Graziosi v Director of Public Prosecutions (Cth)
[2011] VSCA 418
•8 December 2011
SUPREME COURT OF VICTORIA
COURT OF APPEAL
| S APCR 2011 0034 |
| MAXWELL PAUL GRAZIOSI |
| v |
| DIRECTOR OF PUBLIC PROSECUTIONS (CTH) |
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JUDGES: | BUCHANAN and HARPER JJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 18 November 2011 | |
DATE OF JUDGMENT/ORDER: | 8 December 2011 | |
MEDIUM NEUTRAL CITATION: | [2011] VSCA 418 | |
JUDGMENT APPEALED FROM: | DPP(Cth) v Graziosi (Unreported, County Court of Victoria, Judge Murphy, 28 January 2011) | |
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CRIMINAL LAW – Sentence – Dishonestly obtaining a financial advantage by deception – Plea of guilty given reduced weight because it was made shortly before trial – Delay caused by negotiations between the parties – Mere involvement of innocent persons in a fraudulent scheme is not an aggravating factor unless harm is caused to those persons – Parity principle breached – Co-offender sentenced to lesser term – Co-offender co-operated with the authorities and suffered from depression but was more culpable.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr P G Priest QC with Mr T S Sowden | Gary Prince (East Prahran) |
| For the Respondent | Mr D J Lane | Director of Public Prosecutions (Cth) |
BUCHANAN JA:
The appellant was arraigned in the County Court and pleaded guilty to a presentment containing two counts of dishonestly obtaining a financial advantage by deception (counts 1 and 2) and one count of attempting to dishonestly obtain a financial advantage by deception (count 3). The offences were committed against the provisions of the Commonwealth Criminal Code.
After a plea, a total effective sentence of 4 years’ imprisonment with a minimum term of 30 months’ imprisonment was imposed upon the appellant.
The appellant and one Ashok Reddy caused a company to be incorporated to carry on the business of dealing in diesel fuel. The appellant and Reddy became the shareholders in the company.
Between November 2004 and May 2006 the company claimed to be operating a commercial business consisting of the sale and export of diesel fuel from Australia to Fiji. The business was largely a sham. False claims were submitted to the Australian Tax Office by the company for the purpose of dishonestly claiming diesel fuel excise rebates and GST refunds. The company purportedly purchased quantities of diesel fuel and claimed to be exporting this fuel to a company in Fiji, of which Reddy had been a director. The fuel was purportedly delivered to an address in Diggers Rest on which was located a large underground storage tank. In fact most of the fuel was delivered to a service station rather than being exported to Fiji as the company represented.
Count 1 was a rolled up count covering claims for diesel fuel rebates in the period from 3 March 2005 to 8 May 2006. The claims amounted to $1,125,241. Count 2 was a rolled up count covering claims for GST refunds in the period 10 March 2005 to 14 March 2006 amounting to $270,942. Count 3 was concerned with a claim in the sum of $30,828 on 7 April 2006, which the Australian Taxation office did not pay.
The sentencing judge found that in early March 2005 the appellant became aware that the business conducted by Reddy was bogus. The appellant learned that the company was not purchasing fuel, delivering it to the underground tank nor exporting it. The arrangement continued from that time with the appellant’s knowledge and co-operation.
The appellant is now 49 years’ old. He was born in Italy and came to Australia with his family when he was six years’ old. He completed Year 12 at secondary school and obtained employment as a clerk.
The appellant married in 1984 and for a short time operated a business with his wife. In 1985 he commenced to work in the transport business and in 1990 began his own transport business, which he conducted until 2001. Thereafter the appellant worked in the same industry as an employee.
The appellant and his wife have three children. His marriage fell into difficulty at about the time the offences were committed, when the appellant began a new relationship with a woman to whom he is now married.
In the course of the plea a report by a forensic psychologist was tendered. The psychologist apparently made a connection between the appellant’s marital difficulties and the offending in that the appellant was said to be taking risks in his extra-marital affair and also professional risks. The psychologist said that the appellant ‘was not focussed on the running of the company due to his own personal crises’. The psychologist also said that the chances of the appellant re-offending were minimal.
The sentencing judge appears to have accepted the psychologist’s opinion, for he restated it without qualification. His Honour said that he took into account a number of personal references to the appellant’s good character, his service in the community, strong family support and the fact that he had been successfully employed until shortly before being sentenced. His Honour also took into account the repayment by the appellant of an amount of $200,000 to the Commonwealth after confiscation orders were made in respect of the former matrimonial home and another property.
The appellant has been granted leave to appeal against sentence.
The first ground of appeal is:
The sentencing judge erred in –
(a) failing to give the applicant’s plea of guilty sufficient weight;
(b) characterising the applicant’s plea of guilty as ‘latish’; and
(c)according the applicant ‘lesser benefit’ for the plea of guilty due to the stage at which it was entered.
The sentencing judge dealt with the plea of guilty in the following terms:
I have taken into account your plea of guilty, as I must do. It is some evidence of contrition, as is your repayment of the $200,000. Your plea of guilty facilitates the course of justice. It involves you accepting responsibility for your conduct and avoids the need for what would have been a trial lasting some weeks.
Your plea, however, was latish. You chose, after Reddy agreed to plead guilty and provide a statement against you and give evidence against you, to contest the committal and plead not guilty at that time. The trial was set down as hearing in this Court on 19 November 2009, to commence on 17 January 2011 and subsequent to that, there were a number of conferences and mentions with associated negotiations leading ultimately to an agreement and a plea of guilty to the three count plea presentment on 24 November 2010.
You are not to be disadvantaged by the fact that there were negotiations leading to the plea but, as the Crown put it on the plea, the plea was ultimately only entered shortly before the trial date when you had achieved a resolution which you were prepared to accept.
I accord you a lesser benefit for the entry of the plea at that stage, than had it been entered earlier in the proceedings.
In my opinion, the sentencing judge erred in according lesser weight to the plea because it was made shortly before trial. As his Honour accepted, the plea was made when an agreement was concluded after lengthy negotiation. It is not suggested that there was delay in pleading guilty after agreement was concluded or that the appellant or his advisors were responsible for the length of the negotiations or that the negotiations did not lead to significant concessions from the Crown.
The second ground of appeal is that the sentencing judge erred in finding as an aggravating factor ‘the exploitation of innocent agents’. The sentencing judge identified the agents as a fellow employee of the appellant who provided documents which were forwarded with the claim for diesel fuel rebates and a firm of accountants, which submitted documents to the Australian Taxation Office relying on false information supplied by the appellant. The sentencing judge said:
While the extent of the exploitation of innocent agents is not strictly comparable with that referred to in DPP (Cth) v Rowson[1] it remains an aggravating factor here.
[1][2007] VSCA 176.
In DPP v Rowson, Kaye AJA said:
An odious feature of the scheme was that the respondent involved other innocent parties in the wrongdoing, and sought to exploit the reputation of prominent accounting firms and financial institutions, in order to lend some credibility to his scheme.[2]
It appears that his Honour in that case regarded the odious feature of the scheme as the exploitation of the reputation of accounting firms and financial institutions. In my view, the mere involvement of an innocent person in a fraudulent scheme is not an aggravating factor unless it causes harm in some manner to the innocent agent. In the present case it does not appear that the appellant exploited the reputation of any person or created any danger that others might be implicated falsely in his wrongdoing.
[2]Above, [19].
The third ground of appeal is:
The sentencing judge erred in finding, based on the psychological opinion of a forensic psychologist, Dr Kennedy, that the applicant’s involvement in the fraudulent scheme the subject of the charges ‘must be seen as for financial benefit or advantage rather than any pressing financial need’.
I think that his Honour erred in invoking the opinion of Dr Kennedy to support the finding that the offending was not the result of any pressing financial need. The psychologist’s opinion was that the offending ‘is not explainable through mental illness as such, or any social personality factors … ‘. Nevertheless, I do not think that the error is material, for counsel for the applicant at plea accepted that the appellant acted ‘for financial gain’. When the sentencing judge said that it was not a case of a person stealing to pay for cancer treatment, counsel for the applicant responded: ‘No, absolutely.’
Ground 4 of the appeal is:
The sentencing judge erred in that he gave insufficient weight to the principle of parity; and in particular, he failed to take into account that:
(a)the applicant’s role in the fraudulent scheme the subject of the charges was more limited than that of the co-offender, Ashok Reddy (‘AR’);
(b)the applicant was not the instigator of the fraudulent scheme the subject of the charges;
(c)AR was involved in the relevant offending for a longer period than the applicant;
(d)AR faced a greater number of charges than the applicant;
(e)the applicant was not involved in repeat offending or a similar fraud perpetrated by AR;
(f)the applicant’s benefit from the fraudulent scheme the subject of the charges was more limited than that of AR; and
(g)AR had not made repayment, whereas the applicant had repaid the sum of $200,000 to the Commonwealth.
Reddy was charged in relation to the activities of the company which he conducted with the appellant and with another company in respect of a different fraudulent scheme. The counts with which Reddy was charged commenced in December 2004 and ceased in about July or August 2005. A total effective sentence of 3 years’ imprisonment was imposed upon Reddy and it was ordered that he be released on a recognisance order after serving 18 months of that sentence.
It was common ground that Reddy was the instigator of the scheme in which the appellant participated, that he had been involved in offending over a longer period, had received a much larger sum of money than the appellant and committed fraud in a discrete scheme. Reddy did not, it seems, make any reparation to the Commonwealth. The sentencing judge said:
I regard the fact that Reddy made full admissions, co-operated with the authorities, pleaded guilty early and undertook to give evidence against you as very significant matters that do not apply for your benefit.
Reddy and his offending did possess the aggravating factors and the appellant and his offending did have the mitigating factors, which were identified by counsel for the appellant. So much appears to have been common ground at the hearing of the plea. There is, however, substance in the appellant’s contention that Reddy’s early plea should not have been contrasted with the appellant’s later plea.
The matters identified by counsel for the appellant are to be weighed against Reddy’s greater co-operation with the authorities. Further, the judge who sentenced Reddy found that he was suffering from clinical depression and therefore it was appropriate ‘to sensibly moderate the sentence’ in accordance with the principles set out in R v Van Boxtel.[3] The various contrasting factors were hardly commensurable. Accordingly, the sentences imposed upon the appellant and Reddy cannot be compared with any precision. Nevertheless, at the end of the day, I am persuaded that the sentences imposed upon the appellant and Reddy were such as to engender a justifiable sense of grievance by giving the appearance, in the mind of an objective observer, that justice had not been done.[4]
[3](2005) 11 VR 258.
[4]Lowe v R (1984) 154 CLR 606, 623-4 (Mason J).
The fifth ground of appeal is:
In fixing sentence on the applicant, the sentencing judge erred in regarding as a ‘yardstick’ the sentence that Reddy’s sentencing judge would have pronounced on him had he not agreed to give evidence against the applicant.
The sentencing judge said:
Having weighed the competing submissions and the competing considerations, I regard the sentence that his Honour Judge Leckie declared that he would have pronounced had Reddy not agreed to give evidence against you as something of a yardstick for the purpose of considering an appropriate overall sentence in your case.
I do not think that the sentencing judge erred in referring to Reddy’s sentence as ‘something of a yardstick’. His Honour did not treat Reddy’s offending as equivalent to that of the appellant. His Honour was conscious of differences as well as similarities in the positions of the co-offenders. But because they were co-offenders, he was obliged to have regard to the sentence imposed upon Reddy. It was to be compared to and was to play a part as a standard for comparison in the task of determining an appropriate sentence to be imposed upon the appellant.
The final ground of appeal is that the individual sentences, the total effective sentence and the non-parole period are manifestly excessive. As I have arrived at the conclusion that the sentencing judge did err in certain respects, this ground can be subsumed in the consideration of the appropriate sentence to be imposed upon the appellant.
The maximum sentence for each of the offences committed by the appellant was 10 years’ imprisonment. The counts were rolled up counts involving a large number of individual offences. Many fraudulent and forged documents were prepared in the course of the execution of a sophisticated scheme over a considerable period of time and involved overall a significant sum of money. I bear in mind the mitigating factors the appellant could invoke, particularly the pleas of guilty, the absence of any relevant convictions in the case of a man of mature years, the evidence of good character led in the course of the plea and the repayment of $200,000 to the Commonwealth.
Were it not for the sentence imposed upon Reddy, I do not think I would have concluded that the appellant’s sentence should be reduced having regard to the gravity of his offending and the importance of general deterrence in sentencing for this crime. In my opinion, however, the principle of parity does require the imposition of a lesser sentence. As French CJ, Crennan and Kiefel JJ said in Green and Quinn v R:
Where there is a marked disparity between sentences giving rise to the appearance of injustice, it is not a necessary condition of a court of criminal appeal’s discretion to intervene that the sentence under appeal is otherwise excessive.[5]
In the respects relied upon by counsel for the appellant the offending by Reddy was
more serious, and I do not consider that factor was given sufficient weight. In the light of the more extensive offending by Reddy, I do not think that his co-operation and depression warranted the imposition of a sentence that was significantly more lenient than that imposed on the appellant.
[5][2011] HCA 49, [32]. Counsel for the respondent did not contend that the sentence imposed upon Reddy was manifestly inadequate.
I would sentence the appellant to be imprisoned for a term of 2 years and 6 months on count 1, for a term of 2 years and 6 months on count 2 and for a term of 3 months on count 3. I would cumulate 6 months of the sentence on count 2 on the sentence on count 1, creating a total effective sentence of 3 years’ imprisonment. The appellant is to be released upon giving security by recognizance to the satisfaction of the Court that he will comply with the conditions set out in s 20(1)(a) of the Crimes Act 1914 (Cth) after he has served 18 months’ imprisonment.
HARPER JA:
I agree with Buchanan JA.
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