R v Kothe
[2019] VCC 2251
•6 December 2019
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-19-01019
| THE QUEEN |
| v |
| MARIE-CLAIRE KOTHE |
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JUDGE: | HIS HONOUR JUDGE TRAPNELL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 25 October 2019 | |
DATE OF SENTENCE: | 6 December 2019 | |
CASE MAY BE CITED AS: | R v Kothe | |
MEDIUM NEUTRAL CITATION: | [2019] VCC 2251 | |
REASONS FOR SENTENCE
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Subject: CRIMINAL LAW – Sentence
Catchwords: Sentence – Obtaining a financial advantage by deception from a Commonwealth entity – Serious offence – Early plea of guilty – Falsely under-reported income on 57 occasions – Total under-declaration of $235,327.72 – Very high moral culpability – 72-year-old suffering from poor mental health – Gambling addiction – Reparation order made – Imprisonment of two years and six months coupled with a recognisance release order
Legislation Cited: Criminal Code (Cth) s 134.2(1) – Crimes Act 1914 (Cth) s 16A(1)
Cases Cited:R v Milne [2001] VSCA 93 – R v Smith [2004] QCA 417 – Kovacevic v Mills (2000) 76 SASR 404 – R v Purdon (unreported, NSW CCA, 27 March 1997) 7–8 – Atholwood v The Queen (1999) 109 A Crim 465 – Cameron v The Queen (2002) 209 CLR 339 – R v Buggy [2006] ACTCA 20 - R v Lovel [2007] QCA 281 – R v Newton [2010] QCA 101
Sentence: Imprisonment of two years and six months coupled with a recognisance release order
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APPEARANCES: | Counsel | Solicitors |
| For the Prosecution | Ms A Smith | Ms A Pavleka, Solicitor for Public Prosecutions (Cth) |
| For the Accused | Ms C Hollingworth Ms R Dyall | Victoria Legal Aid |
HIS HONOUR:
1 Marie-Claire Kothe, you have pleaded guilty to a Commonwealth indictment containing one charges of obtaining a financial advantage by deception from a Commonwealth entity.[1] The maximum penalty for this offence is 10 years’ imprisonment.
[1] Contrary to s 134.2(1) Criminal Code (Cth).
2 The prosecution filed a summary of prosecution opening dated 11 September 2019 which I have been told by your counsel I can treat as a statement of agreed facts.[2]
The facts
[2] Exhibit P1.
3 You are currently aged 72 years. You have been in receipt of social security benefits since 2005. Between 5 March 2012 and 11 September 2017 (the offending period), you were in receipt of social security payments in relation to the age pension.
4 The age pension is payable to eligible persons aged 65 years and over. The rate of benefit payable is affected by other income received by the person, including income from employment.
5 During the offending period, you were employed at various times by each of the following employers
1) Age Care Services Australia Group employed you on both a part time and casual basis as a personal care worker;
2) Mercy Health and Aged Care employed you on a casual basis as a home carer;and
3) Zev Rabi employed you on a casual basis as a personal carer for his elderly parent.
6 During the offending period, you earned $137,788.88 from Age Care Services Australia Group, $35,157.70 from Mercy Health and Aged Care and $71,428.70 from Zev Rabi. The total amount you earned during the offending period is $244,918.57.
7 On 20 February 2012 you lodged an application to transfer from the disability support pension to the age pension. You were in receipt of the age pension from 21 February 2012.
8 During the offending period your reporting requirements varied as follows:
1) You were initially required to report your income on a fortnightly basis.
2) You were removed from reporting requirements for the period between 18 May 2014 and 29 September 2014.
3) Your fortnightly reporting requirements were reinstated for the period between 13 October 2014 and 27 October 2015.
4) You were removed from reporting requirements from 27 October 2015 and remained so for the remainder of the offending period.
9 Overall, you falsely reported your income to the Department of Human Services (the Department) on 57 occasions. Specifically, you falsely under-reported the income you derived from your employment with Age Care Service Australia Group and failed to report any income you derived from employment with Mercy Health and Aged Care.
10 At all times you were removed from reporting requirements, you remained subject to a legal obligation to advise the Department of any change in your circumstances, including income from employment. During those periods you failed to advise the Department that you were employed by, and derived income from, Age Care Service Australia Group, Mercy Health and Aged Care, and Zev Rabi.
11 As a result of your failure to correctly declare your income and your failures to advise the Department that your circumstances had changed, you received payments of the age pension to which you were only partially entitled.
12 During the offending period you knew that you were required to report your income to the Department and you understood how to declare it. You were periodically contacted by the Department to advice you of changes to your payments and reminded of your obligations.
13 While you were in receipt of social security payments the Department made contact with you on the following occasions:
1) On 20 January 2009 you contacted the Department regarding a debt raised against you for failing to declare income whilst in receipt of disability support payments. You stated that you were unaware that you had to declare your income. The departmental officer explained this obligation to you. The Department did not take the matter further.
2) On 4 February 2009 you contacted the Department to advise that you were working. The departmental officer advised you that you needed to report your income amount.
3) On 6 February 2009 you were given a verbal warning regarding your failure to declare income whilst in receipt of disability support payments.
4) On 19 February 2009 you were advised of your reporting obligations.
5) On 1 and 9 October 2009, 23 September 2011 and 28 November 2011 you advised the Department of your commencement and cessation of employment whilst in receipt of benefits.
6) On 21 February 2012 you were sent a letter confirming that you had been granted the age pension, which provided that you must tell the Department within 14 days of a change in your income.
7) On 28 March 2012 you were advised by telephone of your reporting obligations. You stated that you knew how to calculate your gross income to be declared based on your payslips and hourly pay rate.
8) On 8 May 2013 you contacted the Department to discuss your ongoing reporting obligations.
9) On 10 October 2014 you contacted the Department regarding a review of your entitlement to the age pension. You advised that you had commenced working for Best Child Daycare on 15 September 2014. You confirmed that you understood how to declare your earnings and the requirement to report on a fortnightly basis.
14 Since being granted the age pension on 21 February 2012 you received fortnightly benefits which were paid into your nominated Bankwest Bank account until 16 October 2013 and then into your nominated National Australia Bank account from 17 October 2013.
15 The total amount overpaid is $72,405.13.
16 Your offending was detected by way of a tip off on 23 June 2017. As a result of the tip off the Department commenced an investigation.
17 As part of the investigation the Department wrote to you on 25 May 2018 inviting you to participate in a formal interview.
18 On 6 June 2018 you wrote to the Department declining the offer of a formal interview. In this letter you made the following admissions:
I realise that I have attempted to earn moneys without declaring, same as many others!!!
I lived on a Disability Pension until 2014, when I was eligible for Aged Pension.
It has been a nightmare, cost of living pressure, a big mortgage and other commitments. I was driven to despair with no dignified life.
I agree that I may need to pay back some money to Human Services, but please stop humiliate [sic] me any further.
Offence seriousness
19 I accept the Crown’s characterisation that this is a serious offence. Appellate courts have repeatedly emphasised that an actual sentence of imprisonment is ordinarily likely to be required in cases of sustained and deliberate fraud against the social welfare system, such as in the present case.[3] This is because it is unlikely that mitigating factors will be sufficiently significant to outweigh the primary purpose for imposing sentence in these cases, namely general deterrence.[4] This is the case even if the fraud is relatively unsophisticated and lacking aggravating features such as obtaining multiple benefits, the use of false identities or if the fraud is committed for the benefit of another.[5]
[3] See for example R v Milne [2001] VSCA 93 (Winneke ACJ, Ormiston and Buchanan JJA) (‘Milne’).
[4] Ibid.
[5] See for example R v Smith [2004] QCA 417.
20 In Kovacevic v Mills[6] the Full Court of the South Australian Supreme Court said that in a typical case of sustained and deliberate welfare fraud against the social security system:
… an order for imprisonment, with at least some of the imprisonment actually be served, is ordinarily likely to be required. This is because the commission of a number of offences of fraud over a period of time makes imprisonment appropriate even for a first offender, because of the seriousness of the offending. The same matters may require that at least part of that term of imprisonment actually be served, even in the case of a person with no previous convictions. But there is still a need to consider all aspects of the matter, and to consider the interests of society and of the offender in the rehabilitation of the offender. Also, in an appropriate case, there may be room for the exercise of mercy and leniency.[7]
[6] (2000) 76 SASR 404.
[7] Ibid 411 [40] (Doyle CJ, Mullighan, Bleby and Martin JJ) (citations omitted).
21 Moreover, imprisonment is ordinarily likely even if the fraud is based upon a perceived need; if the fraud is based on greed, the custodial sentence will be longer.[8]
[8] See R v Purdon (unreported, NSW CCA, 27 March 1997) 7–8 (Hunt CJ, McInerney and Donovan JJ agreeing).
22 Your crime is not victimless, because the burden of social welfare fraud perpetrated on the Commonwealth government falls on the whole Australian community.
23 In R v Purdon[9] Hunt CJ at CL opined as follows:
It has also been said that the rule [that a custodial sentence is to be imposed for social security fraud except in very special circumstances] reflects a concern for the protection of the revenue, but I would prefer to express it as a concern for the additional burden upon all taxpayers who shoulder the heavy burden of providing the funds for the social security system to operate and the even heavier burden created by the widespread abuse to it by frauds such as these.[10]
[9] Ibid.
[10] Ibid p 7.
24 It is clear that your crime was relatively calculated and not committed on the spur of the moment. You defrauded the Commonwealth government over a period of 5½ years. Your offending conduct involved 57 occasions of fraudulent behaviour whereby you under-declared your income to Centrelink. Over the course of the offending period you earned $244,918.00 in gross income, however you only declared $9,590.85, resulting in a total under-declaration of $235,327.72.
25 You were not in severely necessitous financial circumstances during this period. It was submitted on your behalf that your offending occurred in the context of financial stress caused by online gambling and losses on the share market. You counsel submitted you have nothing to show for your fraud on the Commonwealth government.
26 While the Crown accepts that your offending took place against a backdrop of difficult family circumstances, it does not concede that the offending was motivated entirely by need. Rather, it appears that it was motivated, at least in part, by your desire for financial gain. You did not cease offending voluntarily, but once your fraud was detected you did write to Centrelink admitting your wrongdoing.
27 The Crown accepts that your offending was relatively unsophisticated and did not involve aggravating features such as the receipt of multiple benefits or the use of false identities.
28 Overall, I assess your moral culpability as being very high.
29 General deterrence is of ‘paramount importance’ in sentencing you for this offence.[11] Clearly, denunciation and just punishment must also loom large in sentencing you.
[11]See eg Milne [12]–[13].
30 You have one old and largely irrelevant prior finding of guilt in 1974 for stealing. I accept that you have learnt your lesson from the investigation and court processes in relation to this matter. Accordingly, despite the Crown’s submission to the contrary, I am satisfied that specific deterrence and protection of the community need be given little, if any, weight in your case. Moreover, I assess your prospects of rehabilitation as being good.
Personal circumstances
31 You were born in Mauritius on 13 April 1947 and you are now aged 72 years. You migrated to Australia in 1968 and initially worked as a bus driver. In 1969 your younger brother died in a car accident in New South Wales. This had a profound effect on your family. Your parents also moved to Australia in 1970. They are now deceased. Your have an older brother who lives in New South Wales.
32 You met your husband, who was a German citizen, in 1971 and you were married in 1973. You and your husband had a difficult relationship and you and he separated in 2003, but you remained living together separated under the one roof until quite recently.
33 Your son Karl was born in 1979 and he is now aged 40 years. He was in court supporting you at your plea hearing. He has a history of drug abuse and he has been diagnosed with chronic anxiety with obsessive compulsive symptoms. Karl has three children who are aged 10, 13, and 17 years. Karl, his partner and three children all reside with you.
34 Your daughter Natalie was born in 1976 and is now aged 43 years. She lives in New South Wales.
35 You attended school in Mauritius from 1953 to 1965 and completed secondary school. You have no tertiary qualifications.
36 You have a history of working as a bus driver. You worked for over 25 years with Telstra in New South Wales and Western Australia. You resigned in circumstances of workplace bullying. You did not receive a redundancy package despite the length of your employment with Telstra.
37 You worked in aged care after completing an aged care course in 2011. Your offending relates to not properly declaring your income whilst working in aged care and receiving the pension.
38 You presently still work in aged care, looking after a 96 year old. You are currently working four to six hours per week in this capacity.
39 You had to sell your house in Cockatoo, Victoria, because of financial pressures. You currently reside in a rental property in Doveton. Your husband moved out of that property in March 2018.
40 So far as your financial circumstances are concerned, I was told by your counsel that you are paying $60 per fortnight out of your pension by way of reparation. In October 2016 you purchased an investment property in Holbrook, New South Wales, jointly with your estranged husband. However, I was told this is not available to assist in repaying your debt to the Commonwealth government because it is needed to fund a deposit for your eventual placement in an aged care home. You estranged husband does not assist you financially.
41 At the plea hearing on 25 October 2019 I made a Reparation Order pursuant to s 21B(1) of the Crimes Act 1914 (Cth) (‘the Act’) for the outstanding balance owing in the amount of $64,869.56.
42 So far as your mental health is concerned, you were first diagnosed with major depressive disorder with mixed anxiety and symptoms of chronic PTSD by Ms Stephanie Chu, a consulting psychologist, in January 2016. I have had regard to the contents of Ms Chu’s ‘Letter of Referral’ dated 28 February 2017.[12] Ms Chu attributes your symptoms of PTSD to workplace bullying that took place at Telstra in Perth between 2003 and 2005. You continue to attend her clinic for treatment on a regular basis.
[12] Exhibit D6.
43 In 2007 and 2008 you were seen by Dr Leonie W Coxon, a clinical and forensic psychologist. I have had regard to the contents of Dr Coxon’s report dated 21 March 2017.[13] He diagnosed you as suffering from severe PTSD, which again appeared to be predominantly attributable to workplace bullying at Telstra. When you saw him in March 2017 you were also ‘significantly anxious and depressed’.
[13] Exhibit D5.
44 You were assessed by Ms Gina Cidoni, a consultant psychologist, on 24 April 2019. I have had regard to the contents of Ms Cidoni’s report dated 24 April 2019.[14] Ms Cidoni concluded you suffer from very poor mental health with a severe and chronic depressive disorder and associated anxiety according to the DSM-V. You also have symptoms of PTSD and hysteria. You endorsed paranoia in the clinical range and you also have schizoid function and some antisocial traits. Ms Cidoni opined: ‘The clinical picture is one of Major Depressive Disorder with psychotic features and comorbid anxiety that represents disconnections with reality’.
[14] Exhibit D3.
45 However, according to Ms Cidoni you do not meet the ‘full criteria for PTSD’. She says this is not unusual because symptoms resolve with the passage of time and you have had counselling.
46 So far as any causal connection between your offending conduct and your mental health is concerned, Ms Cidoni opined:
Her mental health status is related to her offending in that she shows disorganisation, undue stress, impaired concentration and attention and poor coping. Test signs indicate the conditions are chronic/ have been present for a substantial time.
There are decompensations into a psychosis when highly stressed, where there is a loss of contact with reality. Her conditions and circumstances have affected her ability to think and reason calmly and make rational decisions and have resulted in a lack of control over her behaviour.
Nonetheless, you admitted to Ms Cidoni that you knew what you were doing was morally wrong and against the law.
47 Ms Cidoni also opined that you would not cope well in prison and imprisonment ‘could have a devastating effect upon [you] in view of [your] fragility and would cause a further deterioration of mental health’.
48 So far as your physical health is concerned, in a report dated 13 December 2018[15] Dr James Chiu, an orthopaedic surgeon, said you fell on your right knee on 27 July 2018 in a Coles car park in Dandenong. This has caused a long-term injury whereby you are unable to stand for a prolonged period of time and your mobility is severely affected. This has resulted in symptomatic arthritis in all three compartments of your knee. Dr Chui recommends you undergo a right total knee replacement. You are not prescribed any medication, but you take paracetamol for pain relief for your knee.
[15]Exhibit D4.
49 According to a letter from Dr Ariane D’Argent, your general practitioner, dated 22 October 2019,[16] you are currently on the waiting list of a public hospital for a total right knee replacement. You are able to weight bear and walk for only 20 minutes at one time. You are unable to do any heavy lifting, pushing or pulling.
[16] Exhibit D8.
50 Apparently, you underwent a left knee replacement in 2002. Otherwise, you are an active person for your age and in general good health.
51 I have also had regard to a letter from Dr James Churchman of Mediclinic in Clayton South dated 28 March 2019[17] detailing your son, Karl’s, chronic anxiety condition, obsessive compulsive disorder and chronic opiate dependence, for which he is prescribed methadone. Dr Churchman indicated his awareness of the financial pressures your son’s drug addiction has placed on you.
[17] Exhibit D7.
52 You have never abused alcohol or illicit or prescribed drugs. However, as I mentioned earlier, you do have a gambling addiction.
Mitigating circumstances
53 The Crown accepts you pleaded guilty to the present offence at an early opportunity. You were initially charged with three offences contrary to s 134.2(1) of the Criminal Code on summons on 4 December 2018. On 27 May 2019 you made an offer to plead guilty to a single ‘rolled up’ charge. That offer was accepted by the Crown on the same day. You subsequently entered a guilty plea to a single charge on 28 May 2019 at the third committal mention.
54 I accept that your plea was entered at the first reasonable forensic opportunity.[18] Your plea has significant utilitarian benefit in light of the likely length and complexity of any trial. It also indicates an acceptance by you of responsibility for your offending conduct and a willingness to facilitate the course of justice.
[18] See Atholwood v The Queen (1999) 109 A Crim 465, 468 (Ipp J); Cameron v The Queen (2002) 209 CLR 339, 345–6 [20]–[22] (Gaudron, Gummow and Callinan JJ).
55 In your case I am also prepared to sentence you on the basis that you demonstrate some level of true contrition and remorse for your offending over and above what is inherent in your plea.
56 I am also of the opinion that the investigation and court processes arising out of your offending has taught you a salutary lesson and this, together with your age, means I need give little, if any, weight to specific deterrence and protection of the community in your case.
57 You have only one old and largely irrelevant prior finding of guilty and you have no subsequent convictions or findings of guilt and no matters outstanding or pending. Accordingly, I sentence you on the basis that you are a person of otherwise good character. However, for the reasons previously stated, and given the length and nature of your offending conduct, this factor will be given less weight than might otherwise have been the case.
58 In light of the state of your mental health your counsel submitted that Verdins principles 5 and 6 are engaged in your case. She did not rely on any other Verdins principles. The Crown accepts your mental health is a relevant sentencing consideration. I sentence you on the basis submitted by your counsel.
59 I also sentence you on the basis that a sentence of imprisonment would be more burdensome on your than a prisoner of ordinary mental and physical health. Separation from your son would also create some additional burden on you.
60 The Crown concedes that your mental health, in conjunction with your age and physical ailments, at the date of sentence is such that a term of imprisonment would be more burdensome on you than a person in normal health. The Crown also accepts that there is a serious risk that imprisonment would have a significant adverse effect on your mental health, and this is a factor that should mitigate punishment. However, the Crown’s ultimate submission was that the state of your mental and physical health conditions do not justify a term of imprisonment not being imposed; rather, they may justify a term of imprisonment being served in the community rather than in custody.
61 Your counsel submitted that the imposition of a Community Correction Order with an unpaid community work component would satisfy all the sentencing requirements in your case.
Application of sentencing principles
62 I have had regard to current sentencing practices in relation to the charge of dishonestly obtaining a financial advantage by deception from a Commonwealth entity. The prosecutor provided me with a list of cases headed ‘Comparative Sentences Table – Indictable matters: Social Security Fraud’[19] and a number of so-called ‘comparable cases’.[20] I have had regard to this material in formulating the sentence I impose on you.
[19] Exhibit P4.
[20] R v Buggy [2006] ACTCA 20; R v Anderson (unreported, Victorian Court of Appeal, Chernov JA, 7 September 2007); R v Lovel [2007] QCA 281; R v Newton [2010] QCA 101.
63 It is difficult to gauge more than a very general yardstick from so called ‘comparable cases’, given the wide range of offending conduct which can constitute this offence and the myriad of personal circumstances pertaining to individual offenders. Nonetheless, to the extent that I have been able to gain any assistance from comparable cases and other like material, I have sought to do so in your case.
64 In accordance with Commonwealth sentencing law, I must impose on you a sentence that is of a severity appropriate in all of the circumstances.[21] That requirement must be read together with the need to ensure that you are adequately punished for this offence.[22] Moreover, section 16A(2) of the Act sets out a non-exhaustive list of factors that a court must take into account, where they are relevant and known to the court.
[21] Crimes Act 1914 (Cth) s 16A(1).
[22] Ibid s 16(2)(k).
65 The basic purposes for which a court may impose a sentence are just punishment, deterrence, both specific and general, rehabilitation, denunciation and protection of the community. In sentencing you, I must have regard to a range of factors as set out in the relevant provisions of the Act. In general terms, these include the seriousness of the offence, your culpability for it and your personal circumstances.
66 I am required to balance the interests of the community in denouncing criminal conduct with the interests of the community in seeking to ensure that, so far as is possible, you are rehabilitated and reintegrated into society.
67 As I observed earlier, general deterrence and denunciation are very important sentencing considerations for this offence. Whilst just punishment, general deterrence and denunciation must be given significant weight in my instinctive synthesis, I am of the view that in your case, specific deterrence and protection of the community need be given very little, if any, weight. I assess your prospects of rehabilitation as being good.
68 Section 17A(1) of the Act restates the established common law position that imprisonment to be immediately served is a sentence of last resort and a court must consider all other available sentences and all the circumstances of the case.
69 Ms Kothe I have formed the view that a sentence involving a sentence of imprisonment coupled with a reconnaissance release order with the effect that you will serve no time in immediate custody is the appropriate disposition in your case. The prosecutor accepted such a disposition is open to me.
Stand up Ms Kothe
On Charge 1 (dishonestly obtain a financial advantage by deception from a Commonwealth entity) you will be convicted and sentenced to imprisonment for two years and six months commencing from today.
I must make a recognisance release order in your case. I order your release under s 20(1)(b) of the Crimes Act 1914 (Cth) forthwith upon you giving security by recognisance of $3000.00 to comply with the following condition:
You are to be of good behaviour for a period of two years and six months.
There is no PSD to declare.
Ms Kothe, the purpose of these orders is to punish you for the crime you have committed. The effect of my orders is that you have a sentence of imprisonment of two years and six months hanging over your head from today for two years and six months. During the two years and six months period commencing today, you must not commit another offence punishable by imprisonment because that will breach your recognisance and you may be ordered to serve the two years and six months in prison.
Pursuant to s 6AAA of the Sentencing Act 1991 (Vic) I state that the sentence I would have imposed on you but for your plea of guilty is imprisonment for four years and six months with a non-parole period of three years.
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