R v Nair [1999] VSC 339

2. between 1 January 1992 and 26 June 1992, he corruptly gave to Gregor John Dougall, an agent of the Nauru Phosphate Royalties Trust, valuable consideration namely US $178,524 as an inducement or reward for showing favour or forbearing to show disfavour to an investment scheme proposed by John Richard Walsh, Gopel Nair, Patrick John Madden and Lin/Par Ltd or the receipt of which would tend to influence him to show favour or forebear to show disfavour to John Richard Walsh, Gopel Nair, Patrick John Madden and Lin/Par in relation to the affairs or business of the Trust, the principal of Gregor John Dougall and

3. Between 1 November 1992 and 31 December 1992, he used a document which was and which he knew to be false namely a letter addressed to John Walsh dated 2 January 1992 on Trust letterhead regarding a procurement fee allegedly due to John Walsh with intention of inducing another person to accept it as genuine and by reason of so accepting it to do or not to do some act to another persons prejudice.

8. On the material placed before me on this plea, the outcome of the conspiracy was to deprive the Trust of approximately US$11M and to put approximately US$61M supplied by the Trust at risk of loss. That money was supplied to purchase what were called Prime Bank Instruments comprising Standby Letter of Credit, Prime Bank Notes and Master Collateral Commitments. The conspirators dishonestly induced the Trust to provide the funds by making representations which they knew to be false or to be incapable of being carried out, concealing facts which they were obliged to disclose and engaging in unauthorised acts. The latter included payments to Dougall, an employee of the Trust and the subject of the second charge. The third charge concerns an allegedly false document created to support an argument that moneys received by Nair and Walsh were received with the permission of the Trust. The evidence presented before me on the hearing of this plea points to a strong Crown case.

11. Lin/Par was incorporated in Vanuatu on 30 May 1991. It was formed as part of a joint venture between Linluck Nominees Pty Ltd, a company controlled by Gopal Nair, and Paragon Overseas Ltd, a company operated by Madden and two of his associates. While Nair may not have been formally a director of Lin/Par Ltd at the relevant time he admits that he acted in the capacity of a director of Lin/Par from approximately late 1991. He, together with Madden and others, in 1990 and 1991 had combined to try to persuade companies, institutions and individuals to invest money in international banking schemes. These schemes involved trading in the so-called Prime Bank Instruments. No transactions were completed. The Crown case is that the trade in such instruments was non-existent. Nair does not now dispute that proposition. The Crown alleges that in excess of 15 of such transactions were attempted by Nair between September 1990 and December 1991. One scheme instigated in April 1991, involving Nair and the accused Walsh, concerned the promotion of a similar scheme to one Philip Cuda. The result of that transaction was that Cuda lost $150,000 and Nair benefited by the transfer of nearly $73,000 to him in the period from April 1991 to November 1991.

14. It seems that Nair from time to time allowed himself to be held out as being the holder of a doctorate in economics and at times referred to himself as Dr Gopal. He claimed to have been registered as an external student at the London School of Economics for three years. He however had no formal qualifications. He had been a business man in Fiji and claimed that when he first met Walsh he was working as a "freelance consultant" in financial matters. He appeared to spend much of his time overseas and used Walsh as his contact and negotiator in Australia.

17. The conspiracy in this case was formally set in motion by letters to the Trust dated 22 October 1991 written by Madden on behalf of Lin/Par, Walsh and Nair. In one of the letters, marked to the attention of Dougall, Lin/Par set out the terms on which it was proposed that Prime Bank Instruments should be purchased and sold at a profit. The letter represented, inter alia, that the transactions would be carried out by the Trust placing a sum in US dollars in trust with Allen, Allen and Hemsley (Allens) in Sydney with instructions that it be forwarded by Allens to their London office for the attention of the co-conspirator Powles who was then the London resident partner of Allens. The funds were to be directed to be held for the Trust and to be used only for a specified transaction. On receipt of the funds by Allens, Lin/Par would purchase on behalf of the Trust a Prime Bank Instrument for an amount determined by the funds advanced. The letter of credit would be issued in the name of the Trust and delivered to Powles who would then draw upon the Trust funds to pay the cost of acquiring the instruments. On the sale of the instrument by Lin/Par at an anticipated profit, Allens would deliver the instrument to the nominated bank of the purchaser and receive back the sale price. A further instrument would then be purchased and the process repeated. It was proposed that the profit on each transaction be split on the basis of 50% to the Trust, 25% to Lin/Par and 25% to Walsh.

20. On the evidence before me, I accept that Madden, Nair and Walsh were the instigators of the scheme. To help secure the services of Powles, on about 17 August 1991, Lin/Par through Madden had agreed with Powles that he would be paid US$100,000 for each credit transaction, "upon closing".

23. Nair has maintained that he was not a party too or aware of any correspondence in October or November of 1991 between Madden and the Trust and that his formal involvement commenced in early 1992.

26. While it appears that Madden and Walsh may have been involved in the initial direct contacts with the Trust, it is clear from contemporaneous documents that Nair was himself involved in the transaction in the latter months of 1991. I accept that from the Trust's perspective, Nair was not directly involved in the initial negotiations but I am satisfied that his involvement had been referred to in correspondence by Madden. It is also clear that it was Nair who first offered secret commissions to Dougall on 21 December 1991.

29. I accept that the promoters of the scheme relied upon a reference supplied by Powles in a letter that he wrote to the Trust on 4 December 1991. This was a settled version of a draft sent to him by Madden for Lin/Par. In that letter Powles made the following relevant statements

(1) that Allens acted as solicitors for Lin/Par Ltd which had a registered office in Vanuatu

(2) the President of Lin/Par was Patrick J Madden Q.C. who had qualified personnel working with him with extensive banking and financial background

(3) that he had worked with Lin/Par and could advise that Allans was holding in Trust substantial monies for various transactions involving that corporation (in US dollars)

(4) that Lin/Par Ltd was capable of fulfilling its stated objectives to and for the Trust.

It appears that, inter alia, the last statement was false. In particular Nair, knew that he, Madden and Walsh and Lin/Par had for some time been attempting to engage in the sort of transactions proposed for the Trust and had been unsuccessful. In the course of those attempts they had also seen money lost. He and Madden had also misappropriated money. In none of these transactions had anyone been successful in purchasing, let alone trading, a Prime Bank Instrument.. They could, therefore, not honestly state that Lin/Par Ltd was capable of fulfilling its stated objectives.

36. The Trust advanced US$8.7M to Powles on 23 December 1991. It was deposited by Powles into a United States dollar call account, account number 103600, operated by him at the Westpac Bank, 75 King William Street London on 23 December 1991. He used that account as a repository for the money of the Trust and some other persons. On 31 December 1991, $8.5M was transferred to a Swiss bank by Powles.

39. The moneys sent to the Swiss bank were paid back into the Westpac account on 13 January 1992. On 15 January 1992 they were transferred by Powles to Barclay's Bank Plc into an account "A M Glasby" for the credit of the Commonwealth National Bank of Antigua. That bank had been closed by the Ministry of Finance in Antigua. The moneys having been transferred to that account, Powles and the Trust lost control of it and it was never recovered. The Trust was not informed that this had occurred. Rather Powles wrote to Dougall on 16 January 1992 stating that a US$10,000,000 Letter of Credit had been purchased and that arrangements had been made for its resale. Powles wrote again on 28 January 1992 confirming that the instrument had been purchased and was being discounted with a profit of $150,000 with the second rollover starting simultaneously with settlement. There had in fact been no purchase and no rollover. Instead, on 30 January 1992, Powles wrote to Searle demanding the instruments or return of the money. There can be no doubt that Nair was well aware, at the latest by late February 1992, that the transaction with Searle had not been completed and the money probably lost. In view of his close involvement, however, I am satisfied that he would have been fully aware of the course of the transaction.

42. Nair, Powles and Madden from time to time discussed how they were going to deal with the Trust. They continued on a course of deception.

45. Nair was involved in various ways. At times Nair assisted Powles in drafting the letters that were required. For example, on about 10 February 1992 he drafted a letter for Powles to send to a Ms Susan Kerr in Atlanta Georgia confirming that Lin/Par intended to and was capable of purchasing a "Prime Bank Master" and asking for documents to be forwarded. In another document of the same date he drafted a letter for Powles to send to Westpac Banking Corporation authorising the transfer of US$8.55M to an account in Texas in the name of "Patrick John Madden (trust account)". On 26 February 1992, Powles wrote to the Trust, on instructions from Nair, concerning the investment program.

48. There are other examples. On 30 March 1992 the Trust, through Peter Boyle, its Secretary, sought advice about a number of matters concerning the investments including the rollovers, the trust account and security of the funds. This was sent in preparation for a due diligence trip that the Trustees proposed to take in April. Powles copied this letter and sent it to Nair and spoke to him about the terms of a reply. Powles reply was sent in a letter of 30 March 1992 in which he made false statements about the true status of the investment. I am satisfied that this letter was drafted on the basis of a document sent by Nair headed "Suggested Responses" and after discussion with Nair. The false statements included the assertion that the funds or the bank instruments remained under the control of Allens, the assertion that two rollovers had been completed and the assertion that a profit of US$264,000 had already been generated. The documents also reveal that by 30 March 1992 Walsh had persuaded the chairman of the Trust not to proceed with the due diligence examination. He sent a fax to Nair advising him and concluding "All now under control - keep cool".

51. Another example of Nair drafting letters for Powles was the letter Nair wrote to Powles on about 16 June 1992 instructing him on the terms of the letter to send to the Trust advising of the withdrawal of US$6M from the rollover program and its availability to be transferred to which ever bank co-ordinates it requested. I am satisfied that this event did not occur. This letter was written as part of the penalty scheme to which I will refer later.

54. Nair was also involved in an important meeting that occurred in the offices of the Nauru Trust in Melbourne on 23 April 1992. The meeting had been called for the purpose of addressing the Trustees on the progress of the investments. Nair, Walsh and Powles met in the Southern Cross Hotel to discuss how to handle the meeting. It appears that recollections differ somewhat about what occurred but that Nair was present and was involved and participated in the handling of the situation. In particular they managed to conceal the fact that the US$8.55M had been lost and gave false assurances that the monies were secure and that two rollovers had occurred. The Trust had by this stage entrusted some US$30M to them. The three men managed to convince the trustees of the legitimacy of the schemes and the result was the investment of further monies.

57. From time to time Nair himself wrote to the Trust falsely reporting on progress and expectations. For example, on 23 February 1992 he wrote to the Trust extolling the proposed venture into the "master collateral commitment". On 6 March 1992 he wrote an elaborate letter to the Trust explaining the nature of the "master collateral commitment". On 6 March 1992 he wrote again about the anticipated profit from the commissioned program of buying and selling prime bank notes. On 18 March 1992, in response to queries from Dougall, he wrote attempting to explain why the amounts obtained had not been as much as they would have liked. The letter included false representations, for example, about the funds from the third buy/sell being available with Allens early the following week. The letter sought further monies for the program. On 3 April 1992 Nair again wrote to the Trust, this time to Boyle, the secretary, asserting that "the Prime Bank Notes buy/sell is now reaching its conclusion" and that funds for the purchase had been conditionally transferred to the supplying bank. He sought to explain delay on the basis that the less than $100M face value of the "tranche" had been a cause of delay and the total funds had only been received during the third week of March. I am satisfied that he must have known at that time that no transactions had been completed and that in fact the first payment of US$8.5M had been lost. He concluded his letter saying "our undertaking to return to the Trust a profit of minimum of 70% per annum, we are sure, will be surpassed". This was a remarkable statement having regard to what had occurred to date and what he knew from past experience of the difficulty in obtaining the so-called bank instruments, let alone actively trading in them. On 28 July 1992 Nair wrote a letter using the name Dr Gopal to the Trust, addressed to the secretary, Boyle, setting out the anticipated profits to be made from the various types of instruments from the period 8 August 1992 to 5 September 1992. The total revenue he prophesised was $8,700,000. Boyle wrote on his copy of his note that he had received advice from Nair by phone that the timing shown in the letter was conservative and that the dates referred to should be the latest dates achieved. Again the scenario that he described was impossible to achieve as he well knew.

60. A critical challenge to the conspirators came in the middle of 1992 when the Trust engaged accountants to conduct an audit. Discussions occurred between Powles, Madden, Nair and Walsh as to how to deal with the audit and what lies had to be told to conceal what had been occurring, the money they had taken and to enable the conspiracy to continue.

63. Nair participated in the proposal to arrange to pull back $6M from the scheme and introduce the concept of penalties to be imposed upon the Trust for the withdrawal of sums of money from the investment program. Such penalties were to be sufficient to cover the monies they had already been taken from the Trust. In a memo to Powles of 16 June 1992 Nair wrote enclosing a letter from Boyle for the Trust instructing Nair to pull back US$6M into the account of Allen, Allen and Hemsley. He wrote saying this was done at the request of the Nauru government. In his covering note, Nair said

"I organised it this way as a 20% penalty almost covers the amounts drawn from the funds. So please do not get worried as this is the best organising I could do to cover the short fall for 30 June audit. This letter is for your eyes only and is not to be given or told to Pat. We can discuss morning your time from where we will transfer $6M back to the Trust . . . Penalty payable is 20% of $6M or $1.2M (this should almost cover the short fall)."

It would seem that as a result of further dealings between Nair and Boyle, the penalty became 10% of US$25M resulting in the penalty figure of US$2.5M. Nair wrote to Powles to instruct him on what was to be done with the US$2.5M. By raising the penalty figure to $2.5M, Nair had been able to cover the amounts already taken by them while leaving a surplus of over $1M that could be distributed. A sum of $700,000 was to be transferred to a company called Unified Monetary Systems Ltd. In his note to Powles he said "this belongs to you, John and I" and gave the account details. He also instructed that there was to be a transfer of $150,000 to Taylor Madigan, the accountants acting for Walsh and himself. In the note he also directed Powles to transfer $100,000 to Powles and $100,000 to himself. His note concluded

"this will leave a balance of $175,000 in your trust account for future use by us."

I am satisfied that there was no withdrawal for the Trust of US$25M let alone $6M.

70. Nair himself misappropriated $805,833. This is to be compared with Powles who misappropriated $1,886,533, Walsh $1,086,883 (on the evidence before me) and Madden, at least, $246,700. The misappropriations commenced in early January 1992. After the initial payments, Nair from time to time gave instructions for these payments to himself and the various co-conspirators or on their behalf.

73. I am also satisfied that Nair willingly participated in late 1992 in a proposal that a fictional agreement be created whereby the Trust agreed to pay Walsh a procurement fee out of which he, Nair, would receive a share. This agreement would then be used to justify the payments that had been withdrawn by both Nair and Walsh. This procurement fee story was created with the active participation and approval of Dougall who managed to create a critical document being a letter with Trust letterhead purporting to be dated 2 January 1992 setting out the arrangement under which Walsh was to receive a procurement fee of 3% of the funds plus a negotiated percentage of the profits from each buy/sell transaction. The document created was signed by Nair in the following terms "agreed to transfer funds as suggested by Mr Dougall". I am satisfied on the evidence before me that this document came into existence in December 1992. The third charge concerns the use of that particular document. By his plea to count 3 Nair has acknowledged the falsity of this document and his use of it intending to cause another person to act to that person's detriment.

76. In relation to the second charge concerning the bribing of Dougall, Nair now acknowledges that he made payments to Dougall. The Crown case, accepted by Nair, is that following a meeting on 21 December 1991 at a petrol station, Nair and Dougall met at a Hotel where Nair told Dougall that he would pay him $250,000 of his share of each Prime Bank Note rollover and $50,000 out of his share of each stand by letter of credit rollover. This meeting took place two days before the first transfer of US$8.7M from Melbourne to Allen's account in London.

79. Thereafter, for the most part, Dougall contacted Nair when seeking further payments. This continued throughout the relevant period and Dougall received in total $178,524.00. Nair secured these payments for Dougall generally by instructing Powles to forward to money to Dougall.

82. In assessing the gravity of Nair's criminality, I accept that Nair was one of the promoters of the scheme and gave instructions, particularly to Powles, about the conduct of the scheme and the writing of false letters to the Trust. He also participated in that activity himself. He also participated in the plan to create false documents and a false justification for the withdrawal of funds namely the procurement fee and penalty proposals. I accept also that the sums of money involved were very large. The scheme put some US$61M at risk. Fortunately most of that money was recovered. Some $11M however was lost partly through direct misappropriation by the co-conspirators and partly through the mishandling of the first transaction. I accept the Crown's argument that there was a high level of fraudulent deception carried out for almost a year. I accept that the conspirators were in constant communication and provided a steady stream of false information to the Trust. I accept that Nair was involved at the outset in the corruption of Dougall, an important part of the conspiracy.

85. Unlike Powles, Nair cannot point to a significant psychiatric illness which would reduce his culpability and render him an unfit vehicle for general deterrence. I accept the assessment of Mr Joblin that the explanation for Nair's behaviour lay in his desire to resuscitate his fortunes, he having apparently lost substantial assets and community status after the coup in Fiji in about 1986.

88. Mr Nair was born on 27 April 1949. He was raised on a cane plantation. His upbringing was impoverished. He attended school in Fiji initially in one in which education was conducted in the Hindi language. He did not learn English until he went to the High School in Suva at the age of 13 where he stayed to the age of 18. He joined the Bank of New South Wales and worked in a clerical position. From 1968 to 1973 he worked for the bank and then went to a firm Central Manufacturing. He became the chief clerk at that organisation. He worked for another firm as chief accountant/financial controller for four years and then he was apparently "head hunted" by Touche Ross in 1982. He remained with them for less than 12 months before opening his own business and he enjoyed some success as a financial consultant and businessman until 1986. He was involved in the operation of some resorts in Fiji but they were highly geared and with the loss of tourism following the coup those businesses were lost together with his assets which had been used as security. He came to Australia with his wife who was transferred to the Sale branch of Westpac. He worked initially for a drilling company in Sale as an accountant and has worked for a short time in Sydney and Brisbane before embarking on the investment schemes which have led to these proceedings.

91. It may be concluded that Nair came to Australia to rebuild his financial position and he was pinning his hopes on these grandiose schemes to recover his position. There was nothing to suggest, however, that his judgment was affected in any way and plainly he embarked on a prolonged program of deception in his dealings with the Trust.

94. In mitigation, counsel for Nair referred to the fact that his client has pleaded guilty and has thereby saved the community substantial expenditure and significantly shortened the time that will be taken up in this court in dealing with the criminal charges. This will benefit the community by saving substantial sums of money because it is the public purse that would be funding both the prosecution and the defence of all accused. It will also enable the court to deal with other matters.

97. Counsel for Nair also submitted that the plea of guilty is an indication of genuine remorse. The Crown accepts that there is genuine remorse. The situation is somewhat complex, however, because of Nair's conduct. I refer, firstly, to the conclusions I have reached above that Nair participated in 1992 in the creation of the false procurement agreement and false penalty arrangement. Further, there are extensive listening device tapes recorded in 1993 and 1994 which record Nair and Walsh discussing the matter and how best to present their case to the police and how to handle the police investigation. While much of what is said is capable of innocent explanation there are occasions where it might be said that Nair was being coached by Walsh. It is also necessary to consider the fact that Nair sought to exonerate himself in the statement of defence recently delivered by him in response to the prosecution case statement.

100. In relation to the conspiracy charge he asserted that he was not involved with the Trust prior to early 1992 and was not involved in any statements or representations made prior to that date. Nair denied knowledge of the initial representations in late 1991 and he asserted that he believed that the monies would be held by Powles in a trust account. He asserted that he believed that Madden and the others were able to access and deal in securities of the sort alleged, that the financial instruments existed and could be traded at a profit and that Walsh and Madden had access to banks and other institutions. He further asserted that he believed that the relevant account, 103600, was an account for a company named Paragon of which Madden was the director and that the monies held there were held on trust for Paragon and not the Trust. He admitted that no Prime Bank Instruments or other securities were purchased but asserted that at all times he believed that they were obtained or being obtained because of statements made to him including offers to pay penalties for late delivery. He admitted that no profit was derived from the transactions. He asserted that the penalty arrangement that came to be introduced was a genuine one. He asserted that he considered any penalty payments due upon delivery to be a profit and advised the Trust that instruments had been obtained due to his belief that the willingness to pay a penalty indicated that the instruments would be ultimately provided. He denied being a party to any theft.

103. In relation to the bribing of Dougall he admitted that payments were made to Dougall but said that they were made to Dougall because he represented that the Trust would cease to authorise any existing or future investment unless such payments were made. He denied being a party to any attempt to corruptly influence Dougall and asserted that he merely acted to preserve what he considered to be legitimate business which the parties had contracted. He asserted that the Trust had authorised the purchase of bank instruments before he met Dougall or dealt with him. Thus while Nair in his response to the prosecution case statement sought to place the initiative with Dougall for the pursuit of secret commissions, and there was documentary evidence to suggest that Dougall had some enthusiasm for obtaining those commissions, the statements made in response to the prosecution case statement effectively constituted admissions of both the actus reus and mens rea elements of the offence set out in the second charge.

106. In relation to the third charge he asserted, in his response to the prosecution case statement, that he was aware that a procurement fee would be claimed by Walsh as a result of a conversation he had with him in Switzerland in early 1992. He acknowledged that he had written on a letter subsequently located in the file held by Taylor being the document in question in count three. His understanding was that that was to explain the procurement fee. He said he returned the letter to Walsh after initialling it.

109. It is reasonably clear from the documents themselves and the history of the matter and his past experience in the field that Nair could not have honestly believed in the genuineness of any of the transactions in which the group claimed to invest the Trust's money. Thus Nair faces the difficulty that he has very recently formally responded to the prosecution case statement on counts 1 and 3 by attempting to exonerate himself and defend the whole proceedings. In relation to count 2 he attempted to justify the unjustifiable. This raises serious questions about the nature and depth of his remorse for what has occurred. I accept the submission by his counsel, however, that in assessing his conduct and the question of whether there is genuine remorse, it needs to be borne in mind that initially his legal advisers had advised him that the Crown case did not reveal evidence of criminality. His present legal advisers were only recently engaged after a protracted dispute with Victoria Legal Aid. Their advice to him was to the contrary of his earlier advice. It was they, however, who assisted him in preparing his response to the prosecution case statement. The change of advisers and advice may well explain the provision of the response and the subsequent decision to plead guilty. His response to the prosecution case statement, however, reflects adversely on his honesty and the depth of any remorse. I attach little weight to his remorse so far as clemency is concerned. I note Mr Joblin's report and accept his assessment of the sense of shame felt by Nair.

112. The next matter relied upon by counsel for Nair is Nair's offer to assist the Crown. His signed undertaking is in the following terms :

"I, Gopal Nair, of 89 Inglis Street Sale, HEREBY UNDERTAKE to be further interviewed by the Crown with respect to my involvement and the involvement of my co-accuseds regarding any dealings involving the NAURU PHOSPHATE TRUST and to give evidence with respect to the same and to identify and/or produce any documents respecting the same which remain in my possession or to comment upon or explain any documents produced to me by the Crown with respect to such matters. I acknowledge that breach of this undertaking may result in my being resentenced with respect to the matters accordingly."

Counsel for the Crown has indicated that he regards Nair's evidence as potentially critical. He referred in particular to the evidence he could give as to the meeting on 23rd April 1992. There appears to be some conflict on the evidence as to whether Nair or Walsh was the primary speaker and the significance of the role played by Walsh. In addition, until Nair's preparedness to give evidence, the Crown had no direct evidence other than that of Dougall to suggest that the procurement case was a false one. Nair will also of course, be able to give evidence about Walsh's involvement in the case and, to some extent, Taylor's involvement in the matter, Taylor having been his accountant.

117. Counsel also referred to the fact that the evidence is that in about August of 1992, the Trust requested Nair to secure the return of approximately US$20M. This was carried out by Powles. I accept that Nair did respond to that request and thus participated in the return of a substantial amount of the monies that had been obtained by fraud.

120. Another mitigatory matter relied upon for Nair is the age of the offences. I refer to my discussion of this issue in my reasons for sentence concerning Powles (2 August 1999). The delay has been long and some 7 to 8 years have elapsed since the offences were committed. The delay has been a significant disruption to the rehabilitation of Nair, something I perceive to be a real prospect.

123. I accept the submission of counsel for Nair that he is also entitled to the application of the principles laid down by the High Court in Mill v R (1988) 166 CLR 59. I referred to this issue in relation to Powles in the above reasons. I there raised the question whether it was arguable that these principles would apply where the situation arose from the inability of the prosecution authorities to process criminal charges at the same time as compared with the situation in Mill v R where the problem arose from the fact that the crimes were committed in different States. Counsel for the Crown concedes that the totality principal referred to in that case applies in the present case because Nair was charged and dealt with in relation to a similar transaction known as the Cuda transaction on 28 May 1996. This preceded the charging of him in respect of the present offences.

126. In the Cuda transaction he was charged with obtaining property by deception and not theft. In sentencing Nair in that case, Judge Campton held that Nair had falsely represented to Cuda that he had the expertise qualifications and ability to complete a transaction which would return a profit of between US$700,000 and US$1M. As a result of those representations Cuda gave him and Walsh a cheque for the sum of $150,000. Judge Campton found that Nair told Cuda that the sum of $125,000 was required as a "blocking fee" needed to obtain an appropriate credit rating to enable the procuring and completion of the contemplated international banking transaction and that the sum of $25,000 were required for expenses. A loan agreement was entered into under which Nair and Walsh agreed to pay Cuda the sum of $170,000 on successful completion of the transaction. It was envisaged that the loan funds would be required for 45 days and that the loan funds would be accessed for blocking fees, bank charges and incidentals. His Honour found, however, that within a short time Walsh had converted $64,000 to his own use and Nair had converted $73,000 to his own use although some $16,000 of that was spent on travel expenses. The balance was also expended by Nair and Walsh. His Honour held, in light of the evidence he had received, that Nair and Walsh had contemplated that the transaction could be completed and that Nair had travelled overseas for that purpose. He also accepted that Nair was mislead by Walsh into believing that the money had remained in the trust account and that $150,000 together with $10,000 had been repaid to Cuda. He also accepted that Nair believed that the $73,000 that he received had come from another source. In that case Nair consented to an order requiring him to pay $74,467.75 compensation to Mr Cuda. He received a term of imprisonment of eight months, six months of which was suspended for a period of twelve months.

129. The Cuda transaction occurred in April 1991 and thus preceded the present matters. They all come within the totality principle, however, because they are closely related in time and character. Applying the totality principal it is necessary for me in sentencing Nair to proceed on the basis that I must assess what would have been likely to have been the sentence, and, in particular, the effective head sentence imposed if Nair had been sentenced at the one time for these offences and the Cuda transaction.

132. In this instance, however, having regard to the offences, the term of imprisonment imposed for the Cuda transaction, and the term of imprisonment that should be imposed otherwise in these matters, the totality principle would not warrant a reduction in the totality of the sentences. If the sentence for the Cuda transaction had been more substantial, some adjustment would have been more required.

135. I turn to the issue of specific deterrence. Counsel for Nair submits that this was not an issue in the present proceedings. He said he relied upon the evidence of Nair's good behaviour, good character and productive life during the period of time when he grew up and lived and worked in Fiji prior to 1986. He submitted that the risk of Nair repeating the criminal behaviour was extremely remote in view of that history and his remorse and shame as to what has occurred. Attention was drawn to the fact that he did not re-offend after being sentenced in the Cuda matter. Counsel for the Crown submits, however, that there is a need for the sentence to deal with the issue of specific deterrence. It accepts the evidence of otherwise good character. The Crown concedes that the Cuda conviction is not a prior conviction. While the offence occurred prior to the present offences, he was not convicted for that offence prior to the present offences. Counsel refers however, to the similarities between the allegations made in the Cuda transaction to which Nair pleaded guilty and in particular the false representation of having the qualifications and ability to obtain the bank instruments and profits and the proposal to lodge the money safely with an institution. It is put that this all occurred within six months of the commencement of the conspiracy in this case. It is put that the sentence must bring home to Nair a clear understanding that this sort of conduct is unacceptable. At the same time the Crown accepts the chances of his re-offending in the same way are negligible in the sense that the opportunities are unlikely to present themselves again.

138. Finally reliance is placed by counsel for Nair on the evidence contained in the report of Mr Joblin that Nair suffers from claustrophobia of an order that would make his stay in prison particularly stressful for him. I accept his evidence, that claustrophobic prisoners have an extremely difficult time. The Crown does not dispute these points and I proceed on the basis that accordingly prison will be more difficult for him.

141. I note that in the course of the pre-trial handling of the matter, he was called upon to make admissions and did so to a substantial extent and complied with directions relating to the prosecution case statement and its response.

144. Counsel for Nair submits that, weighing up the relevant considerations, I should consider the imposition of a suspended sentence. Counsel for the Crown submits that the relevant considerations required the imposition of an immediate gaol term.

147. In my view the Crown's position is correct. The fraudulent scheme promoted and actively maintained by Nair was a sophisticated one and put at risk substantial sums of money and resulted in the loss of substantial sums of money. He himself benefited significantly. I accept the explanation proffered for his conduct - namely an attempt to recover financially from the substantial losses he suffered as a result of the coup in Fiji. While this provides an explanation, it does not justify his actions and he remains fully responsible and culpable for the actions that he took. I accept the Crown's submission that general deterrence is a significant issue to be considered here . What was involved was a sophisticated fraudulent scheme involving international banking transactions. General deterrence is very important and counsel for Nair did not dispute that fact.

150. I also consider that special deterrence is an issue that must be addressed by the imposition of an immediate term of imprisonment. I accept that Mr Nair enjoyed a good reputation in Fiji and had acquired through his own efforts and ability wealth and status in the Fijian community. I accept that he comes from a large, respectable and law abiding family and that the exposure of what he has done has caused him great shame. Nair is living with his wife but in straightened circumstances. He and his wife are battling to sustain the mortgage on their home because Nair has, since 1993, been unable to obtain employment. He is a man of good intelligence and otherwise has lead the life of a person with good character. Nonetheless, his conduct in the crimes to which he has pleaded guilty was such that it would be proper to have regard to special deterrence in determining the appropriate sentence. At the same time the matters referred to point to the need to consider and encourage his rehabilitation.

153. Weighing up the foregoing matters I have come to the conclusion that the appropriate sentence on the count of conspiracy is the imposition of a term of imprisonment of four years with a non-parole period of two years. On the second count I propose to sentence Nair to a term of imprisonment of two years with a non-parole period of one year. In relation to count three I propose to fix a term of imprisonment of six months. I also propose that the sentences be served concurrently.

156. Finally I note that I have had regard to the penalty imposed upon Powles. While there are similarities there are also obvious and significant differences.