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District Court 9 September 2011

R v GOEL (No 2)

[2011] NSWDC 144

Fraud & dishonesty
CRIMINAL LAW SENTENCE TAX FRAUD

Citation: R v GOEL (No 2) [2011] NSWDC 144
Court: District Court of New South Wales
Date: 9 September 2011
Judge(s): Berman SC DCJ

Background

The offender was an accounting professional who, in October 2008, attended a taxation firm and arranged for 41 fraudulent tax returns to be lodged with the Australian Taxation Office. He presented payment summaries (formerly known as group certificates) for 41 real taxpayers, accompanied by handwritten notes containing bank account details. The payment summaries recorded income that the relevant taxpayers had never earned and tax that had never been withheld.

The scheme was designed to generate tax refunds payable by the Commonwealth into bank accounts not belonging to the nominated taxpayers. The potential loss to the Commonwealth exceeded $180,000. The offender had pleaded guilty to 41 counts of causing tax returns to be filed with the intention of dishonestly causing a loss to the Commonwealth, contrary to section 135.1(3) of the Commonwealth Criminal Code, partway through his trial.

A factual dispute remained after the guilty pleas were entered. The dispute centred on the extent of the offender's knowledge of the fraud, particularly whether he was aware the payment summaries were false and whether he had instructed the tax consultant to claim inflated deductions. Additional evidence was called after the jury was discharged to resolve this question before sentencing.

  • Whether the offender knew the payment summaries were false and was a knowing participant in the broader fraud, or whether his dishonesty was limited to requesting minor unsupported deductions of approximately $300 per taxpayer.
  • How the 41 offences should be sentenced, including the appropriate structure of concurrent and cumulative terms, and the applicable ratio of non-parole period to head sentence for Commonwealth offences following Hili v The Queen; Jones v The Queen [2010] HCA 45.

Decision

The central factual dispute was resolved against the offender. His Honour found, beyond reasonable doubt, that the offender knew the payment summaries were false and was a knowing participant in a scheme to defraud the Commonwealth of more than $180,000. The proposition that he believed the payment summaries to be genuine was rejected as not a reasonable possibility.

The finding turned significantly on the evidence of the tax consultant who prepared the returns. His account, that the offender had supplied specific deduction details for most of the 41 returns during a two-hour meeting, was supported by the objective content of the returns themselves. The returns showed a variety of claimed deductions, including specific categories such as uniforms and travel, as well as differing amounts. This variety was inconsistent with the offender's account that he had simply asked for uniform "general deductions" of around $300 per return.

On sentencing, His Honour structured the sentence using groups of ten or eleven counts, with each group attracting a two-year term running consecutively to the preceding group. The totality principle was applied to arrive at a proportionate overall sentence. The Crown conceded that a non-parole period representing approximately 40 per cent of the head sentence was appropriate for this offender in the circumstances, consistent with the High Court's approach in Hili and Jones to the absence of a fixed statutory ratio for Commonwealth offences.

His Honour also noted, in concluding remarks, that the conduct of the tax consultant in claiming deductions warranted investigation by the Crown and the ATO, though the court left that determination to the relevant authorities.

Orders Made

  • Counts 1 to 10: two years' imprisonment, commencing 9 September 2011.
  • Counts 11 to 20: two years' imprisonment, commencing 9 September 2012.
  • Counts 21 to 30: two years' imprisonment, commencing 9 September 2013.
  • Counts 31 to 41: two years' imprisonment, commencing 9 September 2014.
  • Overall head sentence: five years' imprisonment.
  • Non-parole period: two years from 9 September 2011, with eligibility for parole from 8 September 2013.

Key Takeaways

  • The District Court resolved the factual basis for sentencing against the offender, finding beyond reasonable doubt that he was a knowing participant in the entire fraud, not merely responsible for requesting minor unsupported deductions.
  • Where a factual dispute remains after a guilty plea, a sentencing court may hear further evidence and make its own findings on the criminal standard before proceeding to sentence.
  • Objective documentary evidence, here the varying categories and amounts of deductions across 41 returns, was treated as strong corroboration of the tax consultant's account and a significant basis for rejecting the offender's competing version.
  • Under the High Court's decision in Hili v The Queen; Jones v The Queen, there is no fixed statutory ratio between non-parole period and head sentence for Commonwealth offences; the appropriate ratio depends on the circumstances of the individual case.
  • Consecutive sentences were structured across groups of counts to reflect the totality of the offending, producing an overall head sentence of five years with a two-year non-parole period.

Legislation and Cases Referenced

Legislation
- Commonwealth Criminal Code, s 135.1(3) (dishonestly causing a loss to the Commonwealth; maximum penalty five years' imprisonment per offence)

Cases
- R v Goel (2011) NSWDC 83 (earlier judgment in the same proceedings setting out background circumstances)
- Hili v The Queen; Jones v The Queen [2010] HCA 45 (High Court guidance on sentencing for Commonwealth offences, including the absence of a fixed non-parole period ratio)