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District Court 29 May 2025

R v Mehieddine

[2025] NSWDC 326

Fraud & dishonesty
SENTENCING FRAUD OFFENCES DEFRAUDING THE COMMONWEALTH DEFRAUDING THE MEDICARE BENEFITS SCHEME INITIAL OFFENDING UNSOPHISTICATED INITIAL OFFENDING INVOLVED OVER

Citation: R v Mehieddine [2025] NSWDC 326
Court: District Court of New South Wales
Date: 29 May 2025
Judge: Sutherland SC DCJ

Background

The offender was a registered physiotherapist who held a valid Medicare provider number. Between November 2019 and September 2022, he submitted thousands of false claims to Medicare's Benefits Schedule, claiming rebates for physiotherapy services that were never performed.

The offending began in a relatively unsophisticated form: over-claiming for patients who were genuinely under his care. It then escalated significantly. The offender began lodging claims under the provider numbers of other practitioners at other practices, for patients he had never treated. He obtained a HICAPS terminal (the electronic device used to process health fund and Medicare claims), and later "cloned" HICAPS terminal identifications at other practices using a "rolling password" technique. He also purchased counterfeit Medicare numbers online. He continued this conduct even while travelling overseas, taking a HICAPS machine to Dubai.

Over the three-year period, the offender dishonestly obtained $2,215,351 from the Commonwealth. He spent substantial amounts on luxury car rentals and dining at restaurants overseas. At the time of offending he was on conditional liberty, and he had a prior history of dishonesty and drug-related offences. Drug and gambling addiction were identified as motivating factors in his ongoing conduct.

  • What aggregate sentence was appropriate for eight counts of dishonestly obtaining a financial advantage by deception from the Commonwealth, contrary to s 134.2(1) of the Criminal Code (Cth)?
  • What weight should be given to the offender's guilty pleas, and what discount applied, in light of the timing and procedural history?
  • How should the court treat the offender's subjective circumstances, including youth at the time of offending, drug and gambling addiction, prior criminal history, conduct while on conditional liberty, and participation in rehabilitation?
  • How should delay caused by changes in representation, disputed facts negotiations, and other procedural complications affect the sentencing exercise?
  • What reparation order should be made under s 21B of the Crimes Act 1914 (Cth)?

Decision

The court characterised the offending as serious and sustained. What began as unsophisticated over-claiming evolved into a technically complex fraud involving cloned HICAPS terminal identifications and counterfeit Medicare numbers. The court noted that the offender abused his position as a trusted healthcare provider within a system built on good faith compliance, and that the total amount defrauded was very substantial.

In assessing the guilty pleas, the court allowed a 20 per cent discount. The pleas were entered at committal in April 2024, but the subsequent prolonged procedural history, including multiple changes of counsel and solicitor, disputed facts negotiations, and attempts to withdraw the agreed facts, significantly reduced the utilitarian value of those pleas. The court took into account the delay as a mitigating factor to some extent, but was careful not to treat the offender's own conduct as a source of undue mitigation.

On the subjective side, the court acknowledged the offender's comparative youth at the time offending commenced (he was 22), his drug and gambling addictions, his participation in residential rehabilitation, and evidence of some rehabilitation progress. However, these factors were weighed against a prior history of dishonesty offences, the fact that he was on conditional liberty throughout the offending, and the continuation of the fraud even during overseas travel. The court found that the proceeds were spent on luxury goods and experiences rather than to meet any genuine need arising from addiction or hardship.

The court imposed an aggregate sentence under s 53A of the Crimes (Sentencing Procedure) Act 1999 (NSW), recording indicative sentences for each of the eight counts. The aggregate sentence was seven years' imprisonment with a non-parole period of four years and eight months, backdated to 29 March 2025 to account for pre-trial custody and time spent in residential rehabilitation. The offender will first be eligible for parole on 28 November 2029.

Orders Made

  • Aggregate sentence of seven years' imprisonment imposed under s 53A of the Crimes (Sentencing Procedure) Act 1999 (NSW)
  • Non-parole period of four years and eight months
  • Sentence backdated to 29 March 2025, accounting for 19 days of pre-trial custody and time in residential rehabilitation
  • First eligible for parole: 28 November 2029
  • Additional term (post-parole period) expires 28 March 2032
  • Reparation order under s 21B of the Crimes Act 1914 (Cth) in the sum of $2,215,351 payable to the Commonwealth

Note: The orders section of the provided text also contained background factual narrative and references to earlier Community Correction Orders from prior unrelated matters. The orders above reflect those directly made on sentence in this proceeding.

Key Takeaways

  • A guilty plea discount of 20 per cent was applied where pleas were entered at committal but were followed by extensive procedural delay, repeated changes of representation, and prolonged disputes over agreed facts, all of which substantially eroded the utilitarian value of the pleas.

  • Where fraud offending escalates from rudimentary over-claiming to technically sophisticated manipulation of provider identifications and counterfeit Medicare numbers, the increased sophistication is a significant aggravating feature in sentencing.

  • Addiction was acknowledged as a motivating factor in the offending but carried limited mitigatory weight where the offender's expenditure of proceeds was directed primarily toward luxury consumption rather than reflecting genuine deprivation or hardship driven by that addiction.

  • Under s 53A of the Crimes (Sentencing Procedure) Act 1999 (NSW), an aggregate sentence requires the court to set indicative individual sentences for each substantive count; here those indicative terms ranged from 16 months to five years and seven months depending on the quantum defrauded and the duration of offending under each count.

  • A reparation order under s 21B of the Crimes Act 1914 (Cth) was made for the full amount dishonestly obtained, reflecting the court's obligation to address the financial loss to the Commonwealth caused by the fraud.

Legislation and Cases Referenced

Legislation
- Criminal Code (Cth) ss 134, 135 (offences of dishonestly obtaining a financial advantage)
- Crimes Act 1914 (Cth) ss 16A, 16G, 21B, Pt 1B
- Crimes (Sentencing Procedure) Act 1999 (NSW) s 53A
- Health Insurance Act 1973 (Cth)
- Mental Health (Forensic Provisions) Act 1990 (NSW) s 32
- Crimes Act 1958 (Vic) s 82(1)
- Sentencing Act 1991 (Vic) s 6AAA

Cases
- Hili v R; Jones v R [2010] HCA 45; 242 CLR 520
- Dickson v R [2016] NSWCCA 105
- Issakidis v R [2019] NSWCCA 302
- Ensor v R [2022] NSWCCA 278
- El-Chaar v R [2007] NSWCCA 16
- PC v R [2020] NSWCCA 147
- Ly v R [2014] NSWCCA 78
- O'Meara v R [2009] NSWCCA 90
- Quetcher v R [2010] NSWCCA 257
- DPP (Cth) v Phan [2016] VSCA 170
- DPP v Golic [2014] VSCA 355
- R v Buckman [2016] QCA 176
- R v Cox; R v Cuffe; R v Morrison [2013] QCA 10
- El Rakhawy v R [2011] WASCA 209
- Corbett v R (1991) 52 A Crim R 112
- Environment Protection Authority v Ramsey Food Processing Pty Ltd [2009] NSWLEC 152
- R v Anthony James Dickson (No 18) [2015] NSWSC 268
- R v Blackburn [2023] NSWDC