R v De Stefano [2003] VSC 68

Supreme Court of Victoria|2003-03-13|Before: KELLAM J

CRIMINAL LAW - Sentence - Multiple counts of theft from clients by accountant - Total sum stolen $8.6 million - Plea of guilty - "Gambling addiction".

You, Frank De Stefano, have pleaded guilty before me to 12 counts of theft. Each such count carries a maximum penalty of 10 years' imprisonment.

Accordingly, you were both well known to and trusted by many members of the Geelong community.

At least partly for those reasons of familiarity and trust, many members of the Geelong community relied upon you for financial advice and entrusted their savings to you for prudent financial management.

Thelma Farey and her now deceased husband were two such people. You had acted as accountant and financial manager for Mr and Mrs Farey for some years before Mr Farey's retirement in 1995. The Fareys owned property at Geelong. They decided to retire to the warmer climate of Cairns for both health and lifestyle reasons. These issues were discussed by them with you. Mr Farey arranged that you would hold in trust the sums from the sale of assets held by him in Victoria. Mrs Farey, in her statement contained in the depositions, states that she and her husband placed "complete trust" in you. Between 1994 and August 1995 the Fareys deposited the sum of $524, 052.70 into what they believed was a trust account held by you. Those funds were to be held by you to finance the Fareys' retirement in Queensland which included the purchase of land and the construction of a house at Trinity Beach.

It should be noted that in 1988 you and three others joined in the redevelopment of a site on the Gold Coast and built a restaurant there. The four of you borrowed $1.5 million from the National Australia Bank and gave personal guarantees in respect of that loan. The restaurant commenced operation in 1991 but, it is said, by reason of the recession of that time and the pilots' strike, the tenant of the restaurant was not able to continue in business after 1992. Substantial pressure was thereafter applied to you and your partners by the National Australia Bank for payment of the sum owed to that bank which by then amounted to $2.5million. You sold a number of properties owned by you pursuant to an arrangement you had made with the National Australia Bank in late 1994. Continuing difficulty was experienced by you with the National Australia Bank until September of 1995 when you reached settlement with them. The settlement with the National Australia Bank was achieved partly by the theft by you of $228,113.20 of the funds held by you on behalf of Mr and Mrs Farey.

In addition to this sum, which you stole from Mr and Mrs Farey solely for the purpose of meeting your financial obligations to the National Australia Bank, you stole further funds from them. The total sum stolen by you from the Fareys between 29 November 1994 and 31 December 1998 was $309,418.89. This sum, and your theft of it, forms the basis of Count 1 to which you have pleaded guilty.

Count 2 relates to the theft of $4,980,175.07 belonging to Nexus (Geelong) Pty Ltd which was a company established to hold in trust and administer funds paid to Tomislav Papic by way of compensation. In 1995, Tomislav Papic obtained an order for damages of approximately $6 million, having sued the Geelong Hospital for negligence causing him quadriplegia. Messrs Slater and Gordon had conducted that litigation on behalf of Mr Papic and had, for a period of time thereafter, managed the funds. You approached Tomislav Papic and stated that you could assist him with his financial situation. Some time later, Mr Papic gave you permission to transfer the money from Slater and Gordon to you. An agreement was reached between the Papic family and you that you would be one of the signatories of the bank account established to hold the funds which were to be invested on his behalf. However, subsequently the ANZ bank account signature authority became altered to provide for "any one signature" to be sufficient to make withdrawals.

During the period of approximately four years that you managed Mr Papic's fund, you purchased a number of investment properties and made numerous legitimate disbursements on his behalf. However, between 1 October 1995 and 31 December 1998 you stole the total sum of $4,980,175.07 from him.

Count 3 of the presentment relates to the sum of $1,450,000, belonging to Global Issues Pty Ltd, which was stolen by you from money invested with you by it between 1 May 1998 and 19 April 2000. Claudio Minisini had known you for over 20 years prior to May 1998. You had acted as his accountant and financial adviser. Between May 1998 and June 1999 he arranged the transfer of funds belonging to Global Issues Pty Ltd, a company of which he was a director, to you. On 12 April 2000, Mr Minisini requested that the funds be transferred to the trust account of his solicitors. Mr Minisini spoke to you on 13 April 2000 concerning that request and you told him that the funds would be transferred to the solicitors' account. The funds were not transferred. Subsequently, you advised Mr Minisini's solicitors that the funds would be transferred on Tuesday 18 April 2000. On the next day, 19 April 2000, you in the company of your solicitors attended upon the Fraud Squad and advised them that you had lost your client's funds.

Count 4 relates to funds held by you on behalf of K.L. Consultancy Pty Ltd. Kaye Lawson, who is a director of that company, is a self-employed person who works as an educational consultant in the United States. For many years you had acted as her personal accountant in relation to taxation matters. You established on her behalf that company K.L. Consultancy Pty Ltd. During one of Ms Lawson's visits to Australia you told her that "the best way to streamline" her personal and business arrangements would be to transfer the funds into your trust account. The agreement was that you were to contact her when a payment had to be made and either she or her Power of Attorney would transfer funds into your trust account. Subsequent to this arrangement and between 1 July 1998 and 19 April 2000 you stole $92,081.21 from K.L. Consultancy Pty Ltd.

Count 5 deals with matters relating to Norman Williams. For many years you had acted as accountant and financial adviser to Norman Williams. Norman Williams was a director/shareholder in a company, First Spectrum Pty Ltd, which owned a property in Clifton Hill which was sold in October 1998. A sum of more than $1 million was deposited in your trust account by that company, with instructions from Mr Williams that you were to hold the sum on trust pending further instructions from him. Between October 1998 and March 1999 you made authorised disbursements from that sum of money but you stole the balance of $575,307.77.

Count 6 relates to a sun of $245,000 which was stolen by you from Donna Murdoch between 25 January 1999 and 31 December 1999. A total of $150,000 of that sum had been deposited with you by Ms Murdoch for the purposes of meeting the tax liabilities of companies with which she was associated.

Count 7 relates to a sum of $40,464.06 stolen by you from Popular Pastimes Pty Ltd between 26 April 1999 and 4 May 1999.

Count 8 relates to a sum of $13,654.47 belonging to Wingrove Pty Ltd, which related to a taxation refund belonging to that company.

Count 9 relates to a sum of $250,000 stolen by you from Francesco Mazza between 1 October 1999 and 19 April 2000. Mr Mazza was a self-employed bricklayer who had engaged you for many years to act as his accountant and financial adviser. Mr Mazza was awarded $300,000 compensation in September 1999 in relation to a motor car accident. Shortly before obtaining his settlement funds, he had had a discussion with you about paying off a mortgage on rental property he had bought from his award of compensation. You suggested that he not do that but invest the funds with you in the short term. The arrangement he had with you was that you would hold the funds in trust for a period of seven months at 4.8% interest. Rather than hold the proceeds of Mr Mazza's court proceedings in trust, you stole the sum of $250,000 from him.

For some years prior to 1999, Basil Paramanov, a self-employed plasterer who lived in Hoppers Crossing, had engaged you to act as his accountant. In late 1999, he had a conversation with you regarding tax matters. You suggested that if he had spare funds he could arrange for them to be invested in your trust account where they would earn interest. In December 1999, Mr Paramanov provided the sum of $60,000 to you drawn on the account of Basil's Plasterers Pty Ltd. A further $90,000 drawn on the same account was provided by him to you for investment in January 2000. Almost immediately after such deposits were made you stole the total sum of $150,000 from Basil's Plasterers Pty Ltd. These thefts form the subject of Count 10.

Mr Paramanov also conducted business under the name of Bendiwi Pty Ltd and provided you with a cheque for $100,000 drawn on that company's account for investment by you in December 1999. Likewise, that sum was stolen almost immediately and that amount forms the subject of Count 11.

Nicholas Javni and his brother operated a business under the name of Javni Homes (Geelong) Pty Ltd. In early 2000, Nicholas Javni engaged you to act as accountant and financial adviser to the Javni businesses. The Javni brothers met with you in February 2000 and had a conversation regarding the creation of a new company to be operated by you. You told them that you needed at least $400,000 to deposit into the new account which could then be used to pay bills. Mr Nick Javni gave you instructions that the bank account to be created would have two signatories, who would be himself and his brother, and that you would not sign cheques or withdraw money. On 29 February 2000, Mr Javni withdraw a cheque for $400,000 from the Commonwealth Bank and took it to your office. He saw you at the office and you said you had not yet opened the company account. Mr Javni told you that he did not want to pay the sum into any account other than the company account over which he had control. The witness statement of Mr Javni included in the depositions states that you then became angry and told him that he had wasted your time setting up everything. You stormed off into your office. Shortly thereafter you came back, apologised and suggested that he give you the cheque to be deposited into your trust account until the company was opened. You told him that the company account would be opened that afternoon. Mr Javni complied with your request to give you the cheque. Shortly thereafter you stole the whole sum of $400,000 belonging to Javni Homes (Geelong) Pty Ltd. This theft forms the subject of Count 12 on the presentment.

These thefts are serious breaches of the trust reposed in you by each of your clients.

Mr and Mrs Farey entrusted you with funds that they believed you would manage to provide them with security in their retirement and their old age. At all material times, it must have been clear to you that they relied upon you and trusted you to look after those funds.

The theft of $4.98 million from Nexus (Geelong) Pty Ltd is particularly callous and cruel. It was a gross breach of the trust reposed in you. You met with Tomislav Papic on numerous occasions. There can be no doubt that you, at all times, were fully aware of the nature of the grievous injuries from which he suffered and the fact that he required the funds achieved by him as compensation for his horrendous accident to achieve any degree of independence and dignity. The theft by you of his funds took away his independence. Clearly, that must have been known by you. You conduct in relation to this count was in my view heartless. Tomislav Papic died in October 2001. The victim impact statement filed by his father sets out clearly the trauma that he and his family suffered by reason of your theft. I have no difficulty in accepting the statement of his father that the period of time between April 2000 and the time of his death was a "nightmare" for both Tomislav Papic and his parents.

Donna Murdoch, from whom you stole $245,000, has filed a victim impact statement describing the stress she has suffered by reason of your theft from her.

Nicholas Javni has also filed a victim impact statement describing the feeling of hopelessness he now has in consequence of your dishonesty. He states he has lost his business by reasons of your thefts.

Norman Williams, in his victim impact statement, describes the stress he has suffered not only by reason of the loss of his funds but also by reason of the deception of a person he classed "as a friend over the years".

The theft of the substantial part of the compensation payment made to Francesco Mazza is likewise callous in the extreme. Members of the Geelong community, such as Mr Mazza, a bricklayer; Mr Paramanov, a plasterer; Mr Javni, a builder; and Mrs Farey, a retired elderly person, came to seek your advice because you were well regarded and well known. They saw you as a leader of their community. They entrusted their financial futures to you. On any view, you abused that trust grossly by numerous thefts over a period of approximately five years.

However, as has been pointed out by your counsel, Mr Dunn of Senior Counsel, there are a number of mitigating factors.

You have pleaded guilty to these offences. You are entitled as a matter of law to have that fact taken into account in your favour and I do so. I accept that by your plea of guilty you have saved the community the considerable cost and inconvenience of a trial. More importantly in my view, you have saved the victims the trauma of such a trial. I accept that your plea of guilty is reflective of your remorse which I accept is real. I am satisfied not only through the submissions of Counsel, but the evidence I have heard and the documents tendered before me that you are remorseful and sorry for your conduct and the grief and distress you have caused your victims as well as yourself and your own family. I accept that you have provided assistance to your victims to recover funds stolen by you from other sources than yourself.

Further, I take into account in your favour that with the exception of Count 1, you intimated early your intention to plead guilty to these charges. As I have stated previously, you are the person who reported your crimes to police on 19 April 2000. Notwithstanding that this is to your credit, it is nevertheless apparent that you were about to be the subject of an investigation by the Fraud Squad very soon after that time. Mr Minisini, the director of Global Issues Pty Ltd, and who is a former policeman as I am informed by your counsel, was, to coin a phrase, clearly "at the end of his tether" in terms of your prevarication about payment to him of the sum of $1.45 million owed by you. However, that said, I have taken into account in your favour the fact that you readily admitted your crimes and that you co-operated with police in relation to the investigation of the crimes in question. You provided your files and records to them and assisted them with explanations as to such records. You did not destroy any records. Those records, including a most deceitful letter dated 19 December 1998 to Mr and Mrs Farey, assuring them that you held substantial funds on trust, when in fact you had stolen it all, provide damning evidence against you.

I have been provided with a considerable amount of material about your personal history and your circumstances. You are now aged 54 years, having been born in Italy on 6 August 1948.

You came to Australia in May 1956. You spoke no English when you arrived in Australia but attended St Patrick's Primary School in Geelong and Geelong West Technical School until Year 10 when you commenced work as a clerk. You commenced part-time employment, however, at the age of 12. You were a hard worker after leaving school. In addition to working as a clerk at United Distillers, you worked in a service station at weekends and undertook your further education by way of evening classes. You married in 1971. You obtained your qualifications as an accountant in 1973 and thereafter obtained employment at International Harvester. You commenced working as a bookkeeper and accountant at night and shortly thereafter became the treasurer of the Geelong Italian Social Club. You commenced your own accounting practice in 1978 with your wife working as the receptionist and bookkeeper. In the meantime, you engaged in community activities and became President of the Geelong Ethnic Community Council and Chairman of the Geelong Migrant Resources Centre. Your were first elected a councillor for the City of Geelong in 1983 and you were elected Deputy Mayor in 1989 and Mayor of the City of Geelong in 1991. There can be no doubt that from humble beginnings you achieved a great deal by hard work and endeavour.

Evidence was led on your behalf in the course of the plea. I heard from Dr Richard Williams who is a general practitioner in Geelong and who has known you and the members of your family for more than 20 years. He has treated you throughout that period. He gave evidence that during the period from 1994 to 1996 you suffered from gastric problems which he considers to be largely non-organic functional symptoms related to stress. He held you in high regard at all times and is shocked by the revelation of your crimes.

Mr Sam Sarah, a company director in Geelong, gave evidence before me. Mr Sarah has known you since you and he were children in Geelong. He had been a client of yours for many years and was satisfied with the service that you provided him until 1994/1995 when he found that you were difficult to contact. For that reason, he arranged for someone else in your office to handle his affairs. He spoke of your remorse about the matters which now bring you before this court.

Mr Salvatore Casaceli gave evidence on your behalf. He is a company director who has known you for approximately 30 years. He, likewise, had been a client of yours for many years. He was satisfied with the service you provided him until the mid-1990s when he formed the view that you were not attending to his affairs with the same attention as previously. Likewise, in the mid 1990s he transferred his accounting affairs to another member of your office.

Mr Phillip Gude, a company director, gave evidence of your involvement and commitment to the migrant community of Geelong over the last 20 years. He described you as a man of boundless energy. He described his shock at hearing of the thefts the subject of the presentment now before me.

Monsignor James Murray gave evidence before me. He told me that he has known you for approximately 20 years and that he was aware of your work in the community and that he had spoken to you shortly after the thefts became public and that in his mind you suffer from deep remorse.

Mr Kevin Boland, a takeaway food operator who has known you for many years, gave evidence before me of your particular interest in young people in Geelong and of your good reputation.

Considerable evidence was led before me in relation to your gambling activities. When you first attended upon police on 19 April 2000, you said, "All was going well, probably I don't know, ten years ago, maybe a bit longer I got involved with the gambling, casinos, only in a small way. Unfortunately the addiction grew. About five or six years ago I started delving into clients' funds, clients' trust accounts. I started off in small amounts and didn't work going for the bigger amount hoping it would fix the problem. The problem only got better (sic) (meaning presumably bigger) and there are half a dozen, seven clients that have - whose sums I have taken."

It is apparent that very substantial sums have been gambled by you over recent years and that at least a significant proportion of the sums stolen by you have been used to finance your gambling activities. The evidence of Mr Bateman, who is a senior financial investigator with the Major Fraud Investigation Division, supports this conclusion, as indeed does the evidence of Mr Harrison who was a person you met at Crown Casino whilst undertaking your gambling activities.

Mr Jeffrey Cummins, a psychologist, gave evidence before me in relation to his examination of you on 30 March 2001 and on eight subsequent occasions. He considers that you meet the diagnostic criteria for suffering from a pathological gambling disorder.

In addition, a report of Professor Burrows dated 10 January 2003 has been tendered before me. Professor Burrows saw you first on 28 April 2000, at which time he considered you to be suffering from a major depressive disorder of moderate severity, warranting antidepressant medication and psychotherapy. Professor Burrows formed the opinion that you had suffered from significant stress in your working life and had become involved in gambling initially as a means of relaxation. He formed the opinion that you had always been a "perfectionist, obsessive, driven, needing to succeed, workaholic" and that subsequently you developed a pathological gambling disorder. He is of the opinion that you still suffer from significant depression and will require ongoing psychiatric care for this condition.

Your counsel relies upon delay as a mitigating factor. In particular, he points out that you have committed no further offences whilst awaiting trial and that you have suffered great anxiety and uncertainty before the matter came on for hearing. As I have said, you attended upon police in April 2000. The committal mention date was on 9 March 2001 at which time you pleaded guilty to the then 9 counts on the presentment but not guilty to the charge of theft relating to the Fareys, which as I understand it, equated to Count 1 on the presentment before me.

The delay to that point does not appear to me to be inordinate taking into account the complexity of the investigation of your affairs. However, and in consequence of your plea of not guilty at that time to the charge relating to the Farey thefts, the matter was adjourned over to case conferences in the County Court which took place on 30 April 2001, 25 June 2001, and 23 July 2001 when the DPP advised of his intention to uplift the matter to the Supreme Court. The matter did not come before the Supreme Court until 25 March 2002 when a case conference took place. It appears to me that there was some unsatisfactory delay between July 2001 and March 2002. On 8 April 2002, you were arraigned and pleaded not guilty to Count 1. The matter was fixed for a trial to be heard on 5 August 2002.

However, at a directions hearing on 15 July an application was made on your behalf to adjourn the trial on the grounds of your ill health. A further directions hearing on 2 September 2002 resulted in the matter being fixed as a plea on 9 December 2002. The plea commenced on that date but was adjourned to February of this year by reason of late service of a statement by the prosecution.

I do not consider that the overall delay in bringing this proceeding before the court is of overwhelming weight in the circumstances of this case, particularly where at least part of the delay related to the issue of whether or not you intended to plead guilty to Count 1. Nevertheless, I do accept in your favour that the delay has caused you uncertainty and anxiety over a prolonged period of time. I accept that you have been able to make no plans for the future as you have awaited trial and in circumstances where it has at all times been inevitable you would serve a term of imprisonment, this has weighed all the more heavily upon you. You have not worked during this period and you have become reclusive by reason of your notoriety and your shame.

A large number of written references have been tendered before me. I will not here set out all such references but they include references from several former mayors and councillors with the City of Geelong, numerous members of the Geelong community involved with the Barwon Region Water Authority, past presidents and members of the Geelong Ethnic Community Council, members of the Geelong Police Force, members of the Geelong Italian Social Club, representatives of a wide range of community groups, together with members of the public. Both by reason of their volume and content, these references are a powerful statement of the high regard in which you were held by the Geelong community, and others outside that community, throughout your career and until April 2000. I readily accept that you have been regarded by those who know you as a man of good character and excellent reputation. Indeed, that was the reason why many of your clients attended upon you.

I accept that you developed an addiction to gambling during the period of your crimes and, as I have said, I accept that a significant proportion of the funds stolen by you have been used to finance your gambling activities. However, it is clear to me that your gambling addiction, although explanatory for part of your behaviour, does not explain all of your dishonesty.

It is common ground that the proceeds of part of the thefts the subject of Count 1 took place in order to settle debts owed by you to the National Australia Bank. On 29 September 1995, you stole the sum of $228,116.70 from funds held by you on behalf of Mr and Mrs Farey and applied that in part settlement of such debts owed by you to the National Australia Bank. This was nothing to do with gambling. It was the deliberate theft of money held on trust by you to avoid the financial consequences of your indebtedness to the National Australia Bank. Several days later, on 2 October 1995, you stole $220,000 from the Nexus Geelong Pty Ltd cash management account, over which you had control, (this sum forms part of the funds the subject of Count 2) and deposited that sum in the trust account operated by you with St George Bank.

Within two weeks, you were required to make payments to the builder of the Farey's home in Queensland in the total of $83,817.50 which sum was paid by you, notwithstanding that in reality you had by then held in your account only the sum of $59,729.48 on behalf of Mr and Mrs Farey. It is apparent, as the prosecution contends, that at that time you, having used the bulk of the Farey's funds for your own purposes, met their obligations to their builder with money stolen from Nexus Geelong Pty Ltd, a company incorporated to manage Mr Tomislav Papic's funds.

The Crown contends that in addition to these moneys there are other funds which were stolen by you and not gambled by you. Mr Bateman, a senior financial investigator with the Major Fraud Investigation Dvision, gave evidence before me. He has conducted an extensive investigation into the transactions made by you in relation to each count on the presentment. This has been a difficult task because of the inadequate and inappropriate manner in which you recorded deposits and transactions in relation to funds held by you on trust on behalf of your clients. You held no separate trust account ledgers for moneys received on trust from particular clients. Furthermore, your recording of the details of secondary banking records such as cheque butts, deposit records and account record books, lacked sufficient detail to establish the precise nature and beneficiary of each banking transaction.

However, notwithstanding these difficulties, Mr Bateman prepared a detailed analysis which identified all of the sources of funds into the St George account in the name of F. De Stefano and Associates Pty Ltd Trust Account, the ANZ account in the name of Nexus Geelong and other accounts, including a Citibank account used by you for personal business and other payments, and a Bank of Melbourne cheque account. After such an analysis and after consideration of records provided to him by Crown Casino, Mr Bateman formed the view that of the total sum stolen by you of $8,606,103.47, a sum of $1,491,676.07 was applied to the benefit of you or your family and not lost by gambling. This sum includes the sum of $228,116.70 referred to by me above as being part of the funds stolen from the Fareys to reduce your indebtedness to the National Australia Bank. It also includes the sum of $239,331.55 referred to above which was stolen from Tomislav Papic for the purposes of replacing the above referred to money stolen from the Fareys. It includes a sum of $774,028.03 being various personal and business disbursements made between 8 May 1995 and 10 December 1997 from the Citibank account held in the name of you and your wife and a sum of $189,689.79 for various business and personal disbursements and paid from the Bank of Melbourne cheque account by you between 30 December 1997 and 18 November 1999. In addition, the Crown submits that you obtained personal benefits relating to the thefts by the redemption of so called Crown Loyalty Bonuses in the sum of $298,046.12.

It is apparent that you stole the sum of $228,116.70 from the Fareys to assist you in settling the debt owed by you to the National Australia Bank. Thereafter, you stole $220,000 from Tomislav Papic to replace the funds stolen from the Fareys. It is clear that at approximately the same time your gambling habit increased significantly. It may be that you commenced to gamble heavily with the aim of replacing the funds you had by then stolen. It is apparent, however, that from that time on you treated your clients' money (the subject of the counts on the presentment) as your own. Their funds became pooled with your funds, and funds derived by you from winnings or the cashing in of chips at casinos. It is true, as submitted by your counsel, that there was an inevitability that you would be caught at some stage. The theft from Mr Minisini, a person who was a former police officer, does, as your counsel submits, defy common sense. Accordingly, as stated above, I accept that you became addicted to gambling and that when gambling you behaved irrationally and deviously, as well as dishonestly.

Your counsel submits that I should not accept that the evidence of Mr Bateman that the sum calculated by him as being stolen but not gambled is correct. It is submitted that such sums as were not directly linked to gambling are related to gambling in that cash advances were made on credit cards for gambling purposes, that air fares to travel to casinos were paid on credit cards, and that accommodation expenses were paid in order to enable gambling at casinos.

I am satisfied beyond reasonable doubt that substantial sums of money were taken by you from your clients, pooled with other moneys and used for your own personal purposes, including reductions of mortgages over your home, renovations to your home, school fees and other expenses. The evidence, however, does not permit me to say precisely what amount was gambled and what amount you used for your own purposes. I am, however, not satisfied beyond reasonable doubt that the structure of such transactions was designed to conceal personal or business expenses, but rather that the transfer of funds through your bank accounts and Crown Casino formed part of your criminal activity which was, I accept, substantially used to fund your gambling.

However, that said, your obsession with gambling cannot excuse your behaviour. It provides an explanation for much of your behaviour although, as I have pointed out, it provides no explanation for your theft from the Fareys, the subject of Count 1, or the money stolen from Tomislav Papic to replace those funds. The only explanation for those thefts was that you, as an accountant who held funds on behalf of your clients, were prepared to dishonestly appropriate funds for your own purposes to avoid the ignominy and financial difficulty which would have befallen you if the National Australia Bank had decided to bankrupt you over the sums owed by you to them.

Furthermore, in relation to the issue of gambling, evidence was led before me and submissions were made that you were in effect seduced by casinos. The description of Crown Casino by Mr Dunn was that it was an "Aladdin's cave" where you were treated like "royalty". It is apparent on the evidence before me that you were treated as an important person by casinos because of the amount of money, much of it belonging to your victims, that you gambled. I have no doubt that you derived enjoyment from being treated that way, having perhaps, become accustomed to it because of your success as a public figure in Geelong. Clearly you used, and presumably enjoyed, the benefits of being so treated by casinos as the evidence before me of "gambling rewards" such as free meals, accommodation, theatre tickets and other inducements demonstrate. This fatal flaw in your character was exposed by such treatment and you responded to it. As I have said, I accept that you developed a gambling addiction. However, that said, it must be remembered that you chose to accept those inducements. You knew it was wrong to steal your clients' money but you chose to do so. You are an intelligent man. You were devious both in the manner in which you dealt with your clients' money and in the manner in which you hid your gambling from those around you, particularly those people who knew you in Geelong. It is apparent that your gambling took place outside Geelong. Your gambling addiction was confined principally to casinos and in particular to Crown Casino in Melbourne. Almost no-one in Geelong knew you were a gambler. Whilst I accept the evidence of Mr Cummins that such deceptive behaviour is behaviour observed in those who fit the diagnostic criteria of "gambling addiction", it is clearly, to my mind, dishonest and devious behaviour in which you intentionally engaged. In that regard, you exercised a choice of free will to engage in gambling with your clients' money.

I accept that you have been a hard working and industrious member of the community and that you have made a substantial contribution to the community in your capacity as a member of the Geelong Council and the many other bodies with which you have been associated. I accept that your contribution to the migrant community in particular has been substantial.

As I have said, you are 54 years of age. Your counsel relies upon this as a mitigating factor, together with the state of your health. I accept that your health is not robust. As stated above, I heard evidence from your general practitioner, Dr Williams, and I accept that you have during some years suffered gastro intestinal problems which are likely to be stress related. You have recently had back surgery. I accept that you have, particularly in recent times, suffered from depression which has required treatment with antidepressants. I accept that your age and your health will make imprisonment more difficult for you than might otherwise be the case.

Your counsel submits that your rehabilitation has commenced. You have committed no further offences since being charged and you have taken steps to deal with your gambling addiction. In particular, you have been involved with an anti-gambling programme at the Anglican Church in Geelong.

It is appropriate in this regard that I acknowledge further the assistance given by you to authorities which assistance is the subject of Exhibit 3 tendered before me.

I accept, as submitted by your counsel, that your public humiliation is a burden for you to bear in addition to any punishment that this court may impose. You are now bankrupt. You will in all probability never be an accountant again. The reputation you worked so hard to establish and the honours that hard work brought you are now worth little.

I accept that in your case there are good prospects for rehabilitation and that the suffering which you have brought upon yourself, your victims, your family and your community is such that it is unlikely that you will offend again. It is not beyond comprehension that in the future, notwithstanding your conviction and imprisonment on these offences, you might continue to assist in particular the migrant community, in Geelong. I have no doubt you will have support from your family and others should you wish to avail yourself of it. However, as well as matters personal to you, I must, among other things, take into account other matters relevant to sentencing principles, including the issue of general deterrence.

The breach of trust in which you have engaged is, as I have stated, gross, and involves large sums of money which were stolen over a long period of time. Those members of our society who hold moneys on trust on behalf of others and particularly solicitors, accountants and financial advisers, must understand that if they breach the trust of their clients, severe consequences will follow. The damage to individual members of our community by theft such as yours is extreme. Members of the community who were entitled to rely upon you for their future independence, dignity and comfort, were denied those rights by reason of your dishonesty. There is no alternative, as indeed is conceded by your Counsel, other than the imposition of a term of imprisonment.

Of the manifold elements of sentencing, as well as the matters of rehabilitation and general and specific deterrence to which I have already referred, it is necessary to denounce your conduct and to impose punishment.

As Charles JA said in D.P.P. v Bulfin[1] -

"[I]n the case of white collar crime, the lives of the offenders and their families will frequently have been devastated by the consequences of discovery and punishment. The present case is a very good example. It would be difficult not to feel great sympathy for the respondent's wife and family and indeed for the respondent himself. But I think there is a serious risk that the consequences of discovery and punishment, and the havoc that a custodial sentence usually reeks on the lives of the white collar criminal and his or her family, may have a tendency to distract attention from the importance of general deterrence or to carry in the imposition of sentences for crimes such as the present ... Whatever the motivation, offences of the kind here in question almost invariably involve a carefully calculated course of conduct over a long period, repeated deliberate acts of dishonesty, substantial amounts of money and frequently losses (often tragic in their impact) to large numbers of small investors. The offender often holds a position making it possible, or has the ability, to disguise or camouflage the conduct in question. ... [T]he element of general deterrence will usually carry particular significance in sentencing for crimes such as the present, both in relation to the total effective sentence and the non-parole period; together with a requirement for strong denunciation by the sentencing court."

In my view, much of that statement is apposite in the present case.

* On Count 1, I sentence you to 3 years' imprisonment.

* On Count 2, I sentence you to 6 years' imprisonment.

* On Count 3, I sentence you to 4 years' imprisonment.

* On Count 4, I sentence you to 1 year's imprisonment.

* On Count 5, I sentence you to 3 years and 6 months' imprisonment.

* On Count 6, I sentence you to 2 years and 6 months' imprisonment.

* On Count 7, I sentence you to 1 year's imprisonment.

* On Count 8, I sentence you to six months' imprisonment.

* On Count 9, I sentence you to 2 years and 6 months' imprisonment.

* On Count 10, I sentence you to 2 years' imprisonment.

* On Count 11, I sentence you to 1 year and 6 months imprisonment.

* On Count 12, I sentence you to 3 years' imprisonment.

Your Counsel has submitted that there should be concurrency between the sentences on each of the counts on the presentment. It was argued by Mr Dunn that although there are separate counts it is the "one type of offending". The prosecution opposes this contention.

I have carefully considered each of those submissions and have concluded that it is necessary in the circumstances of this proceeding to order partial cumulation of some of the sentences. The offences took place over a period of five years and involved numerous acts of dishonesty, each of which was a separate and gross breach of trust.

I direct that one year of the sentence imposed on Count 1, together with one year of the sentence imposed on Count 3, together with one year of the sentence imposed on Count 5, together with one year of the sentence imposed on Count 12, are to be served cumulatively upon the sentence imposed on Count 2, and cumulatively with each other, making a total effective sentence of 10 years' imprisonment.

Such a sentence in my view gives effect to the principles of totality and proportionality.

I have given careful consideration to the matters raised by your counsel in relation to the issue of a non-parole period and his submission that there should be a greater than usual disparity between the head sentence and any term which might be fixed before you become eligible for parole. Whilst I accept that there are in your case substantial issues of mitigation to which I referred above, I am not persuaded that there are special circumstances present which might require a great disparity between the head sentence and a non-parole period. In the circumstances, I direct that you serve a period of seven years before you become eligible for parole.

I declare that the time you have served in custody pursuant to s.18(1) of the Sentencing Act in relation to these proceedings is 38 days, and I direct that this period be reckoned as a period of imprisonment to be served under the sentence.

[1] [1998] 4 VR 114 at 113 at 132.

At a glance

Court

Decision date

Before

Source

Judgment (88 paragraphs)

Parties