Fraud offences

[19-930] Introduction

Last reviewed: November 2023

Fraud offences are governed by New South Wales and Commonwealth legislation. While many of the same sentencing principles apply to both jurisdictions, the statutory regimes and the statutory factors that are to be taken into account under s 21A Crimes (Sentencing Procedure) Act 1999 and s 16A Crimes Act 1914 (Cth) differ. It is not uncommon to have a combination of Commonwealth and State offences in the one sentencing proceeding and it is important to differentiate between the two statutory schemes. The regimes in New South Wales and the Commonwealth are therefore dealt with separately, although parts of the New South Wales regime are relevant to Commonwealth offences. For commentary on Commonwealth sentencing generally, see [16-000] Crimes Act 1914 (Cth) — sentencing Commonwealth offenders.

[19-935] The NSW statutory framework

Last reviewed: November 2023

In 2010, a statutory scheme for fraud and identity crimes was introduced into Pts 4AA and 4AB of the Crimes Act 1900 by the Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009. This was intended to bring NSW into line with the national approach for fraud, forgery and identity crimes, with offences based on the Model Criminal Code.

All offences under Pts 4AA, 4AB and 5 of the Crimes Act are to be dealt with summarily unless elected otherwise: Criminal Procedure Act 1986, Sch 1, Table 1. When dealt with summarily in the Local Court the jurisdictional maximum of 2 years applies (Criminal Procedure Act, s 267(2)) and the aggregate sentence or total term of consecutive or partly consecutive sentences cannot exceed 5 years (Crimes (Sentencing Procedure) Act, s 58). No fraud offences have a standard non-parole period: Crimes (Sentencing Procedure) Act, s 54D. See also Maximum penalties and the jurisdiction of the Local Court in [10-000]; [20-035] Fraud offences — ss 192E–192H Crimes Act 1900.

The principles and cases concerning the current fraud offences in NSW are set out below at [20-035][20-039]. Where relevant, the sentencing principles applying to the equivalent repealed offences are included. While some of the sentencing principles developed for current offences may be relevant to repealed offences, the different maximum penalties, elements of the offence etc should be borne in mind.

[19-940] General sentencing principles for NSW fraud offences

Last reviewed: November 2023

General deterrence and the inevitability of full-time imprisonment

General deterrence is an 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). In R v Mungomery [2004] NSWCCA 450, a case involving three counts of defrauding a company under s 176A Crimes Act 1900 (rep, now see s 192E(1)(a)), Hulme J said at [41]:

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.

The difficulty in detecting and successfully prosecuting white-collar crime is also a reason why general deterrence is important: R v Wall (2002) 71 NSWLR 692 at [89]; R v Donald [2013] NSWCCA 238 at [41]. In McMahon v R [2011] NSWCCA 147 Hoeben J (Hodgson JA and Grove AJ agreeing) noted that the:

… community now views white collar crime very seriously, having regard to the fact that it is easy to commit and difficult and expensive to track down: at [83].

Further, both personal and general deterrence are of particular significance for offences which involve the systematic exploitation of the electronic banking system: Stevens v R [2009] NSWCCA 260 at [79].

The general sentencing principles applied by the courts with respect to earlier fraud provisions in the Crimes Act continue to apply despite their repeal. However, cases which state that serious fraud requires that general deterrence be the primary ore pre-eminent sentencing consideration for such offences, or that a sentence of imprisonment must be imposed unless exceptional or unusual circumstances exist, need to be approached with caution following the five-judge-bench decisions of Parente v R (2017) 96 NSWLR 633 and Totaan v R [2022] NSWCCA 75. Such propositions find no support in the text of the legislation and are incompatible with the judicial sentencing discretion: Totaan v R at [81]–[83], [90]–[91]; Parente v R at [101], [108]–[110].

In Totaan v R, a social security fraud case, the court also stated the judicial gloss placed on statutory provisions, including that general deterrence has pre-eminent importance in fraud cases, should be removed: at [93]. General deterrence should not be the primary sentencing consideration in such cases so that personal mitigating factors such as prior good character, age and prospects for rehabilitation are given less weight than might otherwise be the case: Totaan v R at [100]. The structure of s 16A Crimes Act 1914 (Cth) does not permit of such a hierarchy of sentencing considerations: Totaan v R at [78], [100]. The reasoning in Totaan v R can be applied to the similar principles that have developed with respect to general deterrence in NSW fraud cases and s 21A Crimes (Sentencing Procedure) Act 1999.

The need for general deterrence in any given case must always be assessed by reference to the personal circumstances of the offending and which may have operated on the offender: Totaan v R at [98]–[100], [130]; Kovacevic v Mills (2000) 76 SASR 404 at [43].

In respect of the presumption of imprisonment, Hili v The Queen (2010) 242 CLR 520, a Commonwealth tax fraud case, the High Court said the notion of there being a “norm” or “proposition of universal application” in setting sentences is apt to mislead: Hili v The Queen at [36]–[38], [44]. Hili v The Queen was applied in the context of NSW offences in Parente v R at [100]–[104] where the Court observed at [95]:

An approach to sentencing in drug supply cases of first determining whether there has been trafficking to a substantial degree giving rise to an assumption that there must be a full-time custodial sentence, and then to inquire whether there are exceptional circumstances that would justify some alternative imposition, may be characterised as a “two-staged” approach that is contrary to the “instinctive synthesis” approach of taking into account all of the relevant factors in order to arrive at a single result which takes due account of them all.

The same may be said in relation to fraud offences. See also Totaan v R at [90]–[93].

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.”

Similar principles were described in the earlier Commonwealth fraud case of Kovacevic v Mills (2000) 76 SASR 404 at [43]:

In our view in the more serious cases of sustained and deliberate fraud, deterrence is very important, imprisonment is likely to be required, but all mitigating circumstances and the rehabilitation of the offender must still be considered. Substantial mitigating circumstances, and in some cases considerations of mercy and leniency may lead to the conclusion that a sentence of imprisonment is inappropriate or that such a sentence is appropriate, but that the imprisonment need not be served.

Kovacevic v Mills was applied in Totaan at [99]. See also Sabbah v R (Cth) [2020] NSWCCA 89 at [2]–[10].

Not a victimless crime

Even though for some fraud offences, a specific victim cannot be identified, it is wrong to regard white-collar crime as a victimless crime. For example, in respect of insider trading, McCallum J (as she then was) said in R v Curtis (No 3) [2016] NSWSC 866 at [24]:

It causes loss (albeit unquantifiable) to individual traders and it causes harm to the community at large by damaging the integrity of the market as a level playing field.

Youth

The principles that apply to youth in respect of physical violence extend to “white collar” crimes and offences involving fraud and financial deception. However, in fraud cases, the very nature of the offences will require a level of sophistication and intelligence, albeit misguided, especially where numerous acts of defalcation are involved: Singh v R [2020] NSWCCA 353 at [41], [55]. For example, in Hartman v R [2011] NSWCCA 261, the offender’s youth (aged 21) and relative immaturity did not have any role to play in downgrading or lessening the importance of general deterrence because he was operating in the adult sphere of business and commerce in every respect and was educated and worldly: at [93]; see also Singh v R at [43]–[46], [54]–[57] and Sentencing principles applicable to children dealt with at law at [15-090]; Section 21A(3)(j) — the offender was not fully aware of the consequences of his or her actions because of the offender’s age or any disability at [11-300] and Age — advanced age and youth at [10-430].

Limited utility of statistics and schedules

The dangers of comparative sentencing for fraud cases was discussed in R v Hawker [2001] 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.

[G]reater 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 [2000] NSWCCA 419.

When sentencing for fraud offences, 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: R v Martin [2005] NSWCCA 190; PC v R [2020] NSWCCA 147 at [118]. In R v Martin, Johnson J said at [56]:

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 [2001] NSWCCA 148 at paragraphs 17–18; Woodman at paragraphs 22–24; R v Swadling [2004] 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.

In Tweedie v R [2015] NSWCCA 71 at [45], where the applicant committed, inter alia, 27 offences under s 192E, the court said at [45]: “the database relied upon in relation to the fraud offences contained only five cases of sentencing in the District Court or resentencing in this Court which makes the statistics of no use at all.” See also Scanlan v R [2006] NSWCCA 238 at [93] decided in respect of the previous form of the fraud offence. See generally Use of information about sentences in other cases at [10-022] and Use of sentencing statistics — Hili v The Queen at [10-024].

[19-970] Objective seriousness — factors of common application to fraud

Last reviewed: November 2023

The objective seriousness of a fraud offence is assessed by reference to the elements of the offence and the statutory maximum: Muldrock v The Queen (2011) 244 CLR 120 at [27]. 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:

1. 

The amount of money involved (R v Hawkins (1989) 45 A Crim R 430, R v Mungomery [2004] NSWCCA 450 at [40], R v Woodman [2001] NSWCCA 310, R v Finnie [2002] NSWCCA 533 at [59]) and whether the loss is irretrievable: R v Todorovic [2008] NSWCCA 49 at [19].

2. 

The length of time over which the offences are committed: R v Pont [2000] NSWCCA 419 at [74], [75], R v Mungomery [2004] NSWCCA 450 at [40].

3. 

The motive for the crime: R v Mears (1991) 53 A Crim R 141 at 145, R v Hill [2004] NSWCCA 257 at [6], R v Woodman [2001] NSWCCA 310 at [29].

4. 

The degree of planning and sophistication: R v Mille (unrep, 1/5/98, NSWCCA), R v Pont [2000] NSWCCA 419 at [43]–[44], R v Murtaza [2001] NSWCCA 336 at [15], Stevens v R [2009] NSWCCA 260 at [59], [78].

5. 

An accompanying breach of trust: R v El-Rashid (unrep, 7/4/95, NSWCCA), R v Pont, R v Hawkins (1989) 45 A Crim R 430.

The courts have also regarded the impact on public confidence: R v Pont at [74], [75] and the impact on the victim: at [74], [75] as relevant matters.

Factors 1–5 above are discussed in greater detail below.

1. Amount of money involved

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] NSWCCA 450 Hulme J said at [40]:

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 [2001] 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 [2002] NSWCCA 533 at [59] 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”.

In Matthews v R [2014] NSWCCA 185 at [21], the total amount of property obtained by the four deceptions encompassed by the charges and Form 1 matters was just over $1,200. The court noted at [21] that this was a relatively small amount and that s 192E captures offences which can run to defalcations in the millions of dollars. In R v Hawkins (1989) 45 A Crim R 430 at 435 on the other hand the court said the very great amounts of money involved (more than $5 million) and the long period of time over which they were committed were significant. This was no temporary “dipping into the till” crime, but a consistent and persistent demonstration of fraud by a trusted solicitor over a significant period.

In Stevens v R [2009] NSWCCA 260, although $209,182 of the $402,935 defrauded was recovered, the court noted that “the applicant’s criminality was not dependent upon whether the banks had been successful in retrieving any part of the money”; it was the amount fraudulently obtained that was to be reflected in the seriousness of the offences: at [69]. However, in Whiley v R [2014] NSWCCA 164, Adams J (Bathurst CJ and Hoeben CJ at CL agreeing) held that the undamaged return of vehicles obtained by deception significantly reduced the objective seriousness of the offences as “the extent of the loss … [is] the most significant … measure”: at [39].

In the case of a Ponzi scheme, the precise calculation of the scale and amount of the fraud is less significant than the brazen and continued conduct: Fasciale v R (2010) 30 VR 643, endorsed in Finnigan v R [2013] NSWCCA 177 at [31]. In Finnigan, Campbell J (Macfarlan JA and Barr AJ agreeing) held that it “matters little” whether a victim was robbed of $300,000 or $500,000, in the overall context of a Ponzi scheme causing losses of $1.96 million to eight “mum and dad investors” over four years. That the effect on each victim was ruinous was more compelling than precise calculation of the amount involved: at [32].

Similarly, the value of individual transactions constituting individual counts becomes of lesser importance as the pattern of offending is more blatant, frequent and entrenched: Tweedie v R [2015] NSWCCA 71 at [31], where the offending in question was a systematic, frequent and fraudulent use of stolen credit cards.

In Abellanoza v R [2021] NSWCCA 4, the offender, an accounting supervisor with no prior record, misappropriated $3.7 million from her employer by a sophisticated operation over a four-year period, with $2.6 or $2.7 million of the funds remaining unaccounted for. The court found her aggregate sentence of eight years imprisonment with a non-parole period of 5 years for the seven fraud and associated offences, was substantial but within the available range for such serious offending: [38], [144]. In sentencing, the judge was not required to make a finding as to motive for the offence, whether it be gambling, greed or disgruntlement in her employment: [3], [26].

See also Remorse demonstrated by making reparation of loss under s 21A(3)(i) below at [20-000] Mitigating factors.

2. Length of time over which the offences are committed

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 Murtaza [2001] NSWCCA 336 at [15]. In Cordoba v R [2021] NSWCCA 144, the offender was sentenced to 6 years imprisonment for defrauding a TAFE of about $1.65 million (two-thirds of their yearly budget), by engaging in 50 fraudulent transactions over 7 months. The offence involved a significant degree of planning and sophistication and a significant breach of trust. Further, the offender lied to investigators and at a public hearing, secured an adjournment for his sentencing on the basis that he needed surgery but instead was at large for nearly a year, assumed a false identity and continued to work in the same field until he was finally apprehended.

In addition, where an offence is committed over a significant period of time this may ameliorate the weight that may be afforded to good character: Luong v R [2014] NSWCCA 129 at [21]; R v Smith [2000] NSWCCA 140 at [20]–[22].

3. Motive

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; Cordoba v R [2021] NSWCCA 144. 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 at 145. However, in Abellanoza v R [2021] NSWCCA 4, the sentencing judge was not required to make a finding as to motive for the offence, whether it be gambling, greed or disgruntlement in her employment: at [3], [26]. Further, the fact an offence is committed for a motive other than personal greed is not to be considered a matter of mitigation: Khoo v R [2013] NSWCCA 323 at [78].

4. Degree of planning

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] NSWCCA 419 at [43]–[44]; R v Murtaza [2001] NSWCCA 336 at [15]; Cordoba v R [2021] NSWCCA 144 at [111]. 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. However, this would need to be proved beyond reasonable doubt: Meis v R [2022] NSWCCA 118 at [29], [47]; Olbrich v The Queen (1999) 199 CLR 270 at [27].

5. Breach of trust

Breach of trust can be relevant where it is an element of the offence or as a key feature of aggravation: R v Pont [2000] NSWCCA 419 at [43]–[44], R v Murtaza [2001] NSWCCA 336 at [15]. 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. However, 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 [2005] NSWCCA 190 at [40] and 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] NSWCCA 355 at [35]. Hulme J said at [34]:

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.

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 [47].

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 Suleman v R [2009] NSWCCA 70, the judge erred by finding the applicant’s dealings with investors, particularly those within the Assyrian community, amounted to a breach of trust. The fact the applicant was considered to be a successful businessman within the Assyrian community did not impose a position of trust upon him in relation to any person in that community with whom he dealt. Nor did the applicant occupy a position of trust because the investors were commercially naïve. For a relationship of trust to exist, there must have been at the time of the offending a special relationship between the victim and offender, which transcends the usual duty of care arising between persons in the community in their everyday contact or their business and social dealings: at [22], [27].

In R v Edelbi [2021] NSWCCA 122, the court applied Ridley v R [2008] NSWCCA 324 at [85] and said the applicant, who was lodging false compulsory third party insurance claims for services not provided, had breached the trust he had with the community who contribute to the provision of compulsory third party insurance and have an interest in the integrity of the system: at [48]–[50].

Professionals
Legal practitioners

In the two-judge bench decision of Marvin v R (unrep, 1/11/95, NSWCCA), the offender, a solicitor, was convicted of 41 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 (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] NSWCCA 183 at [25]. The court in R v Smith [2000] NSWCCA 140 at [16] 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 10 years with a balance of term of five years. Assi v R [2006] 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 [2006] NSWCCA 275 at [19].

Accountants

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.

Directors

R v Houghton [2000] 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 [19]: “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”.

In R v Hinchliffe [2013] NSWCCA 327, the court allowed a Crown appeal against a managing director who defrauded a body corporate of $1.5 million and was sentenced to two years imprisonment to be served by way of intensive correction order (ICO). He was resentenced to an overall sentence of four years imprisonment with a non-parole period of two years three months.

Other professionals

Coles v R [2016] NSWCCA 32 involved a leading art dealer who sold $8 million worth of artworks to investors who were unaware the paintings had already been on-sold, or belonged, to others. The sentencing judge regarded the offending as “a brazen breach” of the trust his clients had reposed in him: at [13].

Senior employees

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.

Nursing home operators

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 (1997) 96 A Crim R 582. Ghosting was held to be an aggravating feature taken into account in R v Giallussi [1999] NSWCCA 56 at [15].

[19-980] Section 21A Crimes (Sentencing Procedure) Act 1999 and fraud offences

Last reviewed: November 2023

The limitations on applying aggravating and mitigating factors in accordance with s 21A Crimes (Sentencing Procedure) Act 1999 is discussed in detail in Limitations on the use of s 21A — aggravating and mitigating circumstances at [11-040]. A key limitation is that factors which are elements integral to the offence are not to be taken, of themselves, as aggravating features because this would constitute impermissible “double counting”: R v Martin [2005] NSWCCA 190; R v Wickham [2004] NSWCCA 193 at [22]–[23]. However, while such factors cannot be taken into account as aggravating factors they can be taken into account as circumstances of the offence: Arvinthan v R [2022] NSWCCA 44 at [39]. See also [11-000] Section 21A factors “in addition to” any Act or rule of law.

[19-990] Aggravating factors

Last reviewed: November 2023

Breach of trust under s 21A(2)(k)

Breach of trust is a key consideration in sentencing for many fraud offences and is discussed generally above in Objective Seriousness – factors of common application to fraud at [19-970]. This section focuses on the issue of “double-counting” in the application of s 21A(2)(k) Crimes (Sentencing Procedure) Act 1999.

A judge can only have “additional regard” to the abuse of a position of trust as an aggravating factor under s 21A(2)(k) where it is not an element of the offence. In R v Martin [2005] NSWCCA 190 the judge was found to err by having “additional regard” to s 21A(2)(k) where the fraud offence (trustee fraudulently disposing of property under s 172 Crimes Act 1900 (rep)) had “abuse of authority or a position of trust” as an element of the offence. While mention of the abuse of trust is permissible in respect of characterising the objective gravity of the offence, to pay “additional regard” under s 21A constitutes impermissible “double counting”: R v Wickham [2004] NSWCCA 193 at [22]–[23] applied.

In Martin the court said at [40]:

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:

(a) 

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;

(b) 

fraudulently omitting to account contrary to s 178A Crimes Act 1900 by a real estate agent: R v Woodman [2001] NSWCCA 310 at paragraphs 14-15;

(c) 

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;

(d) 

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

(e) 

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.

In Lu v R [2014] NSWCCA 307, the judge made no error in finding the aggravating factor under s 21A(2)(k) established. Although it was an element of the offence under s 176A Crimes Act 1900 (rep) that the offender be a director of a company, “not all company directors accept other peoples’ money for the purpose of investment”, which was the essence of the position of trust abused in that case: at [21].

However, in Suleman v R [2009] NSWCCA 70, the judge erred by taking into account as an aggravating factor, pursuant to s 21A(2)(k), that the applicant’s dealings with investors, particularly those within the Assyrian community, amounted to a breach of trust. See discussion above in Objective Seriousness — factors of common application to fraud at [19-970].

See also Section 21A(2)(k) — abuse of a position of trust or authority at [11-160].

Class of victims under s 21A(2)(l)

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) 65 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 [24].

See also Section 21A(2)(l) — the victim was vulnerable at [11-170].

Multiple victims or a series of criminal acts under s 21A(2)(m)

The aggravating factor in s 21A(2)(m) Crimes (Sentencing Procedure) Act 1999 is concerned with the situation where a single offence contains multiple criminal acts or victims. For example, in Johnston v R [2017] NSWCCA 53, when considering the question of manifest excess it was relevant that the plea was to a “rolled up count” involving 156 fraudulent transactions, meaning the criminality involved was greater than a charge involving only one episode of criminal conduct: at [68]–[70].

However, s 21A(2)(m) is not concerned with offenders who are being sentenced for a series of offences, separately charged, even when committed against multiple victims because that would constitute “double counting”: R v Tadrosse (2005) 65 NSWLR 740 at [28]–[29]; Clinton v R [2018] NSWCCA 66 at [27]–[29]. Such factors can be taken into account as a circumstance of the offending: Clinton v R at [37]–[39]. In Tadrosse, the sentencing judge erred by taking s 21A(2)(m) into account because the applicant was being sentenced for multiple offences and the numerous victims and acts of criminality would be dealt with in accordance with the principle of totality: [29]. Similarly, in R v Kilpatrick [2005] NSWCCA 351, the judge erred by referring to multiple victims in the context of the offences, each of which was individually charged. In Clinton, while the agreed facts revealed uncharged criminal acts were involved in the commission of each fraud offence, s 21A(2)(m) did not apply because the acts were not particularised in the offences: [38]–[40].

See also Section 21A(2)(m) — the offence involved multiple victims or a series of criminal acts at [11-180].

Part of a planned or organised criminal activity under s 21A(2)(n)

An offence involving systematic dishonesty accompanied by planning, sophistication and repetition will constitute an aggravating factor under s 21A(2)(n) on sentence: R v Pont [2000] NSWCCA 419 at [43]–[44]. 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 at [43]–[44]; R v Murtaza [2001] NSWCCA 336 at [15].

The aggravating factor was established in Yow v R [2010] NSWCCA 251 as the nine offences of making and using a false instrument were committed in the context of an organised criminal syndicate and the applicant had arrived in Australia with the sole purpose of using the counterfeit credit cards to obtain goods for the purposes of on-sale: at [13]–[14].

See also Section 21A(2)(n) — the offence was part of a planned or organised criminal activity at [11-190].

The offence was committed for financial gain under 21A(2)(o)

Committing a fraud for financial gain, will sometimes constitute an aggravating factor on sentence, but care must be taken to ensure there is no “double counting”. In Whyte v R [2019] NSWCCA 218, the sentencing judge erred by taking into account financial gain under s 21A(2)(o), when financial gain was an element of the offences of obtaining financial advantage by deception contrary to s 178BA (rep) and s 192E and the financial gain was not present to an unusual extent: Whyte v R at [30]–[34]. The magnitude of the defalcations in Whyte was considered in the offences’ totality and,to add “the further consideration of financial gain beyond what would normally be expected of offences of the kind for which sentence is to be imposed would be to double count”: at [34]; see also Clinton v R [2018] NSWCCA 66 at [10], [12], [20]–[22].

Financial gain is not an inherent characteristic of identity fraud and may constitute an aggravating factor in some cases: Lee v R [2019] NSWCCA 15 at [83]; see also [20-037] Identity crime offences — ss 192J–192L Crimes Act 1900.

[20-000] Mitigating factors

Last reviewed: November 2023

Mental condition

This sentencing factor is discussed in more depth and with reference to High Court decisions in Mental health or cognitive impairment at [10-460]. Briefly, mental illness is one of the factors that forms part of the complex interplay of factors relevant to the sentencing process. It may be relevant to the emphasis to be given to specific and general deterrence. It is also a matter which can reduce an offender’s moral culpability by affecting their ability to understand the wrongfulness of their actions, or to make reasonable judgments, or to control faculties and emotions. It is accepted that the nature and severity of the mental illness, may render a custodial penalty more onerous: DPP (Cth) v De La Rosa (2010) 79 NSWLR 1 at [177]; R v Donald [2013] NSWCCA 238 at [75].

In cases of fraud, care must be taken where an offender has claimed a mental condition and the offence has involved deception over a long period of time. The court must take particular care in determining whether there is a causal connection between the offender’s mental condition and the commission of the offence(s). The following cases provide illustrations.

  • In R v Hinchliffe [2013] NSWCCA 327 the respondent made unauthorised transfers over a one-year period to a company of which he was the sole director. The sentencing judge erred in finding there was a causal connection between the offences and the respondent’s bipolar disorder: at [246]. The respondent did not give evidence at sentence. Over the course of the offending he was functioning in a responsible business position, which he had occupied with apparent success for years prior, and no character witnesses gave evidence to support a finding of any apparent difference in demeanor: R v Hinchliffe at [239].

  • The offender’s narcissistic personality disorder in De Angelis v R [2015] NSWCCA 197 was neither causally connected to the offending nor of sufficient severity to warrant any significant amelioration of sentence: at [62]. The nature of the offending was a vast, deliberate and continuing fraudulent scheme involving (inter alia) perseverance, cunning and intelligence: at [66].

  • In Hartman v R [2011] NSWCCA 261 a nexus was established between the offences and the applicant’s psychiatric condition: Hartman v R at [80]. In that case, the applicant was suffering from a genuine and long term depression spectrum that contributed to his compulsive insider trading. The offending gave him temporary but misguided relief from his major depressive symptoms: Hartman v R at [91]. The applicant’s moral culpability was lessened and some moderation of general deterrence warranted: at [92].

  • Similarly, in R v Donald [2013] NSWCCA 238, the respondent’s bipolar disorder was accepted to have compromised his ability to control his faculties and emotions but did not render him unable to understand the wrongfulness of his actions or to make reasonable judgments. The respondent’s moral culpability was moderately reduced, however there was still a significant role for general deterrence to play: at [76].

  • In R v Joffe [2015] NSWSC 741 the offender’s mental condition was “to an extent casually connected” with the offences and thus reduced his moral culpability and the need for denunciation: at [121]. The judge also accepted that he was suffering from anorexia nervosa which would render any custodial sentence more onerous: [121].

  • In Subramaniam v R [2013] NSWCCA 159, the impact of the offender’s personality disorder was a complex issue, and the causal relationship between her condition and the offending lay in her compromised intellectual and emotional restraints, such that the offender’s moral culpability was found to be moderately reduced: [58].

Absence of criminal record under s 21A(3)(e) and prior good character under s 21A(3)(f)

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 [1999] NSWCCA 285 at [12]. 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] NSWCCA 140 at [20]–[24]; R v Phelan (1993) 66 A Crim R 446; R v Houghton [2000] NSWCCA 62 at [18].

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 [2000] NSWCCA 345 at [20] (a two-judge bench decision referred to in a schedule in R v Hare [2007] NSWCCA 303).

See also Section 21A(3)(e) — the offender does not have any record (or any significant record) of previous convictions at [11-250].

Remorse demonstrated by making reparation of loss under s 21A(3)(i)

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. 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(3)(i) — remorse shown by the offender 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 [1999] NSWCCA 56 and R v Strano [2002] NSWCCA 531 at [76]. See also Subramaniam v R [2013] NSWCCA 159 at [53]–[54].

In R v Woodman [2001] NSWCCA 310 (a two-judge bench decision) Wood CJ at CL said at [32]:

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.

Hidden J (McClellan CJ at CL and Grove AJ agreeing), in obiter remarks in Job v R [2011] NSWCCA 267, noted that the above observation should be approached with some caution. His Honour stated:

I doubt that the former Chief Judge was saying anything more than that, in determining sentence, an offence which has caused a loss which cannot be made good is likely to be viewed more seriously, but the extent to which reparation sounds in mitigation will depend upon the degree of sacrifice involved: at [50]; cf Blackstock v R [2013] NSWCCA 172 at [66].

In R v Fell [2004] 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 [29].

The sentencing judge in Job v R erred by neglecting to take the applicant’s offer of restitution into account: at [48]. While its significance may well have been diminished by the fact the applicant had made no payment at the time of sentence, the undertaking to make reparation, and the steps he had taken to that end by putting two properties on the market, were entitled to some weight in his favour: at [48]–[49].

In Upadhyaya v R [2017] NSWCCA 162, there was no error in the judge not taking the compensation direction under s 97(1) Victims Rights and Support Act 2013 into account as a mitigating factor: at [68]. Under the common law, confiscation orders and the like could only be taken into account in mitigation in exceptional circumstances, and even then, not when the order was to forfeit the proceeds, or was in the nature of a pecuniary order reflecting the benefit derived from committing the offence: Upadhyaya v R at [64]; R v Brough [1995] 1 NZLR 419; R v Kalache [2000] NSWCCA 2 at [76]. A direction under s 97(1) is in the nature of a claw-back or disgorgement of an offender’s “ill-gotten gains”, and therefore by definition does not operate in mitigation of sentence: Upadhyaya v R at [65]–[66].

Guilty plea under s 21A(3)(k)

The statutory framework which provides the mandatory discounts for guilty pleas to offences dealt with on indictment is contained in Pt 3, Div 1A Crimes (Sentencing Procedure) Act 1999. See [11-515] Guilty plea discounts for offences dealt with on indictment. For fraud offences dealt with summarily to which the common law still applies, see [11-520] Guilty plea discounts for offences dealt with summarily and exceptions to Pt 3 Div 1A. It was said before the guideline judgment of R v Thomson and Houlton (2000) 49 NSWLR 383 that pleading guilty is a factor which in white collar crimes especially, attracts a considerable measure of leniency: R v Falzon (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 [2008] NSWCCA 49 at [24].

See also Guilty pleas at [11-500]. Note that the position in relation to Commonwealth offences is different: see [16-010] General sentencing principles applicable at plea of guilty: s 16A(2)(g).

Delay

Delay in having the matter finalised leaves the offender in a position of uncertainty and can be taken into account: R v Houlton [2000] NSWCCA 183 at [23], [41]–[42]; DPP v Hamman (unrep, 1/12/1998, NSWCCA); and R v Phelan (1993) 66 A Crim R 446. It is not every case where delay has occurred in the prosecution of an offender that a reduced sentence results, since each case depends upon its own particular circumstances: Coles v R [2016] NSWCCA 32 at [20]. Delay is not uncommon in complex fraud cases because of the difficulty in detection, investigation and proof. Consequently, delay will have less significance where the offender has engaged in complex fraud and made conscious and deliberate attempts to avoid detection: R v Houlton; Miller v R [2014] NSWCCA 34 at [183]–[186]; see also R v Zerafa [2013] NSWCCA 222 at [88]–[89]; Giourtalis v R [2013] NSWCCA 216 at [1791]–[1793]; R v Donald [2013] NSWCCA 238 at [41]–[57] in the context of Commonwealth fraud.

Where delay is taken into account, it is preferable that is done so in the overall assessment of sentence rather than as a quantified reduction on the sentence imposed: R v Boughen [2012] NSWCCA 17 at [105].

See also Subjective matters at common law at [10-530].

Hardship to third parties

See Subjective matters at common law at [10-490].

[20-010] The relevance of a gambling addiction

Last reviewed: November 2023

It is not uncommon for fraud offenders to suffer from a gambling addiction: R v Todorovic [2008] NSWCCA 49 at [12]–[13], [62].

The court in Johnston v R [2017] NSWCCA 53 extensively reviewed the authorities on relevance of a gambling addiction. It has been consistently held that the fact offences were committed to feed a gambling addiction will not generally be a mitigating factor at sentence: Johnston v R at [36]; R v Molesworth [1999] NSWCCA 43 at [24], [30]; Le v R [2006] NSWCCA 136 at [32]; Assi v R [2006] NSWCCA 257 at [27]; R v Huang [2007] NSWCCA 259 at [42]; R v Todorovic at [62]; Marks v R [2009] NSWCCA 24 at [29]. Even when the gambling addiction is pathological, it will be a rare case that an offender can seek mitigation of his or her penalty: Johnston v R at [36] citing Assi v R at [27].

A gambling addiction will not generally reduce the offender’s moral culpability where the offence is committed over an extended period, because the offender has had a degree of choice as to how to finance their addiction: Johnston v R at [38].

A gambling addiction will not often be connected to the commission of the offence but merely provide a motive or explanation for its commission and is therefore only indirectly responsible for the offending conduct: Johnston v R at [38] quoting the Victorian Court of Appeal decision of R v Grossi (2008) 183 A Crim R 15 at [56]–[57].

In cases where general deterrence is important, it is inappropriate to treat an underlying explanation that the motive was gambling as a mitigating circumstance or factor reducing moral culpability, particularly where the frauds are perpetrated and skilfully executed over an extended period: Johnston v R at [38]. 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.

In the guideline judgment of R v Henry (1999) 46 NSWLR 346 at [203], Spigelman CJ expressly rejected the proposition that an addiction to gambling is a matter in mitigation. Spigelman CJ and Wood CJ at CL stated that addiction (including drugs or gambling) is not of itself a mitigating circumstance: Johnston v R at [40] citing R v Henry at [178]–[203], [273].

The remarks of Wood CJ at CL in R v Henry at [273], concerning the commission of robbery offences to feed a drug addiction apply equally to fraud offences committed to feed a gambling addiction: Johnston v R at [40]–[41]. (These remarks of R v Henry at [273] are extracted in Drug addiction at [10-485].) A gambling addiction may be an important consideration in the assessment of the offender’s prospects of rehabilitation and likelihood of re-offending: Luong v R [2014] NSWCCA 129 at [23], [24]; Hartman v R [2011] NSWCCA 261 at [52].

[20-020] Totality

Last reviewed: November 2023

The majority of fraud cases involve multiple offences and consequently most sentences imposed will be aggregate sentences under s 53A Crimes (Sentencing procedure) Act 1999: see Aggregate sentences at [7-505]ff.

The totality principle is to be applied, and in the case of imprisonment, this may involve fixing an appropriate sentence for each offence and then considering matters of accumulation or concurrency: R v Pearce (1998) 194 CLR 610 at [45]. This task requires consideration of the fact the offender is being sentenced for multiple offences and to ensure that the ultimate sentence imposed is appropriate to the totality of the applicant’s offending and their personal circumstances: Stratford v R [2007] NSWCCA 279 at [29]. See also R v Chan [2000] NSWCCA 345 at [26].

However, the application of the totality principle must not result in a “blanket assessment” of each offence. In Subramaniam v R [2013] NSWCCA 159, the judge erred by imposing indicative sentences of two years, one month for each of the 23 fraud offences and three money laundering offences. This was notwithstanding significant variations in the amounts of money the subject of the deceptions in each offence and the fact the fraud offences carried a maximum penalty of 5 years while money laundering offences carried a maximum of 15 years: at [29]. The sentencing judge in Suleman v R [2009] NSWCCA 70 fell into similar error by treating all 14 counts of s 178BB as possessing the same level of criminality regardless of the amount invested or lost: at [38].

See further Concurrent and Consecutive Sentences at [8-200][8-230] and R v Tadrosse (2005) 65 NSWLR 740; R v Finnie [2002] NSWCCA 533.

[20-035] Fraud offences — ss 192E–192H Crimes Act 1900

Last reviewed: November 2023

Sections 192B, 192C and 192D are definition provisions, and appear in Division 1 of Pt 4AA. The offence provisions appear in Division 2 of Pt 4AA.

Section 192E provides a person who, by any deception, dishonestly obtains property belonging to another or obtains any financial advantage or causes any financial disadvantage, commits the offence of fraud. While actual dishonesty, not reckless dishonesty, is required, a deception may operate either by recklessness or intent, and the two concepts must not be confused: Bazouni v R [2021] NSWCCA 256 at [87] and [90]; see also Selkirk v DPP [2020] NSWSC 1590 at [57]. The maximum penalty is 10 years imprisonment. This represents an increase from some of the repealed offences, for example, the 5-year maximum penalty which was applicable to obtaining money by deception under s 178BA (rep). The introduction of a higher maximum penalty than existed for a corresponding repealed offence “requires some adjustment to the range of sentences that would formerly have been considered appropriate”: Baumer v The Queen (1988) 166 CLR 51 at 57. However, many of the sentencing principles discussed in cases dealing with the predecessor provisions remain relevant.

When sentencing for offences against s 192E it should be borne in mind that the provision captures offences which can run to defalcations in the millions of dollars: Matthews v R [2014] NSWCCA 185 at [21]. In that case, despite unsophisticated deceptions amounting to just over $1,200, there was a need for deterrence in credit card fraud cases which required the imposition of a custodial sentence: at [21]. The offender received two years, three months imprisonment, with a non-parole period of one year, three months.

The disparity in amounts involved in s 192E offences may be demonstrated by contrasting Matthews v R with Zhao v R [2016] NSWCCA 179, where a single count of s 192E related to a fraudulent benefit of US$730,773.39, with a fraud offence involving an additional US$190,224.28 taken into account on a Form 1: Zhao v R at [10]. The offender in Zhao received a sentence of three years imprisonment with a non-parole period of one year, eight months.

In Whiley v R [2014] NSWCCA 164, the court held that a starting point of 4 years for each of two offences against s 192E represented a far greater proportion of the 10-year maximum penalty than justified given the objective circumstances of the offences: at [40]. In each offence, the applicant had purchased a vehicle using a fraudulent cheque and a false name, but returned the vehicles shortly after, undamaged with the keys and a note apologising to each victim: at [39].

In Clinton v R [2018] NSWCCA 66 uncharged criminal acts were relevant to the determination of the objective seriousness of the applicant’s offending and his moral culpability, but they could not also be taken into account as an aggravating factor under s 21A(2)(m): [38]–[40]; see also Multiple victims or a series of criminal acts under s 21A(2)(m) above at [19-990]. Likewise, financial gain is an inherent characteristic of s 192E(1)(b) offences and cannot be taken into account as an aggravating feature under s 21A(2)(o) unless there is something unusual about this aspect of the offending: Clinton v R at [10], [12], [20]–[22]; see also Whyte v R [2019] NSWCCA 218 at [44]; [67]; [76]; see also The offence was committed for financial gain under s 21A(2)(o) above at [19-990] .

In McLaren v R [2021] NSWCCA 12 the offender was sentenced to an aggregate sentence of 12 years with a non-parole period of nine years for 17 offences against s 192E(1)(b) and one against s 193B(2) (deal with proceeds of crime) following his successful sentence appeal for operating a $7.6 million “Ponzi scheme” involving 15 victims. The court acknowledged this was a “grave example of fraud” because of the amount of money, planning, and the fact it was committed over an extended period of time with devastating consequences for the victims. The judgment helpfully reviews sentences for a number of similar cases at [83]–[96]. See also Singh v R [2020] NSWCCA 353 where the offender was sentenced to 6 years imprisonment with a non-parole period of 4 years for three offences against s 192E(1)(b), with three other s 192E(1)(b) offences taken into account on a Form 1. The offender, a 23-year-old assistant accountant, defrauded an advertising agency of $3,286,125 over a three-year period.

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, the same maximum applicable to the predecessor offence under s 178BB.

In Edelbi v R [2021] NSWCCA 122, over a period of 2 years, the offender used his prior position in the compulsory third party claims department of an insurance company to cause fraudulent payments, totalling $299,809, to be paid to various fictitious physiotherapy providers. The offender was sentenced for five offences against s 192G(b), five against s 192E(1)(b), and one against s 93T (participate in a criminal group). The judge was found to have erred by not considering whether the sentence could be served by way of intensive correction order (ICO). The offender was resentenced to an aggregate sentence of one year 11 months to be served by way of ICO (taking into account 13 months already served in custody).

In Kapua v R [2023] NSWCCA 14, the offender, over a period of four months, used the identities of six people to obtain $15,387.30 in cash and goods and attempted to obtain $1,374,502, committing multiple offences contrary to s 192E(1)(b). An appeal against a sentence of 6 years imprisonment with a non-parole period of 4 years, 3 months was dismissed. While there was evidence of a mental health condition, an equally significant consideration was a drug addiction, and a desire to commit offences to fund that drug use.

There are also fraud offences relating to the destruction of accounting records (s 192F) and concerning fraudulent offending by officers of an organisation (s 192H) which carry maximum penalties of imprisonment of five years and seven years respectively.

Equivalent offences under previous statutory scheme

Directors etc cheating or defrauding — s 176A Crimes Act 1900 (repealed)

“Defraud” has been taken to require a loss to the victim of something of value. The loss may be intangible, but must at best involve prejudice to the victim’s “proprietary rights”: Baldini v R [2007] NSWCCA 327 at [42]–[46]; Bikhit v R [2007] NSWCCA 202 at [49].

In Stratford v R [2007] NSWCCA 279 at [43] 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 relation to offences against s 176A, Dunford J in R v Giam (No 2) [1999] NSWCCA 378 said at [27]:

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 [1980] 2 NSWLR 597, R v Pantano [1990] 49 A Crim R 328.

Fraudulently misappropriate money collected/received — s 178A Crimes Act 1900 (repealed)

In R v Higgins [2006] NSWCCA 38, a case involving 15 counts under s 178A, Spigelman CJ stated at [12]–[13]:

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 [1980] 2 NSWLR 597; R v Pantano (1990) 49 A Crim R 328 at 330).

In R v Higgins, the sentence appeal was dismissed and the aggregate sentence of 8 years imprisonment with a non-parole period of 5 years was confirmed.

It is important to ensure that when considering breach of trust as an aggravating feature under s 21A(2)(k) Crimes (Sentencing Procedure) Act 1999, it is not a 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): R v Higgins [2006] NSWCCA 326 (unrelated to the case cited above).

The amount of money misappropriated is only one of the relevant considerations in determining the seriousness of the offences and is not necessarily decisive, especially where there is a period of repeated offending and false expectations are created for the victims who engaged the offender as a trusted member of a profession: Assi v R [2006] NSWCCA 257.

Obtain money or valuable thing by deception — s 178BA Crimes Act 1900 (repealed)

The courts have made a number of important observations concerning credit card fraud under the previous form of the offence. In R v Araya [2005] NSWCCA 283, Johnson J said at [98]:

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.

These remarks become increasingly important given the shift towards a cashless society. In Yow v R [2010] NSWCCA 251 at [30], Fullerton J (Hodgson JA and Price J agreeing) made the following remarks:

The cost to the community of syndicated credit card fraud is not only that it undermines consumer confidence. The losses generated by frauds of this magnitude are invariably passed on to the consumer through the imposition of higher levies or fees. The general public who increasingly use credit cards as a convenient substitute for cash on a daily basis, and the financial institutions that offer and provide a secure range of credit card facilities to both traders and consumers, are entitled to expect that the perpetrators of fraudulent schemes of the kind with which the applicant was involved are appropriately punished both to deter those who may be tempted to participate in credit card fraud and to dissuade those who might be tempted by financial reward to come to Australia with the express purpose of doing so.

In Cranshaw v R [2009] NSWCCA 80, 62 offences were committed, including multiple offences contrary to s 178BA (the predecessor to s 192E), with a further 156 offences of using or making a false instrument taken into account on a Form 1, occuring over a 3-month period. The total exposure to financial institutions was $1,099,200, and of that amount $435,900 was obtained; the offender himself received a net gain of $43,590. The offender was sentenced to 4 years imprisonment with a non-parole period of 2 years 6 months. The judge did not err in failing to refer to alternatives to full time imprisonment, for “no sentencing option other than full time imprisonment” was appropriate: at [64].

[20-037] Identity crime offences — ss 192J–192L Crimes Act 1900

Last reviewed: November 2023

In recognition of the problems associated with the theft and misuse of personal identification information, a series of identity fraud offences were created in Pt 4AB.

It is 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. A person who possesses equipment, material or a thing which is capable of making identification documents, intending to use it to commit an offence, commits an offence contrary to s 192L. The maximum penalty is 3 years imprisonment.

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 [2009] NSWCCA 260 at [2]. 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 v R at [2]. The “ease with which identity crimes can be committed has expanded well beyond the traditional means of stealing mail or eavesdropping to obtain personal data” and the “significance of general deterrence in the exercise of the sentencing discretion will remain a matter to which particular weight must be given”: Stevens v R at [6]–[7], applied in Krol v R [2011] NSWCCA 175 at [81] and Lee v R [2019] NSWCCA 15 at [83]. It is appropriate to recognise the prevalence of identity offences and the need for general deterrence: Lee v R at [84].

The need for both personal and general deterrence, and the imposition of severe punishment, in cases of identity fraud was again reiterated by the Court of Criminal Appeal in Thangavelautham v R [2016] NSWCCA 141 at [37], [104]–[105]. These offences “not only have the potential to cause serious financial hardship and embarrassment to a large number of consumers but also have the capacity to undermine confidence in the country’s financial system”: Thangavelautham v R at [86].

In Chen v R [2015] NSWCCA 277, the offender was sentenced for his involvement in a large identity fraud operation as a producer of false credit cards, driver’s licences and Medicare cards. He received a sentence of 6 years imprisonment with a non-parole period 4 years 6 months for six counts against s 192J, one count against s 192K, one count of possessing a false document (s 255) and five counts of possessing equipment to make false documents (s 256(1)). An additional 12 offences were taken into account on a Form 1.

In Islam v R [2020] NSWCCA 236, the offender was the “ringleader” of a group of taxi drivers who “skimmed” the credit cards of more than 550 taxi passengers over a 3-year period, obtaining a total of between $250,000–$300,000. He was on bail at the time of the offences and had a prior record for fraud. He was sentenced for this offence (s 192J) and an offence of participating in a criminal group (s 93T(1A)), to an aggregate sentence of 4 years 3 months with a non-parole period of 3 years 8 months.

In Lou v R [2021] NSWCCA 120, the offender, who was employed at a store, installed a card skimming device on the store’s ATM cloning credit cards onto gift cards. She obtained more than 1,300 credit cards, gift cards and $1.3 million in cash. Multiple offences were committed contrary to s 192J, s 192K and s 192E, and some of the offences were committed while on conditional liberty. The appeal against an aggregate sentence of 4 years imprisonment with a non-parole period of 2 years 3 months was dismissed. The court noted the increasing prevalence of credit card fraud and identity offences, and the offending was sophisticated and difficult to detect.

The fact an offender commits an offence of dealing with identification information contrary to s 192J for financial gain can be taken into account as an aggravating factor pursuant to s 21A(2)(o) of the Crimes (Sentencing Procedure) Act 1999. Financial gain is not an inherent characteristic of the offence. It is not uncommon for false identity documents to be created for purposes unrelated to financial gain: Lee v R [2019] NSWCCA 15 at [55]–[56], [61], [63]. In Lee v R, the offender’s sentence of 4 years imprisonment with a non-parole period of 18 months for four offences including two against s 192J was appropriate given the offender’s skill in creating false documents of high quality was essential to the success of the sophisticated and organised criminal operation which resulted in a loss of $595,821 to banks: at [81].

[20-038] Forgery offences — ss 253–256 Crimes Act 1900

Last reviewed: November 2023

It is an offence for a person to make (s 253) or knowingly use (s 254) 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. The maximum penalty for offences against ss 253 and 254 is 10 years imprisonment. An offence is committed if a person possesses a false document knowing it is false, with the intention to induce another to accept it as genuine, and in so doing to obtain property, a financial advantage, or to influence exercise of a public duty: s 255. An offence is committed if a person possesses equipment, material or a thing, designed to make a false document, knowing it so designed and intending it will be used to commit forgery: s 256(1). The maximum penalty for offences against s 255 or s 256(1) is 10 years imprisonment.

In R v Grover [2013] NSWCCA 149, the offender used false driver licences to purchase cold and flu medication. The court dismissed the submission that head sentences of 1 year 3 months for each of the two counts under s 254 were manifestly excessive as the fraudulently obtained cold and flu medication was for the purpose of on-sale to enable the pseudoephedrine in it to be used in drug manufacture, and the offences were committed over an extended period and motivated by commercial gain: at [85]–[86].

Equivalent offence under previous statutory scheme

Make or use false instrument — s 300 Crimes Act 1900 (repealed)

In O’Keefe v R (1992) 60 A Crim R 201 at 204, a case involving nine charges under s 300(1) (rep) and nine under s 300(2) (rep), 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.

In R v Tadrosse (2005) 65 NSWLR 740, the offender was convicted of six counts under s 300, one count under s 302, and two under each of ss 178B and 178BA. More than $200,000 was defrauded by the applicant using false documents. He was sentenced to 6 years imprisonment with a non-parole period of 3 years 6 months.

[20-039] Larceny by clerk or servant — s 156 Crimes Act 1900

Last reviewed: November 2023

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] NSWCCA 415, the applicant stole $135,199.40 from her employer 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 sentencing judge’s reasons including general deterrence.

In R v Swadling [2004] 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 11 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 6 years 3 months with a non-parole period of 3 years 3 months. The court found the offences were in the middle of the range of seriousness, the methods employed by the applicant were unsophisticated, the amount taken was not large, and she did little to cover her tracks and was a relatively junior employee.

[20-045] The Commonwealth statutory framework

Last reviewed: November 2023

The Criminal Code (Cth) contains offences of fraudulent conduct (Pt 7.3), false or misleading statements (Pt 7.4) and forgery (Pt 7.7). The general fraud provision in s 134.2(1) Criminal Code covers a wide range of criminal conduct including tax evasion, Medicare and social security fraud as well as Commonwealth employees fraudulently diverting payments. There are additional federal fraud offences and fraud-related offences in other legislation, including the Corporations Act 2001 (Cth), the Customs Act 1901 (Cth), the Crimes (Currency) Act 1981 (Cth) and others. The more common federal fraud offences are dealt with in more detail in Types of Commonwealth fraud at [20-065] below.

The Crimes Act 1914 (Cth) contains matters of general application to federal offences including summary/indictable disposal, time limits, powers of arrest, search and seizure and sentencing. Generally, Commonwealth fraud offences are indictable but many offences may be dealt with summarily in accordance with s 4J of the Crimes Act 1914. Section 4J(4) also provides for the summary disposal of offences relating to property valued at $5,000 or less, upon the request of the prosecutor. A federal offender must be sentenced in accordance with Part IB Crimes Act 1914 (Cth). In particular, a sentencing court must impose a sentence of a severity appropriate in all the circumstances taking into account any “relevant and known” matters listed in s 16A(2): see General sentencing principles applicable: s 16A at [16-010]. There are also specific provisions in the Crimes Act in relation to the imposition of sentences of imprisonment, including that imprisonment is a sentence of last resort and is only available in “exceptional circumstances” for certain minor property offences: see Sentences of Imprisonment at [16-040].

Common law principles also apply to the sentencing of federal offenders: Aboud v R [2021] NSWCCA 77 at [87]. For example, even though there is no specific reference to delay in the factors listed in s 16(A)(2), it remains a relevant sentencing consideration: Aboud v R at [92].

[20-050] Relevance of NSW fraud principles and comparative cases for Commonwealth matters

Last reviewed: November 2023

While specific sentencing principles have been developed in respect of Commonwealth fraud offences, many of the principles that apply to State fraud offences also apply: see DPP (Cth) v De La Rosa (2010) 79 NSWLR 1 at [297]; Scook v R [2008] WASCA 114 at [16]. For example, the scale and complexity of the offence, the level of sophistication and planning involved, the way in which and time over which the fraud was pursued and implemented, the offender’s role and any detailed knowledge of the relevant system defrauded, general deterrence, the possibility of detection and the amount defrauded are relevant to sentencing for Commonwealth fraud: Dickson v R [2016] NSWCCA 105 at [166]–[167]. See also [19-940] General sentencing principles for NSW fraud offences and [19-970] Objective seriousness — factors of common application to fraud.

In Hili v The Queen (2010) 242 CLR 520 the plurality said at [63]:

[t]he applicants’ offending was sustained over a long time. It was planned, deliberate and deceitful, requiring for its implementation the telling of many lies. The applicants acted out of personal greed. The amount of tax evaded was not small. Detection of offending of this kind is not easy. Serious tax fraud, which this was, is offending that affects the whole community. As has been pointed out in [previous cases], the sentences imposed had to have both a deterrent and a punitive effect, and those effects had to be reflected in the head sentences and the recognizance release orders that were made.

Reference can also be made, in some circumstances, to State comparative cases where the same maximum penalty applies and there is similar criminal conduct: Nakash v R [2017] NSWCCA 196 at [18]; R v Cheung [2010] NSWCCA 244 at [129]–[131].

Care should be taken when sentencing for a mixture of Commonwealth and State fraud offences. Aggregate sentences are available for sentences of more than one Commonwealth offence, applying Crimes (Sentencing Procedure) Act 1999, s 53A: DPP (Cth) v Beattie [2017] NSWCCA 301 at [146], [210]. However, a single aggregate sentence cannot be imposed for a combination of Commonwealth and State offences: Sheu v R [2018] NSWCCA 86 at [26]; Burbridge v R [2016] NSWCCA 128 at [12]–[16]; DPP (Vic) v Swingler [2017] VSCA 305 at [78]–[86]; Crimes Act (Cth), s 19AJ. See also Fixing non-parole periods and making recognizance release orders at [16-050].

[20-055] Statutory factors under s 16A(2) Crimes Act 1914

Last reviewed: November 2023

Section 16A Crimes Act 1914 (Cth) contains a list of diverse sentencing factors that must be taken into account where “relevant and known”: see General sentencing principles applicable: s 16A at [16-010]. Care must be taken to ensure that sentencing principles developed in respect of s 16A do not fetter the sentencing court’s discretion: Totaan v R [2022] NSWCCA 75 at [98] (five-judge bench decision). Section 16A is to be applied according to its terms and unwarranted judicial glosses should not be placed on the simple language of the section: Totaan v R at [78], [82]. Principles elucidated in the earlier judgments and discussed in this section, need to be understood in light of Totaan v R. See General deterrence and the inevitability of imprisonment at [19-940] General sentencing principles for NSW fraud offences, and below at General deterrence — s 16A(2)(ja).

The s 16A(2) sentencing factors that have been extensively considered in the context of federal fraud prosecutions include general deterrence (s 16A(2)(ja)) and prior good character (s 16A(2)(m)). Also, it is not uncommon for charges to be “rolled up” when an offender pleads guilty to fraud. For example, in R v Donald [2013] NSWCCA 238, 30 separate transactions were rolled into one offence of dishonestly using a position to gain advantage contrary to s 184(2) of Corporations Act 2001 and the sentencing judge was obliged to consider “the series of criminal acts of the same or a similar character” under s 16A(2)(c) in determining an sentence appropriate in all the circumstances. See also Offence consists of a series of criminal acts of the same or a similar character: s 16A(2)(c) at [16-010].

General deterrence — s 16A(2)(ja)

General deterrence may be a significant sentencing consideration in serious Commonwealth frauds. Such frauds may not be easy to detect and may produce great rewards. General deterrence may also be more effective in the case of white-collar criminals: R v Boughen [2012] NSWCCA 17 at [59]–[91], [96]–[98]; Aitchison v The Queen [2015] VSCA 348 at [66]; DPP (Cth) v Gregory (2011) 34 VR 1 at [15]. In DPP (Cth) v Gregory the Court said at [53]:

… general deterrence is likely to have a more profound effect in the case of white-collar criminals. White-collar criminals are likely to be rational, profit-seeking individuals who can weigh the benefits of committing a crime against the costs of being caught and punished. Further, white-collar criminals are also more likely to be first time offenders who fear the prospect of incarceration.

See also Milne v R [2012] NSWCCA 24 at [296]–[297]; Keefe v R [2014] VSCA 201 at [77]; Zaky v R [2015] NSWCCA 161 at [49].

However, care must be taken not to give general deterrence pre-eminent or primary significance over and above other sentencing factors, s 16A does not fetter discretion and establish a hierarchy of sentencing considerations, and the need for general deterrence in any given case, must always be assessed by reference to the personal circumstances of the offending and which may have operated on the offender: Totaan v R at [98]–[100], [130]. See also Kovacevic v Mills (2000) 76 SASR 404 at [43]; R v Newton [2010] QCA 101 at [7]–[8], [29], [38]; and [19-940] General sentencing principles for NSW fraud offences.

Despite the recognised significance of general deterrence, white collar crime has traditionally been treated more leniently than other forms of criminality: DPP (Cth) v Gregory [2011] VSCA 145 at [53]–[56]; R v Nguyen [1997] 1 VR 386 at 389–390. There is a tendency to place a disproportionate emphasis on a dollar value concept of the loss and effect on the personal circumstances of the offender and their family, sometimes resulting in a lack of deterrence and proportionality: DPP (Cth) v Gregory at [55]. In DPP v Bulfin [1998] 4 VR 114 at 131–132 the Court said:

the consequences of discovery and punishment and the havoc that a custodial sentence usually wreaks on the lives of the white collar criminal and his or her family, may have a tendency to distract attention from the importance that general deterrence ought to carry in the imposition of sentences.

Character, antecedents, age, means and physical or mental condition of the person — s 16A(2)(m)

For white collar offences, such as those against the Corporations Act 2001 (Cth), less weight is attached to prior good character where it facilitates the offender committing the offence: R v Rivkin (2004) 59 NSWLR 284 at [410]; R v Boughen [2012] NSWCCA 17 at [73]; Merhi v R [2019] NSWCCA 322 at [52]–[53]; Elomar v R [2018] NSWCCA 224.

While the presumed anxiety or distress of standing twice for sentence cannot be read into s 16A(1), actual mental distress can be taken into account under s 16A(2)(m): Bui v Director of Public Prosecutions (Cth) (2012) 244 CLR 638 at [20]–[23]. See also Character, antecedents, age, means and physical or mental condition: s 16A(2)(m) in [16-010] General sentencing principles applicable.

[20-060] General sentencing principles for federal offending

Last reviewed: November 2023

Below are some of the general common law principles that have developed in respect of federal fraud. Many of the NSW fraud principles may also be applicable: see DPP (Cth) v De La Rosa (2010) 79 NSWLR 1 at [297]; Scook v R [2008] WASCA 114 at [16]; see [19-940] General sentencing principles for NSW fraud offences and [19-970] Objective seriousness — factors of common application to fraud. Reference can also be made, in some circumstances, to State comparative cases where the same maximum penalty applies and there is similar criminal conduct: Nakash v R [2017] NSWCCA 196 at [18]; R (Cth) v Cheung [2010] NSWCCA 244 at [129]–[131].

Breach of trust

There is no principle or precedent which limits a finding of a breach of trust to offences which happen during the period when the offender is employed. Not only current employees but also former employees should be trusted with the knowledge and confidential information they gain through their employment: Merhi v R [2019] NSWCCA 322 at [32], [39]; R v Standen [2011] NSWSC 1422; Suleman v R [2009] NSWCCA 70. In Merhi v R, a tobacco revenue fraud case, the judge found the fact the offender was using information and knowledge she had obtained while previously employed by the Australian Border Force aggravated the offence: at [33], [38]–[39].

In Ridley v R [2008] NSWCCA 324, the offender committed a number of Commonwealth dishonesty offences by falsely claiming goods and services tax refunds in activity statements submitted to the Australian Taxation Office. Allsop P noted the self-assessment system relies on “the honesty of individual taxpayers” and said the primary judge’s finding that the offence involved a breach of trust and fraud on all members of the community who pay their taxes was an entirely legitimate consideration. The Tax Commissioner’s reliance on information the taxpayer has provided, and that the taxpayer has made a reasonable and honest attempt to meet their obligations, is in terms a kind of trust. Members of the community rely on each other for honesty for the operation of the tax system: at [83]–[85].

Breach of trust is not made out simply because the victim trusted the offender for some reason or other, for example because of the offender’s standing in the community or because they appeared to be a successful businessman. Nor is it made out because the offender dealt with “commercially naïve people”. There must be, at the time of the offending, a particular relationship between the offender and the victim that transcends the usual duty of care arising between persons in the community in their everyday contact or their business and social dealings. It is not enough that the two persons are involved in a commercial relationship: Suleman v R at [22], [25] (a NSW fraud case). See also Breach of trust under s 21A(2)(k) at [19-990] Aggravating factors above.

Delay

While delay is not a specific s 16A(2) factor, it may be taken into account in mitigation on sentence in some circumstances: see also Delay at [10-530]; also List of factors under s 16A(2) is not exhaustive in [16-010].

In cases involving complex financial transactions, the difficulty of detection and proof must be taken into account when considering delay: R v Zerafa [2013] NSWCCA 222 at [89]–[92]; R v Kearns [2003] NSWCCA 367 at [68]. In Giourtalis v R [2013] NSWCCA 216 the court said at [1789]–[1791]:

… in the case of a complex fraud it will always be necessary to balance the effect of the delay on the offender against the difficulty and complexity of proving the offence and the need for general deterrence. In particular, although an accused person is entitled to rely on the rights and protection of the criminal law, in circumstances where such reliance has necessitated a complex and lengthy investigation which is carried out with reasonable expedition, the extent that delay can be called upon as a mitigating factor is limited … Further, there may be cases where the delay is so inordinate that notwithstanding the complexity of the investigation, the fact that the accused has been left in a state of uncertainty for a considerable period of time would be a significant mitigating factor.

See also the discussion above in General sentencing principles for NSW fraud offences at [19-940] and Fixing non-parole periods and making recognizance release orders at [16-050].

Relevance of civil penalties to sentence

Receiving criminal and civil penalties in separate proceedings does not amount to double jeopardy: Adler v R [2006] NSWCCA 158 at [52]–[54]. In Adler v R the offender’s conduct was not a standalone offence under s 184(2) but rather a deliberate fraud causing a succession of other deliberately and intentionally fraudulent acts: at [87]. The severe criminal fraud warranted a sentence very much towards the top rather than the mid-point of the sentencing range: at [89].

[20-065] Types of Commonwealth fraud

Last reviewed: November 2023

Tax fraud

Protecting the Australian taxation system from loss by fraud is important to maintaining public confidence in the taxation system. Tax fraud offences which are not prosecuted by the Australian Taxation Office (ATO) are generally dealt with under s 134.1(1) Criminal Code (dishonestly obtaining Commonwealth property), s 134.2(1) (obtain financial advantage by deception) and s 135.4(3) (dishonestly cause a loss to the Commonwealth).

In DPP (Cth) v Goldberg [2001] VSCA 107 the Court discussed the nature of tax fraud at [32]:

Tax evasion is not a game, or a victimless crime. It is a form of corruption and is, therefore, insidious. In the face of brazen tax evasion, honest citizens begin to doubt their own values and are tempted to do what they see others do with apparent impunity. At the very least, they are left with a legitimate sense of grievance, which is itself divisive. Tax evasion is not simply a matter of failing to pay one’s debt to the government. It is theft and tax evaders are thieves.

While the ATO is the ostensible victim, serious tax fraud will inevitably have a flow on effect to the honest taxpayer: R v Liddell [2000] VSCA 37 at [74]; Hili v The Queen (2010) 242 CLR 520 at [63]. Courts have discussed the rationale for the imposition of severe sentences. In DPP (Cth) v Goldberg the court said at [51]:

The maintenance and integrity of the revenue collection systems, upon which the administration of government and the provision of a wide range of necessary services to the community are dependent, is vitally important to the proper functioning of our society.

In DPP (Cth) v Gregory (2011) 34 VR 1 the court said at [57]:

A sentence imposed for fraud upon the taxation revenue, is intended to reaffirm basic community values that all citizens according to their means should fairly share the burden of the incidence of taxation so as to enable government to provide for the community, that the revenue must accordingly be protected and that the offender should be censured through manifest denunciation. When these considerations are not reflected in the responses of the courts, the criminal justice system itself fails to achieve its objectives.

While many cases suggest serious tax fraud should ordinarily attract imprisonment unless there are exceptional circumstances, ss 16A(1) and 17A of the Crimes Act 1914 are inconsistent with such statements and more recent case law: see Sabbah v R (Cth) [2020] NSWCCA 89 at [2]–[10]; Kovacevic v Mills (2000) 76 SASR 404 at [43]; Totaan v R [2022] NSWCCA 75 at [90]–[100] and Hili v The Queen (2010) 242 CLR 520 at [36]–[38], [41]; see also General deterrence and the inevitability of imprisonment at [19-940] General sentencing principles for NSW fraud offences.

Although general deterrence may be an important sentencing consideration in taxation offences, it should not be the primary or pre-eminent consideration: Totaan v R; see also above [20-055] at General deterrence — s 16A(2)(ja).

Courts have observed that Commonwealth tax fraud has not always been sufficiently reflected in the sentence imposed, compared to other forms of criminality: R v Nguyen [1997] 1 VR 386 at 389–390; DPP (Cth) v Gregory at [54]–[55]. The consequences of discovery and punishment and the havoc a custodial sentence usually wreaks on the lives of white-collar criminals and their families, may distract attention from the importance of general deterrence: DPP (Vic) v Bulfin [1998] 4 VR 114 at 131–132.

Persistent offending over a long period of time in disregard to warnings by the ATO and attempts to hamper ATO investigations will increase the gravity of the offence. In Noble v R [2018] NSWCCA 253 the offender lodged 140 false business activity statements with the ATO with a total of $958,050 being claimed (of which $394,500 was obtained). Despite error having been established, the Court of Criminal Appeal found the effective sentence for the two offences of five years imprisonment, with a non-parole period of two years six months was well within the range for comparable offending involving similar amounts of money defrauded and a guilty plea was entered: at [17]–[18]; see also comparable cases of Hughes v R [2011] NSWCCA 226 and Edwards v R [2013] NSWCCA 54.

In R v Hawkins [2013] NSWCCA 208 the Court of Criminal Appeal found the effective sentence of 3 years 4 months, with a non-parole period of 1 year 8 months, imposed on the respondent, who had been convicted of eight tax fraud offences under s 134.2(1) Criminal Code, was so inadequate that it amounted to an affront to justice. The respondent was re-sentenced to 6 years imprisonment with a non-parole period of 3 years 6 months: R v Hawkins at [44], [49].

The respondent in Dickson v R [2016] NSWCCA 105 was convicted of conspiracy to defraud the Commonwealth (Criminal Code (Cth), s 135.4) and money laundering (s 400.3). The court found the offending fell into the worst category of Commonwealth fraud offences warranting a sentence of 9 years imprisonment (against a maximum penalty of 10 years). The offender, a finance and tax professional, falsified tax depreciation claims in respect of false expenses incurred by his company’s acquisition of medical technologies. This enabled him and his co-offender to avoid tax liabilities of approximately $100 million. The Court found the fact the money the subject of a fraud is not proven to have been used for purposes such as terrorism does not prevent the offence from falling into the worst category: Dickson v R at [164], [165], [168].

Social security fraud

Persons who abuse the system of social welfare must expect to face heavy penalties: Zaky v R [2015] NSWCCA 161 at [43]; R v Van Tang Luu (unrep, 17/12/94, NSWCCA); R v Purdon (unrep, 27/3/97, NSWCCA); R v Winchester (1992) 58 A Crim R 345; R v White [2001] NSWCCA 343 at [36]. Like other Commonwealth fraud, general deterrence and punishment are important considerations when sentencing for social security fraud offences: Dagher v R [2017] NSWCCA 258 at [31]; Crimes Act 1914, ss 16A(2)(ja), (k). In R v Annecchini (unrep, 24/4/96, NSWCCA), Gleeson CJ said:

It is generally the fact that considerations of general deterrence are of importance in dealing with social security fraud. One of the reasons for that is that conduct such as that engaged in by the present appellant is difficult to detect, indeed it is probably detected in a relatively small proportion of cases, and when it is detected it is appropriate that other people in the community who might be tempted to engage in such conduct should understand the penal consequences that attach to it. Indeed, questions of morale become involved if those in the community come to think that people who practise fraud of this kind upon the Commonwealth can get away with it or, if apprehended, will be dealt with leniently ...

Although general deterrence may be an important sentencing consideration in social security fraud, it should not be the primary or pre-eminent consideration: Totaan v R [2022] NSWCCA 75; see also General deterrence and the inevitability of imprisonment at [19-940] and General deterrence — s 16A(2)(ja) at [20-055].

The amount of money dishonestly obtained is also a relevant factor: R v Hawkins (1989) 45 A Crim R 430 at 435. The amount is indicative of the extent to which an offender is prepared to be dishonest for the purposes of advancing their own purposes. Offending that is isolated or spontaneous will, as a general proposition, be regarded as less serious than that which involves a repetitive course of conduct which continues over an extended period of time: Tham v R [2020] NSWCCA 338 at [50]–[51]; R v De Leeuw [2015] NSWCCA 183 at [116]. The use to which the dishonestly appropriated funds were put should also be taken into account. For example, whether it is because of a need or greed: Dagher v R [2017] NSWCCA 258 at [17]. Moreover, because offending of this nature is easy to commit but difficult to detect, the fact that such offending only ceased after detection will also be relevant, as will any breach of trust: Tham v R at [52], [54]; R v Lopez [1999] NSWCCA 245 at [17]–[18]. In Tham v R, Bellew J explained the breach of trust in such cases:

Those who claim social security benefits are often in such genuine and urgent need of assistance that there is no time to undertake an investigation of the veracity of the information submitted in support of a claim at the time that it is made. If a system of more stringent checks were introduced, it may cause delay in the payment of benefits to those genuinely in need … Those circumstances necessarily create a relationship in which the Government relies upon, and trusts, the honesty of those who make applications for monetary benefits, and the veracity of the information which is provided.

In Tham v R, the offender fraudulently obtained $103,873.22 in social security payments involving a significant breach of trust over a six-year period in a premeditated and sophisticated operation facilitated by the creation of a false identity, and only ceased when he was arrested. See also Assie v R (Cth) [2020] NSWCCA 249 for an example of social security fraud where the offender and her husband received payments for making a range of false claims including carer payments and carer allowances, from four co-conspirators who were not entitled to them. The offender was refused leave to appeal her aggregate sentence of five years, with a non-parole period of three years three months.

In R v White [2001] NSWCCA 343, the sentencing judge imposed sentences of imprisonment for five counts of social security fraud (Crimes Act 1914, s 29B) committed by a single mother with no prior record. Two of the offences involved $882.30 and $1242.00 respectively. His Honour took into account that the applicant did not have the means to pay a fine and that any fine imposed would not be “cut out” during the currency of a sentence of imprisonment imposed in respect of the remaining counts: at [4]–[12]. The offender’s appeal was allowed on a different basis, however the Court of Criminal Appeal noted at [54] that no sentence other than imprisonment was appropriate in the circumstances of the case.

Like other fraud, the period of time over which the offences were committed is relevant: R v Hawkins (1989) 45 A Crim R 430 at 435; R v Delcaro (1989) 41 A Crim R 33 at 38.

Disparity between sentences for tax fraud and social security fraud

A review of the case law on social security fraud (see R v Boughen [2012] NSWCCA 17 at [60]–[65]) suggests that statements of principle on fraud are applied less rigorously in tax cases so that tax offenders are treated more leniently than social security offenders: R v Boughen at [66], [91]. It has been observed that the frequency of Crown appeals in tax cases (including DPP (Cth) v Goldberg [2001] VSCA 107, DPP (Cth) v Gregory [2011] VSCA 145 and R v Jones; R v Hili [2010] NSWCCA 108) reflects that “sentencing judges find it difficult to impose sentences that reach the high level which they have, in theory, accepted as being appropriate”: R v Boughen at [69]. Social security offenders are “almost universally less privileged, less prosperous, less educated, in possession of fewer resources, intellectual and otherwise” whereas tax offenders are often “middle aged men, intelligent, professionally successful, financially secure, prosperous”: R v Boughen at [76], [96]. Simpson J observed at [96]:

The community cannot afford for judges to be squeamish about discharging their duty, however personally painful it may sometimes be. To fail to sentence middle class offenders commensurately with social security offenders risks bringing the administration of justice into disrepute as perpetrating class bias.

Corporate fraud

Section 184 of the Corporations Act 2001 (Cth) provides the offences of director or other officer of a corporation failing to exercise power in good faith in the best interests of a corporation (s 184(1)); a director, officer or employee of a corporation recklessly or dishonestly using their position with intent to gain an advantage (s 184(2)) and a person recklessly or intentionally dishonestly using information obtained because they are a director, officer or employee of a corporation with intent of gaining an advantage (s 184(3)). The maximum penalty is 15 years imprisonment and/or a fine of 4,500 penalty units for an individual. The Corporations Act also contains other forms of corporate fraud, including engaging in dishonest conduct in relation to providing financial services contrary to s 1041G(1).

In Sigalla v R [2021] NSWCCA 22 the offender was convicted, following trial, of 24 offences under s 184(2) for using his position as director of a public company to transfer $8.6 million to companies controlled by him, his wife, another director and directly to himself. Over half of the money was used to repay his gambling debts. His appeal against sentence on the basis the judge misapplied the totality principle was allowed and he was re-sentenced to a head sentence of 9 years imprisonment with a global non-parole period of 5 years 9 months.

In R v Donald [2013] NSWCCA 238 the offender, a client adviser for a stockbroking company, transferred profitable shares from client accounts he controlled to accounts in the name of family members on 30 separate occasions, over almost three years, resulting in a total advantage of $1,781,707.71. He was sentenced to two years six months’ imprisonment but released upon entering a recognizance for two years. Following a successful Crown appeal, the offender was resentenced to two years imprisonment, to be released after one year upon entering a recognizance for one year. The sentence failed to reflect the gravity of the offence and failed to serve as an effective deterrent to similarly intelligent, competitive professionals in the financial markets, and was therefore manifestly inadequate. The court noted there is a considerable advantage to an offender in a “rolled up” charge, because it restricts the maximum penalty to that applicable for one offence, instead of what is in reality a number of discrete offences: [84], [85]; R v Glynatsis [2013] NSWCCA 131. Further, there is an inherent leniency in suspended sentences and it has been repeatedly observed that the real bite of general deterrence takes hold only when a custodial sentence is imposed: [84], [86]; R v Boulden [2006] NSWSC 1274 at [51].

In the DPP (Cth) v Northcote [2014] NSWCCA 26 the Crown appealed an aggregate sentence of 2 years imprisonment to be served by way of intensive correction order imposed on an offender convicted of three offences including using his position as director dishonestly to gain an advantage of $1.1 million (s 184(2)). Although the offender was charged with a single offence under this provision, because that offence included all of the conduct which involved the various acts of breach of duty as a director, each act was accompanied by the dishonesty to which he pleaded guilty. This was objectively a very serious example of offending of the kind charged and ought to have been assessed as at the higher end of the range; it occurred over an extended period of time, was premeditated and planned, involved several conscious decisions not to disclose the conflict of interest and delivered $1.1 million in personal profit to the offender: [79], [81]–[83]. The fact there was no actual detriment caused to company was irrelevant having regard to the nature and circumstances of the case: [61], [90]. The Court held an ICO was manifestly inadequate and offensive to the administration of justice and a sentence of 3 years 6 months imprisonment was substituted: [117].

In Kwok v R [2007] NSWCCA 281, where the offender was convicted of two offences against s 184(2), the court found the degree of advantage gained was no more than the assurance of obtaining the leases, and thus the offence was intrinsically less serious. However, the element of dishonesty in terms of concealment, not merely by omission but by active steps, remained a matter of significance bearing on the seriousness of the offence. This was particularly so “in the context of directorial obligation within a board, where honesty from the chief executive is fundamental and its lack not excused by good intention”: at [107].

The offender in Nakhl v R (Cth) [2020] NSWCCA 201 was sentenced to a total of ten years imprisonment with a non-parole period of six years, with a reparation order under s 21B Crimes Act 1914 for $4,631,918, for eight counts of engaging in dishonest conduct in relation to providing financial services contrary to s 1041G(1) of the Corporations Act 2001 (Cth). The offender, a financial planner, invested money for 12 clients over a period of four years resulting in a total loss of $5,121,707.

In R v Silver [2020] QCA 102, the offender, who was aged 19–21 at the time of the offences, pleaded guilty to seven counts of fraud under s 408C of the Criminal Code (Qld) and six counts of using his potion dishonestly with the intention of gaining a financial advantage contrary to s 184(2). The offences occurred over a “lengthy period of time” and involved a “sophisticated” scheme assisting pensioner investors to obtain large loans from banks on fraudulent documentation and investing that money in unregistered investment schemes used to purchase properties. The applicant received more than $4.1 million from the sale of the properties. Taking into account the offender’s late guilty plea, undertaking of future co-operation, remorse, delay, his youth, and some restitution, he was sentenced to 8 years imprisonment for the s 408C offence and 3 years imprisonment for the s 184(2) offence with a recognisance release order after 2 years 6 months.

Currency fraud and offences against the financial system

Additional fraud offences in the context of currency, and the federal banking system, may be prosecuted under other specific Commonwealth enactments. In Hayward v R (Cth) [2021] NSWCCA 63, the offences included uttering and possessing counterfeit currency contrary to ss 7(1) and 9 of the Crimes (Currency) Act 1981 (Cth) and presenting false identification documents to banks, and receiving banking services using a false name, contrary to ss 137(1) and 140 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). Over 3 months, in various places across Australia, bank accounts were opened in false names with false passports to deposit counterfeit Euros and thereby obtain Australian currency. The counterfeit Euros totalled $306,162.57. Counterfeit money offences undermine community confidence in currency and its place in the banking system: Hayward at [63]; R v Institoris [2002] NSWCCA 8 at [38]; DPP v Rohde (1985) 17 A Crim R 166 at 173. The quantity and quality of counterfeit notes uttered was a significant factor on sentence, as was the value of the proceeds derived from the uttering offences: at [66]; R v Institoris at [78]; R v Gittani [2002] NSWCCA 139 at [22]–[23]. For further commentary on Money laundering more broadly, see [65-200].

General fraud

General fraud includes frauds against the Commonwealth benefit or assistance schemes such as Medicare fraud, child care benefit fraud, identity fraud and fraud-related money laundering. The majority of these frauds are prosecuted under s 134.2 of the Criminal Code (Cth) (obtain a financial advantage by deception), s 135.1 (general dishonesty offences) and s 135.4 (defraud the Commonwealth). Reference should be made to the sentencing principles set out in [19-940] General sentencing principles for NSW fraud offences and [20-055] Statutory factors under s 16A(2) Crimes Act 1914 above.

Other useful references — Commonwealth DPP, “Sentencing of federal offenders in Australia: a guide for practitioners”, 4th edn, February 2021.