R v Issakidis

Background - the tax fraud conspiracy

1. The remarks on sentence published by Beech-Jones J in R v Anthony James Dickson (No 18) contain a detailed recitation of the facts in that case. His Honour also there makes a series of findings beyond reasonable doubt consistent with the jury's verdicts for the purposes of sentencing Mr Dickson. There is a very considerable overlap, relevantly approaching a complete coincidence, between the facts that underpinned his Honour's task in sentencing Mr Dickson and the facts relevant to my sentencing task in the present proceedings. In those circumstances, I propose to adopt what his Honour had to say about the background, the financing transactions, the medical technologies, the tax returns and the audit, the assignment agreements and the loss or risk of loss resulting from the offence. It importantly remains necessary to make separate and discrete findings to the appropriate standard in accordance with authority in relation to Mr Issakidis, which I consider are consistent with the verdicts returned by the jury in the present case. However, whilst it is at the heart of both the Crown's concession that Mr Issakidis played a different role in the events that occurred, and that he should receive an overall sentence that is of a "slightly lesser degree of severity" than Mr Dickson, and also Mr Issakidis' submissions that he should receive a sentence of "markedly less" severity, the factual matrix to both sets of offending was effectively or relevantly identical. This is explored in more detail later in these remarks, so that any differences of significance can be accommodated.
2. Beech-Jones J referred to that factual background in the following paragraphs of his reasons for judgment: "[8] Neumedix Health Australasia Pty Ltd ('NHA') was incorporated on 9 March 2006. Its two directors were the offender and his co-conspirator. [9] The essence of the Crown case on count 1, as accepted by the jury, was that the offender and his co-conspirator agreed to cause NHA to make false depreciation claims in its tax returns of many hundreds of millions of dollars. The depreciation claims were in respect of the alleged cost of acquisition by NHA of certain medical technologies, even though it was agreed that no such cost was to be incurred. The offender and his co-conspirator agreed to this so as to enable NHA to avoid incurring tax liabilities on income it was deemed to have received as the owner of units in a number of trusts. These trusts generated very large taxable profits from their participation in certain financing transactions that were arranged between the offender, the ANZ Banking Group Ltd ('ANZ') and some of its clients. [10] The essence of the Crown case on count 6, as accepted by the jury, was that the offender and his co-conspirator agreed to deal with the 'proceeds of crime' being the amounts standing in various bank accounts that represented the cash distributions from the trusts to NHA. The jury accepted the Crown's contention that these funds were the 'proceeds of crime' because they were derived from the conspiracy the subject of count 1. This was so because, to the knowledge of the offender and his co-conspirator, the funds would not be required to meet NHA's tax liabilities as they would be eliminated by false depreciation deductions and the funds would not be required to make payments on the agreements the subject of the claims for depreciation as no genuine obligation to make those payments would be incurred (see R v Dickson (No 16) [2014] NSWSC 1862 at [19]). The offender and his co-conspirator agreed to cause the funds to be distributed offshore to various accounts controlled by entities associated with the offender and then repatriated to Australia, largely for their own enrichment."