Regina v Giallussi

The fraud that was committed on the Commonwealth involved an ongoing systematic falsification of records over a period of approximately five years. The false claims made were for the wages paid to employees who were represented as providing care to the residents when in fact these employees did not provide any care and some of them did not work in the nursing home at all. It is significant to note that the false claims started very shortly after the offender and others took over the running of the business. The false records that were created included false staff rosters, time sheets, payroll records and wages payments. [AB 62] 6 His Honour then turned to subjective matters. He noted the age of the offender (she is now 42 years of age), that she is married with two teenage sons and her husband is a medical practitioner with a practice at Maroubra. She came here from Greece as a baby. She obtained her Higher School Certificate and later a Bachelor of Arts and Diploma of Education at University. She taught at high schools before her marriage in 1980. In 1989 she commenced working at the nursing home which she, her husband and Mr and Mrs Christie acquired in a partnership. The respondent has no previous convictions and his Honour noted that this was not uncommon for the type of offence here involved. Friends and relatives gave evidence of her character and that of her family. They all indicated the great remorse expressed by the offender. Her health suffered because of the events, in particular she became depressed and lost considerable weight. The Court has had the benefit of seeing an exhibited photograph before Judge Downs. His Honour was satisfied that there was little or no chance of re-offending. His Honour accepted that although her husband was a partner in the nursing home, he had no knowledge of the offences.

7 His Honour noted that the moneys were obtained for the offender's own use and purposes, and that her motivation was one of greed. Although she denied it, the judge noted that as a result of the offences, to some extent, the patients failed to receive the benefit of the moneys allocated by the Commonwealth.

8 His Honour also referred to the Department relying on an honesty system and that the default was only discovered by an audit. He said:

It is significant to note that the conduct of the offender commenced shortly after she and others commenced the running of the business and it continued over a period of years. Not only did she falsify documents but she caused others to co-operate with her and as I have already said, to some extent the patients have lost the benefit of moneys that were made available. [AB 66 - 67] 9 The sentencing judge referred to the requirement of the imposition of a full custodial sentence unless special circumstances were shown. His Honour was satisfied that there were special circumstances. Indeed, he said that the fines imposed would be a more severe penalty than the other options available. His Honour summarised the special circumstances. These included the offender's shame, contrition and depression. Also, her previous good character and her husband being a respected medical practitioner. He noted that the moneys defrauded had been repaid in full and that, in pleading guilty, she had saved a lengthy trial and all that would be involved in such a trial.

Bearing in mind all of the facts that I have recited and in particular that she has made full reparation, she has pleaded guilty, she does not have any prior convictions, her prior reputation, the reputation of her family, the fact that she almost certainly would not re-offend, I propose to take the course I have already indicated. Justice in this state does not call for an eye for an eye or a tooth for a tooth but this is a matter where I consider it should be applied. She defrauded the government for motives of greed and therefore I propose to punish her severely through her pocket and to punish her to such an extent that it will be, I am sure, a sufficient deterrent to others. [AB 67 - 68]

CONSIDERATION 11 The Commonwealth submits that the total sentence imposed fails to reflect the objective seriousness of the offences and is manifestly inadequate. The sentence departed from accepted sentencing principles for such offences.

12 There is no doubt that the offences are very serious indeed. The evidence and agreed facts disclose that the respondent (together with her partner, Mr Christie) committed an ongoing, sophisticated systematic fraud over a 5 year period. It involved ongoing falsification of records and false claims of wages paid to employees who were represented as providing care to residents, when some were not, and false claims in relation to others who did not work at the nursing home at all. The fraud began very shortly after the offender and others purchased the business. The purpose of the false records and claims was to obtain benefits from the Commonwealth Government to which the respondent was not entitled. These totalled $264,110.16, although it may be noted that it appears that the respondent's personal gain may have been around $38,000.

13 It also seems that, as his Honour found, the commission of the offences meant that the elderly frail patients of the home, at least to some extent, did not receive the full benefits allocated for their welfare by the Government.

14 Also important is the dependency by the Commonwealth on a system of honesty by the receivers of the funds. This involves a breach of trust where, as in this case, the frauds were committed over a lengthy period of time and only discovered by an audit by the Commonwealth Department.

15 Aggravating the serious nature of the offence is the fact that the offender and her business partner caused employees in the business to assist in the commission of the offences. As his Honour found, the motivation for the offences was one of greed.

16 It is the submission on behalf of the Crown that the judge has allowed the subjective features of the offender to overshadow the objective seriousness of the case.

17 A number of decisions of the Court of Criminal Appeal have indicated that for offences of the type here involved, a full time custodial sentence should be imposed unless there are special circumstances. See for example Regina v Boian and Carter, 10 October 1997 unreported; Regina v Sopher, 17 December 1993 unreported; Regina v Purdon, 27 March 1997 unreported and Regina v Luu, 7 December 1984 unreported. These cases stress the seriousness of such frauds and the need for sentences to incorporate elements of general deterrence.

18 In Purdon, which dealt with a social security fraud, Hunt CJ at CL said:

If the fraud is based upon a perceived need, a custodial sentence must be expected except in very special circumstances. If the fraud is based on greed, the custodial sentence will be longer. 19 Some of the matters which his Honour believed constituted special circumstances need to be re-examined. His Honour gave weight to the pleas of guilty. In assessing what weight to give to the guilty pleas it may be observed that the Commonwealth case against the respondent was a very strong one and the offence was discovered only after an audit. These factors reduce the allowance for the guilty plea which was, in any event, entered belatedly.

20 It is also difficult to see great weight should have been given to the offender's previous good character when the criminal endeavours continued over a period of 5 years.

21 Restitution may, of course, be a mitigating factor especially when it involves a degree of sacrifice.

22 When one examines each and every factor which his Honour found constituted the special circumstances, one is driven to the conclusion that, when weighted against the objective seriousness of the offences, the cumulative subjective factors cannot represent special circumstances which permit imposition of a lessor sentence than a full-time custodial one. The finding of special circumstances was a serious error of principle which lead the sentencing discretion to miscarry.

CONCLUSION 23 When proper account is taken of the objective seriousness of the offences and the absence of special circumstances, it is patent that the sentence imposed was manifestly inadequate. Notwithstanding what his Honour said, there is no element of general deterrence included in the sentence. I do not accept that punishing the offender through her pocket, even if severely, is a sufficient deterrent to others.

24 I turn therefore to the court's discretion not to intervene to correct the sentence notwithstanding the conclusion that the sentence imposed was manifestly inadequate; Regina v Holder [1983] 3 NSWLR 245 at 255 - 256. However, I can see no compelling reason why the court should decline to correct the manifestly inadequate sentence imposed. I reach this conclusion taking due account of the element of double jeopardy for the offender. There are really no compelling circumstances apparent which would justify non-intervention. There is certainly no conduct on the part of the Commonwealth which would be such as to lead the court not to intervene.

RE-SENTENCING 25 It is therefore necessary to re-sentence the offender. In Regina v Allpass, 5 May 1993 unreported, the court acknowledged that re-sentencing after a successful Crown appeal, ordinarily gives recognition to the element of double jeopardy by imposing a sentence which is somewhat less than the sentence it considers should have been imposed at first instance. See also Holder (at 256). 26 In terms of re-sentencing I need not repeat the relevant facts and circumstances of the commission of the offences, nor the subjective factors and circumstances relevant of the offender. They have either been referred to or are to be found in the evidence before the District Court and findings of the sentencing judge. I take account of the factors set out in s 16A of the Act as relevant. In my opinion, the inescapable conclusion is that a custodial sentence is called for. In the absence of special circumstances, no other sentencing option is appropriate.

27 In particular, the fraud was a large one and committed systematically over 5 years. It was only detected by an audit. The false claims were in respect of persons who either did not perform nursing or care services to the elderly frail residents of the nursing home or did not even work there. The offender instructed employees to falsely change documentation. The false documents were numerous and encompassed staff rosters, time sheets, wage payments and pay-roll records. The false claims started soon after the offender and her partner purchased the nursing home. The motivation for the offences was greed. As a result of the fraud, patients did not, at least to some extent, receive the benefits allocated by the Commonwealth. The mitigating factors do not constitute special circumstances. In my opinion, the course of criminality has been very grave.

28 I would propose that the appeal be upheld and the sentence imposed on the respondent be quashed. In lieu thereof, the respondent be sentenced to two years imprisonment for each offence, to be served concurrently and to commence today. That is, a total sentence of two years imprisonment. In addition, the respondent be fined the sum of $20,000 for each offence, a total of $100,000, the court noting that the fines have been paid. In relation to the sentence of imprisonment, a recognizance release order be made directing that the offender be released, upon giving security, after she has served 12 months of the specified term of imprisonment.

29 ABADEE J: In this matter I agree that the Crown appeal should be upheld. However, regrettably I am unable to agree with the presiding judge as to what should be the appropriate result.

30 The presiding judge has pointed to the relevant circumstances. It is not necessary for me to repeat them. Such circumstances were also dealt with somewhat extensively by the sentencing judge, Judge Downs. I agree with the presiding judge's view that in this particular case there were no relevant special circumstances. Trial judges should be wary about too readily falling into the error of finding the existence of occasions that fall outside of the normal rule that a full-time custodial sentence is appropriate in cases such as this, lest the finding of exceptional or special circumstances becomes the normal rule and a full-time custodial sentence becomes the exception. In the circumstances of this case, as I have already indicated, there were no exceptional circumstances.

31 Next, I consider that the sentence was manifestly inadequate having regard to the sentence itself.

32 I also consider that his Honour was in error when he stated that he proposed to punish the respondent through her pocket and to punish her to such an extent that would be a sufficient deterrent to others. With the greatest of respect to the sentencing judge, the sentence that he imposed would not in my view, constitute a sufficient deterrent to others or to the public so as to answer the description, of one reflecting general deterrence. Further, I am satisfied that his Honour failed to give due and proper weight to the objective seriousness of the offences.

33 All that said, there are nevertheless, certain matters which I believe are relevant in this case and it is appropriate for me to mention. They are additional matters not already covered in the remarks of the presiding judge.

34 The first matter that I would draw attention to is, that it was calculated that the respondent to the appeal received the sum of $39,000 of the funds by way of fortnightly payments of varying amounts. That is the actual amount that she received herself. The next matter or aspect that I would concern myself with is the question of double jeopardy and discretion. This is a Crown appeal. In the circumstances of this case, the lowest possible punishment was imposed by the sentencing judge. It is by no means clear as to why he did so and certainly there is nothing to indicate that the sentencing judge had regard to the other sentencing options available to him including escalating up the scale to a full-time custodial sentence, by way of even considering a bond, community service order, or periodic detention. However, my view, having regard to the matters that I have mentioned in these short remarks of mine, and having regard to the full application of the principles of double jeopardy and discretion, whilst I consider that the Crown appeal should be allowed, I do not consider that the sentence that is proposed is the one appropriate in the circumstances of this particular case. I believe that giving effect to the principles of double jeopardy and discretion, and it seemed to me to impose the least possible sentence, that such can be met by the imposition of a fixed term, of a sentence by way of fixed term for three years to be served by way of periodic detention in addition to the imposition of the fines of $20,000 for each offence and totalling the sum of $100,000 in all. I believe that in the circumstances of this case, such a proposed sentence would also give effect to not only the objective seriousness of the offences but also the need to uphold the principle of general deterrence.

35 For these brief reasons, I would propose that the Crown appeal be upheld, I would propose that the sentence of Judge Downs be quashed, that in lieu thereof, the respondent be sentenced to a fixed term of three years to be served by way of periodic detention as and from this date and further, that she be fined the sum of $20,000 in respect of each offence with the total fine being the sum of $100,000. They are the orders that I would propose.

36 ADAMS J: I agree that in this case the sentencing discretion exercised in the District Court miscarried. I agree that his Honour should have passed a sentence involving full-time custody. However, this Court is not sitting as a Court of first instance. It is not really possible to reverse the events that have occurred between the initial sentence and today. The respondent, amongst other things, has had to borrow most of the money used to pay the fines. Those fines are to remain. Although the total sum defrauded was almost $265,000, the benefit to the respondent was about $38,000. I wish to underline the importance of what has been said about the role of the Court in this case where we are considering a Crown appeal. This case is very different therefore from the circumstances which this Court needed to deal with in an earlier case heard today in which we were considering an appeal from first instance by the prisoner. The proceedings in the District Court went awry, in the respondent's favour, it is true, but not due to any fault of hers. We are now five months down the track.

37 Taking into account all of these matters, and the factual matters referred to by his Honour the presiding judge, and if I may say so with respect, those matters which have been adverted to by his Honour Abadee J, I am of the view that the sentence proposed by his Honour Abadee J is the appropriate sentence in this case.

38 STEIN JA: The orders of the Court will therefore be as follows. The appeal is allowed and the sentence imposed by the sentencing judge is quashed. In lieu thereof, the respondent is sentenced to a total term of three years imprisonment on each charge to be served concurrently to commence on 26 March 1999 to be served by way of periodic detention at Mullawa Detention Centre. In addition, the respondent is fined the sum of $20,000 in respect of each offence, a total of $100,000, it being noted that the fines have been paid.

I certify that paragraphs 1 - 38 are a true copy of the reasons for judgment herein of the Honourable Justice Stein and of the Court.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.