ imprisonment. The offence of conspiracy to attempt to pervert the course of justice carries a maximum penalty of 25 years’ imprisonment. The maximum penalties are relevant to sentencing and reflect the seriousness of the crimes you each committed
159 The conspiracy to defraud was well planned and sophisticated. It involved a complex system of utilising companies and invoicing systems to conceal, Mr Napoli, your involvement and connection to the entities engaged to perform the work for the Department. Some 72 false invoices were submitted to the Department and schools for payment.
160 I have also had regard to the period over which you both offended. In the case of the conspiracy to defraud, almost seven years, and over ten months in respect to the conspiracy to pervert the course of justice.
161 Your offending did not stop voluntarily but only when you came under the scrutiny of investigators.
162 The amount of money the Department paid on the false invoices relevant to charge 1 was a little over $500,000.
Mr Shaw submitted that the Department received work to an equivalent amount of $347,000. This submission is based on the amount of $500,000 less the benefit to you, Mr Napoli, of $95,000 and to you, Mr Squillacioti, of $58,000. This in my opinion is an overly simplistic calculation and does not allow for the fact that some of the work invoiced was not in fact done. I do not know how much work the Department paid for that was not in fact performed. I will sentence on the basis that it was a relatively small amount.
163 Although emphasis was placed by your counsel on the figures of $95,000 and $58,000, the gravity of your offending is to be considered in light of the fact that the Department was defrauded an amount in excess of $500,000.
164 Moreover, as was made clear in Ooi v R,[13] measuring loss in dollar terms only proceeds from too narrow a conception of loss. The policies and rules in place to prevent patronage and to ensure a competitive environment were subverted by your offending. You both corrupted the procurement processes designed ultimately to protect the revenue. You undermined the trust that citizens of this State place in public servants to expend taxpayer funds honestly. Honest persons who tendered for government work missed out on obtaining work through your corruption of the process.
[13] Ooi op cit. [59] – [63]
165 I do not accept the submission of your counsel, Mr Napoli, that you directed work to your family members because it was efficient and provided value for money.
166 I find you each were motivated by financial gain. It was not put that either of you had a need for the money defrauded. In your case, Mr Napoli, you were well remunerated by the very Department you defrauded. Whilst you both received benefits, the fraud also resulted in benefits to your associates and relatives.
167 I consider in each of your cases your moral culpability was high. I do not consider the submission, Mr Napoli, that you had a sense of entitlement arising from the culture in which you worked in any way mitigates the sentence to be imposed. You well knew that what you were doing was wrong.
168 Mr Napoli, your offending is even more serious given it involved an egregious breach of the trust reposed in you by the Department.
169 As submitted by Mr Grant, you were a long serving and high-ranking public servant. In your position you were aware of internal departmental policies and procedures, including the Banker School system. You exploited that knowledge to further the conspiracy to defraud.
170 Your offending in respect of the second charge on your respective indictments is also serious. The maximum penalty of 25 years speaks with unmistakable clarity the seriousness with which Parliament views that offending. It is offending, as has been said, that “strikes at the heart of the administration of justice.”[14]
[14] DPP v Oksuz [2015] VSCA 316 [95]
171 Your conduct in relation to this second charge was brazen and sustained. You went to great lengths, particularly you,
Mr Napoli, to conceal your criminal conduct and hinder the IBAC investigation. This included you, Mr Napoli, importuning your son, against his better instincts, to lie on your behalf to investigators. You both rehearsed with others false stories to be told to investigators and hid or destroyed evidence that might implicate you both. Little was said to mitigate this offending.
172 I accept the prosecution submission that the commission of these offences represents serious examples of serious offending.
Pleas of Guilty – Remorse – Prospects of Rehabilitation
173 You have each pleaded guilty and I accept the submission of your counsel that there are significant utilitarian benefits that attach to your pleas of guilty, particularly in times of the COVID-19 pandemic. Your pleas of guilty represent an acknowledgement by each of you of your responsibility for the offending and you have each facilitated the course of justice. I do not, however, accept that your pleas of guilty were entered at an early stage.
174 Whilst there were certain complexities in assessing the extent of the conspiracy to defraud that involved lengthy negotiations, the earlier rejected plea offers were made in respect of different offences, in respect to different sums of money, and that the charges be heard summarily. There was no plea offer in respect of the second charge, until not long before it was entered in May 2020.
175 I accept also that you are both now remorseful for your offending. Your guilty pleas are some evidence of your remorse. Your remorse is also evident in the references tendered, the voluntary payment of the pecuniary penalty orders and in your evidence, Mr Napoli. Although in your evidence, Mr Napoli, you sought to shift some blame for your offending on the workplace culture, I will nevertheless sentence on the basis you are genuinely remorseful for your conduct.
176 In both your cases, your pleas of guilty, remorse, and previous good character are matters that reflect well on your prospects of rehabilitation. Added to those prospects is that neither of you have been in any further trouble since the commission of the offences before me. I find you both have very good prospects of rehabilitation. I consider there is little risk either of you will reoffend upon your release.
Loss of Career
177 In your case, Mr Napoli, you have lost your career with the Department. Given you offended against it over many years, using your trusted position to do so, I do not consider this loss of employment should provide any mitigation in penalty. I accept, however, that you will lose your registration as a tax agent as a result of your offending and that this provides for some mitigation in penalty. In your case, Mr Squillacioti, you used your companies in order to commit the offences. Furthermore, the extent of your loss has not been quantified or proven beyond the assertions of your counsel. I am unable to be satisfied on the balance of probabilities this consideration should mitigate your penalty.
Parity
178 On the issue of parity, I find you, Mr Napoli, are the more culpable offender. Your offending is objectively more serious than Mr Squillacioti’s. The recitation of the facts in Exhibit P1 well bears this out. It was accepted by your counsel that you were the “prime mover” behind the conspiracy to defraud. You, Mr Squillacioti, were invited to join the conspiracy and you did, despite knowing it was wrong. Your conduct, Mr Napoli, in respect of the second charge is also objectively more serious than that of Mr Squillacioti. Whilst both your conduct was reprehensible, yours, Mr Napoli, was even more so given your attempts to have your son lie to IBAC investigators in order to protect you. You thereby exposed him to criminal charges.
179 You both engaged in conduct that distinguishes your cases from those of Calleja and Giulieri. The sentences imposed on them are clearly distinguishable by the nature and scope of their involvement and their assistance to the authorities.
Pecuniary Penalty Order
180 Under s.5(2A)(c) Sentencing Act 1991 I may have regard to a Pecuniary Penalty Order made under the Confiscation Act 1997 to the extent to which it relates to benefits in excess of profits derived from the commission of the offence.
181 In El Cheikh, Vincent JA stated:
'It is clear enough and certainly since the Confiscation Act was amended in 1998 that the word "benefits" in this provision refers to any money actually received as a result of the commission of the offence regardless of the expenditures incurred in deriving it, while "profits" refers to that amount less such expenses concerned in deriving it.’[15]
[15] El Cheikh op. cit at [10]
182 Section 5(2A)(c) provides for a factor that is mitigatory. The onus of proof in this regard lies with the offender.[16]
[16] Ibid., per Batt JA at [16]. See also R v McLeod [2007] VSCA 183 [29]
183 In El Cheikh Batt JA made it clear that evidence is required “as to ‘the extent’ to which the benefits to which the pecuniary penalty order related exceeded the profits derived from the commission of the offence.”[17]
[17] Ibid ., at [16]
184 In each of your cases the amount of the benefit is agreed. In issue, however, is what that figure truly represents. The fact that the prosecution opening referred to the amounts of $95,000 and $58,000 as a “personal benefit” you each received does not settle the issue, in my opinion. Section 5(2A)(c) clearly places the onus on the defence to satisfy the court of the mitigatory effect of a Pecuniary Penalty Order. No evidence has been presented by either of you as to expenses, if any, incurred in obtaining your respective benefits. I am not able to speculate that there were expenses, or if so, what they were.
185 In the circumstances, I am not able to find on balance that the benefit you each received is not a profit from your illegal activity. Accordingly, I am not prepared to find that the payment of the Pecuniary Penalty Order in each of your cases mitigates the sentence pursuant to s 5(2A)(c) as contended by your counsel. Some allowance will be made for the fact that the early voluntary payment of the Pecuniary Penalty Orders to be made has facilitated the course of justice and reflects some degree of remorse.
Impact of Restraining Orders
186 I turn now to the submission concerning the impact of the restraining order upon you, Mr Napoli. As already mentioned, the amount restrained was in excess of that required and, it was submitted, this placed an imposition on you as you had need to access your superannuation but were precluded from doing so for some time. The evidence as to what impact this had on you is thin, but I am prepared to accept that the Department’s excessive restraint, warranting the intervention of your solicitor, has some moderating effect on the penalty to be imposed.
Extra Curial Punishment - Publicity
187 In R v Pilarinos[18] the Court considered it appropriate to have regard to “continuing extensive and sensationalist publicity.”[19] You are each entitled, particularly you Mr Napoli, to have that matter taken into account in the determination of the appropriate sentence. I accept Mr Shaw’s submission that the publicity concerning these charges, at times exaggerated, over a lengthy period, amounts to extra curial punishment.
[18] [2001] VSCA 9
[19] Ibid., at [11]
188 I do not consider that the potential civil claim is tantamount to forfeiture as was suggested by your solicitor in written correspondence to court. This was not pressed this morning by Dr Boas. With respect to media attention concerning the claim, Ms Hamill this morning tendered a report from The Age newspaper dated 19 April 2021, which has been marked Exhibit P3.
189 I have read that article and have had regard to its contents. As I understand the defence position, the civil claim against you Mr Napoli, and the associated media reporting, are relied on as matters that have caused additional stress to you, are unresolved, and until resolved will add to the burden of imprisonment. That is, they are part of the extra curial punishment that you will endure as a result of these charges.
190 I will take this additional burden into account, but I accept the submission of Ms Hamill that without evidence as to the psychological impact the civil claim and the recent reporting of that claim has had upon you, any weight to be given should be limited.
Family Hardship
191 In Markovic[20] the Court confirmed the common law principle that “an offender is entitled to call for an exercise of mercy on the ground of family hardship, but confines the exercise of that discretion to a case where the circumstances are shown to be exceptional.”[21] I am not able to find in either of your cases exceptional circumstances that would justify an exercise of mercy on the ground of family hardship. Each of your family circumstances, which I have already detailed, are not exceptional in my opinion.
[20] Markovic op. cit.,
[21] Ibid., at [15]
192 To the extent that it was submitted that others could not fill the role you play in the care for your mother, Mr Napoli, I am not persuaded that is the case. In your case, Mr Squillacioti, you accepted your daughters can care for your wife. It has not been suggested that the more recent deterioration in your wife’s health changes the evidence that others are able to care for her in the event of your incarceration.
193 Mr Shaw also relied on Borg v R[22] but in my opinion that case is readily distinguishable, having regard to the fact the appellant in that case was breastfeeding her infant child and her other child, had she been sentenced to a term of imprisonment, would have been exposed to the influence of her abusive husband.
[22] Borg op. cit.,
194 However, as was recognised in Markovic, the effect on the offender of hardship caused to family members by the offender’s imprisonment raises different considerations. An offender’s anguish at being unable to care for a family member can properly be taken into account as a mitigating factor.[23] In my opinion, the concern you, Mr Napoli, have for your elderly mother’s welfare, and you, Mr Squillacioti, for your wife’s welfare, including her deteriorating condition, are matters I consider will make your experience of gaol more onerous, and operate to mitigate sentence.
Delay
[23] Markovic op. cit., at [20]
195 I accept there has been significant delay since the charges were laid and your ultimate sentencing.
196 I am prepared to accept you have both lived with the uncertainty of your fate hanging over you and this has caused you additional anxiety. I also accept that since being charged with these offences you have not been involved in any further offending, and thus the process of your rehabilitation has already commenced. These factors will moderate each of your sentences.
Offer of Assistance
197 With regard to your offer Mr Napoli to assist the authorities in respect of Mr Rosewarne, Mr Grant informed me the Director does not intend to take up your offer of assistance. However, I propose to allow some moderation in your sentence on account of this offer. Sentencing principles make it clear that it is in the public interest that offenders provide assistance to law enforcement authorities and this should be reflected in the moderation of the sentence to be imposed. I was not informed in any detail of what assistance you could provide, nor was any evidence called on the issue. The degree of moderation in sentence in the circumstances will not be significant.
Deterrence, Denunciation and Just Punishment
198 I accept the prosecution submissions that the principles of general deterrence, denunciation and just punishment are significant considerations in the sentence to be imposed in both your cases. Others who are minded to offend in the way in which each of you offended must understand they risk condign punishment. Furthermore, your conduct is properly to be denounced and condemned. There is little need for specific deterrence given my assessment of your prospects for rehabilitation and the absence of any further offending.
199 In determining what is a just punishment in each of your cases I have also had regard to current sentencing practice and will apply the principle of totality in determining the level of cumulation. I also take into account the fact that you will be subject, in the foreseeable future, to the restrictions that operate within the prison system as a result of the COVID-19 pandemic, including a 14 day quarantine period and restrictions on personal visits.
Sentence
Calcedonio Napoli
200 I turn now to sentence. Please stand, Mr Napoli.
201 On Charge 1 you are convicted and sentenced to a term of imprisonment of two years and eight months.
202 On Charge 2, a rolled-up charge, you are convicted and sentenced to a term of imprisonment of two years and four months.
203 I direct that 14 months of the sentence imposed on Charge 2 be served cumulatively on the sentence imposed on Charge 1. This makes a total effective sentence of 3 years and 10 months’ imprisonment.
204 I propose to fix a relatively low non–parole period given you have never before been in trouble with the law; that this will be your first time in custody; your very good prospects of rehabilitation and the fact there is little need for specific deterrence. Each of those factors tend to suggest that the need to protect the community from you is low.
205 Having regard to the circumstances of your case I consider the minimum period justice requires you to serve is one of 23 months’ imprisonment. You may be seated.
Carlo Squillacioti
206 Please stand, Mr Squillacioti.
207 On Charge 1 you are convicted and sentenced to a term of imprisonment of one year and eight months.
208 On Charge 2, a rolled-up charge, you are convicted and sentenced to a term of imprisonment of one year and five months.
209 I direct that nine months of the sentence imposed on Charge 2 be served cumulatively on the sentence imposed on Charge 1.
210 This makes a total effective sentence of two years and five months’ imprisonment.
211 For similar reasons to those applicable to Mr Napoli, I will set a relatively low non-parole period. In your case, you must serve a period of 15 months’ imprisonment before becoming eligible for parole. You may be seated.
212 Had it not been for your pleas of guilty I would have sentenced you, Mr Napoli, to a term of imprisonment of four years and
10 months' imprisonment with a non-parole period of three years and three months.
213 I would have sentenced you, Mr Squillacioti, to a term of imprisonment of three years and two months with a non-parole period of two years.
Orders Sought
214 I make the pecuniary penalty orders sought in respect of each of the defendants. Are there any other matters, Ms Hamill?
215 MS HAMILL: No, Your Honour.
216 DR BOAS: No, Your Honour.
217 HIS HONOUR: Thank you, you may remove Mr Napoli and Mr Squillacioti, but just before you do I want to express my thanks to all counsel involved in this difficult matter.
- - -
2
22
0