R v Hopkins - [2021] NSWDC 410

District Court

New South Wales

Medium Neutral Citation: R v Hopkins [2021] NSWDC 410
Hearing dates: 22 April 2021; 25 May 2021
Decision date: 25 May 2021
Jurisdiction: Criminal
Before: GD Woods QC ADCJ
Decision:
With the application of 25% discount the offender is sentenced to an aggregate term of imprisonment for 6 years. There is to be a non-parole period of 4 years.

Catchwords:
CRIMINAL LAW - Sentence – Fraud – s 1041G Corporations Act (Cth) - Totality - Financial misbehaviour – Misappropriation and wrongful movement of monies – Ponzi type fraud – Financial service provider – Early guilty plea – Cooperation with ASIC – Position of trust – Deceptive behaviour – Mental condition contributing to misbehaviour

Legislation Cited:
Commonwealth Corporations Act 2001
Commonwealth Crimes Act
Crimes Act 1914
Crimes (Sentencing Procedure) Act

Cases Cited:
Beattie v The Crown [2017] NSWCCA 301
Kannis v The Crown [2020] NSWCCA 79.
Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610

Category: Sentence
Parties: Australian Securities Investment Commission
Ross Andrew Hopkins
Representation:
Counsel:
Mr S Boland – The offender
Solicitors:
Director for Public Prosecution (Cth)
NYST Legal – The Offender

File Number(s): 2020/00313973
Publication restriction: There is to be no publication of the names of the victims of these offences or of any material which may tend to identify those victims.
There is to be no publication of the name of the accused’s daughter.

Judgment

This is the sentence of Ross Andrew Hopkins in relation to 15 fraud-type offences. On the last occasion I made a non-publication order and I confirm that that non-publication order continues with respect to the identification of victims of the offences.
The offences arise under s 1041G of the Commonwealth Corporations Act 2001. The 15 matters are essentially similar in legal structure save and except as to the difference in the possible maximum penalty as to charges or counts 13 and 15.
Exhibit SA in these proceedings is Crown bundle which includes 17 tabbed sections. Tabs 13 to 17 are not evidence as such but merely assist by way of providing references to possibly comparable cases. Tab 12 is the Crown written submissions which I have carefully considered, as I have carefully considered the submissions of the defence.
There have been early pleas of guilty to all charges, showing the offender’s cooperation with the authorities. This will attract the appropriate discount of 25% from what otherwise would have been an appropriate sentence. 25% is a discount which I regard as appropriate. I will also take into account some elements of contrition exhibited in other aspects of the evidence, and other relevant considerations.
Tab 4 of exhibit SA reflects the cooperation of the offender and his communication with the authorities of the details of this saga of financial misbehaviour. He has been willing to admit his guilt at an early point and I will take that into account. Tab 4 of exhibit SA is important and I will go through that in more detail in due course.
Tab 5 refers to two relatively minor prior matters on the offender’s criminal history from 2016. These are not important as demonstrating any major criminal record, but they are significant in this case in that they are very relevant to the question of the timing of any impact upon him of his daughter’s illness. I will return to that in more detail.
Within exhibit SA there are a number of victim impact statements from the various people affected by the misappropriation and the wrongful movement of monies; tabs 6, 7, 8, 9, 10 and 11, to which must be added exhibit SB. Tab 6 I will refer to as relating to the victim, JL; Tab 7 the victim RS; Tab 8 the victim VL; Tab 9 the victim AM. For tab 10 I will use the letters KP, for Tab 11 the letters LB, and for exhibit SB the letters MB. I have taken these statements into account appropriately, and note that many people have been gravely distressed and injured by the loss of their “nest eggs” at the hands of a trusted financial adviser. Nonetheless, the impact of these crimes on the individuals affected is no more than I would have expected had I not seen or heard these statements.
One of the considerations of making the non-publication order was that to be victimised (as people have in the way that has occurred in this case) can be not only financially embarrassing but emotionally traumatic. That has been a significant reason why I have made the non-publication orders.
Tab 12 is the Crown written submissions.
For the defence a report was presented by psychologist, Mr Sam Borenstein, a well-known forensic psychologist, who reported on 15 April 2021. (Exhibit S.) Exhibit S2 is a letter from a gentleman called Philip Morphew, a friend of the offender, who gives character evidence and refers to the offender’s remorse. Likewise as part of exhibit S2 Nicholas Tuit, also a longstanding friend, gives character evidence. Mr Simon Doogle likewise gives character evidence from the basis of there being a longstanding relationship. Those character witnesses indicate that in their opinions the misconduct in this case was very much out of character with the person they have known over the years.
Importantly, Mrs Hopkins (the offender’s wife) has given a statement which is part of exhibit S2. She explains the background of her lengthy relationship with her husband, emphasising the fact that the misconduct is very much out of character for him as she has known him over the years. She relates the circumstances of his “going to pieces”, if I can put it that way, over the illness of their daughter from around 2016 and overlapping with a number of the events in this case which represent fraudulent behaviour. I will return to that in more detail.
Exhibit S3 is a report of 19 April 2021 by Dr Sloane Madden. Associate Professor Madden indicated a diagnosis of the daughter as being affected by anorexia nervosa, and of the daughter being a patient of her medical practice between 2017 and 2019.
Exhibit S4 is a letter from ASIC sent to the offender concerning a fine of $6,500 imposed on him for corporation law breaches which were punished in March 2016.
I have of course read the written submissions by counsel for Mr Hopkins and I take those into account, as I do his oral submissions expanding on those written submissions.
At tab 4 of exhibit SA is a document which is headed “statement of facts”, but essentially it is the product of discussions between Mr Hopkins and representatives of the ASIC and the prosecutors, with legal representatives of both sides no doubt involved. This establishes matters which are agreed between the parties, or in particular are admitted by Mr Hopkins. That document is extensive and the formalities were satisfied.
It is noted correctly that for the offences against s 1041G of the Corporations Law which commenced prior to 13 March 2019 the maximum penalty is 10 years imprisonment, and for offences commencing on or after 13 March 2019 the maximum penalty is 15 years imprisonment. That higher penalty applies only to two of the offences, charge or count 13 or charge and count 15.
The total amount unlawfully dealt with by the offender in his role as a financial adviser, taking into account the various clients, was $2.94 million rounded off, and the total overall loss to the clients was $2.78 million rounded off.
The misappropriated funds were transferred into the accused’s own personal accounts and used by him for his own benefit. As well they were sometimes transferred into accounts otherwise controlled by him, meaning the accounts of other clients. At all relevant times the accused knew that the clients had not authorised him to make the transfers and were not aware that he had done so.
The offender is 55 years of age and operated as a licenced financial service provider. It is not any component of this case that he pretended to be a financial adviser – he was qualified and authorised by law. That of course does not excuse the misconduct, but it is relevant.
An aspect of the dishonest conduct was that various misleading transfer directions were created by him, including letters, documents and other indicia of apparent regulatory formality, which were in fact fake account details to make the identification and discovery of these misbehaviours more difficult. That pretence all fell away when he eventually spoke to ASIC and settled his document, tab 4 of exhibit SA. At that stage he frankly conceded those matters.
It is unnecessary to go through the cases of each individual client in precise detail, but brief explanation is appropriate. For example in relation to count 1 the offender had been the long-standing financial advisor of this lady since 1998 and he was readily able to access accounts and execute transfers. He did so without authorisation and to her disadvantage, transferring some $479,000 rounded off, none of which has yet been recovered.
Charge 2 or count 2 relates to JL. The offender had only more recently been his advisor, that is, since 2014. Between 2016 and 2018 he executed 23 unauthorised transfers, misappropriating a total of $306,000 rounded off. JL then confronted him but none of the misappropriated funds were returned.
Count 3 relates to the client TD. The involved an “SMSF”, a self-managed superannuation fund. I should interpolate here that it is a regrettable aspect of the governmental management of superannuation that so-called “self-managed superannuation funds” are so easily and frequently mismanaged criminally by people who are in the position of this offender, but the fact is that many people who wish to “self-manage” their own superannuation funds seek financial advice. That is where problems arise, such as in this case.
As to count 3, the offender executed 10 unauthorised transfers, misappropriating a total of $118,000 rounded off. Some transfers inwards were paid into this fund – credits – without authorisation from other people’s accounts. Although this exercise did not start out as a Ponzi scheme, as it continued it came to contain aspects of the Ponzi-type fraud, where “Peter is robbed to pay Paul”. In relation to count 3, roughly $108,000 has not been recovered.
In count 4, relating to KB, again this was a superannuation fund supposedly self-managed. The offender executed 15 unauthorised transfers, misappropriating a total of almost $150,000. Approximately $130,000 has not been recovered. In this matter there also were some inward transfers without authorisation from other people’s accounts.
Count 5, the client CR, was the victim of two unauthorised transfers, misappropriating a total of $40,000, as to which none has been recovered. In the course of this misappropriation the accused sent an email to the client falsely claiming that the funds had been invested in a “bank-hybrid”. This was not true, and he had used the funds for his own personal purposes.
Count 6 relates to the client SF, and again involved a superannuation fund. There were two unauthorised transfers misappropriating a total of $100,000, of which $50,000 has not been recovered. This is another instance where a fabricated explanation was given to the client, referring to an intended placement with some form of “Commbank Capital Notes”. In fact the accused had not placed the funds in any reserved facility but had used the funds for his own personal purposes.
Count 7 related to the client RS, again involving a self-managed superannuation fund. There were 12 unauthorised transfers misappropriating a total of roughly $168,000. There were ongoing discussions between the client and the accused and the offender made himself out to be a helpful friend, recommending certain investments, but the funds were misappropriated. Of the $168,000 misappropriated, approximately $88,000 has not been recovered.
As to count 8, again a self-managed superannuation fund was involved, for a client whom I will describe as BF. There were five unauthorised transfers misappropriating $58,500. Once again a falsehood was told in that a query by the client resulted in an explanation in terms of the money being invested in a “bank-hybrid security”. This was false. None of those monies has been recovered.
Count 9 relates to client MF, where again a superannuation fund was involved, and again the accused had been the longstanding financial adviser – in this case since 2001. There were two unauthorised transfers misappropriating a total of $100,000 and none has been recovered.
As to count 10, the HF superannuation fund, again Mr Hopkins had been a longstanding financial adviser – since 2001. In this case in the relevant period in 2018 there were 11 unauthorised transfers misappropriating a total of about $107,000. The client confronted him about transfers because he did not recognise certain transactions and demanded the money back. In this instance the money was paid back, but by transferring funds without authority from the funds of other clients. This again is Ponzi-type conduct, although clearly it did not start out to be so and there had been years of acceptable financial advice.
Charge 11 relates to the client LB. In this instance there were 20 unauthorised transfers misappropriating a total of $447,000 rounded off. None of those misappropriated funds has been recovered.
Count 12 relates to WSF, to use anonymous initials, and six unauthorised transfers involved the misappropriation of some $78,000. As to count 13, there were three unauthorised transfers misappropriating some $31,000, rounded off. In August 2019, when queried, the offender sent an email in which he explained that a certain transfer was for the purpose of “share floats new issues and opportunities we bid for”. This explanation was false. None of the monies unauthorised in counts 12 and 13 has been recovered.
Count 14 and count 15 relate to a client known by a number as “212”, and I will refer to that client as 212SF. As to count 14 there were five unauthorised transfers misappropriating a total of $85,000. In respect of count 15 there were 23 unauthorised transfers misappropriating a total of $670,000. Taking into account 14 and 15 together, none of that $755,000 has been recovered.
As set out in tab 4 of exhibit SA, the offender frankly conceded to the regulatory authority ASIC, and to the Commonwealth investigators, that misappropriated funds were used for a variety of purposes; (a) repayment of a personal loan, (b) rent, (c) private school fees, (d) credit card debts, (e) travel or holidays, (f) repayment of some debt, and (g) funds paid for clients in the amount of almost a million dollars. That last component represents transfers between clients in order to keep the scheme undetected and afloat.
The document sets out at paras 88 to 94 in detail the cooperation given by the accused by way of making an early guilty plea. He indicated as much on 3 April 2020 and between April and May 2020, and later in the year, an agreed statement of facts was finally settled. It was signed by the accused on 15 October 2020.
The document says at para 93 that the offender’s cooperation was in ASIC’s view strong; the cooperation provided by the accused in admitting the agreed statement of facts and pleading guilty at the earliest opportunity was of significant value to ASIC. Without this cooperation ASIC would have been required to expend significant time and resources seeking to gather admissible evidence capable of proving the offences and preparing a formal brief of evidence for the prosecution service to consider in deciding whether to recommend that criminal charges be laid.
No doubt the agreed statement of facts enabled this matter to be resolved much earlier than would have otherwise been the case, and freed up resources which ASIC has been able to utilise for other investigations. I take that into account.
The Crown has made submissions to the Court on sentence both in writing and orally. The written submissions are tab 12 of exhibit SA and the oral submissions are on the recorded transcripts. I will not go through these in exhaustive detail but I take them into account and will refer to various matters.
I have referred to the maximum penalties, which I will take into account as guideposts. It is not insignificant in this respect that the maximum penalty for these offences was increased by the Federal parliament from 10 years imprisonment to 15 years imprisonment. The increase related to offences commenced prior to 13 March 2019. This is a technical matter of which I will take note in the proper way.
The Crown submits that no other sentence than from one of fulltime custody is appropriate in this case and that only such a sentence would adequately reflect the objective seriousness of the offending. I accept that submission. I have considered alternative dispositions but there will be a sentence of fulltime imprisonment.
The Crown’s written submissions then refer to the various relevant factors set out in s 16A of the Commonwealth Crimes Act which relate to sentencing Federal offenders. The Crown submits that the nature of the offending is objectively serious and towards the upper end of the scale. In my view the offences are all objectively serious and they are above midrange but they are not towards the upper end of the scale.
Taking into account the various considerations in s 16A for the purpose of assessing a sentence, the Crown emphasised that the offences were not isolated and they occurred over a period cumulatively of three years. The total amount misappropriated was $2.9 million rounded off, which is a significant sum. There were multiple victims but more than 13 people were affected as superannuation funds affect the futures of many people who may be dependent on the funds.
The Crown referred to the offender being in a position of trust as an experienced financial adviser. This is correct and I take it into account. Each of the victims trusted and relied on him for his expertise and a number of them considered him a personal friend.
The Crown emphasised the misleading of clients about various investments and made the point that the misappropriated funds were primarily used for personal reasons such as holidays, private school fees, et cetera, none of which purposes were authorised by the particular client.
There was a “course of conduct” in the sense that there was a series of criminal acts of the same or similar character. The losses were significant. The Crown submitted that the offender cannot be shown to have been contrite through making attempts to repay monies. I accept that as being clear on the evidence, but I do accept that he has shown contrition in his communications with his various friends and with his wife. It is qualified contrition but not insignificant.
The Crown submits that the statements made to Mr Borenstein, the psychologist, should be treated with circumspection since the offender did not give sworn evidence of what he told the psychologist. I do not accept that argument wholly because what he told Mr Borenstein was to some extent supported by the undisputed material before the Court in the form of the wife’s statement and the statements of several other character witnesses.
The Crown reminds me that I should take the pleas of guilty into account, which I will certainly do, and note its timing. I will also particularly take into account the cooperation that he showed with ASIC when setting the statement of agreed facts.
The Crown submits that I should take specific deterrence into particular account, but I do not accept that. He will be going to gaol for a significant period and I think it highly improbable that he will ever be advising people as a financial advisor after that. I am satisfied that he has been personally deterred from future misconduct.
The Crown emphasises the importance of general deterrence and I accept that submission. General deterrence is important in cases such as this. Other persons who are in positions equivalent to Mr Hopkins’ as financial advisers should have the lesson in front of them that if they do these kinds of things they may end up in gaol.

The Crown reminds me that I should take account of his character, antecedents, age, means and mental condition, which I do. He is in his mid 50s. There are only two prior matters against him, in themselves fairly minor regulatory breaches, for which he was fined. He has never been in trouble before this case. This is in his favour.
The Crown says that his good character is diminished because he ceased to be a person of good character when he started doing these criminal acts and thereafter during most of the relevant time he was merely a criminal who had not yet been caught. There is some sense in that, but nonetheless I accept the submission of his counsel, Mr Boland, that it is clear that he had been a financial advisor for many years, indeed with many of the very people who were victims in this case, and had not previously transgressed.
The Crown argued against the defence submission that he was distressed by the illness of his daughter and in effect was not thinking straight, and that this impact on his mental health diminishes his culpability. I will turn to that in more detail later on. The Crown referred me to various comparable cases, to which I have had reference.
Before I turn to the submissions of the counsel for Mr Hopkins I will outline the defence evidence. Mr Borenstein is a clinical psychologist and in exhibit S1 he reported on results of his discussions with Mr Hopkins in the interview, and in the light of other documents he had been given. At p 8 of exhibit S1 Mr Borenstein said:

“The offending period spans some three years, between October 2016 and October 2019, and during that period Mr Hopkins was working on projects which he hoped would extricate him from his financial advisor role in which he has worked since 1986.
Mr Hopkins’ life turned upside down when his youngest daughter, now aged 18, was diagnosed with an eating disorder, anorexia, which is known to impact negatively on family function, in particular parental figures. Mr Hopkins and his wife were naturally worried and concerned, knowing there is a high morbidity rate with anorexia nervosa, mortality rate is close to 6%.
Mr Hopkins, together with his wife, Wendy, were on guard, vigilant, watchful and feared the worst. With the benefit of hindsight Mr Hopkins accepts he developed mental health issues, namely recurrent symptoms of depression and anxiety over and above the trauma associated with ensuring the youngest daughter did not succumb to her illness.
Mr Hopkins takes full responsibility for the offending behaviour. He does not seek to excuse the betrayal of his clients’ trust”.

Mr Borenstein says further in his page 8:

“The … time between October 2016 and October 2019 represents prolonged trauma to Mr Hopkins resulting in reduced control, compounding symptoms of depression and traumatic stress. Mr Hopkins was in my opinion suffering a known mental illness/condition, namely a chronic adjustment disorder, with mixed anxiety and depressed mood (DSM-V code 309.28)”.

The conclusion which Mr Borenstein reaches is that:

“Mr Hopkins’ mental health/condition would in my opinion have interfered with his normal decision making, judgment and behavioural choices”.

Further he says at the bottom of p 8:

“Mr Hopkins’ chronic adjustment disorder with mixed anxiety and depressed mood led to a level of mental health impairment resulting in temporary and ongoing disturbance of thought, mood, volition, perception and the disturbance is regarded as significant for clinical diagnostic purposes”.

Mr Borenstein went on to say that all of this

“impacted on Mr Hopkins’ emotional wellbeing, judgment and behavioural responses”.

Mr Borenstein preceded this conclusion in his report by referring to what Mr Hopkins had told him about the child having the anorexia disorder. Mr Borenstein said,

Mr Hopkins offers no excuse for the offending behaviour”.

At p 3 he quotes Mr Hopkins as saying:

“I went into it with my eyes wide open. I knew I was doing the wrong thing. I recognised the trust my clients’ put in me. My mindset was flawed. I was thinking the project I was working on would be a backfill. It was an obvious gamble”.

Exhibit S3 is a letter from the Redleaf Practice at St Leonards relating to Mr Hopkins’ daughter and saying this, “Ms Hopkins was a patient of the Redleaf Practice between 17 May 2017 until 27 February 2019 for management of anorexia nervosa” and a few further remarks.
Exhibit S2 contains the character references. I have already referred to the character references from longstanding friends which I will not dilate upon, but which I have taken into account. Most significantly Mrs Hopkins writes at some length about her husband and this whole drama. She relates their personal history and says he was a very good husband and father. She refers to the illness of the youngest child in 2016 in these terms, at p 2:

“In 2016 our youngest child became ill with a serious mental health issue and her decline from happy and healthy to medically and mentally unstable was rapid and shocking”.
“We sought and gained medical help and she started treatment for anorexia nervosa in early 2017 under the psychiatric care of Dr Sloane Madden in the Redleaf Practice in Wahroonga”.

She goes on to say how her husband’s behaviour changed. She says,

“We all changed. It was impossible to go through that and not change however Ross felt completely unable to help or support the family he had always proudly and fiercely protected”.

At the bottom of p 2 she says “Ross slowly became withdrawn and unsociable, retreated into his study more and more often”. At page 3, she explains how she eventually became aware of the ASIC investigation:

“Ross fell apart. I saw him that evening and asked what was going on. He was devastated and completely broken that I could hardly understand what he was saying but he told me the girls and I should leave him as he was not worthy of us. He admitted what he had done and was totally wracked with grief and guilt about the consequences of his actions on both us and on the clients that were impacted”.

She spoke about his value as a husband and father and about his charitable impulses. She said, “He spent many years volunteering on the fundraising committee of the Mater Misericordiae Hospital in Crows Nest”. She said further that “since the ASIC investigation started Ross has been a changed man and has become a shell of his former self”.
Mr Boland presented written submissions and also made oral submissions. I will refer to some of these but not necessarily to all. He emphasised that his client had had a long period of successful investing work with a number of clients over the years, and that these events did not start out deliberately as a plan which began at a particular time. He invited me to accept that Mr Hopkins began misusing funds under management in amounts that were, in his mind at least, plausibly capable of being “backfilled” (as I understand it, repaid).
Mr Boland submitted that I should accept that proposition because Mr Hopkins appears to have had considerable funds under management. However even if he had “backfilled” (or repaid moneys) in the way that is described this would still have involved criminal offences, even if an eventual “balancing” had concealed certain offences. When a financial advisor is given monies to invest he is expected, and indeed required, to invest specifically as agreed, not in some random fashion that suits his own personal interests or investment theories.
I do accept the submission at p 2 of Mr Boland’s document that Mr Hopkins was a law-abiding money manager for much the greater part of his career.
However I do not accept the further submission Mr Boland makes:

“His decision to misuse funds coincided with his experiencing a major psychological disruption arising out of the devastating illness suffered by his youngest daughter”.

I will return to that matter in due course because it is significant.

Mr Boland urged a number of times, in writing and orally, that the conduct in question was irrational and that it was inevitably going to be found out. I do not accept that. I do accept that he became deeply distressed over his daughter but the business of giving detailed false explanations of where the money was being legitimately invested speaks against it being irrational or chaotic. It was of course deeply stupid but much criminal conduct is deeply stupid. Being stupid is no defence; nor indeed is it mitigation.
Mr Boland urged me to accept that the level of criminality involved here was not, as the Crown said, in the high range, and I accept that proposition. It is certainly somewhat above midrange but there are regrettably many worse cases than this.
Mr Boland urged upon me that I would not regard this as a Ponzi scheme. I should say that this is not really the issue here. The term “Ponzi scheme” is used in various different ways. Mr Hopkins is not charged with committing a Ponzi offence – there is no such offence known as such to the criminal law – but the misconduct has elements of a Ponzi-like scheme or activity, In my view significant elements are that he was a trusted financial adviser, he was managing funds for numerous clients, and he was pretending that his management of the funds was businesslike, lawful and profitable. No doubt for many years it had been businesslike, lawful, and possibly profitable. I do not know, we have not explored that in any detail, but a number of the victims had been his clients for many years. I accept Mr Boland’s submission that it is not to be inferred that he had been misbehaving himself financially during that period.
However, he got to a certain point where he realised that he had to plug gaps or cover losses arising from his wrongful use of funds. Then, as in a Ponzi scheme, money intended for one purpose was used to transfer assets from client A to client B or client C to cover missing monies. That is dishonesty. It is the actual conduct which is in issue here, not a colloquial tag which may be attached to it. There are aspects of Ponzi-type behaviour and Mr Boland’s vigorous and able presentation of his client’s case has not persuaded me otherwise.
As I say, I do accept that the offender’s criminality did not begin as wholesale fraud from the beginnings of his “financial adviser” relationships.
As to the falsehoods that were told by Mr Hopkins, putting clients off when they queried various transactions, Mr Boland is confronted by the concessions made by his own client, but he points out that there is no evidence that Mr Hopkins ever made misrepresentations in order to procure funds in the first place. I accept that. That does not appear in the evidence and I do not think it happened. It appears that he began misappropriating funds only years after he legitimately arranged or obtained the financial adviser relationship with the client.
In regard to some other of Mr Boland’s submissions, Mr Boland can be assured that I will not be using the victim impact statements as additional evidence of financial misconduct. The ASIC negotiated, after many months, a comprehensive agreed facts statement and that is the material upon which I rely. Likewise his client can be assured that I will not be imposing sentence for any conduct other than that which is contained within this prosecution.
In this respect I should say that Mr Boland errs in his submission that is not open to me to look backwards in time beyond the first date in the indictment. That is based on a misunderstanding not uncommon in the criminal law. If there is a relevant consideration which takes its significance backwards in time, and in this case there is, it can be taken into account. I will explain that in a moment.
Mr Boland emphasised on behalf of his client that the conduct was easy for authorities to detect. In para 69 of his written submissions he says:

“At a certain point Mr Hopkins began to conduct himself in a manner which while superficially deceptive was in fact remarkably easy for authorities to detect. Indeed his failure to return money when asked made his detection somewhat inevitable and shows that his course of dishonest conduct was likely characterised by chaos rather than clinical decision making”.

In my view the conduct was not merely superficially deceptive, it was in fact plainly deceptive. To tell people that money which had been spent on airline tickets or private school fees, or to pay off credit cards, was being invested in some legitimate financial enterprise is not merely superficially deceptive, it is deceptive.
Moreover although it is true that the conduct was chaotic in the sense that, as his wife put it, he “fell apart”, that does not necessarily make it easy for the authorities to detect. It was much easier for the authorities to deal with it once he had explained it all and confessed, but in the absence of that the process of investigation and prosecution can be demanding, expensive and time-consuming. Nonetheless, of course one feels sympathy for him having fallen to pieces in the way his wife described and in the way he himself explained to Mr Borenstein.
Paragraphs 72 and 75 of Mr Boland’s submissions are important in that they deal with the significant matter of the child’s anorexia nervosa and its relevance to this case. In 75 he says:

“Without derogating from the impact of Mr Hopkins offences upon his victims, the material before the Court supports a conclusion that his mental condition contributed to his offending conduct in a material way and that his moral culpability is accordingly reduced”.

That is an important matter. If a person commits the actus reus of a criminal offence at a point in time when he or she is suffering (for example) from schizophrenia, it may be that the verdict is not guilty by reason of mental illness, and the person ends up in a mental hospital. However if a person is suffering from something less severe in the way of a mental condition, such as the condition described by Mr Borenstein, which is no doubt a real condition, the criminal conduct may be regarded as less blameworthy because of that mental state and the mental state may mitigate the sentence.
The question arises here of whether the defence can establish on the balance of probabilities a particular mitigating factor, as submitted by Mr Boland. It is a matter for the defence to prove this on the balance of probabilities. The defence legitimately and properly advances evidence on that point by the way of Mr Borenstein’s report, coupled with what the offender himself told Mr Borenstein and what his wife said.
It is not disputed that in 2017 to 2019 one of Mr Hopkins’ daughters did suffer from anorexia nervosa, a very disturbing illness. Exhibit S3 is a report from the Redleaf clinic. Dr Madden says she saw the child on 30 occasions and there were eight sessions of family-based therapy. I infer that that family-based therapy included participation by her father who, it is not disputed, was a loving and devoted parent.
Exhibit S2, which I have already referred to, contains a letter from Mrs Hopkins tendered in the defence case. It is dated 14 April 2021. No attempt was made to seek her attendance for cross-examination and her evidence has not been disputed.
Apart from providing her opinion that her husband’s conduct in these matters was very much out of character for the man she knew and married, she says that it was in 2016 that the child became ill. She does not nominate a precise date. She says the child’s “situation deteriorated quickly”. She says the treatment for anorexia nervosa started in early 2017 and exhibit S3, the letter from Dr Madden, says she was a patient of the Redleaf practice between 17 May 2017 and 27 February 2019.
From the mother’s account in exhibit S2 I infer that treatment was sought swiftly after the problem arose. The date 17 May 2017 is thus significant. Mr Borenstein reported in exhibit S1 that Mr Hopkins had told him (I refer to his report of 15 April 2021 at p 3) that his daughter’s anorexia had a devastating impact on his mental health; “it was terribly challenging, I had difficulty working, I couldn’t sleep”. It continues, “she was suicidal, we got her through, we are very grateful but it took a toll”.
Mr Borenstein is further reported to have said at p 4 of his report that Mr Hopkins told him:

“I knew what I did was wrong even though it was a pretty tough period. I don’t recall the detail but I was very emotional at the time. I lacked self-worth. I felt I had not put the family in a solid enough position to cope. I just had to find a way through. I had to keep all the balls in the air and that’s what I tried to do”.

I have no difficulty in accepting Mr Hopkins deep distress at the time when his daughter was being treated and that he and his wife struggled valiantly to keep her alive. Valiantly and successfully, it would seem. To the extent that this occurred at the same time as the ASIC investigations, no doubt there was a double-overlay of anxiety and distress in the family.
It is significant that exhibit 4, an ASIC letter to Mr Hopkins, told him on 8 March 2016 - I underline 2016 – that he had been convicted in his absence of several breaches of the Corporations Act, and had been fined $6,500. He was warned in that letter of 16 March 2016 that he was still under obligation, “to lodge the required documents with the official liquidator”.
I infer that by March 2016 Mr Hopkins was already in some kind of corporate regulatory difficulties. It seems likely to me that this relates to Mr Hopkins’ statements to the psychologist, Mr Borenstein, at exhibit S1 pp 2 and 3 where he refers to “projects”. On p 2 it is said Mr Hopkins told Mr Borenstein that he was involved in setting up projects for a charitable foundation and he hoped it would eventually lead to a career change, but in 2016 “the main driver of the project died and everything fell apart, everything fell flat”.
On the following page of the report by Mr Borenstein there is this quote from Mr Hopkins: “My mindset was flawed. I was thinking the project I was working on would be a backfill. It was an obvious gamble”. Mr Borenstein continues in his report,

“Mr Hopkins states income normally generated from his core business suffered and he was distracted caring for his daughter over a number of years to ensure she had survived anorexia nervosa”.

One problem for the argument that the offender’s criminality is mitigated by the impact on him of a mental condition and his need to care for his daughter, so that he was not thinking straight, is that the dates do not appear to fit. The conviction in the Local Court apparently over a company failure, which has not been explained, was on 8 March 2016. I repeat; 8 March 2016. The commencement of the daughter’s status as a patient at the Redleaf Practice was 17 May 2017, fourteen months later. This discrepancy is unexplained.
A second problem, related to the first, is that it is not at all clear what was the nature of a project or projects that failed. It is even less clear how any such failure or failures could relate to Mr Hopkins work as a financial adviser and investor of other peoples’ money. I ask, how could any “projects” he was working on be a “backfill” for the loss of his clients’ funds? It is unexplained what “projects” were and it is unexplained what “backfill” meant, although I assume it means some kind of covering-up by the repayment of moneys taken from funds in which they should at all times have been firmly located .
It seems to me it is likely that Mr Hopkins was in some kind of financial difficulties in early 2016, leading to the regulatory breach and when anxieties over these problems developed they were multiplied by the trauma over his daughter’s illness. The most probable explanation of the relevance of the anorexia is that he could not cope with the combination of events and he fell to pieces emotionally.

It appears to me that in order to sustain a lifestyle he wished for his family he has deviated from the path of financial rectitude and got himself into financial difficulties of a kind which has not been satisfactorily explained by the defence; which for the purpose of mitigation it has the onus of doing so. I do not know whether there was some speculative venture he was involved in, or some charitable exercise, but it is significant and not explained that the conviction in early 2016 related to a regulatory failure. Of course he is not to be punished twice for the regulatory offences; their significance is as I have explained and no more.
I do not accept, as has been argued on his behalf, that Mr Hopkins was going along steadily and lawfully until sideswiped by the drama of his daughter’s unfortunate illness. As I say, he has the onus of proving such a positively mitigating factor on the balance of probabilities. That proof is absent and the circumstances of early 2016 are shrouded in mystery, particularly as to the nature of the project he was involved in and as to what could amount to “backfilling” for the potential coverage of missing monies.
In any event, I accept the submissions of the Crown at para 4 of the Crown’s written document that to the extent that the accused was affected by his daughter’s illness, his conduct nonetheless involved positive and rational steps to avoid detection, including numerous false representations and concealment. He may have been distraught but he apparently was sensible enough to try to repel detection in the way that he did.
Even though I have rejected the defence submission of mitigation arising from the anorexia problem, I do accept certain matters in his favour. He clearly told the psychologist a number of times that he does accept blame and responsibility for his actions, and I accept that as showing a measure of contrition. I take this into account over and above the 25% discount for the early guilty plea and cooperation with their utilitarian value.
I also accept in terms of his character that he did for a number of years conduct a legitimate business. This stands in his favour. I accept also, which stands in his favour, that he has always been and is in many ways an admirable and dutiful father and a good husband. This stands in his favour in terms of rehabilitation.
I repeat that I have carefully read the written submissions and I have the advantage of numerous oral submissions by both counsel. I have taken these into account. In Mr Boland’s supplementary oral submissions he said that there was no intention on the part of his client to “permanently deprive” and that he intended to repay. I am inclined to think that that would always have been his hope but it was a deluded hope, akin to that of many hopeful visitors to Royal Randwick on race day. Even though he did not set out in the first place to commit fraud, he did so over a significant period of time in the unjustifiable hope that he might possibly at some stage, if things turned a corner, make things right.
This is a case where taking into account all the consideration of sentencing set out in s 16A of the Crimes Act 1914, the common law, and the evidence as a whole, I do not believe any other sentence than a sentence of fulltime imprisonment is appropriate. These are objectively serious offences and there would be public concern if anything other than a sentence of fulltime imprisonment were imposed.
I say this because the law seeks to avoid imprisoning people where possible. If some other form of less onerous punishment were available it should generally be adopted, but there is a limit. This kind of imposition on people is devastating to the victims and causes distress, family fighting, depression, sometimes illness. A message needs to be sent to persons such as Mr Hopkins that if they commit significant offences they may well go to gaol.
I intend to impose an aggregate sentence. As the Crown reminded me this morning it is open to me to impose an aggregate sentence in this case, that is to say one single overall sentence. This is permissible for Federal offences, as confirmed by the Court of Criminal Appeal in Beattie v The Crown [2017] NSWCCA 301 and Kannis v The Crown [2020] NSWCCA 79. The judge sentencing for Federal sentences, as I am now doing, can utilise the sentencing provisions in the State statute, so I indicate to Mr Boland and his legal advisors that that is the course I intend to take, applying s 53A of the New South Wales Crimes (Sentencing Procedure) Act.
In my view in this case an aggregate sentence is the best manner of giving effect to what is called a principle of totality. I will impose an aggregate sentence, taking into account all the proper purposes of sentencing to which I have referred.
In that respect, the rehabilitation of the offender in due course is important. This is a man who has previously lived a blameless life, who has been a good father, but has committed significant crimes. I do not expect that there will be any repetition of this misconduct by him when he is in due course released from custody.
I have borne in mind the need for him to rehabilitate himself. I also bear in mind the impact of the sentence of imprisonment on his wife and children. He is obviously close to them and imprisonment will have a significant effect. Unfortunately where imprisonment is imposed an adverse impact on family is very common.
It is necessary for me under s 53A to indicate sentences I would have imposed if I had been sentencing individually for each offence. These sentences are not the actual sentences I will impose, but they are a transparent indication of the sentences I would have imposed had I been imposing sentences separately:
The indicative sentences are: For count 1, two years imprisonment. For count 2, two years imprisonment. For count 3, two years and four months imprisonment. For Count 4, two years and four months imprisonment. For Count 5, one year and nine months imprisonment. For Count 6, two years imprisonment. For Count 7, two years imprisonment. For Count 8, two years imprisonment. For Count 9, two years imprisonment. For Count 10, two years and four months imprisonment. For Count 11, two years imprisonment. For Count 12, one and a half years imprisonment. For Count 13, two years and four months imprisonment. For Count 14, one and a half years imprisonment. For Count 15, three years and nine months imprisonment.
In indicating appropriate separate sentences I have done so in accordance with the statute and the High Court decision of Pearce v The Crown [1998] HCA 57;(1998) 194 CLR 610. I have borne in mind in each instance all the relevant sentencing considerations set out in the Commonwealth Crimes Act s 16A and at common law. I have also taken into account the different penalties available between certain offences depending on the date of relevant occurrences.
The maximum penalty of imprisonment for an offence against s 1041G of the Corporations Act, an offence the commission of which commenced before 13 March 2019, is 10 years. For the same s 1041G offence the commission of which commenced on or after 13 March 2019, it is 15 years imprisonment. Charges 1 to 12 and charge 14 attract a maximum penalty of 10 years. Charges 13 and 15 attract a maximum penalty of 15 years.
For the purpose of my sentence today I take into account the respective maximums as guideposts in sentencing. The increase of the maximum, having effect as and from 13 March 2019, is a legal fact which I am bound to note as reflecting the increased seriousness with which the parliament views the misconduct in question.
The statutory increase in penalties does not automatically dictate the imposition in a particular case of an increased penalty, since it is still my duty to consider all the relevant purposes of sentencing and the evidence. Nonetheless the increase of penalty is a matter which I am bound to and do take into account. Apart from the indicative sentences, I regard count 15 as the most serious, and that consideration is supplemented by noting the statutory increase in penalties.
In calculating the indicative sentences I have taken into account in each case a discount of 25% allowed for the utilitarian value of the early pleas of guilty and the assistance to the prosecution of the accused’s cooperation as set out in the agreed facts and. The aggregate sentence has been reduced by 25% from what it would have been had there been no cooperation and conviction after trial.
I do accept some measure of contrition over and above the plea of guilty reflected in what I see as an expression of remorse to his wife and several character witnesses. The degree of remorse is somewhat tempered because there appears to have been no effort to repay to the victims of these offences the monies they have lost due to the offences.
A number of the indicative sentences are the same because the degree of criminality, including the loss, is substantially similar in those cases. However, there are differences of quantum of loss which are meaningful and counts 13 and 15 attract a higher statutory maximum. Significantly, count 15 involved the sum of $670,000, a large sum, none of which has been recovered. Counts 3, 4 and 10 are distinguished in that the mixing of funds between clients’ accounts added an element of Ponzi-type fraud, using that term in the limited way I have previously explained.
The victims whose statements I have read and listened to carefully, and take into account, should understand that the overall sentence will be significantly less than it would have been if I simply added up all of the indicative sentences. That would have amounted to a total involving decades, a sentence appropriate possibly for a murder but not for fraudulent criminality of this kind. Such an outcome would be at odds with the usual punishment for cases such as the present.
In setting an aggregate sentence, as I am about to do, I repeat that I have taken into account the evidence, the submissions of counsel written and verbal, the purposes of sentencing, and the terms of s 16A of the Crimes Act 1914, the impact of the conduct on the victims, the possible impact of the family of the offender and all the other considerations of sentencing.
Having taken all these matters into account, an appropriate starting point for the aggregate sentence is eight years imprisonment. From this I make a discount of 25% for the early guilty plea and its value, particularly in relieving victims of the task of giving evidence. The early guilty pleas have also avoided a possible wait for years before the matter may have been resolved, and have relieved the State of the cost of preparing what could have been a long and expensive trial.
I note that the offender has served no time in custody.
I sentence the offender to imprisonment for six years, the sentence to commence 25 May 2021 and to expire on 24 May 2027.
I fix a non-parole period of four years to commence 25 May 2021 and to expire 24 May 2025. The offender will be eligible to be considered for release to parole on or after 24 May 2025 but the decision whether or not to grant parole is a matter for the Federal authorities, not for this Court.
I should explain to you directly, Mr Hopkins, this is a sentence of imprisonment the minimum period of which is four years, but the overall sentence is six years. You may be released to parole at the expiration of four years, but that is not a matter for my consideration. It is a matter for other authorities notably the Federal Attorney General and those who advise him. In the normal course of events you could expect that you could be released after four years but that depends on your behaviour and other considerations which are a matter for those authorities

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Decision last updated: 18 August 2021

Medium Neutral Citation:	R v Hopkins [2021] NSWDC 410
Hearing dates:	22 April 2021; 25 May 2021
Decision date:	25 May 2021
Jurisdiction:	Criminal
Before:	GD Woods QC ADCJ
Decision:	With the application of 25% discount the offender is sentenced to an aggregate term of imprisonment for 6 years. There is to be a non-parole period of 4 years.
Catchwords:	CRIMINAL LAW - Sentence – Fraud – s 1041G Corporations Act (Cth) - Totality - Financial misbehaviour – Misappropriation and wrongful movement of monies – Ponzi type fraud – Financial service provider – Early guilty plea – Cooperation with ASIC – Position of trust – Deceptive behaviour – Mental condition contributing to misbehaviour
Legislation Cited:	Commonwealth Corporations Act 2001 Commonwealth Crimes Act Crimes Act 1914 Crimes (Sentencing Procedure) Act
Cases Cited:	Beattie v The Crown [2017] NSWCCA 301 Kannis v The Crown [2020] NSWCCA 79. Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610
Category:	Sentence
Parties:	Australian Securities Investment Commission Ross Andrew Hopkins
Representation:	Counsel: Mr S Boland – The offender Solicitors: Director for Public Prosecution (Cth) NYST Legal – The Offender
File Number(s):	2020/00313973
Publication restriction:	There is to be no publication of the names of the victims of these offences or of any material which may tend to identify those victims. There is to be no publication of the name of the accused’s daughter.