Fraud offences in New South Wales
- [19-930] Introduction
- [19-940] Purposes of punishment — deterrent sentences
- [19-950] Unhelpful to generalise about white collar crime
- [19-960] Limited utility of statistics and schedules
- [19-970] Objective seriousness — factors of universal application to fraud
- [19-980] Section 21A Crimes (Sentencing Procedure) Act 1999 and fraud offences
- [19-990] Aggravating factors
- [20-000] Mitigating factors
- [20-010] The relevance of a gambling addiction
- [20-020] Totality
- [20-030] Special circumstances: Corbett’s case
- [20-040] Commonly prosecuted fraud offences
- [20-050] Obtain money or valuable thing by deception — s 178BA Crimes Act 1900 (repealed)
- [20-060] Make or use false instrument — s 300 Crimes Act 1900 (repealed)
- [20-070] Larceny by clerk or servant — s 156 Crimes Act 1900
- [20-080] Fraudulently misappropriate money collected/received — s 178A Crimes Act 1900 (repealed)
- [20-090] Obtain money etc by false or misleading statements — s 178BB Crimes Act 1900 (repealed)
- [20-100] Directors etc cheating or defrauding — s 176A Crimes Act 1900 (repealed)
- [20-110] Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009
There is a range of fraud offences found in the Crimes Act 1900. The Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009 (repealed) amended the Crimes Act by repealing a number of provisions relating to fraud and forgery, replacing them with new fraud and forgery provisions, and inserting offences concerning identity crime. It commenced on 22 February 2010.
The amending Act, in Sch 2, repealed the various fraud and forgery offences created by ss 158, 164-178, 178A, 178B, 178BA, 178BB, 178C, 179-185, 185A, 186, 527, 527A, 527B, 528, 545A and 547A Crimes Act.
Schedule 1 inserted Pts 4AA and 4AB after s 193 Crimes Act (re-numbered s 192A by Sch 2 of the amending Act). Part 4AA contains the fraud offences and Pt 4AB contains the identity fraud offences. (See description of the new offences below in “Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009” at [20-110].) The amendments are said to bring NSW more in line with the national approach to fraud, forgery and identity crimes offences as the offences are modelled on the Model Criminal Code.
Like all other areas of sentencing, the starting point in determining an appropriate sentence for a given fraud offence is its elements, the statutory maximum and other relevant sentencing considerations including aggravating and mitigating circumstances of the crime. The Table of standard non-parole period offences found in s 54D Crimes (Sentencing Procedure) Act 1999 does not contain any fraud offences.
Section 3A(b) Crimes (Sentencing Procedure) Act 1999 provides that one of the purposes of sentencing is to prevent crime by deterring the offender and other persons from committing similar offences. The courts have consistently held that general deterrence is a particularly important sentencing factor for fraud offences. Such crimes frequently involve a serious breach of trust and are usually only able to be committed because of the previous good character of the person who has been placed in the position of trust: Gleeson CJ in R v El-Rashid (unrep, 7/4/95, NSWCCA). Both personal and general deterrence are of particular significance for the offences which involve the systematic exploitation of the electronic banking system: Stevens v R  NSWCCA 260 at .
Where the offence involves a breach of trust by an employee, particularly involving large or substantial sums, systematic dishonesty with planning and some sophistication, unless there are special features present, general deterrence requires that there be substantial sentences of imprisonment imposed: R v Pont (2000) 121 A Crim R 302 at – and the cases cited therein. It was said the imposition of periodic detention had an inbuilt leniency compared with the severity of a full time custodial sentence, and did not adequately reflect the element of general deterrence: R v Halabi (unrep, 17/2/92, NSWCCA); R v Todorovic  NSWCCA 49 at . In R v Mungomery (2004) 151 A Crim R 376, a case involving three counts of defrauding a company under s 176A Crimes Act 1900, Hulme J said at :
“The cases in this area also stress the importance of general deterrence. Organisations, be they business or government, cannot operate effectively without placing a good deal of trust in their employees. Opportunities for the abuse of that trust are legion and breaches are often difficult to detect. Commonly, offenders are able to continue their depredations for long periods. Often matters only come to light when the total amounts involved become too large to be overlooked. It seems to me an inevitable inference that there must be many cases where offending is never discovered — a factor also arguing for sentences which are substantial deterrents.”
Care must be taken when applying general principles in relation to “white collar crime” offences. In R v Brown (unrep, 1/8/94, NSWCCA) Simpson J said:
“… white collar crime itself is so various in its manifestations and nature that it is scarcely susceptible of precise definition or of defined sentencing principles. I do not read the cases cited as laying down any proposition of the inevitability of a full-time prison sentence in any case which could be brought within the description of ‘white collar crime’.”
Hunt CJ at CL agreed with Simpson J and stated:
“I do not accept that it is appropriate to lay down any rule that, in all cases of serious white collar crime, a sentence other than a full-time custodial one by itself demonstrates error requiring a Crown appeal to be upheld. There is a wide range in the nature of white collar crimes and necessarily a wide range in the nature of the appropriate sentences to be imposed.”
Brown was applied in R v Boland (unrep, 13/10/98, NSWCCA) where Stein JA said: “It is trite that there is no rule that in all cases of serious white collar crime a sentence other than a full time custodian one is inapposite …”.
See generally the discussion at [10-010]ff.
In R v Woodman  NSWCCA 310, (a two-judge bench decision) Wood CJ at CL stated that in sentencing offenders in relation to fraud offences, far greater assistance is gained from general sentencing principles rather than by reference to statistics or “schedules of fraud appeals” because of the enormous variation in objective and subjective circumstances involved: , –. Woodman was applied in R v Martin  NSWCCA 190 where Johnson J said at :
“This Court has observed that reference to sentencing statistics is of limited value in the case of fraud offences, given the enormous variation in objective and subjective circumstances involved, and the Court has expressed concern when an attempt is made to compare sentences for a specific offence of dishonesty with other cases involving dishonesty of a different kind: R v Hawker  NSWCCA 148 at paragraphs 17-18; Woodman at paragraphs 22-24; R v Swadling  NSWCCA 421 at paragraphs 29, 54. In each of those cases, the Court has emphasised that far greater assistance is derived from reference to general sentencing principles with respect to white-collar crime.”
The dangers of comparative sentencing for fraud cases was also discussed in R v Hawker  NSWCCA 148 where Wood CJ at CL said:
“There is a danger in endeavouring to extract a ‘range’ from a limited group of decisions on appeal, or from sentencing statistics. Some of the cases here selected by the applicant were Crown appeals in which the principle of double jeopardy or that relating to special discretion attaching to Crown appeals, were applicable. Others were cases involving quite different objective and subjective considerations, as well as differing sums of money. Some involved offenders such as solicitors or others holding fiduciary office or positions of trust, and others of which involved employees of no great seniority. In some instances, the offences were relatively simple and of short duration, and in other cases they were complex and prolonged.
The need for care in attempting any such comparison as that suggested here was recently underlined by Spigelman C J in Slater  NSWCCA 65 at paras 50–52.
In my view, greater assistance is to be derived by reference to general sentencing policy which has seen something of a hardening attitude to white collar crime in view of its difficulty of detection, and in view of the fact that its impact may fall upon a wider group of investors or creditors: Pont  NSWCCA 419.”
More recently in Scanlan v R  NSWCCA 238, a case involving four counts of obtaining money by deception under s 178BA totalling over $396,000, Hoeben J said at : “In offences of this kind statistics are of only limited value. Each offence has to be assessed on the basis of its own particular circumstances”.
The objective seriousness of a fraud offence is assessed by reference to the elements of the offence and the statutory maximum. The statutory maximum penalty acts as a “benchmark or reference point”: R v Way (2004) 60 NSWLR 168 at . Although sentencing for fraud should not be approached in a formulaic manner, the courts have recognised several factors that bear generally upon the objective seriousness of a given offence. The interplay of these factors help to place the offence on the spectrum of like offences, bearing in mind the maximum penalty is to be reserved for cases which are in the worst category. The following features have been identified as influencing the assessment of the gravity of the crime:
The amount of money involved (R v Hawkins (1989) 45 A Crim R 430, R v Mungomery (2004) 151 A Crim R 376 at , R v Woodman  NSWCCA 310, R v Finnie  NSWCCA 533 at ) and whether the loss is irretrievable: R v Todorovic  NSWCCA 49 at .
The length of time over which the offences are committed: R v Pont (2000) 121 A Crim R 302 at , , R v Mungomery (2004) 151 A Crim R 376 at .
The motive for the crime: R v Mears (1991) 53 A Crim R 141 at 145, R v Hill  NSWCCA 257 at , R v Woodman  NSWCCA 310 at .
The degree of planning and sophistication: R v Mille (unrep, 1/5/98, NSWCCA), R v Pont (2000) 121 A Crim R 302 at –, R v Murtaza  NSWCCA 336 at , Stevens v R  NSWCCA 260 at , .
An accompanying breach of trust: R v El-Rashid (unrep, 7/4/95, NSWCCA), R v Pont (2000) 121 A Crim R 302, R v Hawkins (1989) 45 A Crim R 430.
The courts have also regarded the impact on public confidence: R v Pont (2000) 121 A Crim R 302 at ,  and the impact on the victim: R v Pont at ,  as relevant matters.
Factors 1–5 above are discussed in greater detail below.
The amounts of money involved in premeditated deception cases is a significant consideration in assessing the objective seriousness of the offence because it indicates the extent to which the prisoner is prepared to be “dishonest and to flout the law and to advance whatever are his own purposes”: R v Hawkins (1989) 45 A Crim R 430 at 435.
In R v Mungomery (2004) 151 A Crim R 376 Hulme J said at :
“… authority makes it clear that the amount of money involved in premeditated deception is an important, and the period of time over which offences are committed a relevant, factor in determining the extent of criminality — see Hawkins (1989) 45 A Crim R 430, R v Mears (unrep, 14/3/91, NSWCCA), referred to by Wood CJ at CL and Sperling J in R v Woodman  NSWCCA 310.”
In R v Howard (unrep, 28/3/95, NSWCCA), the offender defrauded a total of $6,500 over a four year period. The court held that the offender was entitled to the benefit of the fact that the amounts subject of the charges were relatively small. However, in R v Finnie  NSWCCA 533 at  it was held that although the amount of money defrauded is not determinative of the seriousness of the offence it “… is relevant to a degree and particularly where the offences are premeditated, committed on a number of separate occasions and involve a degree of planning, and are for substantial amounts of money”.
Adams J said in Marinellis v R  NSWCCA 307 at  that the fact that no actual loss has been incurred is a matter which reduces the objective seriousness of the crime(s). The proposition was not endorsed by McColl JA and Latham J.
The length of time over which the offences are committed is a relevant factor in determining the level of criminality involved. The length of time can also be relevant to indicate the degree of planning and to show it was not an impulsive offence: R v Mears (1991) 53 A Crim R 141 at 145; R v Woodman  NSWCCA 310 at  (two-judge bench); R v Murtaza  NSWCCA 336 at .
The motive for committing the offence will be a relevant factor when assessing the criminality: R v Mears (1991) 53 A Crim R 141 at 145. If the fraud is based on greed rather than need the sentence imposed should be longer: see R v Medina (unrep, 28/5/90, NSWCCA); R v Mears (1991) 53 A Crim R 141 at 145.
Offences committed on impulse have been distinguished from offences where there has been planning with a degree of sophistication: R v Mille (unrep, 1/5/98, NSWCCA), R v Pont (2000) 121 A Crim R 302 at –; R v Murtaza  NSWCCA 336 at . The fact that the offence was part of a planned or organised activity is an aggravating factor to be taken into account under s 21A(2)(n) Crimes (Sentencing Procedure) Act 1999: see Aggravating factors at [19-990] below.
Breach of trust can be relevant where it is an element of the offence (for example, s 172 Crimes Act 1900), or as a key feature of aggravation: R v Pont (2000) 121 A Crim R 302 at –, R v Murtaza  NSWCCA 336 at . The fact that the offence involved a breach of trust is an aggravating factor to be taken into account under s 21A(2)(k) Crimes (Sentencing Procedure) Act 1999: see Aggravating factors at [19-990] below.
What is a breach of trust? The breach of trust must be in direct contravention of what the offender was engaged to do: R v Stanbouli (2003) 141 A Crim R 531 at . Hulme J said at :
“The cases where, traditionally, breach of trust has been regarded as exacerbating criminality are where it is the victim of the offence who has imposed that trust — an employer defrauded by his employee, a solicitor who appropriates trust funds to his own use — or where the criminality involves a breach of that which the offender was engaged or undertook to do, e.g. a teacher or baby-sitter who indecently deals with the subject of his or her charge.”
In cases of serious white collar crime involving a breach of trust by a solicitor or another professional person standing in a similar position of trust, a full-time custodial sentence will be imposed, except in cases where there is some unusual feature: R v Boland (unrep, 13/10/98, NSWCCA); R v Pantano (1990) 49 A Crim R 328. Those placed in a special position of trust by the law and the community, such as solicitors and other professionals, who abuse that trust, call their profession into question and merit sentences calculated to ensure that other professionals will be left in no doubt that serious consequences will follow: Pont at .
Where the breach of trust is an element of the offence, it is not to be taken into account additionally as an aggravating factor: R v Martin  NSWCCA 190 at  and see Aggravating factors at [19-990] below.
In R v Pantano (1990) 49 A Crim R 328, Wood J (with whom Carruthers J agreed) said at 330:
“… 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 standards 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.”
In the two-judge bench decision of Marvin v R (unrep, 1/11/95, NSWCCA), the offender, a solicitor, was convicted of forty-one counts of fraudulent misappropriation of funds contrary to s 178A Crimes Act 1900, and two counts of making and the using of a false instrument contrary to ss 300(1) and 300(2) Crimes Act 1900. Sully J said:
“Any solicitor who misappropriates clients’ funds for whatever reason, great or small, arguably good or arguably bad, commits a serious offence, not only in terms of contravening the relevant particular provisions of the Crimes Act, but in terms of the betrayal of public trust and confidence which such behaviour represents. It is appropriate to say simply that that must always be regarded by the Courts, of all institutions, as serious conduct meriting in any but the most exceptional cases, a custodial sentence.”
Marvin was cited with approval in R v Houlton (2000) 115 A Crim R 104 at . The court in R v Smith (2000) 114 A Crim R 8 at  endorsed the sentencing judge’s observation that “It is necessary for the court to impose significant penalties as a lesson to other legal professionals … in a position of trust [so] that this kind of misconduct will not be tolerated”.
In Houlton, the respondent, a solicitor, pleaded guilty to five counts of fraudulent misappropriation totalling $347,000 under s 178A Crimes Act 1900, including 80 offences on a Form 1. His appeal against the three-year period detention sentence was dismissed. R v Hawkins (1989) 45 A Crim R 430 at 436 involved misappropriation of $6.6 million from clients and a company by a solicitor over a three and a half year period. Following a Crown appeal, the offender was resentenced to ten years with a balance of term of five years. Assi v R  NSWCCA 257 involved fraudulent misappropriation and obtaining money by deception by a solicitor: ss 178A, 178BA. Following an appeal the offender was sentenced to a term of sentence of seven years and six months with a non-parole period of four years and six months.
The fact that the offender will be struck off the roll of solicitors can be to be taken into account as a matter of extra-curial punishment: Oudomvilay v R  NSWCCA 275 at .
In R v Sellen (unrep, 5/12/91, NSWCCA) the offender, a chartered accountant, fraudulently misappropriated $1.25 million of his client’s funds over a five year period. Following an appeal the offender was resentenced to five years imprisonment with a balance of term of three years.
R v Houghton  NSWCCA 62 involved a company director fraudulently applying company property. He was convicted for 26 counts under s 173 Crimes Act 1900. Following his appeal his effective sentence was confirmed as a non-parole period of 18 months with a balance of term of six months. Barr J (Fitzgerald JA and Abadee J agreeing) said at : “… sentences imposed for offences involving such serious and persistent breaches of trust must be sufficient to deter others from offending, not least because they are so difficult to detect”.
R v Law (unrep, 7/10/93, NSWCCA) involved an offence under s 176A Crimes Act 1900 where the offender, a company director, defrauded clients and insurers of $180,000. His appeal against his sentence of two years and six months with a balance of term of 18 months was dismissed. After referring to the principles governing breaches of trust in white collar crime cases, including R v Pantano (1990) 49 A Crim R 328 and R v Halabi (unrep, 17/2/92, NSWCCA), Carruthers J said “… the objective circumstances were of such seriousness that despite the subjective circumstances a lengthy custodial sentence was inevitable”.
Positions of seniority in a company make it easier to cover tracks and discourage scrutiny and detection. The obligation to uphold the trust of employers in their employees and to deter breaches of such trust by senior employees means that the courts frequently respond to offences committed by senior employees with the imposition of a custodial sentence: R v Scott (unrep, 7/11/91, NSWCCA). This case involved a senior employee but a very small amount of money and a custodial sentence was imposed on the offender, however on appeal a sentence of periodic detention was imposed to preserve parity with the sentence imposed on the offender’s wife.
The court in R v Pantano (1990) 49 A Crim R 328 at 338 explained the different positions of employees and senior executives in sentencing for fraud offences:
“Although it is difficult to generalise and each case must be taken on its merits, the cases in which a subordinate employee guilty of serious dishonesty should receive a sentence of the same order as a senior executive are likely to be relatively few. This is because of the control exercised by the senior executive, his greater ability to defer and perhaps avoid detection, his grosser breach of trust by reason of has senior position, his greater duties and greater responsibility.”
Generally, where there is a substantial fraud by a bank employee, a custodial sentence is normally required to deter others unless there are special circumstances: R v Chaloner (1990) 49 A Crim R 370 at 375. See also R v Halabi (unrep, 17/2/92, NSWCCA); R v Phelan (1993) 66 A Crim R 446; R v El-Rashid (unrep, 7/4/95, NSWCCA).
In the case of employees other than professionals the court in Pont said at :
“Whilst it seems clear that there is such a principle as would require imprisonment in the absence of exceptional circumstances of defalcating professionals or others, eg., company directors, whose crimes are of considerable extent and wide effect, I am unable to conclude that there is a useful statement of such a principle of general applicability in cases where persons are in a position of trust, the position of trust arising out of an employer/employee relationship. Expressions of the necessity for general deterrence and condign punishment are of limited utility to define the appropriate nature of the sanction to be employed in such circumstances.”
Fraud committed by nursing home proprietors, particularly making claims for work not performed (ghosting), should be regarded as the most serious fraud in the community. Such offences are committed against frail aged persons who are often not in a position to complain against dishonesty: R v Boian and Carter (1997) 96 A Crim R 582. Ghosting was held to be an aggravating feature taken into account in R v Giallussi  NSWCCA 56 at .
Section 21A Crimes (Sentencing Procedure) Act 1999 sets out the aggravating and mitigating features which are to be considered, in addition to any other matters that are required or permitted to be taken into account by the court under any Act or rule of law, in determining an appropriate sentence to be imposed. Sentencers should make clear how they have taken an aggravating or mitigating feature into account under s 21A(2) to avoid double counting: R v Dougan (2006) 160 A Crim R 135 at . Factors which are elements integral to the offence are not to be taken, of themselves, as aggravating features under s 21A(2) Crimes (Sentencing Procedure) Act 1999. For example, an offence under s 172 Crimes Act 1900 includes the abuse of a position of trust as an element of the offence. While mention of this abuse is permissible in respect of characterising the objective gravity of the offence, to pay “additional regard” under s 21A is impermissible “double counting” of an aggravating feature: R v Wickham  NSWCCA 193 at –; R v Martin  NSWCCA 190 at –.
A judge can only have “additional regard” to the abuse of a position of trust as an aggravating factor under s 21A(2)(k) Crimes (Sentencing Procedure) Act 1999 where the breach of trust is not an element of the offence. In R v Martin  NSWCCA 190 the judge was found to err by having “additional regard” to s 21A(2)(k). The fraud offence the offender was convicted of (trustee fraudulently disposing of property under s 172 Crimes Act 1900) already involved the aggravating feature of “abuse of authority or a position of trust” as an element of the offence. While mention of this abuse is permissible in respect of characterising the objective gravity of the offence, to pay “additional regard” under s 21A is impermissible “double counting” of an aggravating feature: R v Wickham  NSWCCA 193 at – applied.
In Martin the court said at :
“With respect to general fraud or dishonesty offences, where breach of trust is not an essential element of the offence, common law sentencing principles have recognised that abuse of a position of trust, where it exists on the facts of a particular case, is an aggravating factor on sentence. Examples of this include the following:
larceny as a servant contrary to s 156 Crimes Act 1900 by a senior accounts clerk: R v Pantano (1990) 49 A Crim R 328 at 330;
fraudulently omitting to account contrary to s 178A Crimes Act 1900 by a real estate agent: R v Woodman  NSWCCA 310 at paragraphs 14-15;
making false accounting entries contrary to s 158 Crimes Act 1900 and using a false instrument to the prejudice of another contrary to s 300 Crimes Act 1900 by a bank employee: R v El-Rashid (CCA(NSW), 7 April 1995, BC9504681 at page 4;
defrauding the Commonwealth Bank contrary to s 29D Crimes Act 1914 (Cth) by a bank loans manager: R v Chaloner (1990) 49 A Crim R 370 at 375; and
offences by a solicitor comprising forging of documents contrary to s 67B Crimes Act 1914 (Cth), defrauding the Commonwealth contrary to s 29D Crimes Act 1914 (Cth), forging and uttering bills and notes contrary to s 273 Crimes Act 1900, fraudulent misappropriation contrary to s 178A Crimes Act 1900: R v Hawkins (1989) 45 A Crim R 430 at 436.
In cases such as these, where breach of trust is not an element of the offence, there is scope for s 21A(2)(k) to permit a court to have ‘additional regard’ to the abuse of a position of trust or authority in relation to the victim as an aggravating factor on sentence. This reflects the position at common law.”
The breach of trust must be in direct contravention of what the offender was engaged to do: R v Stanbouli (2003) 141 A Crim R 531 at . In Stanbouli, Hulme J said at :
“The cases where, traditionally, breach of trust has been regarded as exacerbating criminality are where it is the victim of the offence who has imposed that trust — an employer defrauded by his employee, a solicitor who appropriates trust funds to his own use — or where the criminality involves a breach of that which the offender was engaged or undertook to do, e.g. a teacher or baby-sitter who indecently deals with the subject of his or her charge.”
See also Section 21A Factors at [11-160].
Where the victim was vulnerable, for example, because the victim was very young or very old or had a disability, or because of the victim’s occupation (such as a taxi driver, bus driver or other public transport worker, bank teller or service station attendant), s 21A(2)(l) Crimes (Sentencing Procedure) Act 1999 will be relevant. The aggravating feature under s 21A(2)(l) “the victim was vulnerable” is concerned with the vulnerability of a particular class of victim and is not directed to vulnerability in a general sense: R v Tadrosse (2005) NSWLR 740. In Tadrosse, the general approach taken by the judge to the s 21A factors and the fact it was unclear in his reasons whether any particular factor was present for each offence, made it was impossible to know whether s 21A(2)(l) was applied to all or only some of the offences and if so which ones. The court concluded that there was no evidence that any of the victims fell within the categories under s 21A(2)(l): Tadrosse at .
See also Section 21A Factors at [11-170].
The aggravating factor in s 21A(2)(m) Crimes (Sentencing Procedure) Act 1999 is concerned with the situation where a single offence contains a number of allegations of criminal acts that are part of a single course of criminal conduct. A charge of this nature will often be common in cases of fraud or dishonesty against a single victim or multiple instances of supplying drugs over a lengthy period: R v Tadrosse (2005) NSWLR 740 at . In Tadrosse, the sentencing judge erred by taking into account under s 21A(2)(m) that “the offence involved multiple victims or a series of criminal acts”. While there were clearly multiple offences with multiple victims and acts of criminality before the court, the applicant was going to be sentenced for each of them in accordance with the principle of totality: .
In R v Kilpatrick  NSWCCA 351, the court held that the judge erred in referring to multiple victims in the context of the offences, each of which was individually charged. For s 21A(2)(m) Crimes (Sentencing Procedure) Act 1999 to be relevant it needs to be attached to a particular offence. It is not open to the sentencing judge to use that circumstance as a factor of aggravation where the multiplicity arises in the context of offences, all of which are charged and the subject of individual convictions: Kilpatrick at , Tadrosse at –.
See also Section 21A Factors at [11-180].
The fact that the offence involved systematic dishonesty accompanied by planning, sophistication and repetition will aggravate the offence: R v Pont (2000) 121 A Crim R 302 at –. Offences committed on impulse have been distinguished from offences where there has been planning with a degree of sophistication: R v Mille (unrep, 1/5/98, NSWCCA), R v Pont (2000) 121 A Crim R 302 at –; R v Murtaza  NSWCCA 336 at .
See also Section 21A Factors at [11-190].
Prior good character is a mitigating factor to be taken into account under s 21A(3)(e) and (f). However, in the case of fraud, where the offender has been appointed to a position of trust because of his or her good character, and it is abused, general deterrence will become a major consideration and good character will be of less relevance: R v Gentz  NSWCCA 285 at . In R v El Rashid (unrep, 7/4/95, NSWCCA) Gleeson CJ said:
“Considerations of general deterrence are of particular importance in sentencing for crimes of this nature.
Such crimes frequently involve, as in the present case, a serious breach of trust. Such breaches of trust are usually only able to be committed because of the previous good character of the person who has been placed in a position of trust.”
Similarly, where there are repeated offences over a period of time, or the offender has engaged in a course of conduct to avoid detection, prior good character will carry less weight: R v Smith (2000) 114 A Crim R 8 at –; R v Phelan (1993) 66 A Crim R 446; R v Houghton  NSWCCA 62 at .
In R v Corbett (1991) 52 A Crim R 112 at 117 the court said:
“… a feature of past sentencing for ‘white collar’ crimes involving fraudulent abuse of trust, and sometimes involving fraud on the public purse, has been the imposition of lengthy head sentences, but with a substantial gap between head sentence and non-parole periods or minimum terms. This has probably been the consequence of a desire on the part of the courts, on the one hand, to reflect the need for general deterrence and, on the other hand, to give due account to the fact that the offenders involved frequently have no prior criminal history, are not likely to re-offend, and have good prospects of rehabilitation.”
An offender’s lack of a previous criminal record will not be accorded the significance it might have had where he or she has committed a large number of offences over a long period of time: R v Chan  NSWCCA 345 at  (a two-judge bench decision referred to in a schedule in R v Hare  NSWCCA 303).
See also Section 21A Factors at [11-250].
Section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999 provides that remorse demonstrated by making reparation of loss is a factor to be taken into account as a mitigating factor. Section 21A(2)(i) was amended by the Crimes (Sentencing Procedure) Amendment Act 2007, which commenced on proclamation on 1 January 2008. The amendments apply to sentences imposed in relation to an offence whenever committed unless the person has been convicted of the offence or the court has accepted a plea or guilty to the offence before the commencement date. Where the new section applies remorse will only be relevant as a mitigating factor where the offender has provided evidence that he or she has accepted responsibility for his or her actions, and the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both).
See also Section 21A Factors at [11-290].
Restitution can be a mitigating factor where it involves a degree of sacrifice. It can also indicate a degree of remorse where it occurs, after the defendant became aware of the full consequences of his criminality: R v Phelan (1993) 66 A Crim R 446, R v Giallussi  NSWCCA 56 and R v Strano  NSWCCA 531 at .
In R v Woodman  NSWCCA 310 (a two-judge bench decision) Wood CJ at CL said at :
“The offer by the applicant to make reparation was of limited value to him, particularly in the absence of any earlier attempt to do so. It is not the case that an offender found guilty of fraud offences can purchase mitigation by way of a voluntary repayment. While the degree of sacrifice involved can be taken into account it cannot be overlooked that an order for compensation, or reparation does no more than require the return of illgotten gains to which the offender had no entitlement.
Moreover, as Hunt CJ at CL pointed out in Phelan (1993) 66 A Crim R 446:
‘It is more of a matter of aggravation when there has been a loss which is effectively irretrievable than a matter of mitigation where the loss has been made good’.”
In R v Fell  NSWCCA 235, a case involving 14 counts of obtaining money by deception under s 178BA Crimes Act 1900 and 70 offences on a Form 1, the court found that the sentencing judge was entitled to have regard to fact that the respondent had repaid almost $280,000 to his employer. Aside from being demonstrative of contrition and remorse, the reparation significantly reduced the losses suffered by the victim. This itself was significant enough to have a mitigating effect on sentence: at .
Pleading guilty is a factor which in white collar crimes especially, attracts a considerable measure of leniency: R v Falzon and Pullen (unrep, 20/2/1992, NSWCCA). In R v Halabi (unrep, 17/2/92, NSWCCA) the court said:
“… in white collar crimes the difficulty of detection and the difficulty and expense of investigation and proof means that particular consideration and greater discount should be allowed to an accused person who pleads guilty thus saving the State from the expense of proving the matters associated with the white collar crimes.”
The length and complexity of a prospective fraud trial is a matter relevant to the utilitarian discount for a plea of guilty: R v Todorovic  NSWCCA 49 at .
See also Section 21A Factors at [11-310].
Delay in having the matter finalised leaves the offender in a position of uncertainty and can be taken into account: R v Houlton (2000) 115 A Crim R 104 at , –; DPP v Hamman (unrep, 1/12/1998, NSWCCA); and R v Phelan (1993) 66 A Crim R 446.
See also Subjective Matters Taken into Account (cf s 21A(1)) at [10-530].
Hardship to third parties can only be taken into account where there are exceptional circumstances: R v Caradonna (2001) 118 A Crim R 312 at –. In R v Lo and Ouyang  NSWCCA 382, a social security fraud case, the offenders were sole carers of an 18 month old and three year old children. A Crown appeal against the sentence of home detention was held dismissed. The sentence was held to be within the permissible range.
See also Subjective Matters Taken into Account (cf s 21A(1)) at [10-490].
It is not uncommon for fraud offenders to suffer from a gambling addiction: R v Todorovic  NSWCCA 49 at –, . A gambling addiction may explain why an offender has committed an offence(s) but it has been treated by the courts in the same way as a drug addiction. Latham J remarked in Le v R  NSWCCA 136 at  that a gambling addiction “generally does not warrant the extension of leniency …”. The passage was quoted with approval in R v Huynh  NSWCCA 16 at . In the guideline judgment of R v Henry (1999) 46 NSWLR 346 at , Spigelman CJ expressly rejected the proposition that an addiction to gambling is a matter in mitigation. This passage in Henry is discussed in Hulme J’s dissenting judgment in the fraud case of R v Todorovic  NSWCCA 49 at –. Further to these authorities the court in R v Huang, R v Siu (2007) 174 A Crim R 370 at  quoted the following passage in R v Assi  NSWCCA 257 at  as reflecting the current state of the authorities:
“… Although [the appellant’s] gambling habit may explain his fall into such serious criminal conduct and give some hope of rehabilitation in the future, it has been held to be a rare case where an offender can seek mitigation of penalty based upon an addiction to gambling, even where it is pathological: R v Molesworth  NSWCCA 43.”
The majority of fraud cases involve multiple offences. The sentencer is required to apply the totality principle. In the case of imprisonment this may involve fixing an appropriate sentence for each offence and then consider matters of cumulation or concurrency: R v Pearce (1998) 194 CLR 610 at . When carrying out this task the sentencer is required to have regard to the fact that the applicant is being sentenced for multiple offences and ensure that the ultimate sentence imposed is appropriate to the totality of the applicant’s offending and his personal circumstances: Stratford v R  NSWCCA 279 at . See also R v Chan  NSWCCA 345 at .
In R v Corbett (1991) 52 A Crim R 112 at 117, the court said:
“… a feature of past sentencing for ‘white collar’ crimes involving fraudulent abuse of trust, and sometimes involving fraud on the public purse, has been the imposition of lengthy head sentences, but with a substantial gap between head sentence and non-parole periods or minimum terms. This has probably been the consequence of a desire on the part of the courts, on the one hand, to reflect the need for general deterrence and, on the other hand, to give due account to the fact that the offenders involved frequently have no prior criminal history, are unlikely to re-offend, and have good prospects of rehabilitation.”
However, imposing a lengthy parole period (for the reasons outlined in Corbett) may not be appropriate where the objective seriousness of the offences are considerable and characterised by a number of aggravating features: Scanlan v R  NSWCCA 238 at .
The appellant in McMahon v R  NSWCCA 147 relied upon R v Corbett at 116-117 to support a proposition that because white collar crime was non-violent when compared with other offences, there should be a substantial gap between the head sentence and the non-parole period. The court rejected the approach because it was “quite out of step with current community standards. The community now views white collar crime very seriously…”: per Hoeben J at  with Hodgson JA and Grove AJ agreeing). The court at  instead adopted the approach in Hili v The Queen (2010) 85 ALJR 195. There is no overarching approach in fixing a non-parole period for white collar offenders. The relationship between the non-parole period and the total sentence will depend upon the facts of the case: Hili at , . Although McMahon involved an offence against the Commonwealth what was said about Corbett’s case is nevertheless relevant to setting a non-parole period for a State offence.
The following text focuses on the most commonly prosecuted fraud offences in New South Wales. These offences were repealed by the Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009 but many cases remain in the system. For the new offences, see those described below in “Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009” at [20-110]:
obtaining money or valuable thing by deception: s 178BA (repealed)
make or use false instrument: s 300 (repealed)
larceny by clerk or servant: s 156 (repealed)
fraudulently misappropriate money collected or received: s 178A (repealed)
obtain money etc by false or misleading statement: s 178BB (repealed), and
directors etc cheating or defrauding: s 176A (repealed).
Courts have applied the general principles above to these offences, and the following cases are cited by way of example. Case summaries of Crown and severity appeals for specific fraud offences can be accessed via the “Legislation” component of JIRS.
Section 178BA Crimes Act 1900 provided:
“Whosoever by any deception dishonestly obtains for himself or herself or another person any money or valuable thing or any financial advantage of any kind whatsoever shall be liable to imprisonment for 5 years.”
The term “deception” is defined in subsection (2).
In R v Hare  NSWCCA 303 the court sets out 12 Court of Criminal Appeal cases involving offences under s 178BA, detailing the number of counts, the amount of money defrauded, the sentence imposed, the issues raised in the appeal, and the appeal outcome.
In the two-judge bench decision of Mitchell v R  NSWCCA 72 the court also listed a number of Court of Criminal Appeal decisions involving s 178BA offences. Latham J said at  that:
“… the amount of money defrauded is but one factor in the commission of such offences, which bears upon the assessment of the offender’s criminality. Other factors, including the length of time over which the offences are committed, whether or not the offender occupies a position of trust, and the sophistication of the method employed to defraud the victim, play a part in placing an offence on the spectrum of offences of a like nature, bearing in mind that the maximum penalty is reserved for the worst class of case. The interplay of these factors in any given case, together with the subjective circumstances of the individual offender, is capable of giving rise to the imposition of seemingly disparate sentences, which might appear difficult to justify on nothing more than a relatively superficial comparison.”
In R v Araya (2005) 155 A Crim R 555, Johnson J (Rothman and Simpson JJ agreeing), cited R v Harrower  VSCA 182 with approval where it was said by Brooking JA at para 10:
“This case shows how someone can systematically abuse the system by fraudulently obtaining a stock of these plastic cards which stand in the place of money, and shows some of the injurious consequences of that abuse. Generally speaking, the kind of conduct disclosed here must attract severe punishment”.
Johnson J said at :
“In my view, this statement has general application to the type of offence illustrated in the present case. Members of the community use credit cards for a very wide range of transactions conducted by telephone. The honest use of credit cards in this way is of great importance. In passing sentence for offences of the present type, general deterrence is an important factor. Further, where there is a pattern of fraudulent activity by an offender over an extended period using several credit cards and associated paraphernalia (such as fraudulent drivers’ licences), specific deterrence is also an important consideration on sentence.”
Section 300 Crimes Act 1900 provided:
A person who makes a false instrument, with the intention that he or she, or another person, will use it to induce another person:
to accept the instrument as genuine, and
because of that acceptance, to do or not do some act to that other person’s, or to another person’s, prejudice, is liable to imprisonment for 10 years.
A person who uses an instrument which is, and which the person knows to be, false, with the intention of inducing another person:
to accept the instrument as genuine, and
because of that acceptance, to do or not do some act to that other person’s, or to another person’s, prejudice, is liable to imprisonment for 10 years.”
In O’Keefe v R (1992) 60 A Crim R 201 at 204, a case involving nine charges under s 300(1) and nine under s 300(2), Lee AJ (Gleeson CJ and Priestly JA agreeing), said:
“In these and similar cases, the consideration of general deterrence looms large.
It is of the utmost importance that employers carrying on business and entrusting members of their staff with control of money as must be done, should be entitled to maximum honesty in that activity and the courts play an important role and must play an important role in imposing sentences in cases of this nature which are often called white collar crimes — which will operate effectively as a deterrent to others …”
In R v El-Rashid (unrep, 7/4/95, NSWCCA) the respondent was a bank employee who defrauded two customers of US $120,000 and was convicted of two charges under s 300. Gleeson CJ said:
“… crimes of this kind are to be taken seriously …
Considerations of general deterrence are of particular importance in sentencing for crimes of this nature. Such crimes frequently involve, as in the present case, a serious breach of trust. Such breaches of trust are usually only able to be committed because of the previous good character of the person who has been placed in a position of trust.”
See also R v Tadrosse (2005) NSWLR 740, where the offender was convicted of six counts under s 300, one count under s 302, and two under each of ss 178B and 178BA. In that case, a total of over $200,000 was defrauded by the applicant using false documents. He was sentenced to six years imprisonment with a non-parole period of three years and six months.
Section 156 Crimes Act 1900 provides:
“Whosoever, being a clerk, or servant, steals any property belonging to, or in the possession, or power of, his or her master, or employer, or any property into or for which it has been converted, or exchanged, shall be liable to imprisonment for ten years.”
In Itaoui v R (2005) 158 A Crim R 233 the applicant stole $135,199.40 from her employer, Thomas Cook, over a period of 15 months. The Court of Criminal Appeal held that the applicant’s criminal behaviour in breach of trust of her employer clearly warranted a significant prison sentence for the reasons given by the judge including the importance of general deterrence.
In R v Swadling  NSWCCA 421 the applicant, an accounts clerk, diverted a total of $322,766 of her employer’s funds into her own bank account over a period of 21 months. She was convicted of nine counts under s 156, with eleven offences taken into account on a Form 1. The appeal against sentence was allowed and the applicant was re-sentenced to an aggregate term of sentence of six years and three months, with a non-parole period of three years and three months. The court found that the offences were in the middle of the range of seriousness. The methods employed by the applicant were unsophisticated, she did little to cover her tracks, was a relatively junior employee and the amount taken was not large. Offences in the upper half of the scale of seriousness frequently involve larger amounts of money, more sophisticated methods and attempts to hinder or deflect detection and investigation, and are often committed by more senior employees.
Section 178A Crimes Act 1900 provided:
“Whosoever having collected or received any money or valuable security upon terms requiring him or her to deliver or account for or pay to any person the whole or any part of:
such money or valuable security or the proceeds thereof, or
any balance of such money, valuable security, or proceeds thereof after any authorised deductions or payments have been made thereout,
fraudulently misappropriates to his or her own use or the use of any other person, or fraudulently omits to account for or pay the whole or any part of such money, valuable security, or proceeds, or the whole or any part of such balance in violation of the terms on which he or she collected or received such money or valuable security, shall be liable to imprisonment for seven years.”
In R v Higgins  NSWCCA 38, a case involving 15 counts under s 178A, Spigelman CJ stated at –:
“The objective gravity of the offences was substantial. The amount of money misappropriated was over $1.7 million from a significant number of victims, all of whom were small investors and vulnerable to varying degrees, some to a very high degree of vulnerability.
The frauds took place over a period of some five years and involved premeditation and planning. Of particular significance is the gross breach of trust involved both directly to each investor for whom he was an adviser and by purporting to act with the authority of a financial corporation in whom the investors would also have trust. The element of general deterrence is entitled to considerable weight in white collar crimes involving a breach of trust (see eg R v Glenister  2 NSWLR 597; R v Pantano (1990) 49 A Crim R 328 at 330).”
In that case the appeal against sentence was dismissed and the aggregate sentence was confirmed as term of sentence eight years, non-parole period five years.
In R v Higgins  NSWCCA 326 (unrelated to the case cited above), the offender was a bank manager who visited nursing homes to provide banking services to customers. One elderly customer gave the respondent a cheque for $73,000 to invest on her behalf which the offender used for his own purposes. He was charged with one count under s 178A and was sentenced to a non-parole period of one year nine months, and a balance of term of one year three months. The court held that the sentencing judge did not err in declining to find that the breach of trust in this case was an aggravating feature under s 21A(2)(k) Crimes (Sentencing Procedure) Act 1999. The conduct of the respondent was in this case “an element of the offence”. A breach of trust in the sense of misconduct by a trustee may not necessarily be synonymous with abusing a position of trust as expressed in s 21A(2)(k). However, the judge was required to sentence the respondent for what he had done and to avoid what has become known as “double counting”. The court commented that it would be unproductive to analyse whether some form of breach of trust or underlying policy to that effect is a characteristic of an offence against s 178A.
In Assi v R  NSWCCA 257, the court held that the amounts misappropriated is only one of the relevant considerations in determining the seriousness of the offences and it is not necessarily decisive. In this case, despite the fact that the amount of money misappropriated was not substantial compared to other offences, the appellant’s offences represented a period of repeated offending in which the applicant created false expectations for the victims who came to him for his help as a trusted member of the legal profession.
In R v Rizk  NSWCCA 104, a case involving seven charges under s 178A, the court said at –:
“There is a strong need for deterrent sentences where trust moneys are misappropriated.
… the applicant’s gross breaches of trust, and the need to deter him and others from committing such breaches of trust, called for the imposition of a salutary and realistic non-parole period.”
See also R v Boland (unrep, 13/10/98, NSWCCA) where the offender, a solicitor, was sentenced to a minimum of 18 months, with an additional term of six months for one count under s 178A involving $48,759.08.
In R v Howard (unrep, 28/3/95, NSWCCA) the offender pleaded guilty to seven charges under s 178BB. He was the manager of a cinema complex and over a period of four years falsified records so as to reduce the sum he was required to pay film distributors by a total of $6500. The court held that the offence was aggravated by the fact that the offences constituted a systematic, deliberate, carefully planned and executed fraud perpetrated continuously over a period of four years, but that it was ameliorated by the fact that the amount defrauded, in the context of fraud cases which come before the criminal courts, relatively small. A community service order or periodic detention would have been appropriate. The offender’s sentence was reduced from an 18 month fixed term to a term of 6 months concurrent with other sentences.
In R v Simpson (2001) 53 NSWLR 704 the offender was convicted of seven counts under s 178BB, with 25 offences taken into account on the Form 1. The offender committed the offences by obtaining loans totalling between $140,000 and $220,000 from three different banks using false names and forged documents. He was sentenced to imprisonment for three years and six months, with a non-parole period of two years and seven months.
“Defraud” is not defined in the Crimes Act 1900 but has been taken to require a loss to the victim of something of value. The loss may be intangible, although, it must at best involve prejudice to the victim’s “proprietary rights”: Baldini v R  NSWCCA 327 at –; Bikhit v R  NSWCCA 202 at .
In Stratford v R  NSWCCA 279 at  the Court of Criminal Appeal set out a number of decisions and their relevant features where the offender has been charged with an offence under s 176A or a similar offence.
In R v Giam (No 2) (1999) A Crim R 348 Dunford J said in relation to an offence under s 176A at :
“Courts have drawn attention in the past to the seriousness of white collar crime, and offences under s 176A in particular, as it involves not only fraud but also breach of the trust involved in being a director of a company. Such offences call for significant sentences, particularly where the amount fraudulently obtained is large: R v Glenister  2 NSWLR 597, R v Pantano  49 A Crim R 328.”
In R v Carr (2003) 135 A Crim R 171, Howie J at  discussed the relevant factors in determining the seriousness of an offence under s 176A:
“Having regard to the length of time over which the acts giving rise to the offence occurred, the serious breach of trust involved (in that the respondent was both a solicitor and a director of the company), the amount of money involved and importance of general deterrence the sentence was an appropriate one for that offence.”
In R v Mungomery (2004) 151 A Crim R 376, a case involving three counts under s 176A, Hulme J said at –:
“In this regard authority makes it clear that the amount of money involved in premeditated deception is an important, and the period of time over which offences are committed a relevant, factor in determining the extent of criminality — see Hawkins (1989) 45 A Crim R 430, R v Mears (unrep, 14/3/91, NSWCCA), referred to by Wood CJ at CL and Sperling J in R v Woodman  NSWCCA 310.”
The Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009 (repealed) commenced on 22 February 2010. It introduced various new offences, some of which are described below.
Section 192E contains the offence of fraud, making it an offence for a person, by any deception, to dishonestly obtain property belonging to another or obtain any financial advantage or cause any financial disadvantage. The maximum penalty is 10 years imprisonment.
Section 192F makes it an offence to dishonestly destroy or conceal any accounting record intending to obtain property belonging to another, obtaining a financial advantage or causing a financial disadvantage. The maximum penalty is five years imprisonment.
Section 192G makes it an offence to dishonestly make or publish, or concur in making or publishing, any statement that is misleading in a material particular intending to obtain property belonging to another or obtain a financial advantage or cause a financial disadvantage. The maximum penalty is five years imprisonment.
In recognition of the growing problem associated with the theft and misuse of personal identification information, a series of identity fraud offences were created in Pt 4AB. It is now an offence to either deal in (s 192J), or possess (s 192K), identification information intending to commit or facilitate the commission of an indictable offence. The maximum penalty for the s 192J offence is 10 years imprisonment, and seven years imprisonment for the s 192K offence. The terms “deal” and ”identification information” are defined in s 192I.
There are a number of features of identity crimes which involve aggravated effects on victims and the community generally when compared with other forms of obtaining benefit by deception: Stevens v R  NSWCCA 260 at . Therefore, the use of past sentencing practices for offences such as s 178BA (repealed) of the Crimes Act 1900, must be treated with some care: Stevens at . The “…significance of general deterrence in the exercise of the sentencing discretion will remain a matter to which particular weight must be given”: per Spigelman CJ at .
Schedule 1 of the amending Act omits the old Pt 5 of the Crimes Act (except for Div 3, which becomes Pt 5A by the operation of Sch 2), and inserted a new Pt 5 which contains the forgery offences and relevant definitions.
It is an offence for a person to make a false document intending it to be used to induce some person to accept it as genuine and, because of that acceptance, to obtain another person's property, obtain any financial advantage or cause any financial disadvantage or influence the exercise of a public duty: s 253. The maximum penalty is 10 years imprisonment.
Section 254 makes it an offence for a person to use a false document, knowing that it is false, intending to induce some person to accept it as genuine and, because of that acceptance, obtaining another person's property, financial advantage or causing any financial disadvantage, or influencing the exercise of a public duty. The maximum penalty is 10 years imprisonment.
The Public Defenders Office provides sentencing tables for fraud offences at <www.lawlink.nsw.gov.au/lawlink/pdo/ll_pdo.nsf/pages/PDO_sentencingtables#Fraud> accessed 1/11/11.
The Explanatory Note to the Crimes Amendment (Fraud, Identity and Forgery Offences) Bill 2009 can be found at
<www.parliament.nsw.gov.au/prod/parlment/nswbills.nsf/0/E5BF6F294D5BD244 CA25766A001C2D71?Open&shownotes> accessed 10/11/11.