DPP v Werden
[2006] VSC 397
•27 October 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
CRIMINAL DIVISION
No. 1476 of 2006
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| GABRIEL WERDEN |
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JUDGE: | TEAGUE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3, 4 July and 23 October 2006 | |
DATE OF SENTENCE: | 27 October 2006 | |
CASE MAY BE CITED AS: | DPP v Werden | |
MEDIUM NEUTRAL CITATION: | [2006] VSC 397 | |
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Criminal Law – Sentence – Solicitor in sole practice in Melbourne – Trust account deficiency of over $1 million – Nine counts of theft over a period of 10 months in 1997 and 1998 – Three counts of obtaining financial advantage by deception in 2000 - Pleas of guilty – Head sentence of 5 years and 10 months – non-parole period of 3 years and 4 months
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Ms M. Williams S.C. | Office of Public Prosecutions |
| For the Accused | Mr M. Regan | Victoria Legal Aid |
HIS HONOUR:
Gabriel Werden, you have pleaded guilty to thirteen offences. One count is of having a deficiency in your trust account as a solicitor contrary to s.188 of the Legal Practice Act 1996. There are nine counts of theft. There are three counts of obtaining financial advantage by deception. The maximum penalties for each of having a trust account deficiency, theft and obtaining financial advantage by deception are respectively 15 years, 10 years and 10 years imprisonment. For reasons that I will outline later, there is a substituted maximum of 20 years imprisonment for obtaining financial advantage by deception in your case. That is so, because under the Sentencing Act 1991, you must be declared by me to be, and I do declare that you are, a continuing criminal enterprise offender.
The deficiency in your trust account as a lawyer was $1,104,729.11 as at 25 March 1998. That figure was the total of deficiencies in the individual accounts of the nine clients from whom money was stolen by you. The amounts of the thefts ranged from the highest at $550,000 on count 6 to the lowest of $3,000 on count 10.
The thefts took place between May 1997 and March 1998. During that period you were conducting a legal practice in Melbourne. In the course of that practice, you received money for a variety of purposes. Those purposes included: investment on first mortgage; short term investment; payment towards the purchase of property; payment towards the purchase of a business by the client; and payment to settle an outstanding obligation of the client. As a legal practitioner, your obligation was clear. It was to pay the money received by you into the trust account of the practice and then to pay out money from the trust account only as per your instructions. As to some of the nine clients to whom the counts to which you have pleaded guilty relate, you paid the money received into an account other than the trust account of the practice. As to all nine clients, you did not apply the money as instructed by the client. Instead, you applied the money to your own benefit. Indeed, as to five of the nine clients, it is possible to trace how the money was transferred without delay into an account used by you at one of the casinos at which you gambled. You used accounts at the Adelaide Casino in May 1997, the Crown Casino in June and November 1997, and the Sydney Casino in March 1998.
I will shortly provide a broader chronological listing of other important events. Before doing so, I turn to the last three counts to which you have pleaded guilty. You have opted to have these matters dealt with in Victoria, although the deceptive conduct by you occurred in New South Wales. While there in October and November 2000, you arranged for certain funds to be moved into an account in New South Wales from which you could withdraw money. That was done in three stages. You did so first as to $75,000, and then as to $65,000 and finally as to $62,500. The account from which you withdrew the money was in the name of a person with the name of Johnston from Western Australia. The money was transferred into the Johnston account by a Victorian company which had an investment account in the name of a person with the name of Henning. The transfer was made after you had provided to the company an authority, not in fact but ostensibly signed by Henning, to pay money from the Henning account into the Johnston account.
The offences to which you have pleaded guilty need to be understood in the context of your addiction to gambling. Your roots are in Melbourne, but your gambling and your criminal offending have taken place in several Australian states. For the purpose of applying the sentencing principle of totality, it is necessary to provide some details of what is quite a complex chronology. Presenting it has ultimately been possible through a combination of documents received from interstate authorities, some psychological reports and information provided orally on the hearing of the plea by Mr Regan, who was representing you.
You are now 40 years of age, having been born in January 1966. You come from a law-abiding family with a sister and two brothers. Your parents came to Australia from Lebanon. Your father started out here as a taxi driver. Your parents acquired a small suburban supermarket, then a much larger one, before moving into property investment. Your childhood was marred to a degree by some internal family difficulties. You were educated at private schools before studying at the University of Melbourne where you obtained Law and Commerce degrees. After a period as an employed solicitor following your admission to practice in 1990, you opened your own practice as Werdens and worked as a sole practitioner out of an office in the City of Melbourne. In the early stages, you worked hard, including doing considerable work pro bono. You were married in 1993. Some time later, that marriage ended in divorce linked to your gambling, to your gambling-induced criminal conduct and to your flight from taking responsibility for the latter.
It seems that your move into gambling started in 1994 when a client took you to the original Crown casino. By 1995, you had become an addict. You revelled in the life of the big-time gambler, being fêted at casinos wherever. At times, you borrowed at high rates from loan sharks who frequented the Crown casino. That carried high risks. You chose to run them. Your first brush with trouble arose in late 1996 out of events at Jupiters Casino in Broadbeach, Queensland. By that time, you were treated as a regular player at the casino. In December 1996, you converted into gambling chips a bank cheque made out to you for nearly $500,000. Subequently, the bank cheque was not honoured. You were charged with fraud. In January 1997, you were arrested in Melbourne and extradited to Queensland. You were then granted bail, which was not later answered. Eight years were to pass before you were extradited to Queensland to be dealt with as to that matter. I will return to it.
Your gambling addiction blinded you to the risks that you were running. In 1997, you continued to gamble. You were not deterred by the Queensland events or by family pressure or by the killing in that year of a close gambling associate who also owed money to the loan sharks whom you used. Nor were you deterred by an investigation in Melbourne into the trust account of your legal practice which followed publicity as to the Queensland events. That ultimately led to your being reprimanded in early March 1998 by the Legal Professional Tribunal. By that time, your position as a lawyer was untenable, although the Tribunal would not have been aware of that. Mr Regan told me of your estimates of the millions of dollars that you gambled between 1994 and 1998. During that period, you obviously spent significant time in casinos in several Australian states. I have earlier referred to the money taken from clients and promptly transferred to accounts in casinos in Melbourne, Adelaide and Sydney in 1997 and 1998.
By March 1998, your gambling was clearly out of control. Shortly after the series of thefts from clients in February and March 1998, you left Victoria. You left in the lurch, your clients, your wife and your parents. Neither then, nor later, did you provide any help in sorting out the mess that you had left. In comparable circumstances, some other lawyers have relied in mitigation on their willingness to help their former clients, the police and the Law Institute, to appreciate how moneys were misapplied and how the position as to compensation might quickly be reviewed. You cannot do so.
You chose to live in Western Australia. You kept out of trouble, but only it seems for a matter of weeks. Between June and August 1998 you had, not clients, but a different kind of target for activities that led to your appearing on fraud charges in the District Court in Western Australia in December 1998. You used a variety of names to obtain, or to seek to obtain, money that you had no right to. At that hearing in December 1998, you were sentenced to imprisonment on those fraud charges. You served 15 months and some days in prison. In March 2000, you were released on parole in Western Australia. Shortly after release, you breached that parole. When police sought to arrest you, you managed to avoid being taken into custody. Parole was cancelled in May 2000. You have not returned to Western Australia. I am informed that the outstanding period is calculated at 913 days. That means that you potentially could serve further time in prison in Western Australia.
From Western Australia, you moved to New South Wales. There, still in the year 2000, you used false identity papers to obtain a passport. For what you did then and for later passport offences, you were to be sentenced to prison in New South Wales four years later. In mid-2000, you used a false passport to leave Australia. Later in the year 2000, you returned to Sydney. On your return, you arranged to obtain yet another false passport. In October and November 2000, you committed the deception offences for which you are now to be sentenced by me. You were arrested in Sydney as to those deception offences. When that occurred, you produced false identity papers. Shortly after that, you escaped from police custody. You again left Australia. This time it appears that you moved to Lebanon. It seems that there, in the ensuing period of just over three years, you taught English and engaged in property work. While you were away, an application was made to this court to have you struck off as a lawyer. On 26 April 2002, an order acordingly was made by Beach J. It seems that you did not remain at all times in Lebanon. In 2003, you came under notice in New Zealand. No details of how or why are before the Court.
In April 2004, you chose to come back to Australia. When the flight arrived in Sydney, you were arrested. In that month, you were brought before the Central Local Court in Botany Bay in Sydney to answer charges as to passport offences. You were sentenced to prison effectively for a non-parole period of twelve months, which you served in New South Wales between April 2004 and April 2005. In April 2005, it was ordered that you be extradited from New South Wales to Queensland. Because there is a period of six months that you were not required to serve at that time, you potentially could be required to serve that time in a New South Wales prison in the future.
On 22 August 2005, in Queensland, after four months on remand there, you were convicted of a forgery offence which was committed in December 1996. I have earlier adverted to the events leading to that offence. You were sentenced to prison for 2 years and 6 months. The period of imprisonment was suspended for five years. You potentially could be required to serve more time in a Queensland prison.
On 25 August 2005, you were extradited from Queensland to Victoria. Since then you have been held on remand, waiting to be dealt with as to the offences for which you are now to be sentenced. I noted earlier, as to the last three counts, that you might have chosen to have them dealt with, not in Victoria, but in New South Wales, and that you have opted co-operatively to have them dealt with now. That is a factor to be weighed in your favour.
Denunciation and general deterrence must be foremost in my attention when sentencing you. Save for the passport offences, your offences, which I have just summarised, occurred over a period of about four years, starting in late 1996 in Queensland and continuing until late 2000. In terms of relative seriousness, it is my assessment that your failure to honour your obligations as a lawyer rate above all the others. You stole over a million dollars from people who placed their trust in you. You grossly breached that trust. Not all of your clients were able to recover what they lost or part of what they lost from the Fidelity Fund. I have not been called on to sign any order for compensation as to the thefts, but I have been asked to sign one order for compensation as to the 2000 offences. The signing of that order was not opposed on your behalf, and I have signed the order.
I have read closely the reports of two psychologists who have examined you. They are Mr Beaton who saw you in 1998, and Mr Newton who saw you in 2006. You told Mr Beaton that you knew that you had to permanently stop the gambling. You told Mr Newton that your gambling did stop in 2001. You also told Mr Newton that all your offences arose out of gambling. You gambled away money belonging to others. More of such money was paid out to try to extricate yourself from the plight in which the gambling had left you. Your addiction to gambling does help to explain why you so wantonly and brazenly disregarded the rights of your clients and of the other victims whom you misled and deceived. It cannot be seen to excuse what you did. At most it can be seen to mildly reduce the importance of the element of general deterrence.
There are a number of mitigating factors for which I must allow. You have pleaded guilty to all of the offences for which I am sentencing you. You made clear your intention to do so at an early stage. You have given some assistance to the authorities. You have a supportive family, even though you have brought on them nothing but shame. I have noted approvingly, your having taken up the role of a Prisoner Listener. Further, I accept that you have shown some remorse, as reflected in the pleas of guilty and in some measure through what was said in the two psychological reports.
In formulating the sentence, I must apply a number of established sentencing principles as to cumulation, totality and otherwise. I must allow for relative seriousness, and adjust for matters as to each count such as the amounts and periods involved, and the extent of the breach of trust. I must also allow for the relative concentration of relatively similar offences in several Australia states, adjusting down from normal tariffs to an appropriate degree. Although I am obliged to declare you to be a “continuing criminal enterprise offender”, the resultant doubling of the maximum sentence will actually have no impact on the sentence that I will impose.
I must allow for the circumstance that you have served time in prison not only in Victoria, but also in Western Australia, New South Wales and Queensland. In total, you have so served a period approaching four years. As to the detail of the offences and the break-up of the time served, I need not repeat what was set out earlier. As to the time served in Victoria, I declare 431 days of pre-sentence detention and direct that that be entered in the records. As I have also noted earlier, you remain potentially liable to serve more time in prison in other states. You will have the option of making application after today to the relevant ministers in other states under the legislation corresponding to the Prisoner (Interstate Transfer) Act applicable in Victoria. These sentencing remarks will provide the basis for applying for an appropriate transfer aimed at removing the potential liability.
On Count 2, which I treat as the most serious, I impose a term of 3 years imprisonment. In what follows, I intend that, when stated to be cumulative, other periods will be cumulative on that period of 3 years imposed on Count 2. On Count 6, I impose a term of 1 year, cumulative as to 6 months. On Count 1, I impose a term of 6 months, cumulative as to 3 months. On each of the 6 counts 3, 4, 5, 7, 8, and 9, I impose a term of 4 months, cumulative as to 2 months, a total of 12 months. On Count 10, I impose a term of 2 months, cumulative as to 1 month. On Count 11, I impose a term of 1 year, cumulative as to 8 months. On each of the 2 counts 12 and 13, I impose a term of 1 year, cumulative as to 2 months, a total of 4 months. The head sentence is 5 years and 10 months. I fix a non-parole period of 3 years and 4 months.
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