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District Court 1 April 2021

R v Hausman

[2021] NSWDC 846

Fraud & dishonestyPublic order & justice offences
CRIMINAL SENTENCE MIX OF STATE AND FEDERAL OFFENCES BLACKMAIL DEALING WITH PROCEEDS OF CRIME FEDERAL AND STATE OFFENCES

Citation: R v Hausman [2021] NSWDC 846
Court: District Court of New South Wales
Date: 1 April 2021
Judge: Abadee DCJ

Background

The offender was not a participant in the well-known Plutus tax fraud conspiracy, in which a group of individuals misappropriated over $105 million in tax withholding and GST obligations collected through the payroll services company Plutus Payroll Australia Ltd. However, the offender was aware of the scheme through prior business connections with several of the conspirators, including Adam Cranston and Jason Onley, with whom he shared office space in Double Bay.

From late 2016, the offender and his co-offender, Daniel Rostankovski, planned and executed a scheme to blackmail certain Plutus conspirators by threatening media exposure and scrutiny by authorities unless a substantial sum of money was paid. The offender leveraged personal grievances, including conduct by Adam Cranston that he found deeply offensive, and recruited a journalist to assist in delivering the threat. The scheme resulted in the receipt of significant funds, which were then laundered with the involvement of further co-offenders.

The offender pleaded guilty at an early stage to two charges: blackmail under s 249K(2) of the Crimes Act 1900 (NSW) and money laundering under s 400.3(1) of the Criminal Code (Cth). He also cooperated with authorities, assisted in the recovery of funds, and undertook to provide future assistance to law enforcement.

  • What was the appropriate sentence for a mix of state and federal offences arising from the same course of criminal conduct?
  • How should discounts for early guilty pleas, past assistance, and future undertakings to assist authorities be calculated and stated under both NSW and Commonwealth sentencing regimes?
  • How should the principle of parity apply, given that co-offenders had been or were to be sentenced separately?
  • What was the correct approach to the instinctive synthesis of relevant sentencing factors across concurrent state and federal sentencing frameworks?

Decision

Abadee DCJ sentenced the offender on both counts, applying two distinct sentencing regimes: the Crimes (Sentencing Procedure) Act 1999 (NSW) and associated considerations in ss 3A and 21A for the blackmail offence, and Part 1B of the Crimes Act 1914 (Cth), particularly s 16A(2), for the money laundering offence. His Honour adopted the approach taken by Payne J in sentencing the principal Plutus conspirators, addressing only those s 16A(2) matters engaged by the parties' submissions.

For the blackmail offence (count 1), the baseline sentence before discounts would have been 6 years and 8 months imprisonment. A combined discount of 25 percent was applied for both past and future assistance under s 23 of the CSP Act, as required where an offender provides assistance in relation to a state offence. The resulting sentence, after also accounting for the early guilty plea, was reduced accordingly.

For the money laundering offence (count 2), the baseline before discounts was 6 years and 3 months with a non-parole period of 3 years and 9 months. A 20 percent discount was applied exclusively for the undertaking to provide future assistance under s 16AC of the Crimes Act 1914 (Cth). His Honour noted that, under the Commonwealth regime, the discount for future assistance is stated separately and the Commonwealth Director of Public Prosecutions retains the right to appeal if the offender fails to honour the undertaking.

The effective sentence for the money laundering offence was set at 5 years, commencing on 30 March 2024 upon the expiry of the non-parole period for the blackmail offence, with a non-parole period of 3 years, making the offender eligible for release on parole from 29 March 2027. His Honour conducted an instinctive synthesis of all relevant factors, including the objective seriousness of each offence, the offender's personal circumstances, cooperation with authorities, the recovery of funds, and parity with co-offenders.

Orders Made

  • Count 1 (blackmail, state offence): sentence of imprisonment imposed, with a 25 percent combined discount for past and future assistance; baseline before discount was 6 years and 8 months.
  • Count 2 (money laundering, federal offence): effective term of imprisonment of 5 years commencing 30 March 2024, with a non-parole period of 3 years; the offender is eligible for release on parole from 29 March 2027.
  • The sentence for count 2 commences upon expiry of the non-parole period for count 1.
  • The Commonwealth Director of Public Prosecutions retains the right under s 16AC(3) of the Crimes Act 1914 (Cth) to appeal if the offender fails to fulfil the undertaking to assist authorities.

Key Takeaways

  • The District Court applied two entirely separate sentencing frameworks simultaneously: NSW law governed the blackmail offence and Commonwealth law governed the money laundering offence, requiring distinct calculations for guilty plea discounts and assistance reductions under each regime.

  • Under Commonwealth sentencing law, the discount for an undertaking to provide future assistance is stated separately from any reduction for past assistance, and the prosecution may appeal a reduced sentence if the undertaking is not honoured (s 16AC, Crimes Act 1914 (Cth)).

  • Where a NSW state offence is involved, s 23(4) of the CSP Act requires the court to state the combined effect of both past and future assistance as a single figure, in contrast to the Commonwealth approach of disaggregating the two.

  • Parity with co-offenders sentenced in related Plutus proceedings was a relevant consideration, even where the offender's conduct was collateral to, rather than part of, the primary conspiracy.

  • Cooperation with authorities, including assisting in the recovery of misappropriated funds and undertaking to provide future assistance, attracted meaningful discounts across both sentencing regimes, illustrating how post-offence conduct can materially affect the final sentence in complex fraud-related matters.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1900 (NSW), s 249K
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22, 23, 24B
- Crimes Act 1914 (Cth), ss 16A, 16AC
- Criminal Code 1995 (Cth), ss 11.2A, 400.3
- Proceeds of Crime Act 2002 (Cth), s 320

Cases:
- R v Anquetil [2020] NSWSC 995
- R v Kitson [2019] NSWSC 1109
- R v Hammond [2020] NSWSC 888
- Postiglione v The Queen (1997) 189 CLR 295
- R v Ansari (2007) 70 NSWLR 89
- Buckley v R [2021] NSWCCA 6
- Lee v R [2020] NSWCCA 307
- Elshani v R [2015] NSWCCA 354
- Giourtalis v R [2013] NSWCCA 216
- King v R [2010] NSWCCA 202
- R v De Leeuw [2015] NSWCCA 183
- R v Guo (2010) 201 A Crim R 403
- R v Li (2010) 202 A Crim R 195
- R v Huang; R v Sui (2007) 174 A Crim R 370
- Kim v R [2016] VSCA 238
- Director of Public Prosecutions (Victoria) & Commonwealth Director of Public Prosecutions v Swingler (2017) 269 A Crim R 526
- Benasic and Malavetas v R (1987) 77 ALR 340
- R v Issakidis [2018] NSWSC 378
- Commonwealth Director of Public Prosecutions v Wallenius Wilhelmsen Ocean AS [2021] FCA 52
- Attorney General's Reference No 40 of 2002 (John Alexander Collard) [2003] 1 Cr App R (S) 98