R v Hammond

[2020] NSWSC 888

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

R v Hammond [2020] NSWSC 888

Hearing dates:

9 July 2020

Date of orders:

10 July 2020

Decision date:

10 July 2020

Jurisdiction:

Common Law

Before:

Payne J

Decision:

(1)   an aggregate sentence of imprisonment of 4 years is imposed;

(2) under s 19AB(2) of the Crimes Act 1914 (Cth) a single non-parole period of 2 years and 6 months is fixed;

(3)   the sentence and non-parole period to date from 9 July 2020. The head sentence expires on 8 July 2024. The offender is first eligible for parole on 8 January 2023.

Catchwords:

CRIMINAL LAW – sentence – federal offenders – conspiracy to cause loss to the Commonwealth –

money laundering conspiracy – aggregate sentence – objective seriousness just below the mid-range – significant loss to the Commonwealth – persistent course of conduct – early plea of guilty – [redacted] – excellent prospects of rehabilitation

Legislation Cited:

Crimes Act 1914 (Cth), Pt IB, ss 16A(1), 16A(2), [redacted], 17A, 19AB(2)

Crimes (Sentencing Procedure) Act1999 (NSW), s 53A

Criminal Code Act 1995 (Cth), Schedule ss 11.5(1), 135.4(3), 400.3(1)

Evidence Act1995 (NSW), s 191

Proceeds of Crime Act 2002 (Cth), ss 320(b), 320(d)

Cases Cited:

Dickson v R [2016] NSWCCA 105

Director of Public Prosecutions (Cth) v Beattie [2017] NSWCCA 301; (2017) 270 A Crim R 556

Director of Public Prosecutions (Cth) v Gregory (2011) 34 VR 1; [2011] VSCA 145

Ha v R [2008] NSWCCA 141

Hili v The Queen (2010) 242 CLR 520; [2010] HCA 45

Issakidis v The Queen [2019] NSWCCA 302

Kannis v R [2020] NSWCCA 79

Kristensen v R [2018] NSWCCA 189

Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25

Ngo v R [2018] NSWCCA 296

Putland v The Queen (2008) 218 CLR 174; [2004] HCA 8

R v Agius; R v Zerafa [2012] NSWSC 978; (2012) 87 ATR 528

R v Anthony James Dickson (No 18) [2015] NSWSC 268

R v Glynatsis [2013] NSWCCA 131; (2013) 230 A Crim R 99

R v Hawkins (1989) 45 A Crim R 430

R v Huang; R v Siu [2007] NSWCCA 259; (2007) 174 A Crim R 370

R v Issakidis [2018] NSWSC 378

R v Kitson [2019] NSWSC 1109

R v Ly [2014] NSWCCA 78; (2014) 241 A Crim R 192

R v Moon [2000] NSWCCA 534; (2000) 117 A Crim R 497

R v O’Leary (District Court (NSW), 4 June 2020, unrep)

R v Olbrich (1999) 199 CLR 270; [1999] HCA 54

R v Paul (District Court (NSW), 21 February 2020, unrep)

Tyler v R; R v Chalmers [2007] NSWCCA 247; (2007) 173 A Crim R 458

Xiao v R (2018) 96 NSWLR 1; [2018] NSWCCA 4

Category:

Sentence

Parties:

Regina (Crown)
Devyn Michelle Hammond (Offender)

Representation:

Counsel:
R Sharp (Crown)
C Smith SC (Offender)

Solicitors:
Commonwealth Director of Public Prosecutions (Crown)
Morrisons Law (Offender)

File Number(s):

2017/148649

Publication restriction:

(1) Pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW) the parts of these reasons for judgment which are marked as redacted on the file copy of the judgment initialled by Payne JA are not to be published (other than to the parties and their legal representatives) until further order of the Court.

(2) Order (1) is made on the ground specified in s 8(1)(c) of the Act.

(3) Pursuant to s 11(2) of the Act, order (1) applies throughout the Commonwealth of Australia.

Judgment – EX TEMPORE

[Amended in accordance with the principles in Bar-Mordecai v Rotman [2000] NSWCA 123 at [194]]

1. PAYNE JA: Ms Devyn Michelle Hammond has pleaded guilty and appears before me to be sentenced for two offences:

1. “Between about 1 July 2015 and about 18 May 2017 at Sydney in the State of New South Wales and elsewhere, did conspire with others, namely Simon Paul Anquetil, Adam Michael Cranston, Lauren Anne Cranston, Joshua Meredith Kitson, Dev Menon, Jason Cornell Onley, Daniel Rostankovski, and divers others with the intention of dishonestly causing a loss to a third person, namely the Commonwealth.

Contrary to section 135.4(3) of the Criminal Code (Cth).

2. Between about 1 July 2015 and about 18 May 2017 at Sydney in the State of New South Wales and elsewhere, did conspire with others, namely Simon Paul Anquetil, Adam Michael Cranston, Lauren Anne Cranston, Dev Menon, Jason Cornell Onley, and divers others to deal with money of a value of $1,000,000 or more believing it to be the proceeds of crime.

Contrary to sections 11.5(1) and 400.3(1) of the Criminal Code (Cth).”

2. The maximum penalty for the offence under s 135.4(3) of the Criminal Code is imprisonment for 10 years and/or a fine of $108,000. The maximum penalty for the offence under ss 11.5(1) and 400.3(1) of the Criminal Code is imprisonment for 25 years, and/or a fine of $270,000.

3. An agreed statement of facts pursuant to s 191 of the Evidence Act1995 (NSW) became Exhibit 1 before me. In what follows I have summarised those agreed facts for the purposes of sentence. I have also taken into account all of the other material tendered by the parties on sentence and will refer to it where appropriate.

4. It bears emphasising at the outset that the facts in Exhibit 1 and found by me relate only to Ms Hammond’s pleas of guilty. Those pleas of guilty and the findings of fact made in relation to Ms Hammond do not represent findings, even tentative findings, about any of the remaining alleged conspirators or any other person. I do not intend to make and have not made in the reasons any findings about any person other than Ms Hammond. The other alleged conspirators are presumed innocent of any charge until it is proven otherwise.

Relevant facts

5. In September 2016, the Australian Federal Police (AFP) commenced an investigation into a conspiracy between several persons to dishonestly cause a loss to the Commonwealth (the tax fraud conspiracy). The tax fraud conspiracy involved the establishment and operation of a payroll services company, named Plutus Payroll Australia Pty Ltd (Plutus) and a number of other related subcontracting companies, controlled by a number of the conspirators, for the purpose of depriving the Commissioner of Taxation of Pay As You Go Withholding (PAYGW) amounts and Goods and Services Tax (GST). Over a three year period, Plutus collected $141,291,923.08 in PAYGW and GST from its clients that it was obligated to remit to the Australian Taxation Office (ATO). At least $105,625,304.36 was misappropriated as a result of the conspiracy (74.7% of all PAYGW and GST amounts collected by Plutus). Only $30,883,342.47 was ever remitted to the ATO and a further $4,783,276.25 was also garnisheed by the ATO.

6. The conspirators agreed to launder and misappropriate the monies which were payable to the ATO (the money laundering conspiracy). In furtherance of the money laundering conspiracy, various entities were used to receive, conceal and divert the misappropriated taxes derived from the tax fraud conspiracy, essentially for the benefit of a number of the conspirators.

7. From 1 July 2015, when Ms Hammond joined the conspiracies, the loss occasioned to the Commonwealth was $101,584,952.81.

The tax fraud conspiracy

8. Between February and March 2014, at least five of the conspirators, Messrs Onley, Anquetil, Adam Cranston, Kitson and Peter Larcombe (now deceased) had meetings during which they discussed a scheme which involved operating a payroll business as a means to misappropriate PAYGW amounts and GST that were payable to the ATO. Ms Hammond had no knowledge of these matters and did not join the conspiracies until July 2015.

9. A payroll company, Plutus, was incorporated on 23 April 2014 with Mr Anquetil as the sole director. Legitimate clients of Plutus included initially, contractors, and later, larger corporate companies and government agencies. The principal incentive for companies to sign as clients was the fact that Plutus did not charge a fee for its services.

10. The tax fraud conspiracy operated and was implemented as follows:

1. Legitimate client companies made regular transfers of gross payroll amounts to Plutus pursuant to contractual arrangements. The arrangements provided that Plutus would pay the wages and salaries of the relevant employees and contractors, withhold and remit to the ATO the required PAYGW and GST amounts, as well as remit the employees’ superannuation contributions to their superannuation funds.

2. Between July 2014 and March 2016, Plutus transferred the gross payroll monies, in full, to companies incorporated and controlled by the conspirators and collectively referred to by the conspirators as the “bots” or “bottom companies” or subcontracting companies (the 2nd tier companies) to process the relevant payments. The appointed directors of the 2nd tier companies were unsophisticated people who did not understand the operations of those companies. Mr Rostankovski, under the direction of Messrs Adam Cranston, Menon and Onley, became responsible for recruiting and managing the directors of the 2nd tier companies and ensuring they had no unsupervised involvement in the operations of those companies. While at times she purported to act in the name of one of the directors, Ms Hammond was not involved in either the recruitment or the management of these directors.

3. Ms Lauren Cranston, Ms Hammond and Mr Patrick Willmott operated the 2nd tier companies’ accounts from a “back office”, at the instruction of Messrs Onley, Anquetil, Adam Cranston and Menon. In their liaison with Plutus staff, accountants and other third parties, Ms Lauren Cranston, Ms Hammond and Mr Willmott signed off as the named directors of the 2nd tier companies or as “bookkeepers” assisting the directors in email communication. Messrs Onley and Adam Cranston oversaw the operations of Ms Lauren Cranston, Ms Hammond and Mr Willmott in managing the 2nd tier companies.

4. Although the legitimate client companies’ agreements with Plutus contained a clause enabling Plutus to assign or subcontract its obligations, Plutus did not inform its clients about the subcontracting arrangement it had put in place with the 2nd tier companies. This is because the subcontracting arrangement was a mechanism to misappropriate amounts Plutus was obliged to pay the ATO on behalf of the legitimate companies. While the 2nd tier companies would pay the contractors and employees of the legitimate companies amounts representing their net wages and superannuation, these companies would not remit all of the taxes collected to the ATO but instead a large proportion of these funds would be retained by Plutus and distributed according to the instructions of the conspirators (the 2nd tier cut).

5. The 2nd tier companies paid the 2nd tier cut to other entities controlled by Messrs Onley, Anquetil and Adam Cranston, sometimes as payments of fabricated “invoices”, as well as to individuals including the conspirators and also in some cases back to Plutus. The arrangement also enabled the conspirators to transfer the PAYGW and GST liabilities to the 2nd tier companies. Over time these debts to the ATO would accrue. The 2nd tier company would then be liquidated leaving the debts unpaid.

6. In 2016, Plutus retained a portion of the funds before the gross payroll was remitted to the 2nd tier companies (the Plutus cut). The Plutus cut was implemented following Mr Anquetil’s engagement in March 2016 of an offshore software developer, Mr Azarja who developed an automatic program for withholding the Plutus cut. When Plutus staff occasionally noticed discrepancies, Messrs Kitson and Anquetil instructed them not to concern themselves. From this point on, amounts which should have been remitted to the ATO were dishonestly retained via both the Plutus cut and the 2nd tier cut.

7. Mr Menon was an accountant and a lawyer. He was a partner at Clamenz Lawyers (Clamenz) which was initially located in the same building as Plutus. In December 2016, both Clamenz and Plutus moved locations, to the MLC Centre and Potts Point respectively. Mr Menon ensured the subcontracting arrangement and front office facade was maintained and back office dealings not exposed.

8. While Plutus regularly lodged Business Activity Statements (BAS), throughout the period of the tax fraud conspiracy, the 2nd tier companies either lodged their BAS’s late (up to 13 months late) whilst significantly under-declaring the taxes or did not lodge a BAS at all.

11. On 24 January 2017, the ATO garnisheed five of the eight 2nd tier companies’ accounts. Consequently, Plutus managed its obligations to its clients by paying wages directly from Plutus.

12. Between December 2016 and end of January 2017, video and audio footage was recorded on covert surveillance devices at the “back office” in Miranda (the Regus office). In these recordings, Ms Lauren Cranston and Ms Hammond contemporaneously operated the email and bank accounts of the 2nd tier companies, posing as the directors, and the 2nd tier cut would be withheld by them depending on the instructions by the other conspirators regarding the size of that cut.

13. Between January and May 2017, a number of discussions between the conspirators were recorded on surveillance devices installed at Clamenz, at the MLC Centre in Martin Place, Sydney speaking in explicit terms about the fraud, including its history, key features, the means by which it was implemented and the conspirators’ respective involvement and financial gains. Ms Hammond was in attendance at some of these meetings.

14. On 1 February 2017, at Clamenz, Mr Rostankovski, in conjunction with others, made a blackmail demand of the other conspirators for $5 million. He threatened media exposure of the fraud and bikie gang violence. After the blackmailed amount of $5 million had almost been completely paid via instalments, a further blackmail demand was made for an additional $20 million. Over 12 weeks, a total of $24.24 million of misappropriated taxes retained by the conspirators was transferred from Plutus to a firm, Lands Legal, in answer to the blackmail demands.

15. On 26 April 2017, the ATO served a garnishee order on bank accounts operated by Plutus. The conspiracy concluded after the AFP arrested a number of people, including Ms Hammond, on 17 and 18 May 2017.

The money laundering conspiracy

16. The conspirators agreed that taxes dishonestly withheld from the Commonwealth would be dealt with for the ultimate benefit of the conspirators. The quantum of misappropriated taxes increased each financial year. The means by which monies were misappropriated adapted and evolved. In furtherance of the money laundering conspiracy, monies were received, concealed and disposed of through bank accounts owned by companies associated with the conspirators (not including Ms Hammond).

17. Acts in furtherance of the money laundering conspiracy included:

1. The PAYGW and GST amounts withheld by the 2nd tier companies by the “back office” were transferred to a number of entities’ accounts, controlled by and associated with, in particular, Messrs Adam Cranston, Onley, Anquetil and Rostankovski, and used to purchase particular properties in which conspirators were joint or main beneficiaries. At times, transfers were also accompanied by false invoices and false descriptions such as loans. Ms Lauren Cranston and Ms Hammond made these transfers at the instruction of, and with assistance of Messrs Adam Cranston, Menon, Guillan and Anquetil.

2. Some of the 2nd tier cut was also transferred back to Plutus and from thereon monies were transferred to other entities owned by Messrs Anquetil and Kitson as well as disbursed through electronic transfers.

3. From October to December 2014 monies were also transferred from a company controlled by Mr Anquetil named Media and Marketing Group (MMG) back to Plutus, consistent with a reciprocal contractual arrangement represented by Messrs Anquetil and Kitson as existing between Plutus and MMG and MMG and the 2nd tier companies.

4. From April to June 2016, the Plutus cut was transferred through a company Synep Limited (Synep) which became the parent company of Plutus, MMG and other entities, for the benefit of (at least) Messrs Anquetil, Onley and Adam Cranston.

18. The main financial beneficiaries were Messrs Anquetil, Cranston and Onley. After retaining the 2nd tier cut, Ms Cranston and Ms Hammond arranged regular payments to Messrs Adam Cranston, Onley and Rostankovski.

19. In the 2016-2017 financial year Ms Cranston and Ms Hammond arranged, as instructed, regular payments to Messrs Adam Cranston, Onley and Rostankovski. Ms Lauren Cranston and Ms Hammond recorded this on spreadsheets they maintained. Mr Menon received regular payments to Clamenz from 2nd tier companies, and sought to legitimise such payments through invoices for purported professional fees and disbursements. A series of Clamenz invoices issued between November and December 2016 were seized from Mr Paul’s premises in Cronulla (originating from the Regus Miranda office) that purported to record invoices for legal services to a company, Uneek.

20. [redacted].

21. [redacted]. On 22 December 2016, Mr Menon sent Ms Hammond a message which said “Dev did u get a chance to check the payment to Clamenz and if blocked? Thanks heaps and no hurry just wanted to check no issues”.

22. On a surveillance device recording on 23 December 2016, at the Regus office, Ms Hammond arranged payment to Mr Menon. Mr Menon is recorded over the telephone as saying “with my payment, whatever Dev, whatever suits ... no stress, just whatever you can pay from.” Ms Hammond then switched payments to Clamenz from the PP Australia NSW account and informed Mr Menon that he would need to get his “account guys” to change the invoices to be addressed to PP Australia NSW Ltd, the alternative 2nd tier entity Ms Hammond selected.

23. Between July 2015 and May 2017, Ms Hammond together with Ms Lauren Cranston, were involved in the transfer of $49,084,316.55 of tax fraud proceeds that were deposited in to the eight 2nd tier company accounts over which they had control.

Ms Hammond’s role in the conspiracies

24. Ms Hammond was not involved in the initial planning and set up of Plutus. In February 2015, Ms Hammond’s friend Mr Brodie Murray, who at that time worked for Plutus, told her that a person named Patrick Willmott was looking to employ staff. Ms Hammond was interviewed and hired by Mr Willmott shortly thereafter, on the understanding she was to run payroll, generally administer and reconcile accounts for what she thought were a number of legitimately-run companies, with Plutus as one of the clients.

25. As Ms Hammond came to realise by July 2015, Mr Willmott, along with Ms Cranston and herself, were in fact responsible for the daily operation of the 2nd tier companies in furtherance of the tax fraud and money laundering conspiracies. Ms Hammond knowingly continued to perform her role.

26. Ms Hammond’s role in the tax fraud conspiracy was to process payroll received from Plutus which included making payments of wages and superannuation out of the 2nd tier company bank accounts, and withhold entirely or underpay the amounts owed to the ATO. Together with Ms Cranston and Mr Willmott, Ms Hammond had daily control of the 2nd tier companies’ bank accounts and facilitated the main financial aspects of the scheme from a “back office”, on the instruction and direction of other conspirators.

27. While Ms Hammond acted on instructions, she understood the mechanics of the 2nd tier companies’ accounts, and would confirm with Messrs Cranston and Menon which were the “big” and “small accounts”, and which accounts the various directors and conspirators should be paid from to avoid detection. Ms Hammond knew that she had a central role in facilitating the scheme.

28. Ms Hammond was aware of the true nature of the subcontracting arrangement. She knew the named directors had no control or knowledge of the daily operations of the 2nd tier companies.

29. In furtherance of the money laundering conspiracy, Ms Hammond agreed to assume the identity of these directors in all communications for the benefit of the conspirators. She and Ms Cranston signed off emails and correspondence in the name of the various directors, maintaining a list of the directors’ contact details and passwords when operating the bank accounts, and possessing banking tokens and mobile phones in the name of the directors.

24. Ms Hammond knew of the extent of the taxes withheld:

1. On 22 December 2016, Ms Cranston said to Ms Hammond, “I’m paying 70% of tax, I don’t give a fuck anymore”. Ms Hammond replied, “we may as well, ‘cause we’ve always got left-over”.

2. On 23 December 2016, Ms Cranston said that at least the situation is “not as bad as last year”. Ms Hammond replied “at least we are actually paying some taxes”.

3. On 9 January 2017, Ms Cranston asked Ms Hammond whether they should reduce the tax payments to 60 from 70% and use up residual funds to “catch ourselves”. Ms Cranston said “the thing is we shouldn’t have anything left, we should be budgeting to have fuck all left.”

4. On 13 January 2017, Ms Cranston and Ms Hammond agreed to pay more PAYGW amounts to the ATO that quarter. Ms Hammond noted “our percentages still seem to be quite low, because of how long it took us to start paying.” Later on, Ms Cranston read aloud balances for the 2nd tier companies and Ms Cranston and Ms Hammond agreed that they had not paid enough PAYGW to reduce the balances owing. Ms Cranston and Ms Hammond agreed that the estimated $40 million – $10 million per quarter – for one of the 2nd tier companies should at least “cover the first fucking quarter, so they [the ATO] don’t look into it”.

5. On 19 January 2017, Ms Hammond said to Ms Cranston, “I wonder how this [second-tier company] payroll tax investigation is gonna go down”.

31. Following the ATO garnisheeing some of the 2nd tier companies’ bank accounts in late January 2017, Ms Hammond participated in a series of emergency meetings held at Clamenz. On 24 January 2017, the conspirators discussed ways in which they could keep the ATO from investigating or uncovering the conspiracies. They agreed the director of Sonar, Mr Palumberi, would not sound convincing if interviewed by the ATO and it would be best if he were paid to leave the country.

32. The conspirators discussed which 2nd tier companies should be wound up and which should be retained. Mr Menon suggested PPA NT should “lodge” and then be liquidated. Ms Cranston and Ms Hammond confirmed to the others that they had paid 60% to 70% of the PAYGW and GST to the ATO.

33. On the instruction of Messrs Menon and Cranston, Ms Hammond actively took steps to conceal the conspiracies, including attempted and actual destruction of records, managing perceptions of Plutus staff and third parties. Examples include:

1. On footage recorded at the Regus office on 31 January 2017, Ms Cranston and Ms Hammond were recorded removing records and computers, in an attempt to destroy evidence and conceal the conspiracies. Ms Cranston said to Ms Hammond, “I don’t think anyone’s going to come guns blazing just yet ... that’s just my opinion ... but just in case mate.” Ms Hammond confirmed via WhatsApp to Mr Menon that evening “... just dropped Lauren home and nothing left in Miranda”.

2. On 6 February 2017 at Clamenz, Mr Menon instructed Ms Hammond to delete records and emails, and fabricate a paper trail:

“MENON:   So we got to print, delete - so we got to print everything that helps us and delete everything that doesn’t help us. So effectively for the PP ones, just print out everything that came from the director regarding issues and I’ll go through it all, and delete everything that is crazy.

HAMMOND:   I don’t think there is really anything in there.”

Mr Menon said he would wipe all the emails and that “we’ll just clean up, we’ll just get rid of everything, they’re all going to go into [liquidation].”

34. On 14 February 2017 at Clamenz, Mr Menon told Ms Hammond that she needed to wipe her emails on her personal email account and messages on her phone.

35. On the same day, Mr Menon said to Ms Hammond, Ms Cranston and Mr Cranston that it would be impossible to detect and decipher the financial aspects of the scheme:

“MENON:   There is no forensic accountant in the world, without any, like how the fuck are you going to piece this together, it’s impossible ... Look they will never figure it out, like that’s the only thing that I’m actually, the blessing in disguise was that it was such a clusterfuck, that no one will figure this out because even I couldn’t, even me sitting down with you three, all of us together trying to piece it together now is hard, and we know yeah”.

36. On a number of occasions the conspirators discussed blaming the scheme on Mr Larcombe, who by then was deceased. On 14 February 2017 Mr Menon told Ms Hammond, Ms Cranston and Mr Adam Cranston:

“MENON: So we’ve covered all this now and that but basically what we are saying is Peter [Larcombe] ran the whole thing. Okay. You guys had no idea what was happening, if this ever comes to it. I just want you guys to start thinking about the stories, if, obviously, Adam, this goes for you too Loz, Adam, Jay Onley, [indistinct], protects everyone right, me, every single person.”

37. Ms Hammond said she would say “it was such a mess I couldn’t understand it.” Ms Hammond later said to the police that while she did not protest at the time, she would not actually lie and blame the fraud on Mr Larcombe if approached by the ATO.

38. On 6 April 2017, the conspirators discussed how to ensure that deleted emails could not be retrieved. Ms Hammond said “those server accounts need to be gone ... I’m pretty sure they retrieve emails through the ... server”. Mr Menon said we have to “burn them” and that it was urgent for her to “wipe them” and to send via WhatsApp anything through to him, but not to write anything. Mr Menon said that on 30 June, all of Plutus’ records were scheduled to be deleted and he would inform authorities they had paid all their taxes but had been hacked. Mr Menon said “it’s a good story, hey?” and Ms Hammond replied “definitely”.

Ms Hammond’s financial gain

39. The financial gain Ms Hammond derived from her participation in the tax fraud and money laundering conspiracies was not less than $177,910.74. Some of the monies received by Ms Hammond were used to pay a 10% deposit as part of settlement monies, along with lawfully acquired income from her partner, to purchase a house.

Consideration

40. The offender is to be sentenced for the offence against Commonwealth law and the Court is required to apply the terms of Part IB of the Crimes Act 1914 (Cth). The governing principle under s 16A(1) of the Crimes Act is the imposition of a sentence which is of a severity appropriate in all the circumstances of the offence. The Court must consider the matters identified in s 16A(2) of the Crimes Act, to the extent that they are relevant.

41. Given the length and detail of the submissions made by the Crown and the offender I will deal with the respective submissions when addressing each of the matters required to be taken into account by Part IB of the Crimes Act.

42. The offences with which Ms Hammond is charged, s 135.4(3) of the Criminal Code, carries a maximum penalty of imprisonment for 10 years and/or a fine of $108,000 and the offence under ss 11.5(1) and 400.3(1) of the Criminal Code is imprisonment for 25 years, and/or a fine of $270,000.

43. The maximum penalty serves as a yardstick: Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [30]-[31]. It is important to have regard to the maximum penalty to determine the degree to which the offender’s conduct offends against the legislative object of ensuring compliance with taxation laws. In addressing this question, care should be taken to ensure that what the offender actually did is considered, rather than any shorthand labels: R v Olbrich (1999) 199 CLR 270; [1999] HCA 54. I take the maximum penalty in each case into account as an important guidepost.

44. I take into account the approach to sentencing for a conspiracy charge which was summarised by Simpson J (with whom Spigelman CJ and Harrison J agreed) in Tyler v R; R v Chalmers [2007] NSWCCA 247; (2007) 173 A Crim R 458 at [78]-[85]. It was held in Tyler at [83]-[84] that sentencing for specific acts alone would:

“[83] … be a negation of the complex inter-connection between the various participants, and the organisational nature of a conspiracy. It would represent too literal an application of the decisions that identify the ‘role’ of any participant as a relevant factor in the sentencing exercise. It would be to ignore the essential feature of the offence of conspiracy – the agreement to participate in an organised criminal activity.

[84] That is not to say that the physical acts of the offender whose sentence is under consideration are irrelevant. They are relevant, as one part of a complex tapestry…”

45. These conspiracies demonstrate the “dangerousness” of individuals working in concert for a common unlawful end. I also proceed on the basis that it is axiomatic that general deterrence is an important consideration in relation to white collar offences which are difficult to detect, investigate and successfully prosecute.

46. I turn now to the list of factors I must take into account under s 16A(2) of the Crimes Act. I will ignore those factors that the parties agreed did not apply here.

Section 16A(2)(a): The nature and circumstances of the offence

47. The two conspiracies fall towards the highest range of objective seriousness of offences of this kind, albeit Ms Hammond’s role fell at the bottom of the hierarchy of known conspirators in each.

48. The tax fraud and money laundering conspiracies involved a significant level of sophistication, premeditation, planning and deception and a high degree of dishonesty and corresponding breach of trust. The conspiracies involved the conspirators setting up a large number of corporate entities via which the conspiracies could be implemented and layers could be put in place to conceal the involvement of the conspirators.

49. The conspiracies’ success depended upon the appearance of Plutus as a legitimate company so that it could attract a large number of legitimate clients together with an effective “back office” that processed the thousands of payroll payments and disbursements of the tax fraud proceeds.

50. The tax fraud conspiracy involved the drafting of a number of agreements between Plutus and the 2nd tier entities so that a “paper trail” could be established to create the appearance of legitimacy.

51. The money laundering conspiracy involved the creation and exchange of hundreds of false invoices to launder the tax fraud proceeds. The legitimate clients that engaged Plutus to perform the payroll services were not informed that these services were subcontracted to the 2nd tier entities.

52. Most of the staff that worked for Plutus were not aware of the true nature of the business and were deliberately misinformed about certain aspects of how Plutus operated. Unsophisticated people were appointed as directors to the 2nd tier entities to provide a layer of concealment and to create the appearance that the subcontracting arrangement was at “arm’s length”. In reality, these directors had no role in managing the companies of which they were directors. It was intended by the conspirators that upon detection of the conspiracy those directors would be held responsible for any outstanding tax liability.

53. Ms Hammond was not a principal of the scheme. As I have said, her role fell at the bottom of the hierarchy of known conspirators. She was not involved in the initial planning, deception and set-up of the sophisticated corporate structures, and she had no role in the “front-office” operation within the conspiracies.

54. I accept the defence submission that the role played by the offender in these conspiracies was a subordinate one. The scheme to defraud had been devised by Messrs Onley, Anquetil, Cranston, and Larcombe. Messrs Kitson and later Menon were also heavily involved the evolution of the scheme.

55. The principal participants devised the scheme between February and March 2014. Whilst Ms Hammond was employed in February 2015, it was not until July 2015 that she realised that she was involved in a criminal enterprise. With that knowledge, Ms Hammond continued to perform her role and accepted a trusted and responsible position in the conspiracies. The success of the tax fraud and money laundering conspiracies depended in part on the offender’s participation in the conspiracies.

56. The amount of money involved and the length of time over which the fraudulent offending occurred are significant relevant considerations when determining the objective seriousness and gravity of fraud-related offending: R v Hawkins (1989) 45 A Crim R 430. During the period of the offender’s participation, the loss caused to the Commonwealth was $101,584,952.81.

57. In furtherance of the money laundering conspiracy, the offender and Ms Cranston were collectively responsible for facilitating the laundering of $49,084,316.55 of tax fraud proceeds from the 2nd tier companies to other companies and individuals, principally for the benefit of the principal conspirators.

58. The offender was actively involved in both conspiracies for a 22 month period. This was a consistent and persistent demonstration of fraud over a significant period which is to be taken into account when considering the criminality of the offence.

59. In comparison with the other conspirators, Ms Hammond received comparatively small remuneration. Whilst Ms Hammond received almost $180,000 for her involvement in the conspiracies, I do not conclude that she was principally motivated by greed.

60. The offender was 21 at the commencement of the indictment period. She was then unemployed. She had limited training. She was not by age, experience, occupation or otherwise a professional. Within 10 months of the commencement of the indictment period she was seeing her doctor having had a breakdown and complaining about having too much work and being stressed with work. I have concluded that whilst greed, in the receipt of $180,000 for her involvement in the conspiracies, forms part of the explanation for Ms Hammond’s conduct, her participation was primarily the result of a misguided sense of trust in and loyalty to the people directing the conspiracies and Ms Cranston.

61. In R v Glynatsis [2013] NSWCCA 131; (2013) 230 A Crim R 99 at [48] Hoeben CJ at CL said:

“[48] … The distinction between an offence committed for motives of personal greed and committed for the benefit of some other person is real. This is not to say that such a circumstance is exculpatory, rather it can indicate a less serious level of criminality as it did in this case.”

62. The circumstances in this case are quite different to those in Glynatsis, nevertheless as a matter of principle the objective seriousness of Ms Hammond’s offending is ameliorated to some extent by her relative youth, inexperience and her misplaced trust in others.

63. Ms Hammond was not an instigator or architect of these conspiracies and acted under instructions. Her financial reward, whilst significant, was not her sole motivation for participation. Having said that, there was a significant amount of tax loss caused. The monies laundered place the conspiracies at the upper range of known offences previously dealt with by this Court. There was also a significant and sustained period of involvement by this offender. Given all of these matters, and what Ms Hammond actually did in furtherance of these conspiracies, I have concluded that this offending falls just below the mid-range of objective seriousness for offences of this kind.

64. Put another way, the conspiracies themselves fall at the highest range of objective seriousness of offences of this kind, but Ms Hammond’s position in the conspiracies is at the bottom.

Section 16A(2)(c): If the offence forms part of a course of conduct consisting of a series of criminal acts of the same or a similar character – that course of conduct

65. In R v Agius; R v Zerafa [2012] NSWSC 978; (2012) 87 ATR 528 at [62] Simpson J found that the offenders in a conspiracy to defraud the Commonwealth, which included the filing of false income tax returns over a number of years, had engaged in a course of criminal conduct for the purposes of s 16A(2)(c).

66. The offender’s conduct occurred over a 22 month period. This was not an isolated instance of offending, but rather a persistent course of conduct.

Section 16A(2)(e): Any injury, loss or damage resulting from the offence

67. There is no doubt that revenue fraud on the scale here has a corrosive effect on our society. As Ms Hammond herself acknowledged, the injury suffered by this offending is a collective financial injury. The loss to the Commonwealth of over $100 million will need to be made up from additional taxes levied on other taxpayers or by cuts to government spending.

68. In a time such as the present, when the calls on services which are supplied by government are as urgent as they have been at any time since the Great Depression, the loss of over $100 million which would otherwise have been available to fund those services is a very significant injury suffered by all Australians.

Sections 16A(2)(f) and (g): The degree to which the person has shown contrition for the offence and the offender’s plea of guilty

69. The Crown accepted that the plea of guilty was entered by Ms Hammond “at an early opportunity”.

70. I am satisfied that the offender’s plea of guilty is a demonstration of her remorse and contrition and ought to be recognised. The offender’s clear remorse is apparent also in the subjective material led on her behalf, [redacted]. It is also made plain in the offender’s affidavit.

71. The offender’s plea was entered before the Local Court, and accordingly, the offender should be afforded a significant discount to acknowledge her willingness to facilitate the course of justice, as well as the utilitarian value of her plea: Xiao v R (2018) 96 NSWLR 1; [2018] NSWCCA 4 at [269]-[278]. The utilitarian value of the offender’s pleas of guilty is significant, given the size of the brief of evidence and the likely length of the trial.

72. I propose to apply a 25% discount on the sentence which I would otherwise have imposed on Ms Hammond to reflect all of these matters.

[redacted]

73. [redacted].

74. [redacted].

75. [redacted].

76. [redacted].

Sections 16A(2)(j) and (ja): The deterrent effect that any sentence or order under consideration may have on the person or on other persons

77. It was common ground that general deterrence is a fundamental consideration in the present sentencing exercise. This is because fraud on the Commonwealth revenue is easy to commit, difficult to detect and comes at a great cost to the community. In addition, money laundering is a serious criminal activity. Money laundering is vital to the success of conspiracies such as the present, because it moves the proceeds of crime to third parties, making the detection of the underlying crime more difficult. It also prevents the recovery of funds even if the original fraud is detected.

78. I do, however, accept the defence submission that general deterrence should not dictate a sentence which is not proportionate to the offence committed or appropriate to punish the particular offender before the Court: R v Moon [2000] NSWCCA 534; (2000) 117 A Crim R 497 at [81] per Howie J.

Section 16A(2)(k): The need to ensure that the person is adequately punished for the offence

79. Section 17A of the Crimes Act provides that a court shall not pass a sentence of imprisonment on any person for a federal offence unless the court, after having considered all other available sentences, is satisfied no other sentence is appropriate in all the circumstances of the case. Sentences for offences in the nature of tax evasion should have both a deterrent and punitive effect. This is particularly so in cases such as the present where the fraud is calculated and systematic, and persisted in for some time.

80. As the Victorian Court of Appeal said in Director of Public Prosecutions (Cth) v Gregory (2011) 34 VR 1; [2011] VSCA 145:

“[57] A sentence imposed for fraud upon the taxation revenue is intended to reaffirm basic community values that all citizens according to their means should fairly share the burden of incidence of taxation so as to enable government to provide for the community, that the revenue must accordingly be protected and that the offender should be censured through manifest denunciation.”

81. I have concluded that a sentence of full-time imprisonment is the only appropriate sentence to impose in this case. Given the gravity and objective seriousness of the offending, a significant sentence of full-time imprisonment should be the starting point before the application of relevant discounts. Senior Counsel for Ms Hammond accepted that the imposition of a full-time custodial sentence was here inevitable.

Section 16A(2)(m) and (n): The character, antecedents, age, means and physical or mental condition of the person and the prospects of rehabilitation of the person

82. I make the following findings about Ms Hammond’s subjective case:

1. The offender is a person of prior good character and prior character is relevant to her prospects of rehabilitation: Ha v R [2008] NSWCCA 141 at [43].

2. At the time when the offender was first employed by the conspirators, she was 21 years old and 22 when she realised the unlawfulness of her conduct. I accept, as Senior Counsel for Ms Hammond submitted, that her age and relative inexperience provided a substantial contribution to her being inveigled by the other conspirators to continue to participate in the conspiracies.

3. The relative youth of an adult offender may impact upon the sentencing discretion in a number of ways, including the assessment of the objective gravity of an offence and considerations of the prospects of rehabilitation and general deterrence: Ngo v R [2018] NSWCCA 296 at [91] per Price J (with whom Hoeben CJ at CL and Rothman J agreed).

4. Since the commission of the offences the offender has continued to mature and remains in a supportive relationship. She continues to enjoy the love and support of her parents.

5. Ms Duffy, a psychologist, describes the offender’s current state in the following terms:

“Ms. Hammond has a low risk of reoffending given her lack of criminal history, no drug or alcohol problems. The main risk factor in her offence was her susceptibility to influence by her associates. Following this experience, she is less likely to allow herself to become involved in such a situation again. She has strong protective factors against reoffending such as the support of her family, her work ethic and desire to support herself and contribute to the mortgage.”

83. I find that the offender is most unlikely to re-offend and that she has excellent prospects of rehabilitation.

84. The following character references were given:

1. Ms Patchett, the mother of Mr Ryan Patchett who is Ms Hammond’s partner, explained that she has known Ms Hammond for the past five years. Ms Patchett described Ms Hammond as “caring, reliable and trustworthy” and “an honourable individual, a valuable member of our family, the community and a good human being”. Ms Patchett said she was shocked when she heard that Ms Hammond was arrested and that it “was the last thing that I ever expected to happen”.

2. Mr Ryan Patchett, Ms Hammond’s partner, described Ms Hammond as the “most loving, [caring], loyal and hardworking lady I know”. Mr Patchett stated that after Ms Hammond was arrested, when she could not find work, she volunteered with Orange Sky in Wollongong, helping homeless people.

3. Ms Karen Hammond and Mr Zane Hammond, Ms Hammond’s mother and father, described having watched Ms Hammond “suffer emotionally, financially and mentally through the last 3 years”. Ms Hammond’s parents said that to her credit she had found a way to get through it and that she has still found time to volunteer to help others, including an elderly couple across the road from where Ms Hammond works.

4. Mr Brownlow, Ms Hammond’s current employer, described her as a hard and diligent worker. Mr Brownlow described the prospect of not having Ms Hammond as an employee as “a loss for my business”.

5. Ms Evans, a former employer, described having trusted Ms Hammond with a key to her salon to do tasks unsupervised. Ms Evans described Ms Hammond as having “a strong work ethic and moral standards” and said that she would not hesitate to employ her again.

85. I take all of these matters into account as tending strongly in Ms Hammond’s favour.

Section 16A(2)(p): The probable effect that any sentence or order under consideration would have on any of the person’s family or dependents

86. In the absence of exceptional circumstances, potential hardship to Ms Hammond’s family does not effect any substantial reduction in a sentence of imprisonment. Senior Counsel for Ms Hammond accepted that no exceptional circumstances exist. Accordingly, this principle was not enlivened.

87. The probable effect of the sentence upon the offender’s family and dependants remains, however, a relevant factor to take into account as part of the general mix of subjective features and I take it into account in that way.

Comparable cases

88. I propose to impose an aggregate sentence under s 53A of the Crimes (Sentencing Procedure) Act1999 (NSW) and a single non-parole period pursuant to s 19AB(2) of the Crimes Act 1914 (NSW): Putland v The Queen (2008) 218 CLR 174; [2004] HCA 8; Director of Public Prosecutions (Cth) v Beattie [2017] NSWCCA 301; (2017) 270 A Crim R 556; Kannis v R [2020] NSWCCA 79 at [10].

89. In Hili v The Queen (2010) 242 CLR 520; [2010] HCA 45 the High Court reiterated that consistency in federal sentencing is achieved with regard to what has been done in other cases through the work of the intermediate courts of appeal. The only cases suggested by the Crown to provide any real assistance in fixing an appropriate sentence were:

1. Dickson v R [2016] NSWCCA 105. In that case the offender was found guilty following a trial of two serious offences. Count 1 related to a complex tax fraud with net losses to the Commonwealth in excess of $100 million. The other count related to money laundering of over $63 million. The offender’s personal gain was found to be $19,616,996.37. The offending occurred over a period of about 6 years. Mr Dickson was originally sentenced by Beech-Jones J to 11 years imprisonment with a non-parole period of 7 years (see R v Anthony James Dickson (No 18) [2015] NSWSC 268) but was later re-sentenced following a Crown sentence appeal by the Court of Criminal Appeal to a total effective term of 14 years imprisonment with a non-parole period of 9 years and 3 months (see Dickson v R [2016] NSWCCA 105). Mr Dickson obtained an exponentially greater personal gain than Ms Hammond. [redacted].

2. R v Issakidis [2018] NSWSC 378. This case involved Mr Dickson’s co-conspirator. Mr Issakidis’ personal gain was approximately $15,738,020. Like Mr Dickson he faced two serious charges. A single non-parole period of 7 years and 6 months was imposed. [redacted]. Mr Issakidis’ conviction only appeal was dismissed by the Court of Criminal Appeal: Issakidis v The Queen [2019] NSWCCA 302.

3. R v Huang; R v Siu [2007] NSWCCA 259; (2007) 174 A Crim R 370. In that case the offender pleaded guilty to one offence in contravention of s 400.3(1) of the Criminal Code. The loss to the Commonwealth was $3,088,311 and Mr Huang’s total financial benefit was $30,000. Mr Huang was imprisoned for 5.5 years with a non-parole period of 3 years and 4 months. The Court allowed a total reduction of 50% in the sentence due to Mr Huang’s plea of guilty, contrition and past and future assistance.

90. It is clear that those cases involve a wide range of conduct. I take into account what the High Court made clear in Hili v The Queen at [18] that consistency in federal sentencing is not demonstrated by, and does not require, numerical equivalence.

91. I have given close consideration to the question of parity. Two cases, R v O’Leary (District Court (NSW), 4 June 2020, unrep) and R v Paul (District Court (NSW), 21 February 2020, unrep), peripherally related to the present facts, were agreed by the parties not to shed any real light on the relevant sentence to be imposed here. Having read those decisions carefully I agree.

92. The principal case referred to by the offender as providing guidance for both offences was R v Kitson [2019] NSWSC 1109. In that case the offender was a principal in the tax fraud conspiracy here engaged who pleaded guilty to one contravention of s 135.4(3) of the Criminal Code. The loss to the Commonwealth was at least $105,625,304.36. Mr Kitson participated in the tax fraud conspiracy for a substantially longer period than Ms Hammond. The offender’s personal gain was approximately $1.3 million. Mr Kitson received an overall discount of 50% for his early guilty plea [redacted]. Mr Kitson was sentenced to imprisonment for a period of 4 years and 6 months and a non-parole period of 3 years.

93. Mr Kitson was near the top of the hierarchy in the tax fraud conspiracy. He was far senior to the role played by Ms Hammond. The starting point in Mr Kitson’s case, 9 years, is near the top of the range for offending of this kind. Ms Hammond’s offending is much further down the scale. I have decided that the appropriate starting figure in fixing an indicative sentence, before applying any discount for Ms Hammond, is 4 years imprisonment for the tax fraud conspiracy.

94. Ms Hammond, unlike Mr Kitson, also faces a very serious money laundering charge where the legislative guidepost is imprisonment for 25 years. The seriousness of money laundering has been emphasised in many authorities: see for example R v Ly [2014] NSWCCA 78; (2014) 241 A Crim R 192 and Dickson v R to which I have already referred.

95. The sentence imposed on Mr Kitson does not give me any real assistance in identifying an appropriate indicative sentence for the money laundering offence Ms Hammond faces. I do not think that a comparison between a single non-parole period imposed on Ms Hammond for two serious offences and the non-parole period fixed for Mr Kitson in relation to one serious offence provides any real comparison or assistance in fixing an appropriate penalty for the money laundering offence. I accept the Crown submission that it would be an error to fail to consider the separate criminality the subject of Ms Hammond’s money laundering when identifying an appropriate indicative sentence for that offence.

96. The Crown pointed to head sentences for money laundering of 12 years in the case of Mr Dickson and 8 years and 3 months in the case of Mr Issakidis as providing some guidance in fixing a sentence, prior to discounts, for the present money laundering offence. Any comparison with Ms Hammond’s conduct, however, demonstrates that her conduct is far less serious than in those cases. Having regard to all of the matters I have set out above, the appropriate starting figure in identifying an indicative sentence, before applying any discount to Ms Hammond’s sentence, is 6 years imprisonment for the money laundering conspiracy. After the application of discounts the appropriate indicative sentences are 2 years for the tax fraud conspiracy and 3 years for the money laundering conspiracy.

97. I have given anxious consideration to the principle of totality. I have determined that there should be a degree of notional accumulation between the indicative sentences for the two counts sufficient to reflect the separate serious criminality involved. I have decided that one year is the appropriate amount of notional accumulation. Accordingly I fix an aggregate sentence of 4 years pursuant to the Crimes (Sentencing Procedure) Act. I impose a single non-parole period for both offences of 2 years and 6 months.

98. This sentence is of a severity appropriate for the offences and provides a minimum period that Ms Hammond must spend in custody appropriate to all the relevant elements of punishment, including rehabilitation, the objective seriousness of her offences and her subjective circumstances. The offender is sentenced to an aggregate term of imprisonment of 4 years to commence on 9 July 2020 and expiring on 8 July 2024 with a non-parole period of 2 years, 6 months. The offender is first eligible for parole on 8 January 2023.

Conclusion and sentence

99. Having regard to all of the matters identified in these reasons, and in particular Ms Hammond’s role at the bottom of each conspiracy, her relative youth and inexperience, her early plea of guilty representing a genuine desire to facilitate the course of justice [redacted], I make the following orders:

1. an aggregate sentence of imprisonment of 4 years is imposed;

2. under s 19AB(2) of the Crimes Act 1914 (Cth) a single non-parole period of 2 years and 6 months is fixed;

3. the sentence and non-parole period to date from 9 July 2020. The head sentence expires on 8 July 2024. The offender is first eligible for parole on 8 January 2023.

100. [redacted].

101. I am required by s 16F of the Crimes Act to explain the sentences I have imposed. I have imposed a head sentence of 4 years imprisonment commencing yesterday and expiring on 8 July 2024. I have fixed a non-parole period of 2 years and 6 months, also commencing yesterday. That means that Ms Hammond will be imprisoned for not less than 2 years and 6 months. If she is granted parole at the end of that time, or before the expiration of the head sentence, she will serve the balance of the sentence in the community. If she is granted parole, the order will be subject to conditions determined by the relevant parole authority, and may be amended or revoked. If she fails, without reasonable excuse, to comply with the conditions of her parole, her parole may be revoked and she may be taken back into custody to serve the remainder of her head sentence.

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Amendments

27 March 2023 - Partially redacted to comply with publication restrictions.

Decision last updated: 27 March 2023