R v Ammouchi
[2020] VCC 341
•18 March 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-17-00506
| THE QUEEN |
| v |
| MOHAMED KHALIL AMMOUCHI |
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JUDGE: | HIS HONOUR JUDGE TRAPNELL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 17 September 2018 and 24 September 2018 | |
DATE OF SENTENCE: | 18 March 2020 | |
CASE MAY BE CITED AS: | R v Ammouchi | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 341 | |
REASONS FOR SENTENCE
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Subject: CRIMINAL LAW – Sentence
Catchwords: Two charges of dishonestly causing a loss or risk of loss to the Commonwealth – Paying ‘off the books’ wages without remitting tax to the ATO – Total loss and/or risk of loss to the ATO of $2,944,683 over a 34-month period – Personally derived $329,238 – Early pleas of guilty – Vulnerable person with below average intelligence – Was preyed upon and manipulated by others – Low moral culpability – Verdin’s principles 5 and 6 engaged – Problematic gambling habit – Low risk of re-offending – Strong family support – No relevant prior criminal history – Demonstrated true contrition and remorse – Excellent prospects of rehabilitation – Total effective sentence of three years’ imprisonment with a recognisance release order allowing immediate release
Legislation Cited:
Cases Cited:
Sentence:
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APPEARANCES: | Counsel | Solicitors |
| For the CDPP | Mr B Young QC with Mr M Regan Mr B Young QC | Solicitor for the Commonwealth Director of Public Prosecutions |
| For the Accused | Mr M Fisher | Victoria Legal Aid |
HIS HONOUR:
1 Mohamed Khalil Ammouchi, you have pleaded guilty to a Commonwealth indictment containing two charges of dishonestly causing a loss or risk of loss to the Commonwealth[1] between 14 November 2011 and 29 January 2013 (Charge 1), and between about 19 February 2012 and 31 August 2014 (Charge 2) knowing or believing that the loss would occur or that there was a substantial risk of the loss occurring. The maximum penalty for each of these offences is five years’ imprisonment[2] and/or a fine of $33,000.[3]
[1] Contrary to s 135.1(5) Criminal Code (Cth).
[2] Pursuant to s 135.1(5) Criminal Code (Cth).
[3] See Crimes Act 1914 (Cth) s 4B(2). At the relevant time a ‘penalty unit’ was equal to $110.
2 Charge 1 relates to you causing an admitted quantified loss to the Australian Tax Office (‘ATO’) of Pay As You Go (PAYG) tax neither withheld, declared nor remitted to the ATO in respect of a number of employees of Vic Labour Hire and Resources Pty Ltd (‘VLH’) together with GST received from 14 November 2011 to 29 January 2013.
3 Charge 2 relates to a loss or risk of loss you caused to the ATO of PAYG tax neither withheld, declared nor remitted to the ATO in respect of a number of employees of MLA Security Services Pty Ltd (‘MLA’) as trustee for the Ammouchi Family Trust, Mask Services Pty Ltd (‘Mask’) and a business known as ‘Shoretec’ from 19 February 2012 to 31 August 2014.
The Facts
4 The factual substratum to this offence is set out in three documents filed by the prosecution as follows:
(1) An undated document headed ‘Plea Opening – General Summary’.[4]
(2) An undated document headed ‘The Queen -v- Mohamed Khalil Ammouchi Plea Opening – Executive Summary’.[5]
(3) A document described as ‘The Queen -v- Mohamed Khalil Ammouchi Prosecution Opening for Plea’ dated 28 August 2018.[6]
[4] Exhibit P1.
[5] Exhibit P2.
[6] Exhibit P3.
5 I was told by your counsel I can treat the contents of these documents, so far as they relate to you, as a statement of agreed facts for the purposes of sentencing you for these offences.
6 At the relevant time, ACG National Pty Ltd (‘ACG’) was one of Australia’s largest national private security companies. A major part of its operations involved supplying security personnel at clients’ sites and various public events. Victoria provided the largest income stream from the deployment of the largest guard workforce in the company’s operations.
7 ACG aggressively projected an image eschewing any reliance upon sub-contractors, however, a large number of guards were employees of several sub-contractors to ACG. ACG substantially asserted overarching control in the recruitment, deployment and supervision of guard personnel, whether they were employed directly by ACG or through its several sub-contractors.
8 ACG’s clients at the relevant time included: The Port of Melbourne Authority, Patricks Stevedores, Etihad Stadium, Coca Cola Amatil, the Melbourne and Olympic Park Trust, and all three major Melbourne racecourses. ACG also provided security guards to major seasonal sporting events such as the Spring Racing Carnival and the Australian Open tennis.
9 As an employer, ACG was obliged to withhold an amount of PAYG tax from wages and salaries paid to its employees and to regularly remit that amount to the ATO. During the charged period, that responsibility shifted from ACG to retained sub-contractors in respect of their employees’ wages. There were many guards who thought they were employees of ACG, but their actual employer was either one of your companies (VLH or MLA), Mask, Shoretec, or another company owned and operated by one of your co-accused, Mr Frank Moussa.
10 During the charged period, ACG relied significantly on smaller subcontracted companies to supply security personnel for Victorian events. These sub-contractors included VLH, MLA, Mask and Shoretec. At all relevant times, VLH, MLA, Mask and Shoretec were paying employees untaxed cash ‘off the books’. Consequentially, ACG designated VLH, MLA, Mask and Shoretec ‘preferred partners’. Through these means, ACG utilised VLH, MLA, Mask and Shoretec as means of reducing its labour costs.
11 The prosecution allege that you engaged in ongoing dishonest conduct arising from your association with ACG. It is alleged that you paid ‘off the books’ wages to all guards employed by VLH, MLA, Mask and Shoretec without any tax being withheld or remitted to the ATO.
12 Supplemental untaxed cash payments were regularly paid to a large number of salaried employees of your companies and businesses. PAYG tax was thereby evaded over a period of some 33 months. GST was also not remitted to the ATO. It is agreed by the CDPP and your counsel that I should sentence you on the basis that the loss to the Commonwealth over the charge period from VLH was $1,818,457, being declared but unremitted PAYG tax of $1,280,214 and declared but unremitted GST of $538,243 (Charge 1). The agreed figure in relation to MLA and Shoretec of declared but unremitted PAYG tax is $1,126,226 (Charge 2). Unpaid GST does not form part of this charge.
13 You had a long involvement with ACG. You were employed as a casual guard in either 2005 or 2006. You were selected by ACG in 2011 to become the sole director and only shareholder of two companies, MLA and VLH. The evidence shows that ACG thereafter ‘transferred’ its employees or directed ACG-recruited guards to these entities, while simultaneously maintaining control of their employment and deployment whilst providing remittances for their payment. It additionally sanctioned the payment of untaxed cash by MLA to its own ACG managers, including your co-accused Chris Georgiou, Julian Milla and Sam Karam.
14 MLA was incorporated on 16 February 2011 at the initiative of ACG. The Peterson Group administered its creation and then its fortnightly payroll. You were installed as sole director, secretary and only shareholder of the company.
15 The charged period commences on 19 February 2012, which coincides with the first available invoices. An ATO employer obligation audit of MLA was notified in April 2014 and MLA closed its CBA bank account soon afterwards. As a result, from 25 May 2014 ACG made all MLA payroll invoice payments to a CBA account in the name of Sam Karam's company, Mask.
16 VLH was incorporated on 14 November 2011, also at the behest of ACG. You were installed as secretary, sole director and only shareholder of the company until its voluntary liquidation in January 2013. You were directed to open a Westpac bank account for the company in March 2012.
17 ACG commenced making payments into that account in May 2012. The prosecution contends that VLH was essentially a short-lived sham company strategically created to straddle two partial financial years. It was pre-destined to evade all Commonwealth taxation liabilities prior to its impecunious liquidation. You were chosen to be its obedient figurehead, compliant to ACG and, therefore, non-compliant to the ATO.
18 Although MLA was incorporated earlier than VLH, the evidence shows that the vast majority of ACG's Victorian employee guards (more than 250) were ‘transitioned’ administratively to VLH at some stage, and then ‘transitioned’ back in late 2012.
Charge 1
19 During the charged period, VLH invoiced ACG sales of $5,924,019 but did not remit PAYG instalments or GST to the ATO. As I earlier said, the agreed value of the total loss to the Commonwealth is $1,818,457. VLH was placed into voluntary liquidation on 11 January 2013. You signed a Report as to Affairs admitting the unpaid and unrecoverable loss to the ATO plus penalty interest. You made several large cash withdrawals from the VLH Westpac account leading up to the date of your resolution to liquidate the company leaving it unable to pay any tax debt. It is alleged that both the cash withdrawals and the resolution to wind up the company were directed by ACG and were not done on your initiative.
Charge 2
20 During the charged period, MLA did not remit any PAYG instalments to the ATO. Moreover, no ATO audit was ever undertaken to determine the individual PAYG instalments applicable for individual guard hours worked, so it is not possible to accurately calculate the PAYG tax payable. However, as I earlier said, the agreed figure in relation to MLA and Shoretec of declared but unremitted PAYG tax is $1,126,226.
21 Over $1.6 million of the amounts paid by ACG to MLA (and later Mask) was withdrawn from MLA and Mask bank accounts as cash and promptly delivered back to ACG head office destined for Shoretec, thereby enabling untaxed cash payments to be made to Shoretec guards. A separate commission agreement had been made regarding Shoretec guards, which was brokered by Harry Korras and his events general manager, Hayssam Chmayse. An additional $166,466 cash was directed back to ACG for distribution as untaxed cash supplements to salaried ACG employees, including you, Georgiou, Milla and Karam.
22 Clearly, MLA was heavily geared towards the payment of guard wages in cash rather than direct credit to bank accounts, and you knew that PAYG tax and GST was not being remitted.
Prosecution case more generally
23 It is the prosecution case that in 2011 ACG senior management singled out you, Milla and, in 2013, Karam, as showing sufficient obedience, loyalty and reliability to be installed as figureheads and officers for your respective companies. The Peterson Group also created a trust for you called ‘The Ammouchi Family Trust’ with you as named beneficiary. A bank account for MLA Security Services Pty. Ltd. was opened. You set about assembling a group of guards principally earmarked for events shifts as required. The Peterson Group maintained ongoing business management of your company, with fortnightly payroll and other accounting involvement throughout. You managed the companies to the extent of organising the guards, rostering, and you frequently handled cash withdrawals from your company's bank account to pay guards and deliver cash to ACG.
24 The evidence shows that in 2012 you worked co-operatively with Karam, an ACG events manager, who was also then receiving untaxed cash from MLA. You apparently experienced worsening health problems in 2013. Korras declared on 22 March 2013 that Karam would henceforth ‘operate MLA’ and ‘control all the guards’. Soon afterwards, Karam resigned from ACG management.
25 However, you were not sidelined. Instead, in April 2013 Mask was incorporated with Karam as sole director, secretary and only shareholder. Some MLA guards were administratively transferred over to Mask. For the next 15 or so months you and Karam worked co-operatively until your relations fractured irretrievably in early August 2014. By the end of August 2014, you passively withdrew from any further involvement with MLA, Karam or ACG. This was prior to you and the promoters of this scheme becoming aware of the existence of the investigation which ultimately resulted in these charges.
26 Mr Peter Kyriopoulos, by then the sole director of ACG, offered to pay you $3000 per fortnight for your role as figurehead of VLH and ultimately payments totalling $46,200 were progressively paid into your MLA account.
27 The evidence does not disclose your profits from MLA from March 2012 to mid-August 2013. However, subsequent MLA/ Mask payroll reports make mention of a ‘split’ profit figure between you and Karam. A proportion of the 50/50 profit split came from the GST component of MLA and Shoretec invoices paid by ACG. Thus, the GST was dishonestly retained as profit by you and Karam rather than being remitted to the ATO. The remainder of your profit was derived from the difference between the amount paid by ACG to MLA/ Mask and the untaxed amount paid to guards.
28 You had a total personal profit split of $273,091, which was one-half of the fortnightly amount retained in the MLA bank account from September 2013 until 23 May 2014 and in the Mask bank account until 3 August 2014. You also earlier received $11,146 by way of profit split from Shoretec invoices paid via MLA for four payroll fortnights in July and August 2013.
29 The total ascertainable personal profit derived by you from July 2013 to August 2014 was therefore $284,238. Your counsel fairly conceded you received ‘generous payments’ for your involvement in this fraudulent scheme.
30 You were interviewed by police twice in 2015, the second being at your request and after you had been charged with a conspiracy that was alleged to have commenced on 1 October 2013 and ended on 28 November 2014.
31 In the first interview you were forthcoming about some of your dealings with ACG but did not give full and frank details. You did make relevant admissions of regularly delivering withdrawn cash to ACG.
32 The second interview is particularly significant because in it you volunteered information concerning the circumstances surrounding the creation of VLH. The prosecution fairly conceded this was ‘criminality not already appreciated by investigators’. It alerted the investigators of this scheme and enabled them to discover and assemble additional evidence pertaining to VLH, the vast majority of which did not originally appear in the hand-up brief.
33 Your voluntary disclosure of these matters has resulted in the period now charged in the present Charge 1 being considerably extended from the originally charged date of 1 October 2013[7] to the present 14 November 2011, a period of nearly 23 months.
[7] The original charge was a conspiracy between you and your then co-conspirators to cause a loss or risk of loss to the Commonwealth contrary to sub-section 135.4(5) of the Criminal Code (Cth).
34 The information you disclosed regarding VLH’s operations in Melbourne put investigators on a trail which led them to uncover the involvement of Milla in Sydney Hire Group Pty Ltd. This eventually led to him being prosecuted and pleading guilty to Charge 1 on his indictment (CR-17-00592).
35 As I detail later in these reasons for sentence,[8] these voluntary disclosures by you are significant mitigating circumstances in your case, particularly given, as your counsel accepted, offences of this kind are difficult to detect and can cause enormous loss to the Commonwealth government.
Your role in the offending conduct and the financial gain derived by you
[8] See below [101]–[104].
36 While it is accepted that you performed the role of the sole director, secretary and shareholder of VLH and MLA as subcontractors providing security guards to ACG, it is submitted on your behalf that you did so at the direction of ACG and ACG’s accountants, The Peterson Group.
37 So far as Charge 1 is concerned, it is put on your behalf that your offending can be characterised as ‘a figurehead director of VLH with a relatively limited role’. You accept you opened the company bank account and enabled ACG to access the account. You made some cash withdrawals, signed cheques and signed the relevant ASIC documents, admitting the loss to the ATO for the 2012 financial year. It is put on your behalf that you were in effect ‘targeted’ by Mr Kyriopoulos to perform this role in VLH. I accept that your personal financial gain from the offending comprised in Charge 1 is $46,200.
38 So far as Charge 2 is concerned, you accept that as a director of MLA you played a greater role than you had with VLH. You delivered cash payments to various guards as instructed by ACG and/or The Peterson Group. You were part of a profit splitting arrangement with Karam over approximately a 30 month period which according to the prosecution resulted in you deriving $273,091 from your involvement with MLA and Mask and an additional $11,146 in respect of Shoretec thereby making a ‘total provable profit’ for you of $284,238.
39 Your counsel said ‘it was not disputed’ that during the charged period you were aware that neither PAYG tax nor GST was being paid by the companies you were associated with. However, he submitted you are a ‘simple’ and ‘unsophisticated’ man who was unversed in ‘the subtleties and the intricacies of the business’ and the workings of VLH and MLA were not matters that were ‘necessarily within your knowledge’.
40 Given Mr Cummins assessed you as having ‘most probably low average intelligence’, and Ms Zanini assessed you as having ‘reasoning and thinking skills’ within the ‘below average range’, it was submitted on your behalf that you were a vulnerable target for unscrupulous businessmen who needed a ‘patsy’ to front the subcontracting businesses and who could be easily deceived and would unquestioningly do their bidding. He submitted you are a person who has been manipulated by others from the start of VLH right to its end.
41 You were personally inept in the use of computers and it appears all electronic funds transactions in relation to MLA were undertaken by persons associated with The Peterson Group or ACG.
42 Nonetheless, as the prosecutor submitted you had a role to play in the overall strategy to avoid the payment of PAYG and GST to the Commonwealth government and you played your part. The prosecutor submitted that you were ‘fit for purpose’ in consequence of the fact you were ‘of a very mild and malleable demeanour, apparently reliable and trustworthy’. The prosecutor submitted you were appointed to these positions of trust at the behest of ACG and The Peterson Group; somebody had to perform this role and you did what you were required to do when asked to do it.
43 According to the prosecutor, you were ‘actively involved in the administration’ of these companies. So far as MLA is concerned, you were the person most responsible for the actual physical withdrawal of tens of thousands of dollars in cash fortnightly from the CBA account and you personally distributed this money to the guards and others.
44 Whilst you do not rely on impaired mental functioning at the time of committing these offences under Verdins principle 1 to reduce your moral culpability,[9] I am satisfied that your relatively low level of intellectual functioning and your personality traits, as identified by Mr Cummins and Ms Zanini in their respective reports, did make you vulnerable to being manipulated by persons behind ACG and The Peterson Group. As the prosecution fairly conceded you were ‘selected for [your] essential visible criminal role by others less gullible, much smarter, and more careful, calculating and avaricious’.
[9] R v Verdins (2007) 16 VR 269, 276 [32] (Maxwell P, Buchanan and Vincent JJA).
45 On the whole of the material before me, I am satisfied that you did not fully comprehend the significance of what you were being asked to do and you were taken advantage of by others. In my view this does significantly reduce the level of your moral culpability for your offending conduct.
46 So far as your role in this offending is concerned, I accept that you are a vulnerable person of below average intelligence[10] who was preyed upon and manipulated by others. Whilst you undoubtedly knew what you were doing was unlawful and morally wrong, I accept you did not understand the full implications of your conduct. You were not mentally equipped to exercise a sound judgment regarding your ongoing involvement in committing the present offences. Moreover, I accept you did not realise the extent or quantum of the tax evasion you were involved in until investigators informed you of this.
[10] Mr Cummins clinically assessed Mr Ammouchi as being ‘most probably low average intelligence’ whereas Ms Zanini assessed him using the Kaufman Brief Intelligence Test as having ‘reasoning and thinking skills’ within the ‘below average range’. I prefer Ms Zanini’s opinion as it is based on testing rather than a clinical judgment.
47 Once you commenced committing the offending conduct, you became more and more implicated in the taxation avoidance scheme to the point where it became very difficult, if not impossible, for you to extricate yourself. The stage was eventually reached whereby you had outlived your usefulness, you were sidelined, and others were moved into your role. I accept by the end of your involvement in this nefarious scheme you had become very concerned at what you had become involved in and you were relieved to be out of it.
48 In my opinion, it was not until you were interviewed and charged, and in a position to fully reflect on what had occurred, that you finally realised the significance of what had happened and the manner in which you had been used by people you had liked and respected. This realisation has had a significantly detrimental effect on your psyche and your sense of shame has caused you to break off contact with some family members, including your daughter and former wife, and many of your friends.
49 In my view, these circumstances significantly reduce your moral culpability and lessen the weight I need give to general deterrence and denunciation in your case.
Personal Circumstances
50 I now turn to your personal circumstances. In this I was assisted by your counsel’s written and oral submissions and several psychological and other reports, together with a bundle of character references and documents relating to courses you have undertaken.
51 You are now aged 51 years and you were aged between 43 and 46 during the 33-month offending period. Since being charged with the present offences you have resided with your parents in Preston. You were previously living in public housing but decided to move in with your parents in order to disassociate yourself from previous work colleagues.
52 You are the eldest son in a sibship of five. Your parents are of Lebanese origin. You have two brothers and two sisters. One of your sisters and one of your brothers became estranged from your family after they changed religion.
53 You grew up in a close family environment, where your father worked and provided well for the family, whilst your mother was the home maker. Your father, Khalil Ammouchi, worked as a welder/boilermaker and passed away in September 2016.
54 Your mother, Fatima Ammouchi, is 71 years old and you live with her in your childhood home in Preston. She suffers from diabetes, problems with her mobility and several other debilitating health conditions.[11] You are her primary caregiver. You transport her to hospital and various medical appointments as well as supporting her in her home by performing all the domestic chores and shopping. Your only source of income is a carer’s pension.
[11] See generally ‘Health Summary Sheet’ for Mrs Fatima Ammouchi, dated 17 September 2018 (Exhibit MA 10).
55 It was rightly conceded by your counsel at the plea hearing, that your mother’s circumstances are not exceptional so as to give rise a special sentencing discount for family hardship.[12] Nonetheless, I accept it would be very difficult for other family members to fill the void that would be created if you were unable to continue caring for your mother. I also accept your anguish at being unable to care for your mother would make the experience of imprisonment more burdensome on you and I take that matter into account in your favour.
[12] See Markovic v The Queen; Pantelic v The Queen (2010) 30 VR 589; Crimes Act 1914 (Cth) s 16A(2)(p).
56 You were declared bankrupt in 2016 in the wake of the present offending and you were discharged from bankruptcy on 21 December 2019.[13] Nonetheless, I accept you are not a man of means and you have no capacity to pay a pecuniary penalty or make any payments by way of reparation.
[13] See Exhibit MA17.
57 You completed Year 12 at Preston Technical College. You describe yourself as being an 'average' student. You were keen on playing a variety of sports. You were bullied at school, including being the subject of racial taunts. For you school was a very traumatic experience, where you struggled to fit in with the other students. This has had an adverse effect on your literacy and numeracy skills.
58 After leaving school, you worked in a variety of jobs including office work and factory work. You subsequently completed a security course which ultimately led to your employment with ACG. I accept you have had an excellent employment history until recently. In the past you have played football for the Preston RSL.
59 You were married in 2001. The marriage broke down in 2003, soon after the birth of your daughter, because of your wife probably suffering undiagnosed postnatal depression and being unable to cope raising the child alone whilst you worked long hours. She returned, with your daughter, to live with her mother.
60 You maintain a good relationship with your former wife and seventeen-year-old daughter who, after developing an anxiety disorder as a result of being bullied at school, is engaging in long distance education.
61 You have remained single and ‘devoted to work’ since your marriage breakdown. Since losing your business, and with the present proceedings pending, you have not seen your former wife and daughter because you feel ashamed and embarrassed that you can no longer provide them with financial support. You intend to re-establish contact with your daughter once the present proceedings are over.
62 You were diagnosed with diabetes in 2007 for which you take tablet medication and you have been injecting insulin daily since early 2018. You consult a diabetic educator and you often suffer from elevated blood sugar levels. You have been told by your treating general practitioner that anxiety and stress elevate your blood sugar levels.[14]
[14] See generally Dr John Finkelstein, letter dated 20 September 2018 and ‘Health Summary Sheet’ for Mr Mohamed Ammouchi, printed 20 September 2018 (Exhibit MA11).
63 You have never had any problems with drugs or alcohol. You are a man of Muslim faith and the consumption of alcohol is against your religion.
64 You admit you commenced engaging in problem gambling around 2012 or 2013. For you, gambling was a form of escape and a distraction from work pressures and your personal family problems. It allowed you to cope with feelings you had at that time of ‘being preyed upon by ACG and all the people associated with ACG’. You also enjoyed going to the gambling venue to relieve loneliness and boredom.
65 You told Mr Cummins, a consulting clinical and forensic psychologist engaged by your legal representatives, who assessed you on 27 August 2018 and produced a report dated 4 September 2018,[15] that you gambled ‘to lose yourself’. Mr Cummins observed that at the time of the offending, and even prior to that time, ‘you were often preoccupied with gambling and would gamble to relieve feelings of helpless[ness], hopelessness, confusion, anxiety and depression’.
[15] Exhibit MA2.
66 Your gambling habit developed to the stage where you were gambling daily at venues in Carlton and the CBD. The extra money you made through the present offending was spent on maintaining your gambling habit. Mr Cummins diagnosed you as suffering from a ‘Gambling Disorder’, which is an impulse control disorder, at the time of your offending. Your counsel did not seek to excuse your offending on account of your gambling disorder.[16]
[16] See DPP (Vic) v O’Neill (2015) 47 VR 395; Wheeldon v The Queen [2018] VSCA 344 [35] (Maxwell P and Beach JA).
67 In recent times, you have had been assisted by the Salvation Army in your efforts to rid yourself of this destructive lifestyle. Apparently, your gambling is no longer problematic. You presently attend a local gambling venue as a social outing only and to catch up with the elderly people who also frequent the venue.
68 You spend little time with friends and family, preferring the company of strangers or acquaintances at the gambling venue. You report feeling used, embarrassed and angry towards yourself for trusting your business acquaintances and ending up in your present situation.
69 You explained to Mr Cummins that it was through work as a factory guard, often with Chubb security, that you became involved in the present offending. During the interview with him you became very agitated when talking about your legal situation. You said:
Well I was very well connected in the industry and people kept asking me for jobs and I'd always been working as a security guard. Then I got lured into sort of becoming like a subcontractor with ACG. They set it all up for me. I tried to be as cooperative as I could with the investigators. Just after I got interviewed I received a notice of tax payable. I always thought the tax was being paid through ACG and through Peterson Group. If I'd known I was meant to be paying tax myself, I would've done this through instalment arrangement. I can't cope with this - I just can't believe that I'm in this situation. … The prosecutor has told the judge that I was a patsy in all of this. I think a patsy means that I got stooged and lured by the people who set all of this up. I've told the investigators about who set this up. All I wanted to do was either work as a security guard or look after the security guards who I knew well in the industry. I was a guard. I trusted people. Now I'm scared about this whole situation.
70 Mr Cummins opined that it was most unlikely you suffer from any personality disorder. He assessed you as having ‘most probably low average intelligence’. You presented at interview as being ‘moderately anxious and at least moderately depressed’, which were both reactive to your present predicament.
71 Mr Cummins formed the opinion you are ‘absolutely overwhelmed with embarrassment, shame, regret and remorse concerning [your] offending’. He said you stated at interview you were in effect ‘feeling very proud of the fact [you] cooperated as fully as [you] felt [you were] able to do (based upon [your] knowledge) with the investigators in this case’. I accept you are truly remorseful for your offending conduct and you are unlikely to reoffend in the future.
72 Mr Cummins opined that you were ‘most probably suffering from a depressive disorder during the time of the offending’ which was ‘precipitated not as a result of [you] knowing that [you] were offending but, rather, as a result of [you] feeling pressured and intimidated by ACG management’. This caused you to withdraw from family and friends and resulted in you now suffering from what Mr Cummins diagnosed as a ‘trauma related disorder in the form of a reactive Adjustment Disorder with Mixed Anxiety and Depressed Mood’.
73 Mr Cummins further opined that based upon this assessment ‘it is very likely, if not inevitable, his mental health would deteriorate if he was incarcerated’. Based on this diagnosis and opinion your counsel relied on Verdins principles 5 and 6.[17]
[17] See R v Verdins (2007) 16 VR 269.
74 Following being charged in relation to the present offending, you actively sought assistance for your gambling and mental health issues through your local general practitioner. He referred you to Ms Antonella Zanini, a very experienced clinical therapist, for treatment of mixed anxiety and depression in the context of the present proceedings.
75 You also sought assistance from a financial counsellor employed by the Salvation Army, whom you continue to see approximately every six weeks.[18] Your financial counsellor has assisted you to engage with Fines Victoria and you have successfully completed a Work and Development Permit Scheme with Melbourne Counselling Service in satisfaction of your outstanding fines.[19]
[18] See letter from Gul Celik dated 21 September 2018 (Exhibit MA9).
[19] See letter from Patricia Roake, Manager, WDP Scheme, Fines Victoria dated 28 February 2020 and the accompanying Certificate of Achievement (Exhibit MA18).
76 In a ‘Confidential Report’ dated 17 August 2018,[20] Ms Zanini observed that in March 2018 your score on the Kessler (K10) screening tool indicated you had ‘severe depressive and anxiety symptoms’ and your Beck Anxiety Inventory score was within the ‘very high range for anxiety’. On the DASS test, which is used to measure distress along three axes of depression, anxiety and stress, you scored in the moderate range for depression, severe range for anxiety and mild range for stress. Eight months later, another DASS test indicated you were then suffering moderate depression and anxiety and you were in the normal range for stress.
[20] See Exhibits MA3 and MA16.
77 Ms Zanini re-administered these three tests several times over the period leading up to your appearance at the plea hearing in September 2018. She observed that your test results improved until, as the plea hearing approached your anxiety and depression levels increased to the severe range again. Your diabetes also became unstable as you struggled to manage your worry and stress levels.
78 Ms Zanini assessed you on the Global Assessment of Functioning scale to ascertain your subjective social, occupational and psychological functioning. On 19 March 2015 you scored within the ‘serious symptoms range’. This range indicates ‘major impairment in several areas of functioning including serious impairment with work, relationships, judgement, mood and passive suicidal ideation’.
79 Ms Zanini opined that you meet the criteria for Generalised Anxiety Disorder using the Diagnostic Statistical Manual (DSM-5). This condition results when a person is worried across several domains and finds it difficult to stop worrying. Your mood is also affected by your anxiety symptoms, as is your ability to manage and control your diabetes owing to the ongoing stress of the present legal proceedings. Since your arrest on the present charges you have been receiving treatment for this condition and Ms Zanini described you as being ‘help seeking’.
80 Ms Zanini opined that if you were incarcerated for the present offences you would be ‘at high risk of a deterioration in [your] mental state’.
81 Following the plea hearing, Ms Zanini provided a further report dated 10 December 2019.[21] The Kessler screening tool administered on 6 December 2019 produced a score of 30, which suggests severe depressive and anxiety related symptoms. The Beck Anxiety Inventory also administered on 6 December 2019 showed your level of anxiety was in the very high range and you also scored within the extremely severe range for depression, extremely severe range for anxiety and severe range for stress in the DASS test on the same day. You still meet the criteria for Generalised Anxiety Disorder using the DSM-5.
[21] Exhibit MA15.
82 According to your test result on the Kaufman Brief Intelligence Test, your range for verbal performance is within the below average range and your nonverbal performance is within the average range. Your reasoning and thinking skills are within the below average range.
83 You have two old and presently irrelevant prior matters involving your involvement in assaultive conduct, which were dealt with at the Preston Magistrates’ Court in August 1989, when you were 21 years of age. You received fines totalling $500.[22] You told Ms Zanini this offending arose in circumstances where you ‘accepted responsibility for an assault committed by one of [your] younger brothers’. I have completely disregarded this matter in sentencing you.
[22] The prisoner’s criminal record was filed pursuant to Criminal Procedure Act 2009 s 245(2) after the sentencing hearing commenced. This course was unopposed.
84 You have no subsequent offences and no matters are outstanding or pending. Accordingly, I will treat you as a person of otherwise prior good character. Nonetheless, as your counsel fairly conceded offences of this type are routinely committed by persons of otherwise good character and consequently this factor does not carry the same weight as it would in other circumstances.
85 I have had regard to several character references tendered on your behalf.[23] They speak of your offending as being out of character and that you have a trusting nature which makes you vulnerable to being manipulated by others. They say you have learned from your mistakes and taken positive steps towards your rehabilitation and to disassociate from former workmates in the security industry. Your referees speak of the effect these proceedings have had on you and they say you are truly remorseful, even repentant. In this regard you have been greatly assisted by reengaging with your faith.
[23] Letter from Mario Peter Lanza dated 13 September 2018 (Exhibit MA4); Letter from Bajram Zyka undated (Exhibit MA5); Letter from your sister, Hoda Baghadi, dated 11 September 2018 (Exhibit MA6); Letter from your brother, Ali Ammouchi, dated 10 September 2018 (Exhibit MA7) and Letter from your former wife, Maria Valcazar, dated 11 September 2018 (Exhibit MA8).
86 I have also had regard to several certificates and course completion records which indicate the courses you have undertaken since being charged with the present offences.[24] Your attendance and completion of these educative and training programs augers well for your prospects of rehabilitation.
[24] Exhibits MA12 and MA18.
87 Your bother, Ali, was present in court during the plea hearing and this sentencing hearing and it is clear you have strong family support, which is a protective factor in your case. I accept you are truly remorseful for your offending conduct.
88 Overall, I assess your prospects of rehabilitation as being excellent. I am also of the opinion you have learnt a salutary lesson from your experience and the effect the investigation into these offences and the proceeding itself have had on you and your family. I assess you as having a very low risk of reoffending. Accordingly, I need give very little, if any, weight to specific deterrence and protection of the community in your case.
Sentencing Considerations
89 The fundamental principle in sentencing you is that I must impose a sentence ‘that is of a severity appropriate in all the circumstances of the offence’.[25] I must have regard to a number of sentencing considerations as set out in s 16A(2) of the Crimes Act 1914 (Cth) (‘the Act’). This list is not exhaustive.
[25] Crimes Act1914 (Cth) s 16A(1).
90 Included in the matters to which I must have regard in sentencing you are the following:
(a) the nature and circumstances of the offence;[26]
(b) any loss resulting from the offence;[27]
(c) the deterrent effect that any sentence or order under consideration may have on other persons;[28] and
(d) the need to ensure that the person is adequately punished for the offence.[29]
[26] Ibid s 16A(2)(a).
[27] Ibid s 16A(2)(e).
[28] Ibid s 16A(2)(ja).
[29] Ibid s 16A(2)(k).
91 General deterrence and denunciation are prime considerations in sentencing you in respect of these offences. The courts have a significant responsibility to protect the integrity of the revenue system by imposing punishment for deliberate and sustained fraud in order to deter others who may be tempted to indulge in similar conduct.
92 The taxation system is open to abuse because it is based on trust. Accordingly, when abuse is discovered sentences must be salutary. Tax fraud also has many harmful, but often hidden, social consequences. It is difficult to detect and if undetected the rewards can be great.
93 The Commonwealth Director submitted, and I accept, that in your case detection was made more difficult by the payment of cash wages and the employment of sub-contractors, which had the effect of shifting the tax burden to entities that did not take responsibility for the payment of their taxation obligations.
94 In this caset, the investigation and prosecution of the fraudulent scheme of which you were a part was complex, difficult, time consuming and resource intensive. I was informed that the investigation involved the execution of numerous search warrants, the seizure of thousands of documents, the interception of a large number of communications over a lengthy period and the detailed forensic analysis of accounting records.
95 Your crime is not victimless because the burden of fraud perpetrated on the Commonwealth government falls on the whole Australian community. Serious tax fraud will inevitably have flow-on effects to the incidence of taxation imposed on, and paid by, honest taxpayers.
96 It is for these reasons, and others, that the sentence I impose on you for this offending must give real effect to the principles of general deterrence, denunciation and just punishment. Those, like you, who systematically defraud the revenue of large sums of money over an extended period must in general expect to receive a sentence of imprisonment.
97 You held managerial positions within VLH and MLA, and you were the sole director, secretary and shareholder of both companies. Whilst you were not the instigator of the scheme giving rise to the charges before me, nonetheless, you must have had some awareness of what was occurring, and you played your part in the scheme as directed by others.
98 Your offences were continuing ones, committed over approximately a 34-month period, during which you were partly responsible for the failure of VLH, MLA, Mask and Shoretec to remit PAYG tax, and to a lesser extent GST, to the ATO. The accepted total loss and/or risk of loss to the Commonwealth resulting from both offences is agreed to be in the order of $2,944,683. You personally derived in order of $329,238, a very substantial sum.
99 Clearly, as your counsel conceded, this is serious offending and significant sentences of imprisonment are called for in order to give effect to the principles of denunciation, general deterrence and just punishment. Whether any part of those sentences must be immediately served by you depends upon my assessment of and the weight I give to circumstances personal to you, which I turn to now.
Mitigating Circumstances
100 You have pleaded guilty at the earliest forensically reasonably opportunity and you are entitled to have this taken into account in your favour.[30] Your plea has significant utilitarian benefit in light of the likely length and complexity of any trial and the large number of witnesses that would have been called. It also indicates an acceptance by you of responsibility for your offending conduct and a willingness to facilitate the course of justice. Moreover, in your case, I accept you demonstrate true contrition and remorse for your offending conduct.
[30] See Atholwood v The Queen (1999) 109 A Crim 465, 468 (Ipp J); Cameron v The Queen (2002) 209 CLR 339, 345–6 [20]–[22] (Gaudron, Gummow and Callinan JJ).
101 A significant mitigating circumstance is your degree of cooperation with investigating authorities, particularly in relation to the circumstances giving rise to Charge 1. This must be taken into account pursuant to s 16A(2)(h) of the Act, however this is not a situation in which s 16AC of the Act applies.
102 The courts have recognised that where an offender makes admissions as to facts which otherwise would not have been known to, or capable of being proved by, the prosecution, the offender is entitled to a separate and substantial degree of leniency on sentence. In the recent decision of the Victorian Court of Appeal in Kennedy v The Queen[31] the Court summarised the principle as follows:
It is well settled, as a matter of sentencing principle, that a judge should take into account, as a relevant and significant mitigating circumstance, any admission made by an offender which provides proof of an offence committed by the offender, or of a relevant fact or matter necessary to establish that offence, which might not otherwise have been known to, or be able to be proved by, the prosecution. That principle is based on the policy of the criminal law to encourage offenders to come forward and disclose the fact of an offence that has been committed, and relevant facts that demonstrate the nature and quality of that offence.[32]
[31] [2019] VSCA 127 [26]–[30] (Priest and Kaye JJA).
[32] Ibid [26] citing R v Ellis (1986) 6 NSWLR 603, 604; Ryan v The Queen (2001) 206 CLR 267, 272–3 [11]–[15] (McHugh J), 295–6 [94]–[96] (Kirby J); R v Doran [2005] VSCA 271 [14]–[15] (Buchanan JA) and Latina v The Queen [2015] VSCA 102 [12] (Redlich and Kyrou JJA). See more recently Williamson v The Queen (2019) VSCA 138 [116] (
103 As I earlier observed,[33] the admissions you made in the second record of interview, which occurred at your instigation with the assistance of Mr Lanza, alerted investigators to the extent of your involvement in VLH which, at the very least, considerably extended the period charged in relation to Charge 1. Moreover, your disclosures in relation to VLH alerted investigators to fresh avenues of inquiry which eventually led them to uncover Milla’s activities at the Sydney end of the tax avoidance scheme involving his company, Sydney Hire Group Pty Ltd.
[33] Above [32]–[35].
104 In my opinion, the degree of your cooperation with law enforcement agencies means you are entitled to considerable leniency with respect to Charge 1. It is also indicative of your general level of remorse and relevant to your prospects of rehabilitation, both of which inform the sentences I impose on both charges.
105 Another very significant mitigating circumstance is the effect of delay in your case. There will always be some delay in prosecuting highly complex white-collar crime cases, but here there has been considerable systemic delay occasioned by my personal circumstances. The law recognises that ‘delay is more likely to be a major mitigatory factor where the prosecution or the justice system is responsible for the delay’.[34]
[34] Judicial College of Victoria, Victorian Sentencing Manual, online, page 142 [7.5.3.2].
106 As the Victorian Court of Appeal observed in Rodriguez v DPP (Cth):[35]
Delay is normally relevant in two ways. First, it is relevant to rehabilitation that has occurred during the delay and the effect that has in turn on specific deterrence. Secondly, delay is relevant in the sense that the anxiety and uncertainty of having the prospect of a sentence hanging over one’s head during the period of delay is akin to punishment in itself.[36]
[35] (2013) 40 VR 436.
[36] Ibid 445–6 [36] (Warren CJ and Redlich JA) (citations omitted).
107 So far as your rehabilitation during the period of delay is concerned, I accept you have not reoffended, you have rehabilitated yourself from your serious gambling habit and you have lived a useful and productive life caring for your mother. You have undertaken and successfully completed courses in Certificate IV in Frontline Management and a Certificate IV in English as an Additional Language (Employment/Professional), both at the Institute of Tertiary and Higher Education Australia.[37]
[37] See Exhibit MA12.
108 So far as delay akin to punishment is concerned, you have had these matters hanging over you since your home and motor vehicle were searched on 23 October 2014, a period of some five years and five months. You were charged with a related offence on 26 February 2015. Since the plea hearing, over seventeen months ago, you have had the very real prospect of a sentence of imprisonment with a component of immediate incarceration hanging over your head like the ‘Sword of Damocles’.
109 You have suffered from serious and increasing levels of reactive stress, anxiety and depression and at times your diabetes has become unstable. You instruct your counsel that since the plea hearing you have been ruminating about the outcome of these proceedings and this has adversely affected your ability to sleep and your appetite.
110 You have also been under severe financial stress, resulting in you becoming bankrupt. You continue to see your financial counsellor on a six-weekly basis.
111 In my opinion, both aspects of the delay in this case call for significant leniency to be extended towards you. In this context, I note the prosecution’s candid agreement with your counsels’ submission that in your case delay ‘takes on a different complexion and is of greater significance’ than might otherwise have been the case.
112 I further accept the burden of imprisonment on you would be substantial given the inevitable separation from your mother and your family and your level of anxiety and depression. There is also a serious risk that immediate incarceration would cause your mental health to significantly deteriorate.
Application of Sentencing Principles
113 I have had regard to current sentencing practices in relation to the charge of dishonestly causing a loss or risk of loss to the Commonwealth and similar offences. The Commonwealth Director provided me with relevant comparative material and cases. I have had regard to this material in formulating the sentence I impose in your case.
114 It is difficult to gauge more than a very general yardstick from so called ‘comparable cases’, given the wide range of offending conduct which can constitute this offence and the myriad of personal circumstances pertaining to individual offenders. Nonetheless, to the extent that I have been able to gain any assistance from comparable cases and other like material, I have sought to do so in your case.
115 The basic purposes for which a court may impose a sentence are just punishment, deterrence, both specific and general, rehabilitation, denunciation and protection of the community. In sentencing you, I must have regard to a range of factors as set out in the relevant provisions of the Act. In general terms, these include the seriousness of the offence, your culpability for it and your personal circumstances.
116 I am required to balance the interests of the community in denouncing criminal conduct with the interests of the community in seeking to ensure that so far as is possible, you are rehabilitated and reintegrated into society.
117 General deterrence, denunciation and just punishment are very important sentencing considerations for these offences. I am of the view that in your case specific deterrence and protection of the community need be given very little, if any, weight. I assess your prospects of rehabilitation as being excellent.
118 I have had regard to the sentence I imposed on your co-accused Frank Moussa.[38] On one charge of dishonestly causing a loss or risk of loss to the Commonwealth I sentenced him to three years’ imprisonment with a recognisance release order taking immediate effect together with a $20,000 fine. His offending occurred over a three-year period and involved a risk of loss to the Commonwealth of $1 million.
[38] [2019] VCC 1891.
119 As the prosecution in your case fairly observed, there were circumstances related to Moussa’s offending which made it objectively more serious in some respects than yours. On the other hand, Moussa’s moral culpability was significantly reduced by reason of his intellectual disability. Given the findings I have made in your case, in my view your personal circumstances also call for considerable leniency to be extended.
120 The Commonwealth Director submitted that ‘a sentence of imprisonment, with a portion to be served before recognizance release, remains the only appropriate sentence in the serious circumstances of these offences and [your] admitted role’. The prosecutor emphasised the period of your offending, the amount of the loss and/or risk of loss to the Commonwealth occasioned by your offending conduct, your role in VLH and MLA in particular, and the significant personal financial gains you made as a result of committing these offences.
121 Your counsel accepted terms of imprisonment were the only appropriate sentences to impose in your case, given the objective seriousness of these offences. However, they submitted that when all relevant matters are ‘properly and carefully considered … any term of imprisonment imposed upon [you] should be wholly suspended’. They particularly emphasise the inordinate delay that has occurred in finalising this matter, the effect of that delay on your mental and physical health, particularly in the past 18 months or so, and the substantial and successful steps you have taken towards your rehabilitation.
122 Section 17A(1) of the Act restates the established common law position that imprisonment to be immediately served is a sentence of last resort and a court must consider all other available sentences and all the circumstances of the case.
123 Mr Ammouchi, I have formed the opinion that penalties involving sentences of imprisonment coupled with a reconnaissance release order with the effect that you will serve no time in immediate custody is the appropriate disposition in your case.
124 I have extended particular leniency towards you, so as not to interfere with the prospects of your ultimate rehabilitation by requiring you to serve ‘a portion’ of your sentence in immediate custody. The deleterious effect this likely would have on your relatively frail mental state is also an important consideration in this regard. In my opinion, while your offences are undoubtedly serious and require the denunciation of this Court in strong terms, ultimately the community will be better served by permitting you to resume a normal life, and by you being permitted to put these matters behind you.
Stand up Mr Ammouchi
On the first charge of dishonestly causing a loss or risk of loss to the Commonwealth (Charge 1), you are convicted and sentenced to imprisonment for 21 months commencing on 18 June 2021.
On the second charge of dishonestly causing a loss or risk of loss to the Commonwealth (Charge 2), you are convicted and sentenced to imprisonment for two years and six months commencing from today.
I must make a recognisance release order in your case. I order your release under s 20(1)(b) of the Crimes Act 1914 (Cth) forthwith upon you giving security by recognisance of $5000.00 to comply with the following condition:
You are to be of good behaviour for a period of three years.
There is no PSD to declare.
Mr Ammouchi, the purpose of these orders is to punish you for the crimes you have committed. The effect of my orders is that you have a sentence of imprisonment of three years hanging over your head from today for three years. During the three-year period commencing today, you must not commit another offence punishable by imprisonment because that will breach your recognisance and you may be ordered to serve the three years in prison.
The recognisance release order may be discharged or varied under s 20AA of the Crimes Act 1914 (Cth).
Do you understand all this?
Pursuant to s 6AAA of the Sentencing Act 1991 (Vic) I state that the sentence I would have imposed on you but for your pleas of guilty would have been a total effective sentence of 5 years’ imprisonment with a non-parole period of 3 years’ imprisonment.
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