Arthur Hacking appears for sentence having pleaded guilty to a number of counts under s 249B of the Crimes Act 1900 of corruptly receiving a benefit, each carrying a maximum penalty of seven years' imprisonment with no standard non-parole period; and two counts of larceny by a public servant contrary to s 159 of the Crimes Act 1900, which carries a maximum penalty of ten years' imprisonment with no standard non-parole period.
He asks to be taken into account a number of matters on a Form 1, which are set out in the agreed facts and need not be repeated here. The matters on the Form 1 will be dealt with in the way suggested by the guideline judgment in which the Chief Justice said that matters such as personal deterrence and retribution should be given greater weight in the sentence to be ultimately imposed on the charges which are accompanied by a Form 1.
The agreed facts demonstrate that the offences arose from an Independent Commission Against Corruption (ICAC) investigation into New South Wales Rural Fire Service (RFS) officers. The RFS provides ration packs for its front line officers. It was paying $10 for each of these snack packs and purchased well over 100,000 each fire season, so the contract for each of the packs for a single year was worth about $1.5 million.
Mr Hacking was a contracts officer for the RFS, and he was the primary officer responsible for procurement of them. Scott Homsey was a catering businessman who obtained the contract for the snack packs. Homsey paid a total of about $350,882 to Mr Hacking. This included $228,000 in bank deposits and large cash payments such as $20,000 handed over between the pair on the day of their apprehension.
The offender attended ICAC with his lawyer and made full and admissible recorded confessions. He explained that the money he received from Homsey was because there was an agreement between them and that Homsey would under supply on each delivery of snack packs by 10% and later up to 20%, and that the resulting extra profit from the under supplying would be split between Mr Hacking and Mr Homsey, for this was their skimming arrangement.
R v Hacking [2017] NSWDC 473 | Case summary | Zoe
The offender also stole mobile phones and other electronic items from the RFS and sold them on eBay for a total of about $50,000. He also gave away such phones to his friends.
The skimming arrangement was described by the offender in his recorded interview, as follows:
October of 2012 … he (Homsey) made the offer at that stage to start skimming snack packs … he say well you know we can start skimming a 1000 snack packs and we can split it … he would invoice 10, 000 and supply 9000 … he was gonna split the difference with me. So um over the fire seasons that he would split the money and that was this hence the money
…
12/13 it was about 180,000 … 13/14 it was 200,000 (number of snack packs at $14.50 a snack pack). This financial year [2014-2015] we order 100,000 preparing for the fire season.
Charges 1, 2, 3, and 4 of corruptly receiving a benefit relate to deposits of $38,000, $15,960, $31,922, and $143,000 deposited into his account between November 2012 and February 2013. That is a total of approximately $228,882.
Hacking said that when Homsey put the $143,000 into the account he phoned Homsey and said, "What the fuck are you doing?" Hacking was alarmed that the corrupt payments by bank deposit had become so large that it may raise suspicion. Mr Hacking used a dormant company, AJ Purchasing, to create false invoices and send them to Homsey.
Charge 15, which is the first matter attached to charge 4 on a Form 1, involves signing invoices at work as "okay to pay" in the first fire season. The second fire season 2013-2014 is covered by charges 5, 6, and 7 which led to amounts of $10,000, $15,000 and $20,000 respectively being received in late 2013. The last fire season of 2014-2015 led to the charges 10, 11, 12, 13, and 14, the benefits received there were respectively $15,000, $20,000, $15,000, $15,000, and $20,000.
Charge 16, which is a matter attached to charge 14 on a Form 1 of misleading document used by an agent under s 249C of the Crimes Act 1900 relates to a misleading memorandum prepared in that he had indicated 100,000 snack packs were needed and would be obtained, yet Mr Hacking knew that not all of those would be supplied. Again, he made frank admissions to this in his recorded interview.
Charge 17 is also attached on a Form 1 to charge 14. It is a charge of intent to defraud by misleading statement under s 192G(b) involving allocating three manual invoices for $145,000 each on 18 December and 22 December 2014; and $290,000 on 29 December 2014.
The larceny charges, the subject of charges 21, 22, and 23 relate to him stealing RFS mobile phones and giving them to his friends or family or selling them on eBay. The value of eight phones given away was $5,572 and the value of the phones listed and sold on eBay was $48,994. Count 23 which is attached to charge 22 on the Form 1 relates to $14,695 of mobile phones found at his premises. The total amount received by the offender was, as conceded by Mr James QC, about $400,000, all of which has been repaid by cheque to solicitors for the RFS.
There is no dispute that the offender is entitled to a 25% discount on the term of imprisonment by reason of the utilitarian value of the early pleas of guilty. Mr James concedes that a term of imprisonment is required in the overall sentencing process but submits that the manner in which the term of imprisonment should be served is a matter requiring careful consideration.
The Crown submits that in terms of assistance, although the prosecutor had ample evidence by bank records and surveillance that Mr Hacking was receiving many thousands of dollars from Homsey it was his full and frank record of interview that provided the prosecution with the explanation as to why he was receiving that money; that is, bribes for concealing and supplying, and it would have been difficult if not impossible for the prosecution to have proved the under supply because of the poor standard of record keeping at the RFS.
Mr Hacking gave a detailed undertaking to give evidence consistent with this record of interview for the prosecution in any proceedings against Homsey and his assistance would be of substantial assistance to the prosecution. He confirmed his willingness to do so in evidence today as well as acknowledging the consequence if he does not provide such assistance, namely the need to return to court for sentencing for breach of such undertaking, which would inevitably involve a significant increase in a term of imprisonment.
The Court is empowered to provide a discount for past and future assistance pursuant to s 23 of the Crimes (Sentencing Procedure) Act 1999, and it is generally advisable to indicate the amount allowed for past and future assistance, notwithstanding the difference in approach set out in the some of the authorities. It is clear and accepted in this case that as a general principle a combined discount for the plea of guilty and for assistance should not normally exceed 50%.
Mr James put that although it should not be specified there should be some additional discount above a total of 50% to take account of what he described in very loose terms as an Ellis discount, but I am not satisfied that there is any true Ellis discount arising in the way in which it is generally regarded from the judgment of the Chief Justice in R v Ellis (1986) 6 NSWLR 603. I am of the view that a further discount of 25% should be allowed of which half would be for the past assistance and half for future assistance.
Mr Hacking has no criminal record and has served no time in custody.
The evidence tendered on behalf of the offender commences with an Intensive Correction Order assessment report dated 24 August 2017 which finds that the offender is suitable for an Intensive Correction Order and has signed the requisite undertaking. The report notes that he is assessed as having a low risk of reoffending. The report I am told was ordered by his Honour Conlon DCJ but the circumstances under which the order came to be made is unclear.
I have regard to the significant quantity of both psychiatric and orthopaedic evidence in relation to the offender's background and medical condition. Dr Chan, the psychiatrist, proceeded on the history, which is not challenged, that he is a 53-year-old man, married with a 24-year-old daughter, and living with his family in Kurrajong. He joined the RFS as a volunteer in 2001 and began full time work with the RFS in 2004.
He had a motor vehicle accident in 2011 which led to multiple fractures and he was on crutches for two years and has residual disabilities. He told the psychiatrist that he was disgusted with himself in relation to the charges and described himself as being like an empty skeleton.
He had a normal childhood and upbringing, joined the Air Force for nine years and rose the rank of corporal.
He was diagnosed as having a major depressive episode precipitated by the motor vehicle accident and a significant decline in functioning. His treatment included anti-depressants. The clinical psychologist, Vicki Easson, has seen him on 15 occasions on referral from Dr Mosley up until March 2017. She notes the report from Dr Thomas Clark of August 2012 noting suicidal thoughts. He had been attending the psychologist, and learned his manage his anxiety and reduce his stress.
He has the support of family members who have been able to overcome their initial shock, anger and sense of betrayal. He notes the complete change in his life since 2009 with the constellation of events, including the death of his father, the serious motor accident, his engagement in acts of corruption while employed with a service in which he took great pride, and the damage to his family's happiness, security and reputation.
I have regard to the orthopaedic reports which describe the not unexpected sequelae of orthopaedic injuries that he has, as well as the report of Dr Clark the psychiatrist who saw him in August 2012, presumably for the purposes of proceedings following the motor accident. He diagnosed a post-traumatic stress disorder and a major depressive disorder.
Dr Mosley, GP, has provided a recent report in which she expresses a view given her long acquaintance with Mr Hacking that he will never be a repeat offender. She goes a little too far in asserting that if he had not been involved in the car accident he would not have made such poor and ill advised choices. That is a step I am not prepared to take.
I have regard to a number of references from people who are understandably at a loss to explain why an exemplary community minded citizen would become involved in this type of criminality. All speak to his good character both past and since the offending, and express the hope that he will continue to be a person who can contribute usefully to society and who will not reoffend.
The evidence in relation to counts 19 and 20, which will be taken into account under s 166, are headed firstly "Hacking Lied to ICAC Officer at Roadside." He apparently said to ICAC Officer Granger on his arrest on 14 February 2015 that the $20,000 cash in his possession was money owed to him by Homsey pursuant to loan, but in his record of interview he conceded that was untrue and the money was paid from the snack packs. He did not loan him any money at all.
The second count presumably 20 refers to lie told to an ICAC officer during his house search when the $49,550 was located. He said it had been taken from the bank and been acquired by selling houses and shares and was for his daughter's wedding, but he conceded that was a false explanation in his recorded interview. Both of these lies were made notwithstanding that he had received a clear warning from Officer Granger that it is an offence to lie to an ICAC officer.
I must take into account in sentencing the provisions of s 3A of the Crimes (Sentencing Procedure) Act 1999 which sets out the purposes of sentencing, including, deterrence, protection of the community, promotion of rehabilitation, making the offender accountable, denouncing his conduct and recognising the harm done to the victim of the crime and the community.
Mr James took me to the constellation of factors in relation to objective seriousness which is helpfully set out in the bench book, noting that one must bear in mind the amount of money involved, the length of time over which the offences are committed, the motive for the crime, the degree of planning and sophistication, and breach of trust. By any measure the amount of money involved here taken illegally over a lengthy period of time in a relevantly unsophisticated scheme represents very serious examples of offending under s 249B. The larceny charges to which I have referred also constitute serious examples of the offending involving as they did the brazen theft and on sale in some case of property belonging to the RFS.
I bear in mind, as Simpson J said in R v Brown (unreported 1 August 1994, NSWCCA)
"white collar crime itself is so various in its manifestations and nature that it is scarcely susceptible of precise definition or of defined sentencing principles."
One matter which does emerge clearly from the extensive examination of similar cases in R v Pont (2000) 121 A Crim R 302 is that professionals such as legal practitioners who commit breaches of trust must almost inevitably expect heavy custodial sentences. However, as the Court said at [76] in Pont,
"Whilst it seems clear that there is such a principle as would require imprisonment in the absence of exceptional circumstances of defalcating professionals or others, eg, company directors, whose crimes are of considerable extent and wide effect, I am unable to conclude that there is a useful statement of such a principle of general applicability in cases where persons are in a position of trust, the position of trust arising out of an employer/employee relationship. Expressions of the necessity for general deterrence and condign punishment are of limited utility to define the appropriate nature of the sanction to be employed in such circumstances.
It follows of course that it cannot be said that being in a position of trust by virtue of an employment relationship can constitute an aggravating factor under s 21A.
The Crown took me a number of decisions which provided admittedly limited assistance. Those cases to which I have been taken include R v Potter [2000] NSWCCA 26, R v Beard [1999] NSWCCA 392, Job v The Queen [2011] NSWCCA 267; R v McInnes (unreported, 26 July 1994 NSWCCA) and R v Bertoncello (unreported, 5 November 1997), and I bear in mind the submissions that have been made both by the Crown and Mr James in relation to those matters.
Mr James took me to Siwek v The Queen [2017] NSWCCA 178 in relation to a number of matters noting that the amount involved there in the fraudulent activity was $1.7 million obtained over a number of years. There is also reference made in that case to the decision of Baly DCJ in R v Roth (unreported, 18 December 2015, NSWDC) and I have had regard to her Honour's judgment in that matter as well.
Mr James' submission was that remorse had been demonstrated here in the most tangible fashion by assisting ICAC, by repaying the money, by disclosing additional criminality to ICAC, and engaging in the public humiliation of giving evidence of criminality before ICAC.
He noted that significant elements of public denunciation or deterrence have already been achieved by the public disclosure of the offender's criminality. He submitted, and I accept, that the criminality involved in cases such as in R v Pont (2000) 121 A Crim R 302 was such as to categorise them on a much higher level of objective seriousness. For example, the case of Pont involved the chief steward in the racing industry.
He took me to a number of statements both in EF v The Queen [2015] NSWCCA 20 and more recently by Simpson J in Robertson v The Queen [2017] NSWCCA 205, in support of his submission that any term of imprisonment should be served by way of an Intensive Correction Order, such statements indicating an ICO is a sentence of considerable severity and involves stringent statutory conditions.
I bear in mind that most fraud cases such as this one involve multiple offending and the sentencing judge is required to apply the totality principle and consider carefully questions of accumulation or concurrency so as to ensure that the ultimate sentence imposed is appropriate to the totality of the offender's offending and his personal circumstances, but it must not result in a blanket assessment of each offence. That of course does not mean that one cannot impose similar or identical penalties for a number of offences. One must consider the facts of each individual count.
I have referred to the need to take into account aggravating and mitigating factors as are appropriate to the case. No aggravating factors have been the subject of submission by the Crown, and none are apparent. The fact that the offender appeared to be in a position of trust by virtue of the employment relationship appears to me to be an element of the offending. The mitigating factors have been referred to, namely, prior good character, he is unlikely to reoffend, the pleas of guilty, the good prospects of rehabilitation, the remorse demonstrated, as well as the assistance provided, which I have taken into account.
The orders that I make are as follows:
1. The offender is convicted of each offence.
2. I impose an aggregate sentence of imprisonment of 2 years to commence from today.
3. Pursuant to s 7(1) of the Crimes (Sentencing Procedure) Act 1999, the court directs that the sentence be served by way of an intensive corrections order for 2 years commencing today and is subject to the mandatory conditions prescribed by the regulations under the Crimes (Administration of Sentences) Act 2009.
4. The indicative sentences are:
1. Charges 1, 2 ,3, 5,6 7, 10 - 14: 18 months;
2. Charge 4 : 22 months;
3. Charge 21: 6 months;
4. Charge 22: 20 months.
1. Charges 19 and 20 taken into account under s 166.
2. Form 1 matters are taken into account.
3. The offender is to report to the OIC at the Windsor office of CCS by 5pm, Friday 1 September 2017.
4. I make orders pursuant to the Short Minute of Consent Order, dated 25 August 2017.
Note - These extempore remarks were revised without access to the court file.
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Decision last updated: 05 November 2019