R (Cth) v Nadim Derbasi

[2018] NSWDC 79

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:	R (Cth) v Nadim Derbasi [2018] NSWDC 79
Hearing dates:	2 February 2018
Date of orders:	16 February 2018
Decision date:	16 February 2018
Jurisdiction:	Criminal
Before:	Judge AC Scotting
Decision:	1 The offender is convicted 2 I am satisfied that the appropriate terms of imprisonment when partially accumulated will be for a period of no more than 2 years. 3 The offender is referred for assessment as to his suitability for an intensive correction order as a means of serving the sentence. 4 The sentence proceedings are adjourned part heard before me to 9 April 2018.
Catchwords:	CRIMINAL LAW – Commonwealth offence – plea of guilty – attempt to obtain financial advantage by deception – lodging false business activity statements – knowingly convey false information – joint criminal enterprise SENTENCE – mitigating factors – aggravating factors – contrition – remorse – appropriate penalty - imprisonment – no alternative to imprisonment – Intensive Corrections Order – suitability SENTENCE PRINCIPLES – utilitarian value of plea - disputed facts – factual findings – evidence of offender – subjective matters – objective seriousness – general deterrence – specific deterrence – background of offender – psychological diagnosis
Legislation Cited:	Crimes Act 1914 (Cth) ss.16A(1), 16A(2), 17(1), 20AB Crimes Regulations 1990 (Cth) s.6 Criminal Code (Cth) ss.11.1 and 134.2(1)
Cases Cited:	Cameron v The Queen (2002) 209 CLR 339 Johnson v The Queen (2004) 78 ALJR 616 R v El Karhani (1990) 21 NSWLR 370
Category:	Sentence
Parties:	Regina (Cth) (Crown) Nadim Derbasi (Offender)
Representation:	Counsel: Mr G Brady SC (Offender)     Solicitors: Commonwealth Director for Public Prosecutions (Crown) Armstrong Legal (Offender)
File Number(s):	2016/000124328
Publication restriction:	None

sentence

1. Nadim Derbasi (the offender) appears for sentence after pleading guilty in the Local Court to 2 counts of attempting to obtain a financial advantage by deception from the Commonwealth contrary to sections 11.1 and 134.2(1) Criminal Code (Cth).

2. The maximum penalty for the offence is 10 years imprisonment and/or a fine of $102,000 or both.

Facts

3. The facts of the offences were in dispute.

4. I will set out a narrative of the facts that are not in dispute, identifying any controversial matters before making findings at the conclusion of this section of the judgment. By pleading guilty to the offences, the offender has accepted that the elements of the offence are satisfied.

5. The offender 26 years of age, and was 21 years of age at the time of the offences.

6. On 12 January 2013 a company Mediterranean Resourses Expeditions Pty Limited (MRE) was registered by the Australian Securities and Investment Commission (ASIC). The offender was the sole director and shareholder of MRE as well as the company secretary. The registered office was nominated at an address in Castlereagh Street, Sydney and the offender’s address was included with his details.

7. The application for registration was submitted online through an agent eCompanies. The application was made by a person representing themselves to be Nadim Derbas, using the offenders address, email address, residential address and date of birth. The application was accompanied by a payment of $483.00, that came from the offender’s bank account. The offender’s bank statement records the payment being made on 14 January 2013. On 11 January 2013 a payment of $500 had been made into the offender’s account from ‘Faouk El Ai ITF F M Family Trust’, which was labelled ‘business venture’.

8. The Australian Taxation Office (ATO) had the Castlereagh Street address as well as a postal address of GPO Box 392 Sydney. The ATO had recorded a St George Bank account ending in 916 as the account for any refunds or payments to be deposited into.

9. The Castlereagh Street address for MRE was false. The post office was leased on 19 January 2013 by the offender and his residential address was recorded in the lease documentation.

10. On 1 February 2013 a business activity statement (BAS) was electronically lodged with the ATO on behalf of MRE. The BAS claimed a refund of $2,163,833.00.

11. On 6 February 2013 the ATO commenced a review into the validity of the BAS and MRE’s entitlement to the refund claimed. Lucas Jankowski of the ATO telephoned the offender who was listed on the BAS as the authorised contact of MRE. Mr Jankowski verified the offender’s identity at the commencement of the telephone call, before informing the offender that the BAS was under review and informing him that MRE would have to supply documents to support the refund claimed. The offender told Mr Jankowski that he was busy and asked if he could call him back.

12. Later that day the ATO sent a letter to MRE informing it that the BAS was under review and enclosing a business profile questionnaire, a property and construction questionnaire, a voluntary disclosure form and an audit information sheet.

13. At approximately 4.00pm on 6 February 2103 the offender telephoned Mr Jankowski. The offender informed Mr Jankowski that he needed to contact an overseas partner to obtain the documents and information and that he would have them by the close of business on Friday. The offender confirmed his email address as [email protected] and authorised future correspondence to be by email.

14. Later that afternoon Mr Jankowski sent an email to the offender confirming their conversation and attached the ATO documents that had been sent in the mail earlier in the day.

15. On 8 February 2013 at 11.07am the offender forwarded Mr Jankowski’s email to [email protected]. At 4.30pm the offender received an email from the francis.cornelius email. The email was signed off ‘Francis C’. Attached to that email was a completed business profile questionnaire and a voluntary disclosure. The metadata in those documents indicated that they had been last modified by a computer identified as ‘Farouk and Mariam’ on 8 February 2013 at 3.40pm and 4.21pm respectively.

16. On 11 February 2013 at 3.14pm the offender forwarded the email and the attachments from the francis.cornelius email to another email address operated by him. He printed, signed and scanned the voluntary disclosure.

17. At 4.31pm he forwarded the francis.cornelius email dated 8 February 2013 to Mr Jankowski, attaching the business profile questionnaire and the voluntary disclosure signed by him. He described ‘Francis C’ as his Finance Operator and referred to himself as ‘Operating Director’.

18. The documentation sent to Mr Jankowski gave the impression that MRE was involved in exploring for mineral deposits in Lebanon, the structure of the company and that it was funded by international investors. MRE revised its figures included in the BAS, explaining that the errors in the figures were as a result of an error by a junior employee in keying in the figures. No documents or receipts were provided.

19. On 12 February 2013 at 8.30am Mr Jankowski sent the offender an email requesting documentation to support the amounts claimed in the BAS. He also requested more information on the adjustment claims, evidence of the development of MRE’s website and information relating to its exploration licence.

20. At 12.15pm the offender forwarded that email to the francis.cornelius email address.

21. On 13 February 2013 Mr Jankowski telephoned the offender and informed him that MRE’s documentation was overdue. The offender undertook to supply it later that day.

22. At 4.24pm the offender received an email from the francis.cornelius email address. The email contained a list of transactions relating to MRE but did not assign any cost or monetary value to them. Attached was an invoice from Systronics IT Group Pty Limited (Systronic) dated 13 February 2013 and an application for an exploration licence. The metadata from the Systronic invoice indicates that it was last modified by ‘Frank and Mariam’ on 13 February 2013 at 11.10am.

23. At 4.36pm the offender sent an email to Mr Jankowski containing the text of the email sent from the francis.cornelius email address and the documents attached to it. The application for an exploration licence document had been mainly left blank. Enquiries with the NSW Trade and Investment Department confirmed that MRE had not lodged the application and there was no record of MRE on their system. Enquires with Systronic revealed that the invoice was a fabrication and that neither MRE nor the offender had been a client of Systronic.

24. On 14 February 2013 Mr Jankowski sent an email to the offender informing him that the refund claimed in the BAS had been retained by the ATO.

25. On 4 March 2013, after no further communication or correspondence had been received from the offender, the ATO disallowed the refund claimed.

26. On 5 March 2013 a second BAS was lodged on behalf of MRE for February 2013. The refund claimed was $71,586. The BAS was not processed and the refund was disallowed.

27. On 7 March 2013 Mr Jankowski sent an email to the offender notifying him that the audit had been completed and that further action would be taken against MRE. Attached to the email was a letter making detailed findings about the audit and that a penalty had been imposed.

28. The 2 BAS were lodged electronically via the ATO business portal. This is facilitated by the use of an electronic device called an AUSKEY, which is assigned to an individual who has had their identity verified by the ATO. The AUSKEY was activated and assigned to the offender on 14 January 2013.

29. A computer supplied by the offender in September 2017 was forensically examined by the ATO and the 2 BAS were not lodged from that computer.

30. The prosecution allege that the offender either lodged or caused to be lodged the 2 BAS. The offender denies this, saying he did not become aware of the either BAS until after they were lodged by a co-offender, Farouk El Ali. The offender contends that he was guilty of the offence relating to the first BAS by making representations to the ATO in response tho their enquiries that he knew to be false and in relation to the second BAS because he was in a joint criminal enterprise with Mr El Ali that contemplated the lodgement of the second BAS.

31. In the course of the sentence proceedings, the offender made a statutory declaration dated 2 December 2016. In about April 2017 he made an offer of assistance in relation to Mr El Ali. On 11 August 2017 the offender participated in a record of interview with the investigators from the ATO.

32. The offender gave evidence before me on 2 February 2018 and was cross-examined. He largely adopted the contents of the statutory declaration as his evidence in chief, with the exception of paragraph 37 which he gave evidence should read that he knew that the sums of money claimed had not been spent by MRE.

33. The effect of the offender’s evidence was that he agreed with Mr El Ali to start a business venture together. For that purpose, the offender provided Mr El Ali with his personal details including hi debitcard details, from which he infers Mr El Ali registered MRE and created the AUSKEY. He forwarded the email from eCompanies to Mr El Ali notifying him of the successful registration of MRE. He went to the bank with Mr El Ai to open the MRE bank account and then to the post office to lease the post office box. He did not ask questions of Mr El Ali because he trusted him and did not want to appear unintelligent to him. They had worked together for about 9 months as at January 2013 and Mr El Ali had been a friend to him. He was unaware that a BAS was going to be lodged but had been told by Mr El Ali that if he was contacted by the ATO to tell them that he had to contact the Finance Operator of MRE and that he would correspond by email. The offender says that Mr El Ali took advantage of him to set up the company and take the fall if it went wrong.

34. In cross-examination the offender denied lodging the 2 BAS or causing them to be lodged.

35. Both in his record interview the offender was extremely vague. He had little recall of the events. He accepted sending emails when that could be objectively established, but did not otherwise appear to make much sincere effort to assist. The ATO investigators were very wary of the information presented by him in the record of interview, particularly relating to the involvement of Mr El Ali. However, a number of the matters he disclosed could be independently verified.

36. Taking into account all of the evidence, I am satisfied on the balance of probabilities that Mr El Ali was involved in the transactions. This is clearly established by his use of the francis.cornelius email address at a later point in time, his bank records, the metadata on the subject documents and the fact that his wife is named ‘Mariam’ which is of itself an unusual name. Further, the ATO investigators identified him and spoke to him, confirming his involvement with the offender, albeit that he denied any wrongdoing.

37. I am troubled by the offender’s evidence. He was a very poor historian and that was also reflected in his record of interview. Whilst I have accepted some parts of his evidence that are capable of independent corroboration, I am not satisfied on the balance of probabilities that he had very little knowledge of what was going on, as he claims. I cannot ascertain the true extent of his knowledge, but I am satisfied beyond reasonable doubt of the matters set out below that satisfy the elements of the offence.

38. I am not satisfied beyond reasonable doubt that the offender lodged or caused to be lodged the BAS. I am not satisfied that the offender applied for the AUSKEY. It is reasonably possible that Mr El Ali did both.

39. I am satisfied beyond reasonable doubt that the facts that I have outlined demonstrate that the elements of the offence have been met. The offender was told by Mr Jankowski that the first BAS had been lodged, that it claimed a refund to MRE and that it was under investigation. I am satisfied beyond reasonable doubt that the offender was told the amount of the refund claimed by MRE in the first telephone call to him. The offender did what he had been told to do if the ATO called and referred their enquiry to Mr El Ali. He then represented to the ATO that what he had been told by Mr El Ali was true, when he knew it was false. He did this on a number of occasions. He received documentation, printed, signed and scanned it and sent it to the ATO together with the emails from the francis.cornelius email address. He knew when he did so that MRE had not incurred the costs referred to in that documentation and that it was not involved in mineral exploration in Lebanon or anywhere else.

The offender’s subjective case

40. The offender tendered a report of Mr Sam Borenstein psychologist dated 30 March 2017. The psychologist saw the offender once for the purpose of preparing the report.

41. The psychologist referred to the offender’s version of events. It is unnecessary to repeat that material because I have already made findings on it.

42. The offender reported being under significant stress in the period leading up to the offences as a result of his mother relocating to Syria and leaving his father in 2010. His father’s mental condition deteriorated and he began to drink and gamble and was very depressed

43. His mother returned in 2012 and directed the offender to end his relationship with his girlfriend because she was not a Muslim. The offender’s father died in April 2013 of a heart attack. His mother remained in Australia until December 2013 and then returned to Syria with his youngest sister.

44. At the time of the offences the offender reported trusting Mr El Ali and that he was a friend.

45. The offender was very close to his father who was very supportive of him. At the time of the offences the offender suffered from amotivation and anhedonia. He was worried about his family falling apart.

46. The offender has resumed his relationship with his girlfriend and is engaged. She is aware of the matters before the Court and supportive of the offender. He trained in real estate and worked for some time in that field, but was not ready to commit to that work. He resigned and is now employed in an insurance firm.

47. He has a supportive relationship with his sisters. The offender completed Year 12 and was engaged at school. He enrolled in a TAFE course in marketing before leaving to take up employment as a telemarketer.

48. The psychologist described the offender as an erratic historian, but determined that he was honest by reference to the administration of a deception scale test. The psychologist opined that the offender suffered from moderate symptoms of depression, extremely severe symptoms of anxiety and moderate symptoms of stress. The psychologist did not think his condition amounted to a frank diagnosis.

49. At the time of the offences the psychologist opined that the offender was emotionally vulnerable and that he had symptoms which would satisfy the diagnosis of Adjustment Disorder with Mixed Anxiety and Depressed Mood. The psychologist opined that his judgement was impaired as a result of his symptoms at that time.

50. The psychologist recommended that he seek treatment because his symptoms have continued. He requires counselling and perhaps anti-depressant medication.

51. The psychologist could not identify any antisocial or criminogenic tendencies.

52. The offender tendered a number of documents confirming his real estate qualifications and confirming his employment as a real estate agent and in his current employment.

Sentencing principles

53. I must have regard to Part IB Crimes Act 1914 (Cth) (the Act) in passing sentence and in particular the matters provided for in section 16A of that Act.

54. A court determining a sentence in respect of any person for a federal offence must impose a sentence that is of a severity appropriate in all the circumstances: section 16A(1) of the Act. The Court must take into account the matters listed in section 16A(2) that are relevant and known to the Court: R v El Karhani (1990) 21 NSWLR 370. The list of factors in section 16A(2) of the Act is not exhaustive and common law principles apply to the sentencing of federal offenders: Johnson v The Queen (2004) 78 ALJR 616 at [15].

Consideration

Objective seriousness of the offences

55. The offences are of some objective seriousness.

56. In the first count the offender became aware that the co-offender had lodged the first BAS claiming a substantial refund. He knowingly conveyed false information to the ATO to justify the refund claimed. That information consisted both of what he was told by the co-offender and what he conveyed including that Francis Corneilus was the Finance Operator of MRE and a real person and that the offender was the Operating Director of MRE. He knew that MRE had not incurred the costs referred to in that correspondence. The first offence occurred over a number of days. It involved a series of criminal acts. The refund claimed was in excess of $2.1 million. The co-offender took considerable advantage of the offender by arranging for the documentary trail to lead to the offender and not to himself.

57. In the second count, the offender was in a joint criminal enterprise that contemplated the lodgement of the second BAS. The objective seriousness of the second count is linked to the failure to withdraw from the enterprise. The refund claimed was in excess of $71,000.

Deterrence

General deterrence

58. General deterrence is a fundamental consideration to serious tax fraud on Commonwealth revenue.

59. General deterrence may be afforded less weight where the offender suffers from a mental condition because the person is not an appropriate vehicle to be made an example of. I am not satisfied on the balance of probabilities that I should accept Mr Borenstein’s opinion that he was suffering from an adjustment disorder at the time of the offences. The offender attended one session with a psychologist in March 2017. I do not agree that the offender was an honest historian. I cannot reconcile the psychologist’s conclusion that the co-offender was a father figure when the offender did not know where the co-offender lived and in circumstances where they only socialised at work during breaks. I am satisfied that he was adversely emotionally affected by the breakdown of his parents’ relationship and his mother’s interference with his relationship. I am not satisfied that the offender’s moral culpability is reduced.

Specific deterrence

60. There is some need for specific deterrence. In my view the offender has sought to minimise his involvement in the offences to an extent that impugns his credit.

Other matters

61. The offender is presently 26 years of age. He does not have any prior convictions of relevance and has no significant health concerns.

62. The offender has expressed remorse and contrition to the psychologist and to the Court. He has also expressed remorse to his character referees, which I accept as genuine.

63. The offender has good prospects of rehabilitation. The offender is relatively young and has been gainfully employed for most of his adult life. He has a supportive family and relationship. It is possible that he has a need for psychological counselling to deal with psychological symptoms, but I note that he has not seriously attempted that to date.

64. The offender pleaded guilty. For Commonwealth offences the Court must consider the offender’s willingness to facilitate course of justice and can refer to the utilitarian value of the plea of guilty: Cameron v The Queen (2002) 209 CLR 339 at [14]. The Crown case was a strong one. The offender’s plea has saved the need for witnesses to be called at trial and that can be taken into account: Cameron at [79]. The appropriate discount is 25%.

65. The offender has rendered some assistance to the authorities. He was not charged until 2016. He did not provide information to the ATO until April 2017. He then participated in the record of interview in August 2017 and surrendered his computer in September 2017. The ATO was not in a position to open an investigation into the co-offender until about August 2017. By that time the ATO though that the trail was cold and that they had insufficient information to put to the co-offender or to obtain a search warrant for his computers. The ATO was wary of the information it received from the offender and based on his presentation in the record of interview and before me that wariness was justified. In my view the investigations into the co-offender were untimely as a result of the actions of both sides. I do not think that the offender would have made a good witness for the prosecution. The opportunity to pursue the co-offender is still available, but in my view unlikely. I am satisfied that the offender assisted the authorities, but that assistance is not worthy of any further discount.

Penalty

66. I have had regard to section 17A(1) of the Act and I am satisfied that after having considered all other available sentences that no other sentence other than a sentence of imprisonment is appropriate in all the circumstances of this case. The reasons for this decision are that:

1. the offence committed is objectively serious;

2. there is a significant need for general deterrence;

3. there is some need for specific deterrence;

4. there is a need for denunciation of the offending conduct; and

5. the subjective considerations relating to the offender are necessarily subsidiary to the duty of the Court to ensure that he is given a punishment of appropriate severity.

67. The offender is convicted.

68. I am satisfied that the appropriate terms of imprisonment when partially accumulated will be for a period of no more than 2 years.

69. Section 20AB Crimes Act 1914 and clause 6 Crimes Regulations 1990 provide that an Intensive Corrections Order is available as a sentencing alternative for federal offenders.

70. This is an appropriate case to consider an Intensive Corrections Order having regard to the offender’s age, his prospects for rehabilitation and his role in the offences.

71. The offender is referred for assessment as to his suitability for an intensive correction order as a means of serving the sentence. He is to report to the Leichhardt Community Corrections Office on or before 4pm on Monday 19 February 2018 and such times as may be necessary thereafter for the purpose of conducting the assessment.

72. The sentence proceedings are adjourned part heard before me to 9 April 2018.

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Amendments

02 July 2018 - Paragraph 59 (3rd sentence) and paragraph 63 (4th sentence) have been amended by Judge Scotting on 2 July 2018.

Decision last updated: 02 July 2018