R v Tunde Doja

[2008] NSWDC 69

CITATION:	R v Tunde Doja [2008] NSWDC 69
HEARING DATE(S):	12 -30 November 2007 - Trial, 28 March 2008
EX TEMPORE JUDGMENT DATE:	28 March 2008
JURISDICTION:	Criminal
JUDGMENT OF:	Goldring DCJ
DECISION:	On each of counts 7 to 12 inclusive the offender is sentenced to imprisonment with a non-parole period of two years and a total term of four years. On each of counts 13 and 14 the offender is sentenced to imprisonment with a non-parole period of 18 months and a total term of three years. The dates of each sentence will be as follows: Count 7 the non-parole period will commence on 1 February 2008 and expire on 31 January 2010. The total term will expire on 31 January 2012. Count 8 the non-parole period will commence on 1 May 2008 and expire on 30 April 2010. The total term will expire on 30 April 2012. Count 9 the non-parole period will commence on 1 August 2008 and expire on 31 July 2010. The total term will expire 31 July 2012. Count 10 the non-parole period will commence on 1 November 2008 and expire on 31 October 2010. The total term will expire on 31 October 2012. Count 11 the non-parole period will commence on 1 February 2009 and exxpire on 31 January 2011. The total term wil expire on 31 January 2013. Count 12 the non-parole period will commence on 1 May 2009 and expire 30 April 2011. The total term will expire on 30 April 2013. Counts 13 and 14 will be concurrent terms. The non-parole periods will commence on 1 May 2010 and expire on 31 October 2011. The total terms will expire on 30 April 2013. The first date upon which the offender will be eligible for release on parole is 31 October 2011.
CATCHWORDS:	Criminal law - Sentencing - Particular offences - Obtaining financial advantage by deception
LEGISLATION CITED:	Corporations Act 2001 (Cth) Crimes (Sentencing Procedure) Act 1999
PARTIES:	The Crown Tunde Doja
FILE NUMBER(S):	06/11/0707
COUNSEL:	M.A. Wigney SC - Crown P. McGrath - Offender
SOLICITORS:	Commonwealth DPP Neil J. O'Connor & Associates

SENTENCE
1 HIS HONOUR: Tunde Doja was convicted on 30 November, last year, on eight counts of obtaining a financial advantage by deception. There was a long trial at the end of 2007, which was some three years after these offences were alleged to have taken place, which was in the middle of 2004.

2 At the trial the offender was also charged with a number of offences against the Commonwealth Corporations Act, but the jury could not agree on a verdict on any of those charges. There was a degree of coincidence between the elements of the Commonwealth offences and those of the offences charged in counts 13 and 14, particularly that the offender did not have a valid authority to give financial advice about particular investment products.

3 The verdicts on those two counts were by majority, the rest being unanimous. Of course, majority verdicts are not a possibility in the counts under the Commonwealth laws. In my view, it is not improbable that the extremely complex drafting of the Commonwealth provisions, which necessitated a full day of legal argument before I directed the jury, followed by several pages of written directions, meant that the jury may not have understood what the essential elements were. Given that the experienced counsel who appeared for both the prosecution and the defence were as confused by the language of these provisions as I was, this is hardly surprising.

4 That is not to suggest that the offender was guilty of those offences, but merely to emphasise the difficulty of obtaining a conviction for offences against such badly drafted legislation.

5 The offences on which the jury found the offender guilty were committed while he was carrying on business as a financial or investment advisor. He managed to persuade a number of his clients to apply for what are called “margin loans” to acquire certain financial products. Because the jury did not agree, the offender was not convicted of the Commonwealth offences which, in essence, charged him with carrying on business as a financial advisor without the appropriate licence. That was also an essential element of counts 13 and 14, upon which he was convicted.

6 The evidence about the state of his authority to act as a financial intermediary was quite clear. He certainly appeared to be an effective salesman. He had a number of clients who apparently trusted him and, indeed, in evidence today, I have received a number of references from people who had been his clients. With one exception, the former clients who gave evidence in the trial could be described as relatively poorly educated people who were somewhat greedy, but not wealthy. Most of them were skilled tradesmen or in similar occupations and could properly be described as “battlers”. All of them were attracted by the prospect of obtaining a significant financial reward for little outlay, which was, in effect, what the offender was offering. That, however, did not constitute the offences of which the offender has been convicted.

7 The offender was able to offer his clients an apparent opportunity to make significant financial gains for virtually no outlay on their part. This was possible because Macquarie Bank Limited offered what were called “margin lending facilities”, that is loans which would enable investors to buy financial products. These loans involved considerable payments of fees and interest to the bank.

8 The offender appeared to have represented to his clients that the income from the financial products which he was selling would be sufficient to cover the interest payments and other outgoings related to the margin loans. That, however, was not the conduct that gave rise to the offences charged in counts 7 to 12.

9 The conduct which led to those charges was the completing by the offender of loan application forms on behalf of each of the victims. Because of those statements, which the jury found to have been made by the offender, each of the clients received the benefit of the loan. The applications were addressed to Macquarie Bank and related to margin loans. Each application form required the applicant to set out his or her assets and liabilities, income and expenditure.

10 In each case, the offender filled out this part of the application forms with information that he fabricated, in whole or in part. If he had any instructions from the client about their assets, income or liabilities, what appeared in the application forms was significantly different from what the clients gave evidence that they had told the offender.

11 None of the clients said that they saw what was written in the application forms. Some of them denied ever having signed such forms. Others said that they had signed forms but left blank spaces in those forms so that the offender could complete them. What the offender wrote on the forms was not authorised in any way by the victims. In some cases, what was written was at least partially, and in some cases totally, fictitious.

12 Because of those false statements the victims were made to appear to the bank to be people with either substantial assets or higher income than was the case. The purpose of this conduct was to influence the bank to make the loans to the offender’s clients. If that occurred, the evidence was that the offender, or a company controlled by him, would receive commission for arranging the loan. The offender or his company also stood to gain commission on the sale of the financial products purchased with the loan.

13 It is clear that the victims were persuaded to enter into transactions which they appeared not to understand fully, because they thought they would gain a profit for little or no outlay. Each victim, except possibly Mrs El-Ali, who has a degree in business but little relevant financial knowledge or experience, was relatively unsophisticated. While some spoke English well, others did not.

14 The offender, by contrast, was experienced in the finance industry and was apparently extremely persuasive. He was clearly aware that what he did was not only deceptive towards the financial institutions but also that it exposed the victims, his clients, to significant financial risks and obligations which they had little hope of meeting, and I make those comments knowing that he has told the Probation and Parole Service that he did not believe that anything he did was wrong.

15 The offences are, therefore, very serious. No physical violence was involved but the victims suffered great harm. I have received today some information from Macquarie Bank which suggests that the harm suffered by that institution was not as great as might have been imagined, but it was still significant. The harm to the individual clients appears to have been more significant. Some of them said they had suffered significant financial losses and, as I say, Macquarie Bank suffered losses. It is not clear whether the other financial institutions involved suffered losses, but they may well have done so.

16 Although the offence charged in each of counts 13 and 14 is the same offence, the facts giving rise to those offences were different. In the case of those offences, the Crown alleged, and the jury were satisfied beyond reasonable doubt, that the offender obtained a financial benefit, namely commission on the sale of financial products, for himself or a company associated with him, by falsely representing to the company marketing the financial products that he was properly licensed to deal in products of that kind.

17 The elements of each of those offences are, therefore, rather similar to what was alleged in each of the counts alleging breach of the Corporations Act upon which the jury could not agree.

18 The scheme established by the Corporations Act for the licensing of financial intermediaries is designed to protect members of the public, especially those who may not be as sophisticated as others, in the market for financial services and products, from conduct of a false or misleading character, by ensuring that financial intermediaries have appropriate and up-to-date knowledge and qualifications and generally to ensure high standards of probity in the conduct of the financial industry and that makes these offences serious.

19 The facts, as the jury must have found in this case, relate to precisely the kind of conduct which the legislation is designed to protect against. The offender, for his own benefit (possibly obtained through a company which he formed for the purpose) stood to gain considerable amounts of commission if he was able to sell financial products. The evidence was that, in fact he received significant amounts of commission from the transactions, and he was able to do so without regard to the level of sophistication and understanding of his clients, or their ability to meet the costs of the investment in the financial products which he sold to them.

20 Each offence is similar in characteristics but each is quite discrete. The consequence is that the sentences imposed for the offences must be at least partially cumulative.

21 I need to have regard to some of the matters set out in section 21A of the Crimes (Sentencing Procedure) Act as aggravating or mitigating circumstances. Perhaps the most important of these is the fact that the offender was in a position of trust. He held himself out as a financial advisor, his clients were not sophisticated, the financial institutions trusted him and he, by doing as he did, abused his position of trust. He was dishonest and inaccurate. That was true both in the case of the counts where he falsely completed the application forms and in the counts where he made false representations to the financial institutions.

22 These offences were clearly committed for the offender’s financial gain and they were part of a well-planned and sophisticated continuing operation. The operation may not have been as sophisticated as some strategies that are devised to defraud people, but clearly the availability of the margin lending facilities, was something of which the offender took full advantage.

23 The damage to the investors was clear; they were unable to meet the servicing charges on the loans and the bank had to realise its security, suffering a loss. The overall loss was not significant, it is probably slightly more than $100,000 or in that vicinity, but it is still significant.

24 The offender, as I have said, has never admitted that anything that he has done is wrong and he appears not to understand that it was necessary for him to have a proper authorisation before he did what he did. The offences took place over a series of months. They were not isolated and they were, as I have said, part of an organised and planned course of conduct.

25 I have mentioned the purpose of the legislation, which required the offender to hold the proper authorisation. Where people flaunt that legislative requirement the community requires that the breach be denounced and that people be deterred generally from committing the offences again. That is a serious factor in these proceedings.

26 It is also important that Mr Doja come to appreciate that what he did was, in fact, wrong. The evidence was quite clear that at the relevant time he did not have a proper authorisation, and it must be well known in the community that anyone who wishes to act as a financial intermediary must take the trouble to obtain the proper qualifications and to become authorised, and to make sure that that authorisation is kept up-to-date.

27 Mr Doja is now some fifty-two years old. He was born in Nigeria. He has been in Australia for more than half of his life. He has children here from two marriages, although he is currently single, but the evidence is that he has been attentive and caring towards his children and the evidence in the case, in fact, disclosed that some of the financial arrangements which he made were for the benefit of his daughter.

28 At the time of these offences, Mr Doja was the head of a substantial investment services company. He had a number of employees. He had premises in the Central Business District, which certainly impressed some of the witnesses, and he appeared to be a person who was being very successful. As I have said, he was trusted and he appeared to have some expertise. There is no doubt that he is a man who completed his schooling in Nigeria, not to tertiary level, but he obtained government employment in Nigeria. He then left to travel. He settled in Australia. He obtained qualifications in finance and accounting in this country and he clearly was a person of some sophistication and intelligence. He has a good employment record in government and in the private sector and he has acquired an accounting diploma and a graduate diploma in accounting.

29 As a result of these offences and what was discovered after that, he was made bankrupt and his business was sold. He had to sell considerable property and certainly during the trial it emerged that he was bankrupt and had no assets.

30 He does not have any substance abuse problems and indeed, up until the time of these offences he seems to have been a model citizen. He has clearly had no trouble with the police, except for a driving offence, which I disregard for the purposes of sentencing, and he is a person of good character. However, even people of unblemished character commit offences for the first time. His good character is a factor that I do take into account, but it does not entitle him to undue leniency.

31 While he has been in custody he has been examined by a respected psychiatrist, Dr Jonathon Carne, who, not surprisingly, finds that he had an adjustment disorder with depressed mood, which has become chronic. Dr Carne attributes this depressive reaction to a series of stresses, notably the trial, but also to one other factor, namely the fact that he has been on bail pending the trial and because of his bail conditions, he was unable to travel to Nigeria for the funeral of his father. He is the oldest of several children and he told both Dr Carne and the probation officer that the eldest son is expected to play a leading role in the funeral. His inability to do so has caused him distress. Clearly, he is suffering from a psychiatric condition and Dr Carne recommends that he be treated for it. I will direct that when he is returned to custody, a copy of Dr Carne’s report be provided to the Department of Corrective Services to go with him.

32 In the investment industry there are great temptations for those with relatively greater information and knowledge to exploit their position at the expense of others, who have less knowledge and less sophistication. Those who enjoy a privileged position in the finance industry must realise that the law exists to provide some protection to those who are less privileged than they are. If intermediaries contravene the law and exploit their knowledge and position at the expense of others, they must expect to be dealt with severely. For those reasons I cannot see that there is any alternative to a full-time custodial sentence for each of these charges. In some cases where a person has gained financially from criminal behaviour, as the offender did in this case, it may be appropriate to impose substantial fines.

33 In this case I am satisfied that the offender has not retained any significant assets and has not salted the proceeds of his crime away, using devices designed to defeat creditors, a practice which is not unusual. Unfortunately, his individual clients, who have probably suffered relatively greater financial losses than he has, may not be able to recover their losses so easily. I regard the offences which caused direct harm to the individual clients of the offender, as being, in these circumstances, more serious than the offences where the harm was caused to corporate providers of financial products, who are better able to bear the losses.

34 In the case of the offences charged in counts 13 and 14, the facts giving rise to each offence are similar and the offences were committed at the same time. Although the sentences for each of these sentences will be partly cumulative, on the sentences imposed on the other matters, they will be concurrent with each other.

35 The offender has not previously been in custody and there is no evidence of any previous criminal activity. In addition I have the report of Dr Carne, so I find special circumstances for the purposes of the sentencing legislation. Also, because there are multiple offences, I must have regard to the principle of totality.

36 On each of counts 7 to 12 inclusive the offender is sentenced to a non-parole period of two years and a total term of four years. On each of counts 13 and 14 the offender is sentenced to a non-parole period of 18 months and a total term of three years. The dates of each sentence will be as follows:

Count 7, the non-parole period will commence on 1 February 2008 and expire on 31 January 2010. The total term will expire on 31 January 2012. On count 8, the non-parole period will commence on 1 May 2008 and expire on 30 April 2010. The total term will expire on 30 April 2012. On count 9, the non-parole period will commence on 1 August 2008 and expire on 31 July 2010. The total term will expire on 31 July 2012. On count 10, the non-parole period will commence on 1 November 2008 and expire on 31 October 2010. The total term will expire on 31 October 2012. On count 11, the non-parole period will commence on 1 February 2009 and expire on 31 January 2011. The total term will expire on 31 January 2013. On count 12, the non-parole period will commence on 1 May 2009 and expire on 30 April 2011. The total term will expire on 30 April 2013. The terms for counts 13 and 14 will be concurrent. In each case the non-parole period will start on 1 May 2010 and expire on 31 October 2011. The total term will expire on 30 April 2013. The first date upon which the offender will be eligible for release on parole is therefore 31 October 2011.

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