R v Alex & Ors

R v Alex & Ors - [2024] NSWSC 1565 - NSWSC 2024 case summary — Zoe

JUDGMENT

The trial of George ALEX, Lindsay KIRSCHBERG, Gordon McANDREW, Pasquale LOCCISANO and Mark BRYERS commenced on 12 February 2024, on two counts as follows: 1 Conspiracy with the intention of dishonestly causing a loss to the Commonwealth, contrary to s 135.4(3) of the Criminal Code (Cth) (maximum penalty 10 years imprisonment). 2 Conspiracy to deal with money of a value of $1,000,000 or more believing it to be proceeds of crime, contrary to ss 11.5(1) and 400.3(1) of the Criminal Code (maximum penalty 25 years imprisonment).
The object of the conspiracy charged in count 1 was non-remittance of PAYG amounts that were withheld from wages paid in connection with a labour hire business conducted in Queensland. The companies jointly operating the business were GHR Consolidated Pty Ltd ("GHRC") and Civil Personnel Consolidated Pty Ltd ("CPC"). The proceeds of the offence in count 1 were alleged to have been dealt with pursuant to the conspiracy charged in count 2. The beginning of the charge period for both counts, 1 July 2018, is the approximate date on which four of the offenders commenced to conduct the labour hire business through GHRC/CPC. The four (to whom I will generally refer by surname only, for brevity) were George Alex, Kirschberg, McAndrew and Loccisano. George Alex owned the business. Loccisano acted as a channel of communication between George Alex and Kirschberg and McAndrew. McAndrew was a director of the two operating companies for all but five months of the charge period and Kirschberg was a director for the first year, up to July 2019.
For most of the charge period GHRC carried on business as the trustee of a unit trust. That can be ignored for sentencing purposes. I will refer to the operating entities as one: GHRC/CPC. The Crown's case at trial was that the first failure to remit PAYG occurred on 7 August 2018. Bryers joined the conspiracy in mid April 2019 as a consultant to the other offenders. The end of the charge period, 21 July 2020, is the date on which the first arrests of the offenders were made. Kirschberg had ceased to do anything significant in furtherance of the conspiracy by the end of July 2019. Bryers took very little part in it after late April 2020.
By 4 January 2019, when George Alex, Kirschberg, McAndrew and Loccisano had been conducting the labour hire business for only six months, the Australian Federal Police ("AFP") had grounds for suspicion of criminal conduct sufficient to obtain telephone intercept and surveillance device warrants. Recording of the offenders' conversations, on the telephone and in premises used by them, commenced during the first week of January 2019 and continued for 18 months. That produced an enormous volume of audio evidence, of which the 110 hours played back to the jury was only a small proportion.
The Crown's opening address occupied six days. Its evidence occupied another 56 days, with several interruptions due to illness of jurors and other participants. None of the accused gave evidence. George Alex called one witness. Each accused tendered documents. Counsel's closing addresses and the summing were delivered over five weeks, with numerous interruptions, again mainly due to illness of jurors. The jury retired to consider their verdicts shortly after midday on 24 July 2024. They returned verdicts of guilty against the offenders on both counts, sequentially on 21, 22 and 23 August 2024 (T 509, 519 and 524) and 3 September 2024 (T 632). That was 6½ months after arraignment and empanelment.
The course of the investigation and trial may cause the Australian Taxation Office ("ATO") and the AFP to consider whether early disruption of discovered systemic non-compliance may be a preferable means of protecting the revenue. The authorities could have stopped this fraud in January 2019 when Prime Services (Queensland) Pty Ltd lodged Business Activity Statements ("BASs") disclosing that it had by then defaulted on remittance of $3.6 million of PAYG withheld from the wages of the workers used by GHRC/CPC. Prompt ATO intervention, utilising the Commissioner's extensive powers to require production of business records and to conduct examinations on oath, would have prevented $7 million in further revenue losses over the next 18 months of the investigation. Disruption would also have averted the loss of another $3 million in PAYG on the payroll of Superform (Queensland) Pty Ltd. The trial was long because it concerned crimes that were carried out continuously while evidence was amassed during the long investigation. The trial must have incurred many millions of dollars in prosecution legal costs. Approximately $3.6 million of Commonwealth legal assistance has been provided to four of the offenders.
On the basis of the evidence given during the trial and with due regard for what is implicit in the jury's verdicts, I find the facts of the offending in relation to each count as stated below. The standard of proof beyond reasonable doubt has been applied for findings that increase the objective seriousness and any aggravating circumstances of the offending; facts advanced by the offenders in mitigation have been found on the balance of probabilities.

[7]

Modus operandi

The conspiracy to cause loss to the Commonwealth, that is, to defraud the Commissioner of Taxation, was put into effect by very simple means. GHRC/CPC did not directly employ the 200 or so workers whom it hired out to construction industry clients. The workers were employed by two companies controlled by Kevin McHugh: Global HR Pty Ltd ("Global HR") and Civil Personnel Services (Aust) Pty Ltd ("CPS (Aust)"). McHugh had run the labour hire business through those two companies for some years prior to July 2018, from which time GHRC/CPC took it over. GHRC and CPC, like McHugh's companies before them, derived income from construction companies that paid by the hour for workers hired to them.
McAndrew was the general manager of GHRC/CPC throughout the charge period. He was a director of both companies for most of that time. He worked full-time in the companies' office, located between Brisbane and the Gold Coast. Kirschberg lived in Sydney and carried on other business activities from there. He visited the GHRC/CPC office infrequently. Until the end of July 2019 Kirschberg was often in phone contact with McAndrew to discuss the business. GHRC/CPC employed an office manager, Ms Robyn Turkington. A few office assistants worked under her and a young in-house accountant, Ms Amy Dorling, worked on contract to the companies. The workers who were hired out to construction clients were organised and directed by site managers who had their headquarters at the office. The office workers and site managers are referred to hereafter, collectively, as staff.
Kirschberg received financial information about the labour hire business by email from Ms Turkington and Ms Dorling and he instructed Ms Dorling to carry out accounting and reporting tasks from time to time. After July 2019 his phone and email communications with McAndrew and others in the GHRC/CPC office were markedly less frequent and were for the most part confined to discussion of legitimate aspects of the business.
To maintain the availability of the labour hire workers, GHRC/CPC had to ensure that they were paid their wages, superannuation and other entitlements, irrespective of who directly employed them. The weekly net pay of each worker was calculated by the office staff of GHRC/CPC under the direction of Ms Turkington. Each week Kirschberg and McAndrew, as directors and bank account signatories of GHRC/CPC, caused the total of the workers' net wages to be transferred from GHRC/CPC into a bank account in the name of an intermediary company. Ten different intermediary companies were used in succession over the charge period.
The directors and bank account signatories of the intermediaries acted on the instructions of Kirschberg, McAndrew and, later, Bryers and Loccisano. The conspirators directed the signatories to distribute net wages to the workers each week by electronic multi-pay transfers from the intermediaries' accounts. The conspirators did not put into those accounts funds for remittance of the PAYG that was withheld from the wages. They made no other arrangement for remittance. They intended and agreed that PAYG withheld would not be paid to the Commissioner but would be applied to their personal purposes, principally those of George Alex.
During most of the charge period the net wages of GHRC/CPC's staff were also transferred each week into the bank account of an intermediary and distributed from there by electronic multi-pay. Again, no funds to cover the PAYG withheld from the staff wages were deposited to the intermediaries' accounts and no other arrangement for remittance of PAYG was made.

[12]

Inferences of intent and agreement amongst the conspirators

Kirschberg and McAndrew obviously knew that insufficient funds were transferred into the intermediaries' accounts each week to cover remittance of PAYG - because they effected, or authorised, the transfers. They knew that the intermediaries would not remit PAYG because those entities were not provided with any funds from which to do so and had no resources of their own. The only intermediary in relation to which that was contested was Prime. Both at trial and in the sentence proceedings, most of the forensic effort in the cases for George Alex, Kirschberg, McAndrew and Loccisano was directed to trying to raise a reasonable doubt along the lines that those four offenders may have thought that Kevin McHugh, nominally the principal of Prime, would pay the PAYG. For reasons given below there is no reasonable doubt in that respect.
Bryers did not participate in the factual dispute concerning Prime. It was alleged by the Crown that he joined the conspiracy only after its bank accounts had ceased to be used. From then on Bryers, like the others, was well aware that the subsequent intermediary companies received funds only sufficient to cover net wages and had no independent resources from which to remit PAYG.
During the relatively brief periods in which GHRC/CPC paid labour hire workers or staff directly rather than through an intermediary, again it was obvious to Kirschberg and McAndrew that PAYG was not remitted. Being obvious, the non-remittance was necessarily intended by them and agreed.
Evidence concerning the management of the labour hire business from July 2018 until the arrests two years later established that George Alex asserted full ownership and the right to make all decisions affecting the business. His assertions of ownership, authority and control were accepted and acted upon by Kirschberg, McAndrew and Loccisano at all relevant times. They were accepted and acted upon by Bryers from mid April 2019 when he became a consultant to the other offenders.
George Alex was declared bankrupt in 2011 and remained undischarged throughout the period of the conspiracies. His directions with respect to GHRC/CPC were frequently communicated through Loccisano to McAndrew, Kirschberg and Bryers. Their requests for approval of actions were likewise conveyed through Loccisano to George Alex. George Alex did not assume any formal role or office in GHRC or CPC or in any of the associated companies. He did not have an email address. He used telephone services sparingly. Those precautions were in part adopted for the purpose of evading the administration of his bankruptcy, by obstructing the vesting in his trustee of property acquired after the date of bankruptcy and before discharge.
Having regard to George Alex's control over GHRC/CPC and his dominion over McAndrew, Kirschberg, Loccisano and Bryers with respect to the business and the distributions of its funds for personal purposes, it is inconceivable that any of them would have taken the steps they did to cause non-remittance of PAYG without George Alex's agreement and instructions. The inference of George Alex's agreement is supported by the fact that none of the others received financial dividends proportionate to the risk of financial and criminal liability that they were taking. Also, Kirschberg, McAndrew and Bryers at various times expressed reluctance and discomfort about the non-payment of PAYG and the risk to themselves. They would not have pressed on with the fraud, relatively poorly rewarded and in a state of anxiety, while keeping the whole exercise secret from the owner of the business who was receiving the lion's share of proceeds.

[17]

Kevin McHugh's conduct of the business before July 2018

In about 2012, when McHugh was running the labour hire business through entities bearing various names that included the title "Global HR", George Alex and an associate, Joseph Antoun, claimed that they were entitled to a majority interest. McHugh and his business associates disputed the claim. The dispute led to the execution of a deed on 11 March 2013, pursuant to which McHugh and others promised to pay to George Alex and Joseph Antoun a total of $12 million by instalments over 15 months. The deed expressly provided that McHugh was liable for $5 million of the total. It was a term of the deed that failing payment in full the promisees would be entitled to terminate it and require transfer to themselves of all issued shares in a named parent company.
On 20 March 2013 McHugh paid an instalment of $1,000,000 due under the deed but thereafter he defaulted. Although consent orders were subsequently made in this Court declaring the deed "void, unenforceable and of no effect", on 15 August 2017 McHugh as director of Global HR signed an acknowledgement that the debt was due under the deed and that it would "be paid to [George Alex] in weekly instalments from the Global business". McHugh was induced to make this acknowledgement by an official of the Construction Forestry and Mining Employees Union ("CFMEU") who said that if he did not "sort out the debt with George" then his company's Enterprise Bargaining Agreement with the union "will not be renewed and … may be withdrawn". Without an Enterprise Bargaining Agreement McHugh would not have been able to trade in the field of labour hire.
The letter of acknowledgement of debt included a further undertaking to the effect that during the period in which McHugh would continue to pay instalments of the $12 million, he and his companies and others would pay all taxes and other statutory obligations incurred in the labour hire business and all debts due to creditors. In performance of those promises, between late August 2017 and 30 June 2018 McHugh caused a total of $1.28 million to be paid to two companies controlled by Loccisano. Those companies received the money on George Alex's behalf. By about August 2018 the balance of the original debt was approximately $9 million.

[18]

Takeover of the business by the offenders through GHRC and CPC

In early 2018 McHugh was continuing to operate the labour hire business through Global HR and CPS (Aust). In April 2018 he was in financial difficulty. He had received notice from his bank that it would no longer provide finance against invoices rendered by his companies to their construction industry clients. Through channels that were not identified in the trial, George Alex and Kirschberg learned in about April 2018 that the business was close to failure in McHugh's hands. On 11 April 2018 Kirschberg sent an email to George Alex in the following terms: After looking at the labour hire opportunity in Qld it is clear to me that I should simply await the inevitable demise of GHR and pick up the pieces. I will continue my preparation of Skillology to be fully compliant with Qld and NSW requirements and aggressively target the Qld clients as you suggest.
Skillology was the then name of GHRC, which Kirschberg controlled. On 1 June 2018 he caused its name to be changed to GHR Consolidated Pty Ltd. He also caused CPC to be incorporated on 27 April 2018, with GHRC as its sole shareholder. Kirschberg held the two companies ready to take over the labour hire business from McHugh's entities. He was a director of both GHRC and CPC from early in the charge period.
McAndrew was a career banking officer until early 2018 when he retired from employment with Westpac after 11 years' service as a manager. He met McHugh as a client of Westpac. After leaving the bank he commenced to assist McHugh with the business while it still belonged to McHugh. I infer that he first met George Alex and Kirschberg when they were in the process of taking over from McHugh in mid 2018.
By the beginning of July 2018 bank accounts had been set up for GHRC and CPC with Kirschberg and McAndrew as signatories. From the middle of that month GHRC and CPC commenced to receive deposits to those accounts from construction industry clients, indicating that the two companies were by then conducting what had been McHugh's labour hire business. The workers continued to be employed by McHugh's companies. Global HR employed CFMEU members. They were made available to GHRC for deployment to clients who operated unionised sites. CPS (Aust) employed non-unionists who were made available to CPC for hiring out to other construction industry clients.
No evidence was led in the trial or on sentence to show that the employment of any of the workers with Global HR or CPS (Aust) was terminated in July 2018, or that they were rehired by some other employer, or that new workers who may have been taken on after July 2018 were engaged by an employer other than Global HR or CPS (Aust). The evidence is not clear enough to support a finding as to how long those two companies continued to be the employers of the labour hire workforce that was used in the GHRC/CPC business.

[19]

Management of the labour hire business by McAndrew, Kirschberg and staff

GHRC/CPC initially had insufficient receipts from construction industry clients to cover the wages of the labour hire workers. During the first eight weeks of those companies' conduct of the business, in July and August 2018, Loccisano made weekly deposits to Prime's bank account in amounts sufficient to cover the net pays of the labour hire workers. Prime was incorporated on 2 November 2006. Kevin McHugh was its sole director, secretary and shareholder at all times. The total of the deposits by Loccisano was $1.8 million. Individual net pays were transferred electronically from Prime's bank account to the numerous bank accounts of the workers commencing from 10 July 2018.
At trial George Alex's counsel argued that the deposits from Loccisano's company to Prime represented a loan from George Alex to Kevin McHugh. I accept that the deposits came from money under the control of George Alex but their true character was an injection by George Alex of initial working capital into the business that he had taken over, in the name of GHRC/CPC, from the beginning of July 2018. The money put into Prime's account was used to fund the wages expense that GHRC/CPC had to meet in order to carry on the labour hire business that now belonged to George Alex, not to Kevin McHugh. No doubt George Alex desired to recover the $1.8 million from the business as quickly as possible but in doing so he would be recovering working capital that he had outlaid to his own enterprise, not loaned to McHugh.
Counsel submitted to the jury that George Alex thought McHugh was still indebted to him for millions of dollars under the deed of 11 March 2013 and the acknowledgement of 15 August 2017. I accept it is possible that George Alex, rightly or wrongly, perceived that a large balance was still owing by McHugh notwithstanding that he had from 1 July 2018 acquired full beneficial ownership of the labour hire business. Although the business was now his, George Alex may have considered that getting money out of it was in some sense enforcement of his old claim against McHugh. He may also have considered that he was entitled to remuneration out of the business by way of commission for introducing work.
Whatever the state of his understanding about the basis of his various claims, I am satisfied that from 1 July 2018 George Alex was determined to take out of the labour hire business as much money as he could as quickly as he could. In a loose sense he may have thought that what was now his own labour hire business owed him millions of dollars, either on an historical basis reflecting his dispute with McHugh from six years earlier or on the more current basis of his injections of funds and his introduction of clients.

[20]

Distribution of net wages through Prime's bank accounts - August 2018-March 2019

As earlier mentioned, from 7 August 2018 GHRC/CPC commenced to deposit weekly amounts into a Prime bank account to cover the net wages of the labour hire workers and staff. Supplemental deposits from Mr Loccisano's company were required on some dates in August to fund the net wage distributions. Each week there were received at the GHRC/CPC office timesheets from the labour hire workers who had been deployed to worksites of the companies' clients. Office staff under Ms Turkington's direction entered the timesheet data into a payroll program. They did the same with the staff hours.
Once the data had been entered, the software would calculate the gross pay due to each individual, the amount of PAYG to be withheld and any entitlements in addition to the individual's hourly rate. The software generated payslips, which the GHRC/CPC office staff sent out to the workers by email. The software also generated an ABA file; that is, a listing of the net pay amounts due to each individual, with account names and identifying numbers, capable of being uploaded to the Prime bank account to effect multi-pays of net wages to the workers and staff. The whole of this weekly activity was referred to throughout the case as "payroll processing". Ms Turkington continued uploading weekly ABA files to Prime's first bank account, Ex 1/TB-946, until mid-September 2018.
From late September to mid-November 2018 net pays were distributed to the workers and staff directly from a bank account of GHRC. During those months Ms Turkington uploaded the weekly ABA files to that account. Then a new account was opened in the name of Prime (Ex 1/TB-947) with Ms Turkington as a signatory. Commencing in November 2018 weekly transfers from GHRC/CPC were made into the new Prime account in amounts sufficient to cover net wages. Ms Turkington proceeded as before, uploading ABA files to effect distributions. There were also transferred from GHRC/CPC into Prime's bank account funds to cover workers' superannuation contributions and other entitlements. Those additional payments were funded approximately monthly, with electronic transfers from Prime's account to the bank accounts of superannuation funds and workers' benefit trusts. This continued up to and including the pay run of 22 January 2019.
The regular weekly transfers from GHRC/CPC into Prime's bank account were only sufficient to cover net wages. Once the net distributions to the workers and staff members had been debited, following uploading of the ABA files for the week, the balance of Prime's bank account was reduced to approximately the level at which it had stood prior to the payday transfer from GHRC/CPC. The Crown tendered Ex 45/TB-120 comprising 23 Weekly Analysis Excel spreadsheets, in electronic form, for the weeks ended 10 June 2018 to 18 November 2018. For the week ended 8 July 2018, when GHRC/CPC's conduct of the business commenced, and thereafter, the spreadsheets showed the total estimated net wages of workers and staff for the week. Ms Turkington prepared the Weekly Analysis spreadsheets, taking the total net wages figures from the payroll software into which timesheet data was entered. The amount shown on the spreadsheets as net wages was the amount, subject to rounding, that was then transferred from GHRC/CPC to the Prime bank account for distribution.
From 7 August 2018 the bank accounts in the name of Prime functioned for all practical purposes as additional accounts of the GHRC/CPC business. Prime was not an arms length entity. Ms Turkington effected transactions on the Prime accounts at the direction of McAndrew. I am satisfied beyond reasonable doubt that from at latest 7 August 2018 Prime was nothing more than a corporate name or shell. Apart from Ms Turkington operating its bank account as directed by McAndrew and accountants lodging its BASs with the ATO on 25 January 2019 (explained further below), there was no one conducting Prime's affairs and it had no affairs to conduct. Kirschberg and McAndrew had available to them the figures for gross wages due each week, from the timesheet data that was entered into GHRC/CPC's payroll software by the companies' office staff. They did not cause gross wages to be paid into Prime's bank account each week because they did not intend that the PAYG withheld would be remitted from that account to the Commissioner.

[21]

Cessation of payment of labour hire workers through Prime's bank account

On 25 January 2019 McAndrew learned that accountants retained by McHugh proposed to lodge BASs for Prime. On that day he told Loccisano, "We're not going to be able to run anything through Prime anymore". No further labour hire pay runs were paid from the Prime account. McAndrew continued to transfer funds into the Prime bank account for the payment of staff net wages, on pay dates 29 January 2019 to 20 March 2019 inclusive. Those pay runs were about $24,000 per week, compared to over $300,000 per week for the labour hire workers. The continued use of the Prime account for the limited purpose of paying staff involved the risk of only a modest loss if the ATO should garnishee the account for unremitted PAYG.
BASs were lodged on behalf of Prime on 25 January 2019, disclosing that it had failed to remit $3.63 million of PAYG for the quarters ended 30 September 2018 and 31 December 2018. (That figure is greater than the amount for those two quarters for which the Crown has sought to hold the offenders criminally responsible, by reason of an imperfectly explained analysis that the Crown has made of the source of funds used to distribute net wages). On 29 January 2019 Kirschberg told Loccisano, "the Prime intermediary … is out of the picture". On 11 February 2019 McAndrew told Kirschberg that the Prime bank account was still active but "we don't know for how much longer … we don't know when the ATO's just going to go bang with the garnishee". The ATO went "bang" on 29 March 2019 but by that date there was only $663.02 in the account.
Kirschberg's statements about not being "able to run anything through Prime anymore" and referring to "the Prime intermediary", are revealing. He made other similar statements, at various times, about "putting [funds] through" the bank accounts of Prime and, later, other entities. The language used supports the conclusion that Kirschberg and McAndrew used the Prime accounts as mere passive conduits. They sought to forestall a conclusion by the ATO that GHRC/CPC was the payer of wages, or the employer, that would be liable for unpaid PAYG.
According to a tracing exercise carried out by Ms Celona, the total amount transferred from GHRC/CPC to bank accounts of Prime in the period 17 July 2018 to 24 January 2019 was approximately $9,328,762. Ms Celona traced $6,566,479 of that sum to the payment of net wages and other worker entitlements. Another $918,709 was traced from Prime's bank accounts to various interests of McAndrew, McHugh and an associate of George Alex, as well as substantial cash withdrawals. When the last of the Prime bank accounts ceased to operate it held the negligible credit balance of $663.02, as referred to above. Of the total funds that had been transferred into Prime's accounts from GHRC/CPC, the disposition of $1,843,574 was not traced. It certainly did not go towards payment of PAYG. In the period during which Prime was the intermediary, the total unremitted PAYG, that should have been paid in respect of wages funded by GHRC/CPC, was $2,263,156.
The absence of tracing of the $1,843,574 does not give rise to any doubt that the offenders intended there to be no remittance of PAYG withheld during the period in which Prime was used as a wage paying intermediary. Given the size of GHRC/CPC's payroll, PAYG was required to be remitted within eight days of each distribution of net pays. It is apparent from the Prime bank statements that the weekly cycle of transfers from GHRC/CPC never permitted this. Further, I am satisfied beyond reasonable doubt that the offenders were well aware that no person purported to be acting in the affairs of Prime or to be assuming responsibility for causing remittance of PAYG.
In submissions on sentence, as in their addresses to the jury, counsel for each of George Alex, Kirschberg, McAndrew and Loccisano urged that it was a reasonable possibility that those four thought McHugh would separately fund and remit the PAYG that was withheld from the workers' wages during the period in which Prime's accounts were used. It was submitted that on the basis of that reasonable possibility the Court should not infer beyond reasonable doubt that those offenders must have intended non-remittance during the Prime period and therefore should not find that the conspiracy to defraud commenced any earlier than January 2019, when different intermediary companies commenced to be used.
Kirschberg, McAndrew and Loccisano endeavoured to sustain this possibility on the basis of two Payroll Services Agreements entered into with Prime by GHRC and CPC. They argued that the Agreements obliged Prime to remit the PAYG of labour hire workers and that the offenders would have believed the obligation was performed and that McHugh would see to its performance. The Payroll Services Agreements must therefore now be considered at length. George Alex sought to sustain the reasonable possibility that McHugh was remitting PAYG on the basis that McHugh owed him a lot of money and that remittance would be a way of incrementally discharging that debt.

[22]

Payroll Services Agreements between GHRC/CPC and Prime

In August 2018 Kirschberg and McAndrew retained a solicitor to prepare the Payroll Services Agreements. They were duly drawn up and were executed on 16 August 2018 - by McHugh as director of Prime and by McAndrew and Kirschberg as directors of GHRC and CPC. Each Agreement commenced on 18 June 2018 and would continue for 12 months, with the following provisions: "Fees" were defined as the charges described in an attached schedule. The schedule to the GHRC Agreement listed eight classifications of workers, including "Labourer", "Dogger, Rigger", "Carpenter" and so on. For each classification there were listed three "Prime EBA Rates": for ordinary time, time and a half and double time, respectively. The CPC agreement had a similar schedule of Fees specifying hourly rates for each of 10 categories of labour. Clause 2 provided that in consideration for "the Client" (GHRC or CPC) paying the Fees, Prime would perform Services including, first, weekly payroll processing. That would be carried out on the basis of workers' timesheets and would include issuing payslips and paying weekly wages. A second service would be the supply of workers as required by the Client. By cl 3 it was agreed that GHRC or CPC could create invoices on Prime's behalf, in which case an opportunity to review would be afforded to Prime before finalisation of each invoice. Clause 8 obliged Prime to pay all statutory charges in respect of the workers, including PAYG, superannuation, workers' additional entitlements and payroll tax. Cl 10 required GHRC or CPC to pay the Fees in consideration for Prime providing the Services, as defined in cl 2, subject to receipt of invoices from Prime.
Despite the titles of the Agreements, on their face they were not merely contracts for payroll processing services. Under agreements of that nature an employer transfers a large weekly lump-sum to a payroll contractor together with time data and pay rate information. The contractor enters the data into suitable software, calculates gross and net pay and other worker entitlements, distributes net individual pays, issues payslips, remits PAYG and so on. The Payroll Services Agreements with Prime went beyond this. They were premised on the workers not being employees of GHRC/CPC but being "supplied" by Prime, on the basis that either Prime or some other entity from whom it obtained the workers was the employer. Clause 9(a) included the following: 9(a) Nothing in this Agreement constitutes an employment relationship between […] the Client and the Service Provider's workers (such as the employees, agents or sub- contractors of the Service Provider). No relationship of employer and employee is created by this Agreement.
In substance these purported on their face to be agreements for the hire of labour from Prime to GHRC/CPC. As GHRC/CPC were not to be employers of the workers supplied, Prime's undertaking to GHRC/CPC that it would carry out the pay calculations, issue payslips, transfer pays to the workers, remit PAYG and so on, was not essential to either Agreement. Those obligations, being incidents of the employment relationship, would fall upon whoever was the payer of wages to the workers - Prime or some other entity from whom it obtained the workers. GHRC/CPC was not the payer of wages to the workers but the payer of labour hire Fees to Prime as its labour supplier. Although not central, the promise of Prime to ensure that all the obligations of a wage payer were satisfied and thereby to maintain good financial standing vis-à-vis the workers and relevant statutory authorities had commercial utility.

[23]

Each of the Payroll Services Agreements with Prime was a sham

The Crown opened to the jury that the Payroll Services Agreements were shams on the basis that "it was people within GHRC's own office … who actually provided the payroll services by doing the clerical work to make it happen". In closing, the prosecutor repeated that submission using substantially the same language. There were other respects in which the Agreements were not observed by either party.
Contrary to the terms in which counsel for one of the accused addressed the jury, the unchallenged evidence was that the weekly transfers from GHRC/CPC into Prime's bank account were not made against invoices from Prime and were not in amounts calculated at the Fee rates stipulated in the Agreements. Only the workers' net pays for the week were transferred to Prime in each pay cycle, in one or more total sums. The net pays were at hourly rates very much less than the Fees in the schedules. Also, the weekly transfers for wages from GHRC/CPC to Prime's bank account were made without invoices from Prime. Any invoices that were raised were prepared retrospectively by GHRC/CPC personnel in the name of Prime. Ms Dorling said that from "probably late 2018" she was requested by McAndrew and/or Kirschberg to prepare invoices from Prime "after-the-fact". In doing so she inserted a total amount payable that was either derived from data in the payroll software or was simply a "clearing amount", that is, an amount that had been transferred by GHRC/CPC to Prime and, in the absence of any invoice, had been initially posted to a clearing account in the bookkeeping software. The invoices were not prepared by extension of the hours for each category of worker applied to the corresponding rate in the Fee schedule.
Consistently with her evidence that "there wasn't anyone sort of there running [Prime]", Ms Dorling gave no evidence that anyone on behalf of Prime was given an opportunity to review the invoices that she prepared in its name. On Ms Dorling's evidence there was no one on behalf of Prime to carry out a review of invoices. She was not cross-examined to suggest that any such review was ever sought or undertaken by anyone purporting to represent Prime.
The only invoices from Prime to GHRC/CPC that were tendered and explained in evidence were a group that had been prepared by Ms Dorling in June 2019, on Kirschberg's instructions, in respect of the period late January 2019 to the end of April 2019. Those invoices were prepared after the offenders had ceased to pay labour hire workers' wages from Prime's bank accounts and they covered periods extending beyond the utilisation of Prime's accounts.
Kirschberg's June 2019 instructions to Ms Dorling included the amounts that were to be shown on the invoices. He emailed to her spreadsheets purporting to show the total numbers of hours worked during each weekly pay period from the last week of January 2019 through April 2019, multiplied by rates that he specified as ordinary time, time and a half and double time. For invoices from Prime to GHRC, Kirschberg's calculations used rates that were all for a single category of worker, being the lowest paid category in the schedule to the GHRC Payroll Services Agreement. Similarly, for invoices to be rendered to CPC Kirschberg's spreadsheets were all based on the lowest paid category of worker in the schedule to the CPC Payroll Services Agreement. None of this evidence was the subject of cross examination or contradiction or qualification by other evidence.
On 22 May 2024 (Day 62, near the close of the Crown case) the Crown tendered in electronic form a subfolder of documents that were added to Exhibit 1. Within that folder were documents identified as TB-335, 336, 337 and 591, each of which is in form an invoice from Prime to GHRC or CPC. Those documents were never opened in the presence of the jury for display on the courtroom screens. No oral evidence was adduced concerning them. No submission about them was made to the jury or in the course of the sentence proceedings. In the circumstances those documents cannot be regarded as evidence of performance of the Payroll Services Agreements in any respect.
Separately from the question of invoicing, the amounts of weekly transfers to the Prime bank accounts show that the transfers were not calculated according to the Fee rates specified in the Agreements. The Fee rates included gross pay, superannuation, other entitlements and statutory obligations. That becomes apparent by comparing the Fees with the figures in payslips for individual workers, both union members and non-unionists. Payslips were tendered by the Crown and by George Alex. The hourly Fees in the schedules to the Agreements were well above even the gross hourly pay for the workers. If the amounts transferred to Prime's bank account each week had been calculated using the number of hours worked by personnel in each classification, multiplied by the Fees in the schedules, the transfers would have been much greater and comfortably sufficient to fund PAYG remittances.
The uncontested fact that Kirschberg and McAndrew caused GHRC/CPC to transfer only the net pay to Prime's accounts each week and not to transfer the scheduled Fees reveals their intention not to perform the Agreements in a fundamental respect. This departure from the Agreements had the direct effect of leaving insufficient funds in Prime's account to enable it to fulfil its putative written obligation to remit PAYG withholding amounts - assuming that there was anyone to act in Prime's name to do so.
From all of the above-mentioned departures from the terms of the Agreements I am satisfied beyond reasonable doubt that all the signatories to them intended from the outset that they should not have their apparent, or any, legal effect. It was intended that the Agreements would not be binding and would not be observed or performed. Each of the Agreements was a sham.

[24]

GHRC/CPC's internal reporting ignored the Prime Agreements

Further support for this conclusion is provided by the nature of internal reporting within GHRC/CPC. The evident purpose of the Weekly Analysis spreadsheets referred to at [48] above was to keep the directors and the owner of the GHRC/CPC business informed about trading performance. The Analyses for the weeks ended 8 July 2018 to 18 November 2018 (Ex 45/TB-120) set out figures under headings "Invoiced", "Wages To Pay EST - Net" and "Entitlements". No figures were shown for amounts calculated at the Fee rates in the schedules to the Payroll Services Agreements. If those Agreements were intended to be performed it would be expected that Ms Turkington's Weekly Analyses would have shown the accrual of very substantial indebtedness to Prime, because the only weekly transfers to it were of net wages, well short of the scheduled Fees. If the Agreements were intended to be performed there would be no reason for Kirschberg and McAndrew to concern themselves with figures for "Wages To Pay EST - Net" or "Entitlements". It would fall to Prime to calculate those amounts as part of its payroll processing obligation. Under the Agreements GHRC/CPC would be concerned only with the Fees payable to Prime. Calculation of amounts due to the workers and for PAYG would be solely Prime's concern.
For the weeks ending 18 November 2018 to 23 June 2019 Weekly Analysis Excel spreadsheets were prepared by Ms Turkington in a different format: Ex 21/TB-282, comprising 32 weekly sheets. On those reports both the total gross wages and the total net wages for each week were shown, as well as the value of invoices issued for the week and "Entitlement Data" in respect of workers entitlements over and above their hourly rates. The Weekly Analyses in this second generation format again did not show amounts owing to Prime calculated in accordance with the Payroll Services Agreements. The "Gross Wages", "Net Wages" and "Entitlement Data" that were dissected should have been irrelevant to GHRC/CPC's directors if the Agreements were intended to have any legal effect.
Each week McAndrew requested the current Analysis from Ms Turkington and she provided it to him. She also sent current Analyses out by email to Kirschberg and Loccisano from time to time. It was not suggested to Ms Turkington in cross examination that she was ever asked by any of the offenders for a report on how much was owing to Prime under the Payroll Services Agreements, calculated at the scheduled Fee rates and taking into account credit for weekly transfers of net wages and periodic transfers of funds to workers' entitlements. Nor was evidence adduced from any other source that the offenders at any time sought to quantify an accrued liability to Prime.

[26]

No reasonable possibility that George Alex thought McHugh would remit PAYG

In both the trial and the sentence proceedings there was no direct or circumstantial evidence that George Alex knew of the terms of the Payroll Services Agreements or that he relied upon them for an expectation that McHugh would pay, or cause Prime to pay, PAYG withheld from wages that Kirschberg and McAndrew distributed through Prime's bank account. The possibility that he placed any such faith in the Agreements is purely speculative and does not reasonably arise.
George Alex's counsel put the following submission during the sentence hearing: But they [Kirschberg and McAndrew] had an agreement that it would be paid. And if they shared anything with Mr Alex, the inference is that what they would have shared with him is that McHugh is paying the PAYG. We don't have to pay that and that's why we're giving McHugh the net wages because he's looking after the PAYG.
For reasons already given, I am satisfied beyond reasonable doubt that Kirschberg and McAndrew did not think McHugh was "looking after the PAYG". I am satisfied that they knew he was in no position to do so and they were not expecting his company, Prime, to remit PAYG pursuant to its putative obligation under the Payroll Services Agreements because they were not performing those Agreements, in particular in the respect of not paying the agreed Fees that would cover PAYG. Counsel's submission is not merely speculative, it is positively negated by the evidence.
Counsel propounded the alternative possibility that George Alex thought McHugh would remit the PAYG as an indirect way of discharging his personal indebtedness to George Alex. The first flaw in this is the lack of any reasonable answer to the question: how could George Alex have thought that McHugh had the means to fund PAYG liability in the order of $116,000-$132,000 per week (see [20] above). At that rate, $1,000,000 of PAYG became payable every eight weeks.
There is no evidence that McHugh had any business that could generate cash flow of that order, or that George Alex thought he did. The only business McHugh ever had, so far as the evidence shows, was taken out of his hands by the offenders from July 2018. There was no evidence that he had any capital reserves. The business was failing when he handed it over and there was nothing in the evidence to suggest that he was paid anything for relinquishing it.
In submissions on sentence counsel for George Alex referred to the BASs lodged by McHugh's accountants in the name of Prime on 25 January 2019 (see [51] above). Counsel submitted the following: What is missing in this case is any evidence as to what happened to the $3.6 million that McHugh says he retained as PAYG and did not pay to the ATO. No one knows what happened to that $3.6 million. It was an asset that was available to McHugh and, for all we know, that $3.6 million, all McHugh's other funds, whatever they were, was being used to at least, so far as George Alex was concerned, to repay the debt that was owed to him.
I reject that submission in every aspect. There was no evidence that McHugh said he "retained" $3.6 million. The BASs that his accountants lodged for Prime stated no more than that $3.6 million had not been paid to the workers and had not been remitted to the Commissioner. It was the amount of PAYG calculated in respect of net wages distributed to the workers in the quarters ended 30 September 2018 and 31 December 2018. There was no evidence that Prime or McHugh ever held that amount of money or that George Alex thought he did or that he would use such an amount to remit PAYG. The submission quoted above is a combination of misunderstanding of what the figure of $3.6 million represented and unsupported speculation about what George Alex might have expected.
No evidence suggested that George Alex might honestly but mistakenly have thought McHugh had access to a cash flow or reserves that could fund the PAYG of GHRC/CPC's workforce. The only person or entity identified in the case that could have discharged the weekly PAYG commitment was the entity running the labour hire business, through which marked up gross pay rates were received from construction industry clients, sufficient to pay net wages, remit PAYG and retain profit. That entity was GHRC/CPC. As everyone knew, it had displaced McHugh and his companies, which no longer had any business from which funds could be generated.
It is not reasonably possible that George Alex thought McHugh would remit the PAYG from sources independent of GHRC/CPC. Evidence in the trial included a series of declarations signed by McHugh as director of Prime, stating, inter alia, the following: All statutory obligations of the business entity or group have been met and are in accord with the legislative requirements. The declarations bore dates commencing in November 2018. The later ones were dated 15 May 2019, 15 August 2019, 22 November 2019 and 20 February 2020.
I do not find it reasonably possible that George Alex could have relied upon those documents, even assuming that they were seen by him at about the dates they bear. He had no basis for believing that McHugh had funds from which he could be remitting PAYG on behalf Prime. I am satisfied beyond reasonable doubt that it must have come to George Alex's notice that, contrary to the declarations, McHugh's accountants had disclosed to the ATO on 25 January 2019 that PAYG had in fact not been remitted to the extent of $3.63 million. The declarations purport to have been made on dates months after that disclosure and after Prime ceased even to have an operational bank account, as a result of the ATO garnishee. It is not reasonably possible that George Alex thought such documents were meaningful.
The above considerations add to the negation of the cases for Kirschberg, McAndrew and Loccisano that they thought they could McHugh would remit PAYG in discharge of Prime's supposed obligation under the Agreements. Those three offenders were as well aware as George Alex that McHugh had no such capacity.

[27]

Net wages paid from the ACN companies - 29 January to 2 May 2019

When Prime's bank account became unusable because ATO enforcement action against it was imminent, the offenders effected a seamless transition to the use of bank accounts in the names of ACN 481 and ACN 543 ("the ACN companies"), which had been incorporated by Kirschberg in December 2018 to take over the role of distributing net wages and maintaining separation of PAYG liability from GHRC/CPC. Some person, not identified in the evidence, caused the ACN companies to be registered with the ATO for PAYG withholding, with effect from 10 January 2019. However, no report of amounts withheld was ever lodged. The companies were never registered for STP purposes.
Commencing with the pay run of 30 January 2019, Kirschberg and McAndrew caused funds for labour hire workers' net wages to be transferred each week from GHRC/CPC into the ACN companies' bank accounts. Kirschberg, McAndrew and Ms Turkington were each independently able to effect transactions on those accounts. Staff under Ms Turkington continued to perform the weekly task of entering timesheet data into GHRC/CPC's payroll software and issuing payslips. McAndrew directed Ms Turkington that the ABA files generated by the software were now to be uploaded to the ACN companies' accounts. The net wages were thereby distributed from those accounts, drawing upon the weekly transfers to them from GHRC/CPC. Superannuation and other entitlements were similarly distributed through the ACN companies. In a phone conversation on 29 January 2019 Loccisano on behalf of George Alex expressly approved the use of the ACN companies for the distribution of wages.
There was no commercial or accounting rationale for using the bank accounts of the ACN companies in this manner. I am satisfied beyond reasonable doubt that McAndrew and Kirschberg implemented this procedure for the same reason that they had used Prime's bank accounts in a similar way, to avert a conclusion that GHRC and CPC were employers. They intended that PAYG not be remitted and believed that the employer would be liable for the default. There was no equivalent of the Payroll Services Agreements in relation to the ACN companies. There is no arguable basis for a reasonable possibility that the offenders thought PAYG would be remitted by someone somehow, despite there being no transfer to the ACN companies of funds that could discharge the liability. Non-remittance was intentional.
Kirschberg was initially the sole shareholder and director of each ACN company. From early March 2019 he proposed to transfer his shares in the two companies to Connell, whom he met as an associate of Bryers, and to have Connell replace him as director. In conversations with McAndrew, Kirschberg spoke of the need to create "distance" between, on the one hand, GHRC/CPC and themselves and, on the other hand, the ACN companies. Kirschberg did not want to continue as a shareholder or director because he did not want to be associated with the intended default with respect to PAYG liability. In relation to ACN 481, on 13 March 2019 notifications were lodged with ASIC to the effect that Connell had replaced Kirschberg as director and that all its issued shares had been transferred to a corporation controlled by Connell. The notification stated that these changes had taken place with effect on 14 January 2019. With respect to ACN 543, no notification of any change in favour of Connell was lodged.
In early April 2019 Loccisano nominated two associates of his own to become shareholders and directors of both ACN companies. For ACN 481, on 12 April 2019 notifications were lodged with ASIC that Marino Sotiropoulos had replaced Connell as director with effect from 15 January 2019. For ACN 543, on 15 April 2019 notifications were lodged that Gustavo Duarte had replaced Kirschberg as director and that all shares in the company had been transferred to Mr Duarte. Those changes were stated to have taken place on the day of notification. Mr Sotiropoulos and Mr Duarte, were added as additional signatories on the respective bank accounts.
The last pay run carried out through the ACN companies' accounts occurred on 1 May 2019. Between 30 January 2019 and 7 May 2019 Kirschberg and McAndrew transferred $3,111,780 from GHRC/CPC to the account and $3,106,534 was distributed from there in net wages, superannuation and other entitlements. The difference of only $5,246 shows that the offenders did not transfer to ACN 481 sufficient funds for PAYG to be remitted.
Between 30 January 2019 and 11 April 2019 Kirschberg and McAndrew transferred $1,266,499 from GHRC/CPC to the account of ACN 543, from which $1,281,766 was distributed in net wages, superannuation and entitlements. The shortfall of $15,267 had to be made up from another source. Again, ACN 543 was not sufficiently funded to remit PAYG.

[29]

Involvement of Mark Bryers from April 2019; franchising

Between April 2019 and January 2020 Bryers developed proposals for the other offenders, in several iterations, for franchising the GHRC/CPC labour hire business. The Crown argued that the offenders' purpose in considering a franchise structure was to enhance their evasion of PAYG remittance obligations. Bryers revised his franchising scheme several times. No clear picture emerged from the evidence as to what corporate, legal or financial relationships would be involved in any version. The evidence did not clearly show that any of the schemes he propounded would, if implemented, involve dishonest avoidance of liability for PAYG. Further, the evidence was not sufficient to support a finding that any of the other offenders agreed to adopt a franchising scheme of that character. There was no evidence that any two or more of the alleged conspirators ever agreed upon, let alone implemented, a specific franchising scheme. The evidence on this subject, though voluminous and contributing substantially to the prolongation of the trial, did not advance the Crown's circumstantial case on either count.
In intercepted conversations from 30 April 2019 onwards both McAndrew and Bryers frequently spoke of the franchising concept in terms as if implementation of it would protect them and/or their co-offenders and/or GHRC/CPC from PAYG liabilities for which they perceived they were at risk. The pattern of net wages being passed through conduit bank accounts without remittance of PAYG was followed throughout 2019 and 2020 up to the date of the arrests. McAndrew referred to it as "the crude way of doing things". He looked to the implementation of franchising as protection against his personal financial exposure, in the same way that Kirschberg looked to the adoption of service level agreements. McAndrew described the delay in adoption of some form of protection as "kicking the can down the road". The conversations of McAndrew and Bryers on the subject show that they were reluctant about continuing with the "crude" modus operandi.

[30]

Net wages paid from Queensland Services companies during May 2019

On 30 April 2019 Bryers arranged for the incorporation of GHRC Qld 706 and CPC Qld 797 (the Queensland Services companies) to replace the ACN companies and to assume their role. The director of each company at material times was William Gill, a person recruited by Bryers. On 30 April 2019 Bryers informed George Alex of those arrangements and George Alex approved them. I am satisfied beyond reasonable doubt that Bryers must have commenced to consult the other offenders from some date earlier in April, about the middle of the month, in order to understand the nature of the business, the corporations and bank accounts that they were using and other circumstances relevant to the decision to commence using the Queensland Services companies. None of the offenders, or anyone else, took steps to have those companies registered under s 16-140 of the Taxation Administration Act as PAYG withholders, or to have either of them registered for STP.
For pay dates 9, 15 and 22 May 2019, McAndrew and Kirschberg transferred sufficient funds to cover the net wages of the labour hire workers from GHRC/CPC to bank accounts in the names of the Queensland Services companies. Mr Gill was the sole authorised signatory on the accounts. He acted at Bryers' direction. Bryers regarded Mr Gill as a merely nominal director and expected him to follow Bryers' instructions in all matters pertaining to the companies. On each of the three pay dates referred to, Mr Gill effected multi-pays of wages by uploading ABA files that GHRC/CPC's staff had prepared and emailed to him. No funds to cover PAYG were transferred to the Queensland Services companies and PAYG was not remitted.
As mentioned earlier, Bryers shared the misconception of Kirschberg and McAndrew that the obligation to remit PAYG lay with the employer. His actions in setting up the Queensland Services companies and installing Mr Gill as their director constituted strong circumstantial proof of his dishonest intent that PAYG would not be paid, the purpose of the intermediary being to shield GHRC/CPC from the appearance of being an employer and to avoid its liability for the intended default. Bryers' actions in relation to the Queensland Services companies were undertaken in furtherance of the conspiracy to defraud and manifested his adherence thereto.

[33]

Attempt to characterise net wage payments as made on behalf of Prime

Statements made by Kirschberg, McAndrew and Bryers in intercepted phone conversations during 2019 indicated that they sought to characterise the ACN companies, the Queensland Services companies and API as agents to receive transfers of net wages and workers' entitlements from GHRC/CPC on behalf of Prime. Examples of such conversations are Recordings 239 (2 May 2019, McAndrew / Kirschberg), 278 (16 May 2019, McAndrew / McHugh), 341 (21 June 2019, McAndrew / Kirschberg), 346 (25 June 2019, Kirschberg / Ms Dorling), 347 (25 June 2019, Bryers / McAndrew), 368 and 369 (8 July 2019, Kirschberg / McAndrew and Kirschberg / Bryers), 497 (6 September 2019, McAndrew / Kirschberg), 586 (4 November 2019, McAndrew / Ms Dorling) and 587 (6 November 2019, McAndrew / Bryers), 684 (10 January 2020, McAndrew / Kirschberg), 700 (20 January 2020, McAndrew / Bryers).
This characterisation, apparently intended to engage the Payroll Services Agreements to which Prime was a party, was fanciful. There was no one acting in the affairs of Prime who could have agreed to this. There was no evidence that Kevin McHugh, Prime's sole director, purported to agree to such an arrangement. Prime had had no operational bank account after 29 March 2019 and was indebted to the ATO for $3.63 million that it had no capacity to pay. Prime was not in a position to carry on business, through the bank accounts of other entities or in any other manner. None of the offenders, in particular Kirschberg, McAndrew or Bryers, intended that the Payroll Services Agreements be performed by paying the scheduled Fees to the ACN companies, the Queensland Services companies or API, any more than Kirschberg or McAndrew had intended such performance by payment of the Fees to Prime up to 29 March 2019. The concept of treating payments to successive wage paying entities as if they were payments to Prime under the Payroll Services Agreements was a fraction of a poorly thought out fraudulent idea.

[35]

Net wages paid from AOA - 5 March 2020 to 22 April 2020

Bryers caused AOA to be incorporated on 8 May 2019 with Grady James Bracknell as sole director and shareholder. Mr Bracknell at all times acted in the affairs of AOA in accordance with Bryers' instructions. By mid-2019 Bryers had set up 12 AOA bank accounts with Mr Bracknell and Ms Turkington as signatories.
As with the previous intermediary, API, McAndrew made weekly transfers from GHRC/CPC to AOA of sufficient funds to cover the net wages of labour hire workers and staff. After processing the timesheet data in GHRC/CPC's office, Ms Turkington sent to Mr Bracknell ABA files to enable multi-pays of net wages to be made from whichever of AOA's bank accounts was being used for the week. AOA was used in this manner for eight pay dates from 5 March 2020 to 22 April 2020 inclusive. On four of the pay dates the transfer from GHRC/CPC was split between several of AOA's accounts and the ABA files were uploaded to those accounts respectively.
The total transferred from GHRC/CPC to AOA over the eight weeks in question was $1,207,300. Some funds from a separate source were also deposited to AOA's accounts, enabling it to distribute $1,294,644 in net wages to the workers and staff. No PAYG was remitted. Bryers and McAndrew were involved in this phase of carrying out the conspiracy to cause loss to the Commonwealth but Kirschberg played no active part.
On 8 April 2020 Mr Bracknell created an online link to the ATO for the purposes of STP reporting by AOA. This resulted in the company automatically being registered for PAYG with effect from 1 April 2020. Ms H Bell, AOA's tax agent, subsequently arranged for the PAYG registration to be backdated to 1 January 2020. Ms Turkington and Ms Dorling caused payroll to be run through software linked to the ATO on the STP system only for wage payments in respect of four employees, for each of 16 pay dates between 8 April 2020 and 22 July 2020. Each of those pay runs resulted in an automated electronic report to the ATO showing an average of slightly under $1,500 withheld, for a total of $23,151. This minuscule, partial compliance with reporting obligations has no impact on the inference of deliberate non-remittance of PAYG, in furtherance of a conspiratorial agreement between the offenders.

[37]

Net wages paid from QTI - 20 May 2020 to 15 July 2020

QTI was incorporated in September 2018 with Arthur Yianoulakis as sole director and shareholder. By 20 May 2020 the company had three bank accounts, for each of which Loccisano and Mr Yianoulakis was signatories. Ms Turkington was also signatory of the company's principal bank account, which was used for the distribution of GHRC/CPC labour hire workers' net wages from May to July 2020. As director and bank signatory Mr Yianoulakis acted in accordance with the wishes of Loccisano.
For pay dates 20 May 2020 to 15 July 2020 inclusive, McAndrew caused transfers to be made from GHRC/CPC to AOA's bank account in amounts sufficient to cover the labour hire net wages. He directed Mr Bracknell to transfer those funds into QTI's principal bank account. McAndrew directed Ms Turkington either to upload the weekly ABA files for the distribution of those wages to the QTI account or to transmit the files to Loccisano or Mr Yianoulakis for one of them to upload.
QTI was registered for PAYG withholding from 30 June 2020. On the basis of such information as was available to the ATO the company was treated as a "small withholder", requiring that it lodge Activity Statements and remit PAYG quarterly. On that basis, the first date for lodging a Statement and make a remittance would have been 21 October 2020. However, QTI used a third party service provider to send to the ATO an STP report on 7 July 2020, which resulted in the company becoming registered for STP purposes from that date. By STP it was electronically reported to the ATO, on 7 and 15 July 2020, that PAYG of $361,254 and $64,793 had been withheld in respect of a "pay run period 30 June 2020 to 30 June 2020" [sic]. Those dates and figures are not reconcilable with the disbursements of net wages recorded on QTI's bank statements.
Over the nine pay dates from 20 May 2020 up to the week immediately prior to the arrests, a total of $2,132,578 was transferred into QTI's bank account in the manner described above and $1,666,503 was distributed in net wages to labour hire workers. The ATO's estimate of implied PAYG is $564,541, none of which was remitted. The difference between the total of funds that reached QTI's account and the total of distributions to labour hire workers was $466,075. Half of that was distributed to the offenders and/or their companies or associates and the other half remained in a secondary bank account of QTI.
It was submitted on behalf of Loccisano that at least some of the PAYG required to be remitted by QTI was not due until after the date of his arrest. His counsel suggested it was reasonably possible that he intended to comply with that obligation and was only prevented from doing so by the laying of charges. I do not accept that as a reasonable possibility. After two years of involvement in this activity Loccisano would not have decided in July 2020 to cause some PAYG to be paid to the Commissioner. An inference arises, from the long established course of non-remittance, that he would continue as before. Also, it must have appeared to Loccisano that remittance in July 2020 would attract ATO attention and might lead to action for recovery of past defaults. He is hardly likely to have done anything to arouse further ATO interest, particularly having regard to George Alex's near hysterical reaction to the way in which McAndrew responded to the ATO's audit enquiries of 24 June 2020.

[39]

George Alex

I am satisfied beyond reasonable doubt that the actions of McAndrew and Kirschberg in causing net wages to be paid through intermediate entities without remittance of PAYG were in all respects carried out with the knowledge and approval of George Alex, through instructions conveyed both directly and via Loccisano. From mid April 2019 when Bryers' became involved I am satisfied that his actions, also, were agreed to by George Alex. Those inferences arise strongly from the three principal circumstances considered at [28] above. The only alternative hypotheses are that the other four offenders carried on the non-remittance of PAYG in secret from George Alex or that they proceeded with non-remittance openly but without ever obtaining George Alex's approval. Those hypotheses can be excluded as not reasonably possible.
It follows from the above that George Alex was the principal of the conspiracy, without whose agreement it would not have been put into effect or continued. His directions and approval were continuous throughout the charge period and were, at every point, a necessary condition for the other conspirators' acts in furtherance. George Alex was the principal beneficiary of the fraud. The gravity of his conduct is not in the least reduced by his perceptions, claimed on his behalf by counsel, that he was owed a lot of money by Kevin McHugh, that he sought return of money he had loaned to the business in July and August 2018 and that he was entitled to commission for introducing clients. Legitimate claims or expectations of payment in commerce do not mitigate the criminality of adopting dishonest means to enable recoupment.
In seeking to minimise George Alex's criminality his counsel submitted a long list of things that he did not do, such as personally applying for incorporation of any of the intermediary companies, or recruiting nominee directors, or arranging the invoice financing of the GHRC/CPC business. His lack of involvement in those mechanical steps is beside the point to the gravity of his offending. Those who did perform the executive acts in furtherance of the conspiracy acted under his approval and for his benefit. They would not have undertaken any of their fraudulent actions, in connection with the labour hire business that George Alex owned and controlled, but for his criminal agreement with them to do so.
Through implementation of the conspiracy not to remit PAYG, George Alex received distributions to himself, his family and his friends totalling $2.375 million. That amount was available from the PAYG withheld from the wages of workers and staff. There is no evidence from which the Court could determine any monetary value of any legitimate work done by George Alex in the conduct of the business.

[40]

Kirschberg

For the first half of the charge period Kirschberg's acts in furtherance of the conspiracy to defraud were of a similar nature to those of McAndrew. From 7 August 2018 to 29 March 2019 he was active in causing net wages to be paid through Prime's bank accounts, without remittance of PAYG. I find against him that the Payroll Services Agreements and Prime invoices that he cause to be prepared were fraudulent devices. It was submitted on his behalf that he relied upon legal advice in relation to the Agreements and that his moral comparability is therefore reduced. I reject that submission. Whatever the solicitor who drew the Agreements may have thought about their potential utility, Kirschberg knowingly did not implement them in the fundamental respect of causing GHRC/CPC to transfer the scheduled Fees to Prime. There was no evidence that the solicitor advised Kirschberg he would be acting lawfully by having Ms Turkington distribute net wages out of the Prime account, without providing Prime with sufficient funds to remit PAYG, in circumstances where he had no grounds for believing that McHugh had independent capacity, or the will, to remit PAYG on Prime's behalf.
Kirschberg arranged for incorporation of the ACN companies in December 2018 and he caused net wages to be paid through those entities from January 2019, again without remittance of PAYG. He joined in causing the changeover to the use of the ACN companies' bank accounts when he knew that Prime's account could no longer be relied upon because it was about to be garnisheed (and then was in fact garnisheed) for unremitted PAYG. He subsequently caused the net wages to be passed through the Queensland Services companies, again with no remittance of PAYG.
On sentence Kirschberg's counsel submitted that in the early months of 2019 he had expressed a desire that PAYG be remitted. Reliance was placed upon intercepted phone conversations. I find from the content and context those calls that Kirschberg was referring only to relatively small amounts of PAYG for which GHRC/CPC was potentially liable because they were withheld during a period of transition from the use of Prime as an intermediary to the use of the ACN companies and the Queensland Services companies. He was not urging the payment of all PAYG that had been withheld from wages in the past, or was presently payable, or would be withheld in the future.
The evidence does not show that Kirschberg took any active steps to initiate the next stage of the fraud after the Queensland Services companies, namely, the payment of weekly net wages through API from the end of May 2019. It is not apparent that he played any part in the incorporation of AOA, NWHS or QTI or that he did anything in concert with McAndrew, Bryers or Loccisano to cause net wages to be paid through those companies' bank accounts. The amount of PAYG that was not remitted from labour hire workers wages up to the end of Kirschberg's active involvement with the Queensland Services Companies was $4,840,223. The amount of unremitted PAYG deducted from staff wages in more or less the same period, up to the end of the use of GHRC Administration Pty Ltd as an intermediary, was $463,848. Thus the total loss to the Commonwealth resulting from the implementation of the conspiracy during Kirschberg's active participation was $5,304,071.
Kirschberg's disengagement was not motivated by moral compunction about the ongoing fraud upon the ATO but by his concern about the absence of service level agreements to shield him from financial liability for the defaults. Before retreating from the labour hire business in August 2019 he did not endeavour to put an end to the fraud by agitating for PAYG to be remitted.
Kirschberg maintained infrequent phone contact with McAndrew after August 2019. They discussed the decline in volume of the GHRC/CPC business, the difficulty of funding the weekly distributions demanded by George Alex and Locissano and McAndrew's anxiety about the risk that the ATO would pursue payment of PAYG, particularly against himself. I am satisfied that Kirschberg was made aware through those conversations that net wages continued to be paid through a succession of intermediary companies without remittance of PAYG, albeit that he did not play a practical part in the process.
From July 2018 to January 2020 Kirschberg received from the business fairly regular monthly payments that appear to have been salary or director's fees, totalling about $290,000 over the two years. A further $376,000, approximately, was distributed to him or to entities through whom he benefited, for a total of $666,000. On the balance of probabilities some part of his total receipts was remuneration for legitimate activities of directing the labour hire business. For one year of part-time involvement as a director not based in Queensland, I am not satisfied that the legitimate part could have been any more than a small proportion, well below half, of the total received.

[41]

McAndrew

Throughout the 22 months during which the conspiracy to defraud was carried out, week by week McAndrew caused the transfers of net wages from GHRC/CPC to the intermediaries, consciously and deliberately not transferring gross wages and making no provision for PAYG to be remitted from elsewhere. As the offenders decided upon each change from one intermediary to the next, McAndrew directed Ms Turkington regarding the bank account to which she was to upload the ABA files: T 1960, 1965. Intercepted phone conversations captured McAndrew giving directions of that nature: Recordings 121 (3 April 2019); 184 (17 April 2019); 247 (7 May 2019); 253 (9 May 2019); 311 (29 May 2019); 322 (4 June 2019).
I am satisfied beyond reasonable doubt that it would have been apparent to McAndrew in the period August 2018 to the end of 2019 that loss was being caused to the Commonwealth at the rate previously mentioned of about $1 million every eight weeks. In particular, from 18 November 2018 McAndrew received Weekly Analyses that showed total gross and net wages. At a glance, by simple arithmetic, he would have seen the amount of PAYG being withheld and not remitted. In 2020 he must have been aware of the continuing high rate of loss to the Commissioner, albeit less than during the previous 18 months. With that knowledge McAndrew continued to execute the fraud, moving the wage payment function from company to company in an endeavour to keep financial liability away from himself as a director of GHRC and CPC.
All the while, McAndrew complied with the demands of George Alex and Loccisano to make large payments for the personal benefit of George Alex, his family members and associates, at the rate of $100,000 per week for a substantial part of the charge period. McAndrew knew that the cash flow of the business could not have supported that distribution if gross wages had been transferred each week to the intermediaries, to allow them to remit PAYG. With knowledge that PAYG was being withheld and retained, McAndrew frequently lamented to Kirschberg and later Bryers that the cash flow of the labour hire business could barely sustain the weekly distribution that George Alex demanded. He knew that the weekly payments for the benefit of George Alex left no reserves in GHRC/CPC for payment in arrears of PAYG at any future time. He did not contemplate any such payment being made.
In carrying out weekly funds transfers and net wage distributions as necessary to further the conspiracy, McAndrew acted in close concert with Kirschberg from July 2018 to April 2019. He joined with Kirschberg to have the Payroll Services Agreements drawn up and executed. Far from raising any reasonable doubt about McAndrew's fraudulent intent, those Agreements and the Prime invoices prepared under them were a device, never intended by him to have legal effect or to be complied with by Prime remitting PAYG, and only intended to put the ATO off in any attempt it might make to recover the liability from the only possible source of payment, GHRC/CPC.
From April 2019 to the date of the arrests McAndrew acted in close concert with Bryers, in the selection and establishment of wage paying entities, in making weekly transfers of net wages to those entities and in directing Ms Turkington with respect to the bank accounts to which ABA files were to be uploaded. It was submitted on McAndrew's behalf that his role in the conspiracy was diminished by the circumstance that he was "dispensable". It is true that some other person could have filled the role of managing director of the labour hire business, transferring GHRC/CPC's funds and directing staff to pay only net wages. However, there had to be someone in that role. On the facts of the case it was McAndrew. He had a large active role in furtherance of the conspiracy to defraud for the whole of its duration.
McAndrew was subordinate to George Alex. Although he was a director of both GHRC and CPC for most of the charge period, in practical terms McAndrew acted at the direction of George Alex and would have faced conflict if he had caused PAYG to be remitted when due. That could only have been done at the price of not transferring the $100,000 per week that George Alex demanded. However, it was open to McAndrew to cease his involvement in the fraud by resigning his directorships and his role as general manager. He kept on, furthering the conspiracy day-to-day, in order to hold his position and continue receiving his salary.
McAndrew received regular monthly payments from the business equating to approximately $300,000 per annum over the two financial years up until his arrest. For the legitimate aspect of his activities of running the labour hire business full-time from the Queensland head office, I am satisfied on the balance of probabilities that McAndrew would have been entitled to a large part of what he received over the two years. A significant proportion must be regarded as a bonus, or a share of the proceeds, for implementing the tax fraud.

[42]

Loccisano

In July and August 2018 Loccisano used his company Pasloc Pty Ltd as a conduit for funds owned by George Alex to be deposited to the bank account of Prime, to cover distributions of net wages to labour hire workers for a few weeks. The Crown has limited its case to exclude those transfers. It does not rely upon them as acts in furtherance of the conspiracy in count 1. Similarly, Loccisano's emails in late September and October 2018 seeking repayments of the deposits that he had made to the Prime account were not in furtherance of the count 1 conspiracy.
Between the commencement of the charge period and April 2019, Loccisano's role in the count 1 conspiracy consisted mainly of conveying messages from George Alex to Kirschberg and McAndrew and vice versa. I am satisfied beyond reasonable doubt that such messages were conveyed, concerning non-payment of PAYG, distribution of net wages through the bank accounts of Prime and subsequent companies and disbursement from GHRC/CPC of the $100,000 per week for George Alex's benefit. In mid-April 2019 Loccisano arranged the installation of Messrs Sotiropoulos and Duarte as directors of the ACN companies, which furthered the conspiracy for the next three pay periods until the Queensland Services companies' bank accounts were available to be used.
Over the 12 months from May 2019 Loccisano's role in the fraud was limited to that of messenger for George Alex, until late April 2020 when he became more directly involved in the machinery of distributing net pays. The greater executive involvement occurred through the utilisation of bank accounts of NWHS, WHT and QTI. The total amount of the unremitted PAYG in respect of workers' wages distributed through those companies was $742,333.
Loccisano's part in the count 1 conspiracy did not involve great initiative on his part. He was subordinate to George Alex and he had no independent authority over McAndrew, Kirschberg or Bryers. The evidence does not establish that Loccisano was the author of decisions about transferring funds for payment of net wages without remittance of PAYG, until he agreed to the use of NWHS and QTI over which he had control through Messrs Sotiropoulos and Yianaloukis. The total financial benefit derived by Loccisano from the part he played in the conspiracy to cause loss to the Commonwealth was ion the order of $600,000.

[43]

Bryers

Bryers' principal acts in furtherance of the conspiracy to defraud were as follows: April 2019: arranging incorporation of the Queensland Services companies, causing bank accounts to be opened in the names of those companies and procuring Mr Gill to serve as the companies' director and bank account signatory. April to May 2019: advising Kirschberg and McAndrew to transfer to the Queensland Services companies the weekly net wages for distribution and to cause the ABA files to be uploaded to those companies' accounts; instructing Mr Gill to effect payment of net wages out of the accounts. April to May 2019: arranging incorporation of API and establishing its bank account; procuring Mr Hegedus to serve as director of the company and to be a signatory on the bank account. He coordinated with McAndrew and Mr Hegedus the regular weekly transfer of funds from GHRC/CPC to API's account and the uploading of ABA files by Mr Hegedus after transmission from Ms Turkington. Bryers instructed Mr Hegedus to make regular payments out of the API account to Locissano's company and to Bryers' own company. March 2020: advising McAndrew on steps to be taken to try to obtain release of the $117,000 garnisheed in API's account; assisting with preparation of a statutory declaration of Mr Hegedus, to be submitted to the ATO for the same purpose. March 2020 to 23 April 2020: instructing Mr Bracknell, in his capacity as director of AOA and signatory of AOA's bank accounts, to distribute net wages to labour hire workers; advising McAndrew to make regular weekly transfers of funds for net wages from GHRC/CPC to AOA.
Bryers' was subordinate to George Alex in the conspiracy. George Alex could terminate Bryers' engagement as a consultant at any time. However, Bryers' acts in furtherance were very significant to the execution of the conspiratorial objective. He had the semi-professional knowledge and experience to be able to incorporate new companies that would serve as intermediaries for the distribution of net wages and he had connections with people such as Messrs Gill, Hegedus and Bracknell whom he introduced to act as directors under his instructions. He professed knowledge of ATO methods and purported to advise the other offenders on risks of detection of their fraud. Bryers' participation in the conspiracy was in the capacity of a professional consultant, utilising his skills to encourage and prolong the defrauding of the Commissioner in consideration for the payment to him of handsome fees.
Bryers' instrumental role lasted for one year, from mid April 2019 until late April 2020. From then until the arrests he had no significant involvement. For those last 2½ months immediately preceding the arrests, George Alex took the operation of net-wage-paying intermediaries "in-house", utilising companies controlled by Loccisano; namely, NWHS, WHT and QTI.
I am not satisfied on the balance of probabilities that Bryers' efforts to develop and implement a franchising structure were benign, in the sense of being intended to create corporate relationships or a pattern of transactions whereby PAYG would be remitted in compliance with the Taxation Administration Act. I am not satisfied on the balance of probabilities that any of Bryers' recommendations to his co-offenders or his planning with respect to a revised corporate structure were directed to achieving reporting and payment compliance. I therefore do not find that his pursuit of the franchising possibility mitigates the gravity of his offending. On the other hand, nor am I satisfied to the criminal standard that Bryers' work on the franchising model in any way furthered the conspiracy to defraud. The exploration in the trial of Bryers' ever changing franchising proposals came to nothing. The jury could have been spared the voluminous evidence that was adduced on this subject.
During the period of Bryers' active implementation of the conspiracy to defraud the PAYG not remitted was $4,767,377 in respect of labour hire workers and $286,218 in respect of staff, a total of $5,053,595. I am satisfied to the criminal standard that Bryers received a benefit to himself of at least $800,000 as a result of his participation in the conspiracy. It is not possible to quantify the amount precisely but the Crown and Bryers agree that this figure is at the lower end of the range.

[44]

Detail of the facts of count 2 - conspiracy to deal with proceeds of crime

Funds that were available to the GHRC/CPC business and that could have been applied to the remittance of PAYG were instead transferred from the bank accounts of GHRC/CPC and some of the intermediary wage-paying companies, directly or indirectly, to bank accounts in the names of 20 other companies that were under the control of one or more of the accused. Six of those companies operated flow-through bank accounts, four of them in Australia (Group C Australian Entities, in the Crown's terminology) and two in Singapore (Group C Singapore Entities). The remaining 14 Australian companies (designated Group D) ultimately received the funds that passed through the Group C Entities. The Group D Entities thus received funds that might have been applied in remitting to the Commissioner the PAYG of the GHRC/CPC labour hire business.
George Alex's directions to Kirschberg and McAndrew to transfer funds from GHRC/CPC and/or intermediary companies to companies through which he derived financial benefit for himself and through which he conferred financial benefit on family members and associates were frequently conveyed through Loccisano. Loccisano also controlled the companies and bank accounts through which funds were transferred for George Alex's benefit.
The principal movements of funds over the charge period for count 2 were as follows: 1. Between 9 November 2018 and 25 May 2020 regular weekly transfers were made, to a total of $6,939,200, either directly from a GHRC/CPC account or from the account of API. The transfers were to Loccisano's companies: D & B Plant Hire Pty Ltd for some of the time and otherwise Online Distribution & Supply Pty Ltd. The average weekly amount was $100,000 up to and including 16 December 2019 and $38,000 per week thereafter. 2. Between 7 December 2018 and 21 July 2020 approximately $147,000 was transferred from GHRC/CPC bank accounts to a Gold Coast real estate agent in payment of rent for a unit used by George Alex and his family and associates. 3. On about 5 April 2019 $190,000 was transferred from GHRC Unit Trust through the bank accounts of two of Loccisano's companies to a Gold Coast real estate agent in payment of the deposit for a unit at 3 Hanlan Street, Surfers Paradise. The property was purchased in the name of AGIM Holdings Pty Ltd, a company controlled by McAndrew. AGIM Holdings Pty Ltd held it on behalf of George Alex. 4. Between 5 October 2018 and 8 March 2019 a total of $3.4 million was transferred from GHRC/CPC, through other entities' bank accounts, to an account of Stanton Oxford Funds Management Pte Ltd at Maybank in Singapore. On 15 May 2019 $1.325 million was transferred from that account to Adelphi Finance Pty Ltd, controlled by Kirschberg. With an additional $388,000 transferred from GHRC/CPC to Adelphi Finance Pty Ltd on 17 May 2019, a total of $1.713 million was applied in settlement of the purchase of the Hanlan Street property.
Evidence adduced in the trial identified a number of other less significant transfers from GHRC/CPC directly or indirectly to the benefit of one or more of the accused or their corporate entities. The total amount of the principal funds movements referred to above, combined with numerous lesser transactions, was of a similar order to the estimated $10.12 million of unremitted PAYG. For the purpose of describing the scale of the dealings with proceeds of crime in count 2, it is not necessary to recount the intricate detail of the Crown's tracing evidence. Substantially the whole of the amount of loss caused to the Commonwealth by non-remittance of PAYG was dealt with by the offenders under this conspiracy in contravention of s 400.3(1) of the Criminal Code.

[51]

S 16A(2)(m) - character, antecedents, medical condition

George Alex was 47- 48 when the conspiracies were on foot and he is now 53. After leaving school his formal training in the building industry was interrupted by the untimely death of his father, which necessitated his commencement in full-time employment and caused lasting depressive symptoms. The Court has been provided with very little information about his work history. He told Dr Dayalan, a psychiatrist who prepared a report for the sentence proceedings, that he commenced a labour hire business at the age of 18 and sold it 24 years later in 2012, then began a business selling construction materials in 2015. George Alex's wife has stated that his first employment was under a delivery contract with Carlton Brewery. The Court has no clear picture of his past legitimate income generating activities from which to form a view about future prospects of earning a living by lawful means.
The offender has been married for 33 years and has four children of that marriage, all in early adulthood. His family life is stable and mutually supportive. His criminal record has no entries for previous offences of dishonesty. George Alex was convicted in May 2015 of using a carriage service to make a threat to kill, which occurred in the context of a romantic relationship that soured. He is not able to claim leniency on the basis of prior good character. On the other hand, while there is a need for specific deterrence, that factor is not elevated by any proven past history of recidivist dishonesty.
Character referees from whom letters have been provided to the Court attest to George Alex's devotion and generosity to his immediate and extended family. His sister has a son, now aged 35, who suffers a lifelong disability. George Alex has had this nephew and his carer live with himself and his wife for extended periods. He has taken a genuine and constructive interest in the young man's welfare.
There is also evidence of his financial support for the Greek Orthodox Church. Community generosity of that kind cannot be given significant weight where the crime for which sentence is to be passed is one of fraud in relation to the payment of taxes. A citizen's first financial duty to the community is to comply with taxation law. That consideration is acute in the present case, where the tax not remitted was deducted from workers' wages. The offenders diverted to themselves the workers' contribution to public funds.
George Alex's legs were badly crushed in a motor vehicle accident at the age of 23 years (1994). He was standing at the back of his stationary vehicle when another vehicle collided from behind. After multiple orthopaedic procedures the fractured bones united and skin grafts were used to cover the depleted and deformed soft tissue. The left leg was the most severely damaged and only limited function could be restored. Pain has been chronic and severe since 2014. Remedial surgery of the left leg was required in late 2018. The lower left leg is vulnerable to infection, apparently due to poor circulation in the area of surgical repair. Because of the lost soft tissue in that region there is a risk that any infection may spread to the bone.
To maintain the health and functionality of the lower left leg George Alex requires physiotherapy, which is available from a trained physiotherapist in custody only at infrequent, sub-optimal intervals. There is no evidence before the Court as to the nature of the physiotherapy manipulations or exercises that are required, nor as to the extent to which such exercises can usefully be undertaken independently in a cell or yard. Ideally, hydrotherapy would be indicated but that is not available at all within the prison system.
The result is that George Alex's time in custody will be significantly more onerous than would be the case for the general prison population. It is likely that medically managed pain relief will not be promptly available and there may well be delays in attending to any infection of the wound site. I accept that George Alex will suffer heightened anxiety about management of his injury and about risk of further deterioration of the limb.
Dr Dayalan has diagnosed George Alex with bipolar affective disorder type 2. He has a history of major depressive episodes and hypomanic episodes. As a result of his introduction to oxycodone medication for relief of pain in his leg, George Alex has opioid and benzo diazepam usage disorders, now being managed in custody with buprenorphine opioid substitute. I accept that these mental disorders will contribute to his time in custody being additionally onerous. I will shorten the non-parole component of George Alex's sentence to allow for the burden in custody of both his physical and mental disorders.
Although Dr Dayalan is of the view that George Alex's chronic mood disorder and use of opioids "probably impacted on his cognitive functions that are relevant to the exercise of sound judgment around the time of the offence", not satisfied on the balance of probabilities that any mental disorder was causative of the offending in a manner or degree that would reduce his moral culpability. The conspiracy was on foot for two years. It was not a momentary or impetuous lapse that could be attributed to clouded judgment. Further, the recordings of George Alex's conversations at a number of points during the charge period show him well in control of his own decision-making. One example is from April 2019, when he explained to Kirschberg at length why Messrs Duarte and Sotiropoulos were not suitable directors of the ACN companies.

[53]

S 16A(2)(f), (j), (ja), (n) - contrition, deterrence, rehabilitation

George Alex remains in denial of his offending. He has shown no insight or acceptance of responsibility. In those circumstances and with no substantial evidence to suggest that he has a capacity for honest employment or business in the future, I am doubtful that George Alex will be rehabilitated. His sustained course of offending against the Commonwealth, as the principal of the two conspiracies, suggests to me a risk of future offending which is not allayed by anything put before the Court on sentence.
Throughout the charge period George Alex exercised control, through others, over very substantial funds. He initially caused large injections of capital into the labour hire business in the period April to August 2018, from shortly before the takeover from McHugh and continuing for about two months after the commencement of his own control of the business. Thereafter he exercised control over the removal of substantial funds from the bank accounts of the business to his benefit. All of this took place while he was an undischarged bankrupt, evidently without disclosure to his trustee who otherwise would surely have seized funds from him. Throughout the trial and in the sentence proceedings George Alex's case was presented without any attempt to disclaim this apparent defiance of the bankruptcy legislation. This conduct is a further indication of the risk that George Alex will re-offend in dishonest ways after his release. Specific deterrence is therefore an important objective of the sentence to be fixed, in addition to the general deterrence that is called for in sentencing for tax fraud.
George Alex's counsel has pointed out that the trial was conducted on behalf of George Alex without protracted pre-trial argument or excessive objections to evidence or unnecessary applications in the absence of jury. The same can be said for the conduct of the other defence cases. I regard that circumstance as neutral in the determination of penalty. Once the accused determined to put the Crown to proof, it was in the nature of their wrongdoing and of the charges that the trial would be relatively long. It need not have been as long as it was. Prolongation was certainly not the fault of defence counsel.

[55]

Time served on remand, restrictive conditions of bail

The Crown and the offender agree that he spent 106 days on remand in custody up to and including the first day of the sentence proceedings, 21 November 2024. There have been an additional 14 days up to and including 5 December 2024. The commencement date of his sentence should therefore be backdated by 120 days to 8 August 2024.
It was submitted that there should be some further backdating in recognition of the offender having been constrained by strict conditions of bail for 2 years and 8 months of the period after his arrest and before trial. The bail conditions during the period included the following: Not to leave home save for the following purposes: 1 to attend court; 2 to report [to police at Marrickville station]; 3 to attend conferences with his solicitor; 4 to attend medical appointments
For the first two years while the above condition was in force, George Alex was required to report to police twice daily. The reporting condition was reduced to once daily for the last 8 months of the house arrest condition. Other than R v Cartwright (1989) 17 NSWLR 243, the cases cited in support of backdating to allow for "quasi-custody" while on bail have all concerned offenders who attended drug or alcohol rehabilitation facilities, usually as residents or inpatients. A number of such cases are referred to in Kljaic v R [2023] NSWCCA 225 at [28]. Rehabilitation facilities have institutional structures that require participants to observe rules of conduct while attending. Those features, which have been regarded by the courts as "quasi-custodial", are not present where the only relevant bail condition is confinement of the accused person to his own home. There has not been cited to the Court any case in which the commencement of a sentence has been backdated to any extent solely on account of bail conditions requiring confinement to a home address and frequent reporting to police.
In R v Cartwright the offender provided assistance to authorities. The Court of Criminal Appeal found the following facts: [During] the period of eight months when he was on bail before the trial commenced, he was in fact only nominally on bail. What had happened was that bail was granted on conditions to the effect that the applicant resided in Canberra, that he reported daily there to the Australian Federal Police, that he obeyed their reasonable directions and that he accepted their supervision. This arrangement was to enable the applicant to give further assistance to the authorities in their inquiries. He was unable to return to his home in Sydney.
The Court held that "this period of quasi-custody should have been taken into account in the circumstances - by giving credit for a substantial proportion (but not the whole) of that period". In R v Cartwright, as in the cases concerning residential rehabilitation, there was a degree of authoritative supervision and restriction on liberty that was not present for George Alex while he was confined at home on bail. In fixing an appropriate non-parole period I will take into account in a general sense that for 2 years and 8 months his bail conditions were restrictive in the respect noted. That will be a factor, with others such as his medical condition, in moderating the non-parole period relative to what it would have been had those considerations not been operative. However, I will not accord any specific measure of backdating of the whole sentence on account of the restrictive bail.
After the jury's first verdict of guilty was returned against George Alex, on count 2 (23 August 2024, T 524), I refused the Crown's request that bail be revoked, upon the offender's application that he be permitted to continue detoxification treatment at home under the care of his doctor. The Court was informed that the offender was bedridden. It was made a condition of his continued bail that he not leave his home, in circumstances where the Court was told that he would in any event be unable to do so while under treatment. I reject the submission that the few days of George Alex's confinement at home in those circumstances should be treated as quasi-custody.

[56]

S 16A(2)(m) - character, antecedents, age

Kirschberg was 60-61 at the time of offending and is now 66. He was born and raised in New Zealand. He obtained a Bachelor of Social Sciences degree from the University of Waikato in Hamilton in about 1980. During the remainder of that decade and into the early 1990s he worked in sales positions and, for six years, was self-employed in a partnership business selling computer equipment. Kirschberg moved to Australia in 1993 to enable his partner to pursue a career opportunity that had been offered to her in Sydney. By 1998 he was working in finance, first as a financial advisor in the employment of banks and then as a self-employed provider of invoice financing, including to the labour hire industry.
Kirschberg's prior good character, both in personal life and business dealings, is attested by affidavits of family members, lifelong friends and business associates. That evidence portrays a man of modest tastes and lifestyle, with integrity and sound values. Kirschberg has firm connections with three brothers still living in New Zealand and with members of his partner's family who reside in the United Kingdom.
Kirschberg's participation in these conspiracies was an aberration from the course of his life in all other respects. He has no relevant criminal record. He is entitled to leniency on account of his good character. He did not utilise his good character in the perpetration of the offences. However, in his acts in furtherance of the conspiracy and in the conduct of his case at trial and on sentence, Kirschberg has exhibited a serious blindspot with respect to tax evasion. He has deluded himself that default in remittance of PAYG, withheld from wages paid in connection with the business he was running, could only be brought home to him in the form of financial liability and then only if the companies of which he was a director were to be held liable. In a grave departure from his own values he has wilfully shut his eyes to the obvious dishonesty of deliberately causing irrecoverable loss to the Commissioner of Taxation.
Kirschberg is in reasonable physical health. During the four years since his arrest, while on bail, he has understandably suffered depression and withdrawal from social interaction as a result of being charged. There is no significant compromise to his health that would make incarceration more than usually onerous. The length of the sentence to be imposed is not such as would leave him with a despairing sense of no useful life left after release on parole.

[60]

S 16A(2)(m) - character, antecedents, age

McAndrew was 56-57 when the offending took place and is now 62. It has been mentioned that he had a long career as a bank officer before retiring from that field to assist McHugh with his labour hire business from early 2018. McAndrew has been married for 39 years and has two sons in their thirties. Since his arrest in July 2020 he has suffered anxiety symptoms and depressed mood. His mental condition is described by Dr Nielssen as "an adjustment disorder, or a clinically significant reaction to an adverse life event". Dr Nielssen has assessed his prognosis as good, given that "the natural history of adjustment disorder is to resolve over time as the main cause of the condition recedes into the past". McAndrew has no acute medical disorders that would cause him particular difficulty in custody. He has in the past undergone an operation for prostate cancer, he has coronary artery disease that is stabilised with medication and he has been under regular dermatological review for potential skin cancers.
McAndrew is strongly supported by his immediate family, by his brother and by colleagues who worked with him in banking. All attest to his prior good character. He has no criminal record. He is entitled to leniency on account of his good character, which was in no sense exploited by him in the commission of the offence. Although McAndrew's commission of these crimes is anomalous against the background of prior good character, his offending conduct in furthering the conspiracies exhibits wilful, selective moral blindness and delusion similar to that of Kirschberg. He, like Kirschberg, concerned himself with trying to ensure that financial liability for the loss suffered by the Commissioner would be kept from his door. He disregarded the obvious dishonesty that was inherent in deliberately causing PAYG not to be paid and in distancing himself from the defaults by using the 10 intermediary companies.
The level of McAndrew's receipts from the conspiracies shows that he did not participate out of greed. I am satisfied that he acted to further the criminal agreements, in compliance with the wishes of George Alex and Loccisano, in order to retain his employment. He was not an initiator but he was not strong enough to refuse to carry out the scheme - and to resign, or accept dismissal, if that is what it came to.

[71]

Relativity of the conspirators' sentences

The criminality and culpability of George Alex is greater than that of his co-conspirators on both counts 1 and 2. Both of the criminal agreements were entered into and carried out for his benefit and in relation to his business. The motive force for implementation of both conspiracies was George Alex's determination to maximise and accelerate extraction of money from the labour hire enterprise. In McAndrew's words, his approach to the business was a monetary form of "rape and pillage".
The objective criminality of the other four parties to the conspiracy to defraud, is a step down from that of George Alex. Differences of participation amongst those four do not, alone, make any large contribution towards differentiating the length of their sentences. Kirschberg and Bryers, for example, were active in furthering the conspiracy for only half the period of McAndrew's executive involvement but each of them derived more financial reward than McAndrew. Loccisano did less than Kirschberg or Bryers to implement the mechanics of the conspiracy, at least until NWHS and QTI commenced to be used from late April 2020. However, unlike them he was involved in one capacity or another for the whole charge period ars. Various of the metrics of gravity of offending point in different directions and tend to cancel out as between Kirschberg, McAndrew, Loccisano and Bryers.
A contravention of s 135.4(3) of the Crimes Act, or a conspiracy to contravene the section, may be committed by deliberately understating taxable income, by falsely claiming inflated tax deductions, by over claiming GST refunds, by failing to remit PAYG as in the present case, or in any of a myriad of other ways. In all such offending as it affects the Commissioner of Taxation there is a common feature of gravity. It is a fraud on all other taxpayers who lawfully pay what is due for the maintenance of government and the provision of services for the common good. The Victorian Court of Appeal in DPP (Cth) v Goldberg (2001) 184 ALR 387; [2001] VSCA 107 at [32] described the gravamen of this type of offending as follows: Tax evasion is not a game, or a victimless crime. It is a form of corruption and is, therefore, insidious. In the face of brazen tax evasion, honest citizens begin to doubt their own value and are tempted to do what they see others do with apparent impunity. At the very least they are left with a legitimate sense of grievance, which is itself divisive. Tax evasion is not simply a matter of failing to pay one's debt to the government. It is theft, and tax evaders are thieves.
Because of that essential characteristic common to all cases of tax fraud, there is a uniformity of seriousness across a wide range of individual instances, with the main determinant of greater or lesser criminality being the amount of loss caused to the revenue. On that measure, the cases show that where the amount concerned is in the multiple millions the offending is treated for sentencing purposes as lying in the upper level of seriousness, measured against the maximum penalty of 10 years imprisonment - subject to the impact of subjective sentencing considerations. The following decisions illustrate that: In R v Walters [2001] NSWSC 640 Sully J passed sentence after trial for 10 counts of defrauding the revenue contrary to s 29D of the Crimes Act. That provision was the predecessor to s 135.4 of the Criminal Code and also carried a maximum penalty of 10 years. Walters ran a bricklaying business through a series of companies, each of which in succession he abandoned after misappropriating PAYG deducted from the wages of his workforce. The total loss to the Commonwealth was $7.3 million over nine years of "phoenixing". Individual sentences were imposed with partial accumulation resulting in an overall effective head sentence of 7 years and 8 months. In El-Chaar v R [2007] NSWCCA 16 the amount obtained by fraudulent claims for GST refunds was slightly over $1 million. The claims had been processed with the assistance of a corrupt relative working in the ATO. Thirteen individual counts were laid under s 134.1 (obtaining property by deception), one charge for each of the claims that were lodged with the ATO over a period of one year. The offender pleaded guilty. This Court held that an overall head sentence of 8 years was not manifestly excessive. In R v Dunn (No 9) [2014] WASC 61 the offender was the architect of an elaborate scheme designed to create the appearance of deductible interest payments of $7.19 million (referred to at [17] and [47] of Heenan J's remarks on sentence), with an intended effect of reducing tax payable by $2.6 million (at [67]). The loss to the revenue was not actually realised. In passing sentence after trial, his Honour considered that a head sentence of 8 years would be appropriate but reduced it to 7 years on account of unusual personal circumstances (at [103]-[104]). Chang v R [2016] NSWCCA 296 concerned a conspiracy to claim excessive GST refunds, which resulted in an unrecoverable loss to the Commissioner of $2.7 million. After a trial in the District Court a head sentence of 5 years was imposed. The offender's sentence appeal was dismissed. In Dickson v R [2016] NSWCCA 105, where the amount of loss to the Commonwealth was over $100 million, the offender was resentenced in this Court to a head sentence of 9 years. A co-offender who assumed a lesser role received a head sentence of 7 years: R v Issakidis [2018] NSWSC 378. They were found guilty in separate trials. In R v Adam Cranston [2023] NSWSC 1004 the offender was one of the original planners a scheme under which PAYG was not remitted in respect of multiple employers' payrolls, in an amount exceeding $105 million. The personal gain to the offender was $6.8 million. He was convicted at the conclusion of a long trial and sentenced to 9 years for conspiracy to cause loss to the Commonwealth. Other sentencing decisions in respect of offenders involved in the same conspiracy include R v Anquetil [2020] NSWSC 995 (starting point of 9 years and 4 months for conspiracy to cause loss, discounted for a plea of guilty); R v Kitson [2019] NSWSC 1109 (9 years, before discounts; appeal dismissed in Kitson v R [2022] NSWCCA 166) and R v Dev Menon [2023] NSWSC 768 (8 years and 6 months, after trial).
In the conspiracy to deal with proceeds of crime charged in count 2, again the criminality of George Alex is greater than that of the other four but the seriousness of the offending is roughly equal as between those four. In my view there is a significant distinction for sentencing purposes between dealing in proceeds of crime as a stand alone activity, where the separate offending that generated the proceeds has been committed exclusively by others, and on the other hand dealing in proceeds that have been derived from the money launderers' own predicate crime. The first category includes carriers of cash, holders and operators of bank accounts and the like, who handle and move illicit profits of crimes carried out by others, for example large-scale drug supply. The gravity of such stand alone dealing in proceeds lies in the assistance that it affords to organised crime generally. It incentivises the perpetrators of predicate crimes by enabling them to reap the rewards of their wrongdoing. Head sentences in the order of 12 years have been passed in cases of that type where multiple millions of dollars in proceeds of crime have been dealt with.
The present case is of the second type. As the offence in count 1 was a fraud generating significant retained funds in the form of unremitted PAYG, the offenders' criminal dealing with those funds was largely an incident of that primary offending. The additional criminality in count 2 lay in dispersing and expending the funds so that they were no longer available to meet the statutory obligation or to satisfy any recovery attempt by the ATO. Seen in that light, the gravity of the dealing in proceeds in the present case is limited by its connection to a single predicate offence committed by the same parties, to which the dealing was an adjunct and which is punishable my no more than 10 years imprisonment.
Having regard to the maximum penalty of 25 years under s 11.1(5) and s 400.3(1), a significant term of imprisonment must be imposed on each offender for conspiring to deal in proceeds of crime in an amount of over $10 million. However, in light of the considerations mentioned above their respective sentences on this count should not be of any greater length than their sentences for the conspiracy to defraud and there should be only limited accumulation of the sentences, sufficient to reflect so much of the criminality in count 2 as is not comprehended in count 1.
Apart from the distinction between George Alex and the other four with respect to objective criminal responsibility and culpability, differences between the offenders' individual subjective circumstances will account for some variation in the length of head sentence, degree of accumulation and proportion of non-parole period that I intend to incorporate in the sentencing orders.

[72]

Particulars of Connell's conduct as an accessory to Bryers

According to the agreed facts, Connell "worked as Bryers' business development manager". The two were associated in business prior to 2019. On 17 January 2019 Connell and Bryers together met with the other offenders to discuss what services Bryers could provide to them. The agreed facts do not state what nature of assistance was proposed or accepted.
Connell's very limited contribution to the fraud commenced with him agreeing to act as nominal director and shareholder of ACN 481 and ACN 543 from April 2019. Ultimately his services in that respect were not required. Instead, Loccisano's nominees, Messrs Duarte and Sotiropoulos, were put forward and when they were rejected by George Alex, ACN 481 and ACN 543 were disbanded.
In an intercepted phone conversation Bryers described Connell's role in the following terms: He is not strong on anything else, but making friends with everybody and keeping friendships alive. […] He's got exceptionally wide connections. His job is to entertain people, make people happy. Go to meetings, keep everybody on a nice level keel, while I go about my business.
In fulfilment of that role Connell attended meetings on the Gold Coast with George Alex, Loccisano, McAndrew and others at which he advocated to them the utility of work that Bryers was undertaking, mainly with reference to the franchising proposal which, as it happens, did not contribute in any discernible way to the perpetration of the fraud. Connell kept Bryers informed of what transpired at the meetings, several of which Bryers himself did not attend. From listening to the intercepted conversations as they were replayed to the jury, it appears that much of what Connell had to report to Bryers consisted of the other offenders complaining about him and about each other. Connell's function of liaising, reporting and maintaining relations was of no real consequence to the carrying out of the fraud on the Commissioner.
With respect to the payroll of GHRC/CPC, the period of Connell's offending as an accessory is necessarily limited to the period in which Bryers' principal offending took place. As stated at [145] in relation to Bryers, during that period the PAYG not remitted was $4,767,377 in respect of labour hire workers and $286,218 in respect of staff, a total of $5,053,595.
The Crown submitted the following: Bryers, with the assistance of [Connell], provided significant advice to the conspirators about how the tax fraud could be improved through revised structures and how the conspirators could avoid detection by law enforcement agencies.
That submission must be taken as confined to the fraud with respect to GHRC/CPC's payroll because there is no agreed fact, nor any evidence from the trial, that Bryers advised on an improvement of structure with respect to non-remittance of Superform's PAYG. So far as the advice to which the Crown refers is Bryers' franchising proposal, the Crown never explained to the jury or in the sentence proceedings how the fraud concerning GHRC/CPC would be "improved" thereby. The evidence in the trial satisfies me that Bryers himself had no clear idea of how franchising would help with the non-remittance of PAYG or with concealment. If he did have such an idea, the Crown did not establish what it was, to any standard of proof. I do not accept that Connell assisted in the provision of "significant advice" to the conspirators, regarding franchising or anything else.
In relation to Superform, the agreed facts state the following: Bryers was also responsible for establishing and maintaining the scheme by which unremitted PAYGW was derived from Superform […]. Bryers did this by directing his associate, [William Samuel] Pahl, to set up Superform's KeyPay payroll software, and by obtaining the necessary information with which the payroll could be run. He then assisted with technical issues that arose with the processing of payroll from time to time.
From the evidence given in the trial, the fraud with respect to Superform was carried out by other offenders, who arranged with the principals of Superform that they would make a weekly transfer of that company's entire gross payroll amount to an entity that would then process the payroll. It was represented by the relevant offenders to the Superform principals that the nominated entity would use appropriate software to calculate and distribute net pays and that it would withhold and remit PAYG. Instead, those offenders distributed the net pays but misappropriated the PAYG. The setting up of KeyPay software for processing the payroll was a mechanical preliminary step. The fraud on the Commissioner was carried out by those who operated the bank accounts of the entity that processed the payroll. Between March and July 2020 they caused $3,048,275 of PAYG to be withheld from Superform wages and not remitted to the Commissioner.
Bryers did not control those bank accounts at any time. His involvement in the Superform fraud was very limited. Connell's accessory assistance was even more limited. The only step he took was to inform George Alex and/or Loccisano in March 2020 that, given the size of Superform's payroll, the amount of PAYG required to be withheld each week would be in the order of $200,000. Connell played no part in operating the bank accounts of the putative payroll processing entity or otherwise assisting the fraud.
It is an agreed fact that Connell received a personal benefit of $481,789 for his role in assisting Bryers with both the GHRC/CPC and Superform frauds. It is also agreed that he knew this benefit was sourced from unremitted PAYG. Most of the payments to Connell passed through Bryers' company Strategic Capital Resources Pty Ltd. Having regard to Connell's minimal contribution to carrying out the fraud, I infer that the generous level of payments to him was in large part Bryers' reward for his assistance in securing the other offenders' approval for payment of Bryers' own fees and charges. Bryers' demands to be paid were a constant subject of discussion and disagreement amongst the other offenders. Connell played a part in quelling the disputes. Also, by inference from the intercepted phone conversations, I am satisfied that Bryers distributed more to Connell out of the payments received into Strategic Capital Resources Pty Ltd by reason of their personal friendship and pre-existing business association. Connell's receipts were well above due proportion to his input.
The Crown accepted that "Connell's conduct was in the lowest category" relevant to the parts played by the conspirators in defrauding the ATO. That is a proper concession. The Crown nevertheless submitted the following descriptions of Connell's role: a necessary and vital role; a critical role; [Connell's] assistance to Bryers was vital to Bryers' commission of the tax fraud.
Those characterisations overstate the position insupportably. It is clear on the facts summarised above that Connell could have been dispensed with and not replaced, without the slightest inhibiting effect on the fraudulent non-payment of PAYG to which Bryers' acts, as principal offender, were directed. The role Connell fulfilled was not "critical" or "vital", whether performed by him or by a substitute. His conduct as an accessory may accurately be described as peripheral, insubstantial.

[75]

S 16A(2)(g) - plea of guilty

Connell was initially charged on 21 July 2020 with the two counts of conspiracy upon which the other offenders have now been tried. After committal to this Court, when first arraigned on 11 April 2022 he pleaded not guilty to the two conspiracies. On 22 June 2022 the Crown offered to accept a plea of guilty to the accessory charge for which he is now to be sentenced. Connell did not accept that offer when made and the Crown maintained the original two charges against him for another 19 months. There were substantial interlocutory procedures in this Court in relation to those two charges, including directions hearings with respect to the Crown's service of voluminous evidence, applications to vacate trial dates and a pre-trial hearing concerning the admissibility of intercepted phone conversations and summaries of financial transactions and other data.
Connell was passive with respect to the interlocutory procedures. He did nothing to protract or complicate them. His stance was consistent with the very small fraction of the Crown's evidence that in any way concerned his alleged adherence to the conspiracies or acts in furtherance of them. The evidence served on all accused included several thousand pages of banking, financial and other business records, dense summaries of countless facts in the corporate and tax affairs of more than 40 companies (including the intermediary wage payers and conduit companies through which unremitted PAYG was distributed) and some 10,000 pages of transcript of 140 hours of intercepted conversations. Connell was barely mentioned in that vast body of material, yet while the conspiracy charges were maintained his legal representatives were set the task of trying to discern whether the Crown could prove that the alleged criminal agreements were entered into by the other offenders and, if so, by what evidence the Crown would endeavour to establish Connell's adherence and acts in furtherance. I consider it doubtful that the Crown could have satisfied the jury that Connell became a party to either conspiracy if he had proceeded to trial. I reject the Crown's submission that his plea to the charge as an accessory is no more than recognition of an inevitable outcome with respect to the charges on which he was to have been tried.
In the circumstances, Connell's plea to the accessory charge was of very significant utilitarian value. It materially facilitated the course of justice. But for the plea, the Crown would have pressed on against Connell with the two conspiracy counts and his participation would have added to the trial's length, as an extra accused always does. He may well have been acquitted of both conspiracies. As it was, the trial placed immense strain on the jury by reason of its duration and the Crown's extravagant documentary and audio tender - insistently pressed despite the marginal or negligible probative value of much of the evidence and in the face of all efforts by the Court to limit the burden on the jury. Any further prolongation of the trial would have been intolerable.
In the above circumstances I consider it appropriate to discount the sentence that I would otherwise have imposed upon Connell by slightly less than 15% in recognition of his plea.

[77]

Parity

Connell's sentence must be in proportion to the sentence imposed on William Samuel Pahl following his plea of guilty to a charge in the same terms. On 31 March 2023 Judge Townsden in the District Court sentenced Pahl to imprisonment for 2 years and 6 months, to be released after 1 year and 3 months on recognisance to be of good behaviour for the remainder of his head sentence. The learned judge arrived at the sentence after allowing a discount of 25% on account of Pahl's plea.
The particulars of how Pahl aided and abetted Bryers were more concrete and more substantial than the particulars of Connell's accessory acts. Pahl had expertise in accounting and in payroll processing using software. He provided advice and technical expertise with respect to processing the payroll of GHRC/CPC's workers and staff through ACN 481, ACN 543 and each of the four subsequent intermediaries up to the end of the AOA period. He performed some of the payroll processing himself. Pahl assisted in the transition of GHRC/CPC's payroll from one software program to a replacement. He also assisted with migrating data within payroll programs when the other offenders changed the identity of the corporate intermediary.
Pahl from time to time gave instructions to Mr Hegedus, the nominal director of API, with respect to distributing funds that included the $100,000 going to the benefit of George Alex and lesser amounts to Strategic Capital Resources Pty Ltd, to McHugh and to Mr Hegedus himself. With respect to Superform, in about March 2020 Pahl set up KeyPay software to process the company's payroll and he assisted with the migration of data into that program. Thereafter he advised upon and worked to resolve technical issues in the processing of Superform's wages, as difficulties were encountered by other offenders in carrying out the withholding and fraudulent non-remittance of PAYG from that payroll.
The Crown conceded before Judge Townsden that Pahl's conduct was "in the lowest category of the participants and only Connell's conduct was less culpable". A comparison of his Honour's description of Pahl's activities, in the Remarks on Sentence, with the agreed facts regarding Connell, as summarised above, shows that the latter's culpability as an accessory was less by a very substantial margin. Pahl received less financial benefit from his offending, only $136,535, but I attribute Connell's larger receipts to factors not associated with the degree of his criminal involvement, as explained earlier.
Pahl was 39-40 years old at the time of his offending and 43 when he was sentenced. His antecedents and subjective case generally were comparable to Connell's. Pahl is not afflicted by any medical condition that would make his time in custody more onerous than that of the general run of inmates.

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Judgment (84 paragraphs)

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Cases Cited (17)