Fraud offences

[19-930] Summary of relevant considerations

Last reviewed: March 2024

[19-932] Introduction

Last reviewed: March 2024

Fraud offences are governed by NSW and Commonwealth legislation.

While many of the same sentencing principles apply to both jurisdictions, the statutory regimes and factors required to be taken into account under s 21A Crimes (Sentencing Procedure) Act 1999 and s 16A Crimes Act 1914 (Cth) differ. It is common 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.

See also [20-045] The Commonwealth statutory framework. For commentary on Commonwealth sentencing generally, see [16-000] Crimes Act 1914 (Cth) — sentencing Commonwealth offenders.

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 Where relevant, the sentencing principles applying to the equivalent repealed offences are included.

[19-935] The NSW statutory framework

Last reviewed: March 2024

Parts 4AA and 4AB of the Crimes Act 1900 provide the statutory scheme for fraud and identity crimes.

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.

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

Last reviewed: March 2024

General deterrence

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.

The difficulty in detecting and successfully prosecuting white-collar crime is another reason general deterrence is important. See for example, R v Donald [2013] NSWCCA 238 at [41] and Stevens v R [2009] NSWCCA 260 at [79], where the prevalence of identity crimes and the importance of public confidence in the electronic banking system required considerable weight to be given to general deterrence.

Although sentencing principles applied by courts with respect to repealed fraud provisions in the Crimes Act continue to apply, cases which state that serious fraud requires general deterrence be the primary ore pre-eminent sentencing consideration, 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. Propositions that general deterrence should be the primary sentencing factor 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] ] (a decision relating to s 16A of the Crimes Act 1914 (Cth)); Parente v R at [101], [108]–[110].

The same reasoning in Totaan v R is applicable to general deterrence in relation to NSW fraud offences 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: Totaan v R at [98]–[100], [130]; Kovacevic v Mills (2000) 76 SASR 404 at [43].

Not a victimless crime

While 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] ] that the fraud harmed the community at large by damaging the integrity of the market.

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 offending 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: [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

When sentencing for fraud offences, greater assistance is gained from general sentencing principles than 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]:

[R]eference 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 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] 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: March 2024

Although sentencing for fraud should not be approached in a formulaic manner, the courts have recognised several factors bearing generally upon the objective seriousness of a given offence. The interplay of these factors help place the offence on a spectrum of like offences:

1. 

The amount of money involved (R v Mungomery [2004] NSWCCA 450 at [40]) and whether the loss is irretrievable (R v Todorovic [2008] NSWCCA 49 at [19]). The quantum involved represents the extent to which an offender is prepared to be dishonest (R v Mungomery [2004] NSWCCA 450 at [40]). 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: see Finnigan v R [2013] NSWCCA 177 at [31].

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]). 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 Murtaza [2001] NSWCCA 336 at [15]. If an offence is committed over a significant period of time this may ameliorate the weight afforded to good character: Luong v R [2014] NSWCCA 129 at [21].

3. 

The motive for the crime (R v Hill [2004] NSWCCA 257 at [6]; Cordoba v R [2021] NSWCCA 144). If the fraud is based on greed rather than need the sentence imposed should be longer: R v Mears (1991) 53 A Crim R 141 at 145 at 145. 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]. The fact an offence is committed for a motive other than personal greed is not a matter in mitigation: Khoo v R [2013] NSWCCA 323 at [78].

4. 

The degree of planning and sophistication (R v Murtaza [2001] NSWCCA 336 at [15]; Stevens v R [2009] NSWCCA 260 at [59], [78]). Offences committed on impulse have been distinguished from offences where there has been planning with a degree of sophistication. The fact 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. 

An accompanying breach of trust (R v Pont, R v Hawkins (1989) 45 A Crim R 430). See [XX-XXX] XXX below.

6. 

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.

Breach of trust

Breach of trust can be relevant where it is either an element of an offence of fraud, or as a feature of aggravation: R v Pont [2000] NSWCCA 419 at [43]–[44], R v Murtaza [2001] NSWCCA 336 at [15]; and s 21A(2)(k) Crimes (Sentencing Procedure) Act 1999.

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 …

In R v Pantano (1990) 49 A Crim R 328, Wood J (with whom Carruthers J agreed) said at 330:

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. Executives and trusted employees who give way to temptation cannot pass the blame to lax security on the part of management.

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, transcending the usual duty of care arising between persons in the community in their everyday contact, business or social dealings: 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: [22], [27].

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 which ensure other professionals are left in no doubt that serious consequences will follow: R v Pont at [47]. Other professionals may include accountants, executives or directors, and has extended to art dealers (see Coles v R [2016] NSWCCA 32), senior employees (R v Pantano (1990) 49 A Crim R 328 at 338), and nursing home operators (R v Boian (1997) 96 A Crim R 582, R v Giallussi [1999] NSWCCA 56).

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

Last reviewed: March 2024

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]. 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: March 2024

Breach of trust under s 21A(2)(k)

A sentencing court may only have “additional regard” to 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 erred by having “additional regard” to s 21A(2)(k) when “abuse of authority or a position of trust” was an element of the offence committed, (trustee fraudulently disposing of property under s 172 Crimes Act 1900 (rep)). While mention of the abuse of trust is permissible characterising the offence’s objective gravity, paying “additional regard” to it under s 21A constitutes impermissible “double counting”: R v Wickham [2004] NSWCCA 193 at [22]–[23].

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 did not err 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: [21].

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

Vulnerability of victims as a class under s 21A(2)(l)

Section 21A(2)(l) of the Crimes (Sentencing Procedure) Act 1999 is relevant where a victim is vulnerable, for example, very young, very old, has a disability, or is so by virtue of occupation (such as taxi driver, bus driver or other public transport worker, bank teller or service station attendant).

The aggravating feature 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, it was impossible to know whether s 21A(2)(l) should apply to all, or only some of the offences, and if so, which ones. The court concluded there was no evidence 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]; R v Kilpatrick [2005] NSWCCA 351; 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 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]. Impulsive offences have been distinguished from those with sophisticated planning: 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 where the applicant arrived in Australia with the sole purpose of using counterfeit credit cards to obtain goods to on-sell: at [13]–[14].

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

Offence 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 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 under ss 178BA (rep) and 192E and the financial gain was not present to an unusual extent: Whyte v R at [30]–[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: March 2024

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]. Generally, see 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). See for example:

  • R v Hinchliffe [2013] NSWCCA 327, where there was no causal connection between the offences and the respondent’s bipolar disorder: [246].

  • De Angelis v R [2015] NSWCCA 197, where the narcissistic personality disorder was neither causally connected to the offending nor of sufficient severity to warrant significant amelioration of sentence: [62].

  • Hartman v R [2011] NSWCCA 261, where a nexus was established between the offences and the applicant’s psychiatric condition: [80].

  • R v Donald [2013] NSWCCA 238, where the respondent’s moral culpability was moderately reduced, however there remained a significant role for general deterrence: [76].

  • R v Joffe [2015] NSWSC 741, where the respondent’s mental condition reduced moral culpability and the need for denunciation: [121].

  • Subramaniam v R [2013] NSWCCA 159, where the applicant’s personality disorder was a complex issue, and a causal relationship lay between her condition and the offending as far as her compromised intellectual and emotional restraints, such that the applicant’s moral culpability was 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 their 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].

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 a large number of offences were committed over a long period of time: R v Chan [2000] NSWCCA 345 at [20] (a two-judge bench decision).

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 for loss is 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 their actions, and has acknowledged any injury, loss or damage caused by their 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 offender becomes aware of the full consequences of their 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 … does no more than require the return of illgotten gains to which the offender had no entitlement.

In Upadhyaya v R [2017] NSWCCA 162, the judge did not err by not taking the compensation direction under s 97(1) Victims Rights and Support Act 2013 into account as a mitigating factor: [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.

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]. 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 [10-490] Hardship to family/dependants.

[20-010] The relevance of a gambling addiction

Last reviewed: March 2024

It is common 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 rarely mitigate 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 similarly to 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 in relation to 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: March 2024

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: Pearce v The Queen (1998) 194 CLR 610 at [45]. This task requires consideration of the fact the offender is being sentenced for multiple offences and to ensure 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: [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: March 2024

Sections 192B, 192C and 192D are definition provisions, and appear in Div 1 of Pt 4AA. The offence provisions appear in Div 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 deception need not operate on the mind of a natural person, and may be proved by inference circumstantially, without calling evidence from a witness as to the deception: R v SKL; R v JY; R v XGL [2019] NSWCCA 43.

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).)

It should be borne in mind that, for s 192E offences, they can be constituted by 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.

See also Kapua v R [2023] NSWCCA 14 and Whyte v R [2019] NSWCCA 218.

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.

For an example of a sentencing decision on s 192G, see Edelbi v R [2021] NSWCCA 122.

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 5 years and 7 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 set out a number of decisions regarding s 176A or a similar offence.

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

Decisions regarding an offence under s 178A include: In R v Higgins [2006] NSWCCA 38, which involved 15 counts and misappropriation of $1.7 million from a significant number of victims, and 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.

For example, 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 ... 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 ...

See also Cranshaw v R [2009] NSWCCA 80.

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

Last reviewed: March 2024

Part 4AB contains a series of identity fraud offences to address the theft and misuse of personal identification information.

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 7 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.

Identity crimes have an aggravated effect on victims and the community generally, compared with other forms of obtaining benefit by deception, so the application of sentencing practices for repealed offences (s 178BA) should be approached with care: Stevens v R [2009] NSWCCA 260 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].

The need for both personal and general deterrence, and the imposition of severe punishment, in cases of identity fraud was reiterated by the Court of Criminal Appeal in Thangavelautham v R [2016] NSWCCA 141 at [37], [104]–[105]. Such 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].

For examples of sentencing decisions for such offences, see Chen v R [2015] NSWCCA 277, Islam v R [2020] NSWCCA 236 and Lou v R [2021] NSWCCA 120.

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].

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

Last reviewed: March 2024

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.

For an example of a sentencing decision for such an offence, see R v Grover [2013] NSWCCA 149.

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:

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 Tadrosse (2005) 65 NSWLR 740, the offender was convicted of multiple counts under ss 300, 302, 178B and 178BA where more than $200,000 was defrauded using false documents and 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: March 2024

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.

For examples of sentencing decisions for such offences, see Itaoui v R [2005] NSWCCA 415 and R v Swadling [2004] NSWCCA 421.

[20-045] The Commonwealth statutory framework

Last reviewed: March 2024

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), and the Crimes (Currency) Act 1981 (Cth). 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 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].

For commentary on Commonwealth sentencing generally, see [16-000] Crimes Act 1914 (Cth) — sentencing Commonwealth offenders.

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 federal matters

Last reviewed: March 2024

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.

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 (Cth)

Last reviewed: March 2024

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 common 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 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]; Milne v R [2012] NSWCCA 24 at [296]–[297]; Keefe v R [2014] VSCA 201 at [77]; and 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].

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: March 2024

General common law principles that have developed in respect of federal fraud regarding breach of trust and delay are set out below. In addition, 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].

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: March 2024

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). 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].

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 ... 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.

The Court also 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.

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 [2011] VSCA 145 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. For example, see Noble v R [2018] NSWCCA 253, and for comparable cases, Hughes v R [2011] NSWCCA 226; Edwards v R [2013] NSWCCA 54; R v Hawkins [2013] NSWCCA 208; and Dickson v R [2016] NSWCCA 105.

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 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).

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 at [98]–[99]; see also General deterrence and the inevitability of imprisonment at [19-940] and [20-055] above at General deterrence — s 16A(2)(ja).

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].

See also R v White [2001] NSWCCA 343.

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].

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).

For examples of sentencing decisions for such offences, see Sigalla v R [2021] NSWCCA 22, R v Donald [2013] NSWCCA 238, R v Glynatsis [2013] NSWCCA 131, Nakhl v R (Cth) [2020] NSWCCA 201, and R v Silver [2020] QCA 102.

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 full-time custodial sentence is imposed: [84], [86]; R v Boulden [2006] NSWSC 1274 at [51].

In the DPP (Cth) v Northcote [2014] NSWCCA 26 the Court held an intensive correction order was manifestly inadequate and offensive to the administration of justice and a sentence of 3 years 6 months imprisonment was substituted: [117].

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]. 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, 6th edn, February 2023 at www.cdpp.gov.au/publications/sentencing-federal-offenders-australia-guide-practitioners-sixth-edition, accessed 24/1/2024.