R v Goodburn
[2017] NZHC 1567
•7 July 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2016-004-005382 [2017] NZHC 1567
THE QUEEN
v
STEPHAN GRANT GOODBURN
Hearing: 7 July 2017 Counsel:
JV Angelson for Crown
MN Pecotic for DefendantJudgment:
7 July 2017
SENTENCING REMARKS OF DOWNS J
Solicitors/Counsel:
MN Pecotic, Auckland.
Meredith Connell, Auckland.
R v GOODBURN [2017] NZHC 1567 [7 July 2017]
Introduction
[1] Mr Goodburn, you committed serious frauds against five victims. You appear for sentence after pleading guilty on 9 June 2017. There are six charges, all obtaining by deception. The maximum penalty for each is a seven year prison term.
The facts
[2] The facts are important.
Victim 1
[3] You met the first victim at a tennis club in 2000. A friendship developed. In
2008 the victim came to you with an investment proposal. You countered with one of your own—and one that was bogus. You told the victim you could purchase shares and options in an Australian media company at a reduced rate through your role as a general manager of a media collective in New Zealand.
[4] On 19 December 2008, the victim paid you $190,000. Three days later he paid you a further $91,247. He gave you the funds on the basis you would buy shares and options in an Australian company. Instead, you used the money for your own purposes.
[5] Between December 2008 and November 2009 you approached the victim on three occasions. On each you made the same representation: you could purchase shares and options at a reduced rate. He believed you. Over three or four occasions, he gave you a total of $456,727 so you could buy the alleged shares and options.
[6] In or around August 2010, you returned $6,000 to the victim on the basis you could not purchase the full amount of shares. You returned another $10,000 in November that year.
[7] In the middle of 2011, this victim began to question you about the alleged investments. You deflected his inquiry with lies. Worse, you told him the Serious Fraud Office, or SFO, had begun an investigation in relation to the investments on the basis they involved insider trading. You told him the SFO would eventually
pursue him. And, he may go to prison. You told the victim you could keep the SFO at bay, but in return, he needed to financially support you and your family. You said this was because the SFO had restrained your finances. In other words, you told more lies, and in doing so, falsely represented the victim had committed crimes which could lead to his incarceration.
[8] Between January 2012 and October 2015, the victim paid you a total of
$225,133.34. You used some of this money in relation to two unrelated fraud charges for which you were sentenced in the District Court in 2014. I return to this point later.
[9] In November 2015 the victim went to the SFO overwhelmed with stress. He learnt there had never been an investigation. And, you had never bought any shares or options for him. You repaid some money to the victim thereafter: $23,000 in December 2015 and a further $13,000 in January 2016.
Victim 2
[10] You met the second victim in approximately 2003. In or about 2005 you told him you were able to buy a large number of shares in a company you and he worked for, or had worked for. You told the victim it was a very good time to purchase shares. The victim took out a second mortgage on his home to fund a bank cheque for $300,000, which he gave you on 9 June 2006.
[11] In 2008 the victim asked you to sell the shares. You acknowledged you had never purchased them, said you had a gambling problems, and had spent all his money. You signed a deed acknowledging the debt, which you promised to repay with interest and costs.
[12] On 19 December 2008 you repaid the second victim $60,000. However, that money had come from the first victim. So, you were using proceeds of crime to partially repay your second victim. Between March 2009 and January 2011 you repaid the second victim a further $76,000.
Victim 3
[13] You met the third victim in early 2015. You and she formed a relationship. You told her you had bought $200,000 worth of shares in a particular company. This was a lie. You told the victim you were prepared to sell her $30,000 worth of these shares. She paid you that sum on 5 July 2015. You used the money to fund, at least in part, the purchase of a European car. This leaves two victims.
Victim 4
[14] You met the fourth victim at the end of 2009. Between then and July 2010 you told her you could purchase shares in a company at a reduced rate. On 9 July
2010 she transferred $10,000 to your bank account.
[15] As with the other victims, you obtained that money through a lie. There were no shares. On or about 11 March 2011, you acknowledged as much. You said you would repay her before 5 April 2011. You have not repaid this victim anything. All of the money she gave you, you spent.
Victim 5
[16] You met the last victim in or about 2007. You and she entered a relationship. At the end of 2010 you told her the relationship should be taken to “the next level”. You suggested you and she buy a house together. You said you had found one in Parnell. You asked her to pay an amount towards the deposit.
[17] On or about 12 November 2010, the victim gave you a cheque for $40,000 which she believed was to be used towards a deposit for the Parnell home. On or about 25 November 2010, she gave you another $7,000 for the same purpose. She later learned there was no home. You then said you had bought a different house in Newmarket, and you needed money to settle that purchase. On or about 9 December
2010, the victim wrote out a bank cheque in the amount of $25,000. She also paid you a further $7,000.
[18] There was no home in Newmarket either. You acknowledged as much in an agreement in which you promised to repay the debt by no later than 21 February
2011. You have not repaid this victim anything.
[19] Charges were laid on 2 June 2016. You exercised your right to silence.
Starting point
[20] Sentencing in this area turns on a number of factors:1
(a) The nature of the offending;
(b) Its magnitude and sophistication;
(c) The type, circumstances and number of victims; (d) Motive for the offending, if any;
(e) The amounts involved, including loss;
(f) The period over which the offending occurred;
(g) The seriousness of breaches of trust involved; and
(h) Victim impact.
[21] I deal with each, albeit in a different order.
[22] The logical starting point is the amount taken. You obtained a little under
$1.4 million through fraud. You repaid a little under $200,000, but $60,000 of that amount you had defrauded from the first victim. It follows you caused loss of more
than $1.2 million.
1 R v Varjan CA97/03, 26 June 2003 at [22].
[23] As observed, there are five victims. The first suffered the most. You took more than $963,000 from him. You repaid $52,000, which means he lost more than
$900,000. You took $300,000 from the second victim. You repaid him $136,000, but $60,000 had come from the first victim. The remaining victims lost $30,000,
$10,000 and $79,000 respectively.
[24] Unsurprisingly, they have suffered greatly. The first was your friend. He describes the impact of your offending as “immense”. He feels “violated”. The second victim was also a friend, albeit perhaps not as close as the first. He describes “irreparable” financial damage and serious emotional harm. The third victim is now embittered. You and she were in a relationship. She no longer trusts others. And as she says, she worked hard to save the money you took from her. There is no victim impact report from the fourth victim, but as with the other victims, you abused her trust. The fifth victim, with whom you were in a relationship, moved to be with you. She felt “ashamed and stupid” for trusting you. For a period, she was depressed.
[25] Your offending began in 2005. It ended in October 2015. The fact it occupied 10 years is a significant aggravating feature.
[26] You were motivated by greed. You defrauded the victims to fund a lavish lifestyle. You say the offending occurred because you fell on hard times, particularly in 2011 when you were made bankrupt. The difficulty with that explanation is that the offending began well before then.
[27] Notwithstanding the Crown’s submission to the contrary, I do not consider your offending to have been particularly sophisticated. True, there was some documentation to give credence to your lies, but in essence it involved repetition of the same or similar accounts to people who trusted you.
[28] In summary, your offending constitutes large scale but relatively unsophisticated serial fraud against five victims with an attendant breach of trust and serious victim impact, all over a decade.
[29] The Crown and your lawyer Ms Pecotic broadly agree on the starting point. Ms Pecotic contends it should be five years, the Crown six. Both have referred me to a number of cases to support their respective positions. I will not detain you with detail, but my written copy of these remarks will contain the cases I have considered.2
[30] The most similar, overall, is a case called R v Joshi.3 It involved 20 victims and a net loss of almost $2 million. There were a greater number of victims in that case, and of course greater loss, but the offence period was much shorter. The primary victim in that case lost a similar amount of money to your first victim. The Judge adopted a starting point of six and a half years’ imprisonment. I adopt the same starting point even though it is six months more than that advanced by the
Crown.4 I now explain why.
[31] While some aspects of R v Joshi are more serious than yours, your offending has a feature that case does not. I return to what you did in relation to the first victim. When he questioned you about the alleged investments in 2011, you led him to believe he could go to prison unless he paid you yet more money; overall, a further $225,000. You bought his silence for another four years. In doing so, you caused him to believe he may go to jail even though he had done nothing wrong.
[32] I regard this sequence as troubling. It involved particularly cynical and dishonest behaviour against a person who regarded you as a friend. It is a serious and uncommon aggravating factor.
Uplift
[33] Much of your offending was committed while you were on bail for, and serving sentences, in relation to other fraud charges. I elaborate.
[34] Between 17 January 2012 and 30 April 2014 you were on bail in relation to two sets of fraud charges. The first resulted in a term of 150 hours of community
2 R v Joshi [2015] NZHC 2215; R v Mount DC Nelson CRI-2011-042-968, 17 December 2014;
R v Rose [2016] NZHC 1109; and R v Love [2016] NZHC 2394.
3 R v Joshi, above n 2.
4 Haarhaus v R [2010] NZCA 41 at [25], and cases cited therein at footnote 3.
work on 9 May 2013. The second resulted in an additional 250 hours of community work on 1 May 2014. The Judge who dealt with you on the second occasion told you your offending could have resulted in a term of imprisonment. You avoided imprisonment—or at least improved your sentencing position—because you offered to pay of reparation of almost $27,000, including $9,000 immediately. The Judge thought you were making good for your wrongdoing, but you deceived the Judge. The reparation you paid had come from the first victim in this case, so you were using proceeds of crime to achieve a more lenient sentence in relation to earlier fraud offending. This is another example of particularly cynical and dishonest behaviour.
[35] As for your previous convictions, you have some in this country and others entered in Australia. Detail is not available beyond the two dealt with here in 2014. You used a friend’s credit card to pay for “expensive”5 hotel accommodation and when he or she took the card away, you defrauded the hotel over “many weeks” by almost $27,000.6 As observed earlier, you then used the first victim’s funds to pay reparation, or a figure towards reparation thereby improving your sentencing position.
[36] You have a total of 17 previous convictions for fraud in New Zealand, including the two just described. All of these offences were committed between July 2011 and December 2012. All resulted in community work, unlike your Australian convictions, which attracted terms of imprisonment.7
[37] In May 1995, the Southport District Court imposed a four year term of imprisonment on you for misappropriation of property, false pretences and attempted false pretences, forgery, uttering a forgery, theft, and what is described as making a “wilful false promise”. While the detail of that offending is not before me, clearly it was serious. Cumulative terms of imprisonment were imposed by same Court in October 1995 and May 1996 for incurring a debt by false pretences, misappropriation of property and false pretences offences. Your Australian record
implies you were not eligible for parole until August 1997.
5 R v Goodburn DC Auckland CRI-2014-004-753, 1 May 2014.
6 At [1].
7 See Fry v R [2014] NZCA 174 at [4].
[38] To recapitulate, your offending against the first victim began in 2005. It follows you have a propensity for fraud traceable to 1995, albeit with a hiatus between your release from prison in Australia (whenever that was) and 2005.
[39] Ms Pecotic urges me not to uplift your sentence based on your criminal history, either here or in Australia. She invites my attention to the risk of punishing you twice, and notes much of your New Zealand offending for sentence today occurred before you were sentenced in the District Court in 2014. That is true, but some of your offending also occurred after that, and of course there is your Australian offending too. As observed before, it was serious.
[40] The combination I have described—the fact much of your offending was committed while on bail and during sentences imposed by the District Court for earlier frauds; your propensity for fraud; and your use of criminal proceeds to pay, or partially pay reparation—requires a stern response and one mindful of the need for public protection. I uplift the starting point by 15 months’ imprisonment.
Mitigating features
[41] Mr Goodburn, you are 55. Your wife appears to have stood by you, even though you have let her and your young son down. I have read her character reference. I have also read the two other character references. While both are well meant, neither adds much. One of the two referees has known you for only five years, and the second has had little recent contact with you.
[42] Your pre-sentence report is, as Ms Pecotic acknowledges, something of a “mixed bag”. It describes you as open and taking full responsibility for your offending. It also says you did not attempt to minimise or justify the circumstances that led to your offending.
[43] The report says your “level of remorse” is low. You are considered to pose a medium risk of re-offending, but as presenting only a low risk of harm. The number of victims and their loss may be thought to suggest otherwise, particularly when regard is had to your earlier convictions for fraud. The report also says you appear
to be “highly self-entitled”, and lack empathy for your victims. Ms Pecotic urges me
to treat these remarks with caution.
[44] I have read your undated letter in which you say you are sorry for the harm you have caused. You say the “main reason” for your offending is that you have always wanted more than you have. I am not persuaded that is the problem; after all, it is part of the human condition to want more, which is often a vehicle for progress. What distinguishes you is that you are prepared to engage in criminal dishonesty to get more, including from people who believe you to be their friend.
[45] Ms Pecotic invites attention to your preparedness to attend a restorative justice conference. She submits you are remorseful, and additional discount for this feature is required. I do not accept that submission.
(a) While you repaid approximately $200,000, $60,000 came from the first victim. The balance represents little beyond 10 percent of the loss you have caused.
(b)The pre-sentence report writer considers you lack empathy. Your actions in relation to the first victim vis-à-vis the SFO; your use of proceeds of crime to pay reparation, or partially pay reparation in
2014; and like behaviour in relation to the second victim in 2008 all suggest you are a calculating individual. So too your criminal history for fraud.
(c) You did not cooperate with the authorities by, for example, making a confession on arrest.8
(d)And while you are entitled to a meaningful discount for pleading guilty, a topic to which I turn to next, you did not plead guilty
promptly.
8 See R v Varjan above n 1, at [23].
[46] To summarise, totality of circumstance suggests you lack genuine remorse. Even if I am wrong about that, there is nothing tangible to warrant taking the exceptional step of a discrete discount for remorse.9
[47] Reparation is not realistic. As Ms Pecotic observes, you do not have a cent to your name. I gather $12,000, which was found at your property, or in connection with you, may arguably be available but because you are an undischarged bankrupt that is better dealt with by the Official Assignee.
[48] The only real mitigating feature is guilty plea entry.10 The Crown contends the discount for this feature should be capped at 10 percent. It notes correctly your pleas were entered on the eve of trial. It also notes, correctly, the case against you was strong. However, as Ms Pecotic observes, possible resolution through plea arrangement was foreshadowed in September 2016. Ms Pecotic submits a
20 percent discount is appropriate.
[49] I agree, but for different reasons. You benefited from the plea arrangement because another serious charge of blackmail was abandoned. However, you spared the victims from having to testify at trial. That would have been distressing for them, particularly the first. It is well known testifying against a defendant in a criminal case can be difficult, particularly if there is media interest. And, the State avoided the cost of a trial, which was expected to last two weeks. In combination, these factors require meaningful recognition, which I set at 20 percent of the overall starting point.
[50] The result is a term of imprisonment of six years and two months. [51] Mr Goodburn, please stand:
(a) On the first charge of obtaining by deception, I sentence you to a term
of imprisonment of six years and two months.
9 See Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607 at [24]–[28].
10 Hessell v R, above n 9.
(b)On the second charge, I sentence you to a term of imprisonment of three and a half years.
(c) On all remaining charges, I sentence you to terms of imprisonment of two years.
(d) All terms are to be served at the same time.
[52] So your effective sentence is six years and two months. [53] You may stand down.
……………………………..
Downs J
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