R v Moussa
[2019] VCC 1891
•25 October 2019
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-17-00593
| THE QUEEN |
| v |
| FRANK MOUSSA |
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JUDGE: | HIS HONOUR JUDGE TRAPNELL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 September 2018 | |
DATE OF SENTENCE: | 25 October 2019 | |
CASE MAY BE CITED AS: | R v Moussa | |
MEDIUM NEUTRAL CITATION: | [2019] VCC 1891 | |
REASONS FOR SENTENCE
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Subject: CRIMINAL LAW – Sentence
Catchwords: Dishonestly causing a loss or risk of loss to the Commonwealth – Early plea of guilty – Risk of loss to the ATO of $1 million – Paying ‘off the books’ wages without remitting tax to the ATO – Offending committed over three years – Assisted by daughter in offending – Extremely low intellectual functioning – Moral culpability is reduced by intellectual disability – Actively participated in offending – No particularly relevant prior criminal history – Demonstrated true contrition and remorse – Excellent prospects of rehabilitation – Three years’ imprisonment coupled with a reconnaissance release order – Fined $20,000.
Legislation Cited: Criminal Code (Cth) s 135.1(5) – Crimes Act 1914 (Cth) s 4B(2) – Crimes Act1914 s 16A(1) – Crimes Act1914 s 16A(2)(k)
Cases Cited:Atholwood v The Queen (1999) 109 A Crim 465 – Cameron v The Queen (2002) 209 CLR 339 – Muldrock v The Queen (2011) 244 CLR 120 – R v Bux (2002) 132 A Crim R 395 – Caldwell v The Queen [2014] VSCA 274 – Romero v The Queen (2011) 32 VR 486
Sentence: Three years’ imprisonment coupled with a reconnaissance release order – Fined $20,000
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APPEARANCES: | Counsel | Solicitors |
| For the CDPP | Mr B Young QC with Mr M Regan Mr B Young QC | Solicitor for the Commonwealth Director of Public Prosecutions |
| For the Accused | Mr P A Dunn QC with Ms V Drago (20 September 2018) Mr P A Dunn QC (25 October 2019) | Melasecca Kelly & Zayler |
HIS HONOUR:
1 Frank Moussa, you have pleaded guilty to a Commonwealth indictment containing one charge of dishonestly causing a loss or risk of loss to the Commonwealth[1] between 1 October 2011 and 19 October 2014 knowing or believing that the loss would occur or that there was a substantial risk of the loss occurring. The maximum penalty for this offence is five years’ imprisonment[2] and/or a fine of $33,000.[3]
[1] Contrary to s 135.1(5) Criminal Code (Cth).
[2] Pursuant to s 135.1(5) Criminal Code (Cth).
[3] See Crimes Act 1914 (Cth) s 4B(2). At the relevant time a ‘penalty unit’ was equal to $110.
2 The charge relates to a risk of loss to the Australian Tax Office (‘ATO’) of Pay As You Go (PAYG) tax neither withheld, declared nor remitted to the ATO in respect of a number of employees (including yourself) of FMAM Corp Pty Ltd (‘FMAM’) as trustee for the FMAM Family Trust.
3 Supplemental untaxed cash payments were regularly paid to a large number of salaried employees of your company. PAYG tax was thereby evaded over a period of some 3 years. Ultimately, it was agreed by the CDPP and your counsel that I should sentence you on the basis that the risk of loss to the Commonwealth over this period was in the order of $1 million.
THE FACTS
4 The factual substratum to this offence is set out in three documents filed by the prosecution as follows:
(1) An undated document headed ‘Plea Opening – General Summary’.[4]
(2) An undated document headed ‘The Queen -v- Frank Moussa Opening – Executive Summary’.[5]
(3) A document described as a ‘The Queen –v- Frank Moussa Prosecution Opening for Plea’ dated 28 August 2018.[6]
[4] Exhibit P1.
[5] Exhibit P2.
[6] Exhibit P3.
5 I was told by your counsel I can treat the contents of these documents, so far as they relate to you, as a statement of agreed facts for the purposes of sentencing you for this offence.
6 ACG National Pty Ltd (‘ACG’) is one of Australia’s largest national private security companies. A major part of its operations involves supplying security personnel at clients’ sites and various public events. Victoria provides the largest income stream from the deployment of the largest guard workforce in the company’s operations.
7 ACG aggressively projected an image eschewing any reliance upon sub-contractors, however, a large number of guards were actually employees of several sub-contractors to ACG. ACG substantially asserted overarching control in the recruitment, deployment and supervision of guard personnel, whether they were employed directly by ACG or through its several sub-contractors.
8 ACG’s clients included: the Port of Melbourne Authority, Patricks Stevedores, Etihad Stadium, Coca Cola Amatil, the Melbourne and Olympic Park Trust, and all of the three major Melbourne racecourses. ACG also provided security guards to major seasonal sporting events such as the Spring Racing Carnival and the Australian Open tennis.
9 As an employer, ACG was obliged to withhold an amount of PAYG tax from wages and salaries paid to its employees and to regularly remit that amount to the ATO. That responsibility shifted from ACG to retained sub-contractors in respect of their employees’ wages. There were a number of guards who thought they were employees of ACG, but their actual employer was either your company, FMAM, or another company owned and operated by one of your co-accused Mr Mohamed Ammouchi.
10 During the charged period, ACG relied significantly on smaller subcontracted companies to supply security personnel for Victorian events. These sub-contractors included FMAM. At all relevant times FMAM was paying employees untaxed cash, ‘off the books’. Consequentially, ACG designated FMAM a ‘preferred partner’. Through these means ACG utilised FMAM as a means of reducing its labour costs.
11 The prosecution allege that you, considerably assisted by your daughter, Venessa Moussa, engaged in ongoing dishonest conduct arising from your association with ACG. It is alleged that you paid ‘off the books’ wages to all guards employed by FMAM without any tax being withheld or remitted to the ATO. These payments included guard shift wages paid to both yourself and to Ms Moussa. It is alleged that the resultant risk of loss was ‘substantial’, but that risk of loss cannot be accurately quantified because an audit of the total wages paid to the guard contingent has never been conducted and accordingly their individual tax liabilities, if any, are unknown. However, as I said earlier, you fall to be sentenced on the agreed basis that the risk of loss to the Commonwealth was in the order of $1 million.
12 It is further alleged that you made a number of untaxed cash supplemental payments to three ACG salaried personnel as follows: Hayssam Chmayse, with payments totalling $48,913.00 and tax evaded of $18,936.03; Jim Korras (your co-accused Harry Korras’ brother) with payments totalling $6,336.00 and tax evaded of $2,237.08; and Tracey Preece, with payments totalling $8,125.00 and tax evaded of $2,921.24. The quantum of the total tax evaded in relation these three people is $24,094.35 on total wage payments of $63.374.00, over a period of four years in the case of Chmayse. This is a quantifiable actual loss to the Commonwealth which forms part of the $1 million.
13 You company, FMAM, was incorporated on 30 September 2011 with you as the sole director, company secretary and the only shareholder. FMAM was the trustee for the FMAM Family Trust. Evidence indicates that you were related to Chmayse who, at the time, was ACG’s General Manager Events. You and your daughter, Venessa, had previously been employed by ACG. Ms Moussa had worked both as a security guard and at ACG’s head office in Parkville.
14 No taxation returns, BAS statements or Tax File Number Declarations were lodged by FMAM during the financial years 2012, 2013, 2014 or 2015. No PAYG tax was withheld or remitted to the ATO.
15 From the outset, FMAM payroll administration was undertaken personally by you and Ms Moussa. Business records relating to FMAM principally comprise FMAM invoices to ACG, FMAM banking records and associated email correspondence. FMAM invoices relating to ACG seized during the investigation total $6,369,102, which includes a $579,028 GST component. I note that this GST component is not alleged within the particulars of the charge on the indictment which is confined to unpaid PAYG tax. Accordingly, this unpaid GST does not form part of the sentencing facts in your case. Banking records obtained under warrant show that ACG paid $7,788,888 into FMAM bank accounts.
16 CBA bank records, including CCTV evidence, establish that 504 cash withdrawals totalling $4,953,190 were made from the FMAM CBA account. The cash withdrawals were all between $9000 and $9990, with 424 (or 84%) being for $9900. You and Ms Moussa were the only signatories to the company’s bank account.
17 The prosecution case is that the cash withdrawals were made in these amounts in order to conceal both the size and character of the tax evasion by keeping the withdrawals below $10,000, the amount at which AUSTRAK reporting is required.
18 The cash was then distributed downstream to the guards, returned to ACG or retained by FMAM, either as the your own untaxed wages or as the net profit derived from the scheme by FMAM.
19 Investigations revealed that the office of YPA Real Estate, which was operated by your wife, was being utilised as a collection point where guards would attend to pick up their cash pay envelopes. Four cash collection registers, listing 173 different guards' names, were seized during the investigation. These show signatures against various dates during 2014. Surveillance of YPA revealed numerous guards attending and collecting envelopes containing cash.
20 The arrangement FMAM had with ACG remained consistent throughout almost all of the charged period. The arrangement was that ACG almost invariably paid FMAM at the rate of $25 per standard guard hour, plus 10% GST. A lesser rate of $23.50 per hour, plus GST, was paid by ACG for guards working at the ACG Subaru site. A higher rate of $27.00 and $27.50 per hour plus GST was paid by ACG for guards employed at the World Trade Centre and Melbourne Airport respectively. A number of guard supervisors were invoiced to ACG at $28.00 per hour, plus GST. Double hourly rates plus GST were generally paid for public holiday shifts.
21 FMAM then paid a lesser per-hour rate to the guards, generally retaining between $3 to $5 per standard shift hour. This resulted in most standard guards actually receiving between $20 to $22 per hour worked. The total number of guard hours invoiced to ACG by FMAM over the charged period was 233,627 hours. Accordingly, an estimate of FMAM’s profit can be made based on the $3 to $5 per hour the company retained. The total hours invoiced includes 2,443 hours worked by you and 1,739 hours worked by Ms Moussa. It is alleged that the minimum amounts received was $60,327.50 by you personally and $44,687.95 by Ms Moussa, making total untaxed wages of just over $105,000.
22 Because no ATO audit was undertaken which would have allowed for calculation of each guard’s individual tax liabilities, the total amount of tax evaded referrable to the FMAM cash payrolls cannot be accurately quantified. Nonetheless, the prosecution contends that by taking into account the $6.39 million invoiced to ACG by FMAM, ACG payments to FMAM totalling $7,788,888, and cash withdrawals totalling $4,953,190, the risk of loss to the Commonwealth was ‘substantial’. As I said earlier, it was eventually agreed by the CDPP and your counsel that I should sentence you on the basis that the risk of loss to the Commonwealth was in the order of $1 million.
23 Prior to the sale of ACG’s business to Spotless Facility Services Pty Ltd on 31 October 2014, an attempt was made by ACG to transfer the guards employed by FMAM to another company in an effort to regularise their salary payments. You and Ms Moussa continued to administer the ‘off the books’ untaxed cash component of FMAM’s business. You also inherited a number of other cash guards who had previously worked for another subcontractor company.
24 I was told the end date of the charge period is fixed at the end point of the payroll cycle for the fortnight ending 12 October 2014. This was the last completed payroll before search warrants were executed on 23 October 2014.
25 During the investigation, you were the subject of a telephone interception warrant and your residence and business premises were searched pursuant to warrant. You were arrested in late February 2015 and charged in relation to this offending. You participated in a record of interview, but substantially exercised your right to give ‘no comment’ answers.
Personal circumstances
26 I now turn to your personal circumstances. In this I was assisted by your counsels’ oral and written submissions and a number of psychological and other reports, together with a bundle of character references.
27 You are now aged 55 years and you were aged between 47 and 50 during the offending period. You live with your wife, Amira Maghnie. You are currently employed at a restaurant in Elsternwick. I was told that you have no ‘real assets’.
28 You were born in Akkar in Lebanon, an Orthodox Christian village containing some 40 homes, on 22 November 1963. You are the third eldest in a sibship of eight and the oldest son. This is significant in your family dynamic.
29 Your father migrated to Australia in 1972 ahead of the rest of your immediate family to join his brother who was living in Melbourne. A year later, your mother also migrated to Australia with her youngest son, while you and your three sisters remained in Lebanon in the care of your paternal grandparents awaiting the completion of paperwork necessary to finalise your migration to Australia.
30 In 1976, when you were aged 11, the civil war in Lebanon escalated, forcing your grandparents to flee with you and your sisters to Syria. As a result of the civil war, you received an extremely limited education in Lebanon because schools were frequently closed as a result of bombings and killings. Undoubtedly, living through this period in your birth county’s history has adversely affected you. Nonetheless, I note there is no diagnosis of PTSD in your case.
31 After two weeks in Syria, you and your sisters flew to Australia and were reunited with your parents and younger brother who were living in Brunswick. There was an incident at the airport in Syria where you and your youngers sisters were separated from your eldest sister whose job it was to escort you to Australia. In the end she did not board the flight. This caused great distress to you at the time. At this time your father was working night shifts in a factory.
32 You attended Brunswick North Primary School for about six months in 1976. You then commenced your secondary education at Brunswick High School in 1977 at the age of 13. Your attendance was somewhat infrequent at that time; you did not enjoy school because of language difficulties and bullying. Your first language was Arabic and you spoke very little English. Apparently, you received only basic English instruction. Nonetheless, you did manage to complete Years 7 and 8.
33 In 1979, at the age of 15, you left high school halfway through Year 9 as a result of the difficulties you were then experiencing. Your decision to leave school caused significant issues for your family and because of this you were forced to leave your home.
34 You moved into your grandparents’ home in Coburg and you and your father stopped speaking to one another. You secretly remained in contact with your mother during this period. Eventually, in 1981, you and your father reconciled. However, you remained living with your grandparents until shortly before your first marriage, in 1985.
35 Your employment was spasmodic for the first three years after leaving school. You worked casually in several different jobs in the hospitality industry and in odd jobs such as at petrol stations, a local supermarket and in a factory in Brunswick.
36 In 1982, you obtained employment as a waiter at a Lebanese restaurant in Lygon Street, Carlton. You worked there for some several months. You then worked at the Falafel House on Chapel Street, Prahran for several months. It was at this time that you committed your first offence by making a false statement in relation to a traffic offence. I note that your criminal history records nine charges of making a false statement for which you received a $10 fine on each charge.
37 In 1983, you commenced employment at another restaurant on Chapel Street where you worked for 12 months. Unfortunately, your grandfather was diagnosed with brain cancer at this time and he passed away within six months of diagnosis. This had a significant impact on you. You went somewhat off the rails and started offending and it is in this context that you were convicted of a number of offences in 1983 at the Brunswick Magistrates’ Court.
38 In 1984, when you were aged 21 years, you were first employed as a security guard at a Brunswick night club. This lasted for a period of two years. The work was either casual or part time and on a needs only basis. You were paid in cash. To make ends meet, you also worked in the hospitality industry. Apart from a short period in 1985 when you worked as a waiter and pizza delivery driver, you have been employed as in the security industry since this time.
39 In 1985, you met your first wife, Ann Zlatkin, who was of Russian background. Your relationship was not approved of by either of your families. Nonetheless, you married at a Registry Office about six months after meeting. You and your wife moved to a rental apartment in Thornbury. During this year you worked as a waiter and pizza delivery driver for a restaurant on Chapel Street.
40 In 1986, you and your wife had your first child, Monica, who is now 33 years old. She is married with three children and runs a café in Keilor. Your second child, Venessa, who is 31 years old, was born in 1988. She is single and works in the hospitality industry. She lives with her mother. She is the daughter who was associated with you in your FMAM business and she had been previously employed by ACG.
41 In 1988, you commenced working as a security guard casually at Chaser’s Night Club. You also continued to work as an in-house security officer for various venues around Melbourne. At this time, you first were required to obtain your security guard’s licence.
42 In 1991, you began working for Peter Benny at Advent Security on Sunday afternoons at the football. You had been introduced to Advent Security by your co-accused, Sam Karam, who was employed in a managerial position.
43 In 1992, you ceased work as a security guard at night clubs and began performing community-based security work within the Lebanese community.
44 In 1993, your relationship with your wife, Ann, began to run into difficulties and you separated in 1996.
45 In 1996, you met your current wife, Amira Maghnie, whilst working as a security guard. In 1997, you moved into her house in Broadmeadows, where she lived with her three children, Summer, Anthony and Daniel. Following a protracted and difficult custody battle, after six months your children by your first marriage also moved in with you, Amira and her children.
46 During this period, you continued to work in the security industry and Amira worked in the hospitality industry.
47 In 1998, you and your first wife, Ann, were divorced. It was an acrimonious breakup and as a consequence you commenced receiving treatment from a psychologist. However, your relationship with Ms Zlatkin is now amicable and this has been the case since your daughter Monica’s wedding, some years ago. Indeed, Ms Zlatkin provided a supportive character reference for you in these proceedings.[7]
[7] Contained in exhibit FM8.
48 In 1999, you commenced employment with ACG on the understanding that you would be consistently employed in an otherwise casual industry. You worked at Etihad Stadium, working one or two shifts per week. The rest of the time you cared for yours and Amira’s children.
49 In 2001, you pleaded guilty to obtaining property by deception and handling stolen goods in circumstances where I was informed you were asked to bank a stolen cheque. You were sentenced to 1 month’s imprisonment, suspended for 12 months, and a 12 community-based order, which you successfully completed.
50 From 2001 to 2010, you lived in Broadmeadows with Amira and your collective children. You were still working in the security industry at football matches and Lebanese functions as in-house security.
51 In 2010, Amira established a real estate agency, YPA, which she ran as a sole trader. During this year, your daughter, Venessa, commenced working for ACG and, unfortunately, your mother became ill with emphysema.
52 In 2011, ACG encouraged some of its employee security guards to become sub-contractors and you were encouraged to become one of the sub-contractors. You were promised guaranteed work. You felt very humbled by this approach because you had always been an employed person and you would now be self-employed. It was explained to you that ACG would organise the corporate structure through which your business would operate.
53 After about two weeks, ACG’s accountants, The Peterson Group, organised the incorporation of FMAM Corp Pty Ltd and the creation of the FMAM Family Trust. It was submitted on your behalf that at this time you were unsophisticated and ignorant regarding company matters and the purposes of the trust. I accept this is so. The corporate structure was designed by ACG and they dictated how FMAM would operate.
54 You became self-employed for the first time in your life. At the inception of the company, you employed four security guards, however, this grew over time to the point where you were eventually employing in excess of 150 security guards. Your daughter, Venessa, left ACG and became responsible for the day to day running of the FMAM business and overseeing its financial operations. She did this with the assistance of The Petersen Group.
55 Whilst I accept you had some involvement in the day to day management of FMAM, including withdrawing large sums of cash and paying this to the security guards the company employed, you also worked as a security guard at the football, usually two to three shifts per week at Etihad, and at the Flemington and Caulfield Racecourses. In my view this is indicative of the fact that you were not the controlling mind and will of the company, but played a subservient role to others more versed in the operation of the cash payments to sub-contractors scheme.
56 Also in 2011, you and your family travelled to Lebanon for a holiday and your first grandchild was born. Sadly, your mother’s health significantly deteriorated to the extent where she required the provision of additional oxygen. You visited her daily and tended to her medical and day to day needs. Your father’s health also began to further deteriorate. Moreover, you assumed financial responsibility for your sister and her children, when her husband left them and moved back to Lebanon, where he continues to live.
57 Despite all these family pressures, you began volunteering at St Mary’s House of Welcome, where you continue to work as a volunteer. I have had regard to the contents of a character reference tended on your behalf from Lee-Ann Boyle dated 21 August 2018.[8]
[8] Contained in exhibit FM8.
58 In 2012, ACG directed more security guards to work for your company. By this stage, you were managing some 40 security guards.
59 In May of that year, your mother passed away and the following month your father was diagnosed with dementia which rapidly developed. At this time, you were visiting your father daily and tending to his medical and day to day needs. This placed severe strain on your relationship with Amira and you and she separated. You moved into your daughter, Monica’s, home for some nine months.
60 So far as your mental health is concerned, I was told that this deteriorated in the late 1990s after the breakdown of your first marriage but remained untreated for a lengthy period of time. However, in 2012 you were formally diagnosed with depression and anxiety, which was situational, and you were referred for treatment.[9] I note that your counsel did not submit that any Verdins principles are engaged in your case on this account.
[9] See letter of Dr Anthony Diarmantaras dated 10 September 2018 (Exhibit FM7).
61 In 2013, as a result of a breakdown in the relationship between ACG and another sub-contracting company, MLA Security Services Pty Ltd, ACG directed more security guards to work for your company and consequently FMAM had 60 to 70 security guards working for it.
62 In 2014, you and Amira reconciled and you returned to live in the family home. You and she travelled to Hawaii for a reconciliation holiday. Your second grandchild was born and you continued to care for your sick father.
63 In this year you were diagnosed with Type 2 Diabetes for which you are medicated. You also suffer from arthritis, have some disc problems in your spine and you have elevated cholesterol levels. I was told these conditions are well controlled with medication and are not relevant in my sentencing you.
64 As a result of the breakdown of relationships between ACG and other companies, security guards wished to work for you, and as a result your company continued to grow. However, later that year, for reasons unknown to you, ACG commenced reducing the number of security guards working for you. This led to an attempt in September 2014 by ACG to move your security guards to a company called ‘Next-Gen’ as part of a process of ‘sanitation’ leading up to the sale of ACG to the Spotless Group.
65 In August 2014, you contacted Mr Nic Kyriopoulos of The Peterson Group with a view to having your taxation affairs put in order. Shortly after this, search warrants issued in the present investigation were executed and FMAM was eventually placed into liquidation. In February 2015, you were arrested and charged with offences including the present offence.
66 Since that time you worked briefly for your wife’s real estate business but this ended shortly after you commenced employment owing to customer complaints. Since leaving your wife’s real estate business you have been unable to find work. You do continued to attend to the daily care for your father until he passed away in 2016.
67 In 2017, Amira was forced to sell her real estate agency business as a result of your present circumstances.
68 In 2018, you finally obtained employment as a restaurant manager at a pizza shop in Elsternwick. In this year your third grandchild was born.
69 So far as your financial circumstances are concerned, I accept that you have not profited significantly from your offending conduct. You have never owned any real estate property and your only assets are motor vehicles. You paid your daughter’s rent in 2012 and 2013 when she moved out of home and you provided some financial assistance to your wife’s business when it was struggling financially. During the offending period you had a family holiday in Lebanon and later you travelled with your wife to Hawaii. Your wife purchased a BMW in 2003 valued at $96,000 which was partly financed by a loan of $46,000. Throughout the offending period you also continued to support your sister and her children after her husband left her and their eight children. You also paid for your mother’s funeral.
70 I was told that by the end of 2014 you had no assets other than the cars. Nonetheless, I was told that you do have some capacity to pay a fine. No reparation has been sought by the ATO or the Commonwealth DPP in respect of this charge.
Your role in the offending conduct
71 So far as the payment of cash to security guards engaged by your company is concerned, I was told that these payments were made in a very unsophisticated fashion. Either you or your daughter would call and order money for collection or otherwise simply withdraw the cash. Your daughter would then divide the cash up for payment to the security guards.
72 However, as the Crown pointed out, in each case you personally filled out the withdrawal slip and there were a total of 504 withdrawals from 26 branches of the bank. Indeed, on one day, there were 18 withdrawals of $9,900 from various branches of the bank.
73 As the size of the company’s payroll increased, Vanessa primarily managed the affairs of the company because she was computer literate and had managerial skills which you lacked. You, on the other hand, left school at 15 and have always worked in unskilled occupations. Although you can read and write basic English, you are computer illiterate. Moreover, as I detail later in these reason for sentence, you have been assessed as having extremely low intellectual functioning.
74 Whilst I accept that the fraudulent scheme you were engaged in was not of your making and you are unsophisticated when it comes to matters of business, I cannot accept that you were entirely ignorant regarding what was occurring when it came to FMAM’s operations. Your personal involvement in so many withdrawals of such large sums of money must have rung some alarm bells with you in spite of your very low level of intellectual functioning. On any view you actively participated in the scheme to avoid the payment of PAYG tax by engaging sub-contractor guards and paying them in cash over a lengthy period of time.
75 Nonetheless, I do accept the scheme was instigated and largely operated at the behest of ACG and you were to a large extent a pawn in implementing and carrying-out this dishonest venture.
76 Moreover, so far as the day to day operations of FMAM’s business is concerned, that was primarily your daughter’s responsibility. She would deal with ACG, liaise with the security guards to determine their availabilities, advise ACG of the hours worked by security guards and withdraw the funds from FMAM’s account once ACG had transferred those funds to that account. She would also put the cash in the envelopes for the security guards, who would then be paid either directly at the various events for which they were engaged or by them attending your wife’s real estate agency business premises.
Prior convictions and findings of guilt
77 You have a limited and largely irrelevant prior criminal history. In August 1982, you were convicted of nine charges of making a false statement and you were fined $10 on each charge.
78 In May 1983, you were before the Brunswick Magistrates’ Court charged with carrying an offensive weapon, two charges of fraudulently using a Marine Act licence, three charges of stating a false name or address, and some driving offences. You were convicted and fined what appears to be a total of $450.
79 In 1994, you were before the Preston Magistrates’ Court charged with unlawful possession and without conviction you received an adjourned bond.
80 More concerning is an appearance before the Melbourne Magistrates’ Court in May 2001 where you were charged with handling stolen goods and received a 1 month sentence of imprisonment wholly suspended for 12 months and ordered to pay compensation of $4,100. At the same hearing you were charged with two counts of obtain property by deception and you were convicted and placed on a community-based order for 12 months. Some three months later, that community-based order was cancelled and you were convicted and fined in the aggregate $2,000.
81 Whilst I accept your counsel’s submission that these are somewhat dated and relatively minor offences, nonetheless they do indicate some history of dishonesty on your part and they are not entirely irrelevant to my sentencing you for the present offence.
82 I was also told that you are have committed no subsequent offences and there are no matters currently outstanding. Given the present offence occurred just over five years ago, this does demonstrate your ability to remain law abiding which is relevant to the weight I give to specific deterrence in sentencing you and the view I take of your prospects for rehabilitation.
Sentencing considerations
83 The fundamental principle in sentencing you is that I must impose a sentence ‘that is of a severity appropriate in all the circumstances of the offence’.[10] I must have regard to a number of sentencing considerations as set out in s 16A(2) of the Crime Act 1914 (Cth) (‘the Act’). This list is not exhaustive.
[10] Crimes Act1914 s 16A(1).
84 Included in the matters to which I must have regard in sentencing you, are the following:
(a) the nature and circumstances of the offence;[11]
(b) any loss resulting from the offence;[12]
(c) the deterrent effect that any sentence or order under consideration may have on other persons;[13] and
(d) the need to ensure that the person is adequately punished for the offence.[14]
[11] Ibid s 16A(2)(a).
[12] Ibid s 16A(2)(e).
[13] Ibid s 16A(2)(ja).
[14] Ibid s 16A(2)(k).
85 General deterrence and denunciation are prime considerations in sentencing you in respect of this offence. The courts have a significant responsibility to protect the integrity of the revenue system by imposing punishment for deliberate and sustained fraud so as to deter others who may be tempted to indulge in similar conduct. Because the tax system is based on trust, it is open to abuse. Accordingly, when abuse is discovered, sentences must be salutary. Tax fraud also has many harmful, but often hidden, social consequences. It is difficult to detect and if undetected the rewards can be great.
86 The Commonwealth Director submitted, and I accept, that in your case detection was made more difficult by the payment of cash wages and the employment of sub-contractors, which had the effect of shifting the tax burden to entities that, like FMAM, did not take responsibility for the payment of its taxation obligations.
87 In this case, the investigation and prosecution of this fraudulent scheme of which you were a part, was complex, difficult, time consuming and resource intensive. I was informed that the investigation involved the execution of numerous search warrants, the seizure of thousands of documents, the interception of a large number of communications over a lengthy period and the detailed forensic analysis of accounting records.
88 Your crime is not victimless because the burden of fraud perpetrated on the Commonwealth government falls on the whole Australian community. Serious tax fraud will inevitably have flow-on effects to the incidence of taxation imposed on, and paid by, honest taxpayers.
89 It is for these reasons and others that the sentence I impose on you for this offending must give real effect to the principles of general deterrence and denunciation. Those, like you, who systematically defraud the revenue of a relatively large sum of money over an extended period of time must in general expect to receive a sentence of imprisonment.
90 You held a managerial position within FMAM and you were the sole shareholder of that company. Whilst you were not the instigator of the scheme giving rise to the charge before me, nonetheless you must have had some awareness of what was occurring.
91 Your offence was a continuing one committed over approximately a three year period during which you were complicit in the failure of FMAM to remit PAYG tax to the ATO. The accepted risk of loss to the Commonwealth is in the order of $1 million. FMAM invoices relating to ACG seized during the investigation total $6,369,102. Over 100 security guards were employed by FMAM at one stage.
92 Were it not for matters personal to you, I would have found this to be a serious example of this offence and your moral culpability would have been assessed as being high.
Mitigating circumstances
93 You have pleaded guilty and you are entitled to have this taken into account in your favour. Moreover, I accept that your plea was entered at the first reasonable forensic opportunity.[15] 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.
[15] 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).
94 In your case, I accept you demonstrate true contrition and remorse for your offending conduct. This is evident from Mr Armstrong’s report where he said that during his assessment you ‘disclosed without prompting [feelings of] significant remorse for [your] actions.’ Mr Armstrong opines that your remorse is ‘genuine’. Later in his report he said that you ‘demonstrated genuine remorse, disgust and shame’ and you ‘in fact … demonstrate significant empathy’.
95 Dr Diarmantaras also observed: ‘He has conveyed a deep sense of remorse and embarrassment for his actions and has felt profoundly humiliated as his name has been splashed in the media.’
96 I have had regard to the character references which have been tendered on your behalf.[16] Apart from some largely irrelevant and now somewhat dated prior convictions and findings of guilt, you are person of otherwise prior good character and ‘a family man who has always put the needs of others … before himself’.
[16] Exhibit FM8.
97 I accept that you are a ‘caring and passionate family man’ who is a role model for your children, step children and extended family members. You have been a good provider for your wife and children and you have provided significant and regular assistance to community organisations. You are a regular church goer at two Antiochian Orthodox Christian churches and you are a well-respected member of the congregations. Nonetheless, while prior good character is always a relevant mitigating circumstance, in cases of this nature it does not receive the weight it might otherwise be given.
98 I accept that you have learnt a salutary lesson from the investigation, charging and legal process in this matter. Accordingly, I am of the opinion that I need give little weight to specific deterrence or protection of the community in sentencing you. Moreover, I assess you prospects of rehabilitation as being excellent.
99 There has been significant delay in finalising this matter which is through no fault of yours. The outcome of these proceedings has been hanging over your head for some time now and I accept this has caused you significant stress and anxiety. I take the effect of this delay into account in your favour. Moreover, during the five years since the offending period ended you have been offence free and a model citizen.
100 I accept you are a family man who provides significant support to members of your immediate and extended family and that a sentence of immediate imprisonment would cause you custodial hardship as a result of separation from your family and your concern for their well-being.
101 I also accept that you have the support of your family and friends and that this offending is out of character for you. You have never used any illicit substances and you do not drink alcohol.
Intellectual disability
102 In my view, the most significant consideration in sentencing you is whether you suffer from a profound intellectual disability and, if you do, its relevance to the application of sentencing principles in your case. Unfortunately, this has been an evolving saga and it has taken far too long to get a definitive answer to these questions.
103 In September 2018, Mr Luke Armstrong, a consultant psychologist engaged by your legal representatives, assessed you as having an intellectual disability with a full scale IQ of 61.95 (with a 95% confidence interval) meaning your overall thinking and reasoning abilities would exceed only 0.5 per cent of individuals of your age.[17] This places you in the ‘extremely low range’ of intellectual functioning. Mr Armstrong opined that your presentation was consistent with this assessment. Moreover you were assessed using the Academic Achievement: Wide Range Achievement Test (WRAT5) as being equivalent to Grade 2 level for arithmetic and spelling and Grade 3 level for reading.
[17]See psychological report of Luke Armstrong dated 13 September 2018 (Exhibit FM6).
104 Mr Armstrong opined that he had ‘reservations’ that you ‘fully comprehended or had a proper and complete understanding of [your] actions’. He also thought this level of intellectual functioning placed you at risk of ‘being manipulated by others (gullibility)’ and that your abilities in abstract thinking, planning and cognitive flexibility are impaired and immature for your age. Mr Armstrong opined that ‘I doubt, due to his level of intellectual disability that he fully comprehended the wrongfulness of his actions during the alleged period of offending’.
105 Mr Armstrong gave evidence at the plea hearing and was cross-examined by counsel for the Commonwealth Director. I think it is fair to say he remained of these opinions.
106 Your senior counsel, Mr Dunn QC, submitted that you are ‘a man with an intellectual disability and extremely low cognitive abilities [who] was distracted by personal circumstances’. He submitted that: ‘As a result of [your] intellectual disability, general and specific deterrence cannot be given the emphasis that they might otherwise have in sentencing’. His ultimate submission regarding disposition was that: ‘Having regard to [your] role, [your] personal circumstances and the delay in this matter, … a term of imprisonment with immediate release upon recognizance pursuant to s 20(l)(b) of the Act is the appropriate disposition’.[18]
[18] See Exhibit FM1.
107 In a subsequent written submission[19] your counsel, relying on the decision of the High Court in Muldrock v The Queen,[20]submitted: ‘The level of [your] moral culpability is reduced by reason of [your] intellectual disability alone’. He submitted that you were effectively acting under the control and at the direction of ACG at the time of committing this offence and by reason of your intellectual disability you ‘had limited ability to make appropriate and considered decisions’ about what you were being directed to do. For this reason, it was submitted your ‘moral culpability is consequently low’.
[19] Exhibit FM2.
[20] (2011) 244 CLR 120, 139 [54] (French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ).
108 You counsel further submitted, relying on R v Bux,[21] that, while the principles of general and specific deterrence are not limited altogether, they need to be moderated in the present case by reason of you ‘significant intellectual disability’. It was also submitted on your behalf that you are ‘an inappropriate vehicle for the [application of] the sentencing principles of general and specific deterrence given [your] intellectual disability and extremely low cognitive functioning’.
[21] (2002) 132 A Crim R 395, 402–3 [33] (Eames JA, Batt JA and O’Bryan AJA agreeing).
109 The CDPP responded in written submissions[22] and orally that Mr Armstrong’s opinions were compromised by the fact he had not been provided with the telephone intercept transcripts in relation to your mobile telephone which appear in the depositions at pages 13047 to 13401 (Operation Boscobel Exhibit 300).[23] The prosecution contended that:
a review of those telephone intercept transcripts reveal Mr Moussa to be an efficient manager and communicator so far as the arranging of guards for rosters was concerned, and that he regularly liaised effectively and concisely with Messrs Chmayse and Georgiou at ACG concerning rostering and guard allocation, and was quite adept at calculating when he thought that his ‘management fees’ were short. The calls also reveal that Frank Moussa worked extremely closely with daughter Venessa Moussa in making substantial cash withdrawals and dividing up of those cash amounts for individual guards and ACG managers. The calls also reveal that guards were quick to contact Mr Moussa personally if they thought they had been underpaid.
A number of ‘noteworthy’ examples’ are extracted from these transcripts
[22] Exhibit P5.
[23] Exhibit P6.
110 I have carefully read these transcripts and, while they do demonstrate you had an ability to perform some role in the management of the FMAM business, I am unable to be satisfied on the balance of probabilities that Mr Armstrong’s opinions should be disregarded altogether or accorded little weight. For example, in many instances it is not possible to tell whether you are simply relaying information or instructions obtained from your daughter or someone at ACG and/or The Peterson Group.
111 Moreover, I do not accept the CDPP’s submission that the matters they rely upon inevitably cast doubt on Mr Armstrong’s opinions that, by reason of your intellectual disability, you were unable to fully comprehend the wrongfulness of your actions at the relevant time or that you were not a person who was gullible and at risk of being manipulated by others. One of the problems is that it remains very unclear to what extent you daughter Venessa was able to assist and guide you in the performance of your role in the scheme. In my opinion, it is open to me to find, on the balance of probabilities and on all the material before me, that she played a significant role in this regard.
112 Accordingly, I am satisfied that your intellectual disability played a significant causative role in your offending conduct such as to lessen the weight I would otherwise give to general deterrence and by reducing your moral culpability for the offending conduct. To borrow the language of the Victorian Court of Appeal in Caldwell v The Queen,[24] in my opinion there is present in this case ‘evidence of a lack of capacity to reason as to the wrongfulness of the conduct [such that your] moral culpability for the offence [is] substantially reduced as [is] the need for denunciation and retribution’.[25]
[24] [2014] VSCA 274 (Redlich, Priest and Beach JJA). [56] (citations omitted).
[25] Ibid [56] citing See Romero v The Queen (2011) 32 VR 486, 490 [13] and 491 [18].
113 Following the plea hearing I requested a pre-sentence psychological report and an Extended Pre-Sentence Assessment – Outcome Report pursuant to s. 8A of the Sentencing Act 1991 (‘the Sentencing Act’). I also requested an assessment of services under s. 80 of the Sentencing Act that you be assessed for eligibility to receive services as a defined client under the Disability Act 2006.
114 I received a Psychology Court Report from Dr Rachel Watson of Forensicare dated 20 December 2018[26] and an Extended Pre-Sentence Assessment – Outcome Report from Mr Stephen Mirikiis, a court assessment and prosecutions service officer at Sunshine Community Correctional Services, dated 15 December 2018.[27] I also received a document headed ‘Further Submissions in Respect of Sentence’ from your legal representatives dated 23 January 2019.[28]
[26] Exhibit C1.
[27] Exhibit C2.
[28] Exhibit FM9.
115 Dr Watson opined as follows:
Mr Moussa may have some cognitive impairment; however, I was unable to separate this from his language difficulties and lack of formal education during this assessment interview. I did not conduct formal testing as that was beyond the scope of this assessment, but did explore some of his functional capacity during the interview (which will be outlined in the Prior Testing section below). Mr Moussa presented with an ability to reflect upon his own emotional experiences, and could consider the emotions of others. He provided detailed and appropriate answers to the questions posed to him in the interview. Mr Moussa could plan ahead and was able to drive to a novel location when attending the appointment. He became lost when driving to the appointment, which is not unusual given our clinic location, but was able to follow directions from administrative staff easily. Some possible indicators of impairment were that he required four attempts to gain his driver’s licence, he stated he would avoid complex conversations he did not understand, and he required a supportive classroom environment to gain his security licence. It is unknown whether this reflects global or specific impairments, lack of formal education, or a poor understanding of English. (emphasis added)
116 Later in her report Dr Watson said:
It is noted that the level of impairment outlined in the report [of Mr Armstrong] using the DSM-V criteria was somewhat inconsistent with Mr Moussa’s disclosures during the current assessment. Further information about his areas of deficits may help inform the reason for this discrepancy. Although it appears likely that Mr Moussa does have some cognitive difficulties, it is difficult to determine the nature of these from the brief cognitive report outline, and this assessment interview. It is noted that this general type of cognitive assessment can be confounded if someone does not have a formal education, English is their second language, they are from a non-Western cultural background, experience anxiety or depression, or use medications that may inhibit responding. Validity of testing should also be considered in forensic settings, which can include issues of effort, motivation, and attention. (emphasis added)
117 Dr Watson concluded:
With regard to Mr Moussa’s general functioning, he was able to negotiate his work roles, even with his difficulty with understanding complex English or poor reading and writing skills (albeit he largely maintained only part-time, low-skilled employment). He was able to read a map and negotiate finding new addresses to deliver pizzas to customers, only being late on a couple of occasions. To obtain his security licence, he found a supportive school that provided extra guidance for people to pass the test. Mr Moussa also stated that he had the capacity to care for his children, including planning meals and attending the supermarket to buy groceries, and getting them ready for school. He continues to provide this role for his grandchildren. On face value these capacities appear inconsistent with a FSIQ score of 61.
118 Dr Watson administered the Paulhus Deception Scales (PDS) and made the following assessment:
Mr Moussa’s score on the Impression Management scale fell within the much above average range when compared with general population norms. His elevated score on this scale is associated with an attempt to present himself as relatively free of social or moral shortcomings, although not unusual in a forensic setting, his self-report should be interpreted with caution. Based on this result his responses on self-report questionnaires are probably invalid.
119 Dr Watson also administered the Level of Service/Risk, Need, Responsivity (LS/RNR) and opined that your ‘score of 14 places [you] in the moderate-risk category’ of general re-offending.
120 The Extended Pre-Sentence Assessment – Outcome Report did not address your level of intellectual functioning. Applying the LS/RNR the assessment officer assessed your risk of general reoffending as medium. In light of these assessments, I must give some weight to specific deterrence in sentencing you for the present offence.
121 The Department of Health and Human Services conducted an assessment on 20 December 2018 and established you do not to meet the criteria for an intellectual disability as defined in the Disability Act 2006.[29]
[29] See Exhibit C3.
122 Your legal representatives appealed this decision on 20 February 2019, requesting a review of the target group assessment. In August 2019, a comprehensive assessment was conducted by the department's psychologist Mr John Phung who found you to be eligible to receive services under the Disability Act 2006. You were subsequently issued with a statement dated 14 August 2019 that you have an intellectual disability within the meaning of that Act.[30] On 16 September 2019 a Justice Plan was prepared in relation to you.[31]
[30] Exhibit FM10.
[31] Exhibit FM12.
123 I have received a Client Overview Report dated 16 September 2019 authored by Ms Cathie Smith, a disability justice coordinator at the West Division of the disability and NDIS Branch of the Department of Health and Human Services.[32] Ms Smith confirms that a ‘comprehensive assessment was conducted by psychologist Mr John Phung’ who found you to be eligible to receive services from the department. Ms Smith observed that ‘Due to [your] cognitive deficits [you] struggle with planning and conversation.’ She elaborates a number of aspects of your past history and current lifestyle to indicate the practical aspects of level of your intellectual disability. She also notes that, while you are not currently an NDIS participant, you have been supported by the department to apply to NDIS to determine if you meet the access requirements.
[32] Exhibit FM11.
124 While I am alert to Dr Watson’s opinion that your score on the Paulhus Deception Scale may mean that assessments based on your self-report are ‘probably invalid’, I cannot go behind the Department’s assessment of you and sentence you on a basis other than you do suffer from an intellectual disability of a magnitude sufficient to qualify for services under the Disability Act 2006.
125 Moreover, I accept the criticisms made of Dr Watson’s report by Mr Melasecca in his written submission dated 23 January 2019.[33] The fact Dr Watson did not carried out formal testing in relation to the level of your intellectual functioning, in my view greatly weakens her opinion, which is now at odds with both Mr Armstrong and, it would appear, Mr Phung.
[33] Exhibit FM9.
126 Since receiving these reports and other documents in September 2019, I have received an undated document headed ‘Defence Outline of Submissions’, which was filed with the Court on 16 October 2019.[34] I have also received a document headed ‘Prosecution Outline of Supplementary Submissions’ dated 16 October 2019[35] and a document headed ‘Response to Prosecution Outline of Supplementary Submissions’ dated 21 October 2019.[36]
[34] Exhibit FM13.
[35] Exhibit P8.
[36] Exhibit FM14.
127 I have paid careful attention to all the matters raised in these latter written submissions. After much anxious consideration, and bearing in mind the onus of proof is on the balance of probabilities in respect of the presence of mitigating circumstances, I find that your intellectual disability was causative of your offending conduct on the present charge. By reason of this finding I am satisfied that your moral culpability is reduced and that I should significantly moderate the weight I give to general deterrence and denunciation in sentencing you. I also take your intellectual disability into account as part of your personal circumstances which are relevant to the sentence I impose in your case.
128 The DHHS appeal process had been very lengthy and has led to a considerable delay in sentencing you, which is a matter I must also take into account in your favour.
Application of sentencing principles
129 I have had regard to current sentencing practices in relation to the charge of dishonestly causing a loss or risk of loss to the Commonwealth and similar offences. The Commonwealth Director provided me with relevant comparative material and cases.[37] I have had regard to this material in formulating the sentence I impose in your case.
[37] Exhibit P4, Table 3 ‘Sentencing Schedule - $80,000 - $93,999’.
130 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.
131 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.
132 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.
133 General deterrence and denunciation are very important sentencing considerations for this offence. However, in your case, for the reasons I have given, they will be significantly moderated. I am of the view that in your case specific deterrence and protection of the community need be given some weight. I assess your prospects of rehabilitation as being excellent.
134 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.
135 Mr Moussa I have formed the opinion 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. Additionally, I will impose a substantial fine on you.
Stand up Mr Moussa
On the charge of dishonestly causing a loss or risk of loss to the Commonwealth (Charge 1) you are convicted and sentenced to be imprisoned for three years commencing from today.
I must make a recognisance release order in your case. I order your release under s 20(1)(b) of the Crimes Act 1914 (Cth) forthwith upon you giving security by recognisance of $5000.00 to comply with the following condition:
You are to be of good behaviour for a period of three years.
In addition you are fined $20,000. I direct that fine be referred to the Director of Fines Victoria for collection.
There is no PSD to declare.
Mr Moussa, 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 three years hanging over your head from today for three years. During the three year period commencing today, you must not commit another offence punishable by imprisonment because that will breach your recognisance and you may be ordered to serve the three years in prison. In addition you must pay a fine of $20,000, but you will have time to pay that fine. Fines Victoria will be in touch with you to arrange the terms for payment of the fine.
The recognisance release order may be discharged or varied under s 20AA of the Crimes Act 1914 (Cth).
Do you understand all this?
Pursuant to s 6AAA of the Sentencing Act 1991 (Vic) I state that the sentence I would have imposed on you but for your plea of guilty would have been a sentence of 4 years’ imprisonment with a non-parole period of 2 years’ imprisonment together with a fine in the sum of $25,000.
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