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District Court 16 February 2018

R (Cth) v Nadim Derbasi

[2018] NSWDC 79

Fraud & dishonesty
CRIMINAL LAW COMMONWEALTH OFFENCE PLEA OF GUILTY KNOWINGLY CONVEY FALSE INFORMATION JOINT CRIMINAL ENTERPRISE SENTENCE MITIGATING FACTORS

Citation: R (Cth) v Nadim Derbasi [2018] NSWDC 79
Court: District Court of New South Wales
Date: 16 February 2018
Judge: Judge AC Scotting

Background

The offender, a man aged 26 at the time of sentencing (21 at the time of the offences), appeared for sentence after pleading guilty in the Local Court to two counts of attempting to obtain a financial advantage by deception from the Commonwealth. The offences involved the lodgement of two false Business Activity Statements (BAS) with the Australian Taxation Office (ATO) through a company, Mediterranean Resources Expeditions Pty Limited, of which the offender was the sole director and shareholder.

The first BAS, lodged in February 2013, claimed a refund of over $2.16 million. When the ATO commenced a review, the offender engaged with ATO officers and forwarded fabricated supporting documents, including a false invoice and a blank exploration licence application. The second BAS, lodged the following month, claimed a further $71,586. Neither refund was paid, as the ATO detected the fraud and disallowed both claims.

The facts were in dispute in important respects. The offender denied personally lodging the BAS, contending that a co-offender, Farouk El Ali, had done so. He accepted guilt on the first count on the basis that he had knowingly conveyed false information to the ATO during the review process, and on the second count on the basis of a joint criminal enterprise with the co-offender that contemplated the lodgement of the second BAS.

  • Whether the offender's disputed account of events (that he did not lodge the BAS himself) should be accepted for sentencing purposes
  • The objective seriousness of the offences and the appropriate weight to be given to general and specific deterrence
  • The utilitarian value of the guilty plea and the discount to be applied
  • Whether the offender's assistance to authorities in relation to the co-offender warranted a further sentencing discount
  • Whether any sentence other than imprisonment was appropriate, and specifically whether the offender was suitable for an Intensive Corrections Order (ICO)

Decision

The court conducted a disputed facts hearing, during which the offender gave evidence and was cross-examined. Judge Scotting found the offender's evidence warranted caution, noting that his presentation in both the record of interview and in the witness box justified the ATO's wariness about the reliability of the information he had provided. The court accepted that the offender did not personally lodge the BAS but found that he was nonetheless criminally responsible: on count one by knowingly conveying false information to the ATO during the audit, and on count two through a joint criminal enterprise with El Ali.

On the question of objective seriousness, the court treated the offending as serious. The attempted fraud involved the creation of a shell company, fabricated supporting documents, and deliberate engagement with ATO officers to perpetuate the deception, even though no money was ultimately obtained.

Regarding the offender's cooperation with authorities, the court acknowledged that the offender had made a statutory declaration, offered assistance in relation to the co-offender, and participated in a record of interview in August 2017. However, Judge Scotting found that the assistance was of limited value. The information provided was insufficient to support a prosecution of the co-offender, and the offender would not have made a reliable witness. No additional discount beyond what had already been allowed was warranted.

The court determined that no sentence other than imprisonment was appropriate, citing the objective seriousness of the offences, the significant need for general deterrence, some need for specific deterrence, and the need for denunciation. The appropriate total term, on a partially accumulated basis, was no more than two years. Given the offender's age and prospects for rehabilitation, however, the court considered an ICO a viable alternative to full-time custody and ordered an assessment of the offender's suitability before proceeding to final sentence.

Orders Made

  • The offender was convicted on both counts
  • The court determined that a partially accumulated term of imprisonment not exceeding two years was appropriate
  • The offender was referred for assessment of suitability for an Intensive Corrections Order, with a direction to report to the Leichhardt Community Corrections Office by 4pm on 19 February 2018
  • Sentence proceedings were adjourned part-heard to 9 April 2018

Key Takeaways

  • The District Court confirmed that a disputed facts hearing is required where an offender's account of the circumstances of offending materially differs from the prosecution's version, even after a guilty plea has been entered.
  • A guilty plea to fraud-related offences does not preclude the sentencing court from making factual findings adverse to the offender where the court rejects or qualifies the offender's evidence about how the offending occurred.
  • Cooperation with authorities does not automatically attract a sentencing discount: the court assessed the actual value of the assistance provided and found it insufficient to warrant further reduction where the information was unreliable and had not advanced the investigation in any meaningful way.
  • Under section 20AB of the Crimes Act 1914 (Cth) and the Crimes Regulations 1990 (Cth), an Intensive Corrections Order is available as a sentencing alternative for federal offenders, and the court found it appropriate to explore this option where the offender was young and had genuine rehabilitation prospects, even in the context of objectively serious offending.
  • Where Commonwealth fraud offences involve deliberate fabrication of documents, the creation of a shell company, and sustained deception of a government agency, the sentencing court will treat general deterrence as a significant factor, with subjective considerations taking a subsidiary role.

Legislation and Cases Referenced

Legislation
- Crimes Act 1914 (Cth), ss 16A(1), 16A(2), 17A(1), 20AB
- Crimes Regulations 1990 (Cth), cl 6
- Criminal Code (Cth), ss 11.1 (attempt) and 134.2(1) (obtaining financial advantage by deception)

Cases
- Cameron v The Queen (2002) 209 CLR 339
- Johnson v The Queen (2004) 78 ALJR 616
- R v El Karhani (1990) 21 NSWLR 370