Court of Appeal (Vic)|2010-10-19|Before: NETTLE and HARPER JJA and T FORREST AJA

Yusuf v The Queen [2010] VSCA 266 (19 October 2010)

1 This is an appeal from a total effective sentence of sentence of 12 years' imprisonment with a non-parole period of nine years imposed on the appellant on pleading guilty to 107 counts of obtaining property by deception and 19 counts of obtaining financial advantage by deception. By his offending he defrauded 109 members of the public of a total of $7,297,400, of which only $1,728,648 was recovered.

2 As appears from the judge's sentencing remarks, the appellant left school after Year 10 and to begin with was unemployed. He then obtained jobs in a friend's takeaway shop and later in his father's cabinet-making business. He married in 1992 and worked as a cleaner and a printer's assistant, and then in his own cabinet-making business. That business failed and ceased operation in 2000. In March 2001 he changed his name to Omar Jihad Yusuf after the dissolution of his parents' marriage. For a time, he worked as a shop-fitter and then, through a friend, he became involved in the transport industry.

3 He obtained a job as a sub-contractor driving a delivery truck for a transport company known as Transnet. That company assisted him to purchase a truck and he registered his own business under the name of On The Go Transport. He conducted it through a similarly named company ('OTG'). As time went on, he registered a series of further companies with names indicative of involvement in the transport industry, property investment, shop-fitting, and sports clothing businesses. The appellant was the sole director of each of those companies.

4 During the period 2002-2003 he developed a 'core business strategy' which involved raising capital from members of the public for the purported purpose of purchasing trucks. The scheme typically sought investment by way of loan of $36,000 secured by a 49% interest in a 12 tonne 'tautliner' truck. Under the terms of the supposed investment, OTG was to retain a 51% interest in the truck and was responsible for securing delivery contracts for the truck, hiring drivers and seeing to the maintenance of the truck. Each truck was said to have a value of $100,000. Investors were promised a return of $2,000 per month over a five year period and 49% of the truck's depreciated value after five years, estimated to be $33,000.

5 The scheme proved very attractive to members of the public and, with increasing investments, the appellant grew the apparent scale of the business by moving it from modest premises to 101 Collins St and employing a number of staff. Employees and investor clients were paid $200 per month 'spotter' fees for the duration of each contract with any new client they introduced to the business. The appellant thus created a cascading sequence of investments. He also encouraged investment by the use of elaborate formal documentation, including prospectuses, letters soliciting investment and loan agreements. Agreements were signed by some 131 investors in respect of 262 transactions.

6 By each purported loan agreement, OTG warranted that moneys advanced by the investor would be used wholly and exclusively to purchase commercial vehicles for use in OTG's transport business, and that the vehicles would be purchased outright and would not be subject to a lease agreement, hire purchase agreement or like encumbrance.

7 The appellant operated two bank accounts for the purposes of OTG's business. The first was a Business Cheque Plus account, number 278590, with the Bank of Melbourne. The appellant was the sole signatory to that account and used it to receive investors' moneys and, during the period between July 2003 and March 2005, he deposited a total of $9,257,600 of investors' moneys into the account. Of those funds $1,045,245 was used to purchase trucks and $2,612,174 was used to make monthly payments to investors. Otherwise, amongst other expenditure, $1,331,400 was paid to the appellant's personal accounts; $907,291 was paid out to unidentified persons; $521,133 was spent on wages; $459,235 was spent on loans; $393,300 was paid to cash; $366,000 was placed on term deposit; $271,619 was paid in travel expenses; $225,000 was paid for a Ferrari; $196,500 was paid for a BMW; $175,000 was paid to Yusuf Holdings - China Pty Ltd, a holding company controlled by the appellant; $147,270 was paid to Islamic organisations; $139,000 was paid for a Mercedes Benz; $123,452 was spent on office rent; $100,000 was spent on donations; $77,138 was paid to a pharmaceutical company; and $55,000 was spent on racehorses.

8 The second account (referred to in the documentation as 'OTG Trucks Account 9686') was credited between October 2004 and April 2005 with $890,050, of which $311,780 represented operating revenue and $530,000 represented the proceeds of sales of trucks during March 2005. During the same period: $297,020 was paid to the appellant's personal accounts; $200,000 was paid into his wife's bank account; $93,000 was withdrawn as cash; and $20,000 was paid for travel expenses.

9 In effect, the bulk of both companies' expenditure was for the appellant's personal purposes.

10 During 2003 and 2004, OTG acquired 26 trucks. Of those, six were acquired pursuant to finance agreements with Esanda (and thus in breach of the warranties given to investors that the title would be preserved for their benefit). Excluding those trucks, only $1,045,243 was spent on the purchase of trucks, compared to the $9,257,605 received from investors supposedly for the sole purpose of purchasing trucks. The appellant amassed some $3.5 million of investors' money before any trucks were purchased.

11 During the life of the OTG business, the appellant undertook a series of deceptions to create and reinforce the impression that the business was one of substance. Among other steps, he assumed the title of 'Prince' and endorsed correspondence with that title. He registered some 13 companies to create the impression that he was operating a substantial group of businesses. He took on employees with relevant skills to set up oil deals and pharmaceutical deals, but did not proceed to conclude agreements when the proposed deals were presented to him. He instructed his accountant to draw up fictitious income tax returns, which were never lodged, to be shown to employees and investors to create the impression of substantial business income. He falsely assured employees and investors that moneys received under the core truck purchase scheme would be held in trust.

12 He also set up a web page in which he made extravagant claims as to the extent of his business and assets, and he ordered customised number plates from Vic Roads in a sequence which suggested a fleet of 98 vehicles. He provided Dunn & Bradstreet with false data as to motor vehicle assets, and as to a fictitious multi-billion dollar oil business, and he produced false bank statements and showed them to others for the same purpose. He acquired invoices for the purchase of a passenger ferry for $8 million and a jet plane for $37 million, which he did not own, and showed them to others as pretended proof of his ownership of those assets. He claimed to own islands off the Australian coast and he flaunted the use of expensive motor vehicles. He paid $20,000 to be the major sponsor of a business directory marketed to the Muslim community of Victoria and boasted falsely in a Muslim community newspaper of the state of his wealth and his contributions to charitable works. He sponsored the Australian Muslim Festival held at Broadmeadows and made extensive donations to Islamic charities.

13 Meanwhile, he spent hundreds of thousands of dollars on an extravagant lifestyle, involving first and business-class travel, luxury clothes, luxury accommodation and expensive entertainment and jewellery. He never paid income tax.

14 The fraud began to unravel in November 2004, when The Age newspaper published an article questioning the appellant's bona fides. It caused investors to question the state of the business. The appellant's response was to crank up the fraud another level, by sending to each investor a pretended proposed deed of settlement and a letter offering to terminate the investor's loan agreement and repay the investor's funds within 60 days of signature of the deed. Many investors signed and returned the deed which was sent to them, and waited for payment, but they received nothing.

15 Instead, the appellant exploited the two months' grace thereby obtained to close down the offices of OTG's business, ship all business furniture and equipment abroad, sell the OTG trucks and withdraw all remaining funds from the OTG accounts. In March 2005 he also shipped the entire contents of his home to Malaysia. He told employees that he was moving the business there because Australians were racist and jealous of his wealth. When the 20 trucks which were not the subject of finance arrangements were sold for $530,000, in what amounted to the final breach of the loan agreements, he caused the proceeds of those sales to be paid to himself and his wife and, in large part, sent those funds abroad beyond reach of recovery.

16 Due to the large number of counts, types of counts and varying amounts of money involved in counts, the sentencing exercise was unusually complex. The complexity was due in part to the fact that a significant number of counts were rolled-up counts, which embodied two or more offences, and a further significant number of counts were continuing criminal enterprise offence counts, which attracted a maximum penalty of twice the ordinary maximum penalty for the relevant offence.

17 In order, therefore, to deal with those complexities, the judge adopted a system of grouping various of the counts into categories and treating each count within a category in the same fashion. As the judge explained in his sentencing remarks, the scheme of his sentencing disposition was thus as follows:

• On each of counts 4 and 7, being rolled-up counts of three offences aggregating to $108,000 per count, to impose a sentence of three years' imprisonment ('the $100,000 rolled-up counts').

• On each of counts 13, 14, 18,[1] 20, 23, 60, 64, 69, 73, 78, 91, 92, 116, 117 and 125, being continuing criminal enterprise offence counts involving sums aggregating to more than $100,000 per count (the largest being $210,000 in the case of count 91), to impose a sentence of four years' imprisonment ('the $100,000 CCE counts').

• On each of counts 1, 3, 12, 17, 21, 45, 46, 48, 74 and 75, being rolled-up counts of between two and five offences aggregating to more than $50,000 per count, to impose a sentence of three years and six months' imprisonment ('the $50,000 rolled-up counts').

• On each of counts 8, 9, 15, 22, 27, 29, 31, 34 41, 47, 51, 52, 62, 63, 65, 71, 77, 79, 86, 90, 94, 95, 108, 111, 115, 118, 119 and 122, being continuing criminal enterprise offence counts involving sums aggregating to more than $50,000 but less than $100,000 per count, to impose a sentence of three years' imprisonment ('the $50,000 CCE counts').

• On each of counts 11, 24, 35, 36 39, 49, 50, 53, 54, 55, 59, 84 and 103, being rolled-up counts of two or three offences aggregating to less than $50,000 per count, to impose a sentence of 18 months' imprisonment ('the residual rolled-up counts').

• On each of counts 2, 5, 6, 10, 16, 19, 25, 26, 28, 30 32, 33, 37, 38, 40, 42, 43, 44, 56, 57, 58, 61, 66, 67, 68, 70, 72, 76, 80, 81, 82 83, 85, 87, 88, 89, 93, 96, 97, 98, 99, 100, 101, 102, 104, 105, 106, 107, 109, 110, 112, 113, 114, 120, 121, 123, 124 and 126, being individual counts involving less than $50,000 per count, to impose a sentence of one years' imprisonment ('the residual discrete counts').

18 As the judge then observed, because of the large number of individual sentences, it was not practicable to cumulate many without breaching the totality principle. Consequently, his Honour took the course of making limited representative orders for cumulation with the aim of achieving a total effective sentence consistent with the aggregate criminality of the offending. His Honour thus ordered that:

a) the sentences imposed with respect to the $100,000 CCE counts, other than count 91, be served concurrently with each other, and that two years of such sentences be served cumulatively upon the sentence imposed with respect to count 91;

b) the sentences imposed with respect to the $50,000 rolled-up counts be served concurrently with each other, and that two years of such sentences be served cumulatively upon the sentences imposed as above;

c) the sentences imposed with respect to the $50,000 CCE counts be served concurrently with each other, and that two years of such sentences be served cumulatively upon the sentences imposed as above;

d) the sentences imposed with respect to the residual rolled-up counts be served concurrently with each other, and that one year of such sentences be served cumulatively upon the sentences imposed as above; and

e) the sentences imposed with respect to the residual counts be served concurrently with each other, and that one year of such sentences be served cumulatively upon the sentences imposed as above.

19 There are three grounds of appeal, being: (1) alleged inconsistencies as between some of the individual sentences; (2) alleged error in approach to setting the non-parole period; and (3) manifest excessiveness. It is convenient to deal with them in that order.

20 The nub of Ground 1 is there are several inconsistencies between groups of sentences which bespeak error. They are:

• First, counts 4 and 7 were both rolled-up counts involving the receipt of three cheques aggregating to $108,000 per count, and attracted individual sentences of three years' imprisonment, whereas the $50,000 rolled-up counts attracted individual sentences of three years and six months' imprisonment and the amounts involved in each of those cases ranged between only $68,400 and $75,600.

• Secondly, the judge imposed a higher individual sentence of four years' imprisonment on each of the $100,000 CCE counts than the individual sentences of three years' imprisonment which he imposed on Counts 4 and 7 (being rolled-up counts involving $108,000 per count).

• Thirdly, most of the $50,000 CCE counts involved amounts of $72,000 and attracted individual sentences of three years' imprisonment, whereas most of the residual discrete offences involved amounts of $36,000 and yet attracted individual sentences of only one year's imprisonment. It was contended that, even allowing for the fact that a CCE offence attracts twice the usual maximum penalty, the disparity was too great.

• Fourthly, despite the fact that most of the $50,000 rolled-up counts involved amounts of $72,000 per count, they attracted individual sentences of three years and six months' imprisonment, whereas the $50,000 CCE counts attracted individual sentences of only three years' imprisonment (despite the fact that a CCE offence attracts twice the usual maximum penalty).

• Fifthly, although both the residual rolled-up counts and the residual discrete counts involved amounts of less than $50,000, the former attracted individual sentences of 18 months' imprisonment, while the latter attracted individual sentences of 12 months' imprisonment.

• Sixthly, in making orders as to cumulation, the judge treated Count 18 (being a rolled-up count embodying three offences aggregating to $144,000) as a CCE count attracting an individual sentence of four years' imprisonment, in contradistinction to the individual sentences of three years imposed on Counts 4 and 7 (being the other rolled-up counts in the same category as Count 18).

21 Some of those criticisms appear to be well founded. There is no obvious explanation for the fact that the bulk of the $50,000 rolled-up counts attracted individual sentences of three years and six months' imprisonment but the two rolled-up counts aggregating $108,000 per count attracted an individual sentence of only three years. There is also no obvious explanation for the fact that the CCE counts involving between $50,000 and $100,000 attracted individual sentences of three years' imprisonment while rolled-up counts involving similar amounts attracted individual sentences of three years and six months' imprisonment. It is plain enough, too, that the judge made a slip in describing Count 18 as a CCE count when it was in fact a rolled-up count - for as the judge had earlier noted in his sentencing remarks, it is not open to treat a rolled-up count as a CCE count.[2]

22 Other criticisms, however, are misplaced. There is logic in the judge's decision to impose individual sentences of 48 months' imprisonment on the CCE counts aggregating to more than $100,000 compared to the individual sentences of three years imposed on the rolled-up counts aggregating not more than $100,000. There is also nothing necessarily problematic about the judge's decision to impose a higher sentence of three years and six months' imprisonment on rolled-up counts involving more than $100,000 and three years' imprisonment for individual CCE counts involving amounts of more than $50,000, or about the judge's decision to

22 impose higher sentences on rolled-up counts involving less than $50,000 than for individual counts involving comparable amounts.

23 Moreover, in the scheme of things, such errors as there may be are relatively insignificant. They do not appear to have had any bearing on the total effective sentence or non-parole period. They are simply something for the appellant to seize upon to have this court examine his sentence afresh. If this were an appeal under s 278 of the Criminal Procedure Act 2009 that would not be so. It is only because the appeal is brought under s 568 of the Crimes Act 1958 that we are saddled with that consequence. The few errors which have been identified imply that 'a different order' should have been made in respect of at least some of the individual sentences. And in the way in which s 568(4) has been interpreted, the result is to 're-open the sentencing discretion'. Thus we are bound to approach the task afresh.

24 In the view which we take of Ground 1, Ground 2 may be of little consequence. It is premised on what was plainly a slip in expression on the part of the judge. In his sentencing remarks, his Honour stated that, because of the appellant's plea of guilty, it was appropriate to set a non-parole period representing a higher than usual proportion of the total effective sentence. Plainly, what his Honour intended to convey was that it was appropriate to set a non-parole period representing a lesser than usual proportion of the total effective sentence. There is no error in that.[3]

25 It was contended under Ground 3 that the individual sentences, total effective sentence and non-parole period were all manifestly excessive in view of the amounts of money involved, the appellant's lack of prior convictions, what was said to be his early plea of guilty and his remorse, the extended period of time which he spent remanded in custody awaiting trial, the fact that he is incarcerated in protective custody and it is probable that he will remain there indefinitely, his alleged vulnerability to depression, and the length of sentences imposed by this court in what are said to have been comparable cases.

26 We do not find any of that to be persuasive. The judge dealt with each of those considerations, other than the so-called comparable cases, in a fashion which we think to be compelling.

27 We agree with his Honour's conclusion that the amounts of money involved in this case and the way in which they were misappropriated required a rigorous sentence in order to provide the sort of general and specific deterrence and community protection which is needed. As his Honour explained:

The sentence I must impose must reflect the gravity of your conduct. A large number of the counts you face comprise rolled up counts arising out of repeat instances of fraudulent conduct in respect of invitations to invest.

In addition a large number of the counts also constitute continuing criminal enterprise offences for which the maximum penalty is 20 years imprisonment.

The penalties I impose must reflect the large total amount involved in your offences, the total number of your victims, the individual seriousness of the offences, the total number of those offences, the significant period of offending, the massive number of conscious criminal decisions made by you in the course of your fraudulent conduct, the charade of deception in which you engaged and the utilisation of so much of what you gained for personal purposes.

The reality is that viewed as a whole your offending was a connected continuing criminal enterprise engaged in over a period of several years and directed to the gaining and betrayal of the trust of many people for the purposes of your personal gain. Moreover many of these people were financially vulnerable. You were totally unscrupulous in the methods you used to gain their trust and descended to abusing association with your professed religious faith and with the ethnic community from which you came.

Not only is the scale of your offending a matter bearing on the culpability of your conduct, but its extent, rapacity and monetary significance raises substantial issues of general deterrence and of individual deterrence. It also in my view raises a serious question of protection of the public.

28 So far as the appellant's plea of guilty is concerned, we share the judge's view that, apart from its utilitarian benefit, such effect as it may have had in the sentencing synthesis is substantially if not wholly outweighed by the appellant's substantial lack of remorse and poor prospects of rehabilitation. With respect, we see no reason to disagree with the judge's conclusion that the appellant is lacking in true remorse and that his prospects of rehabilitation are doubtful. As his Honour explained:

You returned to this country only after you had been arrested for fraud in Malaysia. You were granted bail from that jurisdiction in respect of charges on which you ultimately face the threat of corporal punishment in addition to imprisonment. You breached an undertaking to return to that country and gave yourself up to the authorities here. The overwhelming inference is that you elected to face criminal proceedings in this country rather than to remain in Malaysia to face the charges then pending over there.

Further it is apparent that you did not feel any remorse at the time your fraudulent conduct was first brought to the public notice. Rather you elected to further deceive the investors in your schemes and to use the time obtained by reason of this deceit to clean out the assets which you had previously obtained by way of continuing fraud.

...

Both the question of specific deterrence and of protection of the public raise consideration of prospects of rehabilitation. I am not persuaded by the material advanced on behalf of you that these are particularly good. It is plain that your offending was the product of fundamental defects in your personality. I accept Mr Newton's opinion that there is a basis upon which you may gain greater insight into the nature and consequences of your behaviour. Nevertheless it seems to me that it cannot be said that your prospects of rehabilitation are such that this issue favours a materially reduced sentence.

29 Equally, as to the hardship of the appellant's continuing incarceration in protection, and his vulnerability to depression, we consider that the judge was plainly right that:

Ultimately it seems to me that I must balance your plea of guilty, your extended period on remand, your continuing incarceration in protective custody and your vulnerability to depression, on the one hand against on the other hand the need for denunciation of your conduct, the need to provide for appropriate punishment, general deterrence, specific deterrence and protection of the public.

30 In short, this was fraud writ large. It was constituted of 126 counts of deception practised over several years, taking almost $7.3 million and netting almost $5.6 million of the accumulated savings of 109 ordinary trusting people, of whom at least some have been left destitute as a consequence. According to ordinary conceptions of honesty or decency, the iniquity of the offending was palpable. It involved multi-layered, calculated breaches of trust practised over a period of years in order to feed the appellant's greed and quest for self-aggrandizement. Even when it became apparent that the appellant would be detected, and one might have expected that he would have been jolted into a sense of remorse and contrition, his only concern to was to put what remained of the dishonestly obtained moneys beyond the reach of those who were entitled to have them back, and thereby to increase the benefits which he and his family had already received at the expense of his victims. Even now, so far as appears, he has not made the slightest attempt to make any sort of reparation for what he stole. And while he returned to this country to face justice, it is to be inferred that the only reason he did so was to avoid a thrashing at the hands of authorities in Malaysia.

31 Nor do we consider that the so-called comparable cases are of much assistance either, because, in our view, none of them is comparable. The first is R v Fernandez,[4] in which the victim was the State Revenue Office and the amounts misappropriated totalled $10 million. Counsel stressed that the court there referred to the sentence of ten years' imprisonment with a non-parole period of seven years as a stern sentence. With respect, we do not think it was a stern sentence. Compared to the lengths of sentences now commonplace for spontaneous acts of violence the consequence of a few moments of drunken madness, a sentence of ten years' imprisonment for what was in effect a theft of $10 million was to be expected. In any event, the case is distinguishable on the basis that the continuing criminal enterprise offence provisions did not there apply.

32 The second case is R v Shannon,[5] which involved a fraud by way of sale of bogus raffle tickets totalling $7 million, which attracted a sentence of seven years and four months' imprisonment with a non-parole period of five years. That case, too, was a different case to this one. There were a very large number of tickets and the effects on each of the victims was correspondingly low. The offender was profoundly remorseful and thoroughly co-operated with police from the first moment the scam was detected. He was thought to have exceptional prospects of rehabilitation and it was that and his profound remorse which resulted in a merciful sentence.

33 The third case was R v Roussetty,[6] which involved a fraud totalling $15 million but with substantial repayments which reduced the victims' losses to $3.2 million. In contradistinction to this case, the appellant was profoundly remorseful, had made every effort to make restitution and had excellent prospects of rehabilitation. Even then, the sentence was 11 years and two months' imprisonment with a non-parole period of seven years.

34 In our view, the total effective sentence imposed and the non-parole period which the judge imposed in this case were within the range.

35 We turn then to the task of re-sentencing. The approach which we intend to adopt is as follows:

• For individual counts involving up to $10,000: six months' imprisonment;

• For individual counts involving between $10,001 and $20,000: nine months' imprisonment;

• For individual counts involving between $20,001 and $36,000: 12 months' imprisonment.

• For rolled-up counts involving up to $20,000: 12 months' imprisonment;

• For rolled-up counts involving between $20,001 and $50,000: 18 months' imprisonment;

• For rolled-up counts involving between $50,001 and $100,000: 24 months' imprisonment;

• For rolled-up counts involving between $100,001 and $140,000: 30 months' imprisonment;

• For rolled-up counts involving more than $140,000: 33 months' imprisonment.

• For CCE counts involving between $50,000 and $100,000: 30 months' imprisonment;

• For CCE counts involving between $100,001 and $140,000: 36 months' imprisonment;

• For CCE counts involving between $140,001 and $200,000: 42 months' imprisonment; and

• For CCE counts involving more than $200,000: 48 months' imprisonment.

36 Count 91 is the only count falling within the last category. We will, therefore, treat the sentence of 48 months' imprisonment imposed on Count 91 as the base sentence and make the following orders for cumulation:

• Count 73 (as representative of CCE counts involving between $140,000 and $200,000): 24 months.

• Count 64 (as representative of CCE counts involving between $100,001 and $140,000): 18 months.

• Count 8 (as representative of CCE counts involving between $50,000 and $100,000): 18 months.

• Count 18 (as representative of rolled-up counts involving more than $140,000): 18 months.

• Count 103 (as representative of rolled-up counts involving between $20,000 and $50,000): 12 months.

• Count 2 (representing individual counts involving between $20,000 and $36,000: six months.

37 The individual sentences and parts of individual sentences to be served cumulatively on each other and on the sentence imposed on Count 91 are thus as follows:

38 In the result the total effective sentence is 12 years' imprisonment and, like the judge, we will set a non-parole period of nine years, for the reasons expressed by his Honour.

39 For the reasons we have given, we will allow the appeal, quash the sentence passed below and re-sentence the applicant to the same total effective sentence of 12 years' imprisonment with a non-parole period of nine years as was passed below.

[1] The inclusion of counts 18, 45 and 126 in the categories to which the judge assigned them was an error. Counts 18 and 45 were both rolled up counts where the amount subscribed was in each case $144,000, a fact recognised in the sentence imposed - four years' imprisonment in each case. Count 126 should have been included in the $50,000 CCE counts because the sum involved was $72,000.

[2] R v Ralphs [2004] VSCA 33.

[3] And ultimately, this ground was abandoned.

Yusuf v The Queen [2010] VSCA 266

At a glance

Court

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Judgment (88 paragraphs)

Yusuf v The Queen [2010] VSCA 266 (19 October 2010)

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Legislation Cited (1)