DPP v Burgess [2019] VCC 1742

4 It was not until, at the end of the 2018 financial year, when the Chief Financial Officer of SKM was notified by an employee that their PAYG Payment Summary appeared to record that they had been paid a much higher amount than they believed they had been entitled to and in fact been paid. As a result, Deloitte Risk Advisory Pty Ltd was retained to undertake an analysis of the payroll and identify and quantify any fraudulent payments.

5 In November 2018, Deloitte reported to SKM that, between 20 July 2016 and 30 June 2017, there had been a total of 66 payments totalling $119,902.32 made to a bank account that had been used by you to receive your payroll. Those transactions were recorded in the SKM payroll as being payments to 17 other separate SKM or former SKM Recycling employees.

6 The Deloitte report also identified a further 32 payments between April and November 2017, where $48,136.75 had been paid to a different bank account in your name. Those transactions had been recorded in the SKM payroll as being made in respect of eight other separate current or former SKM employees, not you.

7 So, of those 25 separate SKM employees in respect of whom the 98 payments were made, they were either not employed at the time of the offending or they were not employed in the pay periods that the fraudulent payments related to.

8 SKM provided the report to Victoria Police. In December 2018, a search warrant executed at the National Australia Bank confirmed that the bank accounts to which the payments had been made were your bank accounts.

9 It was in March 2019 that you were arrested and interviewed. You made full admissions and you were charged on that same day.

10 Within three months, on 4 June 2019, at the committal mention, you indicated your intention to plead guilty to appropriate charges reflecting that criminality and you were committed to this court for plea on a straight hand up brief.

11 As a result, you have pleaded guilty to two rolled up charges of obtaining financial advantage by deception. Charge 1 covers the financial year 2016 to 2017 and that relates to 70 transactions in a total amount of $128,466.13 paid to a bank account in your name. Charge 2 covers the period of your employment in the 2017-2018 financial year. You left your employment in December 2017 and the charges cover the period between 5 July and 24 November 2017. Charge 2 relates to 28 separate transactions totalling $39,572.94.

12 That means that the total amount obtained by you in those 98 transactions over that 16-month period was $168,039.07.

13 The maximum penalty for obtaining a financial advantage by deception is 10 years' imprisonment.

14 SKM Recycling was placed into receivership in August 2019. No restitution has been made by you to SKM and no compensation orders have been sought by it or by the receivers now acting in control of it.

15 Your counsel acknowledged that this was a serious example of fraud against an employer, having regard to the breach of trust and abuse of your position, the total value of funds obtained, your persistence in the conduct and the degree of skill, planning and sophistication involved. It was not challenged on the plea that the funds that you obtained were used to purchase everyday items or to cover everyday living expenses and to pay off debts and fines. Although I accept that the funds you obtained were not used to purchase what might be described as luxury items or to live a life of opulence or excess, you were earning good money and you were already able to support yourself and your son on your earnings. The money therefore can properly be described as going on extras, paying off debt more easily and more quickly than you otherwise would have been able to. Some of that debt I note was what I call profligate debt in the first place, that is toll fines. Some of it enabled you to live a more comfortable life than you otherwise could afford on your earnings. Your actions therefore, as was submitted by the prosecution, are properly characterised as being motivated by financial betterment or greed in that sense, not need.

16 Theft from an employer, particularly by a person entrusted with access to the employer's funds, is a serious breach of trust and calls for denunciation. Employees in a position of trust must understand that they will be held accountable and punished in a way that not only marks their wrongdoing but serves as a deterrent for them and for others in positions of trust. It is clear therefore that, subject to considerations personal to you, just punishment, denunciation and deterrence loom large in the sentencing mix.

17 Turning then to matters personal to you. You were born in South Africa in 1976. By the time you were 5, your family had relocated to New Zealand and you are a New Zealand citizen. You report periods of financial hardship during your childhood and adolescence.

18 Despite this, it is clear that you are intelligent, able to take advantage of the educational opportunities that were open to you and have a steady work history. You completed secondary school. You obtained a Bachelor of Science at Auckland University majoring in pharmacology. You worked for 5 years in pharmaceuticals before moving to the United Kingdom. You worked there for some time and became pregnant. The relationship with the man was not a long term or committed relationship. You decided to return to New Zealand where you had the support of your family and where your son was born.

19 On your return to New Zealand, you studied accountancy and book-keeping, obtained that diploma to which I have referred and worked for a number of businesses in that capacity, including a business run by your father. In 2009, you migrated to Australia with your then partner, John, and your son. To Dr Matthew Barth, who assessed you for the purposes of the plea, you described your relationship with John as volatile, verbally abusive and one which involved heavy drinking by both of you. When you separated from John, you reported that you were left with significant debts of his.

20 Not long after that, you formed another relationship. That too was characterised by heavy alcohol abuse and it was characterised too by physical and verbal violence perpetrated by that partner against you. In November 2016, that relationship came to an end when your partner physically assaulted you and threatened you with a knife. He was eventually sentenced to a term of imprisonment for offences relating to assaulting you, threatening you and stalking you. You were understandably terrified of him and of the threats that he continued to make.

21 I was told that your decision to resign from SKM in December 2017 was two-fold. First because you were afraid that your former partner, who was shortly thereafter due for release from prison, would be able to locate you at your workplace because he knew you worked there, upon his release. And, second, because you described the workplace at SKM as volatile and the work itself as stressful.

22 It was put on your behalf that it was in this context of family violence and residual debt from the end of the previous relationship and a $6,000.00 road toll debt that the offending occurred. So far as reliance on debt is concerned, as I have already observed, that still fits within the personal gain rather than need motivation.

23 It was put on your behalf that your motivation was also to provide a better and more financially stable life for your son. So far as that is advanced as a mitigatory factor, I do not accept it as mitigatory. Parents engaging in offending behaviour of this type model, as I said in the course of the plea, poor lessons for their children about honesty, integrity and trust. No child should be used as an excuse for their parent's misappropriations. Defrauding an employer is not less culpable because it is said to be for the child's and not the parent's material benefit. Your child is not complicit in your wrongdoing and he should not be made to feel so by such justifications. And I do not know about him, but I suspect most children would feel sullied, not advantaged, by discovering that increased material comfort had been paid for by ill-gotten gains, justified by reason that it was for the child's benefit, not for the parents'.

24 Dealing then with more positive matters. You have no previous convictions. You have a history of continuous employment and you have clearly been committed to your son and raised him in what were often difficult circumstances as a single parent. Although in New Zealand it appears you had considerable family support, it would appear that the relationships you have had in Australia have not been good and that the men have been abusive. You have clearly worked to protect and shield your son from that and remain devoted to him. All that counts considerably in your favour.

25 You made full admissions to the police when you were interviewed and you pleaded guilty at the earliest possible stage. It was not challenged by the prosecution that, although the prosecution case was strong, its strength was greatly improved by your full and frank admissions. You have saved the time and cost of a trial and you are entitled to the full benefit of the utilitarian value of that guilty plea.

26 I accept that you have also expressed some remorse. When interviewed by police you said:

"I was just struggling and it was just such a dumb move and yeah ... I regret it every day... but that's what I did ..."

"It was so stupid. I justified it [at the time] by telling myself I would do it until I got back on my feet. It was so stupid. They [her employers] trusted me. I'm sorry for betraying the company."

28 It is difficult to see how much weight to give to that. It is certainly retrospective regret. I accept that. But this was, as I noted, protracted and persistent offending. Each of those 98 separate payments involved a number of steps. You had time each time you chose to create another false record and to divert further funds to yourself, to think about what you were doing, about how wrong it was and to stop. You did not. The remorse that you expressed did not stop you from enjoying the benefits of the money that you diverted to yourself. The remorse did not encourage you to disclose your wrongdoing to your employer, resign or make any attempt at restitution.

29 I do not accept that the fact that you ceased making transfers to yourself for a short period before you left SKM is evidence of remorse. On what I was told (and I sought clarification about it on the plea), your reasons for leaving SKM did not include remorse or regret for your defrauding or an attempt to break the cycle. It was to distance yourself from your former partner because of his pending release from prison and because of what you described as a toxic, volatile and stressful workplace environment.

30 However, even though I have some reservations about the remorse that you have expressed, and I have found that it is limited essentially to after the event and post-discovery, I want to make it very clear that that does not aggravate the offending. I do not take it into account as an aggravating feature. However, I do take into account the remorse that you have expressed since being charged as adding to your already good prospects for rehabilitation.

31 After some discussion in the course of the plea, Dr Fitzgerald acknowledged that Verdins principles did not operate to mitigate your moral culpability in respect of this offending. Dr Barth makes it clear that you do not meet the diagnostic criteria for a personality disorder and that your reality testing and capacity to make moral judgments was not impaired at the time of the offending. And having regard to the decision in O'Neill, personality disorder would not in any event enliven the first limbs of Verdins in relation to moral culpability.

32 I was told and accept that you acknowledge you have had a problem with alcohol and that, since being charged, you have engaged well with Alcoholics Anonymous. Acknowledging and addressing your alcohol abuse is clearly also a positive factor in respect of your prospects for rehabilitation, even though I do not consider the alcohol abuse was in any way causally relating to the offending or a mitigating feature. However, I do take into account Dr Barth's conclusion that you remain, so far as alcohol abuse is concerned, in the early phase of rehabilitation and more structure and intensive alcohol treatment would be beneficial in reducing your risk of relapsing into problem drinking.

33 Dr Barth also noted that you had depressive symptoms that were, at the present moment, relatively intense. They had been, not surprisingly, increasing as your plea hearing date came up and were very much related to that. He also noted that you were vulnerable to more severe depressive mood disturbance were you to be sentenced to a term of imprisonment. That sadly is the situation for many people who find themselves having to face the reality of their misconduct and their need to be dealt with by the criminal law as a result. So, whilst I take that into account, it is a very common feature for people in the plight that you now find yourself in.

34 I do accept that, therefore, your concern about your future, the difficult process of having to frankly acknowledge to yourself how wrong your behaviour was, how it looks in the harsh, stark light of day as opposed to the rationalisations that one can go through at the time, has made that time in the lead up to the plea a more difficult time for you. I take that into account as part of the overall sentencing synthesis.

35 You are not an Australian citizen and you have been facing the risk, if you were to be sentenced to a term of imprisonment of 12 months or more, of mandatory deportation. I accept that too is a matter that has hung heavily over you, not only because your life has been here for the last 10 years but because Australia is now your son's life too. And, so, I accept as part of the overall sentencing synthesis, that extra burden during the time of the lead up to the plea.

36 Four testimonials were provided, including from your parents. Each of the authors expressed in some detail and clearly with a deep knowledge of you and your circumstances, shock and surprise of your offending conduct. They all, in various ways, said they believed it to be out of character. They each believe in the fundamental goodness in you and they will continue to offer their support to you. So far as the assertion that it is out of character, that is always a difficult one to deal with in cases of white collar fraud. It is a feature of most white collar offending that people of otherwise good character are able in effect to rely on that in order to commit their fraud, to deceive their employers and those around them about what they are doing. In other words, presenting one face to the world whilst carrying on a persistent deception behind people's backs.

37 The authorities are clear that, in that sense, good character is an enabler of the offence as well as a feature that can be taken into account as an indication of a person's law-abiding past and as a positive factor to take into account when assessing their prospects for rehabilitation. Whilst I do not accept the offending is out of character because of its persistence, I accept the fact you have no previous convictions and that, apart from this, you are highly regarded by people who know you well and who appear, themselves, to be people of integrity. I accept you have good prospects for rehabilitation.

38 Your counsel submitted first that a community correction order alone or, if not that, a combination sentence, including a term of imprisonment and a CCO was within range. Both the prosecution and defence provided me with a number of comparative cases to which I have had regard. It is trite to note that each case turns on its particular facts. Save to say that they support the proposition that current sentencing practices clearly indicate that, in cases such as this, sentences including a term of imprisonment with a non-parole period, a combination sentence with a term of imprisonment of less than 12 months and a community correction order and a community correction order alone have been imposed. Apart from that, they are of little further assistance in that there are similarities and differences to your circumstances in all of them.

39 Ultimately, I have come to the view that your personal circumstances, when considered in the context to the seriousness of the offending, require the imposition of a term of imprisonment as part of a combination sentence. You were assessed and found to be suitable for a community correction order. Corrections assessed you as being at low risk of reoffending and I accept that assessment. The sentence I therefore propose to impose will not place you at risk of deportation or will not trigger the automatic deportation order that would have followed had I imposed a sentence of 12 months or more. It will require you to serve a term of imprisonment and it will also require you to serve a community correction order upon release from that term of imprisonment.

40 The conditions on that community correction order include a very considerable loading of unpaid community work and a condition that you continue to engage in alcohol abuse assessment and treatment. Because you are assessed as being at low risk of reoffending, I am not imposing a condition for supervision in addition. The effect of this combination sentence is that part of the punitive element is encompassed by the term of imprisonment and part of it by the requirement, not only to be subject to a community correction order, but to perform unpaid community work during its term. So, there is a punitive element in both of those two parts. But I have ultimately come to the view that I can achieve the ends of just punishment, denunciation and deterrence by having a considerable part of that punitive element of the sentence served in the community, under a community correction order rather than by imprisonment.

41 Ms Burgess can you now please stand. Delwyn Burgess, on the two charges of obtain a financial advantage by deception to which you have pleaded guilty, you are convicted.

42 On Charge 1, you are sentenced to be imprisoned to a period of six months.

43 On Charge 2, you are sentenced to be imprisoned to a period of three months and that is to be served concurrently with the sentence on Charge 1.

44 That makes a total effective sentence of six months. In addition, on each of Charges 1 and 2, you are directed to serve a community correction order for a period of two years commencing upon the completion of your imprisonment.

45 The mandatory terms that apply to all community correction orders are these. You must not commit another offence for which you could be imprisoned during the time that the order is in force. You must comply with any obligation or requirement prescribed by regulation 17 of the Sentencing Regulations 2011. That means you must not be impaired by drugs or alcohol when you attend on Corrections for any visits and you must submit to drug or alcohol testing if directed to do so. You must report to and receive visits from the Secretary or delegate.

46 You must report to the community corrections centre at Ringwood, that is Level 1/2 Bond Street, Ringwood within two clear working days after the commencement of the order, so that is within two clear working days after your release. You must let a community correction officer know within two clear working days if you change your address or your job. You must not leave Victoria without first getting permission to do so from the Secretary or delegate and you must obey all lawful instructions from and directions of the Secretary or delegate. In addition to these mandatory terms, you must perform 300 hours of unpaid community work over a period of two years as directed by the regional manager.

47 If you fail to comply with the unpaid community work condition or any part of it, the Secretary can give you a direction to perform additional hours of unpaid community work in accordance with s 83AU of the Sentencing Act and you must undergo assessment and treatment including testing for alcohol abuse or dependency as directed by the regional manager. Do you understand the effect and the conditions of this community correction order and do you consent to it being made?

49 HER HONOUR: Thank you, I will ask Dr Fitzgerald to accompany my associate to the dock and to have you sign that when you have satisfied yourself of those conditions.

50 I declare pursuant to s 6AAA of the Sentencing Act 1991 (Vic) that, but for your pleas of guilty, I would have sentenced you to a term of imprisonment of three years and fixed the period of two years as a time that you would have been required before being eligible for parole.

51 There are no ancillary orders to be made are there, Ms Keath?

53 HER HONOUR: And do the orders that I have pronounced correctly reflect what I said I intended to do?

55 HER HONOUR: Do you agree with that Dr Fitzgerald?

57 HER HONOUR: Thank you. A copy of the community correction order will be provided to Dr Fitzgerald and he will provide that to you, Ms Burgess. Can you now please remove Ms Burgess?