R (Cth) v Petroulias

Crimes Act 1914 (Cth) Income Tax Assessment Act 1936 (Cth) LEGISLATION CITED : Evidence Act 1995 Mental Health Act 2007 Crimes (Administration of Sentences) Act 1999 Criminal Procedure Act 1986

Cheung v The Queen [2001] 209 CLR The Queen v Olbrich [1999] 199 CLR 270 The Queen v De Simoni [1980]-[1981] 147 CLR 383 R (Cth) v Petroulias (No. 1) [2006] NSWSC 788 R (Cth) v Petroulias (No. 30) [2007] 214 FLR 311; [2007] NSWSC 1119 R (Cth) v Petroulias (No. 34) [2007] NSWSC 1462 Petroulias v R [2007] NSWCCA 134 R (Cth) v Petroulias (No. 16) [2007] NSWSC 506 CASES CITED : R (Cth) v Petroulias (No. 29) [2007] NSWSC 1005 R v Qutami (2001) 127 A Crim R 369 R v Palu (2002) 134 A Crim R 174 R v Peisley (1990) 54 A Crim R 42 R v Gent (2005) 162 A Crim R 29 Siganto v The Queen (1998) 194 CLR 565 R v Sopher (1993) 70 A Crim R 570 Director of Public Prosecutions (Cth) v El Karhani (1990) 21 NSWLR 370 R v MA (2004) 145 A Crim R 434 Ibbs v The Queen (1987) 163 CLR 447

PARTIES : Regina (Commonwealth) (Crown) Nikytas Nicholas Petroulias (Offender)

COUNSEL : Mr P Hastings QC; Mr C Hoy (Crown) Mr R Sutherland SC; Mr G Walsh (Offender)

Commonwealth Director of Public Prosecutions (Crown) SOLICITORS : Templeton Knight Lawyers (Australia) Pty Ltd (Offender)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION CRIMINAL LIST

2002/93 Regina (Commonwealth) v Nikytas Nicholas Petroulias (No. 36)

1 JOHNSON J: On 13 June 2007, a jury was empanelled following pleas of not guilty by the Offender, Nikytas Nicholas Petroulias, to each of three counts in an indictment, namely:

(a) one count of defrauding the Commonwealth contrary to s.29D Crimes Act 1914 (Cth) ;

(b) one count of agreeing to receive a benefit on an understanding that the exercise by him of his duty as a Commonwealth officer would be affected contrary to s.73 Crimes Act 1914 (Cth) ; and

(c) one count of publishing to a person to whom he was not authorised to publish, documents which came into his possession by virtue of him being a Commonwealth officer, and which it was his duty not to disclose, an offence under s.70 Crimes Act 1914 (Cth) . 2 On 18 December 2007, the jury found the Offender guilty of the second and third counts, being the offences under ss.73 and 70 Crimes Act 1914 (Cth). The jury could not agree upon a verdict with respect to the first count under s.29D Crimes Act 1914 (Cth) and were discharged on that count without verdict. On 27 March 2008, the Commonwealth Director of Public Prosecutions determined not to proceed further with the s.29D count against the Offender. 3 A sentencing hearing took place before me on 16, 23, 28, 29 and 30 May 2008. At the conclusion of the sentencing hearing, I reserved my decision on sentence until today. The Offender has been on conditional bail since 18 December 2007.

Fact Finding on Sentence 4 It falls to me as the trial Judge to determine punishment and, for that purpose, to make findings of fact relevant to sentencing. The primary constraint is that the view of the facts adopted by me for purposes of sentencing must be consistent with the verdicts of the jury. Any findings of fact against the Offender must be arrived at beyond reasonable doubt: Cheung v The Queen [2001] 209 CLR 1 at 12-13 [14]. 5 The Court may not take facts into account on sentence, in a way that is adverse to the interests of the Offender, unless those facts have been established beyond reasonable doubt. On the other hand, if there are matters which the Offender relies upon in mitigation of penalty, it is enough if those matters are proved by the Offender on the balance of probabilities: The Queen v Olbrich [1999] 199 CLR 270 at 281 [27]-[28]. 6 It is necessary that I keep in mind, at all times, the fact that the Offender was not convicted of the s.29D fraud count. He stands to be sentenced only for the two offences of which he was found guilty by the jury. The sentences to be imposed on the Offender should take account of all the circumstances of the offences of which he has been found guilty, but he is not to be punished for an offence for which he has not been convicted. In imposing sentence, I am entitled to consider all the conduct of the Offender, including that which would aggravate his offences, but I cannot take into account circumstances of aggravation which would have warranted a conviction for a more serious offence, in this case, the s.29D fraud offence: The Queen v De Simoni [1980]-[1981] 147 CLR 383 at 389. 7 The history of the litigation giving rise to the trial at which the Offender was convicted may be found in a series of judgments delivered by me in 2006 and 2007. See, in particular, R (Cth) v Petroulias (No. 1) [2006] NSWSC 788 (refusal of stay) and R (Cth) v Petroulias (No. 30) [2007] 214 FLR 311; [2007] NSWSC 1119 (refusal of application for verdicts by direction). 8 The trial before this jury proceeded for six months. The sentencing hearing occupied five sitting days. It is necessary that I make findings on a range of matters for the purpose of passing sentence. This will take a little time. 9 At the time of these offences, the maximum penalty for offences under each of ss.70 and 73 was imprisonment for two years and/or a fine of 120 penalty units ($13,200.00): ss.4AA(1) and 4B(2) Crimes Act 1914 (Cth).

The Second and Third Counts 10 The jury were provided with written directions and a detailed chronology: R (Cth) v Petroulias (No. 34) [2007] NSWSC 1462. The elements of the offences contained in the second and third counts were explained to the jury in the summing up (SU58-61). 11 The second count was in these terms:

"That between about October 1997 and February 1999 at Sydney, in New South Wales and elsewhere, the accused, then a Commonwealth officer with the Australian Taxation Office, did agree to receive a benefit for himself, namely money, on an understanding that the exercise by him of his duty as a Commonwealth officer would be affected." 12 The essential elements of the second count, found proved by the jury, are as follows: (a) that the Offender was at all relevant times an officer with the Australian Taxation Office ("ATO") and, thus, an officer of the Commonwealth;

(b) that the Offender agreed to receive a benefit in the form of money for himself; and,

(c) that the basis upon which the Offender so agreed to receive that money benefit was an understanding that he would, in return, be improperly affected in the performance by him of some duty which he owed in his capacity as a Commonwealth officer, namely, as an officer of the ATO. 13 The third count was in these terms: "That between about June 1998 and April 1999 at Sydney in the State of New South Wales, the accused, being a Commonwealth officer with the Australian Taxation Office, did publish to Richard Llewellyn Morgan, a person to whom he was not authorised to publish, documents which came into his possession by virtue of him being a Commonwealth officer and which it was his duty not to disclose." 14 The essential elements of the third count, found proved by the jury, are as follows: (a) that the Offender was an officer of the Commonwealth within the ATO;

(b) that the Offender obtained possession of documents which contained information concerning the affairs of any other person by virtue of him being a Commonwealth officer;

(c) that the Offender was under a duty not to disclose the documents to a person to whom publication was not authorised;

(d) that the Offender published, that is gave, the documents to Mr Morgan; and

(e) that Mr Morgan was not an authorised recipient of the particular documents. 15 There was significant factual overlap between each of the three counts on the indictment. In the practical context of the trial, the Crown relied, with respect to the second count, on all evidence relevant to the first count with the exception of evidence which related solely to the element of deprivation. As part of the first count, the Crown alleged that the Offender was guilty of fraud in that he had placed the revenue of the Commonwealth at risk. As the jury could not agree on a verdict on this count, it is necessary to place to one side, for present purposes, all evidence bearing upon the element of deprivation. 16 The Crown case on the second count was based upon a course of conduct on the part of the Offender between about October 1997 and February 1999. The Crown case on the third count alleged unauthorised publication by the Offender in the period between about June 1998 and April 1999. 17 I now proceed to consider the evidence before the jury for the purpose of finding facts, to the requisite standard, and consistent with the verdicts of the jury, with respect to the second and third counts.

Facts of the Offences 18 The Offender was born in 1967. By 1996, the Offender had tertiary qualifications in law and had a close interest in revenue law. In 1996, he became acquainted with Mr Richard Morgan at a time when both men worked at Computer Law Services, a provider of information products to taxation-related businesses. In the same year, the Offender became acquainted with Mr Nicholas Panos, Mr Andrew Gray and Mr John McLaren. 19 In about February 1997, the Offender expressed interest in taking up a position within the ATO. On 19 February 1997, as part of that process, the Offender signed an ATO declaration of secrecy acknowledging that he was bound by the relevant secrecy provisions of tax legislation (SU79-80). 20 On 12 May 1997, the Offender commenced as a consultant with the ATO. The term of his appointment as a consultant was ultimately extended until he became a permanent employee of the ATO on 24 November 1997. 21 I am satisfied that, by May 1997, the Offender had determined to go into the business of marketing schemes including employee benefit arrangements ("EBAs") which would be attractive, from a tax perspective, to taxpayers. When interviewed on 24 March 2000 by Federal Agent Wildman, the Offender explained that he had been helping his then wife with her Masters degree and, in that context, had studied EBAs. The Offender told Federal Agent Wildman (SU299): "…then the offer came to go to the ATO so I mean I was really interested in going along with all of this as a business, I thought it was a fantastic business, then I went to the ATO." 22 I am satisfied that the Offender was establishing a business during the course of 1997 involving the marketing of EBAs, and that it was his intention to further those private business interests in the positions which he took up within the ATO, initially as a consultant and later as a full-time employee. 23 In and after June 1997, the Offender met, from to time, with Mr Morgan and Mr Panos concerning business arrangements. I accept the evidence of Mr Morgan concerning meetings at which discussions took place, and agreement was reached, with respect to division of the proceeds of the business. 24 I accept the evidence of Mr Morgan that a meeting took place at the Offender's home in Campsie which was also attended by Mr Panos (SU310-312). I am satisfied that the Offender was the prime mover of this business scheme. At this meeting, the Offender said that Mr Panos' principal role in the business would be lodging documentary applications for advance opinions and private rulings. The Offender explained the nature of these concepts to Mr Morgan at the meeting. The Offender told Mr Panos of Mr Morgan's marketing skills of which the Offender had become aware from their time working at Computer Law Services. At the end of the meeting, Mr Panos had some reservations about Mr Morgan's involvement given his lack of legal knowledge, but the Offender emphasised to Mr Panos the marketing role which Mr Morgan would play. 25 I am satisfied that agreement was reached between the Offender, Mr Morgan and Mr Panos to divide money with each to receive a third. This agreement continued in 1997 and 1998. Payment was in fact made to the Offender. The entire business arrangement hatched in 1997, which continued in 1998, was motivated by financial gain for all, including the Offender. 26 The documentary evidence adduced in the trial provided powerful corroboration of the marketing role played by Mr Morgan and the documentary preparation and submission role of Mr Panos. I am satisfied that it was the Offender who introduced Mr Morgan to Mr Panos for the purpose of giving effect to the business arrangement of which the Offender was the principal moving party. The arrangements and events proved through the documentary evidence, taken with the evidence of Mr Morgan is, in my view, strong evidence that the Offender entered into these arrangements for personal financial gain and maintained a motive of personal financial gain throughout the active life of the business arrangements from 1997 to late 1998. 27 By June 1997, the Offender had met and clearly impressed a senior ATO officer, Mr Jim Killaly. Mr Killaly provided an impressive referee's report for the Offender dated 30 June 1997. Mr Killaly's assessment of the Offender is important for a number of purposes. Firstly, it demonstrates the extent to which the Offender was pressing his involvement within the ATO at a time when, I am satisfied, he was establishing private commercial business interests outside the ATO. Secondly, given an issue which has arisen in the sentencing proceedings concerning the Offender's mental health and ability to function between 1997 and 1999, the assessment of Mr Killaly provides a reliable contemporary assessment of the Offender. Mr Killaly had discussions with the Offender concerning technical aspects of international tax. Mr Killaly spoke in glowing terms of the Offender's communication skills (Exhibit D35): "Nick is very articulate and a very good writer. He has a clear and concise style and can arrange complex material in a logical and fluent manner. He is personable and presents himself confidently, well able to challenge and contribute ideas. He is well able to discuss issues and think well on his feet. In my view he meets the criterion to a high standard."

With respect to the Offender's conceptual, analytical and strategic skills, Mr Killaly said (Exhibit D35): "Nick has a demonstrated ability to analyse complex tax issues and distil the assumptions and implications. He has demonstrated this ability to think at a very high level in his academic work, in the private sector as an employee of Mallesons and in his journalism. I have no doubt that he can assimilate several sources of information. He is quick to identify the tax angles and to develop solutions. While he has not had much exposure to public policy I am confident from my discussions with him that he can apply purposive approaches to the interpretation of tax legislation." 28 Mr Killaly considered that the Offender had "demonstrated the ability to thoughtfully weigh up competing arguments and give a considered and well-reasoned view". He considered that the Offender was "well able to contribute to the development of professional skills of staff". 29 In about July-August 1997, Mr Panos introduced Mr Geoffrey Strong to the Offender as part of the developing relationships being formed to advance the business. 30 In the meantime, inside the ATO, the Offender was cultivating associations with persons working in the area of EBAs or employee benefit trusts ("EBTs"). 31 On 30 June 1997, Mr Andrew Gardiner posted a message on the ATO GrapeVine system requesting that anyone who had seen an EBT arrangement to contact him. Within a day, the Offender emailed Mr Gardiner, stated that he had come across "a ripper of a scheme in the high wealth projects" which he was investigating and would sit down and review (Exhibit C175). I am satisfied that the Offender took this step, at that time, as part of a process to advance his personal business interests through acts within the ATO which would assist those interests. Before, during and after this time, the Offender intentionally withheld from ATO personnel the true facts concerning his private business interests and relationships. Thus, a process was underway where the Offender was utilising his position, firstly as a consultant and later as a full-time employee within the ATO, to further his private business interests. A clear conflict of interest existed and I am satisfied that the Offender knew that this was the case. 32 The technical nature of advance opinions and private rulings, issued by the ATO, was the subject of directions to the jury (SU52-54; 67-78) and need not be repeated here. It is sufficient to observe that rulings and opinions were regarded as valuable commodities by persons engaged in marketing schemes and tax products in the commercial world. The holder of an opinion or ruling, which expressed the ATO view with respect to the particular circumstances, was perceived as having an advantage for tax purposes. The Offender explained these advantages, in a practical way, to Mr Morgan who was to perform the task of marketing them. I will refer shortly to evidence disclosing the Offender's own perception of the value of holding an opinion or ruling, and the positive features of them which were to be emphasised for marketing purposes. 33 In August 1997, the Offender engaged in email communications with ATO employees including Mr Gardiner and Mr James Targett concerning EBTs. On 4 August 1997, the Offender attended a seminar conducted by Mr Michael Charles at the Dandenong office of the ATO in relation to employee share schemes. 34 I am satisfied that the Offender's contact with these ATO officers was primarily for the purpose of him establishing associations, and acquiring information, to assist his own private business interests. 35 A clear example of the collision between the Offender's private interests and his public duty as an ATO consultant is demonstrated by a document extracted by police, in March 2000, from a storage unit, used by the Offender, in Melbourne under the name of Christopher Marriott, in which a computer hard drive and a large number of documents were located. Extracted from the hard drive was a document dated 17 August 1997 (Exhibit C206, Tab 8). This was a draft application for an advance opinion for the Productivity Incentive Corporation Employee Incentive Plan. On 9 September 1997, Mr Panos sent an application for an advance opinion, marked for the attention of Mr Charles, for the Productivity Incentive Australia Productivity Incentive Plan. This application had been drafted by the Offender. I will refer to this application again later in these reasons. 36 In effect, the Offender was operating on both sides of the tax fence at the same time. He was associating with Mr Charles and others inside the ATO. At the same time, he was preparing an application to be directed to Mr Charles concerning the same subject matter. The Offender's conflict of interest could be seen in stark relief at this time. 37 At various times in 1997, the Offender was reminded of the importance of identification of actual or potential conflicts of interest. On 18 August 1997, a written agreement was entered into between the ATO and the Offender's company, Middleduke Pty Limited ("Middleduke"), in relation to consultancy services for the ATO High Wealth Individuals' Taskforce. The agreement prohibited the Offender from disclosing any Commonwealth material or contract material to any other person without prior written approval of the Commonwealth. In a portion of the agreement headed "Conflict of Interest", the Offender warranted that, at the date of signing the contract, "No conflict of interest exists or is likely to arise in the performance" of obligations under the contract and that "if, during the term of the contract, a conflict or risk of conflict arises", the Offender undertook to notify the ATO immediately in writing of that conflict or risk (Exhibit C15). 38 It was submitted for the Offender that I should find that his status as an ATO consultant in 1997 gave rise to some uncertainty, and grey areas, with respect to actual and potential conflicts of interest. I do not accept this submission. I am satisfied that there was, by August 1997 if not before, a clear bright-line test of actual or potential conflict of interest of which the Offender was well aware. This was not a grey area. The obligations of the Offender were, I am satisfied, clear to him at that time. His failure to disclose areas of actual conflict of interest demonstrate the foundation for actual impropriety found by the jury for the purpose of its verdict with respect to the second count. 39 On 19 August 1997, a day after he signed the Middleduke contract, the Offender was communicating by email with Mr Targett concerning an employee benefit trust. He requested Mr Targett to obtain a copy of the trust deed from the relevant entity. 40 On 28 August 1997, a document entitled "The Mechanics of the Productivity Incentive Plan" was created by the Offender on his hard drive (Exhibit C206, Tab 11). I am satisfied that this was a marketing document, further evidencing the active part being played by the Offender in the development of the scheme of marketing EBAs for commercial gain. 41 I accept the evidence of Mr Morgan that the Offender met with him and discussed marketing approaches with respect to the Productivity Incentive Scheme. An entry in the Offender's diary for 30 August 1997 (Exhibit C227) evidences the fact that the Offender met with Mr Morgan at that time. 42 A further incident occurred in early September 1997 which emphasised, once again, the importance of the Offender identifying areas of actual or potential conflict of interest. A question arose concerning the Offender's use of ATO facilities for non-ATO purposes. An innocuous event triggered a meeting between ATO officers and the Offender. A memorandum dated 2 September 1997 (Exhibit C16) was prepared following that meeting. The memorandum was entitled "Future Arrangements Regarding Nick Petroulias". It indicated that the Offender would "focus most of his attention on the review of international issues". It said "Where Nick in his private consulting work, represents a client which involves an ATO matter, the general nature of the matter should be communicated" to nominated senior personnel and this would "avoid any potential or perceived conflicts of interest". The memorandum stated "Nick's dealings with ATO people outside the high wealth individual task force will always be in conjunction with HWI people" and that this would ensure that "other ATO staff have a proper introduction to Nick's function in HWI". Once again, this document emphasised to the Offender the lines of demarcation and communication which were appropriate to guard against actual or perceived conflicts of interest given his role in the High Wealth Individuals' Taskforce. The rules were clear and emphatic. I am satisfied that there was no room for honest controversy or debate concerning the construction and application of these rules. Once again, the Offender was on clear notice of his obligations in the area of conflict of interest. 43 Within days of this memorandum, the Offender was in contact with an ATO officer, Mr Lowman Chow, concerning an application for an advance opinion made by Mr Panos for Productivity Incentive Australia Pty Limited (Exhibit C17). The Offender had social dealings with Mr Chow, by way of yum cha, on 7 September 1997. Over the next two days, the Offender prepared a lengthy facsimile which was sent to Mr Chow on 9 September 1997 supporting the issue of the advance opinion (Exhibit C18). 44 False and misleading statements were made to Mr Chow in September 1997 with respect to the alleged activities of Productivity Incentive Australia Pty Limited. The application of 2 September 1997 for an advance opinion had been directed by Mr Panos to Mr Chow. Mr Chow spoke to Mr Panos by telephone and informed him that Mr Chow's area within the ATO related to media and communication industries. Thereafter, Mr Panos sent a facsimile to Mr Chow stating that the Productivity Incentive Trust Plan would be developed mainly for prospective clients in the media and entertainment industry. It was asserted that Productivity Incentive Australia Pty Limited was seeking to develop the product for entities such as News Corporation, Fairfax, Village Roadshow, the Hoyts Group, Greater Union, Video Ezy, Civic Video, Dymocks and Angus & Robertson. I am satisfied that this was a false statement by Mr Panos communicated for the purpose of ensuring that Mr Chow retained the application. The Offender wished the application to remain with Mr Chow so that the Offender could exercise his influence to ensure a favourable outcome. Given the intense involvement of the Offender with this application, I am satisfied that he well knew of this contrivance even if he had not proposed it himself, in the first place, to Mr Panos. 45 There were further communications between Mr Panos and Mr Chow with respect to the application in September-October 1997. At the same time, the Offender was communicating with Mr Chow supporting the issue of the advance opinion. At no time did the Offender inform Mr Chow of his personal business association with Mr Panos, let alone his personal interest in the application then before Mr Chow. On 8 October 1997, Mr Chow issued a favourable letter of advice in response to the application (Exhibit C27; Exhibit C95, Tab 1). 46 The nature of the Offender's conflict of interest was illustrated starkly by a document related to Mr Chow's letter issued on 8 October 1997. Located on the Offender's hard drive found in the Melbourne storage unit was an unformatted draft letter created on 24 October 1997 and directed to Mr John McLaren. I am satisfied that the Offender was the author of this document. Mr McLaren was a business associate of the Offender in the scheme to market EBAs. The draft letter urged Mr McLaren to contact Mr Norman Draper, whom the Offender had met at a seminar on 14 October 1997. 47 It is important to note, at this point, that the letter issued by Mr Chow on 8 October 1997 contained what was described as a "Part IVA sign off", a reference to Part IVA of the Income Tax Assessment Act 1936 (Cth). The document addressed to Mr McLaren, and written by the Offender, provides powerful evidence of the existence of a business arrangement, in which the Offender was a central figure, and the use by him of his position within the ATO to further those business interests. The document included the following (SU115): "Things to note: speeding things along, Accountants tend to be driven by deadlines (ISD, ATO, ASC returns, etc) and therefore are slow to move on product. In order to motivate them to move quicker it should be pointed out that it should not be left to end of year because it looks like a sham/Part IVA; and most importantly, it costs the client money each and every month that it is not implemented in the form of PAYE instalments, payroll tax, Super guarantee charge and workers comp. IE, for even a small company, these on-cost savings pay for the plan. Second opinions: If possible, it would be handy to arrange for second opinions in Melbourne to be done by Andrew Gray rather than the client's other solicitors/advisers. The object would be to minimise potential plagiarism and at the same time ensure that a consistent message is being given. Andrew's number is [XXX] . You could tell the client that being familiar with the product, the costs of any second opinion would be smaller than to take it to someone who is not familiar with it. Competitors - comparison. We are the only ones with an advance opinion which includes a Part IVA sign-off. Arthur Andersen have an advance opinion on their product which sells for $40,000 but does not have a Part IVA sign-off. Part IVA as you know, is very important to accountants so it is a difference that is worth noting. Also, ours is the only advance opinion which is under the new 1997 Act. That is, it is not open to the ATO to argue that the wording of the new Act is different and therefore the advance opinion does not apply." 48 The document continued and referred to some competitor schemes as "shockers". The Offender continued (SU116): "These schemes are a total disaster. Note that even if it did work, there would be indexation for CGT purposes merely on the $1 rather than in our case, on the full value of the contribution. It is important to point out that price should not be a consideration for a scheme that will work for next 10 years or so to reduce tax - particularly when it carries no tax audit risk. If the cheaper end of the market sells theirs at $5,000 less than us for example, that is a small price to pay over a substantial period for avoiding audit risk. If the clients do get audited, they will also have to spend at least the difference on advisers fending off the ATO. They will also be disrupted from their business activities where they should be making money." 49 I am satisfied that the Offender, in this document, was urging Mr McLaren to market the Productivity Incentive Scheme by reference to the letter issued by Mr Chow on 8 October 1997. The Offender was emphasising what are said to be advantages of the scheme including "Part IVA sign off" and "avoiding audit risk". I am satisfied that the Offender caused Mr Chow to issue the letter of 8 October 1997, and thereafter ensured that the letter would be used by his business associates, on the other side of the tax fence, as a marketing tool. This involved a blatant and actual conflict of interest. The fact that the Offender was a consultant, and not a full-time employee, at this time makes no difference to this conclusion. By this time, there was a clear conflict of interest and flagrant breach of trust on the part of the Offender with respect to his public duties as a consultant with the ATO. 50 Events soon after demonstrated the use of Mr Chow's letter for selling purposes. On 6 November 1997, Mr McLaren met Mr Draper in an attempt to market the Productivity Incentive Scheme. Amongst the materials provided by Mr McLaren to Mr Draper was a copy of part of the letter of Mr Chow issued 8 October 1997. I infer that the letter was provided to Mr McLaren by the Offender or by Mr Panos. The use by Mr McLaren of the Chow letter for marketing purposes, in my view, confirms that the Offender's marketing suggestions to Mr McLaren (contained in the 24 October 1997 draft) had been implemented. 51 I am satisfied that the Offender applied a combination of subtle and unsubtle pressure to Mr Chow, which led Mr Chow to issue his letter of advice on 8 October 1997. The Offender's efforts in this respect were intense and continued for a period of time. Mr Chow, of course, was completely unaware of the Offender's personal interest in the application. 52 The circumstances surrounding the issue of this letter by Mr Chow provide a graphic illustration of the impropriety of the Offender which forms part of the second count. I am satisfied that the involvement of the Offender in this episode sets the scene for what continued over many months in 1997 and 1998. It provides a clear and reliable insight into the activities of the Offender, surrounding the issue of advance opinions and private rulings, in circumstances of gross conflict of interest and clear impropriety. 53 On 9 September 1997, Mr Panos made application for an advance opinion for Productivity Incentive Australia Pty Limited Productivity Incentive Plan. The application was marked for the attention of Mr Charles. I am satisfied that this application had been drafted by the Offender in and after August 1997. As mentioned earlier, a draft of this document was located on the Offender's hard drive seized from the Melbourne storage unit by police on 23 March 2000 (Exhibit C206, Tab 8). 54 The Offender played a part in settling a favourable response by Mr Charles to the application. On 25 November 1997, Mr Charles issued a favourable letter to Mr Panos (Exhibit C95, Tab 2). This was a further clear example of a gross conflict of interest by the Offender. He had drafted the application sent by Mr Panos to Mr Charles, and then involved himself in the charade where he purported to assess the application and advise Mr Charles as to the outcome. Like his involvement in the application to Mr Chow, the acts of the Offender with respect to this application involved serious impropriety. 55 I accept that the Offender told Mr Charles that he (the Offender) had advised Mr Panos to forward the application to Mr Charles because it was in his area of experience and that the Offender told Mr Charles that he knew Mr Panos (SU133). This was not much of a disclosure. The evidence demonstrated that very many people knew each other in the tax industry. What was critical was the true nature of the relationship. This limited disclosure to Mr Charles was the extent of any disclosure by the Offender to any of Messrs Charles, Chow or Targett. I am satisfied that it was a grossly inadequate and misleading statement which omitted the true nature of the relationship between the Offender and Mr Panos. 56 On 11 November 1997, the Offender and Mr Morgan together visited an accountant, Mr Calligeros, for the purpose of marketing EBT schemes. Although the Offender was still a consultant to the ATO at that time, I am satisfied that he well understood that actions of this type involved an actual conflict of interest. The visit to Mr Calligeros was for the purpose of the Offender, together with his business associate Mr Morgan, marketing schemes for personal gain. 57 On 24 November 1997, the Offender commenced permanent employment with the ATO, for a fixed term of four years, at the level of Senior Executive Service Band 1, Office of Chief Tax Counsel. 58 On 14 October 1997, the company, Morgan HR Pty Limited, was registered. This was a corporate front to be utilised by Mr Morgan for marketing purposes. At all relevant times in 1997 and 1998, Mr Morgan operated, on his own, out of his small flat in Elizabeth Bay. He had no employees or other staff. I am satisfied that the registration of Morgan HR Pty Limited was effected to further the private business plan of the Offender, Mr Panos and Mr Morgan. 59 On 25 November 1997, Mr Panos made application for an advance opinion for a Productivity Incentive Trust Plan for Morgan HR Pty Limited. The application was marked for the attention of Mr James Targett. The Offender had been in contact with Mr Targett for purposes relating to EBTs since at least August 1997. I am satisfied that the Offender told Mr Panos to mark the application for the attention of Mr Targett. 60 Following the receipt by Mr Targett of the application of 25 November 1997, the Offender communicated with Mr Targett with respect to the application. I am satisfied that the Offender spoke to Mr Targett on about 15 December 1997 and told him, with respect to the application, to "let this one go … we will be looking at these in the new year … we are going to issue a public ruling" (Exhibit C87). On 12 January 1998, Mr Targett issued a favourable advance opinion to Mr Panos with respect to the Productivity Incentive Trust Plan for Morgan HR Pty Limited (Exhibit C95, Tab 3). 61 The application made to Mr Targett on behalf of Morgan HR Pty Limited by Mr Panos included extravagant and clearly false statements concerning that company and its alleged activities. Although it was Mr Panos who wrote the letter in question, I am satisfied that the Offender had knowledge of the falsity of this information, and the fact that it was being proffered to the ATO. It was the Offender who had introduced Mr Morgan to Mr Panos and who was, I am satisfied, the mastermind of the private commercial arrangements put in place between these men, and others. 62 On 2 December 1997, Mr Targett spoke to Mr Panos concerning the application he had received for Morgan HR Pty Limited. Mr Panos informed him that the application had been directed to Mr Targett because Morgan HR Pty Limited was an adviser dealing mainly with Large Business and Industry and Property and Construction clients whereas the Productivity Incentive Australia Pty Limited request sent to Mr Chow had mainly dealt with media clients. At that time, Mr Targett worked in the Large Business & Industry (Property and Construction) part of the ATO. I am satisfied that the Offender had proposed that the application be sent to Mr Targett, with whom the Offender had been in contact on EBT issues. I am satisfied that the false statements by Mr Panos were made at the suggestion of the Offender to ensure that Mr Targett retained the application. That this was plainly false is demonstrated by the fact that Morgan HR Pty Limited had no clients at all. The company, in effect, was Mr Morgan operating out of his small flat in Elizabeth Bay. His sole role was to market schemes. All this serves to demonstrate a level of deceit used in communications with the ATO of which the Offender was, I am satisfied, well aware. 63 On 12 January 1998, Mr Targett issued a favourable advance opinion with respect to the Morgan HR Pty Limited Productivity Incentive Trust Plan (Exhibit C95, Tab 3). 64 I note that the Crown did not contend, nor do I find, that there was any impropriety whatsoever on the part of Mr Chow, Mr Charles or Mr Targett with respect to the applications in which the Offender became involved. I am satisfied, however, that the Offender directed Mr Panos to mark applications for the attention of these persons in circumstances where the Offender had developed an association with these persons, and could thereafter play an active part in promoting a favourable response to the applications. 65 The Offender met Mr Emmanuel Aivaliotes in about April 1997. Mr Aivaliotes had commenced working at the ATO in February 1996. Before then, he had worked for some 18 years as a solicitor in private practice and in other capacities. The Offender asked Mr Aivaliotes to work with him in the SRA and he commenced to work there in late 1997. He had an office on the same floor as the Offender in the ATO's Centrepoint office in Sydney. 66 Mr Aivaliotes was called as a Crown witness at committal proceedings, in the first trial before Sully J and a jury in 2005, and was in the witness box giving evidence when the second trial before me and a jury was aborted in May 2007: Petroulias v R [2007] NSWCCA 134. By that time, I had acceded to an application by the Crown for leave to cross-examine Mr Aivaliotes as an unfavourable witness under s.38 Evidence Act 1995: R (Cth) v Petroulias (No. 16) [2007] NSWSC 506. During the course of the evidence in chief of Mr Aivaliotes before the jury that convicted the Offender, I granted the Crown leave under s.38 to cross-examine Mr Aivaliotes, as an unfavourable witness, with respect to seven specified topics: R (Cth) v Petroulias (No. 29) [2007] NSWSC 1005. 67 It is appropriate that I record my findings concerning the evidence of Mr Aivaliotes. As will be seen, for a period of months after January 1998, Mr Panos (and others associated with the business, including Mr Morgan, Mr Strong and Mr McLaren) directed applications for private rulings and advance opinions for the attention of Mr Aivaliotes. I am satisfied that these, and other related applications, were made as part of the private business arrangements involving the Offender. Some 65 private rulings or advance opinions were issued by Mr Aivaliotes pursuant to these applications between January 1998 and October 1998. It was the Crown case that the Offender had effectively controlled Mr Aivaliotes over a period of time and exercised influence over him, directly and indirectly, in the issue of favourable rulings and opinions. The evidence of Mr Aivaliotes at committal proceedings and in the 2005 trial demonstrated, in a number of respects, that he had been acting under the effective control and direction of the Offender with respect to the issue of these rulings and opinions. 68 However, Mr Aivaliotes altered his evidence in a number of respects at the two trials in 2007. In those trials, Mr Aivaliotes said that much of the work was done by him and that he acted in a way which reflected his own independent views on matters, rather than following the views given to him by the Offender. The effect of this change in evidence of Mr Aivaliotes was to elevate his own role in the decision making, and to reduce significantly the role of the Offender. It was in areas touching this change that Mr Aivaliotes was cross-examined, by leave, by the Crown at the trial. 69 I am satisfied that the jury accepted, as the truth, the earlier accounts given by Mr Aivaliotes at committal proceedings and the 2005 trial which demonstrated the significant controlling role of the Offender in the issue of favourable rulings and opinions in 1998. In my view, Mr Aivaliotes gave a most unconvincing series of explanations for his changes in evidence. At times, he gave a tangled and confused account of the changes in his evidence. Indeed, his capacity to change positions in the witness box served to highlight an element of malleability which, I am satisfied, existed in 1998 in his role in issuing advance opinions and private rulings whilst under the influence of the Offender. I am satisfied that the jury concluded that Mr Aivaliotes was, in truth, a puppet used by the Offender as a means of ensuring speedy and positive outcomes for applications for advance opinions and private rulings for applicants associated with the Offender's own private business interests. I am satisfied that the Offender selected Mr Aivaliotes as the person to whom applications should be directed because he had assessed Mr Aivaliotes as a compliant individual who would act in accordance with the Offender's wishes. 70 Many of the advance opinions and private rulings issued by Mr Aivaliotes were cut-and-paste efforts which, I am satisfied, were not the product of any independent legal assessment. Rather, if the Offender indicated to Mr Aivaliotes that opinions or rulings should issue, Mr Aivaliotes proceeded to act in accordance with the Offender's wishes. 71 It is not necessary, for present purposes, to refer to each and every advance opinion or private ruling issued in 1998, formally or notionally by Mr Aivaliotes. It is sufficient to observe that applications for rulings and opinions which received favourable outcomes were made by, amongst others, Mr Panos, Mr Morgan, Mr McLaren and Mr Strong. 72 On 19 January 1998, the Offender was appointed Acting Assistant Commissioner, SRA, within the ATO. 73 The evidence of Mr Morgan came under strong challenge by the Defence at trial. The jury was given warnings and directions under s.165 Evidence Act 1995 concerning the evidence of Mr Morgan (SU407-409). I am satisfied that the jury accepted the evidence of Mr Morgan concerning the existence of the business arrangements in and after 1997 involving the Offender, Mr Morgan, Mr Panos, Mr McLaren, Mr Strong and Mr Gray. The evidence of Mr Morgan did not stand alone. There was a powerful documentary case which, in my view, supported the direct evidence of Mr Morgan concerning the role and activities of the Offender with respect to these persons, and their business arrangements, in 1997 and 1998. 74 It is the case that the only direct evidence of payment of money to the Offender, as a result of his involvement in this business arrangement, emanated from Mr Morgan. It is also the case that Mr Morgan's account with respect to payment of money to the Offender varied. This was a factor referred to in the course of the s.165 warnings given to the jury. I have regard to the s.165 warnings concerning Mr Morgan for the purposes of my own fact-finding function on sentence. 75 I have carefully considered Mr Morgan's evidence and the arguments advanced with respect to it at the trial and on sentence. In my judgment concerning directions to the jury (R (Cth) v Petroulias (No. 34) at [32]-[46]), I gave reasons for giving certain directions to the jury concerning the evidence of Mr Morgan. I referred to a number of pieces of evidence independent of Mr Morgan which, in my view, supported his account in significant respects. It was not necessary for the Crown to prove actual payment of money to the Offender to secure a conviction on the second count. An agreement to receive money was sufficient. However, I am satisfied, beyond reasonable doubt, that the sum of $41,000.00 in cash was paid to the Offender as part of this business arrangement, but that the Offender returned the money at a later time when investigations of his conduct were underway. The Offender was a controlling figure in the arrangement. He was so involved for financial gain. 76 I am satisfied that Mr Morgan's evidence provides an essentially accurate account of what was happening with respect to the business arrangements outside the ATO in 1997 and 1998, including dealings with the Offender, Mr Panos and others concerning the implementation and advancement of those business arrangements. The documentary evidence, as I have said, provides substantial support, viewed from the ATO side of the fence, for Mr Morgan's account of events. I am satisfied that the only rational explanation for the Offender's involvement in these arrangements between 1997 and 1999 was personal financial reward. 77 As 1998 unfolded, applications for advance opinions and private rulings came in marked for the attention of Mr Aivaliotes. The Offender was directly involved in the favourable consideration of these applications. I am satisfied that, at no time did the Offender reveal to Mr Aivaliotes either the fact, or the nature, of his business association with Mr Panos, Mr Morgan, Mr Strong or Mr McLaren. I do not accept the evidence of Mr Aivaliotes, expressed for the first time at the second trial in 2007, that the Offender had disclosed in late 1997 an association with Mr Panos and others. This was a topic in relation to which the Crown was granted leave under s.38 to cross-examine Mr Aivaliotes: R (Cth) v Petroulias (No. 29) at [64]-[67], [83]. He had previously said on oath that the Offender had not disclosed any association with these persons. I am satisfied that the earlier evidence of Mr Aivaliotes, that there had been no disclosure, was the truth. I reject his late and unconvincing account to the contrary. 78 In and after January 1998, the Offender held the position of Acting Assistant Commissioner within the ATO. The trust and responsibility vested in him in that senior office was manifest. In breach of that trust, the Offender continued to involve himself, and effectively control, the outcome of applications for advance opinions and private rulings processed through Mr Aivaliotes. 79 On 31 March 1998, the Offender completed a Statement of Registration of Private Interests which required disclosure of any areas of actual or potential conflict with public duty (Exhibit C203). No disclosure was made despite the clear existence of actual conflict. This served as yet another reminder to the Offender of his obligations. He ignored them. 80 Whilst all applications for advance opinions and private rulings by the Offender's business associates met with favourable outcomes, with the Offender playing an influential role in these outcomes, the evidence demonstrated a different approach was taken by the Offender to six applications by other interests. These applications were declined in 1998, with the Offender playing a significant role in that outcome. Although it was submitted for the Offender that these applications could be distinguished in various ways from those made by the Offender's associates, I am satisfied that no relevant distinction can be made. This was powerful evidence of favouritism by the Offender towards his business associates. 81 On 26 March 1998, notices under s.264 Income Tax Assessment Act 1936 (Cth) were directed to Morgan HR Pty Limited and Productivity Incentive Australia Pty Limited through Mr Panos (Exhibits C116 and C117). Thereafter, Mr Morgan wrote to Mr Aivaliotes on 14 April 1998 concerning the s.264 notice to Morgan HR Pty Limited (Exhibit C118). On 21 April 1998, letters were sent by Mr Aivaliotes with respect to these s.264 notices indicating that material in relation to the arrangements had been examined and that the ATO agreed with the tax consequences outlined by the companies and that, accordingly, "We will not be auditing your clients as part of this current project" (Exhibits C120 and C121). 82 I am satisfied that the Offender was aware that these s.264 notices had been sent to the two companies through Mr Panos, and that powers under s.264 were being utilised with respect to these companies, Mr Morgan and Mr Panos. I am satisfied that this was a façade, by which the s.264 power was utilised resulting in letters being provided to Mr Morgan and Mr Panos which were capable of being utilised for marketing purposes. I am satisfied that the involvement of the Offender in this area involved a misuse of an important statutory power under tax legislation. 83 In May 1998, the Offender formed the view that documentation should be created to provide a veneer of authenticity to the process of assessment by the ATO of Productivity Incentive Corporation applications. Located in the hard drive of the Offender's computer seized from the Melbourne storage unit in March 2000 was a non-formatted version of a document headed "Productivity Incentive Corporation Re Meeting on Wednesday 28 January 1998 and Thursday 29 January 1998" (Exhibit C206, Tab 30). It was a draft of a document which, in settled form, was entitled "Memorandum of Understanding Re the ATO Attitude Toward the Taxation Treatment of Incentive Structures" on the letterhead of Productivity Incentive Corporation (Exhibit C146). 84 This document purported to be minutes of a meeting on 28 and 29 January 1998 attended by the Offender, Mr Strong, Mr Panos and Mr Aivaliotes. When investigations were underway in late 1998 and early 1999, the Offender handed copies of this document to senior ATO personnel. I am satisfied that no meeting took place on 28 and 29 January 1998 as alleged in this document. This was a further topic in relation to which the Crown was granted leave to cross-examine Mr Aivaliotes at the last trial: R (Cth) v Petroulias (No. 29) at [23]-[28], [79]. I accept, as the truth, Mr Aivaliotes' earlier sworn evidence that he had no recollection of being at such a meeting. 85 I am satisfied that this document is a contrived document. Substantial parts of it involve a cut and paste from promotional material for Productive Incentive Corporation which, I am satisfied, was created by the Offender. If the document was genuine, it indicates that a meeting took place between Mr Panos and Mr Strong (representing the Productivity Incentive Corporation interests) and the Offender and Mr Aivaliotes (representing the ATO) at which lengthy and detailed discussions took place concerning Productivity Incentive Corporation activities leading to a "Memorandum of Understanding". I am satisfied that the Offender was the prime mover of the Productivity Incentive Corporation, with Mr Panos and Mr Strong being secondary players to the Offender in this respect. The content of the document serves to demonstrate its implausibility. I am satisfied that the document was created by the Offender for use in the event that some record was required to seek to explain the ATO's consistently favourable approach to Productivity Incentive Corporation applications. The fact that it was deployed by the Offender in late 1998 and early 1999 to assist with such an explanation, supports this conclusion. I am satisfied that the document was not created until some time in and after May 1998. So much is demonstrated by the document located on the Offender's hard drive in the Melbourne storage unit. There had been no such meeting in January 1998. 86 The fact that the Offender went to such elaborate lengths to create a false document of this type speaks eloquently of the true nature of his relationship with Mr Panos and Mr Strong, and the manner in which he was in a grave and continuing conflict of interest throughout 1998. The fact that the Offender was fabricating such a document, at a time when he held one of the most senior positions in the ATO, points starkly to his abuse of trust at that time. 87 I have mentioned, in general terms, that applications for advance opinions and private rulings by the Offender's business associates were addressed to Mr Aivaliotes in the ATO in 1998. The evidence revealed that some applications came in batches and favourable rulings and opinions were issued frequently in batches. For example, five applications for private rulings were made on 1 May 1998. Mr Aivaliotes issued four private rulings on 3 June 1998 and four more on 5 June 1998. Four private rulings were issued by him on 17 June 1998. Thirteen applications for private rulings were made on 30 June 1998 and 12 rulings were issued by Mr Aivaliotes on 8 July 1998. Five more applications for private rulings were made on 9 July 1998. Seven private rulings were issued by Mr Aivaliotes on 10 July 1998 with two more on 15 July and three more on 16 July 1998. All of these rulings were made by or on behalf of entities associated with the Offender's undisclosed business interests. 88 On 25 July 1998, a meeting took place at the Airport Sheraton Hotel in Sydney between the Offender, Mr Panos, Mr Strong, Mr McLaren, Mr Gray and Mr Morgan. Senior Counsel for the Offender at trial accepted that such a meeting took place, but contended that it was a meeting attended lawfully by the Offender, in his ATO capacity, with these persons to discuss tax issues. I reject this submission as, I am sure, did the jury. 89 I accept the evidence of Mr Morgan that this was a meeting between business associates to discuss products and marketing strategies for the sale of tax schemes. I am satisfied that the Offender was not present for any lawful purpose. Rather, the meeting was to advance his own private business interests and those of the other persons present. This was a further manifestation of the grave and continuing conflict of interest involving the Offender throughout 1998. 90 I am satisfied that it was about the time of the 25 July 1998 meeting that the Offender provided to Mr Morgan documents, being client lists, containing information which had been obtained in the exercise of the Offender's duties with the ATO. The provision of these documents to Mr Morgan by the Offender founded the conviction by the jury on the third count. The documents provided by the Offender contained summaries of taxpayers and tax agents whom the Offender considered ought be contacted by Mr Morgan for marketing purposes. It was submitted for the Offender that the documents provided by the Offender contained relatively innocuous information which was otherwise generally available. If this was so, it is difficult to understand why the Offender would have bothered to provide the documents to Mr Morgan, his salesman. 91 The irresistible inference is that the Offender considered that there was a substantial advantage in Mr Morgan having this material for marketing purposes given that it summarised persons and entities who were likely to be receptive targets for marketing of tax schemes. The Offender's intention was that the information be used to exploit a marketing advantage which possession of this information gave the Offender and his associates over their business competitors. I am satisfied that the Offender provided these documents to Mr Morgan for the purpose of advancing his personal interests. I am satisfied that the information contained in these documents had been compiled from information gathered by use of the ATO's compulsory powers. 92 This was a clear and serious breach of the tax secrecy provisions which had bound the Offender from the beginning of 1997. He could have been in no doubt that these were confidential documents, the supply of which to a third party would constitute a criminal offence. 93 This was not a technical breach of the law. By this time, the Offender occupied high office in the ATO. The information contained in the documents had been gathered by use of statutory powers, including s.264 notices. The Offender was motivated by private financial gain in handing these documents to Mr Morgan. The fact that Mr Morgan did not, in the end, use the documents for marketing purposes does not assist the Offender, in any material way, on sentence. The Offender intended that the documents be put to use in this way. The provision of these documents, in clear breach or the law, constituted a further example of a grave abuse of trust by the Offender in his office with the ATO. 94 On 25 September 1998, the Offender was appointed First Assistant Commissioner, Strategic Intelligence Network, within the ATO. 95 On 20 October 1998, the Public Rulings Panel of the ATO met in Melbourne to discuss the forthcoming issue of a draft public ruling concerning the associate test. The Offender was in attendance at this meeting (Exhibit C194). 96 On 21 October 1998, Mr Aivaliotes issued six advance opinions or private rulings with respect to non-complying superannuation funds, all in response to applications by Mr Morgan or Mr McLaren. An advance opinion and a private ruling concerning non-complying superannuation funds were issued by Mr Aivaliotes to Mr Strong on 23 October 1998 (Exhibit C95, Tabs 72, 73). 97 On 28 October 1998, the draft tax ruling was issued at a press conference held by Mr Carmody, the then Commissioner of Taxation. At this time, the Offender informed Mr Carmody that there would be a reaction because of rulings that had issued. Thereafter, a process of investigation commenced during which the Offender was asked to identify rulings and opinions which had issued. 98 During this investigation, I am satisfied that the Offender provided incomplete and misleading explanations to ATO personnel who were seeking from him the true facts concerning what had happened. It was during these investigations that the Offender proffered the fabricated "Memorandum of Understanding" said to have arisen from a meeting on 28 and 29 January 1998, to which I have already made reference. 99 I am satisfied that the Offender was in a position to provide, if he saw fit, a full and frank account of the opinions and rulings which had been issued. He did not provide that information to ATO personnel. Located in the Melbourne storage unit in March 2000 were a large number of original ATO documents and copy documents. They constituted a substantial, if not complete, record of applications by the Offender's business associates for advance opinions and private rulings, and the opinions and rulings themselves. The fact that the Offender had retained, taken away from the ATO and secreted these documents in Melbourne, was significant incriminating evidence at trial. The fact that the Offender did not produce these documents to ATO investigators, nor use them to provide a complete account of events to them, indicates the continuation of a pattern of deceit, motivated by self-interest and now self-protection on the part of the Offender. 100 The Offender's deception during the investigation extended beyond the suppression of ATO documents which he had in his possession. At the suggestion of the Offender, a meeting took place between Mr Aivaliotes and the Offender at Coogee Beach on 16 March 1999. According to Mr Aivaliotes, whose evidence I accept in this respect, the Offender was somewhat agitated. I am satisfied that the Offender's state of agitation was the product of a guilty mind and his awareness that the investigation may reveal the true facts of his association and dealings with Mr Morgan, Mr Panos, Mr McLaren, Mr Strong and others associated with his business arrangements. 101 At this meeting, the Offender handed to Mr Aivaliotes a document (Exhibit C147) which identified six "problem areas" and suggested, with respect to each area, a "possible response". This was an overt attempt by the Offender to persuade Mr Aivaliotes to provide an account in these areas which was consistent with that of the Offender and which might constitute, in the Offender's eyes, an exculpatory account. One of the problem areas was, tellingly, "Why all applications look the same". Another picked up the misspelling of the name "Aivaliotes" on a document which, the Crown contended, had been created by the Offender, and not Mr Aivaliotes, who would not be likely to misspell his own name. Another problem area concerned the Ashley Cain applications which bore the date "25 March 1998", but looked exactly like the "Geoff Strong application of 30 October", and referred to a Deed of Contribution which had not existed as at 25 March 1998. 102 I am satisfied that the preparation and production of this document by the Offender provides powerful evidence of his knowledge of contrivances used in 1998 with respect to applications for, and the grant of, favourable advance opinions and private rulings to persons with whom the Offender had private business interests. If the process was all above board, and the Offender believed it to be above board, it is difficult to understand why the Offender would not simply present all the material to ATO investigators. Instead, he went to extraordinary lengths to suppress it and to seek to persuade Mr Aivaliotes to get his story straight, and to align it with the Offender's story. 103 The Offender resigned from the ATO effective on 6 April 1999. 104 On 8 April 1999, the Offender handed to Mr Brown, an ATO investigator, a laptop computer which had been issued to him by the ATO. Technical examination of the Offender's computer revealed a letter described in the trial as the "Nick to Nick" letter (Exhibit D42). I am satisfied that this letter was prepared by the Offender and was directed to Mr Panos, clearly prior to 8 April 1999. This letter was a powerful piece of evidence against the Offender. It sheds substantial light on the true relationship between the Offender, Mr Panos, Mr Strong and Mr McLaren. I am satisfied that it demonstrates the controlling and pivotal role of the Offender in his secret (from the ATO) business arrangements with these persons. 105 The document provides potent evidence of the Offender's impropriety (relevant to Count 2) and the provision of ATO documents in breach of the law for private purposes (relevant to the second and third counts). As this letter provides a telling insight into the Offender's mind, his motives and acts, it is appropriate to set it out in full: "Nick, The DPP has now become involved. They are looking at favouritism towards certain people. There are a number of loose ends that need to be sorted out. These are:- Geoff and his mates. As you know, they have been giving us the problems in what they have been saying. It is important that you sort out the position with Geoff. Further, the meeting in January - the 2 day one where you, me, Geoff and Emmanuel met in the York Street offices to discuss how PIC would operate its plans and that PIC would be sending in a number of plans. It is important that you and Geoff get familiar with those notes. These are notes prepared by either Geoff or you and sent to me. (They are very suspicious of those notes). The client lists - if Geoff has any, make sure they are destroyed. McLaren: I believe they now know about Global Growth. What is the relationship with PIC? I don't know, I am going to say that they are some sort of copycat as Geoff and Mclaren swap ideas and letters. But I would not know the full story. That is for you to sort out. There is a problem with the Ashley Cain application. It is dated 25 March (as are all PIC applications - eg Co Ltd by Guarantee and ETP Plan). Further, answers questions that have not yet arisen until October. Ie the Deed of Contribution is in response to the Commissioner's ruling in October - they can't have predicted it back in March. The only answer I can suggest and please make sure that McLaren has memorised, is that because when they called in October, and I raised the FBT concerns, the [sic] amended the application but not the original date. Ie they changed their submission on the FBT point, without changing the date of the original application and faxed it a few times to the ATO to make sure that they got it. Money - This is particularly important. Everything must be accounted for, even if as loans to Geoff and others. No HK shit. It smells bad. The idea of investing in HK was to set up a major superfund as a spin off from the existing operations." 106 There are a number of features of this letter which call for comment. Firstly, the Offender is conscious that the authorities are investigating "favouritism" towards certain people and that, in that context, "a number of loose ends … need to be sorted out". I am satisfied that the Offender is here acknowledging favouritism towards others in the issue of advance opinions and private rulings. This lies at the heart of the impropriety involved in the second count. The Offender recognises the existence of a conflict of interest and the need to hide the true facts to guard against its discovery. 107 The Offender is directing Mr Panos to "sort out the position" with Mr Strong "and his mates". There is reference to the notes of the alleged meeting in January 1998. I am satisfied that no such meeting took place. The reference to the alleged meeting in this letter involves recognition by the Offender that there is a need for all concerned to familiarise themselves with the alleged minutes (which I am satisfied were a contrivance), to prepare for the investigation. 108 The Offender directs Mr Panos that, if Mr Strong has any "client lists" he should "make sure they are destroyed". This direction sheds considerable light upon the role of the Offender with respect to the conduct of the business. This bears upon both the second and third counts. 109 The reference to "money" being "particularly important" and that "everything must be accounted for, even as if loans to Geoff or others" points strongly towards the Offender's involvement in a business for financial gain. The question may once again be asked - if all was above board, and the Offender believed it was above board, why write a letter such as this to Mr Panos? I am satisfied that the only rational response to this question is one that incriminates the Offender, in a clear way, with respect to the second and third counts. 110 Telephone conversations between the Offender and other persons were recorded in September and October 1999 under telephone intercept warrants and were tendered before the jury at trial. A number of statements of the Offender during these telephone conversations were incriminating. During a conversation between the Offender and Mr McLaren on 24 September 1999, there was discussion concerning what police investigators should be told concerning Productivity Incentive Corporation. The Offender directed Mr McLaren not to mention Mr Morgan to the police. The Offender suggested to Mr McLaren a possible explanation to police as to how he (McLaren) obtained information as the ruling requests "were exactly the same". The Offender suggested that he tell police that he obtained them on disk from Mr Panos (Exhibit C198). This evidence portrays the Offender in a controlling and central role with respect to the business arrangements, and the persons involved in those arrangements. Once again, if all was above board, why did the Offender wish to suppress information about Mr Morgan from the police? The response is clear and is damaging to the Offender. 111 On 23 March 2000, police executed a search warrant on the Melbourne storage unit held in the name of Christopher Marriott and seized a large number of original and copy ATO documents and the Offender's hard drive. The Offender had rented this storage unit in April 1999 and had placed the documents and hard drive in the storage unit. 112 The Offender was arrested and charged by police on 24 March 2000.

Summary of Factual Findings Concerning Offences 113 I have set out, at considerable length, a chronological recital of the facts which I have found concerning the offences. I now express conclusions with respect to these factual findings. 114 I am satisfied beyond reasonable doubt of the following:

(a) the Offender, an intelligent and highly educated lawyer, took up employment as a consultant, and then permanent employee of the ATO, between 1997 and 1999;

(b) the Offender entered employment with the ATO for the purpose of conducting a business with respect to the marketing of EBAs outside the ATO, and using his contacts and influence within the ATO to advance his private business interests;

(c) throughout the period when the Offender worked as a consultant or employee of the ATO between 1997 and 1999, he did not reveal to anyone the true nature of his associations and his private business interests in areas directly relevant to the exercise of his duties;

(d) the Offender did, at the same time, influence favourable outcomes with respect to applications for advance opinions or private rulings in 1997 and 1998 and orchestrate, through Mr Morgan and others, the use of opinions and rulings (and associated documents) for marketing purposes for his own private financial interests;

(e) with respect to the issue of the opinions and rulings, the Offender exercised influence, to varying extents, over Mr Chow, Mr Charles, Mr Targett and Mr Aivaliotes with respect to the issue of favourable opinions and rulings;

(f) in the same period, the Offender used his influence to guide applications made by other interests towards unfavourable outcomes, which were difficult to reconcile with the favourable outcomes for interests associated with the Offender;

(g) the Offender agreed to receive a benefit, namely money, and did receive money (about $41,000.00) as proceeds from these private business interests;

(h) the Offender provided client lists to Mr Morgan in breach of the secrecy provisions in the tax legislation - the client lists were compiled from information obtained by use of the ATO's compulsory powers and were provided to Mr Morgan for marketing purposes to gain a commercial advantage over their business competitors;

(i) when investigations were underway after October 1998, the Offender withheld ATO documents from investigators which would have revealed the true position, and provided to them a false document (the Memorandum of Understanding), as well as seeking to influence Mr Aivaliotes and to direct others involved in the business arrangement (in particular Mr Panos, Mr McLaren and Mr Strong) as to false accounts which they should give to police, and steps which they should take to frustrate and obstruct the ATO and police investigation;

(j) the actions of the Offender, whilst a consultant and then an employee of the ATO, involved a clear and grave conflict of interest and abuse of trust.

Consequences of the Offences 115 The Crown case at trial on the first count, the charge of fraud under s.29D, involved, as an element of the offence, the need for the Crown to prove that the Offender put the revenue of the Commonwealth at risk by causing private rulings and advance opinions to issue. The jury could not agree upon a verdict on the first count and was discharged without verdict. I am satisfied that it was this element, the so-called element of deprivation, upon which the jury could not agree with the result that no verdict was returned on the first count. 116 I am fortified in this conclusion by the manner in which the trial was conducted by both the Crown and Defence. In practical and evidentiary terms, the parties approached the second count upon the basis that the jury ought convict the Offender of that offence if satisfied beyond reasonable doubt of the matters relied upon by the Crown on the first count, with the exception of the element of deprivation. 117 In accordance with the principles in The Queen v De Simoni, I must approach the question of sentence on the second and third counts without reference to the evidence bearing upon the element of deprivation which related solely to the first count. 118 There is one qualification to what I have just said. Senior Counsel for the Offender submitted that the Court ought be satisfied, on the balance of probabilities, that each of the relevant opinions and rulings issued were correct in law. In this way, the Offender sought to call in aid on sentence on the second count, as a mitigating factor, the assertion that each of the opinions and rulings was correct in law. It was accepted that, in accordance with the principles in The Queen v Olbrich, the onus of proof as to the existence of such an alleged mitigating factor lay upon the Offender. 119 The submission advanced for the Offender on this issue, at the sentencing hearing, did not descend to any level of detail. Rather, it was put as a global submission which sought to refer back, in a general way, to arguments advanced to the jury on this question. I propose to deal with this submission shortly, consistent with the way in which Senior Counsel for the Offender advanced it on sentence. 120 I am not satisfied, on the balance of probabilities, that each of the advance opinions and private rulings issued were correct in law. There was significant evidence at trial bearing upon both fringe benefits tax and deductibility which, in my view, stand in the way of such a finding favourable to the Offender. In my view, to the extent that this issue arose as a jury issue, I found the arguments advanced by the Crown to the jury persuasive. 121 Added to this is the body of evidence concerning the modus operandi of the Offender and his associates, including Mr Morgan and Mr Panos, with respect to applications for and the issue of advance opinions and private rulings. A clear inference is available that, if the advance opinions and private rulings were all correct in law, then the Offender and his business associates would not need to go to the very considerable lengths disclosed by the evidence to obtain these favourable opinions and rulings. This process involved deceit by the Offender during the process of consideration and issuing of the various advance opinions and private rulings, and further deceit and a cover up by the Offender when an investigation was underway with respect to the circumstances of the issue of the opinions and rulings. 122 Consideration of the legal questions agitated before the jury, and the body of evidence disclosing the acts and omissions of the Offender over an extended period whilst applications were made and granted, does not lead me to be satisfied, on the balance of probabilities, that the opinions and rulings were correct in law. I emphasise that I have entered into this area because of a defence submission, which I do not accept. Given the global way in which the argument was advanced at the sentencing hearing, my global reasons for rejecting the submission will suffice. 123 The Crown tendered on sentence evidence which was said to relate to the tax consequences or implications of the offences for which the Offender is to be sentenced. A statement of Michael Ingersoll dated 20 December 2004 was admitted, over objection, together with a schedule summarising steps taken within the ATO with respect to tax deductions said to have been claimed by reference to the relevant opinions and rulings (Exhibits B, C, D). I admitted this evidence for reasons shortly given during the sentencing hearing (ST54-55). Mr Ingersoll was cross-examined on this material (ST58-95). 124 I am satisfied that Mr Ingersoll's evidence is relevant to the question of sentence. Of course, it does not, and cannot, go to any issue of loss to the Commonwealth, including placing the revenue of the Commonwealth at risk. It is relevant, however, to the practical consequences of the ATO needing to untangle, and scrutinise closely, tax deductions claimed by taxpayers as a result of rulings and opinions issued effectively by the Offender. Mr Ingersoll's statement and the schedules reveal that a total amount of deductions claimed by taxpayers by reference to these rulings and opinions, totalled $42,227,415.00. Three categories of deductions gave rise to this figure:

(a) taxpayers who received opinions or rulings regarding employee benefit trusts issued by the Offender, claimed deductions totalling $15,527,585.00;

(b) taxpayers who entered into employee benefit trusts without an advance opinion or private ruling, but who based deductions on rulings and opinions issued, effectively, by the Offender claimed deductions totalling $17,398,277.00;

(c) taxpayers who entered into controlling interest superannuation arrangements without an advance opinion or private ruling, but who based deductions on rulings and opinions issued, effectively, by the Offender, claimed deductions totalling $9,301,553.00. 125 I accept the Crown submission that the acts of the Offender, which constituted the offences, undermined the credibility of the ATO and the system of issuing private rulings. It was an understandable consequence of the offences that the ATO undertook a close examination of deductions claimed, directly or indirectly, as a result of the opinions and rulings issued through the actions of the Offender. 126 The evidence of Mr Ingersoll indicates a process of protracted correspondence and negotiation with respect to the relevant taxpayers. This process was necessitated by the improper acts of the Offender associated with the issue of the opinions and rulings. The acts of the Offender placed a significant cloud over all rulings and opinions with which he had been involved. 127 In the course of submissions (ST339-340), I raised with counsel an analogy which, in my view, is apt. If a police officer or a prosecutor took a bribe in a particular case, it would likely lead to the need for a review of other cases in which the particular police officer or prosecutor had been involved. This would be a consequence of the taint or cloud generated by the improper acts of the relevant police officer or prosecutor and the need to scrutinise the extent of the impropriety. Of course, the Offender had directly influenced the issue of many favourable opinions and rulings. To these were added claims for deductions made by indirect reliance upon the Offender's opinions and rulings. 128 I am satisfied that the evidence of Mr Ingersoll is relevant to this issue which, in turn, is relevant to sentence. The acts of the Offender served to undermine public confidence in the ATO generally, and, in particular, its system of rulings. Substantial action was required by the ATO to examine deductions claimed by taxpayers which were directly or indirectly referable to the opinions and rulings issued effectively by the Offender. 129 I emphasise that this evidence is not being taken into account to conclude that, in some way, the revenue of the Commonwealth was put at risk. It is not open to me to consider that question given the absence of a verdict on the first count. Rather, as I have said, this evidence bears upon the detrimental impact on public confidence in the ATO and the private ruling system administered in the public interest by the ATO, and the practical need for use of substantial ATO resources to, in the words of the Crown submission, sort out the mess created by the Offender's improper conduct. The credibility of the rulings and opinions issued by the ATO was integral to the tax system, and the actions of the Offender brought the ruling system into serious disrepute.

The Offender's Subjective Circumstances 130 The Offender did not give evidence at the trial nor in the sentencing proceedings. 131 A presentence report dated 27 March 2008 (Exhibit A) was obtained. In addition, a number of reports of psychiatrists and psychologists together with reference material was tendered in the Offender's case on sentence. A number of authors of these documents gave oral evidence and were cross-examined. The Offender's mother gave evidence in support of the Offender. 132 The Offender informed the Probation and Parole Officer, who prepared the presentence report, that he had studied law and economics, obtaining his doctorate shortly before commencing work in the ATO in 1997. The Offender stated that he was married, but separated in April 2000, and no longer had contact with his ex-wife. He had regular contact with his parents and brothers who reside in Melbourne. 133 The Offender informed the Probation and Parole Officer that he had been seeing a psychiatrist and therapeutic counsellor since 2005.

134 With respect to the offences, the presentence report stated: "In discussions with Mr Petroulias he acknowledged that in hindsight, he should have declared knowledge of the Productivity Incentive Australia and Productivity Incentive Corporation tax schemes. He also stated that he could not see how providing information to Mr Morgan was an issue, let alone an offence as the information that he provided was reportedly publicly available. Mr Petroulias justified his actions, stating that he was naive due to his lack of work experience at the time. Overall it appears that Mr Petroulias is unwilling to accept full responsibility for his offending behaviour." 135 A statement from Mrs Dimitra Petroulias, the Offender's mother, was tendered in the sentencing proceedings (Exhibit 4) and Mrs Petroulias gave evidence. I am satisfied, from this evidence, that the Offender was an intelligent and hard-working student who obtained significant qualifications in law. He wrote articles in journals concerning legal and tax issues. The Offender married in 1993. Mrs Petroulias said that the Offender's wife had left him in January 1998, but this does not seem to accord with the account given by the Offender to the Probation and Parole Officer. It also seemed that Mrs Petroulias' knowledge of events surrounding the break up of the Offender's marriage was somewhat tenuous (Exhibit 4, paragraph 10). 136 Having heard and observed Mrs Petroulias giving evidence, I do not consider that her contact with the Offender in 1997, 1998 and 1999 (before his return to Melbourne in April 1999) was of a type and frequency which equips her to provide a reliable account of his conduct and manner during that period. 137 Mrs Petroulias gave evidence through a Greek interpreter. There were features of her statement, which was prepared by the Offender's solicitor, which did not sound like the words of Mrs Petroulias. For example, it stated that "Nikytas was very mono-focused and had an insatiable thirst for knowledge" (paragraph 16). The Crown cross-examined Mrs Petroulias about the statement that the Offender "became interested in tax law because he saw it as the most important junction between the government and every citizen all of the time" (paragraph 24). Mrs Petroulias, in cross-examination, was not able to sensibly explain these words. I was left with the clear impression that many of the concepts in the statement were not grasped by Mrs Petroulias. I believe she was trying to help her son in her evidence. However, there was something of a disconnect between the statement and her own words in oral evidence. 138 Although aspects of the Offender's earlier life referred to by Mrs Petroulias were said to be indicative of the possible presence of bipolar disorder or Aspergers syndrome, the events described by Mrs Petroulias did not, it seems to me, provide an objective foundation for some of the opinions expressed by psychiatrists and psychologists to which I will turn shortly. I formed the view that Mrs Petroulias was doing her best to assist her son in his difficult present circumstances, but that her true evidentiary contribution to this case is quite limited. 139 I accept that the Offender was born in a hard-working migrant family and has worked and studied hard, thereby acquiring very significant academic and professional qualifications. It is the manner in which he has used his professional qualifications, and his position of trust in the ATO, which lies at the heart of the present case and which is relevant to the sentencing decision which I must make. 140 Other evidence was tendered concerning the Offender's history and background. This included a statement of Maria Pallas (Exhibit 3) who was not called to give evidence. Her statement, like that of Mrs Petroulias, used elaborate phrases which suggested that it did not contain her choice of words. The Crown submitted that I should attach no weight to the statement. I accept that submission. 141 I have had regard to the references tendered in the Offender's case listed hereunder: · Mark O'Neill dated 15 April 2008 (Exhibit 18) · Rowena Martinich dated 14 May 2008 (Exhibit 19) · Paul John dated 22 March 2008 (Exhibit 20) · Father Gerasimos Koutsouras dated 21 March 2008 (Exhibit 21) · Father Dionisis, undated (Exhibit 22) · Jo Rotiroti dated 30 March 2008 (Exhibit 23) · Brian Joseph McGrath dated 25 March 2008 (Exhibit 25) · Glenda Schmidt dated 13 March 2008 (Exhibit 6) · John Robert Lamont, undated (Exhibit 7) · John Robert Lamont (No. 2), undated (Exhibit 26) · Christopher James Sonter dated 26 March 2008 (Exhibit 27) · Ian Daley, undated (Exhibit 28) · Anthony James Scott dated 26 March 2008 (Exhibit 29) · John Howard Eager dated 16 April 2008 (Exhibit 30) · Gary Fitton dated 27 March 2008 (Exhibit 31) · Tiyana Maksimovich-Binno dated 16 March 2008 (Exhibit 32) 142 The references demonstrate the intelligence and capacity of the Offender, who has obtained substantial tertiary qualifications which he has utilised in professional work which he has undertaken. A number of the referees spoke of the pressures upon the Offender since his arrest in 2000 and whilst the criminal proceedings have been on foot. The references speak, in positive terms of the Offender's character. Some referees purport to express views concerning the period between 1997 and 1999 when the offences occurred. I do not consider that this material is of particular assistance for the purpose of fact finding on sentence. A real difficulty with many of the references is that the authors are not objective commentators on the Offender. Several portray him as a victim and not an offender. These referees do not appear to have grappled with the powerful body of incriminating evidence to which reference has been made earlier in these reasons. Several are clearly allies of the Offender in business and other activities. All of this affects the weight to be given to this evidence. To the extent that some referees speak of a change in attitude by the Offender since about 2005, this does not sit comfortably with the Offender's statement to the Probation and Parole Officer in early 2008 referred to earlier. 143 A document entitled "Synopsis of Nick Petroulias" prepared by the Offender's solicitor and dated 24 March 2008 was tendered (Exhibit 8). I infer that the contents of the document are the Offender's instructions to his solicitor. The Crown submitted that no weight should be given to this document in the absence of evidence from the Offender. I accept the Crown's submission. I bear in mind that the evidence demonstrates a pattern of deceit on the Offender's part in 1997-1999 at the time of the offences and during the investigation. This included the suppression of information, secreting of documents and attempts to influence others as to versions to be given to investigators and the destruction of potentially incriminating evidence. All of these matters emphasise the need for care and the difficulty in relying upon an unsworn and untested biographical account emanating from the Offender. 144 I give this document no weight except insofar as there is evidence from the Offender's mother, or some other reliable source, which supports any part of it: R v Qutami (2001) 127 A Crim R 369 at 377 [58]; R v Palu (2002) 134 A Crim R 174 at 184-185 [39]-[41]. This document will be treated as if it was a submission made from the bar table, on behalf of the Offender concerning his background and circumstances. 145 I move to the psychiatric and psychological evidence tendered in the Offender's case. The following reports were tendered: · Dr Ben Teoh (psychiatrist) dated 9 May 2008 (Exhibit 1) · Dr Nathan Serry (psychiatrist) dated 20 March 2008 (Exhibit 17) · Dr Nathan Serry (psychiatrist) dated 8 May 2008 (Exhibit 17) · Dr Nathan Serry (psychiatrist) dated 19 May 2008 (Exhibit 17) · Ms Margaret Ann Smith (psychologist) dated 11 May 2008 (Exhibit 2) · Ms Margaret Ann Smith (psychologist) dated 22 May 2008 (Exhibit 5) · Ms Margaret Ann Smith (psychologist) dated 28 May 2008 (Exhibit 33) · Tim Watson-Munro (psychologist) dated 25 March 2008 (Exhibit 9) · Tim Watson-Munro (psychologist) dated 1 May 2008 (Exhibit 10) · John Taylor (psychologist) dated 12 May 2008 (Exhibit 13) · Hamid Dadgostar (psychologist) dated 12 May 2008 (Exhibit 14) · Dr Christopher Canaris (psychiatrist) dated 31 August 2005 (Exhibit 16) · 2005 File Note of Dr Canaris (Exhibit 15) 146 In addition to the tender of the reports, Dr Teoh, Dr Serry, Ms Smith, Mr Watson-Munro and Mr Taylor gave oral evidence at the sentencing hearing. 147 The effect of the psychiatric and psychological evidence adduced for the Offender is that the Offender is said to suffer Bipolar 1 disorder and Aspergers syndrome. In addition, Dr Teoh diagnoses depression. I note that each of these psychiatrists and psychologists, with the exception of Mr Watson-Munro and Dr Canaris, examined the Offender for the first time in 2008. It appears that Mr Watson-Munro examined the Offender for the first time on 26 March 2007. Dr Canaris saw the Offender in July 2005. 148 No evidence has been adduced, in documentary or oral form, from a medical practitioner who has examined or treated the Offender prior to 2005, by which time the Offender was 37 years of age. There is, of course, the evidence from the Offender's mother, but that is not accompanied by any medical evidence. Nor does Mrs Petroulias state that the Offender was subject to any medical assessment or treatment in the past. 149 Dr Canaris was not called in the Offender's case. A report dated 31 August 2005 addressed to the Offender's former solicitors was tendered (Exhibit 16). It appears, from that report, that Dr Canaris saw the Offender on 27 July 2005 and 1 August 2005. On the first occasion, the Offender was accompanied, for part of the examination, by his lawyer and, on the second occasion, he was accompanied by his partner. The report of Dr Canaris expresses the opinion that the Offender suffers from Aspergers disorder. The report refers to certain material provided to Dr Canaris which is said to contribute to that diagnosis. No mention is made in the report of any other condition, including bipolar disorder. 150 Dr Canaris' file notes were tendered (Exhibit 15). Those notes record, for 27 July 2005 "possible bipolarity" and later "bipolar disorder type II - to start Lithium 250 mg twice daily. Blood tests and to come back next week". The entry for 1 August 2005 records a discussion with the Offender's partner - "She wonders about Aspergers". The note states "a definite possibility, note increased co-morbidity with bipolarity, to get s Lithium done". The next entry, for 22 February 2007, includes the note "Would like a trial of Lithium again - For Lithium Carbonate 250 mg twice daily (202 repeats)". An entry for 28 February 2007 records "He has not filled the Lithium script - I feel in the circumstances given all the turmoil coupled with his living on his own that he would be better off without filling it. However, he seems to find it helpful to offload his burden. To come back in one week". 151 The next and final note is for 12 March 2008. It states "Has [come] asking for a medico legal report. I have had to explain that I have seen him too often to be independent but not often enough to write credibly as a treating psychiatrist. He will need an independent report". 152 It is somewhat puzzling that, if a diagnosis of bipolar disorder was made by Dr Canaris in 2005, he would not refer to it in his report of 31 August 2005. No explanation for this omission has been offered, as Dr Canaris has not given evidence, nor has the Offender. 153 Each psychiatrist and psychologist who produced a report for the sentencing hearing was provided with certain documentation which he or she was asked to assume was correct. This included the synopsis document mentioned earlier. The only material provided to them which has been adopted on oath is the statement of Mrs Petroulias, referred to earlier. 154 In addition, parts of statements of Mr Aivaliotes (Exhibit 11) and Mr Chow (Exhibit 12) were provided to the psychiatrists and psychologists. Reliance was placed upon Mr Aivaliotes' description of the Offender's speech and demeanour on 13 March 1999 when they met at Coogee Beach in circumstances described earlier in these reasons. Mr Aivaliotes described in his statement of 1 April 1999, the Offender as being agitated in speech and demeanour. Given the topic under discussion at the meeting as outlined above, this description is hardly surprising and is not, in my view, helpful to the Offender with respect to the existence of some mental disorder. 155 The part of Mr Chow's statement relied upon included Mr Chow's view that the Offender's management style was different from the normal ATO culture, in that he was somewhat disorganised and there appeared to be no real structure. He was "very fast moving, too fast moving". I do not consider that this statement is of particular assistance to the Offender. There was, of course, in evidence at the trial and before me a substantial body of material disclosing the intelligence, qualities and skills of the Offender over an extended period of time. I have referred earlier to Mr Killaly's reference of June 1997. I bear in mind, of course, the meteoric rise of the Offender in the ATO in 1998 which does not suggest the existence or manifestation of any psychiatric condition which affected his capacity and judgment. It seems to me that the limited and selective material provided to the psychiatrists and psychologists is of little assistance with respect to the opinions proffered by them. 156 Senior Counsel for the Offender submitted that a finding should be made that the Offender suffered from bipolar disorder and Aspergers syndrome at the time of the offences, and that these conditions had affected the Offender so as to reduce his culpability. He submitted, further, that the Court should find that the Offender suffers presently from these conditions, and that this should be taken into account on sentence having regard, inter alia, to the additional hardship he will experience if sentenced to full-time imprisonment. 157 The Crown did not challenge the diagnoses of the Offender as suffering bipolar mood disorder and Aspergers syndrome, although noting that the diagnoses were based substantially upon a subjective history provided by the Offender or his mother. The Crown accepted that the medical evidence was sufficient to establish that the Offender suffers from a medium-to-long term condition of bipolar mood disorder, and noted that the Crown had led no evidence to the contrary. Whether, and the extent to which, the Offender suffers from Aspergers syndrome was said to be less clear. However, the Crown pointed to the cross-examination of Dr Teoh (ST107.20) as indicating that, if Aspergers syndrome exists at all, the condition is not severe. 158 The Crown accepted that the weight of evidence established that the Offender was currently suffering from depression, but noted that this situation was predictable given his present circumstances. The Crown submitted, however, that the course of conduct on the part of the Offender revealed by the evidence demonstrated a deliberate process of achieving a position of influence in the ATO, whereby he could advance his own business interests. The Crown submitted that, even if the Offender suffered from bipolar disorder in 1997-1999, it played no part in the commission of the offences. 159 The Offender bears the onus of proof with respect to the existence of bipolar disorder and Aspergers syndrome, as he contends that these matters should operate in his favour on sentence: The Queen v Olbrich. It falls to me, as the sentencing Judge, to determine whether I am satisfied, on the balance of probabilities, that the Offender suffers from these conditions at the present time and whether he suffered from the conditions, or either of them, at the time of the offences. 160 The objective foundation for the opinions expressed by the psychiatrists and psychologists is, in my view, tenuous. I do not consider that the extracts from the statements of Mr Aivaliotes and Mr Chow advance the Offender's case on this issue. Nor do I consider that the evidence of the Offender's mother, when considered as a whole, assists on this question. The Offender has not given evidence himself. Other evidence adduced on sentence, including the reference material, does not, in my view, advance the Offender's case with respect to the existence of one or other or both of these conditions. In forming this view, I have had regard to the reference of Dr Lamont, which I have considered with the rest of the evidence. 161 I am satisfied, on the balance of probabilities, that the Offender presently suffers from depression and has done so for some time. This is understandable given the legal process which has been on foot for some years, and the verdicts of the jury in December 2007. I am not satisfied, however, that the Offender was depressed, in any relevant sense, at the time of the offences. 162 Dr Teoh first saw the Offender on 16 April 2008. Dr Teoh reported that the Offender presented with a history consistent with a diagnosis of bipolar mood disorder Type 1 and Aspergers syndrome, together with depression. He has prescribed Lithium and another mood stabiliser, Olanzapine. Since late May 2008, the Offender has apparently been under Dr Teoh's care as a patient at the Northside Clinic for treatment of bipolar mood disorder. The evidence of Dr Teoh, both written and oral, was confined to a current diagnosis of the Offender and did not purport to express any opinion concerning his mental state at the time of the offences. 163 Dr Serry examined the Offender once in his Victorian rooms on 20 March 2008. According to Dr Serry, the Offender's history was said to be consistent with a diagnosis of bipolar disorder. In his later reports and his oral evidence, Dr Serry purported to express opinions with respect to the Offender's consciousness of guilt at the time of the offences. The factual material upon which these opinions were based was both thin and incomplete. In my view, no real weight can be attached to Dr Serry's attempts to explain aspects of the Offender's conduct at the time of the offences. No satisfactory or complete summary of the evidence in the trial was provided to Dr Serry. No attempt was made by Dr Serry to grapple with the substantial body of incriminating evidence summarised earlier in these reasons. I am not persuaded that any weight should be attached to his opinions concerning the Offender's mental state at the time of the offences. 164 A number of psychologists gave oral evidence. In approaching their evidence, I keep in mind that it is important that psychologists do not cross the barrier of their expertise. It is appropriate for persons trained in the field of psychology to give evidence of the results of psychometric and other psychological testing, and to explain the relevance of those results, and their significance so far as they reveal or support the existence of brain damage or other recognised mental states or disorders. It is not, however, appropriate for them to enter into the field of psychiatry: R v Peisley (1990) 54 A Crim R 42 at 52. 165 Mr Watson-Munro referred to the diagnoses made by psychiatrists of bipolar mood disorder and Aspergers syndrome. With respect to Aspergers syndrome, Mr Watson-Munro suggested that the Offender had exhibited a range of eccentric behaviour including the development of a fixation on peculiar topics, such as American presidents. The foundation for this appeared to be part of the statement of the Offender's mother who said the Offender "knew all there was about American presidents". In evidence, Mr Watson-Munro (understandably) stepped back from his reliance upon an interest in American presidents as being indicative of Aspergers syndrome (ST172). With respect, this was drawing a long bow. At one point in oral evidence, Mr Watson-Munro spoke in terms of "errors of judgment" on the Offender's part (ST168). Once again, he stepped back from that characterisation when informed that the jury had found impropriety on the Offender's part. I attach little weight to Mr Watson-Munro's opinion which attempted to, in some way, relate the Offender's possible conditions to the events between 1997 and 1999. With respect, Mr Watson-Munro had a slight, almost non-existent, understanding of the evidence adduced at the trial which was strongly adverse to the Offender. 166 Mr Taylor administered a number of tests to the Offender. He reported that the results of the tests administered did not indicate that he had a personality disorder. He was assessed as being severely depressed at the present time (12 May 2008). Mr Taylor observed that his test results, together with the history provided and documents made available, were consistent in indicating that the Offender suffered from bipolar disorder and Aspergers syndrome. Particular emphasis was placed upon the depression from which the Offender was said to be suffering. Mr Taylor did not attempt to express an opinion concerning the Offender's mental state at the time of the offences. 167 Ms Smith provided a series of reports and gave oral evidence on two occasions. Whilst acknowledging Ms Smith's academic qualifications, I note that her reports for this case constitute the first report she has prepared for court proceedings since 1984 (ST126.16). She has a very limited clinical practice, confined to pro bono work (ST126.11, 141-142). She interviewed the Offender for the first time on 21 May 2008 for one hour. She examined a number of documents and reports which had been tendered for the Offender on sentence. Based upon the material and her interview with the Offender, she supported the diagnosis of bipolar 1 disorder and Aspergers syndrome. Ms Smith accepted that it was not the role of a psychologist to diagnose mental illness, and she said that she did not intend to diagnose psychiatric disorders or illness in the Offender (ST136-137). 168 At the completion of the sentencing hearing on 23 May 2008, I indicated to counsel that I would be assisted by submissions dealing with factual matters raised in my judgment R (Cth) v Petroulias (No. 34) at [32] and following (ST182-183). The hearing was adjourned until 28 May 2008. On that day, a further report of Ms Smith was tendered (Exhibit 33) and Ms Smith was recalled (ST218ff). The supplementary report of Ms Smith indicated that she had been provided with my Judgments Nos. 29 and 30 and asked to express opinions as to whether the Offender's illness had substantially contributed to the offences in the period 1997 to 1999. Ms Smith purported to express opinions favourable to the Offender by reference to my judgments. 169 However, as mentioned earlier in these reasons, Judgment No. 29 related to the Crown application for leave to cross-examine Mr Aivaliotes as an unfavourable witness under s.38 Evidence Act 1995. In my view, no part of that judgment concerning the conduct of the Offender could assist, in any objective way, an assessment of the Offender's mental state at the time of the offences. The judgment deals with changes of evidence by Mr Aivaliotes. Ms Smith fastened on one paragraph in Judgment No. 29, which was said to be supportive of the proposition that the Offender was in a manic phase of illness at the relevant time. In my view, no reasonable and balanced assessment of this judgment could lead to this opinion. When tested concerning this issue, Ms Smith accepted as a possibility that she could have "over-interpreted some of the material" provided to her (ST227.36). 170 Ms Smith expressed opinions favourable to the Offender which were said to arise from an examination of Judgment No. 30. This judgment related to a defence application for a directed verdict of acquittal. In my view, no part of this judgment contained any summary of evidence which could provide any sensible foundation for an opinion concerning the Offender's mental state at the time of the offences. 171 Ms Smith's supplementary report of 28 May 2008 (Exhibit 33), at page 3, asserted that Judgment No. 30 (of 8 October 2007) "provides greater details of the category of 'consciousness of guilt' that I referred to in my reports which sought to analyse the categories of offensive behaviour - including the 'Nick to Nick' letter where Mr Petroulias is seeking to warn and protect the parties concerned of the investigation". Ms Smith continued in the report "His behaviour at this point is consistent with the depressive phase of the condition where he is acting out of delusions about his prior behaviour, has deep shame and anxiety and believe they are to blame for all that is happening to everyone around them". 172 However, there was no reference to the "Nick to Nick letter" in Judgment 30. When asked about this, Ms Smith accepted that this was not referred to in Judgment 30, and that she had been provided with this information verbally from a Defence solicitor (ST238). 173 Ms Smith was provided with Judgment No. 34, which reproduced the "Nick to Nick letter", before entering the witness box on 28 May 2008. Having seen it for the first time then, she purported to express opinions favourable to the Offender by reference to the document. The Crown submitted that the oral evidence of Ms Smith and her supplementary report of 28 May 2008, should be disregarded. The Crown submitted that there was clearly no factual justification for the opinions expressed and that her evidence was, in the words of the Crown, "unconditionally biased" in favour of the Offender. The Crown submitted that Ms Smith's evidence served the useful purpose of highlighting the fallacy of endeavouring to attribute the conduct of the Offender to his mood disorder. 174 I accept the Crown submissions concerning Ms Smith's evidence of 28 May 2008 and her supplementary report. In my view, she overstepped the boundary of proper expert evidence by a significant degree. I make due allowance for the fact that Ms Smith had not prepared a report for court proceedings for 24 years. Her first report did not advert to the Expert Code of Conduct, despite the necessity for such a reference under Part 75 r 3J Supreme Court Rules. It is not the function of an expert witness to express opinions favourable to the party calling the witness, irrespective of the existence or otherwise of an objective foundation for the opinion. In my view, no weight whatsoever should be attached to the evidence of Ms Smith in these proceedings, except insofar as she speaks of her academic knowledge of the nature of bipolar mood disorder. In my view, Ms Smith has over-interpreted factual material in a gross fashion in this case, so that the Court can attach no real weight to her evidence which, under the Expert Code of Conduct, is intended to serve the primary function of assisting the Court in discharge of the expert's duty to the Court. 175 I summarise my findings with respect to the psychiatric and psychological evidence in the following way. I am satisfied that the Offender suffers from depression, and has done so for some time. I accept that this has been contributed to by the protracted proceedings against him, culminating in the verdicts of the jury convicting him of two serious offences. 176 I am not satisfied that the Offender suffers, or has suffered, from Aspergers syndrome. The factual foundation underlying this opinion is, in my view, tenuous. There is very little, if any, sworn evidence of factual matters which would provide a proper evidentiary foundation for such a diagnosis. If, however, the Offender does suffer from Aspergers syndrome, then it is a very mild form of the disorder at most. 177 The evidence which is said to provide an objective foundation for a diagnosis of bipolar mood disorder is somewhat confusing. I do not consider that the evidence of the Offender's mother provides any real foundation for this diagnosis. Other historical or anecdotal material, all of which is unsworn, does not in my view assist the diagnosis. The small portions of statements of Mr Aivaliotes and Mr Chow which have been referred to do not, in my view, assist the Offender on this issue. 178 A confusing picture emerges with respect to the role of Dr Canaris in 2005. Although bipolar disorder is referred to in the file notes of Dr Canaris, it is not mentioned at all in the detailed report provided on 31 August 2005 to the Offender's then solicitors. An available inference is that, although bipolar disorder was raised as a possibility by Dr Canaris, he did not in fact diagnose it, and thus did not refer to it in that report. The Offender did not call Dr Canaris in the sentencing hearing. There is a curious file note from March 2008 which seems to suggest (for reasons that are difficult to understand) that Dr Canaris refused to provide a report, in any capacity, for the Offender. 179 The Court is left with the evidence of Dr Teoh, who has been treating the Offender since 16 April 2008, and Dr Serry who saw the Offender on one occasion in March 2008. Beyond that, there is the evidence of psychologists which, in reality, repeats what has been said by the psychiatrists. In my view, they do not materially add to the diagnoses. 180 It is the fact that Dr Teoh has been treating the Offender for some two months for bipolar mood disorder, including prescription of Lithium. This treatment has included inpatient treatment at Northside Clinic. Although I am well satisfied that the Offender is presently depressed and has been for some time, I am not presently satisfied, on the balance of probabilities, that he suffers from bipolar mood disorder. If he does, I do not consider that the condition is severe. 181 I am certainly not satisfied, if the Offender has suffered from bipolar mood disorder, that it played any part in the commission of the offences for which he is to be sentenced. 182 The conduct of the Offender which gives rise to the convictions involved a deliberate course of conduct over an extended period of time. He was a well-educated and highly trained professional person. He was promoted several times in 1998, reaching one of the highest positions within the ATO. The fact that he was promoted to that position is powerful evidence of the assessment by those around him that he was a capable, intelligent and resourceful person. I am satisfied that he was each of those things. However, he utilised these skills for criminal purposes. He engaged in significant and sustained impropriety, involving abuse of trust and misuse of his senior office in the ATO. 183 I am satisfied that the Offender's conduct between 1997 and 1999 was well-planned and motivated by self-gain, that is greed. It was not clouded, in any respect, by any health problem that he may have had. Accordingly, although there is current evidence suggesting psychiatric issues surrounding the Offender, which I will take into account in passing sentence, none of these matters bear upon his culpability for the serious crimes for which he has been convicted by the jury.

Application for Psychiatric Probation Order 184 Upon the basis of the psychiatric evidence adduced in the sentencing proceedings, Senior Counsel for the Offender submitted that a psychiatric probation order under s.20BV Crimes Act 1914 (Cth) ought be made in this case. Section 20BV(1) is in the following terms: "(1) Where a person is convicted in a State or Territory of a federal offence and the court is satisfied that: (a) the person is suffering from a mental illness within the meaning of the civil law of that State or Territory, and

(b) the illness contributed to the commission of the offence by the person; and

(c) appropriate psychiatric treatment for the person is available in a hospital or other place in the State or Territory; and

(d) the person consents to the order being made, the court may, without passing sentence on the person, make an order (in this section called a psychiatric probation order ) that the person reside at, or attend at, a specified hospital or other place for the purpose of receiving that psychiatric treatment." 185 It was submitted for the Offender that such an order ought be made upon the basis of the evidence before the Court. The Crown submitted that the evidence did not satisfy, at the least, the requirements in s.20BV(1)(a) and (b) of the Act. In any event, the Crown submitted that the nature of the Offender's crimes were such that an order under the section would not be appropriate. 186 I am not satisfied that an order under the section should be made. Firstly, the evidence does not satisfy me that the Offender is suffering from a "mental illness" within the meaning of the civil law of New South Wales, relevantly the Mental Health Act 2007. No psychiatrist has expressed the opinion that the Offender satisfies the test of "mental illness" under that Act. There was passing reference to s.20BV in the report of Mr Taylor (Exhibit 13, page 10). Ms Smith's first report (Exhibit 5, page 3) purported to provide an opinion that the Offender met the criteria for mental illness in 1997-1998 as defined in the Mental Health Act 1990. However, Ms Smith acknowledged that she was not purporting to cross the line between psychology and psychiatry and diagnose an illness or disorder in the Offender. Further, for reasons explained above, I am not prepared to attach any weight to the opinions of Ms Smith with respect to the Offender. Accordingly, there is no evidence to satisfy the Court that the Offender meets the requirements of s.20BV(1)(a) of the Act. 187 Further, even if the Offender was suffering at present from a "mental illness", I am not satisfied that any illness contributed to the commission of the offences for which he is presently before the Court. Once again, my reasons for this conclusion are expressed above. Even if the Offender had mental health issues of some type in 1997-1998 (and I am not so satisfied), I am certainly not satisfied that any such issues contributed to the commission of the present offences. 188 It may be that appropriate psychiatric treatment is available to the Offender through Dr Teoh in a hospital (s.20BV(1)(c)). I was informed by his Counsel that the Offender consented to an order being made (s.20BV(1)(d)). However, it is clear that the statutory preconditions for a psychiatric probation order have not been met. I decline to make such an order.

Potential For Summary Disposal of Second and Third Counts 189 The Offender submitted that the Court should take into account on sentence the possibility that the second and third counts could have been disposed of summarily in the Local Court. It was submitted that it was the first count which had been the lead count on the indictment throughout, and which had rendered it necessary that all three counts be tried on indictment. The Crown submitted that, given the nature and gravity of the offences alleged in all three counts, the prosecution of the Offender was always going to proceed on indictment and that the theoretical possibility of summary disposal of the second and third counts was not a factor to be taken into account in the Offender's favour on sentence. 190 I do not consider that the theoretical possibility of summary disposal of the second and third counts bears on the question of sentence in this case. No application was made for these matters to be dealt with summarily. They could only have been dealt with summarily if both the prosecutor and the defence consented: s.4J(1) Crimes Act 1914 (Cth). Having regard to the overall seriousness with which the second and third counts were regarded, the Crown submitted that prosecution consent to summary disposal would never have been forthcoming. I agree with this submission. 191 In my view, the nature of these prosecutions, even if confined theoretically to prosecution of the second and third counts only, would always have been regarded, in the proper exercise of prosecutorial discretion, as appropriate matters for prosecution on indictment: R v Gent (2005) 162 A Crim R 29 at 47 [86]. This is especially so given that, if the second and third counts had been dealt with summarily, the maximum penalty available would have been confined to 12 months' imprisonment on each count. Having regard to the objective criminality involved in the second and third counts, I do not consider that the theoretical possibility of summary disposal can be called in aid by the Offender on sentence. 192 I note, in this respect, that it was not submitted at the sentencing hearing that the Offender had ever offered a plea of guilty to the second and third counts, if the Crown determined not to proceed with the first count. In reality, given the objective criminality involved and the high office held by the offender at the time of the offences, these matters were always destined to be prosecuted on indictment.

Applicable Principles Under s.16A Crimes Act 1914 (Cth) 193 In determining the sentence to be passed on the Offender for these offences, the Court must impose a sentence that is of a severity appropriate in all the circumstances of the offence: s.16A(1). It is necessary for me to take into account matters contained within s.16A(2) as are relevant and known to the Court. 194 I take into account the nature and circumstances of the offences: s.16A(2)(a). I have made findings concerning the offences committed by the Offender. I am satisfied that each offence was of a very high order of objective gravity. The offence in the second count proceeded over a considerable period of time and the offending conduct did not cease until the offences were detected. 195 The conduct of the Offender, in the second count, involved gross impropriety on his part, continuing over many months and involving an obvious and actual conflict of interest. The Offender well knew, at the time, that what he was doing was wrong. His deceit during the course of the offence, and his acts to conceal the true facts and to direct others to take action to conceal the true facts, provides clear evidence of the Offender's consciousness of his wrongdoing. At the time of the offences, the Offender was rising quickly in seniority within the ATO, ultimately occupying one of the highest positions in the ATO. The then Commissioner of Taxation, Mr Carmody, appointed the Offender to a high and responsible office, clearly unaware of the Offender's betrayal of trust which had been happening for some months, and continued. This is not a case of corrupt conduct by a junior officer within the Public Service, on an isolated occasion. 196 I am satisfied that the present case involves planned acts of corrupt conduct, carried out over a lengthy period, by a very senior officer to whom others in the organisation were entitled to expect was a model of probity. Where a high official engages in corrupt conduct, the damage to the public fabric is substantial. The Offender's conviction on the second count is such a case. 197 I am satisfied that the conviction on the third count involves the commission of a most serious offence under the section. The secrecy provisions under tax legislation operate to ensure that information provided to the ATO, including material obtained by use of compulsory powers, is confined to its proper public use within the ATO. I am satisfied that the material contained in the client lists, provided by the Offender to Mr Morgan, had been obtained by use of the ATO's statutory powers. Although it may not have been sensitive personal information about taxpayers, it was material gathered by the Offender, and provided to Mr Morgan, to be used for commercial gain and to give the Offender's business interests a marketing edge over competitors. I am satisfied that this was a flagrant breach of the duty of an officer within the ATO to maintain secrecy over information obtained in the course of his duties. 198 I am satisfied that these two offences are very close to the worst cases of crimes of this type: Ibbs v The Queen (1987) 163 CLR 447 at 451-452. 199 I am required to consider the degree to which the Offender has shown contrition for the offence: s.16A(2)(f). I am satisfied that the Offender has not demonstrated contrition at all for the offences. As demonstrated by his explanation to the Probation and Parole Officer, the Offender does not accept that there was any impropriety or deceit on his part in the conduct giving rise to his conviction on the second and third counts. 200 The offences occurred between 1997 and 1999. The Offender was arrested on 24 March 2000. The committal proceedings proceeded over 37 hearing dates between 5 November 2001 and 17 July 2002. Appellate proceedings flowed from the committal proceedings. A trial proceeded, without verdict in 2005, and then two trials in 2007 before a jury convicted the Offender on the second and third counts in December 2007. 201 A person charged with a criminal offence is entitled to plead not guilty, and defend himself, without thereby attracting the risk of the imposition of a penalty more serious than would otherwise have been imposed: Siganto v The Queen (1998) 194 CLR 565 at 663 [22]. However, the Offender is not entitled to any leniency which may flow from a finding of contrition or remorse. Nor, of course, was there a plea of guilty which would attract a discount on sentence. 202 The Court should have regard to specific deterrence of the Offender: s.16A(2)(j). It was submitted for the Offender that he had lost his future career with the ATO as a direct result of his involvement in the arrangements and conviction, and that specific deterrence, with regard to his functioning as a Commonwealth officer, had been achieved. It was submitted that his professional future has been effectively destroyed and that this bears upon specific deterrence. 203 The Offender's loss of a future career within the ATO was an inevitable and necessary consequence of his corrupt conduct involving abuse of trust whilst working within the ATO. I take into account the fact that appointment to pubic office is not likely to happen again. I do take into account the likely professional consequences of the Offender's convictions for these serious crimes. 204 A difficulty for the Offender in the area of specific deterrence flows from his refusal to acknowledge his clear and gross wrongdoing. An offender who acknowledges wrongdoing, and has some insight into his offending, may attract a lesser element of specific deterrence. However, despite the Offender's clear impropriety and deceit during the period when the offences were committed and the investigatory aftermath, the Offender lacks any insight into his criminal conduct. I am satisfied that a significant element of specific deterrence is appropriate in his case. 205 In forming this view, I have taken into account the medical evidence adduced in the sentencing hearing. I do not consider that the medical evidence, to the extent to which I have accepted it, operates to reduce the appropriateness of specific deterrence with respect to the Offender. 206 The Court must take into account the need to ensure that the Offender is adequately punished for the offences: s.16A(2)(k). I have regard to this factor, and propose to pass sentences which, in my view, will fulfil the requirement in s.16A(1) and also ensure that the Offender is adequately punished for his serious crimes. 207 The Court must have regard to the character, antecedents, age, means and physical or mental condition of the Offender: s.16A(2)(m). The Offender has no prior criminal history. Some of the reference material is relevant on sentence to his prior good character. However, the weight to be given to evidence of good character on sentence depends, to an extent, on the character of the offence committed: R v Gent at 41 [51]. Less weight is attached to prior good character with respect to white-collar offences, where it has been observed that such crimes are rarely committed by people who have a criminal history: R v Gent at 43 [59]. In my view, the Offender's prior good character is of limited assistance to him on sentence. It may be taken that prior good character was a prerequisite to his appointment and elevation to high office within the ATO. He came to occupy a senior office, being a position of trust and responsibility, because he was meant to be a person of good character. In this way, he could not have been in a position to commit these serious offences if he was not a person of good character. In these circumstances, this factor provides little assistance to him. He stands to be sentenced for offences of serious impropriety and breach of trust in the exercise of his public office. 208 The Offender's antecedents involve tertiary qualifications at a high level, which equipped him to obtain high office within the ATO. I do not consider that this assists the Offender on sentence. 209 The Offender was aged between 29 and 31 years at the time of the offences. He is now 40 years of age. He was promoted to high office at a relatively young age, no doubt because of the perception of those around him that he was capable, reliable and trustworthy. He acted improperly and abused the position of trust which he occupied from the time when he was a consultant to the ATO through to the time when he was elevated to the position of First Assistant Commissioner and beyond. His age, then or now, does not assist him on sentence. 210 There is some material before the Court, in the presentence report and the reference material, which points to the Offender having expended large sums of money in his defence so that he is now heavily in debt. There is no evidence from the Offender in this respect, but it seems clear that his defence of these proceedings over the years has involved considerable expenditure of funds. I take this into account on sentence. 211 I have already adverted to evidence concerning the mental condition of the Offender. I accept that he is presently depressed and has been for some time. I am not satisfied that he presently suffers from other mental disorders but, if I am wrong in that respect, I consider, at its highest, the evidence points to a mild form of bipolar disorder and an even milder form of Aspergers syndrome. I take into account that the Offender's present health may serve to increase the hardship of a sentence of full-time imprisonment, but that consideration is limited by the necessity of maintaining proper standards of punishment: R v Sopher (1993) 70 A Crim R 570 at 573-574. I have regard to the fact that medical services are available through Justice Health, the functions of which include the provision of health services to offenders in custody: s.236A Crimes (Administration of Sentences) Act 1999. I proceed to sentence upon the basis that medical services will be available to the Offender in custody, albeit not necessarily of a type that may be available to him in the general community. 212 The Court must have regard to the prospect of rehabilitation of the Offender: s.16A(2)(n). Given that the Offender does not accept his guilt of the crimes, nor acknowledge impropriety or wrongdoing, an assessment of his prospects of rehabilitation is not without its difficulties. He has demonstrated a tendency to deflect blame to others for his own wrongdoing. Nevertheless, there is a reasonable prospect that the Offender may be able to reconstruct his life at a future time, so as to be able to live in the community without the commission of offences. 213 General deterrence must also be taken into account in determining the sentences to be passed on the Offender: Director of Public Prosecutions (Cth) v El Karhani (1990) 21 NSWLR 370 at 378. I am satisfied that general deterrence is an important factor on sentence in this case. It is necessary to impose sentences upon the Offender which demonstrate the gravity with which the law regards corruption by a public officer occupying a senior position of trust. It is necessary, in my view, that a strong message be sent through the sentences to be imposed upon this Offender to others in public office that criminal abuse of trust of this type will be met by heavy sentences. I do not consider that the Offender's current mental health issues render him an unsuitable, or less suitable, vehicle for application of the principle of general deterrence. 214 I have regard to the delay between 2000 and today, and the effects of that delay, on the Offender. I also have regard to the lengthy period for which the Offender has been subject to bail conditions and the extended periods when he has been required to attend Court for his trials.

The Related Offence Under s.166 Criminal Procedure Act 1986 215 A related offence is before the Court, alleging theft by the Offender of ATO documents under s.30 Crimes Act 1914 (Cth). This charge was referred to this Court from the Local Court pursuant to the related charge provisions in the Criminal Procedure Act 1986. The charge relates to an allegation that the Offender stole a number of ATO documents which were located in the Melbourne storage unit. 216 Having heard submissions during the sentencing hearing with respect to this related charge, I indicated that the appropriate course was to remit the matter to the Local Court under s.169 Criminal Procedure Act 1986 (ST48). I formed that view having heard that the matter would be defended, and that evidence additional to that adduced in the trial would be required. The parties were not ready to proceed to a hearing of the related offence, and I determined that it was inappropriate to delay the sentencing hearing further for that to be done. The Crown asked that the matter be remitted to the Local Court and the Defence did not advance a contrary submission. 217 I am satisfied that it is in the interests of justice, for the purpose of s.169 Criminal Procedure Act 1986, that the related charge be remitted to the Local Court and I will so order.

Determining Appropriate Sentences 218 The proper and impartial administration of the tax laws is critical to the operation of our federal system of government. The law vests substantial powers in those exercising these important functions. Those powers are accompanied by important responsibilities, including the duty to serve the public and to maintain confidentiality according to law. By his crimes, the Offender has betrayed the trust and responsibility vested in him. He has damaged the public fabric of our community by undermining confidence in the fair and impartial administration of the tax system. 219 The Offender acted in this way for personal gain. There was a clear and obvious conflict between public duty and private interest which presented itself starkly to the Offender over many months between 1997 and 1999. He engaged in a course of conduct which involved gross impropriety and abuse of trust motivated by personal gain. 220 These offences involve a very high order of objective gravity. There are few subjective factors which operate in the Offender's favour on sentence. His prior good character is of little assistance given that it was a qualification for the positions which he occupied and abused. He has not demonstrated contrition. The length of time that the proceedings have been on foot has no doubt taken its toll on him. I accept that his present health is affected by depression arising from the criminal proceedings and, in particular, his conviction by a jury of serious crimes. Specific deterrence and, in particular, general deterrence ought play a significant part on penalty. 221 The Court shall not impose a sentence of imprisonment on a federal offender unless it is satisfied that no other sentence is appropriate in all the circumstances of the case: s.17A(1) Crimes Act 1914 (Cth). I am satisfied that no other sentence is appropriate for these offences and this Offender having regard to the findings made in these reasons and in particular, the objective gravity of his crimes. I am satisfied that no sentence short of full-time imprisonment is appropriate in the circumstances of the case. 222 The Offender is to be sentenced to imprisonment for two offences. I must have regard to the principles concerning accumulation, concurrency and totality. The offences contained in the second and third counts involved different aspects of the same course of criminal conduct committed by the Offender. I am satisfied, however, that entirely concurrent sentences are not appropriate. 223 The second count involved gross impropriety on the part of the Offender in the performance of his duties over an extended period. The third count involved a grave breach of the specific confidentiality requirements which bound the Offender as a Commonwealth officer. As stated earlier, I am satisfied that the information published by the Offender to Mr Morgan, in breach of the confidentiality requirement, was itself information which had been gathered through the use of compulsory powers of the ATO. The information had been gathered for use by the Offender, and his associates, to advance his own commercial interests to the detriment of his business competitors. 224 Having regard to all factors bearing on the question of sentence, both objective and subjective, I am satisfied that a sentence for imprisonment for one year and nine months should be passed with respect to the second count, the s.73 offence. A sentence of imprisonment for one year and eight months ought be imposed for the third count, the s.70 offence. 225 I am satisfied that the sentences ought be served as partly cumulative sentences giving rise to a total head sentence of three years and two months' imprisonment. As the sentences for the two offences, in the aggregate, exceed three years, it is necessary to either fix a single non-parole period in respect of the sentences or make a recognizance release order: s.19AB(1) Crimes Act 1914 (Cth). 226 I am satisfied that the appropriate course is to set a single non-parole period of two years to date from today. I am satisfied that this is the minimum period that the Offender should spend in prison having regard to all the elements of punishment, including the objective seriousness of his crimes, specific and general deterrence, denunciation and the Offender's subjective circumstances: R v MA (2004) 145 A Crim R 434 at 440-441 [33]-[34]. 227 Nikytas Nicholas Petroulias, in relation to each of the counts of which you have been found guilty by a jury, you are convicted. In relation to the second count (the s.73 offence), I sentence you to imprisonment for a term of one year and nine months to date from 20 June 2008 and to expire on 19 March 2010. In relation to the third count (the s.70 offence), I sentence you to imprisonment for a term of one year and eight months to date from 20 December 2009 and to expire on 19 August 2011. The overall term is accordingly one of imprisonment for three years and two months commencing on 20 June 2008. 228 I fix a non-parole period of two years to date from 20 June 2008 and to expire on 19 June 2010. 229 I am required by law to explain to you the effect of this sentencing order. You need to understand that the effect of that order is that you will serve a period of imprisonment of not less than two years and, if a parole order is made on or after 19 June 2010, you will also serve a period in the community, called the parole period, under supervision, so as to complete the overall sentence of three years and two months. If a parole order is made, it will be subject to conditions, and it may be amended or revoked. In particular, it may be revoked if you fail without reasonable excuse to fulfil those conditions, in which event you may be returned into custody, pending further review and possible re-release, depending upon your behaviour and response to any rehabilitation opportunities which may be offered while you are in custody. 230 Pursuant to s.169 Criminal Procedure Act 1986, I order that the related offence under s.30 Crimes Act 1914 (Cth) be remitted to the Local Court. 231 I direct that a copy of the report of the Offender's treating psychiatrist, Dr Ben Teoh of 9 May 2008 (Exhibit 1), together with a copy of my remarks on sentence be placed in a sealed envelope and addressed to the Nursing Unit Manager of the Corrections Centre to which the Offender is to be taken as a result of the sentences which have just been passed.

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