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District Court 12 March 2021

R (Cth) v Grewal

[2021] NSWDC 360

Fraud & dishonesty
CRIME SENTENCE

Citation: R (Cth) v Grewal [2021] NSWDC 360
Court: District Court of New South Wales
Date: 12 March 2021
Judge: Neilson DCJ

Background

The offender, a qualified pharmacist and sole proprietor of a pharmacy in Lindfield, pleaded guilty to a charge of dishonestly obtaining a financial advantage from the Commonwealth by engaging in a sustained course of fraudulent conduct against the Pharmaceutical Benefits Scheme (PBS). Between November 2015 and May 2019, she submitted 524 false PBS claims for prescriptions where no medication was actually dispensed and no valid prescription existed.

To execute the scheme, the offender used the legitimate Medicare numbers of herself, her daughter, her parents, her partner, and her partner's parents, along with the Medicare provider numbers of 12 health care providers. All payments, totalling $365,922.09, were deposited into the pharmacy's business account. The offender used the funds to keep the pharmacy financially afloat rather than for direct personal enrichment.

The principal charge covered the period from November 2015 to August 2018, with a second related offence (November 2015 to May 2019) taken into account on a schedule under s 16BA of the Crimes Act 1914 (Cth). Both the Crown and the defence accepted that a custodial sentence was warranted. The sole dispute was whether that sentence should be served by way of full-time imprisonment or an alternative custodial arrangement.

  • Whether the sentence should be served as full-time imprisonment or by way of an Intensive Correction Order (ICO)
  • What weight, if any, could be given to unsworn subjective material tendered on the offender's behalf
  • How the court should balance strong subjective circumstances (including mental health considerations) against the objective seriousness of systematic professional fraud on a Commonwealth scheme
  • Whether an ICO would better address the offender's risk of re-offending than full-time custody

Decision

Neilson DCJ found that the offending was plainly deliberate and systematic. The offender had used her professional knowledge of how the PBS operated to ensure the scheme would not trigger automatic detection, including using correct Medicare and provider numbers. The court drew on established authority holding that systematic fraud by professionals involving large sums is treated as particularly serious, representing an abuse of professional privilege and carrying real potential to damage the reputation of the relevant profession.

The court also emphasised the broader community impact of PBS fraud. Drawing on R v Holdsworth [1993] QCA 242, his Honour noted that defrauding Commonwealth schemes amounts to taking money from every Australian taxpayer, and that general deterrence requires courts to signal that custodial punishment is the expected consequence of such conduct.

Despite that objective seriousness, the court found the offender presented an exceptionally strong subjective case. After examining her personal history, mental health background, and treatment trajectory, Neilson DCJ was satisfied that unsworn material provided on her behalf was sufficiently consistent, plausible, and detailed to be given weight, consistent with the principles summarised in Imbornone v R [2017] NSWCCA 144. The court found the offender had largely ceased offending around the time she commenced psychiatric treatment in April 2019.

On the question of the ICO, Neilson DCJ concluded that full-time custody would not be the better mechanism for addressing the offender's risk of re-offending. Maintaining the offender's existing treatment regime was assessed as more effective in preventing reoffending than incarceration. Accordingly, the court imposed a sentence of 18 months' imprisonment to be served by way of an Intensive Correction Order, with conditions including abstinence from alcohol, continuation of treatment, and 350 hours of community service.

Orders Made

  • Convicted on the principal charge under s 135.1(1) of the Criminal Code (Cth)
  • Sentenced to 18 months' imprisonment, to be served by way of an Intensive Correction Order (ICO), with the following conditions:
  • Must not commit any offence
  • Must submit to supervision by a Community Corrections officer
  • Must complete 350 hours of community service work
  • Must participate in a treatment programme as directed by Dr Anthony Sams
  • Must abstain from alcohol
  • Must report to the Community Corrections office at Hornsby by telephone within seven days
  • Ordered to pay reparation to the Commonwealth of Australia of $365,922.09 pursuant to s 21B(1)(c) of the Crimes Act 1914 (Cth)

Key Takeaways

  • Systematic PBS or Medicare fraud by a professional is treated as a serious category of Commonwealth offending, warranting custodial sentences and the full weight of general deterrence, regardless of the offender's motive for retaining the funds.
  • An ICO remains available as an alternative to full-time imprisonment where the sentencing court positively determines that it better addresses the offender's risk of re-offending; s 66 of the Crimes (Sentencing Procedure) Act 1999 does not create a blanket prohibition.
  • Unsworn subjective material is not automatically treated with scepticism or dismissed; the District Court confirmed that such material can carry weight where it is consistent, plausible, and sufficiently detailed, applying the principles gathered in Imbornone v R [2017] NSWCCA 144.
  • Defrauding a Commonwealth scheme is characterised in sentencing as harm to the general public, given that the Commonwealth is funded through taxation, and courts have described general deterrence as a primary consideration in these matters.
  • Where an offender's mental health treatment regime is assessed as the most effective means of preventing reoffending, that treatment obligation can be embedded as a condition of an ICO, with alcohol abstinence requirements added where clinically relevant.

Legislation and Cases Referenced

Legislation
- Criminal Code (Cth), s 135.1(1)
- Crimes Act 1914 (Cth), ss 16BA, 21B(1)(c)
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 66

Cases
- Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCCA 194; (2010) 79 NSWLR 1
- DPP v Golic [2014] VSCA 355
- DPP (Cth) v Phan [2016] VSCA 170
- El Rakhawy v The Queen [2011] WASCA 209; (2011) 214 A Crim R 124
- Imbornone v R [2017] NSWCCA 144
- R v Buckman [2016] QCA 176
- R v Holdsworth [1993] QCA 242