R v Issakidis

The financing transactions

1. Beech-Jones J also referred to the relationship with the ANZ and its clients and the structure of the transactions in the context of which the conspiracies occurred. His Honour described these transactions with particular and understandable emphasis upon Mr Dickson. The framework of the transactions is nonetheless precisely the same as that in which Mr Issakidis offended. The transactions at the centre of the conspiracies had the following characteristics or features.
2. During the course of 2005 and 2006, Mr Dickson carried out negotiations with the ANZ. One of the ANZ's clients sold an asset to a partnership consisting of the trustee of a unit trust, namely ANZ Investment Holdings Ltd, and the client. The ANZ provided debt financing to fund the purchase. The asset was leased back for use in the client's business. The trust generated assessable income from the lease payments although most of that income was used to pay debt, interest and fees. NeuMedix acquired 100 percent of the units in the unit trust. Under the relevant taxation legislation, all of the net income of the trust was to be treated as the taxable income of NeuMedix although it did not receive a distribution of those amounts as they were used to pay down the ANZ's debt. Instead, NeuMedix received a cash distribution from the trust of 9 percent of the taxable income of the trust.
3. The result of each such transaction was that ANZ's clients received an injection of cash from selling its asset. The client paid rent to use the asset, and those payments were tax deductible. The rental cost was lower than it otherwise would have been because NeuMedix was effectively contributing part of its tax losses to make the transaction more commercially attractive. ANZ received interest on its loan to the trustee, which was paid by the lease payments and fees for facilitating the transaction.
4. As noted, in return for it acquiring the obligation to declare the entirety of the taxable profit of the trust in its tax return, NeuMedix received cash payments representing 9 percent of each trust's taxable profit. In order for its participation in these transactions to make any commercial sense, NeuMedix had to have available to it very large amounts of tax losses to offset the taxable income it was required to declare. Mr Dickson repeatedly assured the ANZ that those deductions had been, or would be, generated by NeuMedix assuming obligations to pay very large amounts to acquire certain medical technologies. ANZ was assured that NeuMedix was in effect "selling tax losses" arising from large depreciation expenses on medical technology to acquire funding. The true position was that no such obligations were intended to be incurred and none was incurred. Instead Mr Dickson and Mr Issakidis agreed to use the bulk of the cash distributions for their own purposes.
5. In total, four such transactions were arranged involving three of the ANZ's clients, Bluescope Steel, Gunns and Incitec. The relevant trust deeds were executed on 30 August 2006, 17 December 2006, 1 August 2008 and 21 September 2009. The first cash distribution to NeuMedix was made on 26 October 2006 when $14.3M was sent to NeuMedix. Overall a total of $68.405M was distributed to NeuMedix by the four trusts between that date and 24 December 2009. As the ratio of cash distributed to deemed tax income was 9:100, it follows that it was envisaged that in excess of $750M in assessable income would be notionally distributed to NeuMedix and declared in its tax returns over time. In fact, just over $378M was "distributed" in the financial years 2007 to 2010, and declared in NeuMedix's tax returns.

The medical technologies

1. Throughout the period of the two conspiracies, NeuMedix presented itself as a business involved in the acquisition and exploitation of medical technology. It employed staff and had office premises. Both Mr Dickson and Mr Issakidis and other staff employed by NeuMedix had a number of dealings with various inventors of medical technology. The Crown case was not that the entirety of NeuMedix's business was a façade or that the medical technologies were not genuine. The Crown case concerned the means by which NeuMedix was alleged to have acquired three particular medical technologies which were the subject of the depreciation claims in NeuMedix's tax returns for the financial years 2007 to 2010.
2. The first medical technology was a cancer vaccine known as "Genvax". It was developed by Dr Stephen Ralph. Throughout 2006, Mr Dickson and Mr Issakidis met with Dr Ralph and discussed the terms upon which the technology might be acquired and exploited. The Crown tendered a variety of executed and unexecuted agreements which purported to transfer the rights to this technology to various entities. With the exception of those that were signed by Dr Ralph, the Crown case was that it could not and did not have to demonstrate when they were executed as Mr Dickson was engaged in the process of manufacturing agreements from time to time to suit his purposes and those of Mr Issakidis.
3. On or about 9 January 2007, Dr Ralph and his company, Genvax Pty Ltd, executed an agreement assigning the intellectual property rights in Genvax to Athena Health Patents Incorporated ("Athena") for 50 percent of the gross revenues on commercialisation. This is not the relevant assignment the subject of the false depreciation claims that were later made in NeuMedix's tax returns. On or about 15 January 2007, a loan agreement was executed in which Athena agreed to lend to Genvax Pty Ltd up to $1.8M on a non-recourse basis for the development of Genvax. A project deed concerning the development and exploitation of Genvax was executed on or about the same day.
4. Athena was incorporated in the Cayman Islands. It was originally named Neumedix Biotechnology International Limited but it changed its name to Athena in January 2007.
5. The assignment from Dr Ralph and Genvax Pty Ltd to Athena was executed on behalf of Athena by a solicitor purporting to act under a power of attorney executed by one of Athena's corporate directors, Flying Dragon Group International Ltd.
6. The second item of medical technology was a device placed on the upper part of the spine during surgery known as the "CG Surgical Clip". It was developed in New Zealand. On or around 2 March 2007, a representative of CG Surgical Limited executed an assignment of the intellectual property in CGS to Athena in exchange for 50 percent of the proceeds of commercialisation. On or about the same date, CG Surgical signed a loan agreement with Athena under which the latter agreed to advance up to NZD825,000 for the development of the technology. Shortly after these documents were executed a commercial dispute broke out so that in the end result only a small portion of the funds were advanced and there was almost no further development of the CGS.
7. The third item of technology was a diagnostic test for colorectal cancer known as "Cologene". It was developed by Dr Jenkins from the United Kingdom.
8. One of the agreements produced by Dr Jenkins was an assignment of the rights in Cologene from his company Armedillo Health Ltd to Athena in exchange for 40 percent of the proceeds of commercialisation. Another was a loan agreement between Athena and Armedillo under which an amount of up to GBP1.3M was agreed to be lent for the development and exploitation of Cologene.
9. The other two agreements were assignments by Athena. Under one of these agreements, Athena purported to assign the rights for Cologene to NeuMedix for the territory of Europe (other than the United Kingdom), USA, Mexico, Brazil and South Africa for a consideration of GBP200M. Under the other agreement, Athena purported to assign the rights to Cologene for the rest of the world to Neumedix Health New Zealand Ltd for GBP200M. The significance of these agreements is that they are fundamentally inconsistent with the assignment agreement for Cologene provided to the ATO which was said to justify the depreciation claims for the purported acquisition of Cologene by NeuMedix.

The tax returns and the tax audit

1. NeuMedix's tax return for the 2007 financial year was lodged on 26 February 2009. It was signed by Mr Dickson. It was not signed by Mr Issakidis. The return disclosed $47,837,698 in income from the unit trusts. However, this was offset by various expenses, the largest of which was a claim for $76,071,054 in depreciation expenses. The overwhelming bulk of that claim consisted of depreciation expenses in respect of the cost of the alleged acquisition by NeuMedix of the intellectual property in Genvax and CGS from Athena.
2. NeuMedix's tax return for the 2008 financial year was lodged on 17 September 2009. It was also signed by Mr Dickson but not by Mr Issakidis. That return disclosed $77,229,906 in income from the unit trusts but claimed $98,470,850 in depreciation expenses. The overwhelming bulk of the latter claim consisted of claims for depreciation expenses in respect of the cost of the alleged acquisition by NeuMedix of the intellectual property in Genvax, CGS and Cologene from Athena.
3. The lodgement of these returns led to the automatic generation of tax assessments which accepted the claims that were made. As NeuMedix recorded a tax loss, it did not incur any tax debt. However the returns attracted the attention of officers of the ATO which commenced an audit.
4. In February 2010, the ATO wrote to NeuMedix making a very broad request for the production of documents. On 15 February 2010, Mr Dickson wrote to the ATO seeking an extension of the time for compliance.
5. Between March and May 2010, Mr Dickson arranged for the ATO to be provided with fourteen folders of documents said to be responsive to the ATO's request and supportive of the amounts stated in NeuMedix's 2007 and 2008 tax returns, including the large depreciation claims. Included in this material were three unsigned agreements each of which purported to record an assignment of the intellectual property in one of the three medical technologies from Athena to NeuMedix. Each of them had a handwritten annotation on the front indicating that it represented the executed copy. The combination of the provision of these agreements with their annotations, the contents of the tax returns and various unsigned minutes of NeuMedix that were provided to the ATO recording the entry into of the agreements, amounted on the Crown case to an unambiguous assertion to the ATO that NeuMedix had acquired the three technologies on the terms set out in those agreements.
6. The ATO's letter of 10 February 2010 requested NeuMedix to provide, amongst other documents, any valuations of the relevant medical technologies that supported the amounts claimed for depreciation in NeuMedix's tax returns. Included in the material supplied to the ATO were three documents purporting to be valuations of the medical technologies by the Karkalla Biotechnology Group. Those valuations stated that the value of Genvax was USD627M as at December 2005, the value of CGS was between USD103M and USD119M as at February 2006 and the value of Cologene was USD2.541B as at November 2007. Each of the reports had a signature and underneath that the name "Peggy Wong, President Karkalla". Elsewhere in each document she was described as "Peggy Wong PhD President Karkalla".
7. There was evidence in the Crown case to suggest that these valuation reports were concocted by, or at the direction of, Mr Dickson and that the Dr Peggy Wong referred to either did not exist, or if she did, she had no connection to the reports. There was a vast amount of documentary material to support the Crown's contention. This included computer records pointing to the documents and their logo being created well after the dates referred to in the reports; documents indicating that Mr Dickson controlled various companies named "Karkalla"; the hosting of a contact email address for Peggy Wong by NeuMedix in Australia, although it was alleged that she was based overseas; and numerous other documents allegedly signed off by Peggy Wong that inconsistently attributed to her a multitude of titles and job descriptions. Mr Dickson's use of false identities was one aspect of his modus operandi in carrying out the two conspiracies. Mr Issakidis denied that he had any involvement in the creation of these false characters or that he even knew that they were not genuine.
8. On or about 17 May 2010, Mr Dickson caused NeuMedix's tax return for the 2009 financial year to be lodged electronically. The return declared $123,841,532 in assessable income from the unit trusts and claimed $106,689,541 in depreciation expenses. On 1 September 2011, NeuMedix's tax return for the 2010 financial year was lodged. It was signed by Mr Dickson but not by Mr Issakidis. The return declared $129,474,513 in assessable income from the unit trusts and claimed $109,021,139 in depreciation expenses. The overwhelming bulk of the depreciation claimed in each return was referable to the alleged cost of the acquisition of the three medical technologies under the assignment agreements. Further, when those depreciation claims were combined with carried forward losses from prior years, which were in turn attributable to depreciation claims in those years, it meant that the tax assessments that were automatically generated did not create a tax debt in favour of the Commonwealth.
9. On 15 February 2012, Mr Dickson caused NeuMedix to lodge amended returns for each of the financial years 2007 to 2010. The income declared in the returns was $18,550,000, $77,229,906, $30,868,000 and $129,474,513 respectively. The first and third of these figures were incorrect. The correct amounts were in the order of those disclosed in the 2007 and 2009 initial returns. The amount of depreciation claimed in each amended return was $76,888,893, $118,570,332, $104,042,825 and $102,825,040 respectively. The total of these amounts is just in excess of $402M. In excess of $378M was declared as income earned by NeuMedix from the unit trusts.

Mr Issakidis' role and conduct

1. The role played by an offender is a relevant consideration in sentencing for a conspiracy offence. In Tyler v R; R v Chalmers (2007) 173 A Crim R 458; [2007] NSWCCA 247, Simpson J said at [83]­-[84]: "[83] Identifying the 'role' of a participant by reference to his position in the organisational hierarchy is a very different proposition from isolating the precise physical acts that can be attributed to the particular offender, and selecting the punishment by reference solely to those isolated acts. It would be quite artificial, and contrary to the very concept of a conspiracy, to dissect with precision the physical acts of each of the conspirators, and to sentence the conspirator for those acts alone. That would be a negation of the complex inter-connection between the various participants, and the organisational nature of a conspiracy. It would represent too literal an application of the decisions that identify the 'role' of any participant as a relevant factor in the sentencing exercise. It would be to ignore the essential feature of the offence of conspiracy - the agreement to participate in an organised criminal activity. [84] That is not to say that the physical acts of the offender whose sentence is under consideration are irrelevant. They are relevant, as one part of a complex tapestry: see R v Nguyen [2005] NSWCA 362; 157 A Crim R 80 at [102]."
2. In the present case the Crown specifically accepted Beech-Jones J's findings in R v Anthony James Dickson (No 18) at [102] as to the difference in roles between Mr Dickson and Mr Issakidis: "… However, even allowing for the fact there were only two conspirators, the offender was the predominant player in the events the subject of count 1. As between him and his co-conspirator it was the offender who possessed a detailed knowledge of the tax system. It was the offender who possessed the professional skills necessary to implement, and did implement, those aspects of the conspiracy that were the vehicle for fraud, namely the incorporation and control of overseas entities, the use of false identities, the drafting of sham commercial agreements, the procuring of bogus valuations and the preparation of tax returns. The co-conspirator was not subordinate to the offender in any hierarchical sense. Nevertheless it was the offender who was the moving force behind the conspiracy that was the subject of count 1."
3. In these proceedings, the Crown contended notwithstanding these remarks that Mr Issakidis' role in the tax fraud conspiracy remained as Mr Dickson's equal and involved Mr Issakidis engaging in a substantial amount of conduct that was critical to the successful implementation of the conspiracy. Whilst the latter is true, I consider that the former requires closer examination.
4. Mr Issakidis role encompassed a number of different aspects.

Deception of ANZ

1. Mr Issakidis maintained that the totality of the evidence suggested that he was not part of an initial approach to the ANZ in 2004. That approach was made by Mr Dickson and Robin Harper who had both previously become involved with that bank doing what became known as structured finance deals. Two such transactions had been implemented by the time Mr Issakidis came to be involved. Mr Issakidis did, however, attend a meeting with the bank in 2006 in anticipation of further structured finance deals, three of which becoming the subject matter of the conspiracy count. Mr Dickson had considerably more to do with the bank than Mr Issakidis. It was Mr Rowe's evidence that Mr Dickson, not Mr Issakidis, represented to the bank that the NeuMedix group of companies had "tax losses" that would underpin the effectiveness or viability of the ANZ transactions. Mr Rowe's evidence was that Mr Issakidis generally kept him informed about the medical technologies.
2. Mr Issakidis accepts for present purposes that he was "involved" in communications with the ANZ. However, he maintains that his involvement was limited to being copied in on correspondence generated by Mr Dickson or others on his behalf, but that it did not originate with him. Mr Issakidis characterised his position as that of a passive recipient. Mr Issakidis contended that the high water mark of his active involvement was his letter of 12 April 2007 concerning the ANZ's due diligence process, and that the letter is no more than a generalised response that further details would be forthcoming. To the extent that further details were provided, they came from Mr Dickson.
3. The Crown submitted that Mr Issakidis was a party to the elaborate lies told to the ANZ. He was involved in meetings and communications spanning many years in which these lies were told. Principal among these were that NeuMedix had large legitimate tax losses available for it to participate in the structured finance deals and that NeuMedix would use the monies it received from the deals to purchase and commercialise intellectual property. These lies were critical to creating the opportunity to perpetrate and benefit from the tax fraud conspiracy.
4. The Crown submitted that Mr Issakidis was presented as a senior, highly experienced businessman and former solicitor with a particular passion for the commercialisation of intellectual property. These skills complemented Mr Dickson's expertise in structured finance transactions. A large (yet not exclusive) part of Mr Issakidis' role was to update and liaise with the bank about the medical technologies, whereas Mr Dickson focused more on the financial aspects of the relationship.
5. According to the Crown, Mr Issakidis' role also included furnishing the bank with falsified information when the bank was undertaking its apparently belated due diligence of NeuMedix. The 12 April 2007 letter he wrote to the bank was written as NeuMedix's "Managing Director" in response to the bank's request for audited financial accounts. Mr Issakidis promised to furnish it with "financial information on a regular basis relating to the activities of this company". Falsified financial reports for NeuMedix, containing large tax losses, were subsequently provided to the bank, co-signed by Mr Issakidis. Other financial information was also provided at various stages. Mr Issakidis also facilitated an inspection by the bank's representatives of NeuMedix's research activities at Griffith University pursuant to the bank's due diligence program.
6. I am ultimately satisfied beyond reasonable doubt that Mr Dickson and Mr Issakidis performed different roles and that Mr Issakidis' role was marginally less significant than that of Mr Dickson. Mr Dickson was clearly the architect and engineer of the tax fraud scheme and the overwhelming majority of documents produced in its operation were created by him. However, Mr Issakidis' role was less involved in the production of documents than in dealing with people in order to create and maintain a semblance of legitimacy. Some understanding of the significance of Mr Issakidis' importance to Mr Dickson can be measured by his share of the proceeds. That share was smaller than Mr Dickson's share but still amounted to in excess of $15M, making this an objectively very serious crime of its kind.

Exploitation of inventors

1. Mr Issakidis accepted that his primary role was liaising with inventors, negotiating the medical deals and monitoring ongoing expenditure concerning them. However, the Crown maintained that Mr Issakidis' role involved the procurement of intellectual property from inventors of certain technologies and its exploitation in order to generate the false appearance that NeuMedix had a suite of technologies that legitimately generated its large depreciation claims.
2. First, Mr Issakidis was involved in placing advertisements in publications to attract inventors. He had his real estate associate Steve Murray place an advertisement in a Gold Coast newspaper. This advertisement attracted Dr Ralph and his Genvax technology to become involved with NeuMedix. Mr Issakidis also paid for another advertisement to be placed in a scientific journal in the name of Karkalla International Holdings. He gave Mr Dickson his approval for Mr Dickson to send material to David Curran at Warrane College at the University of NSW recruiting possible inventors allegedly on behalf of a syndicate of international investors called Ashton Appleton Asset Management Ltd.
3. Secondly, Mr Issakidis was also involved in the commercial negotiations with the inventors to acquire their technologies on behalf of Athena Health Patents. He was involved in ongoing dealings with the inventors after their technologies had been acquired, including organising funds to be distributed to them. Mr Issakidis' most significant dealings were with Dr Ralph in respect of Genvax and Messrs Galvin and Broughton in respect of CG Surgical. He only had limited dealings with Dr Jenkins in respect of Cologene. Dr Ralph said that he negotiated with Mr Issakidis in 2006 in relation to Athena's acquisition of the technology and he had "DLA Phillips Fox on [his] side and Banki Haddock & Fiora on Mr Issakidis' side". This evidence demonstrated that Mr Issakidis' assertion that he believed Athena was an independent company of international investors represented by Mr Dickson was false: Mr Issakidis was the person actively representing Athena. He also provided his solicitor Ralph Praeger with a power of attorney supposedly issued by John Dickson to sign on behalf of Athena in relation to the Genvax transaction. Similarly, Mr Issakidis settled letters for Rob Thompson on behalf of Athena to send to Mr Galvin. He was also aware that Mr Praeger had been granted a power of attorney issued by "Edward Chang" to sign on behalf of Athena in relation to the CG Surgical transaction.
4. I am satisfied beyond reasonable doubt that Mr Issakidis' involvement was essential to the creation and maintenance of the appearance that the so-called business activities in which Mr Dickson and Mr Issakidis were involved were legitimate.

Exploitation of Walsh & Walsh

1. Mr Issakidis maintained that so far as this firm was concerned, while his role was not completely passive in the early days of the conspiracy, it was largely that of a conduit, or an introducer. The financial information provided to Walsh & Walsh was generated by Mr Dickson and merely passed on by Mr Issakidis. With the exception of including the figure of $37,000 relating to a consulting fee, Mr Issakidis had no other substantive involvement with the financial material.
2. The Crown contended that Mr Issakidis was involved in the exploitation of accountancy firm Walsh & Walsh unwittingly to create falsified financial reports for NeuMedix to provide to the ANZ. First, Mr Issakidis introduced his golfing associate and the firm's principal, Graham Walsh, to Mr Dickson and NeuMedix. Secondly, in the early period of the conspiracy, Mr Issakidis forwarded false financial information prepared by Mr Dickson to Mr Walsh in order that the accounts could be prepared. This included the "accountant's memorandum" which represented that NeuMedix had acquired technologies for millions of dollars and also a set of assignment agreements between Karkalla International Holdings and NeuMedix for hundreds of millions of dollars. The assignment agreements represented Peggy Wong in Hong Kong as Karkalla's representative and were completely inconsistent with Messrs Dickson and Issakidis having told the ANZ that Athena was the intellectual property vendor. Thirdly, in March 2008, Mr Issakidis co-signed NeuMedix's financial report for the financial year 2007 that had been prepared by Walsh & Walsh which claimed losses of $97,340,865. This version was supplied to ANZ. In June 2009, Mr Issakidis also signed a second version that claimed losses of $82,424,740. Both reports contained representations that NeuMedix "has a secured line of credit from Dampier Finance Asia Pacific Limited (an Asian based merchant bank)".

Deception of the ATO

1. So far as concerns the ATO, Mr Issakidis exclusively relied upon the fact that the material prepared and forwarded to the ATO both before and after the NeuMedix audit was prepared and settled by Mr Dickson.
2. The Crown submitted that Mr Issakidis was involved in the deception of the ATO during its audit of NeuMedix by signing, among other things, the false, HFAC Harmony deed backdated to 1 March 2006. This and other backdated documents had been created with the assistance of Michael Harper. The obvious purpose of this document was to give a false legitimacy to the large tax losses that NeuMedix had previously claimed in its tax returns. It also created another layer of disguise by asserting that Athena Health Patents was acting as agent and nominee for the HFAC Harmony Biotechnology Private Equity Partnership.

Mr Issakidis' knowledge of Mr Dickson's role and conduct

1. Mr Issakidis submitted uncontroversially that in order to convict him of the conspiracy count, the jury had to be satisfied beyond reasonable doubt that he knew that Athena was not an independent company backed by international investors. Mr Issakidis submitted, however, that it does not follow from the jury's finding that he was aware of the precise nature of the complex off-shore structures set up by Mr Dickson. For example, even though Mr Issakidis was regularly copied into correspondence generated by Mr Dickson, Mr Issakidis almost never responded to it. He submitted that there was nothing in his education or professional background that could have led to the inference that Mr Issakidis was aware of all of Mr Dickson's conduct in this respect. Mr Issakidis contended that if he had had the ability to understand the complex transactions created by Mr Dickson, his involvement in them would have been much greater. He contended further that it is by no means clear from the jury's verdict that Mr Issakidis had any knowledge of who was or who was not a fictional or non-existent character utilised by Mr Dickson for his own purposes.
2. The Crown submitted that the jury patently rejected Mr Issakidis' evidence that he believed Athena was an independent company backed by "international investors". This was ultimately the central issue, about which he was cross-examined at some length. The jury also implicitly rejected Mr Issakidis' other evidence that he was not aware of the extent of Mr Dickson's dishonest conduct because he did not read many of Mr Dickson's emails to him or because he could not read a balance sheet.
3. I am satisfied beyond reasonable doubt that Mr Issakidis knew the full ambit of Mr Dickson's extensive role and conduct in devising and implementing the tax fraud conspiracy. This knowledge can be inferred in part from the large volume of communications, over many years, in which Mr Dickson is shown to bring matters to Mr Issakidis' attention and sometimes ask for his input. Many of Mr Dickson's emails were marked "fyi" and covered all aspects of the scheme. They demonstrate a common mind and no significant secrets between Mr Issakidis and Mr Dickson. I am satisfied beyond reasonable doubt that Mr Issakidis read these emails, or a significant proportion of them, and that he remained aware at all times of what Mr Dickson was doing. Mr Issakidis' educational and professional background as a very experienced former solicitor, businessman and company director are consistent with the fact that he had the ability and skill to understand and appreciate the significance of the various matters that Mr Dickson brought to his attention.
4. It is implicit in the jury's finding that Mr Issakidis knew about the full apparatus of foreign companies and fictional identities that Mr Dickson used to perpetrate the tax fraud conspiracy. The main companies included Athena Health Patents in the Cayman Islands, Dampier Finance Asia Pacific Ltd and Karkalla International Holdings Pty Ltd in Samoa, and Intrepid Finance International and Flying Dragon in Hong Kong. Mr Issakidis was aware from an early stage that Mr Dickson was utilising these foreign entities and also searching for additional opportunities with various financial institutions. He sent and received correspondence from a number of Mr Dickson's fictional identities associated with these companies, including Dr Peggy Wong in relation to Karkalla International Holdings and Jay Corbett in relation to Dampier Finance Asia Pacific. Mr Issakidis knew that staff employed in NeuMedix's offices were represented at times as working for some of these companies, including Rob Thompson for Karkalla International Holdings and Adrian Compton in relation to Dampier Finance Asia Pacific.

Mr Issakidis' motivation and financial gain

1. I am satisfied that Mr Issakidis' participation in the tax fraud conspiracy was motivated by greed. He knew from the outset that his participation in the scheme carried the very real prospect, if not the guarantee, of a significant financial reward. Mr Issakidis' personal share in the approximately $68M that NeuMedix received in ANZ monies was $15,738,020. Mr Issakidis spent it on luxury items and investments, including purchasing real estate, prestige cars and a motor yacht. The transactions charted in Exhibits Q and R involving remittances to him are: Transaction # Amount Not charted $3,000,000 Transaction 23 $1,000,006 Transaction 33 $155,006 Transaction 49 $2,000,000 Transaction 59 $2,976,000 Transaction 90 $3,000,008 Transaction 97 $975,000 Transaction 98 $2,032,000 Transaction 102 or 104 $600,000 Total $15,738,020

1. Mr Issakidis conceded that it was open to me to conclude that he was motivated by greed.

Mr Issakidis' role and conduct

1. Mr Issakidis contended that he did not operate as Mr Dickson's equal in connection with the money laundering offence. His role was to supervise the scientists and expenditure related to them. Mr Issakidis gave detailed evidence about this at the trial.
2. Mr Issakidis also submitted that it was Mr Dickson who set up the complex and intricate set of offshore arrangements for expatriating and returning large sums of money and that it was also Mr Dickson who coordinated the several companies concerned. Mr Issakidis contended that to the extent that he had any direct involvement in these matters, it was limited to operating upon bank accounts at Mr Dickson's direction.
3. The Crown again contended that Mr Issakidis' role in the money laundering conspiracy was in fact as Mr Dickson's equal and involved him engaging in a substantial amount of conduct that was critical to the successful implementation of that conspiracy. This covered a number of different aspects.
4. For example, Mr Issakidis organised the remittance of over $60M from NeuMedix's NAB account in Australia to DFAP's Barclays account in Hong Kong. He controlled NeuMedix's bank account. Some of these transfers were falsely described as for the "Acquisition of intellectual property patents". Mr Issakidis was a party to the deception of Barclays when they were carrying out their "know your client" obligations when Mr Dickson was seeking to forward monies to other accounts. Mr Dickson copied him into various emails with the bank.
5. Possibly the most significant evidence concerning Mr Issakidis' role consisted in his calculation of the respective shares of ANZ monies. Mr Issakidis was cross-examined at length about what came to be called the "divvy-up" documents, which calculated the split of the ANZ monies and interest earned on them for distribution among himself, Mr Dickson and a third person. These documents were, significantly, in Mr Issakidis' handwriting. Mr Issakidis maintained at all times that these documents related to a calculation of the relevant interest payments and not, as the Crown alleged, to a distribution of the sums paid by the ANZ as part of the transactions.
6. The Crown maintained that Mr Issakidis corresponded with Mr Dickson's fictional identities in order to lay a false paper trail to disguise the return of ANZ monies to him, including Jay Corbett, Peggy Wong and John Jiao Long Zhu. Mr Issakidis submitted that this did not follow inevitably from the jury's verdict, which was necessarily limited to findings concerning the elements of the offence. Mr Issakidis maintained that the only available inference is a finding that he knew in a general sense about the fact that Athena was not, in truth, legitimately being paid large sums of money generated by the structured finance deals and that it may also be inferred that the jury accepted that he was dealing with the proceeds of a fraud.
7. The Crown conceded that the evidence does not permit a finding beyond reasonable doubt that Mr Issakidis knew, for example, the precise details of the shareholding or ownership and control of the companies based in Hong Kong or Samoa.
8. Mr Issakidis exploited Praeger Batt lawyers unwittingly to create falsified legal documents to disguise the return of his ANZ monies from overseas and to provide to the ATO during its audit. He also used that firm's trust account to receive funds that were being returned from overseas. For example, during the ATO's audit of Mr Issakidis' personal affairs, he instructed the firm to create a suite of documents described as "Bills of Sale", that were intended to disguise his ownership of assets. One asserted that "Craxgold granted Bill of Sale for Dampier Finance FX Solutions as trustee for the Takahashi Kato Discretionary Trust as agent for the Itsutsu Hoshi Finance Partnership". Again, these documents involved the creation of elaborate layers of false ownership and control so as to disguise Mr Issakidis' ownership of the assets. Similar efforts were made using Praeger Batt when Mr Issakidis disguised his investment in Gold Coast real estate under the cloak of the NanaHoshi Partnership and his fictional business partner John Jiao Long Zhu.
9. Mr Issakidis was involved in the deception of the ATO during its audit of him and his companies by creating and providing falsified loan, partnership, trust and non-compete agreements in an attempt to disguise the return of ANZ monies to him. In addition to Praeger Batt, Mr Issakidis engaged the services of Michael Harper and Adrian Compton to assist him to achieve these ends. Mr Harper prepared various documents, including the non-compete agreement to which Mr Issakidis made hand written additions. Mr Compton was presented as a lender to facilitate false loans to Mr Issakidis. For example, Mr Compton said in his evidence that there "wasn't any loan approval process, for approval, it was just Michael's way of asking in code". Mr Compton fulfilled requests from Mr Dickson to create false bank statements so as to substantiate the false loans that had been made to Mr Issakidis and his wife. Mr Issakidis wrote to the ATO promulgating all these false arrangements.
10. It is once again implicit in the jury's verdict that Mr Issakidis also knew about the full apparatus of foreign companies and fictional identities that Mr Dickson used to perpetrate the money laundering conspiracy. I am also satisfied beyond reasonable doubt that Mr Issakidis knew about Mr Dickson's use of his brother John Dickson in Hong Kong to facilitate the transfer of funds between overseas accounts and banks in Australia. He knew about the assistance being provided by Michael Harper and Adrian Compton, largely on Mr Dickson's instructions, during the period of the ATO audits.

Mr Issakidis' motivation and financial gain

1. As already mentioned, Mr Issakidis was a beneficiary of portion of the funds he conspired to deal with in the sum of approximately $15,738,020.

Any injury, loss or damage resulting from the offence: s 16A (2)(e)

1. It is submitted by the Crown that it is open to me to make the same findings of fact that Beech-Jones J made in R v Anthony James Dickson (No 18) at [76] and [80], namely that the loss or risk of loss intended to be caused to the Commonwealth was $135M. In Dickson v R, the Court of Criminal Appeal found no error in Beech-Jones J's findings on the issue of the quantum of loss. I propose to adopt that course. It was not contested by Mr Issakidis.
2. The Crown submitted that taxation fraud is a fraud on all other taxpayers who lawfully pay what is due for the maintenance of government, the institutions of government and services for the common good. As was said by the Victorian Court of Appeal in DPP (Cth) v Goldberg (2001) 184 ALR 387; [2001] VSCA 107 at [32]: "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."
3. Ultimately, the injury that is suffered is a collective financial injury and a loss of confidence in the efficacy and integrity of the taxation system.

The degree to which the person has shown contrition for the offence: s 16A(2)(f)

1. Mr Issakidis has shown no sign of contrition or remorse for his offending. On the contrary, he chose to give evidence at his trial and to tell what I am satisfied beyond reasonable doubt were lies about his knowledge of the complex and intricate facts that constituted his criminal activities. It is therefore understandable that Mr Issakidis did not give evidence at his sentencing proceedings. It would have been difficult for Mr Issakidis convincingly to retreat from his robust protestations of innocence before the jury and to offer straight-faced explanations on matters that in some cases were wholly incredible. Mr Issakidis' explanation of the divvy-up documents and his insistence upon a belief in the existence of overseas investors are two examples of this tendency. It is probably an inevitable function of these circumstances that no submissions were proffered on Mr Issakidis' sentencing proceedings suggesting that he was contrite or remorseful. He has also lodged an appeal against his conviction, as he is entitled to do.

The degree to which the person has co-operated with law enforcement agencies in the investigation of the offence: s 16A(2)(h)

1. Mr Issakidis has not provided any co-operation with law enforcement agencies in the investigation of the offences or any other offences. This is not a factor that counts against him for present purposes. It is simply a matter from which he can derive no benefit or assistance.

The deterrent effect that any sentence or order under consideration may have on the person: s 16A(2)(j)

1. It was contended by the Crown that although Mr Issakidis will be further advanced in age when he is released from prison, the sentences imposed on him should encompass some element of specific deterrence, given that he has failed to acknowledge any wrongdoing in his actions and that he may have an opportunity to re-enter the business world upon his release and offend again.
2. As superficially and theoretically attractive as that argument may appear, I have no expectation, to a degree approaching certainty, that Mr Issakidis will be attracted to, or involved in, any similar criminal activity upon his eventual release from custody. There is in my view any number of obvious reasons for this. First, Mr Issakidis will be of an advanced age. Secondly, his considerable health problems, to which reference appears elsewhere in these remarks, are likely in differing ways to a greater or lesser extent to have an adverse effect upon his motivations and physical abilities. Thirdly, having regard to the depredations of the custodial setting, it would be surprising if Mr Issakidis were prepared to risk any further time there. I note in this last respect that Mr Issakidis attempted to take his own life in the shadow of his originally scheduled sentencing proceedings. The awful prospect of imprisonment for a man of his age, having experienced a full and prosperous life and enjoyed the apparent benefits of social recognition, is difficult to overestimate.

The deterrent effect that any sentence or order under consideration may have on other persons: s 16A (2) (ja)

1. The Crown submitted that the sentences imposed on Mr Issakidis should factor in a very significant component for general deterrence.

The tax fraud conspiracy

1. The Crown drew attention to the well-established principle that general deterrence is a predominant consideration when sentencing offenders for offences involving a fraud committed upon the Commonwealth revenue and that such crimes should attract a full-time custodial sentence, other than in exceptional or very special circumstances. It was not contended on behalf of Mr Issakidis that anything apart from a custodial sentence was called for in this case.
2. The Crown submitted that fraud upon the Commonwealth is prevalent, easy to commit, difficult to detect and damaging to the community. Appellate courts have also repeatedly stated that sentences for tax fraud in particular should have both a significant punitive and deterrent effect. This is said to be particularly so where the fraud is calculated, systematic and carried out over an extended period: R v Wright (1994) 74 A Crim R 152 at 157-160; R v Caradonna (2000) 118 A Crim R 312; [2000] NSWCCA 398; R v Stitt (1998) 102 A Crim R 428.
3. In Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45 at [63], the High Court observed: "[63] The applicants' offending was sustained over a long time. It was planned, deliberate and deceitful, requiring for its implementation the telling of many lies. The applicants acted out of personal greed. The amount of tax evaded was not small. Detection of offending of this kind is not easy. Serious tax fraud, which this was, is offending that affects the whole community. As was pointed out in Ruha, the sentences imposed had to have both a deterrent and a punitive effect, and those effects had to be reflected in the head sentences and the recognizance release orders that were made."
4. The same sentiment was expressed in R v Huston; R v Fox; R v Henke; ex parte Cth DPP (2011) 219 A Crim R 209; [2011] QCA 350 at [58]: "[58] Sentences in these cases must do more than pay lip service to the need for general deterrence. They must be effective deterrents, and address the reality that conspiracy to evade tax is a form of corruption which has an insidious corroding effect on society. They must as well vindicate honest taxpayers."
5. The Court in DPP (Cth) v Gregory (2011) 34 VR 1; [2011] VSCA 145 at [53]-[54] emphasised the importance of general deterrence as a sentencing consideration in white collar crime: "[53] In seeking to ensure that proportionate sentences are imposed the courts have consistently emphasised that general deterrence is a particularly significant sentencing consideration in white collar crime and that good character cannot be given undue significance as a mitigating factor, and plays a lesser part in the sentencing process. In the case of taxation offences general deterrence is also given special emphasis in order to protect the revenue as such crimes are not particularly easy to detect and if undetected may produce great rewards. 'Deterrence looms large' as the present process of self assessment reposes on the taxpayer a heavy duty of honesty. Moreover, general deterrence is likely to have a more profound effect in the case of white collar criminals. White collar criminals are likely to be rational, profit seeking individuals who can weigh the benefits of committing a crime against the costs of being caught and punished. Further, white collar criminals are also more likely to be first time offenders who fear the prospect of incarceration. [54] In many if not most cases, imprisonment will be the only sentencing option for serious tax fraud in the absence of powerful mitigating circumstances. A sophisticated degree of planning accompanied by a lack of contrition should ordinarily lead to a more severe sentence of imprisonment. But despite the recognised importance of general deterrence, tax fraud has not always been as severely enforced as other forms of criminality. Over a decade ago this court, constituted by Winneke P, Brooking and Callaway JJA observed in R v Nguyen and Phan that the seriousness of the offence of defrauding the Commonwealth of income tax 'has not always been sufficiently reflected in the sentence passed.'"
6. I have on occasion expressed some doubt about the effectiveness of general deterrence in the case of crimes of passion or spontaneous or unexpectedly provoked acts of violence. The prospect that offenders in such cases ever turn their minds in advance to the consequences of their actions is likely to be small. The position is quite different in the case of well-planned, often intricate, commercial crimes where the curiously unquestionable luxury of extended periods over which to contemplate the consequences of detection is ever present. The sentences that I intend to impose in the present case will include some element of general deterrence.

Money laundering

1. I propose to take the same approach with respect to the money laundering offence. In R v Ly (2014) 241 A Crim R 192; [2014] NSWCCA 78 at [86], the Court noted the following: "The serious criminal activity of money laundering warrants severe punishment not the least in order to reflect general deterrence of a very significant degree. When the activity is engaged in for profit over a significant period of time and with a large number of transactions, the prior good character of the offender is of less significance than might otherwise be the case: R v Huang; R v Siu at [36]."
2. With respect to conspiracies generally, the remarks in Shepherd v R (1988) 37 A Crim R 303 at 313 should also be noted: "It is not often mentioned but it is never to be forgotten that men acting in combination to achieve unlawful ends present a far greater evil and danger to the community than do the acts of individuals acting alone to achieve their nefarious ends."

The need to ensure that the person is adequately punished for the offence: s 16A(2)(k)

1. The courts have consistently recognised that revenue fraud is prevalent and serious and that the community's expectation is that it will be appropriately punished: see, for example, R v Huang (2007) 174 A Crim R 370; [2007] NSWCCA 259 at [36]. Money laundering is also a serious criminal activity.

Character, antecedents, age, means and physical or mental condition of the person: s 16A (2)(m)

1. The Crown acknowledged that Mr Issakidis' age and health were subjective features that distinguish him from Mr Dickson. These factors, and the significance of them for sentencing purposes, were central to Mr Issakidis' submissions in these sentencing proceedings.
2. Mr Issakidis was born in May 1944. He is accordingly shortly to turn 74 years of age. It is uncontroversial that Mr Issakidis suffers from a series of medical conditions of differing significance. It is necessary to examine these briefly.

Heart disease

1. Mr Issakidis has a long standing heart condition. In 2002, he was diagnosed with "severe disease involving the left anterior descending coronary artery" requiring the insertion of a stent. In 2008, Mr Issakidis experienced chest pains and underwent a procedure for the widening of his coronary artery. Mr Issakidis' current coronary status is set out in a report from Dr Kenneth Hossack dated 17 October 2017. Tests conducted thus far suggest that: "… either Mr Issakidis has developed blockages in one or more of the stents that have been placed or that there has been a progression in the severity of coronary artery disease in the other un-stented vessels such that it is causing him symptoms and causing abnormal stress echocardiogram."
2. Dr Hossack was of the opinion in October 2017 that: "If coronary angiography was not performed and treatment not instituted then there would be a significant risk, greater than 20%, that Mr Issakidis would sustain a myocardial infarction within the next three to four months and there would be a significant risk, greater than 20%, that Mr Issakidis could die suddenly within the next three to four months."

Cancer treatment

1. Mr Issakidis has completed a course of radiotherapy for the treatment of prostate cancer. As a side effect of that treatment, Mr Issakidis developed diarrhoea, poor urinary flow, urinary urgency, and frequency. Medication to alleviate these symptoms is potentially inimical to his heart condition.

Knee pathology

1. Mr Issakidis suffers from quite severe bilateral patellofemoral osteoarthritis and early bilateral medial and lateral arthritis. Dr David Zavattaro considered, in his report dated 12 October 2017, that Mr Issakidis was: "… at the stage where he has quite significant anterior knee pain which is significantly affecting his activities of daily living and requires bilateral staged total knee replacements."
2. It is submitted that Mr Issakidis' combination of conditions is such that there should be some moderation of the otherwise appropriate sentence to reflect the fact that his time in custody will be more burdensome than might otherwise be the case for a man of his age without the same problems with his health.

Mental health

1. Mr Issakidis has been diagnosed with a depressive illness characterised by early morning wakening, lack of energy and motivation, symptoms of anxiety, social withdrawal and inability to experience pleasure. He has been diagnosed with an anxiety disorder and suffers from panic attacks which have emerged in the five years since being charged with these offences. Dr Olav Nielssen prepared a report dated 17 October 2017 in which he indicated that Mr Issakidis: "… did not report any previous symptoms of anxiety, apart from being aware of feeling anxious in enclosed spaces. However, he said that he had experienced a panic attack around the time he was charged with the offences and said that he had experienced intermittent panic attacks during periods of stress from that time, with shortness of breath, the sensation that he was having a heart attack and strong urge to get into the open to overcome the sensation that he could not breathe."
2. Mr Issakidis apparently reported to Dr Nielssen that he had previously been quite gregarious, but had become withdrawn and isolated in recent years, especially in the last 12 months.
3. Mr Issakidis contended that the delay of more than five years between his original arrest and ultimate conviction has not been attributable to anything done or not done by him. He submitted that any sentence to be imposed should reflect the delay and the impact that it is likely to have had upon his mental health.
4. The principles that apply to a consideration of whether a particular offender's sentence should be mitigated on account of his or her health or age were recently listed by Beech-Jones J in R v Obeid (No 12) [2016] NSWSC 1815 as follows: "[117] First, in circumstances where illness is relevant to the determination of a sentence, its weight must be assessed in light of 'all the circumstances of the case, and an appropriate balance has to be maintained between the criminality of the offender and any damage to health or shortening of life' (R v Achurch [2011] NSWCCA 186; 216 A Crim R 152, 'Achurch' at [117] per Johnson J citing: R v Sopher (1993) 70 A Crim R 570 at 573; R v BJW [2000] NSWCCA 60; 112 A Crim R 1 at 6-8 [23]-[31]). [118] Second, although the health of an offender is relevant to the type and length of any sanction imposed, generally it will only be a mitigating factor 'when there is evidence to show that there is a serious risk that imprisonment will be a greater burden on an offender, by reason of ill health, or where there is a serious risk that imprisonment will have a grave adverse effect on the offender's health' (R v Badanjak [2004] NSWCCA 395 at [9] per Wood CJ at CL with McClellan AJA and Smart AJ agreeing; R v Smith (1987) 44 SASR 587 at 589; Achurch at [118]). [119] Third, the relative strictness that is applied to a consideration of whether some matter affecting the health of an offender operates as a substantial mitigating factor does not necessarily apply when such matters are considered in combination with other factors such as age in determining whether 'special circumstances' are established for the purposes of s 44(2) of the Sentencing Act (see Griffiths v The Queen (1989) 167 CLR 372 at 379 per Brennan and Dawson JJ; R v Simpson [2001] NSWCCA 534; 53 NSWLR 704). However, double counting of matters affecting the length of the head sentence and matters that might constitute special circumstances must be avoided (R v Fidow [2004] NSWCCA 172 at [18] per Spigelman CJ ('Fidow')). [120] Fourth, an otherwise appropriate sentence of imprisonment should not be reduced on the basis that it is likely to extend to most of the offender's remaining life expectancy (Goebel-McGregor v R [2006] NSWCCA 390 at [128] per James J, with whom Hidden and Hislop JJ agreed; Barton v R [2009] NSWCCA 164 at [22])."
5. Mr Issakidis has no relevant criminal history.
6. The Crown submitted that Mr Issakidis' standing within the business community, both with respect to his dealings as a property developer and the exploitation of medical technologies, his legal education and former practice as a solicitor have operated to facilitate the commission of the offences and have placed him in a position from which he was able to commit them. The Crown relied upon a line of authority to suggest that where the need for general deterrence is strong, less weight should be given to good character in such circumstances. This is said to be particularly so in cases of the systematic defrauding of the revenue. While I accept the force of this argument, it should not be permitted in this case to derogate from the strength of Mr Issakidis' very powerful subjective case and the extent to which that distinguishes him from Mr Dickson.

The prospect of rehabilitation: s 16A(2)(n)

1. I consider that Mr Issakidis has good prospects of rehabilitation. Indeed, having regard to both the enigmatic nature of the offending conduct, in the sense that it has been committed by a man with a formerly respected position in the community and no criminal antecedents, as well as his relatively advanced age, it is difficult to believe that Mr Issakidis would again resort to conduct of the type that underscores his convictions. Even taking account of my conclusion that Mr Issakidis was motivated by greed, it remains one of the great mysteries in this case why he permitted himself to become involved in the no less than Machiavellian schemes of Mr Dickson when his otherwise unblemished, successful and legitimate career should have been winding down. I was given the distinct impression by Mr Issakidis over the several days of his cross-examination that he had an almost unwavering belief in his own ability to explain the inexplicable. For example, his persistent adherence to a stated belief in the existence of overseas investors was transparently the stuff of fantasy. I am equally satisfied that any pretensions of retaining that capacity will by now well and truly have dissipated. I suspect that Mr Issakidis' decision not to give evidence at his sentencing hearing was a tacit recognition of that fact.

Delay

1. Mr Issakidis submitted that delay was a significant factor to be taken into account in his favour. That was on his case particularly so having regard to his psychiatric or psychological issues to which I have earlier referred.
2. The brief history of the proceedings to date is as follows: Event Date Arrested and charged 24 April 2012 First return 27 April 2012 Committed for trial 28 May 2013 First trial commences 4 August 2014 Mistrial declared 10 November 2014 Moseley stay ordered 26 June 2015 Second trial commences 9 March 2016 Jury discharged 14 March 2016 Third trial commences 16 March 2016 Hung jury declared 7 June 2016 Fourth trial commences 10 April 2017 Guilty verdicts returned 13 June 2017

1. Mr Issakidis contended that the appropriate starting point in this context was the well-known remarks of Street CJ in R v Todd [1982] 2 NSWLR 517 at 519-520. More particularly, Mr Issakidis referred to the remarks of Bellew J in Sabra v R [2015] NSWCCA 38 at [45] as follows: "[45] Delay which is not attributable to an offender may be relevant on sentence at a number of different levels. Ordinarily, such delay will be a mitigating factor if (as in the present case) it has resulted in significant stress to the offender, or has left him or her, to a significant degree, in a state of uncertain suspense. Where there is evidence that delay has led to consequences being visited upon an offender which are adverse to his or her circumstances and which are over and above stress and anxiety, be those consequences in the nature of interrupted rehabilitation or otherwise, then the weight to be given to such delay in the sentencing process will obviously be greater. But that is not to say that an offender must be able to establish consequences of that kind before delay can become relevant at all. To so conclude would be contrary to the weight of previous authority in this Court."
2. It is clear since DPP (Cth) v Pratten (No 2) [2017] NSWCCA 42, if not otherwise, that delay per se does not operate to mitigate a sentence. A plea of guilty ought not to be construed as causing delay. The extent to which delay is the fault of unreasonable conduct on the part of the prosecution is a relevant circumstance. In that case, Basten JA noted at [94] that: "… delay may lead to uncertainty and stress with the potential to disrupt the offender's life. However, any stress and psychological problems, to be taken into account favourably to the offender, will usually need to result from circumstances beyond his control."
3. Mr Issakidis contended in the present case that almost none of the delay was the result of circumstances within his control. For example, the first trial was aborted because of the late disclosure of material by the Crown. A second trial was aborted because of jury misconduct. The third trial resulted in a jury that was unable to reach a verdict.
4. In my opinion, to some extent these delays should be taken into account when considering what the proper sentence is in this case. At one level, these delays are no more than the expected and usual operation of the judicial process, and are unassociated with any impropriety on the part of the Crown. However, in another sense they are clearly both beyond Mr Issakidis' control and regrettably likely to be more significant to him as an offender in his 74th year than to one who is much younger. Specifically, the prospect for Mr Issakidis of serving a sentence starting at his age is likely to have caused some concerns for him that might not have been present, or not present with the same force, if he had been sentenced three or four years earlier. To that fact must be added the deterioration during that time of Mr Issakidis' physical and mental health. I accept that it is more difficult for aged inmates to live and function with dignity in a correctional setting.
5. Counsel for Mr Issakidis emphasised principles of parity in the current setting. In the case of Mr Dickson, the Court of Criminal Appeal emphasised the nature of his offending, its scale, the level of sophistication and planning involved, the way in which and the time over which it was pursued and implemented, and Mr Dickson's role in the conspiracy, having regard to his detailed knowledge of the taxation system.
6. However, far from relying upon any argument based upon parity with Mr Dickson, Mr Issakidis understandably sought instead to underscore the significant differences between them. Mr Issakidis contended that the sophistication and planning accompanying his offending was largely brought about by Mr Dickson utilising his knowledge and experience and that that represented one relevant point of departure. He secondly emphasised that Mr Issakidis' role was "materially different and lesser [sic]" than that of Mr Dickson.
7. As I have already observed, it has been expressly conceded by the Crown that Mr Issakidis could reasonably anticipate the imposition of sentences that were slightly less severe than those imposed upon Mr Dickson.

Consideration

1. My conclusion that Mr Issakidis was motivated by greed offers the only explanation as to why he ever became involved in the events that gave rise to these criminal proceedings.
2. Mr Issakidis gave evidence that in 2002 he became interested in medical technologies through his association with Dr Lawrie Clift and a company called Monet Technologies, a firm from America that dealt with the promotion and development of medical technologies. About a year later, Mr Issakidis formed HealthTech Pty Ltd with Dr Clift and Monet Technologies to promote medical administration software. From the early 2000s, Mr Issakidis had an interest in medical technologies and a growing passion for promoting them.
3. That interest led to a meeting at the accounting firm Ernst & Young about a technology with which one of their clients was involved. It was at Ernst & Young that Mr Issakidis met Andrew Robertson, Robin Harper and Anthony Dickson among others. They were the senior people involved in NilNav and Ernst & Young and he was subsequently retained by NilNav to promote and distribute medical technologies in Australia and the USA.
4. Mr Issakidis said he developed a complete trust in Anthony Dickson who he viewed as the senior person at Ernst & Young. Mr Issakidis knew him to be admitted as a barrister in New South Wales and someone who had accounting and taxation experience, and who had been concerned with structured finance deals. Mr Issakidis was asked to become involved in one such deal for the acquisition of intellectual property relating to global diseases in the course of which there would be moneys paid through the ANZ and various structures. Mr Issakidis said he was not au fait with these accounting structures or how they worked, but he had some knowledge of how taxation losses could be used from his own previous experience with his company Sailfox. Mr Dickson told him that the transactions were very complicated but that he would take care of all the documentation, instructions, legal and accounting obligations. Mr Issakidis said that he took comfort in these statements by Mr Dickson and that he had total trust in him. At a subsequent meeting with the ANZ, Mr Issakidis agreed to become involved.
5. Concerning their respective roles in NeuMedix, Mr Issakidis said that Mr Dickson told him that he was to work with the inventors and, where possible, monitor the research expenditure. Mr Dickson also told him that Mr Dickson would be concentrating purely on the legal and accounting work. Mr Dickson told Mr Issakidis that he would be signing off on all financials and all legal documents because the documents were complicated and must be correct.
6. Mr Issakidis' response to the Crown case was to contend that it all came down to his honesty and the extent of his knowledge. The question for the jury to decide was whether Mr Issakidis was honest and whether he was aware, or had knowledge, of what Mr Dickson was doing. Central to that question was that Mr Issakidis believed the commercial structures were legitimate and that the taxation and depreciation claims were legal.
7. Despite the extraordinarily detailed and complicated factual matrix with which the jury were concerned, the very simple, and probably not very difficult question, was whether or not it was legal for a company to claim a depreciation deduction for a depreciable item for which it had neither paid nor become legally obliged to pay. The essential question for the jury to consider on the tax fraud conspiracy was whether Mr Issakidis honestly believed that it was legal for NeuMedix as a taxpayer to claim an income tax deduction amounting to hundreds of millions of dollars for the alleged cost of acquisition by NeuMedix of what were genuine medical technologies, even though it was agreed that no such cost was to be incurred.
8. It follows from the jury's verdict on the conspiracy to defraud count that this explanation was entirely rejected.
9. During his extensive cross-examination, Mr Issakidis gave this evidence: "Q. … At that time, you'd had loan agreements for $4 million with that company; correct? A. Yes, that's correct. Q. You knew at that time, didn't you Mr Issakidis, that Mr Dickson controlled that company? A. No I did not know that. Q. You knew he controlled the Barclays Bank account of Dampier Finance Asia Pacific at that time; didn't you? A. I did not know he controlled that account. Q. I thought you gave evidence yesterday that he had some relationship with that account, didn't he? A. Yes, he was involved in shifting the fund. I presume that was pursuant to the ownership of the funds by the overseas investors, and he was taking instructions from them. … Q. You knew that IFI had held ANZ Bank moneys at this time, didn't you? A. I knew some moneys had gone or were going under the control of that because he was told to me to be an escrow agent for the overseas investors. … Q. You knew at this time that there were no international investors, isn't that right? A. I did not know anything about that. I always believed there were international investors and in fact I had seen a chart or more than one chart presented by Dickson showing overseas investors on it. Q. Your evidence to the jury is you trusted Mr Dickson for these six years 2006 to 2012, is that right? A. Yes my evidence is that I trusted him. I had no reason not to trust him. Q. … There were some more communications between yourself and Mr Thompson and you responded to Mr Thompson with some more advice as to what to put into correspondence with Galvin, is that right? A. Yes I did. I was concerned, I didn't want to see NeuMedix Health Australasia wasting time on something that perhaps may never reach commercialisation. Q. You said in correspondence on behalf of Athena, did you ask 'Why isn't Athena doing this?' A. It didn't occur to me to ask because I have been involved in assisting people all my life. I don't, I don't ask whether they could go to their lawyer or go to someone else. I was asked to have a look at it. I was the one who started the argument and I was happy to make the amendments."
10. I am satisfied beyond reasonable doubt that Mr Issakidis knew that there were no overseas investors and that his repeated references to them, or to their existence, were lies told in order to explain what could not otherwise be explained. Mr Issakidis even used this concept of international investors in his attempts to explain the divvy up documents. For example: "Q. Right. And you knew the interest rate being earned in the Dampier bank account in the United Kingdom; is that right? A. I asked for it, because my point was, which I think I made earlier, that money had gone over, in other words money had left from the account of NeuMedix Health Australasia to the overseas investors before it should have. Therefore, if it's now sitting in an account overseas, then the interest that it's earnt on that account should also be part of these calculations. … Q. In any event, there is nothing there about paying too early to the international investors, is there? A. No, I didn't, at that time Dr Ralph was done. CG Surgical was done, and I was given to understand that Jenkins was about to be done, very close to finalisation. There were a couple of things I believe at the time, so I didn't have any objection to sending this money, but then, the Jenkins matter ultimately didn't complete until November 2007 and it was after this time, I can't tell you how many days or whether it was the following month but I started to have heated arguments with Dickson about the fact that money had gone over there too early, there was interest, and the interest should be something that has nothing to do with the overseas investors and that led to the interest calculations that I did."
11. Occasionally, some of Mr Issakidis' references to international investors became inconsistent and contradicted previous references to them. For example: "Q. So that is the polar opposite of what you told this jury in respect of the use of those moneys to your knowledge at the time, isn't that right? A. Again, I don't recall this email but, reading it, I don't think it is polar opposite because at some stage, and I can't say if it was just before or just after there was a visit to Hong Kong I was informed that Intrepid Finance was adopting that role as escrow agent for the investors, and he ultimately did become actually a lender on one of my loans."
12. I am also satisfied beyond reasonable doubt that Mr Issakidis trusted Mr Dickson, but not in the way he intended the jury to understand it. Mr Issakidis trusted Mr Dickson to carry out his side of the overly complex scheme in order to deceive the ATO and to secure a return to them both of millions of tax free dollars, washed in overseas accounts and eventually but surreptitiously repatriated for Mr Issakidis' personal use.
13. Mr Dickson may have assumed the greater role in the creation and execution of these schemes, but Mr Issakidis appears to have been recruited to add an air of legitimacy to what was going on. His reputation as a successful and honest businessman with no hint of any previous difficulties with the ATO was a valuable asset in Mr Dickson's armoury and it is apparent that he utilised it. I am satisfied beyond reasonable doubt that Mr Issakidis read the emails into which he was regularly copied by Mr Dickson and that he closely monitored the negotiations with the ATO and the progress of the audit.
14. In my opinion both counts represent offences in the worst category. The accepted loss to the Commonwealth is in excess of $100M. The offences depended upon and were conceived following intricate planning and preparation. The offences were committed over a number of years. They even proceeded in the face of what must have become apparent was the ATO's interest in the deals and involved methodical attempts to satisfy that office that they were above board.
15. The Crown contends that a sentence of full time custody is the only appropriate sentencing option. I do not understand Mr Issakidis to submit otherwise. The decision of the Court of Criminal Appeal in Mr Dickson's case does not constrain, but is a persuasive influence upon, my sentencing discretion. It is a unique comparator for present purposes and obviates the need to consider other, less relevant, "comparable" cases or sentencing statistics. (I confess in passing, however, to some difficulty understanding what is referred to in Dickson v R [2016] NSWCCA 105 at [207], dealing with the sentences imposed upon Mr Dickson by Beech-Jones J, as "the errors earlier discussed").
16. Having regard to the scale of the criminality involved, I am satisfied that no sentence other than a sentence of full time imprisonment for each offence is appropriate in this case: Crimes Act, s17A(1) and (2).
17. I accept that by reason of his age, his mental and physical health and the fact that he has never before been imprisoned, Mr Issakidis is entitled to some leniency. I am also aware that Mr Issakidis' wife is totally dependent upon him financially and arguably emotionally dependent to an even greater degree. This is a matter of relevance in accordance with s 16A(2)(p) of the Crimes Act. Mr Issakidis has no relevant criminal record and is otherwise a person of good character. The effect of any sentence upon Mr Issakidis will include the total destruction of his standing in the community as a respected businessman and contributor to society. Any prospect that Mr Issakidis will return to any semblance of his former life must be close to non-existent. In addition, in stark (statistical as well as actual) contrast to his co-offender, Mr Dickson, there is a very real prospect, having regard to Mr Issakidis' age and ill-health, that he will never return to live in society but that he may die before the expiration of his non-parole period.
18. Mr Issakidis spent three days in gaol following his arrest before he was granted bail and was eventually taken into custody following his conviction on 19 October 2017. The period at large in the community between that day and the conclusion of his trial was with the agreement of the Crown to enable Mr Issakidis to seek treatment for one or more of the health problems with which he was attempting to deal. Mr Issakidis was arrested on 19 October 2017 pursuant to a warrant issued when he failed to appear at his sentencing hearing. Taking these periods into account, any sentence that is imposed should therefore be backdated to 16 October 2017 to take account of the time already served.
19. Michael Issakidis, for committing count 1 on the indictment, being an offence contrary to s 135.4(5) of the Criminal Code, you are sentenced to imprisonment for 7 years commencing on 16 October 2017 and expiring on 15 October 2024.
20. Michael Issakidis, for committing count 2 on the indictment, being an offence contrary to s 11.5(1) and s 400.3(1) of the Criminal Code, you are sentenced to imprisonment for 8 years and 3 months commencing on 16 October 2019 and expiring on 15 January 2028.
21. Pursuant to s 19AB(1) of the Crimes Act 1914, I fix a single non-parole period of 7 years and 6 months expiring on 15 April 2025.
22. Mr Issakidis, I am required by s 16F of the Crimes Act to explain to you the sentences I have imposed. I have ordered that you be imprisoned for an aggregate period of 10 years and 3 months commencing on 16 October 2017 and expiring 15 January 2028. I have fixed a non-parole period of 7 years and 6 months imprisonment, which will expire on 15 April 2025. That means that you will be imprisoned for not less than 7 years and 6 months. If you are granted parole at the end of that time, or before the expiration of the aggregate sentence, you will serve the balance of the sentence in the community. If you are granted parole, the order will be subject to conditions determined by the relevant parole authority, and may be amended or revoked. If you fail, without reasonable excuse, to comply with the conditions of your parole, your parole may be revoked and you may be taken back into custody.

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