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District Court 9 December 2011

R v Susan Lee

[2011] NSWDC 257

Fraud & dishonesty
CRIME SENTENCING SOCIAL SECURITY FRAUD RELEVANCE OF MENTAL ILLNESS RELEVANCE OF GAMBLING RELEVANCE OF DELAY IN CHARGING

Citation: R v Susan Lee [2011] NSWDC 257
Court: District Court of New South Wales
Date: 9 December 2011
Judge: Letherbarrow SC DCJ

Background

The offender pleaded guilty to two charges of social security fraud spanning almost 9.5 years, from August 1998 to February 2008. The fraud involved representing to Centrelink that a deceased man, Mr A, was still alive and entitled to the aged pension. The offender had been designated as Mr A's nominee with Centrelink while he was alive, and she used that access to redirect his pension payments to her own bank account after his death in July 1997.

Over the fraud period, the offender made a series of active misrepresentations to sustain the scheme: redirecting payments to her own account, advising Centrelink that Mr A had moved addresses, lodging rent certificates in his name, and even requesting an advance payment of $500 on his behalf in September 2007. The total amount dishonestly obtained was $118,352.71. ATM records and withdrawal patterns showed consistent personal use of the funds, including withdrawals at Star City Casino.

Search warrants were executed in February 2008, at which time the offender made admissions. Despite this, court attendance notices were not issued until June 2010, more than two years later. The offender was ultimately committed for sentence to the District Court after pleading guilty at Liverpool Local Court in February 2011.

  • Whether the offending conduct warranted a full-time custodial sentence, given that social security fraud of this kind is generally understood to require imprisonment absent "very special circumstances"
  • Whether the offender's health conditions and mental illness constituted mitigating factors sufficient to displace a custodial sentence
  • Whether the offender's role as carer for ill family members amounted to exceptional circumstances justifying a non-custodial outcome
  • Whether the substantial delay between the execution of search warrants and the issuing of charges warranted a reduction or suspension of sentence
  • Whether a gambling addiction was a relevant mitigating factor

Decision

The court confirmed that offences involving social security fraud ordinarily attract full-time custodial sentences, and that a non-custodial outcome requires "very special circumstances." His Honour reviewed a range of mitigating factors advanced on the offender's behalf, including her guilty plea, her physical and mental health, her caring responsibilities for family members, and the two-year-plus delay in charging her.

On the question of health and mental illness, the court accepted that the offender had genuine health concerns, including a history of depression and involvement with the mental health system. However, these were not found to be of a severity that would constitute very special circumstances. Similarly, the offender's role as an informal carer for family members was acknowledged, but the court found this did not reach the threshold required to displace custody.

The delay in charging was treated as a relevant mitigating factor going to the overall sentence. The court noted the delay was unexplained by the Crown, and that living under the prospect of prosecution for an extended period constituted a form of additional burden on the offender. However, this too was insufficient to justify a fully suspended sentence. On gambling, the court noted that, while the facts suggested some use of funds at a casino, there was insufficient evidence to treat problem gambling as a meaningful mitigating factor in the overall sentencing exercise.

Having weighed all subjective and objective factors, Letherbarrow SC DCJ was not satisfied that very special circumstances existed. A custodial sentence was imposed, structured so that the offender would serve six months in custody before being released on a recognisance for the remaining six months, subject to supervision by the probation and parole service.

Orders Made

  • Offender convicted and sentenced to 3 months imprisonment for the offence under s 29B of the Crimes Act 1914 (Cth), commencing 7 December 2011 and expiring 6 March 2012 (taking into account 2 days of pre-sentence custody)
  • Offender convicted and sentenced to 9 months imprisonment for the offence under s 135.1(1) of the Criminal Code 1995 (Cth), commencing 7 March 2012 and expiring 6 December 2012 (sentences cumulative, total 12 months)
  • Offender to be released after serving 6 months of the aggregate sentence (on 6 June 2012) on a recognisance under s 20(1)(b) of the Crimes Act 1914 (Cth) in the sum of $1,000, to be of good behaviour for 6 months, subject to supervision by the probation and parole service
  • Reparation order made pursuant to s 21B of the Crimes Act 1914 (Cth) in the sum of $118,352.71 payable to the Commonwealth

Key Takeaways

  • Social security fraud prosecuted in the federal jurisdiction attracts a strong sentencing principle favouring full-time custody; a non-custodial outcome requires "very special circumstances," a threshold the District Court found was not met on these facts.
  • Mental illness and poor physical health may be relevant mitigating factors in sentencing, but the court found they do not automatically displace the need for imprisonment, particularly where the offending is serious, sustained, and involves deliberate deception over many years.
  • An offender's caring responsibilities for ill family members were acknowledged as a relevant subjective consideration, but were not treated as sufficient on their own to constitute the very special circumstances needed to avoid custody.
  • Unexplained prosecutorial delay of more than two years between investigation and charging was recognised as a mitigating factor, reflecting the burden on the offender of living under the prospect of prosecution; however, it did not, in combination with other factors, rise to the level required to displace a custodial sentence.
  • Insufficient evidence of a gambling addiction meant that casino-related withdrawals of fraud proceeds did not operate as a meaningful mitigating factor in the sentencing exercise.

Legislation and Cases Referenced

Legislation
- Crimes Act 1914 (Cth), ss 4J(1), 16A, 16A(2)(g), 16A(2)(p), 19B, 20(1)(b), 21B, 29B
- Criminal Code 1995 (Cth), s 135.1(1)
- Australian Passports Act 2005 (Cth), s 29

Cases
- Pearce v The Queen (1998) 194 CLR 610
- R v Sinclair (1990) 50 A Crim R 418
- R v Hart [1999] NSWCCA 204
- R v Alla [2004] NSWCCA 378
- R v Wood [2005] NSWCCA 233
- R v Ouyang [2004] NSWCCA 382
- R v Capper [2000] NSWCCA 63
- R v Togias [2001] NSWCCA 522
- Le v Regina [2006] NSWCCA 136
- R v Winchester (1992) 58 A Crim R 345
- R v Hemsley [2004] NSWCCA 228
- R v Molesworth [1999] NSWCCA 43