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Local Court 30 May 2018

R v Rasavong

[2018] NSWLC 5

Fraud & dishonesty
CRIMINAL LAW SENTENCE RELEVANT FACTORS PRIOR HISTORY CRIMINAL OFFENDING ABUSE OF POSITION OF TRUST OFFENCE INVOLVED A DEGREE OF PLANNING

Citation: R v Rasavong [2018] NSWLC 5
Court: Local Court of NSW
Date: 30 May 2018
Judge(s): Judge Graeme Henson, Chief Magistrate

Background

The defendant was engaged as a contractor with an investment services company and, in late 2015, was given unsupervised administrative access to a computer system managing client accounts for a linked asset management firm. He exploited that access to submit 20 fraudulent electronic redemption forms, diverting client funds totalling $396,183.78 to his own bank account. To conceal the fraud, he altered client email addresses and passwords to prevent account holders from detecting the unauthorised transactions.

The fraud came to light after the defendant's employment was terminated in January 2016 and clients began reporting access problems. A forensic audit commissioned between March and July 2017 established the full extent of the conduct. The defendant was spoken to by police in September 2017 and made a handwritten admission. He entered a guilty plea at the first court appearance in October 2017.

The matter proceeded in the Local Court on a single charge of dishonestly obtaining a financial advantage by deception under section 192E(1)(b) of the Crimes Act 1900 (NSW). The Director of Public Prosecutions did not elect to have the matter heard in the District Court, which capped the Local Court's sentencing power at a maximum of two years' imprisonment.

  • What sentence was appropriate given the nature, scale, and circumstances of the fraud?
  • Which aggravating factors under section 21A(2) of the Crimes (Sentencing Procedure) Act 1999 (NSW) applied?
  • What discount applied for the early guilty plea?
  • Whether the defendant's psychiatric diagnoses and personal circumstances constituted mitigating factors.
  • Whether the Local Court's two-year jurisdictional limit reactivated legislative alternatives to full-time imprisonment (such as intensive correction orders or home detention) that would otherwise be unavailable given the seriousness of the offending.
  • Whether special circumstances justified departing from the standard statutory ratio between the non-parole period and the additional term.
  • What compensation order was available given the Local Court's civil jurisdictional limit of $100,000.

Decision

Aggravating factors: The court identified three applicable aggravating factors. The defendant had a prior conviction for similar dishonest conduct, and while that earlier offence was of lesser gravity, it undermined confidence in his rehabilitation. He held a position of trust with unsupervised access to employer and client systems, which he breached repeatedly. The offence was committed for financial gain. The court declined to treat planning as an additional aggravating factor, finding that the expertise involved did not exceed what would ordinarily be expected for this type of offending.

Mitigating factors and personal circumstances: The defendant had been diagnosed with substance abuse disorder, addictive disorder, and adjustment disorder, linked to the breakdown of his marriage and a significant financial loss in a prior business venture. The court accepted these diagnoses as relevant but did not accept the submission that the fraud was motivated by a desire to repay former clients. A 25% discount was applied for the utilitarian value of the early guilty plea, consistent with the Court of Criminal Appeal's guidance in R v Thomson; R v Houlten.

Imprisonment and the jurisdictional limit: The court concluded that the only appropriate sentence was full-time imprisonment. It further determined that, assessed on its merits, the appropriate sentence exceeded the Local Court's two-year jurisdictional limit. The court held that this finding did not reactivate legislative sentencing alternatives, such as intensive correction orders, that would otherwise be unavailable for an offence of this seriousness. It was not appropriate to artificially reduce the sentence to bring it within the parameters of a particular legislative option where the circumstances of the offending would not independently justify such an outcome.

Special circumstances and compensation: The court found special circumstances under section 44(2) of the Crimes (Sentencing Procedure) Act warranting a departure from the standard non-parole to additional term ratio, given the defendant's rehabilitation needs. On compensation, the court noted that the total recoverable loss, including $396,183.78 in defrauded funds and $58,796.10 in forensic audit costs, amounted to $454,979.88. The Local Court's civil jurisdiction cap of $100,000 restricted the compensation order to that amount, with the court noting the availability of civil proceedings for the balance.

Orders Made

  • The defendant was convicted and sentenced to a total term of imprisonment of 24 months, comprising a non-parole period of 15 months commencing 30 May 2018, with eligibility for parole on 29 August 2019, and a balance of term expiring 29 May 2020.
  • Upon release on parole, the defendant is to be supervised by Community Corrections and required to undertake drug, alcohol, and gambling addiction rehabilitation programs.
  • A copy of the psychiatric report regarding available treatment options is to accompany the warrant committing the defendant to prison.
  • The defendant is ordered to pay part compensation of $100,000 (reflecting the Local Court's civil jurisdictional limit), with the court noting that civil proceedings remain available for any outstanding balance.
  • The court noted an unverified assertion that $30,000 had already been repaid and indicated that formal acknowledgment of that sum should be provided if accepted by the victim.

Key Takeaways

  • A sentencing court's determination that the appropriate sentence exceeds the Local Court's two-year jurisdictional limit does not revive or reactivate legislative alternatives to full-time imprisonment, such as intensive correction orders, that would otherwise be unavailable given the objective seriousness of the conduct.
  • It is not appropriate to reduce a sentence artificially to bring it within the parameters of a particular sentencing option where the offending circumstances would not otherwise justify that outcome.
  • Abuse of a position of trust, particularly involving unsupervised administrative access to employer and client systems, constitutes a significant aggravating factor under section 21A(2)(k) of the Crimes (Sentencing Procedure) Act.
  • Under the approach in R v Yildiz, planning is only an aggravating factor where its degree or nature exceeds what would ordinarily be expected for the offence type; specialist knowledge or technical skill required to carry out the offence does not, of itself, elevate planning to an aggravating circumstance.
  • The Local Court's compensation jurisdiction is capped at $100,000 in summary proceedings, and where losses exceed that figure, the court can note only that civil proceedings remain available for the balance; this stands in contrast to the broader compensation powers available in the District Court on indictment.

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW), ss 192E(1)(b), 192E(3)
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 5, 21A(2), 21A(3)(h), 44(2), 68(1)
- Criminal Procedure Act 1986 (NSW), Schedule 1, Table 1

Cases
- Kelsall v R [2017] NSWCCA 240
- R v Carr [2002] NSWCCA 434
- R v Doan (2000) 50 NSWLR 115
- R v Johnson [2004] NSWCCA 76
- R v Mato; R v Rusu (1999) 109 A Crim R 121
- R v Mungomery (2004) 151 A Crim R 376
- R v Pantano (1990) 49 A Crim R 328
- R v Pont (2000) 121 A Crim R 302
- R v Thomson; R v Houlten (2000) 49 NSWLR 383
- R v Yildiz (2006) 160 A Crim R 218
- R v Zamagias [2002] NSWCCA 17