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4
District Court 16 January 2019

R v Clarke

[2019] NSWDC 2

Fraud & dishonesty
SENTENCING MULTIPLE STATE OFFENCES DISHONESTLY OBTAIN FINANCIAL ADVANTAGE GUILTY PLEA OBJECTIVE SERIOUSNESS GENERAL DETERRENCE

Citation: R v Clarke [2019] NSWDC 2
Court: District Court of New South Wales
Date: 16 January 2019
Judge: Judge ML Williams SC

Background

The offender was a solicitor employed by a Sydney law firm who, between December 2015 and August 2017, fraudulently transferred approximately $9.75 million from client accounts into his own private bank account. His clients included a prominent Australian media proprietor and associated corporate entities. The offender had cultivated a close personal relationship with the principal client, and that trust formed the foundation of his ability to commit the offences.

The funds were almost entirely dissipated through gambling. The offender placed extraordinarily large bets on sporting events across multiple platforms, with his total betting activity estimated to exceed $100 million over the relevant period. His TAB records alone recorded approximately $14 million in bets, representing only an estimated 10 to 20 percent of his total wagering.

The offender pleaded guilty to six charges under section 192E(1)(b) of the Crimes Act 1900 (NSW), each carrying a maximum penalty of ten years' imprisonment. The offences involved transfers ranging from approximately $18,000 to $4.45 million, achieved through forged documents, impersonation of clients, and the manipulation of colleagues and banking staff.

  • What was the appropriate sentence given the objective seriousness of the offending, including the total sum involved and the sustained, sophisticated nature of the fraud?
  • What weight should be given to general deterrence in the context of white-collar crime committed by a legal professional?
  • What mitigating factors applied, including the guilty plea, the offender's personal circumstances, a gambling addiction, and cooperation with authorities?
  • Whether special circumstances existed to justify a non-parole period of less than the standard one-third reduction from the head sentence.
  • How should the aggregate sentence be structured across the six individual charges?

Decision

The court identified the objective seriousness of the offending as very high. The total amount stolen exceeded $9.75 million. The fraud was sustained over approximately 20 months, involved planning and sophistication, and included the forgery of documents, impersonation of clients to banking staff, and the deliberate manipulation of a colleague's mobile phone to intercept verification calls. The offender exploited a position of deep personal and professional trust.

The court placed significant weight on general deterrence. Judge Williams observed that fraud by lawyers carries particular gravity because solicitors hold a position of public trust conferred by law and community confidence. The difficulty in detecting and prosecuting such offences reinforced the need for substantial custodial sentences to deter others in similar professional positions.

The court accepted several mitigating factors. The offender had no prior convictions, gave frank and honest evidence at sentencing, cooperated with authorities, and had taken steps to assist in the recovery of funds. A 40 percent discount was applied to the indicative sentences to reflect the early guilty plea and other mitigating matters. The court also accepted that the offender suffered from a genuine gambling addiction, though it noted this did not displace the weight to be given to general deterrence.

The court found special circumstances, which allowed the non-parole period to be set at three years rather than the standard minimum. The court took into account the strict bail conditions the offender had been subject to, treating time under those conditions as analogous to a form of quasi-custody, consistent with the approach in Kelly v R [2018] NSWCCA 44. The court noted there was no prospect of repayment of the stolen funds, which remained a relevant consideration in assessing the overall harm caused.

Orders Made

  • The offender was convicted of each of the six offences.
  • An aggregate sentence of imprisonment of 6 years was imposed, commencing 14 January 2019 and expiring 13 January 2025.
  • A non-parole period of 3 years was imposed, expiring 13 January 2022, with the offender eligible for release to parole on that date.
  • Special circumstances were found.
  • Indicative sentences were recorded as follows:
  • Sequence 001 (17 August 2017, $4,455,000): 3 years, 7 months
  • Sequence 002 (1 September 2017, $2,500,740): 3 years
  • Sequence 009 (2 December 2016, $82,070): 11 months
  • Sequence 010 (23 June 2017, $260,664): 18 months
  • Sequence 011 (30 June 2017, $2,537,266): 3 years
  • Sequence 012 (29 December 2015, $18,035.97): 8 months

Key Takeaways

  • Fraud by a solicitor against clients attracts heightened sentencing weight because legal practitioners hold a special position of public trust; a breach of that trust calls the profession into question and demands sentences that send an unambiguous message to other professionals.
  • A gambling addiction, while accepted as a genuine mitigating circumstance, does not substantially reduce the emphasis on general deterrence where the offending is sophisticated, sustained, and involves large sums taken from trusting clients.
  • The District Court applied a 40 percent discount to indicative sentences to reflect the combination of an early guilty plea and other accepted mitigating factors, consistent with the principles in R v Ellis (1986) 6 NSWLR 603 and related authorities.
  • Special circumstances were found, permitting a non-parole period of three years against a six-year head sentence, in part because of the quasi-custodial effect of strict reporting and residential bail conditions, following Kelly v R [2018] NSWCCA 44.
  • Where white-collar fraud involves systematic dishonesty, planning, and a serious breach of trust, the difficulty in detecting and prosecuting such offences is itself a reason to emphasise general deterrence in fixing the sentence.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1900 (NSW), s 192E(1)(b)
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 5

Cases:
- Alkanaan v R [2017] NSWCCA 56
- DPP (Cth) v De La Rosa (2010) 205 A Crim R 1
- Johnston v R [2017] NSWCCA 53
- Kelly v R [2018] NSWCCA 44
- Khoo v R (2013) 237 A Crim R 221
- Luong v R [2014] NSWCCA 129
- Markarian v R (2005) 228 CLR 357
- Pearce v The Queen (1998) 194 CLR 610
- R v Ellis (1986) 6 NSWLR 603
- R v Gentz [1999] NSWCCA 285
- R v Grossi (2008) 183 A Crim R 15
- R v Hawkins (1989) 45 A Crim R 430
- R v Henry (1999) 46 NSWLR 346
- R v Hill [2004] NSWCCA 257
- R v Lam (2015) NSWCCA 143
- R v MAC (2006) 167 A Crim R 159
- R v Mears (1991) 53 A Crim R 141
- R v Murtaza [2001] NSWCCA 336
- R v Pereira [2018] NSWCCA 171
- R v Pont (2000) 121 A Crim R 302
- SZ v R [2007] NSWCCA 19
- Veen v The Queen (No 2) (1988) 164 CLR 465