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District Court 26 October 2023

R v Baraket

[2023] NSWDC 455

Fraud & dishonesty
CRIME FRAUD

Citation: R v Baraket [2023] NSWDC 455
Court: District Court of New South Wales
Date: 26 October 2023
Judge: Scotting DCJ

Background

The offender, a sales executive in his mid-thirties, had been declared bankrupt in January 2016 following the collapse of his recruitment business. As a bankrupt, he was required to contribute a portion of his income, including commissions, to his bankrupt estate under the supervision of an appointed trustee.

Between July 2019 and January 2020, the offender provided seven falsified payslips to the trustee and made a further false representation about a payment into the estate. The falsified payslips understated his commission income by over $168,000, preventing approximately $91,158 in required contributions from reaching his creditors. The offender also falsely claimed to have made a payment of over $6,000 into the estate when he had not done so.

The offender pleaded guilty in the Local Court to eight charges of making a false claim in proceedings with intent to defraud, contrary to section 263(1)(d)(i) of the Bankruptcy Act 1966 (Cth). Each offence carries a maximum penalty of five years' imprisonment. The matter was committed to the District Court for sentence.

  • What was the appropriate sentence for eight counts of bankruptcy fraud, having regard to the offender's personal circumstances, mental health, and drug dependency?
  • What weight should be given to the guilty plea, cooperation with the trustee, and reparation of the defrauded amount?
  • Whether the sentence should be served in full-time custody or by way of an Intensive Correction Order (ICO), which is a form of imprisonment served in the community under strict supervision.

Decision

Scotting DCJ applied the federal sentencing framework under Part IB of the Crimes Act 1914 (Cth), including the considerations in section 16A(2), alongside applicable common law principles. The court accepted that the offending was serious: the payslips had been carefully manipulated, adjusting superannuation, tax, and year-to-date figures to avoid detection, and the fraud spanned several months.

The court gave the offender a 25% discount on sentence, reflecting the utilitarian value of the early guilty pleas, his cooperation with the trustee, and the remorse those pleas demonstrated. Notably, the offender had since repaid the full amount he had wrongly withheld from his bankrupt estate, which the court treated as a relevant mitigating factor.

The court accepted the psychologist's evidence that the offender met the diagnostic criteria for Unspecified Bipolar and Related Disorder and Stimulant Use Disorder, and that both conditions were present at the time of the offending and causally related to it. At the time of the offences, the offender had approximately $30,000 in cocaine-related debts and feared for his family's safety if those debts went unpaid. The court found that the severity of the mental health conditions and their direct causal link to the offending meant that general deterrence, retribution, and denunciation could be given reduced weight.

Weighing all factors, the court was satisfied that community protection would be better served by an ICO than by full-time custody, following the approach endorsed in Mandranis v R [2021] NSWCCA 97. The court emphasised that an ICO is a sentence of imprisonment, not a non-custodial outcome, and that its conditions would hold the offender accountable while supporting his rehabilitation.

Orders Made

  • The sentence is to be served by way of an Intensive Correction Order (ICO) pursuant to section 7(1) of the Crimes (Sentencing Procedure) Act 1999, commencing 26 October 2023 and expiring 25 April 2026.
  • Standard conditions apply: no further offences; submission to supervision by a Community Corrections Officer.
  • Additional conditions:
  • Abstain from all restricted or prohibited drugs (except those prescribed by a medical practitioner)
  • Receive mental health treatment as directed by Community Corrections
  • Receive drug rehabilitation treatment as directed by Community Corrections
  • Complete 120 hours of community service
  • The offender must report to the Sutherland Community Corrections Office on or before 4pm on 2 November 2023.
  • Non-compliance with ICO conditions may result in formal warnings, more stringent conditions, or revocation and full-time custody.

Key Takeaways

  • A direct causal link between diagnosed mental illness and offending conduct can reduce the weight given to general deterrence, retribution, and denunciation at sentencing for federal offences.
  • Under the federal sentencing framework in section 16A(2) of the Crimes Act 1914 (Cth), courts must consider a non-exhaustive range of factors; common law principles continue to apply alongside that statutory list.
  • An ICO is a custodial sentence served in the community, and the District Court here treated it as capable of adequately reflecting the seriousness of sustained, premeditated bankruptcy fraud.
  • Reparation of the full amount wrongly withheld, combined with an early guilty plea and cooperation with the trustee, attracted meaningful mitigation, including a 25% sentencing discount.
  • Falsifying payslips across multiple fields (commissions, superannuation, tax, and year-to-date figures) to conceal income from a bankruptcy trustee will be treated as deliberate and calculated conduct, even where underlying personal circumstances provide some mitigation.

Legislation and Cases Referenced

Legislation
- Bankruptcy Act 1966 (Cth), s 263(1)(d)(i)
- Crimes Act 1914 (Cth), Part IB, s 16A
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 7(1)

Cases
- Hili v The Queen (2010) 242 CLR 520
- Johnson v The Queen (2004) 78 ALJR 616
- Mandranis v R [2021] NSWCCA 97
- R v El Karhani (1990) 21 NSWLR 370
- R v Olbrich (1999) 199 CLR 270
- R v Zamagias [2002] NSWCA 17