"This case has its commencement back in early 1993 when you and another man, Mr Bailey, who was involved in car dealerships, saw money to be made in a mortgage loan business. At the outset I make it clear that there is no suggestion or imputation of dishonesty in any operations against Mr Bailey. The mortgage loan business was based simply on the advertising and networking of obtaining investors to put their money into mortgage secured loans. As a result, Bailey O'Neill and Associates Pty Ltd was formed, and in the years that followed business flourished. The industry had no regulation and, even at that stage, you had three prior convictions for theft imposed in the Magistrates' Court in 1987. Briefly the facts of the case may be summarised as follows. Count 1 alleges that between 15 June 1995 and 2 September 1998, you, being an officer of Bailey O'Neill and Associates, did intentionally and dishonestly, intending to gain directly or indirectly an advantage for yourself, make improper use of your position as an officer of the company by drawing on the bank account of the company's trust account No. 2, 350 cheques in the amount of $2,266,479.09 and applying the proceeds of same to your own use. Now, this is called a rolled up count consisting of a number of offences brought together to create one offence. It is to be noted that it involves the improper use and drawing and dishonest use of 350 cheques. It covers a period from 15 June 1995 to 2 September 1998. The amount you have dishonestly used totals $2,266,479.09. It involves the intentional and dishonest use by you of that amount by drawing 350 cheques which you were not entitled to draw. You were effectively in charge of the trust account and they were drawn upon and you were the sole signatory, in effect. This count, which covers a substantial component of your criminality, has a maximum prison sentence of five years. It involved you in using, for your own purposes, the capital trust fund into which investors' funds were paid and were expected to be married up to a specific mortgage. The way you went about it required little skill, as the accounting systems were abysmal, checking was completely lacking and you had virtually complete autonomy over the trust fund. You further manipulated the cash journal books from which you tore pages and made false entries. Essentially you maintained and you manipulated this account by the following methods. A, investors would invest in mortgages, initially for a period of a year, but they could go up to six or seven years; B, investors would make further payments into the account when all the time the mortgages were at an end; C, investors were informed the mortgages had not been paid whereas the mortgages would already have been; D, investment moneys were paid towards an investment that did not proceed. The money would remain in the account and investors made payments by various means. A considerable amount of money was paid to investors by way of late interest or additional interest payment of funds back to them. The moneys you dishonestly used were improperly sent out in various directions. Your criminality was high and sustained over a number of years. The money was expected to be paid out of that account, unless it related to a properly secured investment. You commenced your criminality after making an unauthorized loan of $250,000 to a man named McArdle. This act does not form part of the charge. You bankrolled a friend's Federal Court case for a substantial sum of money. You also made futile investments in the hope, no doubt, that rewards would flow and enable you to bring the trust account to reach its proper level in the bank. You were, however, the main beneficiary. A figure of over $540,000 was spent by you on renovations to your South Yarra home. You purchased a Porsche for $213,000. You drew cheques for various amounts of cash and drew four cheques for $40,000 to maintain a cocaine habit. I should add, the Porsche was paid back for $100,000 and a further $78,000 went back into the proper account. You paid 18 cheques to CitiBank in an amount of $117,500 to pay for your own purposes and credit cards. Many other cheques went to unsecured funding of companies and property developers. All this was made possible because you had sole control of the trust account. In many cases investors were making payments on mortgages which had already been paid out. All this was discovered in about September 1998. You were basically frank about your dishonesty when it was obvious your scheme was being discovered. Attempts were made to get funds back into the trust account by you and Mr Bailey. In all, a sum in the figure of $1,080,000 remains outstanding. The bulk of investors have, for all practical purposes, lost their money. The point to make is that this high degree of criminality is to be dealt with under an offence which covers a maximum term of five years. By your plea of guilty I am required to give you a discount and, by reason of s.16G of the Commonwealth Crimes Act, I am required to give you a further discount on the head sentence because of the absence of remissions. These discounts bring down the maximum sentence I can impose significantly from five years. The other three offences are offences which occurred in the course of maintaining the criminality involved in count 1. Although they carry a maximum sentence of ten years, I must sentence you for each offence separately and on the basis of the criminality involved in that particular offence. I cannot use those higher sentences to punish you for your criminality under count 1, the maximum of which is inadequate. Count 2 involved you in forging and using a false mortgage document to obtain a false discharge at a settlement. This enabled you to pay $34,000 back into the trust account. Count 3, at a settlement of a property, you received a pay out cheque of $26,150, which should have gone to an investor; instead you paid it into your own bank account and used $20,000 to pay off to a developer. You used the rest of the money for your own purposes. Count 4 also involved discharge of a false mortgage. As in Count 2, you drew up a false discharge of the mortgage document which enabled you to pay $60,000 back into the trust account. The investors never saw any of it and received no money whatsoever." (His Honour later noted that the applicant had made some restitution to investors but some $1,080,000 remained outstanding.)