R v David Michael WILLS

District Court of NSW|2012-11-14

Mr Grant Brady (for the Accused) Mr Darren Robinson (DPP)

Mr Ross Hudson (for the accused) File Number(s): 2009/80902

Factual basis for sentencing 8It is my task to find facts not inconsistent with the jury verdicts. Matters adverse to the offender cannot be taken into account unless I am satisfied beyond reasonable doubt of their existence. Many of those facts can be resolved by reference to the jury verdicts and the critical allegations that founded them; allegations which must have been accepted by the jury. Some factual disputes simply cannot be resolved. Some do not need to be resolved. Many matters of fact, including those relating to Mr Wills' medical and personal circumstances are uncontroversial and still have some weight, despite the fact he did not give evidence on sentence. Other unsworn assertions, especially those which traverse the verdicts, must be given no weight at all: The Queen v Olbrich (1999) 199 CLR 270, at [24] [25] [27]; Weininger v The Queen (2003) 212 CLR 629, at [22] - [24]; Qutami v R [2001] NSWCCA 353. 9In 1998, Mr Wills was a top executive at Woolworths in charge of its Management Services Division (MIS). He was respected for his superior skills in this area. He was a leader in an emerging field. He was well rewarded. His opinions were respected and deferred to. 10In the mid 1990's Mr Wills was looking for a new Point of Sale system for all Woolworths' supermarkets. He took to the Senior Executives and Woolworths' Board a proposal that rather than purchase an established system tied to a hardware supplier, Woolworths should develop their own in conjunction with an Israeli company Az-Ben. Peter Henderson represented Az-Ben in Australia. Through his company Smart Retail Terminals (SRT) he also provided Woolworths with computer software and hardware services. Caroll Henderson managed SRT with her husband Peter. 11The jury by its verdicts did not accept there was anything criminally untoward in SRT's dealings with Woolworths. It is also clear that they did not accept the prosecution's proposition, which founded the principle conspiracy count, that Mr Wills' initial decision to recommend and push Az-Ben's product, APOS 2000 was from its outset, corrupt or tainted. 12It is however clear that the jury accepted beyond reasonable doubt that having chosen Az-Ben and APOS 2000 Mr Wills received corrupt benefits from that company's principle, Mr Benzion Weissman, for having shown favour to Az-Ben in its dealing with Woolworths. As the initial conspiracy was pressed as having related to the initial contracts both with Az-Ben and SRT the jury clearly decided that the crime proved occurred only after the initial Az-Ben / Woolworths agreement was entered into. The offences relate therefore to the receipt by Mr Wills of corrupt rewards or commissions or kick backs for favourable decisions made by Wills associated with the continuation and implementation of contracts, which benefited Weissman and companies associated with him. 13A complex example is count 32. Weissman and Kearns used Finnigan Computers Limited (FCL) to deposit $557,151 in CBH's Jersey account. Prior to that MIS had initiated a contract with a company Datatrack for the supply of Radio Frequency (RF) 'guns'. Datatrack paid a substantial sum to Weissman out of the money they were to, or had, received from Woolworth's to integrate their RF guns with the APOS 2000 programme. The Crown case, accepted by the jury, is that for his role in organising this transaction a corrupt commission was paid to him by Weissman to Wills. Weissman with assistance of a Jersey Solicitor Michael Kearns, used as a conduit, the Henderson's company, Finnigan Computers Limited (FCL). The timing and amounts paid by Woolworths to Weissman's International Retail Systems (IRS) and Datatrack indicate this is why about ½ million dollars went via a complex route to Mr Wills' CBH in August 1997. 14The jury's verdicts indicate a comprehensive rejection of most of Mr Wills' evidence and his version of events but they did involve some extension to him of the benefit of the doubt. This is entirely understandable, but his evidence that money was paid to him by Weissman for solely a future joint venture to market overseas APOS 2000 and other products could not withstand careful scrutiny. There may have been a proposed joint venture but consistent with the verdicts Mr Will's part in it was funded by money that flowed indirectly but consistently from money Weissman received from Woolworths, which money Mr Wills was instrumental in having paid to Weissman and which could only have been, given the verdicts, a corrupt reward for his services. Three examples should suffice: (1)The jury rejected Mr Wills' assertion money was sent to his BVI company only for a proposed future joint venture to market APOS 2000 and other products internationally. In doing so they must have accepted the uncontested evidence he received over 3 million dollars from Weissman. Much of the money was spent on his personal or own business interests. And, Mr Weissman, at no stage, requested the money be returned or otherwise accounted for. (2)Mr Wills played an important role in the Az-Ben - Woolworths negotiations which left Az-Ben with the international rights to the jointly developed product with only a modest return promised to Woolworths. (3)The rights to market APOS 2000 internationally were sold by Az-Ben to an American company, National Cash Registers (NCR) in March 1998, yet money for, as Mr Wills said, the marketing of APOS 2000 internationally continued to flow to Wills well after that date. That money included a substantial proportion of the money NCR paid to Az-Ben in June 1998 - a significant proportion of which went via front companies to the BVI company, Cross Border Holdings (CBH), of which Wills was the beneficial owner. 15Having rejected Mr Wills' version the jury must have accepted that he received payments from Weissman for the favours shown to Az-Ben, which flowed directly from the contractual arrangements he fostered. I am quite sure there was an arrangement for a joint business with Weissman and the Hendersons and for a time Kearns. It may be that part of the business had a legitimate basis or one that involved only a breach by Mr Wills' contract of his employment with Woolworths. What was illegitimate and criminal here were the funds sent to Wills by Weissman, their source and the subterfuge used to disguise both that source and the reason the funds were sent. 16This does not mean that Az-Ben's APOS 2000 product was necessarily a bad one or that Az-Ben and Weissman did not provide some proper services to Woolworths. What it appears the jury did accept was that where money went from Woolworths to Az-Ben a proportion of it was returned to Mr Wills as a corrupt benefit, 'commission' or 'kickback'. 17Having rejected Mr Wills version, this conclusion was inevitable given the uncontradicted evidence that Weissman, initially through the Henderson's FCL then his own IRS and then what he described as his "switch company", Retail Technologies (RT), funnelled money to Mr Wills' Cross Border Holdings (CBH). 18The Crown put forward Count 2 as a conspiracy to launder the proceeds of the first conspiracy. Rejection of Count 1 still left the jury with an option of accepting beyond reasonable doubt that Mr Wills either established or used the BVI companies set up by Kearns, for himself, the Henderson's and Weissman to engage in money laundering transactions. The necessary unlawful agreement established by the jury verdict must have been between Wills, Weissman and Kearns. While the Crown focussed at trial on the initial set up of companies in the British Virgin Islands with corresponding bank accounts in Jersey, the agreement as initially particularised and supported by the evidence, clearly showed not only Wills and others had an agreed intention to use these companies and accounts for money laundering but in fact carried that agreement out. 19The jury, by giving the benefit of the doubt to the Hendersons, clearly did not accept all the evidence of Mr Weissman and Mr Kearns in particular. Similarly, they did not accept the Crown proposition that there were corrupt dealings between Mr Wills and the Henderson's in relation to SRT's providing services to Woolworths. While there was a suspicion that some items supplied by SRT were over ordered, the evidence of those involved in these arrangements from both Woolworths and SRT cast doubt on the Crown's proposition the services were not provided or not properly rewarded. Wills' involvement in private parallel business dealings with the Henderson's appears to have breached his contractual obligations to his employer but that is not a matter I take into account as it is not the subject of any count that remains for sentence. 20Count 22: The jury were instructed that Count 22 and Count 23, which involved Mrs Caroll Henderson giving the benefit of $31,000 received by Wills, were related and that consistency would require similar verdicts for both counts. The jury could not agree on Count 23. I can only presume that having acquitted Mrs Henderson of most counts against her some jurors took the view that in all the circumstances a merciful verdict on this count was required. (I note the Director appears to have taken a similar view and that matter has now been no-billed). There seemed to me ample evidence in the documents held by the Henderson's (Ex 65) and the banking records (Ex 46) to justify both Mr Wills' and Mrs Henderson's conviction. It is difficult however, given the contested and contradictory nature of the evidence in relation to the other counts involving alleged favours to SRT, to find anything other than this was an isolated incident so far as that company and the Henderson's were concerned. It seems to me the "favour" found proved related to the parallel business arrangements in place between Wills as head of Woolworths' MIS and his proposed future overseas business dealings with the Hendersons. As a consequence I put this conviction in a decidedly less serious category than the other counts. It does not call for a custodial sentence. 21Money Laundering: Turning to the conspiracy conviction it seems clear the jury accepted that during the period of the indictment Mr Wills did conspire with Weissman and Kearns to launder the money through the various offshore accounts. While I have my suspicions, in order to reconcile the jury verdicts I could not find beyond reasonable doubt that Wills set up Cross Border Holdings solely for the purpose of hiding payments received from Weissman. Rather, I find he utilised an existing entity for that purpose. 22The specific money laundering conviction - Count 35 - is an example of how the money laundered was spent. The Crown (Sentence MFI 1, paragraph 12.2) accepts any punishment for Count 35 should be subsumed within that for Count 2: see s 55 Crimes (Sentencing Procedure) Act 1999). I agree. 23Uncharged Acts: While I have referred to the benefits flowing to Mr Wills from Weissman's dealings with NCR it is important to note that Mr Wills was not charged with a fraud on NCR. He is to be sentenced only on the basis of the specified amounts in each substantive corrupt benefit charge, here, in total just under $1.4 million. In submissions the Crown suggest that the offender should be sentenced on the basis of the total sum of over $3.7 million deposited into CBH (MFI 1 para's 8 & 9). I cannot do so. It seems to me that to retain consistency with the jury verdict, my focus must be on the laundering of that $1.4 million. A person should only be punished for the crimes for which he has been convicted. That other crimes were or may have been committed can only be taken into account for the limited purpose of placing the offences for which he must be sentenced in context, and as evidence the offences of which he was convicted were not isolated. That the offences were not isolated will be taken into account in any event, as all the counts remaining for sentence are part of a series. 24There are aspects of the evidence concerning additional payments received by CBH and in Wills' correspondence with NCR that concern me. I do not accept Mr Wills was acting solely in Woolworths' interest when he encouraged, as I find he did, the Az-Ben and NCR relationship but I must also take care not to use matters, which deny the offender leniency, as additional or aggravating features on sentence: R H (1980) 3 A Crim R 53, R v JCW (2000) 112 A Crim R 466 at [68].

Sentencing considerations 25I am satisfied that, in all the circumstances of this case, no sentence other than imprisonment is appropriate. That is because the offending involved deliberate, calculated, systematic and repeated crimes by a respected and senior executive in breach of trust, and resulted in very large losses to Woolworths over a period of time. 26It seems to me to be appropriate to fix an aggregate sentence. Given the way the Crown ran its case with the corrupt benefits received as particulars of a conspiracy they failed to prove, the counts which resulted in convictions must be seen as an example of individual payments for a variety of continuing corrupt acts by Wills. It is hard to distinguish one corrupt benefit offence from another apart from the amount of money received and when the payments were made, with the possible exception of count 32 (the Data Track matter) there is no particular act to which an offence can be related, they were part of a series with the total amount being of greater consequence than its individual components 27I must however indicate an appropriate penalty for each offence. And, each such indicated sentence must be individualised and appropriate to the offending and the offender. They can be distinguished by the amounts received, by taking account of the fact the gravity of crimes escalated with their repetition and by making allowance for common elements. It would be wrong to punish twice for those common elements: Pearce v The Queen (1998) HCA 57; 194 CLR 610, [40]; Portolesi v R [2012] NSWCCA 157, [44] - [46]. 28I must then assess an appropriate aggregate or total sentence and its aggregate non-parole period. This involves considering questions such as accumulation or concurrence. There was a single, albeit extended, episode of criminality and in some instances a sentence for one offence could comprehend those for another. There must however be some accumulation here given the period of time over which the offences occurred, the different nature of the corrupt benefit and the money laundering offences. My aim is to achieve an appropriate relationship between the total criminality of the crimes committed, the indicated individual sentences and the aggregate sentence, and aggregate non-parole period I intend to impose: Cahyadi v R [2007] NSWCCA 1, [27]; (2007) 168 A Crim R 41.

Delay 29There was a considerable delay in the bringing of charges in this matter, due in part to lack of police resources. Long delay can have an impact on an offender because of the uncertain suspense in which they are left. It can also allow them to demonstrate rehabilitation or show, as here, that the period of offending was a single episode in an otherwise blameless life. As such sentencing for stale crimes calls for a measure of understanding and flexibility of approach: R v Blanco [1999] NSWCCA 121; (1999) 106 A Crim R 303 at [16]. That said, here one reason for the delay was the complexity of the arrangements put in place by the offender to prevent discovery of his offence and thwart any investigation.

The seriousness of the offences 30Nothing in Mr Wills' personal circumstances, to which I will refer shortly, mitigate the gravity of his offending. The crimes were committed for significant financial gain motivated by personal greed by someone already very handsomely remunerated. They may have been opportunistic at first but they continued for some time and involved considerable subterfuge. They resulted in considerable loss to his employer. Payments to Wills were obviously built into the amounts charged to Woolworths by Weissman. The risk taken was great but so too were the rewards. There was evidence of considerable indirect or intangible loss to Woolworths and its business reputation. 31 Mr Wills exploited his senior position in the company. He used that position to avoid detection and to commit the crimes. He abused his position of trust and that shown in him by the company and his sub-ordinates: Pantano v R (1990) 49 A Crim R 328 at [338]. 32In summary each crime individually and/or in total: (1)Involved a gross breach of trust. (2)Took place over a lengthy period of time. (3)Was motivated by extreme greed. (4)Involved considerable sums of money. (5)While initially opportunistic, involved planning and significant planned efforts to avoid detection. (6)Had a considerable impact on the offender's employer.

Pattern of sentencing 33Offences of this nature are thankfully rare. There are only six (6) s 249B(1) matters noted in the Judicial Commission database. A recent monograph from the NSW Judicial Commission's Sentencing in Fraud cases Research Monograph 37 (2012) was helpful to me for its outline of relevant principles. I have had the assistance of reviewing a considerable number of cases referred to in the table prepared by the Public Defenders for crimes of a similar general type, which occurred over a similar period and the cases drawn to my attention by the Crown in their written submissions. 34There is some utility in looking to sentences imposed at the relevant time or imposed for offences of similar nature and maximum penalty: R v MJR (2002) 54 NSWLR 368; (2002) 130 A Crim R 481, but great care needs to be taken. The significance of sentencing patterns "result from the application of the accumulated experience and wisdom of first instance judges and of appellate courts" but I note such decisions are "no more than historical statements of what has happened in the past:": DPP Cth v De La Rosa [2010] NSWCCA 194; (2010) 79 NSWLR 1 at [303] and [304], per Simpson J. I must have regard not just to what was done in other cases but more particularly why it was done: Hili v The Queen, Jones v The Queen [2010] HCA 45; (2010) 242 CLR 520. Each offence and each offender are different and while consistency of principle and recognition of past sentencing patterns do assist me, here individual sentences are required which focus on this offender and his offences, not punishment of others by other judges.

The case for the offender 35Mr Wills was not represented at sentence. He did not give evidence. As is his right, he maintains his innocence. There has been neither acceptance of responsibility nor any display of insight, remorse or regret. It is clear to me the enormity of his crimes have not yet been brought home to him. That said, having regard to his age, his illnesses, his behaviour since the offences and the impact of his convictions and imprisonment, I am confident he will not re-offend. 36When the matter came before me on 14 November 2012 he requested and received, over objection, an adjournment for what he said was an urgent and a potentially life saving series of heart operations. He relied on a series of medical reports (Exhibit 1), which indicate he has a severe and high risk of coronary artery disease, liver problems, a Vitamin D deficiency, Diabetes Mellitus, and other health issues. He informed me that he had a series of operations scheduled for November and December 2012. While I was sure that Corrective Services would not deny him proper treatment, had he been imprisoned on that date it could only have delayed essential and potentially life saving treatment. I was not prepared to take that a risk. 37In December 2012 Mr Wills underwent angioplasty and stenting to his right coronary artery. It was a "long and difficult procedure" (Dr Aggarwala Ex 2). Mr Wills tells me he also had colon surgery in late 2012. Further angioplasty and stenting procedures are scheduled for the left anterior descending artery (Ex 2). 38Mr Wills asked for a further adjournment today so that this scheduled angioplasty could be completed. That application was opposed and refused. It is clear that the operation will have to be undertaken while he is in custody. I have confidence appropriate arrangements can be put in place, but it is an additional hardship I take into account. 39In his written response to the Crown's submissions (Sentence MFI 2) Mr Wills reiterated his denial of criminal liability. He takes issue with most of the Crown's submissions (Sentence MFI 1). In essence he asserts his convictions have resulted from a viscous and vindictive conspiracy resulting from collusion between Woolworths' executives and Police. The Crown not unsurprising rejects these assertions (Sentence MFI 3), as, of course, do Woolworths and the Police. 40It is clear from his submissions that Mr Wills not only fails to appreciate the reasons for the jury verdict but also shows no insight into the serious criminality of his conduct. His justifications for his criminal action do not accord with the evidence led at trial and accepted by the jury. I cannot take account additional factual matters raised only in submission and inconsistent with the jury verdicts. On the whole they appear to be after the fact rationalisations for what I must accept was seriously criminal behaviour on his part. 41Mr Wills raised his prior good character at trial. Apart from one drink driving matter, which I put to the side, he has never come to the notice of the courts. While he did use his position to commit these offences, his prior and post offence good character remains a matter I can take into account as it indicates to me his prospects of resuming a law-abiding life on release are good. 42The pre-sentence Report (Exhibit B) indicated that he has worked all his life most often in senior corporate positions or in his own businesses. It notes he is unlikely to benefit from supervision. He is now retired and enjoys involvement with his children and grandchildren. The Report indicates that he appears to deal with pressure, including those resulting from his conviction and consequent risk of going to prison, by drinking to excess. I note that at trial there was some evidence he was also drinking to excess during some of the period the offences were committed. He was also at that time in the middle of a divorce from his wife of 26 years. It was at this time he received his only conviction for high range drink driving (Exhibit A). While I note the offences occurred during a period of stress this does not excuse or explain what occurred. 43He has some assets but it is likely what he has will be spent on legal expenses or seized to compensate his victim. This is only just, but it will mean he will have little materially to show for a life of work and will have little of his own to fall back on, on his release. He will need assistance adapting to normal community life, although I trust his family may stand by him. 44He has significant health problems. He will need continuing medical treatment in custody and will have to spend time in hospital. There is no evidence his reasonable needs cannot be meet but as Justice Health has not assessed him, such a possibility remains open. I do not overlook the fact the realities of prison life will, because of his health, make his time in custody harder and more burdensome than most other prisoners. His ill health and its consequences are factors that also warrant a longer period on parole: R v Sellen (1991) 57 A Crim R 313.

Conclusion 45As I have taken care not to double count matters in aggravation so too I must take care not to double count matters in mitigation. The factors relevant to fixing the overall term of the sentence, including personal and general deterrence, are also relevant to fixing the non-parole period but the weight given to them may differ: R v MA (2004) 145 A Crim R 434. Here, as I propose to impose an aggregate sentence, that sentence and its aggregate non-parole period must also reflect the overall objective criminality of the crimes committed. 46The maximum penalty for an offence gives some indication of the seriousness with which the community views the offences and provides some guidance to a sentencing Judge. Section 249B offences have a maximum penalty of 7 years. The section 73(2) offence has a penalty of 10 years. Conspiracy penalties are at large. 47There is clearly a need for concurrence and partial accumulation. I am satisfied the fact that he will be goaled will deter Mr Wills from future offending but sentences must also, by their severity, attempt to deter others. This is particularly important in cases such as this, where it can be presumed business executives like the offender made a rational assessment of the risks of being caught and punished and weighed them against the potential rewards. 48The sentences must recognize the harm done to the victim, Woolworths, and community in general. The sentences must denounce what was done and make Mr Wills accountable for his actions. 49I find 'special circumstances' justifying adjustment of the ratio between the non-parole period and the parole period to allow for supervision on release, to allow time for Mr Wills to adjust to normal community life and to recognize the hardship flowing from his ill health which will make serving the sentences more difficult. 50In each matter you are convicted. Count 2 In relation to Count 2, money laundering conspiracy, I indicate a sentence of 5 years. Count 6 In relation to Count 6, 4 June 1997, receive a corrupt benefit of $137,160 I indicate a sentence of 3 years. Count 7 In relation to Count 7, 22 January 1998, receive a corrupt benefit of $22,891 I indicate a sentence of 1 year. Count 8 In relation to Count 8, 20 June 1997, receive a corrupt benefit of $83,374, I indicate a sentence of 2 years. Count 10 In relation to Count 10, 18 February 1997, receive a corrupt benefit of $10,000, I indicate a sentence of 6 months. Count 14 In relation to Count 14, 21 February 1997, receive a corrupt benefit of $10,000, I indicate a sentence of 6 months. Count 17 In relation to Count 17, 26 February 1997, receive a corrupt benefit of $176,210, I indicate a sentence of 3 years. Count 19 In relation to Count 19, 7 April 1998, receive a corrupt benefit of $86,854.79, I indicate a sentence of 2 years. Count 22 In relation to Count 22, 13 May 1997, receive a corrupt benefit of $31,000 (SRT), I indicate the matter should be disposed of pursuant to s 10 A Crimes (Sentencing Procedure) Act 1999 by recording a conviction and no other penalty. Count 24 In relation to Count 24, 10 June 1997, receive a corrupt benefit of $141,346.47, I indicate a sentence of 3 years. Count 27 In relation to Count 27, 1 July 1997, receive a corrupt benefit of $19,204, I indicate a sentence of 6 months. Count 30 In relation to Count 30, 7 October 1997, receive a corrupt benefit of $24,000, I indicate a sentence of 6 months. Count 33 In relation to Count 33, 29 August 1997, receive a corrupt benefit of $557,551, I indicate a sentence of 4 years. Count 35 In relation to Count 35, 10 September 1997 (Mercedes), launder $250,000, I indicate a sentence of 3 years. Count 36 In relation to Count 36, 3 December 1997, receive a corrupt benefit of $67,000, I indicate a sentence of 1 year. Count 37 In relation to Count 37, 11 December 1997, receive a corrupt benefit of $25,000, I indicate a sentence of 6 months. I impose an aggregate sentence of 7 years, consisting of an aggregate sentence non parole period of 4 years, to commence on 18 January 2013 and expire on 17 January 2017. You will be eligible for consideration for release to parole on 17 January 2017. The aggregate sentence parole period of 3 years will commence on 18 January 2017 and expire on 17 January 2020. A copy of the medical reports in Exhibits 1 and 2 is to accompany the warrant.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 January 2013

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