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District Court 23 February 2024

R v Mustapha

[2024] NSWDC 30

Fraud & dishonesty
CRIME SENTENCE DEALING WITH PROCEEDS OF CRIME

Citation: R v Mustapha [2024] NSWDC 30
Court: District Court of New South Wales
Date: 23 February 2024
Judge: Colefax SC DCJ

Background

The offender was a registered tax agent who, at age 20, devised and carried out a fraud against the Australian Taxation Office over a period of approximately ten weeks between January and April 2018. He used personal details collected from migrants who responded to fake online job advertisements, lodging fraudulent income tax returns on their behalf without authorisation and directing refunds into bank accounts he controlled.

The scheme netted $145,175.61 in fraudulent tax refunds (affecting 25 taxpayers), with a further $36,293.99 attempted but not obtained (affecting 6 taxpayers). An additional $48,373.48 was received in connection with 9 further taxpayers and charged as a proceeds of crime offence, as direct evidence of unauthorised lodgements for those individuals was not available. The total loss to the Commonwealth across all three offences was $193,549.09.

The offender was not charged until March 2022, following ATO investigations that began in April 2018 and a formal interview in June 2021. He pleaded guilty in February 2023 and was committed for sentence to the District Court.

  • What is the objective seriousness of each offence, and where does each fall within the relevant range?
  • What weight should be given to subjective mitigating factors, including age at the time of offending, guilty plea, and rehabilitative progress?
  • Whether the offender demonstrated genuine remorse sufficient to attract leniency.
  • Whether an Intensive Correction Order (ICO) was appropriate, or whether full-time imprisonment was required, having regard to community safety considerations under s 66 of the Crimes (Sentencing Procedure) Act 1999 (NSW).

Decision

His Honour assessed the objective seriousness of each offence by reference to the amount defrauded, the offender's position as a registered tax agent, the accompanying breach of trust, the degree of planning and sophistication, the multiplicity of dishonest acts, and the duration of the offending. Sequence 1 (the primary fraud of $145,175.61) was assessed as slightly below mid-range. Sequences 8 (the attempt) and 41 (the proceeds of crime offence) were assessed as approximately halfway between the bottom and middle of the range.

On subjective matters, His Honour accepted several mitigating factors: the offender's young age at the time of offending, his limited and minor criminal history, his stable family background, the absence of mental health or substance issues, his family responsibilities, and his guilty plea. However, His Honour expressed scepticism about the offender's claimed remorse, noting that he gave no sworn evidence, offered only second-hand expressions of regret, and had made no reimbursement to the Commonwealth. His Honour was not satisfied on the balance of probabilities that genuine remorse existed. Four victims provided Victim Impact Statements, each describing substantial emotional harm.

His Honour imposed an aggregate sentence of 3 years' imprisonment. In determining the mode of service, the court applied the framework in Stanley v Director of Public Prosecutions (NSW) [2023] HCA 3 and considered s 66 of the Crimes (Sentencing Procedure) Act 1999 (NSW), which requires an assessment of community safety. Given the offender's otherwise good background, substantive rehabilitation, low risk of reoffending, and the time elapsed since the offending, His Honour found that community safety would be better served by an ICO than by full-time custody. Full-time imprisonment was assessed as likely to increase rather than reduce the risk of reoffending.

Orders Made

  • Sentence of 3 years' imprisonment, to be served by way of an Intensive Correction Order commencing 23 February 2024.
  • Mandatory ICO conditions: no offences to be committed during the order; submission to supervision by a Community Corrections Officer.
  • Additional condition: 500 hours of community service.
  • Reparation order in the amount of $193,549.09.
  • The offender directed to report to Bankstown Community Corrections Office by 4:00pm on Monday, 26 February 2024.

Key Takeaways

  • The District Court confirmed that, for tax fraud offences, an offender's limited criminal history carries reduced (though not negligible) mitigating weight compared with offences of a different character.
  • Where an offender makes no reimbursement, provides no sworn evidence of remorse, and offers only second-hand expressions of regret, the sentencing court may decline to find genuine remorse proved on the balance of probabilities.
  • Under s 66 of the Crimes (Sentencing Procedure) Act 1999 (NSW), and consistent with Stanley v Director of Public Prosecutions (NSW) [2023] HCA 3, an Intensive Correction Order may better serve community safety than full-time custody where an offender presents a low reoffending risk and has made substantive rehabilitative progress, even in cases of serious fraud.
  • A registered tax agent who exploits their professional position to perpetrate ATO fraud commits a significant breach of trust, which is a relevant factor in assessing objective seriousness, even where the amount falls below mid-range.
  • Sentencing courts treat young age at the time of offending as a genuine mitigating factor, but its weight must be considered alongside the planning, sophistication, and breach of professional position involved in the particular offending.

Legislation and Cases Referenced

Legislation
- Criminal Code Act 1995 (Cth), ss 134.2(1), 400.6(1), 11.1(1)
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 66

Cases
- Stanley v Director of Public Prosecutions (NSW) [2023] HCA 3