Regina v Shawn Darrell Richard

Judicial Task on Sentencing 8In the circumstances of this present case, it is appropriate that I remind myself of the judicial task on sentencing. 9In the system of criminal justice which operates throughout Australia, as the sentencing judge, I am obliged to exercise a wide discretion as to what sentence should be imposed upon Mr Richard by applying well identified principles of law to the facts which are agreed, and which I find: R v MacDonell (NSWCCA, 8 December 1995, unreported) per Hunt CJ at CL at [1]-[2]; House v The King (1936) 55 CLR 499. 10Because the offences to which Mr Richard has pleaded guilty involve contraventions of the Corporations Act 2001 (Cth) and are thereby offences against a federal statute, the sentence to be imposed upon Mr Richard must be determined, in the exercise of federal jurisdiction by this Court, in accordance with Part 1B of the Crimes Act 1914 (Cth). 11However, it needs to be kept in mind that Part 1B is not "...an exhaustive statement of the will of the Parliament with respect to sentencing for federal offences": Putland v The Queen (2004) 218 CLR 174 at [53] per Gummow and Heydon JJ (Callinan J agreeing). 12Common law principles of sentencing apply to the sentencing of federal offenders: Johnson v The Queen (2004) 78 ALJR 616 per Gummow, Callinan and Heydon JJ at [15]. 13This is because of the words used in section 16A(1) of the Crimes Act , namely: "In determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence." 14In DPP (Cth) v El Karhani (1990) 21 NSWLR 370, the Court of Criminal Appeal (Kirby P, Campbell and Newman JJ) said at [378C]: "[Section] 16A(1) imposes on the Court the duty, which is its primary obligation, to ensure that the sentence or order 'is of a severity appropriate in all the circumstances of the offence'. It is by this duty that the general principles of sentencing law are imported into the function of a court imposing a sentence on a Federal offender convicted of the offence. What will be 'appropriate' will depend, in part, upon a consideration of fundamental notions, such as that of general deterrence." 15The Court is obliged to take into account the matters specified in s 16A(2) of the Crimes Act that are relevant to the particular sentencing exercise being undertaken. The Court is entitled to take into account other matters which accord with developed legal principles. 16Of s 16A(2), the Court of Criminal Appeal said in El Karhani at [378E]: "The list of particular considerations in s 16A(2) must be read as subject to the primary obligation of the court stated in s 16A(1). All that s 16A(2) requires is that the court should 'take into account' the listed matters. They provide a catalogue of matters to be considered in determining the 'severity appropriate in all the circumstances of the offence'. However, the opening words of s 16A(2) must be noted. They state that the matters there listed are to be taken into account 'in addition to any other matters'. These words make it plain beyond argument that the legislature was not seeking, by the list, to exclude other relevant matters. One other such relevant matter is clearly the general deterrent effect of the sentence."

General Deterrence 17The principle of general deterrence is of particular importance in relation to offences such as those to which Mr Richard has pleaded guilty and which are commonly referred to by the rubric " white collar offences ": R v Pantano (1990) 49 A Crim R 328 at 330. 18What the principle of general deterrence involves, and why it is an important and relevant matter for a sentencing court to take into account, is well explained in R v Radich [1954] NZLR 86 at 87 by the Court of Appeal in New Zealand when it said this: "...one of the main purposes of punishment...is to protect the public from the commission of such crimes by making it clear to the offender and to other persons with similar impulses that, if they yield to them, they will meet with severe punishment. In all civilized countries, in all ages, that has been the main purpose of punishment, and it still continues so. The fact that punishment does not entirely prevent all similar crimes should not obscure the cogent fact that fear of severe punishment does, and will, prevent the commission of many that would have been committed if it was thought that the offender could escape without punishment, or with only a light punishment. If a Court is weakly merciful, and does not impose a sentence commensurate with the seriousness of the crime, it fails in its duty to see that the sentences are such as to operate as a powerful factor to prevent the commission of such offences. On the other hand, justice and humanity both require that the previous character and conduct, and probable future life and conduct of the individual offender, and the effect of the sentence on these, should also be given the most careful consideration, although this factor is necessarily subsidiary to the main considerations that determine the appropriate amount of punishment." 19This passage has been cited with approval by Courts in Australia: R v Rushby (1977) 1 NSWLR 594 at [598C]; R v Kane [1974] VR 759 at 764765.

Other relevant specific matters 20Section 16A(2) of the Crimes Act 914 obliges the court to take account of a number of particular matters if relevant. It will be convenient to summarise them in this way: (d)Matters relating to the objective features of the offence, such as the nature and circumstances of the offence (s 16A(2)(a)), whether the offence is part of a course of conduct (s 16A(2)(c)) and the extent of loss or damage caused by the conduct (s 16A(2)(e)); (e)Matters relating to the subjective features of the offender, such as the character, age and state of health of the offender (s 16A(2)(m)), the post offence conduct of the offender including showing contrition, pleading guilty and providing assistance to authorities (ss 16A(2)(f)-(h)), specific deterrence (s 16A(2)(j)) and prospects of rehabilitation (s 16A(2)(n)); (f)Matters relating to adverse effects upon others of the conduct or the consequences of it, such as the personal circumstances of the victims of an offence (s 16A(2)(d)) and the effect on an offender's family or dependents of any sentence imposed (s 16A(2)(p)).

Offences 21Mr Richard has pleaded guilty to two offences contrary to section 1041G(1) of the Corporations Act 2001 (Cth) that: Charge 1: Between about 15 November 2005 and about 30 June 2009 at Sydney in the state of New South Wales in the course of carrying on a financial services business did engage in dishonest conduct in relation to financial services knowing that conduct to be dishonest. Charge 2: Between about 8 October 2007 and about 30 September 2009 at Sydney in the state of New South Wales in the course of carrying on a financial services business did engage in dishonest conduct in relation to financial services knowing that conduct to be dishonest. 22It is to be observed that, with the exception of the date, the charges are in identical terms. The facts and circumstances, to which I will come, are quite different. 23Mr Richard has also admitted his guilt in respect of a further offence contrary to section 1041E(1) of the Corporations Act that: Between about 15 February 2006 and 30 September 2009 at Sydney in the state of New South Wales did make statements which were materially misleading, and known by him to be materially misleading, that were likely to induce persons in Australia to acquire financial products. He asks that this offence be taken into account pursuant to section 16BA of the Crimes Act in passing sentence on him for the first offence to which he has pleaded guilty. 24At the time that these offences were committed, each of them carried a penalty of a maximum term of imprisonment of five years and as well the possibility of a fine of up to $220,000. That is the maximum penalty which it is appropriate for me to consider. However, I note that since the time when these offences were committed, these penalties have been doubled by the Parliament, so that the maximum penalty for each offence is now 10 years imprisonment and a fine of up to $495,000: s 1311 Corporations Act and Schedule 3 of the Act. 25However, a sentence of imprisonment is not to be imposed unless I am satisfied "... that no other sentence is appropriate in the circumstances" : s 17A(1) of the Crimes Act .

The Facts 26The evidence included a lengthy 32 page Statement of Facts. The findings which follow are a summary of those complex facts. Although I have provided only a summary of the facts in this judgment, I have had careful regard to the whole of the Statement of Facts, which I find are the facts which form the basis of the sentences to be imposed. 27Mr Richard is a Canadian national, resident in Australia. At all relevant times, he was carrying on financial services business in this jurisdiction within the terms of s 1041G for the Corporations Act . 28To understand the offences committed by Mr Richard, it is necessary to outline the framework of corporate and managed funds entities within which these offences occurred. This framework consisted of numerous holding and subsidiary companies, often changing names, traversing international jurisdictions beyond Australia, including the United States of America and those within Asia, the Caribbean and Pacific Islands. It is convenient to refer to the entire group as the Trio Capital Group. 29Only the key entities through which Mr Richard operated to commit the offences need to be described. A convenient starting point is the Astarra Strategic Fund ("ASF"), as the dishonest conduct of Mr Richard relates to transactions that all have their genesis in ASF. 30ASF was a managed investment fund, registered with ASIC, which was wound up by the Court on 19 March 2010. 31The responsible entity for ASF was Trio Capital Ltd ("Trio"). Trio was also the responsible entity for other managed investment schemes and, as well, the trustee for five superannuation entities (collectively the "Trio Managed Funds"). Mr Richard was, at various times, a director and the responsible officer and agent of Trio. Mr Richard was a director of Trio's immediate holding company, Astarra Funds Management Pty Ltd ("AFM"). At all relevant times, Mr Richard falsely represented that he was a director and owner of Trio's ultimate holding company. Trio was put into liquidation on 22 June 2010. 32The investment manager of ASF, via agreements with Trio, was Astarra Asset Management Pty Ltd ("AAM"). Mr Richard was a director of AAM. In addition, AAM was an authorised representative of Trio and Wright Global Investments Pty Ltd ("WGI"). I have already described Mr Richard's relationship with Trio. With respect to WGI, he was a director and the responsible officer. Mr Richard also falsely represented that he was a director and owner of AAM and WGI's ultimate holding companies. AAM was wound up on 22 December 2009. 33EMA International Ltd ("EMA") was a special purpose vehicle established to facilitate investments by ASF in funds offshore. Mr Richard was in control of EMA. 34It is admitted by Mr Richard that he represented himself to investors as being the controller of Trio, WGI and AAM, in circumstances where Mr Richard was aware that these representations were false. The representation was false because at all times after July 2004, Mr Richard knew that Mr Jack Flader, a US citizen based in Hong Kong, was the ultimate controller of these entities and the business of the Trio Capital Group. 35Mr Richard used his positions with respect to AAM, Trio, WGI and AFM to arrange the transfer of Australian investors' monies from Trio Managed Funds in Australia, to overseas funds controlled by Flader ("Flader Controlled Funds"). The money was subsequently used to purchase shares in US companies at inflated prices, from foreign companies controlled by Flader ("Flader Vendor Companies"). The inflated share prices realised significant profits for the Flader Vendor Companies. 36The shares which were purchased were themselves only quoted on the Over-the-Counter Bulletin Board as unregulated US equity securities. This meant that they were vulnerable to share price manipulation, and often, there was only restricted stock available for trading. 37From November 2006, when the directors of Trio became concerned and decided to cease its exposure to a particular Flader Controlled Fund (the Exploration Fund), Mr Richard participated in the creation of new offshore funds for Trio to invest in, all of which were controlled by Flader. He falsely represented to Trio and ASF investors that he was diversifying the portfolio to different investment managers from the original Flader Controlled Funds. 38The GSCL Group, of which Mr Flader was the Chief Executive Officer and Chairman, was the custodian of the assets of the Flader Controlled Funds at all material times. In addition, the GCSL Group, provided administration services to EMA. 39The only monies invested into the Flader Controlled Funds were those from the Trio Managed Funds, with two exceptions. The Australasian Conference Association Superannuation Trust and the Australian Baseball Federation Inc. directly invested in one of the Flader Controlled Funds. 40A large proportion of profits received by the Flader Vendor Companies, from the sale of shares purchased from Australian investors' monies deposited into the Flader Controlled Funds, were subsequently used to provide funds to Trio, WGI, AFM and AAM, by way of loans from other companies controlled by Flader ("Flader Funding Companies"). Mr Richard falsely represented to auditors of Trio, WGI, AFM and AAM that he controlled these funding companies. 41Mr Richard did not disclose to, and took steps to actively conceal from, Trio or investors in Trio Managed Funds, his relationship with Mr Flader, the existence of the interrelated network of companies and investment funds and his personal financial advantage from the activities of the Trio Capital Group. 42Furthermore, the non-equity investments that contributed a substantial portion of the value of the Flader Controlled Funds were also problematic. Between at least April 2007 to 5 October 2009, Mr Richard was aware that the financial instruments setting up the derivatives, foreign exchange agreements and fixed interest investments had not been verified regarding their execution, ability of counterparties to honour the obligations nor their independent value. This was largely due to the fact that they were also obtained from Flader companies. 43Against this general description of the companies in the Trio Capital Group and the nature of the transactions, it is appropriate to now examine the particular facts which relate to the charges. The facts forming the basis of the specific charges are as follows.

Charge One 44Charge One refers to dishonest conduct by Mr Richard whereby on two separate occasions he arranged for over $16.2m of ASF and superannuation monies to be paid into Flader Controlled Funds, in circumstances where AAM received payments of over $5.3m to further the scheme, and Mr Richard personally received payments of over $1.3m. 45The liquidators of ASF have not been unable to recover any of the monies from Trio Managed Funds that were invested in the Flader Controlled Funds. 46There are two discrete sets of facts and circumstances relied upon by the Crown, to prove this charge. They are both admitted by Mr Richard. Circumstance A (15 November 2005 - 14 December 2005) : 47Mr Richard, as agent for Trio and director of AAM and WGI, arranged for ASF and Astarra Superannuation Plan to invest $3m and $3.559m respectively, in shares in a Flader Controlled Fund namely, the Exploration Fund. Trio was trustee of the Astarra Superannuation Plan, and had appointed WGI as its investment manager. The Exploration Fund purchased shares in Yarraman Winery Inc from Flader Vendor Companies. From the $6.559m of funds, $817,580 was transferred to a bank account located in Curacao, in the Netherlands Antilles, from which Mr Richard benefited personally.

Circumstance B (1 July 2008 - 30 June 2009) : 48Mr Richard, by using his positions at Trio and AAM, arranged for ASF to transfer $9.65m to purchase shares in new Flader Controlled Funds. He used EMA as the vehicle to effect this transfer. From this money, AAM received $5,356,541 and transferred to Mr Richard $252,794 for his own personal benefit. These monies were paid into a bank account in Liechtenstein maintained by Mr Richard.

Charge Two 49Charge Two refers to dishonest conduct of Mr Richards which relates to $10.4m of ASF funds invested into Flader Controlled Funds, in circumstances where Mr Richard knew that over $9.7m of those monies was to be used to purchase the assets of, or shares in, the Exploration Fund that were not otherwise convertible to cash. 50It is not said that Mr Richard received any direct financial benefit from these transactions. 51There are five separate sets of facts and circumstances relied upon by the Crown.

Circumstances A and C (8 October- 19 December 2007, 22 May - 18 June 2008) : 52Mr Richard, using his positions at Trio and AAM, arranged for ASF to enter five agreements investing a total of $6 million in new Flader Controlled Funds, via EMA. The money received was used by these funds to purchase shares from the Exploration Fund thereby providing liquidity to the Exploration Fund which used the money to fulfil the requested redemptions of the direct deposit made by the Australasian Conference Association Superannuation Trust and also by the ARP Growth Fund.

Circumstance B (30 November - 14 December 2007) : 53Mr Richard's dishonest conduct involved a false representation to the trustee of the Australasian Conference Association Superannuation Trust that the redemption value of its investment, as at 30 November 2007, was $982,899 less than the value of the investment as reflected in the internal records of the Exploration Fund. In other words, he lied to the Trustee so that the full amount of the investment was not returned to it, and almost $1m, to which it was not entitled, was kept by the Exploration Fund.

Circumstance D (28 August 2008 - 31 March 2009) : 54Similar to circumstances A and C, Mr Richard arranged for ASF to purchase shares in the Exploration Fund, on 10 occasions, to the value of $4.43m. The transactions facilitated ARP Growth's Fund requested redemptions, which were not otherwise possible due to the Exploration Fund's significantly overpriced shares that were not convertible to cash if not purchased by ASF. Circumstance E (1 November 2006 - 30 September 2009) : 55Mr Richard arranged for ASF to enter 36 agreements via EMA, to the value of $34.9m, with the reference assets being shares in new Flader Controlled Funds. As previously described, these new funds were created by Mr Richard's dishonest conduct, after Trio's investment committee had placed a ban on further investment in the Exploration Fund and were falsely represented to be a diversification within ASF's investments.

Charge to be taken into account - False Statements in contravention of s 1041E of the Corporations Act 2001 (Cth). Circumstance A (10 April 2007 - 30 September 2009) : 56Mr Richard made misleading statements by over-inflating the value of ASF's agreements with EMA, that were included in valuation statements to Trio, with the added likely effect of inducing Trio to enter more such agreements. Circumstance B (15 February 2006 - 31 August 2009) : 57Mr Richard made materially misleading statements in a Product Disclosure Statement for ASF and in questionnaire responses relating to ASF, aware that these statements were like to induce Australians to apply for financial products, namely units in ASF. The statements related to the investment selection process, due diligence and monitoring.

Seriousness of the Offences 58The Crown submitted that this was a case which indicated "...a very high degree of criminality not previously encountered by Australian Courts ." It also submitted that the criminality demonstrated that the case " ...approaches the very worst category of offences of their nature ." 59Mr Richard submitted that because it was an agreed fact that at all material times he had acted under the ultimate control and instruction of Mr Jack Flader, this was, whilst an example of serious criminality, not of the kind which the Crown submitted. 60Mr Richard submitted that the correct way to view the seriousness of the offence, and the true nature of his criminal conduct was to regard it as the same criminality throughout the period of almost four years, namely that Mr Richards dishonestly operated a single scheme which included a number of transactions. Senior Counsel who appeared for Mr Richard accepted that an adequate description of that scheme was that it was a scheme designed to divert Australian investors' money from superannuation and managed investment funds into overseas hedge funds contrary to the interest of the investors in return for significant undisclosed payments. 61It was argued that the seven separate episodes of criminal conduct referred to in the Statement of Facts were examples of this overall criminality. This it was said was the same criminality, and hence warranted the view that any sentence imposed for both offences warranted a substantial degree of concurrence. 62Both the Crown and Mr Richard's submissions accept that Mr Richard was involved in a single scheme over the almost four years of his work with the Trio Capital Group. Both seem to accept that the seven episodes relied upon are individual instances over the entire period of Mr Richard's involvement with Trio Capital. The charges are not said to be representative ones. 63It was put on behalf of Mr Richard that he was a nave and gullible personality who was " ripe for the picking ". I accept, as does the Statement of Facts, that Mr Flader was the architect and ultimate controller of the scheme. I would be prepared to accept that at the commencement of his employment with the Trio Capital Group, Mr Richard was somewhat nave and gullible. He seemed to have been gratified by the attention which he was being given and, also, by his rapid promotion within the Trio Capital Group to a position of power and importance. 64I am not satisfied however this remained the motivation throughout his time with the Trio Capital Group. The deceptions in which he engaged, knowing of the dishonesty of his conduct, seem to me to quickly tell against a nave, gullible man caught up, against his better judgment, in a dishonest scheme. His conduct bespeaks intentional and knowing participation in criminality over a long period for substantial personal gain. I am satisfied that this conduct was for nearly all of the four year period motivated simply by greed. 65It is appropriate to note some features which assist in the assessment of the nature and circumstances of the offences and the seriousness of the criminality involved. They include: (a)the period of time over which the criminality occurred was from November 2005 to September 2009, namely, three years and ten months. This is a lengthy period; (b)the sum of monies involved in the criminal offences, and which was ultimately lost to Australian investors was $26.6m made up of $16.2m reflected in Charge 1 and $10.4m reflected in Charge 2. This is a very, very substantial sum; (c)he knew, or else must have known, that his conduct would cause a loss to the Australian investors; (d)Mr Richard personally received, in addition to his net annual salary of $113,426, over $1.3m in payments. Astarra Asset Management, a company of which he was a director, received $5.3m. These payments provided significant personal benefits for Mr Richard. He concealed the $1.3m in overseas bank accounts; (e)it is an element of both of the offences to which Mr Richard has pleaded guilty, that he knew at the time that his conduct was dishonest. As well with respect to the further offence to be taken into account, he admits that he knew that the statements he was making were materially misleading at the time he made them; (f)because the two principal offences are rolled up charges, they each include more than one episode of criminal conduct. Necessarily, the criminality involved is greater than with a charge in which only one episode of criminal conduct is relied upon; (g)the role Mr Richard played in the offences was a pivotal one. Whilst he may not have been the ultimate controller, a role attributed to Mr Flader, he was the central figure in Australia, without whose participation these offences could not have occurred. He knew what was happening across all of the corporate entities involved; (h)the offences involved active concealment and misleading conduct on Mr Richard's part in order to disguise the true nature of the transaction, and the actual conduct which was occurring; (i)Mr Richard engaged in conduct amounting to systematic deception in order to conceal the receipt of funds by him, including using private email accounts and overseas bank accounts to facilitate the concealment of the receipt of his personal benefit; (j)Mr Richard's conduct involved a gross breach of trust in knowingly acting contrary to the interests of corporations of which he was a director and officer which were entitled to have his complete attention; (k)he was motivated by greed, and could, had he so chosen, have withdrawn from his participation in the scheme at any time, or else reported it to the authorities, but he elected to continue with his dishonest conduct. 66I regard the criminality as very serious indeed. Whilst I am not prepared to say it is an example of the most serious criminal conduct which offences of this kind encompass, it is nevertheless very serious. I would place it as nearing that upper range of criminality for both of the offences. 67In forming this opinion, I have also had regard to the conduct underlying the offence against s 1041E (1) which I am asked to take into account when considering the first charge.

The victims of the offences: s 16A(2)(d) Crimes Act 1914 68The material tendered by the Crown did not establish the identity of any of the victims of the offences of Mr Richard. Obviously, it can be said that those who invested in one or other of the superannuation funds of the Trio Capital Group who were promoted and run by Mr Richard were victims. However, no individual detail of the personal circumstances of those investors is provided. 69Exhibit D, a media release dated 13 April 2011 from the Assistant Treasurer and Minister for Financial Services and Superannuation, the Honourable Bill Shorten MP, provides some indication of the number of victims when it says this: "Over 5,000 victims of fraud from the collapse of Trio Capital Limited (Trio) will be compensated for their loss, following a Government decision announced today. ...Bill Shorten today announced his decision to provide a grant of approximately $55 million in financial assistance to benefit the members of four superannuation funds that were formerly under the trusteeship of Trio. 'Investors in APRA [Australian Prudential Regulation Authority] regulated funds deserve to be compensated by the Government when they lose their investments through fraud or other malfeasance by super fund trustees. I'm very pleased to be able to offer Trio investors this compensation' Mr Shorten said. ...The grant of financial assistance will be recovered by way of a levy on regulated superannuation funds under the Superannuation (Financial Assistance Funding) Levy Act 1993." 70It is immediately obvious by reference to the $55m figure stated, that the Media Release extends to cover losses greater than those involved in the offences to which Mr Richard has pleaded guilty. I note, for more abundant caution, that this sentence does not relate to the larger sum of money referred to by Mr Shorten, but rather the sum of $26.6m set out in the Statement of Facts. 71It is also appropriate to note that funds lost as a consequence of Mr Richard's conduct included those invested by members in superannuation funds. Superannuation monies represent an important and significant element in the financial system in Australia and in ensuring its economic and financial stability. Superannuation monies represent the savings of individual members of the community which are intended to provide a secure retirement fund. The need for honesty is dealing with superannuation funds is self-evident. 72The Crown in its submissions noted that other investors, including investors and self-managed superannuation funds would not be eligible to participate in the compensation package offered. It submitted that this result was dictated by the terms of the legislation. 73It is notorious that most self-managed superannuation funds are small and less able to absorb investment losses, when compared with large funds of the kind regulated by APRA, which are more likely to have access to high quality advice, to have a portfolio of diversified investments and to have sophisticated oversight from APRA. Hence, large regulated funds are more likely to be able to more readily resist and to recover from lost investments. 74The terms of the financial assistance grant announced by the Commonwealth Government means that, if there are individual investors or else self-managed superannuation funds who are victims of Mr Richard's conduct, they will be required to bear the losses themselves. 75However, I am quite uncertain as to the detail of any of these victims who are not to be compensated by the Commonwealth Government and find myself unable on the present state of the evidence to make any specific finding about the personal circumstances of any victim of the offence. 76The material tendered by Mr Richard indicates that there are 123 investors in the ASF, for whom a firm of solicitors act, who are contemplating bringing legal proceedings to recover their losses. Again, the identity of the individual investors is not made clear. This material provides a part of the picture, but it is an inadequate basis without more, upon which to base any findings.

Any injury, loss or damage resulting from the offence: s 16A(2)(e) Crimes Act 1914 77As I have indicated earlier, I am satisfied that the losses involved in the offences amounted to $26.2m. This is a very large sum of money. 78The liquidator of the various companies and funds within the Trio Capital Group have not been able to recover any of the funds which were dealt with by the conduct which is the subject of the charges.

Contrition: s 16A(2)(f) Crimes Act 1914 79I am obliged to have regard to, and take into account, the degree to which Mr Richard has shown contrition for the offence, including whether he has taken action to make reparation for any injury, loss or damage resulting from the offence. 80I am satisfied that Mr Richard has shown significant contrition for the offence. 81I have come to this conclusion based upon the following facts and matters: (a)his plea of guilty to the offences which was entered at the first available opportunity, and the fact that he made admissions to ASIC before he was charged; (b)the fact that he has given assistance to ASIC with respect to the affairs of the Trio Capital Group. The details of his assistance can be found in Exhibit B (a confidential exhibit); (c)his conduct in assisting Mr Roderick Mackay Sutherland, a trustee of his bankrupt estate, in particular by providing access to Liechtenstein banking documents and details of a loan to his parents, part of which was recovered satisfactorily by the liquidator; (d)he has provided assistance to other investors and bodies who have claims against Trio Capital. The details of this are to be found in Exhibit 1 and need not be recounted in full; (e)he has expressed his considerable regret and remorse for his offending behaviour to a number of people, including W John Taylor, a forensic psychologist, Mr Stephen Kleboe, the Probation and Parole officer who prepared a pre-sentence report, Mr Nicholas Polin, a barrister who had developed a social friendship with Mr Richard, and a number of other friends and acquaintances who have provided references. 82Whilst he has not taken any specific action to make reparation for the particular loss resulting from the offence, he has helped in other ways with the broader affairs of Trio Capital, which I am satisfied demonstrates his contrition.

Pleas of guilty: s 16A(2)(g) Crimes Act 1914 83It is clear that the pleas of guilty to the offences that Mr Richard has entered have a real utilitarian value. 84A plea of guilty is relevant for a court to consider in determining the appropriate sentence to be imposed because such a plea saves the community a considerable amount of time and money, which contested committal hearings and trials would have involved. It is a substantial facilitation of the course of justice. Particularly when a plea is entered at the earliest opportunity, as it was here, the saving to the state and the facilitation of the course of justice is well recognised. 85Whilst ASIC had conducted resource intensive enquiries in the months leading up to the offer of assistance by Mr Richard which ultimately resulted in the provision of the Statement of Facts (Exhibit A), the Crown concedes that ASIC would have had to expend further significant time and resources seeking to gather independent admissible evidence, including evidence from uncooperative witnesses from numerous overseas jurisdictions. The Crown accepts that the cooperation provided by Mr Richard was valuable to ASIC in bringing this matter to an early resolution, thus freeing up ASIC resources to be utilised for other investigations. 86I propose to allow a discount of 25% with respect to any sentence which would otherwise be imposed to reflect Mr Richard's pleas of guilty, and the substantial facilitation of the course of justice, reflected by his conduct.

Cooperation with law enforcement agencies: s 16A(2)(h) Crimes Act 1914 87The details of cooperation by Mr Richard with ASIC are contained in Exhibit B. They are confidential and do not need to be discussed in this judgment. I assess them as significant and of value. I will allow an additional discount of 12.5% to reflect that assistance and the consequences that flow from it. That allowance is an additional one half of the discount allowed for the utilitarian value of the pleas of guilty. 88No application was made for a determination of the kind set out in s 21E(1) of the Crimes Act with respect to future assistance. No part of the discount, which I have just described, relates to future assistance.

Deterrence 89I earlier remarked upon the purpose of general deterrence and the fact that it is a relevant consideration. 90In crimes of this kind, white collar crimes, the element of general deterrence is especially important because "...of the need to mark out plainly to others who might be minded to breach their professional or related obligations that such conduct will generally merit, in appropriate cases, condign punishment." R v Rivkin (2003) 198 ALR 400 at [44] per Whealy J. 91In R v Pantano (1990) 49 A Crim R 328 at 330, Wood J (Carruthers J agreeing) said: "...those involved in serious white collar crime must expect condign sentences. The commercial world expects executives and employees in positions of trust, no matter how young they may be, to conform to exacting standard of honesty. It is impossible to be unmindful of the difficulty of detecting sophisticated crime of the kind here involved, or of the possibility for substantial financial loss by the public. Executives and trusted employees who give way to temptation cannot pass the blame to lax security on the part of management. The element of general deterrence is an important element of sentencing for such offences: Glenister [1980] 2 NSWLR 597." 92Remarks to similar effect can be found in other cases including R v Doff [2005] NSWCCA 119 per Wood CJ at CL, Adams and Bell JJ at [56]; Higgins v Regina [2006] NSWCCA 38 at [13] per Spigelman CJ (Barr and Howie JJ agreeing); R v Howard [2003] NSWSC 1248 at [47] per Kirby J; R v Corner (NSWCCA, 19 December 1997, unreported) per Powell, Beazley JJA and Sperling J; R v Williams [2005] NSWSC 315 per Wood CJ at CL at [44]-[48] and Director of Public Prosecutions v Bulfin [1998] 4 VR 114 at 131-132. 93General deterrence must loom large in any sentence which is imposed in this matter. 94Specific deterrence is something to which attention must also be paid: s 16A(2)(j) of the Crimes Act . The evidence satisfies me, as is often the case in white-collar crimes, that Mr Richard is unlikely to offend again. That is for a number of reasons including, but not limited to, the enforceable undertaking which he has entered into with ASIC (Ex C), the fact that he was of prior good character and has expressed contrition and remorse for the offences and the fact that such reputation as he had in the commercial community has been destroyed. 95This conclusion is confirmed by the expert reports of Mr W John Taylor, a forensic psychologist who formed the view that Mr Richard had a low risk of re-offending and had good prospects of rehabilitation. 96Specific deterrence does not loom large and requires little, if any, weight in the sentencing process in this case.

The need to ensure that punishment is adequate for the offence: s 16A(2)(k) Crimes Act 1914 97The Court is required to ensure that the punishment is adequate for the offence. 98This is a brief legislative reference to one of the key principles of sentencing, namely the totality principle. 99The practical expression of the totality principle which has been cited with approval is that of Lord Widgery CJ in Regina v Faulkner (1972) 56 Cr.App.R. 594 at 596 where his Lordship used this language: "[A]t the end of the day, as one always must, one looks at the totality and asks whether it was too much." 100The obligation on the Court to consider the principle of totality as part of approaching the sentencing of a federal offender is clear: see Johnson v The Queen (2004) 78 ALJR 616 at 622 [15] per Gummow, Callinan and Heydon JJ; Hili v The Queen [2010] HCA 45 at [25] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 101The practical application of the principle in cases involving more than one charge and sentence, such as this one, is demonstrated by what the High Court of Australia said in Mill v the Queen [1998] 166 CLR 59 at 63: "Where the principle falls to be applied in relation to sentences of imprisonment imposed by a single sentencing court, an appropriate result may be achieved either by making sentences wholly or partially concurrent or by lowering the individual sentences below what would otherwise be appropriate in order to reflect the fact that a number of sentences are being imposed. Where practicable, the former is to be preferred." 102In considering this issue, it is also necessary to say something about the use, in this case, of what are called " rolled up charges ". 103As I have earlier explained in these remarks, underlying each of the charges are a number of different episodes of conduct, each of which is in breach of the legislation. 104Rolled up charges can be brought by the Crown only where there is agreement with the offender and when there is a plea of guilty. If either (or both) of these elements were missing, the charges presently before the Court would be bad for duplicity and would be liable to be struck down. 105The use of rolled up charges by the Crown is a matter of considerable advantage to an offender: R v Jones [2004] VSCA 68 at [13] per Charles JA (Phillips JA and Bongiorno AJA agreeing). The advantage to the offender is that the use of a rolled up charge restricts the maximum available sentence to that prescribed by the legislation for the single offence, rather than the total theoretically available maximum sentence from multiple charges. 106In this case, the Crown submitted that there was a public interest in presenting rolled up charges. It said that rolled up charges encouraged pleas of guilty and made more efficient the discharge of the Court's workload. It also submitted that presenting the indictment with two rolled charges provided an appropriate available maximum sentence which sufficiently reflected the underlying criminality of Mr Richard's criminal conduct. 107I acknowledge, as did Charles JA in Jones that a rolled up count can ease the task of a sentencing judge. It does so by limiting the number of separate charges upon which a sentence is necessary and, as a result, limits the range of sentences available. 108The other reason that there is a benefit to an offender who pleads guilty to a rolled up charge is that, as only one sentence is imposed for all of the episodes of criminality, the sentence in effect represents a complete concurrence of separate sentences which might otherwise have been imposed for those separate episodes of criminality. 109The fact that here the charges are rolled up charges is a relevant matter to which regard must be had in considering the principle of totality and, in particular, questions of concurrence and accumulation of the sentences to be imposed on the individual charges.

Subjective features of Mr Richard: s 16A(2)(m) and s 16A(2)(n) Crimes Act 1914 110I need to have regard to the character, antecedents, age, physical and mental condition of Mr Richard and the prospect of his rehabilitation. Mr Richard gave no evidence on his plea about these matters or at all. However, a considerable amount of material was tendered including expert reports and letters of reference. I have had regard to, and been informed by, that material in expressing the conclusions which follow. 111Mr Richard at the time of sentencing is 36 years of age. He is single. He is a native of Canada where his parents and sister reside. He has no family in Australia. 112He was raised in a stable family and was close to both his parents. He left school at the age of 18 years having completed 12 years of education. He attended university and studied for two years towards a Bachelor of Administration. He did not complete that course. 113He has a satisfactory history of past employment. He left home at the age of 22 when he came to Australia on a holiday in 1997. In February 1998 he went to Taiwan where he stayed for a couple of years and then ultimately returned to Australia. 114He came to Australia in 2002 for the purpose of working in the Trio Capital Group. He is a permanent resident of Australia. He has made friends with people in Australia but is not in any permanent relationship. He will have some, but not much, support whilst in custody. 115In January 2011, Mr Richard was made a bankrupt. 116He has not committed any previous criminal offences. The Crown accepts, as do I, that prior to his involvement with the Trio Capital Group, he was a man of good character. 117The expert evidence of Mr W John Taylor, which I accept, is that he has a low potential for re-offending and has good prospects for rehabilitation. 118However, in the area of white collar crimes many offenders are in a like position, namely that the crime is their first offence, they are otherwise of good character and are unlikely to re-offend and have good prospects of rehabilitation in the present circumstances. Whilst each of these considerations, which are particular to Mr Richard, is entitled to some weight, they do not deserve much weight.

Section 17A Crimes Act 1914 119If a sentence of imprisonment is to be imposed, then I need to be satisfied that such a sentence is the only appropriate sentence. 120There are four matters which I consider require a conclusion that a sentence of imprisonment is the only appropriate sentence: (a)The circumstances of the offence and the seriousness of the criminality involved - as I have explained in [ REF _Ref300838417 \r \h It is appropriate to note some features which assist in the assessment of the nature and circumstances of the offences and the seriousness of the criminality involved. They include: ] above, each of the elements there described demonstrate a high degree of criminality; (b)The number of offences and their nature - although there are only two offences against s 1041G of the Corporations Act , these are rolled up offences and seven episodes of criminality are involved. The additional charge needs also to be included in this assessment. As well, the law regards an offence against s 1041G as a serious one; (c)Importance of general deterrence for white collar crimes - as the authorities demonstrate, general deterrence is an important factor. The "real bite" of general deterrence only takes hold when a custodial sentence is imposed; R v Boulden [2006] NSWSC 1274 per Whealy J at [51]; Braun v R [2008] NSWCCA 269 at [85] per Hall J (McClellan CJ at CL, Harrison J agreeing); (d)Personal circumstances - there is nothing about Mr Richard's personal circumstances which are fully described in [ REF _Ref300838479 \r \h I need to have regard to the character, antecedents, age, physical and mental condition of Mr Richard and the prospect of his rehabilitation. Mr Richard gave no evidence on his plea about these matters or at all. ]-[ REF _Ref300838486 \r \h However, in the area of white collar crimes many offenders are in a like position, namely that the crime is their first offence, they are otherwise of good character and are unlikely to re-offend and have good prospects of rehabilitation in the present circumstances. Whilst each of these considerations, which are particular to Mr Richard, is entitled to some weight, they do not deserve much weight. ] above which would make a sentence of imprisonment inappropriate. For these reasons I am satisfied that nothing less than a sentence of imprisonment would be sufficient in this case. 121Counsel for Mr Richard did not make a submission to the contrary of this.

Sentence 122Mr Richard is guilty of serious crimes of a high order. They were carefully considered and planned, they were concealed, they continued over a period of nearly four years and they led to significant financial losses in excess of $26m. Mr Richard knew that what he was doing was dishonest, that he was providing misleading information to those entitled to accurate information and that in respect of the criminality encompassed by Charge One, he received over $1m personally, which was a very significant personal benefit. 123The maximum sentence provided by the legislation in respect of each count is five years. 124On Charge One, a sentence of four years imprisonment would reflect the serious criminality of the offence and the subjective circumstances of Mr Richard. This is a sentence which equates to 80% of the maximum available. 125But Mr Richard is entitled to a discount because of the utilitarian value of his plea of guilty and because of the assistance that he has provided to authorities. Applying the discount of 37.5%, the result is a reduction of 18 months so that the appropriate sentence is one of two and a half years imprisonment. 126On Charge Two, I assess the seriousness of the criminality involved and the subjective circumstances of Mr Richard as being of the same extent as in Charge One. The same sentence is warranted. 127The appropriate sentence on Charge Two would also be four years. Again, applying the discount for the utilitarian value of his plea of guilty and because of the assistance that he has provided to authorities, the resulting appropriate sentence is two and a half years. 128I turn next to considering the principle of totality. The two offences have significant common elements. The corporate structure, context and environment were the same. The method of carrying out the offence involved similar features. However, the matters are not identical. Some measure of accumulation is appropriate, but I do not agree that the sentences ought to be completely or very largely concurrent. This would not adequately reflect the totality of the criminality involved. It would also not reflect the fact that the rolled up charges include a significant measure of concurrency. 129I will allow one half of the first sentence as the appropriate extent of accumulation. Accordingly, the sentence for the second offence will commence 15 months after the start of the first sentence. 130This means that the overall period of the two sentences will be a total of 3 years and 9 months imprisonment. 131I am required to determine how much of this sentence Mr Richard will spend in custody and how much, if any, will be subject to a non-parole order or a recognizance release order (s 19AB Crimes Act ). 132In considering whether to fix, and if so what, period is to be served in custody before either a parole period is able to begin, or else when a recognizance release order should be made to operate from, there is no fixed rule or formula: Hili v The Queen [2010] HCA 45. 133What is necessary is to have regard to Part 1B of the Crimes Act , and to fix a sentence which is of appropriate severity to reflect the crime involved. The sentences which are imposed must have a deterrent and a punitive effect: Hili at [63]; R v Ruha [2010] QCA 10 at [45]. 134At the request of the Crown and Mr Richard, in light of the evidence in the confidential exhibits, I will recommend to the Corrective Service authorities that the custodial part of the sentence which I impose be served by Mr Richard in protection in the special management area. In fixing the period Mr Richard will spend in custody, I will take into account the fact that his term of imprisonment will be more restricted and more difficult than if he were not so confined. 135Looking at the overall degree of criminality and having regard to all other relevant matters, I am satisfied that an appropriate period for Mr Richard to spend in custody before being released pursuant to a recognizance release order is two years and six months.

Orders 136Mr Richard: (a)On Charge One: I sentence you to a term of imprisonment for two years and six months commencing on 22 July 2011 and concluding on 21 January 2014. (b)On Charge Two: I sentence you to a term of imprisonment of two years and six months commencing on 22 October 2012 and concluding on 21 April 2015. (c)I recommend to the prison authorities that you be placed in protection in the special management area within the prison system. (d)I order that you be released upon entering into a recognizance to be of good behaviour after you have served two years and six months, namely on 21 January 2014.

Explanation 137Section 16F(2) of the Crimes Act requires me to give an explanation of the purpose and consequence of making the recognizance release order. Here is that explanation: (a)The sentences which I have imposed require that you serve a period in custody of two and a half years and then a further period of one year and three months in the community which is the balance of the whole of the sentences; (b)The order is subject to the condition that you be of good behaviour during this period of fifteen months whilst your liberty is subject to the order; (c)If you are not, without reasonable excuse, of good behaviour, you will be in breach of the order and you will likely be returned to custody for the remainder of your sentence; (d)The recognizance may be discharged or varied under s 20AA of the Crimes Act .

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 August 2011