R v Pablo

Agreed facts

1. At the time the offences were committed the offender was a self-employed IT consultant. In early 2020 he was contacted by an individual by the name of Dave Darshan, who remains unidentified. Whilst the offender was originally hired to do online marketing and search engine optimisation for Darshan's alleged puppy selling business, the offender was ultimately persuaded to act as a recipient of funds from puppy buyers. In these circumstances the offender opened approximately 29 bank accounts to receive these funds. Effectively the arrangement was that the offender would receive the money from customers of Darshan. He would withdraw the funds and then deposit them into bitcoin wallets for Darshan using an ATM near his apartment. He would deduct approximately 20% commission for himself.
2. The offender repeatedly requested information to validate the legitimacy of Darshan's business as the offender's banking accounts were being closed for suspicious activity. However, he never received any such documents. By May 2020 the offender was aware that customers were not receiving the puppies they were paying for. As most of the offender's bank accounts were closed after a few fraudulent transactions, most funds were subsequently deposited into the offender's personal bank accounts.
3. The offender continued to receive deposits into his account, taking commissions and laundering defrauded funds for approximately six months. The offender candidly conceded during interviews with police that from about May 2020 he was aware that Darshan's business was a scam.
4. In total the offender received $172,624.99 into his various bank accounts between the months of May 2020 and January 2021. Based on the offender's admission of receiving a 20% commission on the transactions, it is estimated that the offender received approximately $34,524.99 in total as payment for his participation in the scam.
5. The Statement of Facts details the individual amounts transferred by the victims into the relevant bank accounts as follows: 1. May 2020 the amount was $25,070.00 received from 13 individuals. 2. June 2020 the amount was $54,040,00 received from 18 individuals. 3. July 2020 the amount was $39,575.00 received from 14 individuals. 4. August 2020 the amount was $20,790.00 received from 7 individuals. 5. October 2020 the amount was $15,999.99 received from 4 individuals. 6. November 2020 the amount was $13,150.00 received from 3 individuals (Form 1). 7. January 2021 the amount was $4000.00 received from 2 individuals (Form 1).
6. The offender's criminal behaviour was detected following investigations by police in response to several victims reporting fraudulent activity. In September 2020 the offender attended Day Street police station and attempted to report that he had been a third party through whom the scam had been committed. The offender prefilled a Fraud Assessment Form claiming he had been a victim of a "job scam". The offender provided relevant documents relating to the scam at that time. As a result of his attendance police contacted the offender at a later date and arranged an appointment for him to provide documents to Parramatta police. In response the offender attended Parramatta police on 23 February 2021 and was interviewed. The offender voluntarily agreed to participate in a recorded interview in which the offender made full admissions in respect to the offences. The offender admitted that by May 2020 he appreciated that there was no legitimate reason for the funds to be transferred into his account. The offender assisted Darshan in respect to the creation of dummy invoices to explain the income. The offender further admitted that despite his own concerns in respect of the legitimacy of the operations, he continued to open further accounts and receive money until January 2021.
7. After reviewing the volumes of documents supplied by the offender the police executed a search warrant at the offender's home, and he was arrested and further interviewed. The offender made further full admissions in respect to his offending, including offering his own expertise in information technology to further assist Darshan in the commission of the offences. The offender freely acknowledged that by April 2020 he knew the processing of funds involved a scam and openly admitted that he did so for the purposes of financial advantage. In addition to payment for services, Darshan commenced paying the offender's rent. The offender freely acknowledged that customers would not receive the puppies they were promised in return for the transfer of funds. The offender again freely acknowledged that he was involved in the criminal activity for financial gain in full knowledge that it was a scam. The offender offered to assist police with attempts to identify the offender Darshan, although any such attempts were unsuccessful.
8. I accept the Crown's submission that the objective seriousness falls within the lower middle of the range. It must be acknowledged that there were numerous victims with the total defrauded amount exceeding $170,000.00. Whilst the individual amounts were significantly smaller, they still involved thousands of dollars lost by individual victims. The objective seriousness is compounded by the fact that the puppy scam was being perpetrated at the time of the first Covid-19 lockdown when individuals were particularly vulnerable. Counsel for the offender conceded that it was common knowledge that persons were buying dogs in response to the lockdown.
9. The level of planning in the offending was moderately sophisticated, and the offender conspired with Darshan by various means to assist in perpetrating the scam. I accept the Crown's submission that the number of transactions, and the period over which the transactions occurred were significant, indicating the extent of the offender's criminality. The Crown cites several decisions (R v Huang (2007) 174 A Crim R 370 at [35]; R v Li (2020) 202 A Crim R 195 at [41]) for the general proposition that a number of transactions involving small amounts of money will be taken to be more serious than a single transaction of a larger amount as an isolated offence.
10. Clearly there were significant financial costs to the victims, who individually lost thousands of dollars and are yet to be compensated. As contended by the Crown, it must be acknowledged that there was also emotional upset by the victims in relation to the expectation of a puppy and one not being received.
11. The offender's role was significant, providing the means by which the primary offender Darshan was able to receive the significant financial benefit from the scam. It was the offender's actions which enabled Darshan to perpetrate the fraudulent activity on numerous victims. I accept the Crown's submission that the operation conducted by the offender was sophisticated and opportunistic.
12. In respect to deterrence, I accept the Crown's submission that the serious criminal activity of money laundering warrants severe punishment, not the least to reflect the general deterrence of a very significant degree. The activity in which the offender was engaged for profit was over a significant period, with a large number of transactions.

Subjective circumstances

1. The offender was born in the Philippines as the fourth of five children. His father worked as a police officer until he was convicted and jailed for apparently shooting a person in the line of duty. The offender's older sister financed his education, although he was able to obtain a scholarship and was accepted into Stanford University in performing arts. However, he had to abandon his dream and return to the Philippines as he was unable to obtain a work visa. The offender thereafter worked as a hotel entertainer in Thailand for five years before progressing a career in information technology. He arrived in Australia with his partner and started an information technology consulting business. It was in these circumstances that he came into contact with Darshan which led ultimately to his offending.
2. The offender has been in two long-term same-sex relationships. He has been living with HIV since 2014 and was more recently diagnosed with thyroid issues for which he is using medication.
3. According to a statement from the offender's sister Daisy Castillo, in late 2020/early 2021 the family's pig farming business in the Philippines was closed following the outbreak of swine fever. As a consequence, the offender's sister reached out to the offender to financially support the family in the Philippines.
4. In the meantime, the offender commenced using ice, in mid 2020, having apparently become reliant on it for sexual functioning. This led to significant ice addiction which was financially draining. The use of ice also had significant side-effects.
5. The offender currently has an Onshore Protection Visa application under consideration by the Department of Home Affairs. The application is based upon the offender's fears of persecution owing to his membership to particular homosexual social groups. According to a letter from the offender's solicitor, who is assisting with his immigration matters, the Minister may refuse to grant a visa to a person who does not satisfy the character test. In this respect a person with a "substantial criminal record" (sentenced to a term of imprisonment for 12 months or more) will not satisfy the character requirement. In these circumstances, according to the Migration Act 1958 (Cth), the Minister must cancel the offender's visa. He will be taken to indefinite immigration detention which will pose significant challenges to the offender's health and well-being due to his complex health needs.
6. The offender was interviewed by Dr Mark Milic, psychologist, where the offender's history traversed above was disclosed. The offender told Dr Milic that since his arrest he has been worried about his future and the prospect of being deported to the Philippines. He has been nervous and depressed for the last two years in anticipation of his sentence.
7. The offender's responses on the questionnaire assessment indicated that the offender has a drug use disorder. He also has had tendencies to overconfidence, self-absorption, and overreliance on attention from others to maintain self-esteem. His responses also indicated a history of problems with generalised anxiety disorder.
8. Dr Milic observed that the criminal proceedings had taken a high emotional toll on the offender and that this will act as a deterrent to reoffending. The offender's prospects of rehabilitation were enhanced on his marked reduction in drug use and participation in counselling. Dr Milic observed that the offender's best prospects of rehabilitation were in the community where he could continue counselling and receive better care for his physical health issues including HIV infection management, thyroid disease management and pre-diabetes.
9. A report from Lisa McCann, Senior Social Worker/Sexual Health Counsellor at the Sydney Sexual Health Centre confirmed that the offender presented for counselling in July 2021 and attended six sessions until December 2021. Ms McCann first dealt with the offender in January 2022, and he had attended for five sessions from July 2022 until the date of the report in September 2022. It was noted that the primary issue addressed in counselling was the offender's problematic drug use and associated negative impact on physical health, mental health, and social health. The treatment plan was designed to support the offender's harm minimisation strategies, improve self-care and health efficacy, increase motivation to access specialist drug health services and develop skills to establish and attain other health related goals.
10. Ms McCann was of the opinion that the offender had demonstrated motivation to reduce drug dependency; he proactively accessed service supports, attended counselling sessions as scheduled, and engaged in strategies to establish and attain health goals. This had resulted in a reported reduction in frequency and amount of drug use used on a weekly basis. To assist maintenance of harm minimisation outcomes, recommendations were made for the offender to access a specialist drug health service.
11. A separate report was provided by Dr Chris Bourne, Senior Staff Specialist Sexual Health and Clinical Advisor who confirmed that the offender had been transferred to the Sydney Sexual Health Centre in 2020 from the Western Sydney Sexual Health Centre. The offender had seen a doctor six times, nurse four times and a counsellor 12 times, for medical and psychological care.
12. Reference has already been made to the letter from the offender's sister in the Philippines. Ms Castillo attests the offender's otherwise good character, who had always given himself to others, even at times sacrificing his needs for others. The offender had expressed considerable remorse relating to the relevant offences stating that he is sorry for all the victims of the fraud. Ms Castillo also acknowledged that the offender's ability to continue to work so as to provide some financial support for his family in the Philippines was important.
13. The offender did not give evidence. I am left to reach my decision upon representations attributed to him by others. Caution is required when assessing out-of-court representations for the purpose of determining sentence, as was noted by Smart AJ in R v Qutami [2001] NSWCCA 353. His Honour's observations in this respect were the subject of further consideration by Wilson J in Imbornone v R [2017] NSWCCA 144. Her Honour discussed the care required, with reference to Qutami amongst other authorities. Beginning at paragraph [57], her Honour summarised the statements that are derived from the authorities to which she referred and once more reminded sentencing courts of the caution one must bring to bear when dealing with factual matters drawing upon representations that are not affirmed or unsworn and remain untested.
14. In Lloyd v R [2022] NSWCCA 18 McCallum JA (with whom Hammill and Cavanagh JJ agreed) noted that the observations of Smart AJ in Qutami are sometimes mistaken for principle, and that the weight and cogency of such evidence is a matter for the individual assessment of the sentencing judge. Her Honour observed at [47] that there is no principle of law that requires a sentencing judge to exercise "very considerable caution" before relying on the contents of an expert report absent evidence from the offender. In this respect her Honour acknowledged that the court is not the only forum in which a reliable medical history can be obtained.

Submissions

1. Counsel for the offender notes that the offender has no criminal history in New South Wales and claims that he has no criminal history elsewhere. The submissions note that the offender voluntarily visited the police station in September 2020, confessing to his involvement in the fraud and offering to assist. In February 2021 he was voluntarily interviewed by police where he confirmed his involvement and again offered to assist. In May 2021 he was arrested, volunteered to be interviewed, and freely admitted to the offences.
2. The submissions acknowledge aggravating factors including that the offender was involved in a planned or organised activity although "towards the bottom of the chain". The offence was committed for financial gain, although it is submitted that it was to finance the offender's existing drug addiction and to allow him to remit money to his family in the Philippines. The offences did involve multiple victims in the series of criminal acts, although it is contended that each individual case involved smaller amounts of money.
3. In respect to mitigating factors, in any individual case the loss was not substantial. The offender does not have a criminal record and is otherwise a person of good character. It is contended that the offender was unlikely to reoffend and there were good prospects of rehabilitation. The offender had shown remorse, had pleaded guilty and had offered to assist authorities.
4. The offender's submissions note the Crown's concession that the offender had expressed some remorse and acknowledged the impact on his victims. Further the Crown had acknowledged the good prospects of rehabilitation and that this was the offender's first offence. It was also acknowledged that during the offending period, the offender was a heavy user of drugs and that the offender's risk of reoffending is low. The Crown's acknowledgement that the offender is entitled to an Ellis discount having provided assistance to the investigating police is noted.
5. The offender notes the delay on the part of investigating police to further investigate the matter, following the offender's initial attendance in September 2020. It is apparent that given that delay further offences were committed resulting in additional losses. It is submitted that the case is "unusual, problematic and somewhat troubling" given the offender's medical history, difficulties living with HIV/AIDS and difficulties dealing with homosexuality in the Philippines. Finally, the submissions note the opinion of Dr Milic that the offender's best prospects for rehabilitation were in the community where relevant services were available.
6. I have already referred to the Crown's submissions as to the objective seriousness of the offences, the role of the offender and the need for deterrence. The Crown identifies the relevant aggravating factors under section 21A of the Crimes (Sentencing Procedure) Act 1999 including being involved in a planned organised activity, the offences being for financial gain and that the five offences were rolled up in charges encompassing ongoing criminal activity reflected in separate criminal acts. Whilst the offender's subjective case was acknowledged, the Crown contended that the offender did not seem to have grasped the overall impact of his behaviour on the community. Whilst it is acknowledged by the Crown that overall, the offender had good prospects of rehabilitation, the offender will need to address his drug use. It notes the sentence assessment report that the offender's risk of reoffending was low, although it would be necessary to consider the long period during which the offences took place and the numerous occasions of offending when assessing such a risk.
7. In respect to any Ellis discount, the Crown notes the principles referred to in Ellis, including the fact that leniency will vary according to the likelihood that the offences would have been discovered by authorities, and the likelihood that the offences could have been proven beyond reasonable doubt without the disclosure. Whilst the Crown notes that the victims of the fraud had given police details of the bank accounts connected to the offender, the extent of the offender's activities, and degree of his involvement would not have been apparent had he not gone to police and provided relevant assistance. In respect to the totality principle in the case of imprisonment, it may involve the fixing of an appropriate sentence with consideration thereafter of accumulation or currency. However, the application of the totality principle must not result in the "blanket assessment" for each offence. In the Crown's submission, at least partial accumulation is appropriate. Finally, it is contended that the s 5 threshold is crossed, and a sentence of imprisonment is appropriate.

Consideration

1. Given the seriousness of the offences; the fact that there were numerous victims who were defrauded, that the offending occurred over some months and the offender was complicit in furthering the scam perpetrated by Darshan, I am satisfied, in accordance with s 5 of the Crimes (Sentencing Procedure) Act 1999 that no penalty other than imprisonment is appropriate. It is important that there be a general deterrence in respect to scams which involve financial fraud given their prevalence. Further, there is specific deterrence in respect to the offender.
2. It is not without significance that the numerous victims have suffered individual financial losses with no prospect of recompense. In this respect it is necessary, in determining the appropriate sentence, to recognise the harm that has been done to the numerous victims arising from the offender's crimes. In this respect it is also appropriate that a sentence be imposed which makes the offender accountable for his actions and generally to denounce his conduct.
3. However, in determining an appropriate sentence, the offender is entitled to a discount given his cooperation with authorities and the offer to provide assistance in seeking to identify the principal offender Darshan. In this respect, I note the appropriate acknowledgement by the Crown that the offender's cooperation meant that the extent of the offender's activities, and the degree of his involvement, was uncovered to a greater extent than otherwise would have been the case. I also take into account the fact that the offender has no prior convictions and is otherwise a person of good character.
4. In respect to mitigating factors I take into account the fact that the offender apparently suffers from a generalised anxiety disorder and a drug use disorder. This is compounded by the difficult financial circumstances involving his family in the Philippines, and the fact that his family reached out to the offender to financially support them given their predicament. I also take into account the offender's apparent remorse.
5. Whilst there are five offences in respect to which the Court is passing sentence (together with two offences on a Form 1) this is an appropriate matter for the Court to invoke s 53A of the Crimes (Sentencing Procedure) Act 1999 and impose an aggregate sentence. It will be necessary for me to indicate what sentences would have been imposed had separate sentences been imposed.
6. I find that the offender is entitled to a discount in accordance with s 23 of the Crimes (Sentencing Procedure) Act 1999. I find that this discount is appropriate on the basis that the offender has assisted law enforcement authorities in the detection and investigation of the offences in which the offender was involved. In considering the matters referred to in s 23 (2) of the Crimes (Sentencing Procedure) Act 1999, I note the Crown's concession that the extent of the offender's activities, and degree of his involvement, would not have been apparent had the offender not gone to the police and provided relevant assistance. Whilst the offender's assistance did not lead to the identification of the offender Darshan, this is not to detract from the offender's offer to provide such assistance. It is apparent from the material that the offender's information was truthful and reliable, and that the offender offered to provide assistance even prior to his arrest.
7. The offender is also entitled to a discount for the utilitarian value of the plea of guilty entered at the first available opportunity. It is appropriate that a combined discount be made for both the plea of guilty and assistance (SZ v R [2007] NSWCCA 19 at [44]; Panetta v R [2016] NSWCCA 85). In all the circumstances, I find that an appropriate combined discount for the plea of guilty and assistance given should be 35%.
8. In respect to each offence of knowingly deal with proceeds of crime (taking into account the two matters on the Form 1 document) the appropriate sentence is two years nine months from which is deducted the 35% for the plea of guilty and assistance given, resulting in a total sentence of one year nine months (rounding down). Taking into account a need for some accumulation between sentences, a total aggregate sentence of two years is appropriate.
9. The next consideration is how the sentences are to be served. A Sentencing Assessment Report completed on 9 September 2022 involved an interview with the offender, a review of the letter from the offender's sister and the Drug and Alcohol Counselling Report.
10. The report notes that whilst the offender retained a minimal support network in Australia, having relocated from the Philippines in 2020, he remains close with his family and maintains regular contact with them. The offender provides ongoing support to his family in the Philippines following the closure of their industrial farm due to a natural disaster in 2021. It was noted that the offender was a self-employed IT consultant. He had identified financial stress and a drug habit as contributing factors towards his offending behaviour. He had been introduced to the drug culture within the LGBTQI community and, whilst initially using it for recreational purposes, he had developed a drug habit. The financial pressure both funding his developing drug habits and providing for his family following loss of their business, led to the offending.
11. The offender acknowledged the disappointment and financial burden he had caused to his victims but also focused on the impact towards himself and his family, both financially and emotionally. The offender acknowledged the benefits of engaging interventions to address his drug use and mental health, and it was noted that he was currently engaged in work with a local drug and alcohol counsellor. He acknowledged his intention to maintain this intervention. He also expressed a willingness and ability to participate in community service work.
12. The offender was assessed at a low risk of reoffending, however, if the Court made a supervised order, Community Corrections would monitor him for any indicators of increased risk. It was considered that there were no conditions other than a supervision condition required to implement the supervision plan. The offender had been assessed as suitable to undertake community service work.
13. Section 66 of the Crimes (Sentencing Procedure) Act 1999 provides that community safety must be the paramount consideration when the sentencing court is deciding whether to make an ICO in relation to an offender. Section 66(2) further provides that, when considering community safety as required by s 66(1), the sentencing court is to assess whether making the order or serving the sentence by way of full-time detention is more likely to address the offender's risk of reoffending. Further, when deciding whether to make an ICO, the court is required to consider the purposes of sentencing provided in s 3A of the Crimes (Sentencing Procedure) Act 1999, as well as any relevant common-law sentencing principles.
14. Since being charged with the relevant offences the offender has taken active steps towards his own rehabilitation including: 1. Attending the Sydney Sexual Health Centre in 2020 for support and counselling which involved attending a doctor on six occasions, a nurse on four occasions, and a counsellor on twelve occasions for medical and psychosocial care. 2. Attending the counselling service attached to Sydney Sexual Health Centre in July 2021, seeking to address his problematic drug use. 3. The offender, with the support of social worker counselling, invoking harm minimisation strategies, and improving self-care and health efficiency.
15. It is significant that the social worker, Lisa McCann, was of the opinion that the offender had demonstrated motivation to reduce drug dependency by proactively accessing service supports, attending counselling sessions as scheduled, and engaging in other strategies, which has resulted in a reported reduction in frequency and amount of drug use on a weekly basis. The report further notes that the offender had acted on the advice provided and had referred himself to a specialist drug health service.
16. I also note the report of Dr Mark Milic, that the offender's prospects of rehabilitation are enhanced by his marked reduction in drug use and participation in counselling. Dr Milic considered that the offender's best prospects of rehabilitation were in the community where he could continue counselling and receive better care for his physical health, including HIV infection management, thyroid disease management and pre-diabetes.
17. I am satisfied that an ICO is more likely to address the offender's risk of reoffending. In this respect, given the offender has better prospects of rehabilitation in the community, there is a real prospect that if the offender was to serve the period of imprisonment by way of full time detention, his present trajectory towards rehabilitation and becoming drug free would be significantly impacted.
18. However, it is also necessary to consider the purposes of sentencing provided in s 3A of the Crimes (Sentencing Procedure) Act 1999. Given the conditions of the intensive correction order which I intend to impose I am satisfied the offender will be adequately punished for the offence and will provide appropriate deterrence. However, the imposition of an ICO, for the reasons earlier identified, will promote the offender's rehabilitation, whilst making the offender accountable for his actions, and denouncing his conduct.

Orders 1. In respect of the offences to which the offender has pleaded guilty, the offender is convicted. 2. The offender is sentenced to an aggregate sentence of two years imprisonment, to be served by way of an intensive corrections order. 3. That sentence will commence on 23 September 2022 and expire on 22 September 2024. 4. The standard conditions that apply during the terms of the order are that the offender: 1. must not commit any offence; and 2. must submit to supervision by a community corrections officer at the City Community Corrections office and is to attend this office by 30 September 2022 to facilitate this condition. 1. The following additional conditions apply: 1. The offender is to perform 200 hours of community service work; and 2. The offender is to participate in a rehabilitation or treatment program.

Amendments 26 September 2022 - Changed party name - Rex 26 September 2022 - Changed comma to semicolon at Order (5)(a) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 November 2022