AI-generated summaries. Not legal advice. Always verify against the official judgment on NSW Caselaw.
← All decisions
District Court 1 April 2021

R v Rostankovski

[2021] NSWDC 847

Fraud & dishonestyPublic order & justice offences
CRIMINAL SENTENCE FEDERAL AND STATE OFFENCES BLACKMAIL AIDING AND ABETTING TAX FRAUDS MONEY LAUNDERING

Citation: R v Rostankovski [2021] NSWDC 847
Court: District Court of New South Wales
Date: 1 April 2021
Judge: Abadee DCJ

Background

These proceedings arose as satellite sentencing matters connected to the well-known Plutus tax fraud conspiracy, in which a group of individuals defrauded the Commonwealth of over $105 million in Pay As You Go Withholding and GST taxes collected through a sham payroll services structure. The offender was not a core Plutus conspirator but had worked for key figures in the scheme, managing nominee directors of the "second tier" companies used to siphon tax funds. From August 2016, his involvement crossed into aiding and abetting one of the principal conspirators, Adam Cranston, in conduct intended to dishonestly cause a loss to the Commonwealth.

The offender and a co-offender, Mr Daniel Hausman, subsequently identified the Plutus conspirators' vulnerability and moved to exploit it. In February 2017 they made unwarranted demands, with menaces, against Cranston and others, threatening to expose their involvement in fraud and money laundering unless paid substantial sums. The pair then laundered the proceeds of that extortion.

The offender was sentenced on three counts: aiding and abetting Cranston's dishonest conduct (a federal offence under the Criminal Code (Cth)); blackmail (a state offence under the Crimes Act 1900 (NSW)); and money laundering of proceeds exceeding $1 million (a federal offence under the Criminal Code (Cth)).

  • What were the appropriate sentences for each of the three offences, having regard to objective seriousness and the offender's individual circumstances?
  • What discount, if any, was warranted for the offender's guilty pleas?
  • How did the offender's cooperation with law enforcement affect the sentencing factors, including as a mitigating consideration?
  • Whether the existence of a restraining order under the Proceeds of Crime Act 2002 (Cth) constituted extra-curial punishment that should reduce the sentence imposed.
  • How the principles of parity (with the co-offender Hausman) and totality should be applied across the federal and state sentences.

Decision

Abadee DCJ sentenced the offender across two separate regimes: the state Crimes (Sentencing Procedure) Act 1999 (NSW) governed the blackmail offence, and Part 1B of the Crimes Act 1914 (Cth) governed the two federal offences. The court followed the approach of Payne J in the earlier Plutus conspirators' sentencing, addressing only those s 16A(2) matters to which the parties had made submissions.

On objective seriousness, the blackmail offence was treated as a serious example of its kind, involving deliberate exploitation of the Plutus conspirators' criminal vulnerability for personal financial gain. The money laundering offence was also treated seriously given the sums involved exceeded $1 million. The aid and abet offence, while less serious than the conduct of the principal conspirators, was not trivial given the offender's active role in managing nominee directors and facilitating the fraud's infrastructure.

The court accepted that the offender's cooperation with law enforcement was a relevant mitigating factor, as was his guilty plea. A 20% discount was applied for the plea on the blackmail count, reducing the head sentence for that offence from six years to four years and nine months. The court rejected the submission that the restraining order under the Proceeds of Crime Act amounted to extra-curial punishment of sufficient weight to further reduce the sentence. Applying the totality principle across the aggregate federal sentence and the state sentence, the court arrived at a notional net effective term of 12 years, adjusting for significant concurrency between counts while maintaining some accumulation.

Orders Made

  • Count 2 (blackmail): Imprisonment for 4 years, commencing 31 March 2021 and expiring 30 March 2025, with a non-parole period of 2 years and 5 months expiring 30 August 2023.
  • Counts 1 and 3 (money laundering and aiding and abetting, aggregate federal sentence): Imprisonment for 8 years, commencing 31 August 2023 and expiring 30 August 2031, with a non-parole period of 4 years and 9 months expiring 30 May 2028.
  • The offender is eligible for parole on 30 May 2028, subject to conditions set by the relevant parole authority.

Key Takeaways

  • A restraining order under the Proceeds of Crime Act 2002 (Cth) did not, in this case, constitute extra-curial punishment warranting a reduction in the head sentence, consistent with the court's view that such orders are civil asset-preservation measures rather than punitive sanctions.
  • A 20% guilty plea discount was applied to the blackmail offence, reflecting the utilitarian value of the plea within the applicable state sentencing regime.
  • The District Court applied the totality principle across both state and federal sentences, adjusting the degree of accumulation between counts to ensure the aggregate did not exceed what was appropriate for the overall criminality.
  • Where an offender participates in a fraud conspiracy peripherally at first and then transitions into a more active role, the sentencing court will calibrate objective seriousness to reflect the nature and extent of that transition rather than treating the offender as equivalent to the principal conspirators.
  • Cooperation with law enforcement was treated as a mitigating factor, though its weight was assessed against all other circumstances, including the seriousness of the offending across multiple distinct criminal episodes.

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW), s 249K
- Crimes Act 1914 (Cth), ss 16A, 17A
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 5, 21A
- Criminal Code (Cth), ss 11.2, 11.2A, 135.1, 135.4, 400.3
- Proceeds of Crime Act 2002 (Cth), ss 29, 39, 44, 320

Cases
- Attorney General's Reference No 40 of 2002 (John Alexander Collard) [2003] 1 Cr App R (S) 98
- Attorney-General v Emmerson (2014) 307 ALR 174
- Benasic and Malavetas v R (1987) 77 ALR 340
- Commissioner of the Australian Federal Police v Mulder (2013) 278 FLR 103
- Commonwealth Director of Public Prosecutions v Beattie (2017) 270 A Crim R 556
- Commonwealth Director of Public Prosecutions v De La Rosa (2010) 243 FLR 28
- Commonwealth Director of Public Prosecutions v Gregory (2011) 34 VR 1
- Dickson v The Queen [2016] NSWCCA 105
- Elias v The Queen (2013) 248 CLR 483
- Elshani v R [2015] NSWCCA 354
- GAS v The Queen; SJK v The Queen (2004) 217 CLR 198
- Gillard v The Queen (2003) 219 CLR 1
- Green v The Queen (2011) 244 CLR 462
- Hili v The Queen; Jones v The Queen (2010) 242 CLR 520
- Huang v R [2018] NSWCCA 57
- Imbornone v R [2017] NSWCCA 144
- R v Anquetil [2020] NSWSC 995
- R v Hammond [2020] NSWSC 888
- R v Kitson [2019] NSWSC 1109