The Queen v Munro

Case [2022] QDC 80

DISTRICT COURT OF QUEENSLAND

CITATION:

The Queen v Munro [2022] QDC 80

PARTIES:

THE QUEEN

v

ROGER MUNRO

(defendant)

FILE NO:

1330/21

DIVISION:

Criminal

PROCEEDING:

Application pursuant to section 590AA of the Criminal Code.

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

8 April 2022

DELIVERED AT:

Brisbane

HEARING DATE:

13, 16 August and 9 October 2021, 22 February and 30 March 2022

JUDGE:

Smith DCJA

ORDER:

Application dismissed.

CATCHWORDS:

CRIMINAL LAW – JURISDICTION, PRACTICE AND PROCEDURE – APPLICATION TO SET ASIDE PLEA OF GUILTY – Whether plea should be set aside – where the defendant was charged with four counts of fraud – where the allegation was the defendant improperly dealt with moneys he received for investment – whether there was a Ponzi scheme – whether improper pressure placed on the defendant to plead guilty – whether plea advanced the defendant’s interests   

LEGISLATION:

Criminal Code 1899 (Qld) s 590AA

CASES:

Hura v R (2001) 121 A Crim R 472, cited
Maxwell v R (1996) 184 CLR 501; [1996] HCA 46, cited
Meissner v R (1995) 184 CLR 132; [1995] HCA 41, cited
R v Carkeet [2009] 1 Qd R 190; 185 A Crim R 147; [2008] QCA 143, cited
R v DBY [2022] QCA 20, cited
R v EP [2020] QCA 109, followed
R v GV [2006] QCA 394, cited
R v Liberti (1991) 55 A Crim R 120, cited
R v Lovell [2012] QCA 43, cited
R v Mundraby [2004] QCA 493, followed
R v Murphy [1965] VR 187, cited
R v Nerbas [2011] QCA 199; [2012] 1 Qd R 362; 210 A Crim R 294, discussed
R v Sagiv (1986) 22 A Crim R 73, cited
R v Wade [2011] QCA 289; [2012] 2 Qd R 31, cited
R v WBA (No 2) [2018] QCA 360, cited
COUNSEL:

Mr J Hunter QC with Miss A Freeman for the Commonwealth Director of Public Prosecutions

Mr I Munsie for the defendant

SOLICITORS:

Commonwealth Director of Public Prosecutions for the Crown

McDonald Lawyers for the defendant.

Introduction

  1. The defendant applies to set aside pleas of guilty.

  2. The defendant pleaded guilty to three counts of fraud on 19 July 2021.

  3. The trial was due to commence on 19 July 2021. It was the fifth trial listing of this matter since the indictment was presented on 12 March 2018.

  4. There has been a considerable delay in the proceeding, namely:

    (i)The first trial listing 11 March 2019 was adjourned at the request of the defendant on medical grounds;

    (ii)The second trial listing 23 September 2019 was adjourned at the request of the prosecution due to the complainant for count 1 receiving cancer treatment;

    (iii)The third trial listing 30 March 2019 was de-listed due to the Covid-19 pandemic;

    (iv)The fourth trial listing 22 March 2021 was adjourned by consent due to the concerns of the trial Judge the trial would not be completed within the timeframe allocated.

    Defendant’s submissions[1]

    [1]Exhibit…

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The Queen v Munro [2022] QDC 80
Case
[2022] QDC 80
Decision Date

CaseChat Overview and Summary

The case of The Queen v Munro involved the defendant being charged with four counts of fraud with circumstances of aggravation. The defendant argued that his plea of guilty should be set aside, claiming that he had been improperly pressured to plead guilty by his solicitor and that the plea did not advance his interests. The court needed to determine whether the defendant's plea should be set aside based on the evidence provided, including the defendant's mental health conditions, his claims of improper pressure, and the nature of the investment scheme.

The court examined the evidence presented by the defendant, which included his affidavit detailing his mental health conditions and physical health issues, and his allegations of improper pressure from his solicitor. The court also reviewed the bank account statements and other documentary evidence to assess the nature of the investment scheme. The court found that the evidence did not support the defendant's claims that the money was primarily used for trading, and instead, it appeared that the scheme had the hallmarks of a Ponzi scheme. The court concluded that the defendant had failed to establish any miscarriage of justice and that improper pressure was not exerted by the solicitor. Therefore, the application to set aside the plea of guilty was dismissed.

The final order of the court was to dismiss the application to set aside the plea of guilty. The defendant's plea of guilty would stand, and the case would proceed to sentencing.

Orders

Orders of the court

Application dismissed.

Background

Background to the litigation

The defendant’s evidence is not supported and should not be accepted. In those circumstances the defendant has failed to establish any miscarriage of justice and his application should be dismissed.The factsBackground At the time the defendant entered pleas of guilty on 19 July 2021, he stood charged with four counts of fraud with circumstances of aggravation. The statement of facts[6] (which I note is not accepted by the defendant) but is the Crown case at its highest, noted that the total quantum involved the $711,100. The maximum penalty for each of the offences was 12 years’ imprisonment. [6]Exhibit 16. In December 2008, ASIC commenced investigating the defendant. This concerned his receipt of funds from about 70 investors through an Australian registered company R G Munro Futures Pty Ltd (“RGMF”) and a company registered in the State of Delaware in the United States of America, The Starport Futures Trading Corporation (“Starport”) and the use of those funds to undertake share trading activities in Australia and overseas. RGMF went into liquidation in October 2008. Starport went into liquidation in Australia in May 2009. In reports filed with ASIC, the liquidator of RGMF reported that the funds owed to investors by Munro, Starport and/or RGMF, were between AUD $90 million and $100 million. In June 2011, ASIC closed that investigation and no charges were laid. Since at least 2009, the defendant has asserted to investors, liquidators and to ASIC that at least USD $62,000,000 of Starport and RGMF investor funds are held in the USA. However, he has failed to produce documents to ASIC or to the liquidators of Starport or RGMF evidencing the existence of such funds, nor have any funds been returned to the investors. On 30 May 2014, ASIC commenced an investigation following the receipt of information that the defendant was continuing to raise funds purportedly to release USD $62,000,000 of Starport and RGMF investor funds he claimed were held in the USA. During the course of the investigation, an analysis of bank accounts held by the defendant and his wife, reveal that the accused appeared to be raising funds for a new trading scheme. In various emails and documents to investors, the defendant referred to this scheme as the TradeStation Futures Trading Fund (“TradeStation”). He was raising funds from some of the Starport and RGMF investors as well as family and friends. The investigation revealed that in September 2011, he commenced emailing investors inviting them to invest money with him in TradeStation. A number of common representations were made by him to the investors namely:(a)He was trading with a small group of clients;(b)He was using a dormant trading account held by his friend David Imgraben in the USA with a brokerage firm called TradeStation;(c)The minimum investment was $20,000 being one unit and multiples thereof;(d)Investment returns would be paid quarterly;(e)He would receive a 20% management fee from profits. The investors whose funds are the subject of counts 1 to 4 provided statements to ASIC stating:(a)They deposited investment funds into the defendant’s National Australia Bank account;(b)They provided funds to the defendant to invest in TradeStation in response to the representations made in the emails described above;(c)They understood that any profits generated by the defendant from trading were to be returned to them on a quarterly basis, less the defendant’s management fee;(d)They understood the trading account was located in the USA;(e)Since the end of 2014, they have not received any return on their investment or a redemption of their capital with the exception of Mr Armstrong (count 2) who received a cheque for $3950.00 on 20 May 2015;(f)The defendant has continued informing the investors that TradeStation funds still exist and are located in the USA. Imgraben and TradeStation

Evidence

Evidence Before The Court

The matter was listed for an application for revocation of bail on 6 August 2021. After this Mr Munsie instructed by McDonald Law came onto the record for the defendant. The hearing of the application for revocation of bail was listed on 13 August 2021. That was adjourned until after the change of plea application is determined. Defence evidenceDefendant’s affidavit (Exhibit 7) The defendant has filed an affidavit[10] in which he alleges he has been diagnosed with bipolar disorder, a major depressive disorder and a dissociative disorder. He has sought psychiatric treatment for these conditions.[10]Exhibit 7. He also has a number of physical health conditions including:(a)Paroxysmal atrial fibrillation for which he had a pacemaker installed in 2016;(b)Chronic plain/opioid addiction (resulting from post-operative pain);(c)Essential hypertension;(d)Carcinoma of the prostate as a result of which he had several post-operative issues. He is concerned that he will not receive adequate treatment in custody. Exhibits RGM-1, RGM-2 and RGM-3 relate to his current medical treatment. He presently lives with his wife of 49 years who suffers from a nerve-based disease. He assists her with basic day to day activities. He is concerned she won’t receive adequate care if incarcerated. He has been involved in a number of court matters which have been stressful, traumatic and he and his wife have lost all of their personal financial resources. He has never been charged with breaching bail conditions and has never intentionally breached his bail conditions. He does not have a passport. At 8.57am on 17 July 2021, the defendant received an email from his solicitor which advised that if he pleaded guilty to counts 2, 3 and 4 on the indictment, the prosecution would discontinue count 1. On Sunday 18 July 2021, he had a meeting with Mr Hoare of counsel and Mr Clare the solicitor at Mr Clare’s office in New Farm. He was running late for the meeting. He arrived at the office at about 2.45 to 2.50pm. He says that during the discussion he was often interrupted by Mr Hoare and Mr Clare. Mr Hoare indicated he was having discussions with the prosecutor. He advised that if he pleaded guilty to three counts, the amount of the fraud would come down to about $330,000 as the Crown would drop the count as regards to Ms Cannon. The solicitor Mr Clair said “you’re mad if you don’t take this deal”. The defendant said he was in a terrible state having lost his dog and that his wife was very upset. He said that a life changing decision should not be made in the emotional state he was in. Mr Hoare stepped out to speak to his wife and when he returned he said he wanted a decision and said, “if you’re smart you’d be pleading guilty to those three charges”. The defendant alleges that Mr Hoare said that if he didn’t plead guilty, he and Mr Clare would have a conflict of interest, would withdraw from the case and not act for him. The defendant told Mr Clare it was a big decision and he needed time to consider it. Mr Clare absolutely exploded and stood over him and said he was an absolute fool. He said this was the best deal they’d ever get for him. During this time Mr Clare was aggressive and badgering. Mr Clare said if he pleaded not guilty, they would withdraw from acting and it was likely his bail would be revoked. The defendant felt intimidated by Mr Clare. The defendant asked if he could call his wife to let her know what was happening. Mr Hoare returned and the defendant told Mr Hoare that he’d been berated by Mr Clare and Mr Hoare said that was the way Mr Clare operates. The defendant said, reluctantly, that he would plead guilty but he felt conflicted. Mr Hoare asked what he meant by conflicted and the defendant said he hadn’t spoken with his wife about the matter, he felt it had been sprung on him and he would like to think about it overnight. Mr Hoare said he could not have overnight. At that stage Mr Clare returned to the room and typed a document on the computer. Before the defendant signed the instructions to plead guilty, he asked if he changed his mind if there was a way he could withdraw the plea of guilty. Mr Clare said there was a way. The defendant said he would sign the document provided he could change his mind. The instructions were put in front of him and he did not read the first part of it, only the sentence next to the boxes. He enquired with Mr Hoare about whether he could plead guilty without admitting the elements of the offence and Mr Hoare said he could not do this. He said to Mr Hoare if he signed the instructions he would be perjuring himself. As a compromise, Hoare told Clare to put a line through the third box. The defendant asked Mr Hoare about the sentence and likely penalty. Mr Hoare left the room as he was going to call the prosecutor. He was told that he could expect 15 months’ of actual imprisonment, with the head sentence being three times that. He continued reading the document and ultimately signed the instructions. When he signed them, he could not recall if each box was ticked.

Decision

Reasons for decision

In respect of any submissions about the defendant rambling in his evidence it should be taken into account that the defendant is an older man with health conditions. It is submitted that the defendant’s evidence about Mr Clare’s threats should be accepted and in those circumstances improper pressure was placed upon the defendant to plead guilty and the plea should be set aside.Conclusions I have taken into account of all the evidence both oral and documentary and the submissions made in reaching my conclusions.Nature of the scheme I did not accept the defendant’s evidence that the money paid to the NAB account was primarily used to conduct trading. An examination of Exhibit 35, the NAB account, between February 2013 and March 2014 shows:1. On 15 April 2013, Mr Armstrong deposited $19,600 when the account balance was only $817.94. This money was not put into trading accounts as alleged by the defendant. $950 cash was withdrawn on 16 April 2013; $10,500 was given to Mr Von Harten on 17 April 2013; $8,035 went to Mrs Munro’s Halifax account on 19 April 2013[151]; and $400 cash was withdrawn from an ATM at Kingscliff on 19 April 2013. It is clear the majority of the money was not spent on trading but more rather most of it was returned to other investors.2. On 15 January 2014, Mr Von Harten deposited $200,000 into the account. Again very little of this money, if any, went on trading. On 20 January 2014, $30,000 was given back to Mr Von Harten. On 20 January 2014, $40,000 was given to his niece. On 20 January 2014, $5,852 was given to Ms Cannon. On 20 January 2014, $19,148 was given to Ms Cannon’s super fund. On 20 January 2014, $1,980 was withdrawn by Mr Munro. On 20 January 2014, $3,016 was given to Ms Wern. Again, the majority of the money was not spent on trading but only to pay existing investors. [151]This could be for trading noting the prosecution does not say that no trading was conducted. It is my opinion this shows the scheme clearly had the hallmarks of a Ponzi scheme. A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid into the scheme by subsequent investors rather than from any actual profit earned from monies invested. The scheme entices new investors by offering returns from legitimate investments which are abnormally high and inconsistent. “The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from subsequent investors to keep the scheme going.”[152][152]R v Lovell [2012] QCA 43 at [30] per Chesterman J. Additionally contrary to the defendant’s evidence, I could see no evidence that overseas traders paid money into this account. Even the defendant conceded that in his evidence. Additionally, it was clear that some of the money was also used for his personal benefit. A number of amounts seemed to have been spent on personal items such as: Numerous ATM withdrawals Medical Centre April 2013 Rental car 8 April 2013

Ratio Decidendi

Legal Principle Established

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