New South Wales District Court CITATION: R v Neil Gordon Camm; R v Harold Charles Cary; R v Brendan Matthew Godfrey [2008] NSWDC 162 HEARING DATE(S): 7 February - 28 March 2008 - Trial, 16 May 2008 JUDGMENT DATE: 16 May 2008 JURISDICTION: Criminal JUDGMENT OF: Goldring DCJ Neil Gordon Camm is sentenced to four years imprisonment commencing 16 May 2008 and expiring 15 May 2012 with a non-parole period of two and a half years which will expire on 15 November 2010. DECISION: Harold Charles Cary is sentenced to three years imprisonment to commence 16 May 2008 and expire 15 May 2011, but he will be released on recognizance after serving a term of one year and six months. The date upon which he is to be released will be 15 November 2009 and that recognizance will be in the sum of one thousand dollars. Brendan Matthew Godfrey is sentenced to one year and ten months imprisonment, to commence 23 May 2008 and expire 22 March 2010, but pursuant to s 20(1)(b) Commonwealth Crimes Act I direct that he be released upon giving security in the amount of $10,000. CATCHWORDS: Criminal law - Sentencing - conspiracy - relative involvement of conspirators - defraud Commonwealth entity LEGISLATION CITED: Crimes Act 1914 (Cth) Crown Neil Gordon Camm (Offender) PARTIES: Harold Charles Cary (Offender) Brendan Matthew Godfrey (Offender) FILE NUMBER(S): 07/11/0355 P Roberts SC with C A Webster (Crown) COUNSEL: C Miralis (Camm) G Newton (Cary) J Glissan QC (Godfrey) Commonwealth DPP SOLICITORS: Nyman Gibson (Camm) John Klees & Assoc (Cary) Wood Fussell ACT (Godfrey) SENTENCE 1 HIS HONOUR: Originally five accused were charged on indictment with the offence of conspiracy to obtain a gain dishonestly from a Commonwealth entity ATSIC. One of them, Elizabeth Quince, was acquitted after trial. Lindsay Watson and Brendan Godfrey both pleaded guilty to a charge of taking part in a scheme with the intention of obtaining a benefit from a Commonwealth entity dishonestly. They did so during the week the trial was listed, in a period before the jury was empanelled and while I was dealing with pre-trial issues. 2 Mr Watson's sentence has been adjourned for reasons that I mentioned earlier today. Mr Godfrey is convicted of the offence to which he has pleaded guilty. Mr Cary and Mr Camm were convicted when the jury found them guilty of the conspiracy charge. 3 I am dealing with the three remaining offenders together because the facts in the cases are similar, if not identical. Agreed facts were tendered in the case of Mr Watson and Mr Godfrey but they are similar to the case presented by the Crown at the trial, which lasted for some eight weeks. Those facts disclose that the offence committed by Mr Godfrey was committed as part of the same joint illegal enterprise which gave rise to the conspiracy charges upon which the jury convicted Mr Camm and Mr Cary. As I indicated when the matter was mentioned, I will depart from those agreed facts only in some minor respects where the evidence presented in the trial is significantly at variance with them. 4 In the agreed facts there is a reference to the reason why Mr Cary changed his name. At the trial Mr Cary gave evidence of the reasons. That may have been the reason why he changed his name from Tatt, a name by which he had previously been known, to Cary, but it is clear that at the time he changed his name he was bankrupt and it may well be that he knew that as a bankrupt he could not purchase a property. In fact, during the period of his bankruptcy there is evidence that he did purchase a property at Coleambally, and that he was advised to do that by Mr Watson. 5 Whatever the reason, I could not be satisfied beyond reasonable doubt that the reason he changed his name was something he did with any idea of deceiving ATSIC. His name had in fact changed well before he was involved in any approach towards ATSIC. It was, however, dishonest for him not to disclose his bankruptcy to ATSIC, but that was only one of a number of things that were not disclosed. 6 I do accept the evidence that the loan application form was completed, on behalf of Mr Cary and Ms Quince, by Mr Watson. I shall refer to Mr Cary and his partner Ms Quince as the Carys. I certainly could not be satisfied beyond reasonable doubt that Mr Cary knew of the falsity of the statements in the form. There was ample evidence of subsequent conduct from which the jury could infer dishonesty sufficient to justify the finding of guilt, but it is important that I say this, because it does effect the degree of criminality that I attach to Cary. 7 As I have said, I have remanded Mr Watson to be sentenced by another judge. But one of the reasons for that is that I formed a view, on the basis of the evidence at trial presented by the Crown, as well as by the Defence, that led me to the conclusion, beyond reasonable doubt, that Mr Watson was the architect and prime mover in this conspiracy; although it was not primarily for his benefit. It is the only rational inference that can be drawn from the evidence, not only of Mr Cary and Mr Camm, but also of the evidence given by Mr Jackson, Mr Irlam, Mr Phillips, Mr Gabbedy, Mr Fragopoulos and Mr Duff; and there may have been more. 8 Mr Watson was familiar with the Carys' financial position and their skills. The only rational inference open to me is that he initiated the process of applying to ATSIC for a loan initially for the genuine purpose of enabling the purchase of the property known as 'J'. However, any reasonable person in his position, given what he knew of Mr Cary's past financial affairs and especially his bankruptcy, must have had doubts about the Carys' ability to manage 'J' and service the debt, even with a sympathetic and flexible lender such as ATSIC. 9 The idea of using the finances provided by ATSIC to purchase other properties and to derive a significant cash benefit for Mr Watson and his co-offenders was, I am satisfied beyond reasonable doubt, his idea. He designed both the scheme and the means of carrying it into fruition. There was evidence given that various participants put about a story that Aboriginal people had special rights to harvest water, and that was instrumental in convincing other people to participate in the scheme. This included the experienced managing law clerk, Mr Gordon Duff, and the ATSIC consultant, Mr Irlam. I have no doubt that both Mr Camm and Mr Cary at the time believed that Aboriginal people did have special rights to harvest water, even though they were dishonest in other ways. They believed this falsehood because they trusted Watson. 10 Watson was responsible for enlisting both Mr Camm and Mr Godfrey into the scheme. Mr Camm's contribution was essential, both in respect of securing the services of Mr Petch, which I will mention, and providing the intermediary in the purchase of 'V'. I was asked to draw the inference that Mr Godfrey suggested the use of an intermediary to produce an inflated price with the intention of deceiving ATSIC, but I am not sure that there is any evidence upon which I could base that inference. There was evidence from which I could infer that Watson was at all times the directing force of the scheme. 11 On the evidence it may have been open to the jury to form a reasonable doubt about the degree to which Mr Cary knew and understood how he was being used as a pawn in a plot which would benefit him, but which would also benefit Watson and the other offenders. The jury clearly had such a doubt in the case of Ms Quince, but were satisfied to the requisite standard that Mr Cary, at least at some stage, became aware of the conspiracy devised by Watson and continued to participate in it knowing that there was an element of dishonesty. 12 It is clear from his evidence that he was influenced by Watson in all he did in respect of business and finance from about 1996 on. There was no evidence that he did anything connected with his business or finance without consulting or, more likely, being directed by Watson. This culpability in the whole sequence of events, in my view, was significantly less than that of Watson. 13 Mr Camm, on his own evidence, was a willing participant in the arrangements, and a significant beneficiary. There is no basis for any reasonable doubt that, although Mr Camm took some initiatives, they were taken to fulfil objectives set by Watson. 14 Although the evidence of Mr Fragopoulos was not of great probative value, it does lead to the inference that Mr Godfrey was also drawn into the scheme by Mr Watson. Mr Godfrey also received a significant benefit, but again the only rational inference is that the leading spirit in the enterprise was Mr Watson. 15 The common facts in relation to all the offenders is that they were involved in a scheme to obtain a gain dishonestly from ATSIC. The jury must have accepted at least those parts of that case that I describe below in order to reach the verdicts that they arrived at. 16 ATSIC was a body established by the Commonwealth Parliament. It was elected by Aborigines and Torres Strait Islander people and operated programs for Aboriginal and Islander people. One such program was to provide loans to Aboriginal and Islander people to establish businesses. In February 2001 the Carys made an application to ATSIC for a loan to enable them to purchase a farm property and to buy equipment. 17 Ms Quince was Aboriginal, and Mr Cary, as her de facto partner, was eligible to join in the application. The application was false and the Crown case was that Mr Cary knew it was false. It clearly contained statements that were false and it omitted material information which should have been disclosed. Mr Cary said that he did not know that the contents of the application were false because he did not complete it, although he admitted signing it. 18 Because of its date, the making of the application could not be part of the conspiracy charge. However, the Crown says that by his continued action in building on the untruths contained in the application form after 24 May 2001, the offender Cary maintained the untruths in the application form, and they are an essential element of the offence. As I have said the evidence was that Mr Watson provided financial advice to Mr Cary over a period commencing late in 1996 or early in 1997, and I have already referred to the bankruptcy. 19 The Crown case was that, as matters progressed, it was necessary for the offenders to provide further false details, not so much about the Carys, as in relation to the price and value of the property to be acquired. This required the involvement of Mr Camm, Mr Petch and Mr Godfrey. It is quite clear that Mr Camm told lies to ATSIC in relation to the properties that the Carys proposed to purchase using ATSIC funds, and Mr Godfrey was involved in planning and executing the deception. 20 The main thrust of the Crown case was that for a long period before the original application to ATSIC Mr Cary and Ms Quince had many debts that they were unable to pay, and there was significant evidence about this. Further, in 1999 Mr Cary purchased a property in Coleambally where he and Ms Quince lived for some time. That was financed by a loan from the Commonwealth Bank. The property was purchased by Mr Cary while he was bankrupt, and he had taken that step on the advice of Watson. He became bankrupt in the name of Tatt. Later he changed his name to Cary, which was his father's name. He was unable to meet the mortgage payments to the Commonwealth Bank and after March 2001, that bank commenced proceedings against him to recover possession of the land. Ultimately the debt to the Commonwealth Bank was paid out of moneys received from ATSIC. It was in fact sold to Lindsay Watson, according to the evidence, for $80,000 in 2003. The loan from the Commonwealth Bank and the obligation to repay it were never disclosed to ATSIC, despite a provision in the application form requiring disclosure of all assets and liabilities. 21 The Crown also relied on the fact that when Mr Cary and Ms Quince applied to ATSIC for a loan, they did not disclose that Mr Cary had previously been known by the name Tatt. Mr Jackson, the ATSIC officer, gave evidence that ATSIC required a credit reference before approving a loan, and there was in evidence an authority to obtain a credit reference signed by Mr Cary in the name of Cary and Ms Quince. The Crown case was that if the credit reference had been applied for in the name of Tatt, the loan would not have been approved, or at least that the credit inquiries would have shown that Mr Cary, at the time, was in serious financial difficulties. He had no money and no assets. 22 As I have said, the actual application form was completed by Mr Watson but signed by Mr Cary and Ms Quince, and submitted to ATSIC in February 2001. It sought a loan of $4,423,450 to allow the applicants to buy a property near Hay called 'J'. The purchase price of that property was shown in the application as $3.8 million, but the loan was also intended to cover machinery valued at approximately $1.4 million. The Crown says that that application was completed dishonestly, because it did not disclose that Mr Cary had previously been known as Tatt. Secondly, part of the application form, where the applicant was required to set out details of mortgages and loans was left blank, omitting any information concerning the mortgage loan from the Commonwealth Bank and the fact that payments to the Commonwealth Bank were in arrears, and thirdly that it represented that Mr Cary and Ms Quince would contribute in total $1,040,000 odd towards the project when, in fact, they had no money or assets at all. Mr Cary's evidence was that some of the statements in the form were, in fact, untrue but he was not aware of that when he signed the form. 23 ATSIC received the application, decided that some matters in it required further attention and in accordance with ATSIC's usual practice, Neville Jackson, the person who dealt with it in the Wagga office, referred the applicants to a business facilitator, Neil Irlam, who was employed by a private company in Parkes. One could not fail to be less than impressed with the competence and diligence with which ATSIC approached this loan. ATSIC was keen to make their business loan program work and it was persuaded that Mr Cary and Ms Quince were good candidates. ATSIC therefore appears not to have verified many things told to its officers or agents, particularly by Mr Watson. 24 Although ATSIC was impressed with Mr Cary and Ms Quince, it would not lend the full sum for which they had applied. In April 2001 Mr Irlam told Mr Watson that ATSIC would not lend for the purchase of machinery, but eventually ATSIC approved a loan of $2.8 million to assist in the purchase of 'J', and this was notified in a letter dated 28 May 2001. At this point the Crown says the conspiracy started. The dishonesty was to maintain the false statements contained in the application form to justify the making of the loan that had been approved; although to do so giving different security. 25 The purchase of 'J' did not proceed, and I could not be satisfied beyond reasonable doubt that this was in any way due to anything done by any of the offenders. Mr Cary and Mr Watson became aware that another property, 'N', was on the market for the price of $2.2 million. The owner of this property was Mr Smith, and the selling agent was his brother-in-law, Mr Phillips. Mr Cary and Mr Watson began to negotiate the purchase of 'N'. 26 Mr Phillips drew up a document representing the intentions of the parties. This included a sale price for the property of $2.8 million, which would be the sale price shown in the formal contract, but it also stated that the purchasers would receive a "rebate" of $600,000 provided that the sale took place before a specified date. The effect of this arrangement was that Mr Cary and Mr Watson, who was involved in this negotiation, would represent to ATSIC the purchase price of the property was $2.8 million; that is, the same figure as the loan with ATSIC had approved for 'J'. I infer that this was only reason that such an arrangement would have been made. 27 The Crown case was that at his point the second type of dishonesty began. Mr Irlam thought that 'N' was on the market for $3.8 million and he told ATSIC this, but he could not recall accurately who told him. One of the conditions imposed by ATSIC when it approved the loan for the purchase of property was the provision of a valuation. The real purchase price for 'N' was $2.2 million, so if the plan was to succeed, it was necessary to provide an inflated valuation. 28 At this time Mr Camm was drawn into the conspiracy. He was a real estate agent and a broker for water rights working in Leeton. Mr Camm said he had known Mr Watson all his life and their families were friends. Camm in turn contacted Petch, after Watson had contacted him. Petch was a friend of Camm and licensed valuer from South Australia who had worked with Mr Camm in relation to the sale and purchase of irrigation rights. Mr Petch agreed to provide a valuation for the property which was described as "suitable". 29 Mr Petch was given an immunity from prosecution in respect of these matters because he agreed to give evidence and he did so. He said that he inspected the property, 'N', and prepared a draft valuation but that was not used. At about this time Mr Watson approached ATSIC on behalf of Mr Cary and Ms Quince to substitute 'N' for 'J' as security for the loan which had already been approved. Mr Irlam was aware of that proposal and supported it. ATSIC ultimately approved the substitution of 'N' as security - substitution of 'N' for 'J' - for a loan of $2.8 million, although Mr Jackson gave evidence and there was a document produced which stated that ATSIC's policy was to lend only 85% of the valuation. 30 Mr Smith's solicitor was a Ms Gibson. She was suspicious of the arrangement for a rebate of $600,000 and she asked the solicitor then acting for the purchasers to draft the appropriate provision and to undertake to disclose the arrangements to ATSIC. Mr Smith and Mr Phillips were pressing Mr Cary, and indeed Mr Watson, to exchange contracts for the sale of 'N', but this did not happen. Mr Gabbedy, who was Mr Watson's solicitor and who had acted for Mr Cary in the past, ceased to act for him and there was a delay in appointing a solicitor to act for the Carys. 31 At one stage a solicitor from Victoria called Cantwell, who was also connected with Watson, acted for him, but ultimately a Canberra firm, Hill and Rummery, was appointed. Mr Gabbedy had acted for Cary in relation to the purchase of the property in Coleambally and initially he was instructed to act in this matter as well, but ultimately did not do so after Mr Smith's solicitor, Ms Gibson, had contacted him. In any event the sale of 'N' did not proceed. 32 As late as 15 August, Mr Cary told Mr Smith that the negotiations were continuing. But while the negotiations for 'N' were still on foot, in August 2001, Mr Cary became aware that a property called 'V', also near Hay, was on the market for a price of $750,000. This was a property of about 14,000 acres with a frontage to the Lachlan River. Mr Headon, the owner, said that although he had owned the property for many years and had irrigated part of it, he had sold the irrigation rights, which were formerly attached to the property, some time before 2000, so that the only right to pump water from the river was for domestic and stock purposes. 33 The agent for this property, Mr McLeod, showed Mr Cary and Ms Quince over the property and on 22 August 2001 Mr Cary paid a cash holding deposit of $3,000 to Mr McLeod. Mr McLeod later wrote to the solicitors about the purchase and a copy of this was sent to Mr Watson. Mr Irlam said that at one stage he understood 'V' had a purchase price of $3.8 million. But in cross-examination he conceded that he was not sure whether that figure was given to him by Mr Cary, by Mr Watson, or by someone else. 34 The Crown case was that at this stage Watson at least, with the advice of others, decided to interpose an intermediate purchaser between the vendor, Mr Headon, and the ultimate purchasers, Mr Cary and Ms Quince. This would mean that Mr Headon would sell to the intermediate purchaser for $750,000 and the intermediate purchaser would sell to Cary and Quince for $2.8 million. A contract with the price of $2.8 million could be shown to ATSIC. This procedure ensured that ATSIC would still lend Cary and Quince $2.1 million, even though the price that Headon was asking for 'V' was only $750,000. Cary said that he understood that the reasons for this structure of the transaction were different. 35 On 22 October 2001 Cary showed Irlam over the property. Irlam formed the impression that the property had been irrigated and that irrigation rights were still attached to it. There is no evidence that Mr Cary actually said anything to him about irrigation rights at this time. Indeed, Mr Cary's evidence was that Mr Irlam told him about special rights for Aboriginal people. Mr Irlam also formed the impression that Mr Cary and Ms Quince were able to pay a deposit of $700,000 from their own resources. The Crown says that Mr Cary told Mr Irlam, although Mr Cary denied it. 36 In the light of the other evidence about their financial situation at the time it was certainly not true that the Carys could contribute any significant sum from their own resources. At about this time ATSIC advised that it was prepared to extend the time to draw down the loan. On 29 November 2001 Irlam reported to ATSIC about the 'V' proposal, including the purchase price of $2.8 million, which he said was a million dollars cheaper than he had originally been informed, and the deposit. He recommended that Mr Cary and Ms Quince be given the loan of $2.1 million. He expressed the view that 'V' was a vastly superior property. Mr Cary and Ms Quince were not asked for any other information other than that which they had provided in February. This loan of $2.1 million was ultimately approved in December 2001. 37 There was evidence concerning the possible involvement of Mr Cary's sister, Ms Harris. The Crown invited an inference that this was done as part of the scheme. However, Ms Harris gave evidence that she thought she might wish to make an investment and any interest she might have had in purchasing 'V' was because Mr Watson, who had approached her independently, had suggested it to her. There was no evidence capable of satisfying the jury beyond reasonable doubt that the intervention of Mr Cary's sister was as an intermediary to inflate the price. 38 Mr Fragopoulos, a fish merchant in Canberra, knew both Mr Watson, who was doing some work in a shop near his business premises, and Mr Godfrey, who was a customer. He said that Mr Watson told him that he was helping an Aboriginal couple get a loan from ATSIC. Mr Fragopoulos told Mr Watson about Mr Godfrey who he understood had worked for or with ATSIC. 39 Mr Fragopoulos described Mr Godfrey as an investor. Fragopoulos subsequently introduced Watson to Godfrey and was present at some meetings where they discussed the arrangements relating to the loan by ATSIC to Mr Cary and Ms Quince. 40 Mr Fragopoulos said that Mr Watson maintained that his solicitors had told him that they did not do conveyancing work in New South Wales. Mr Gabbedy, who at all material times was Mr Watson's solicitor, had in fact acted for Mr Cary on the purchase of the property at Coleambally, which is in New South Wales. Mr Fragopoulos spoke to Mr Duff, a managing clerk employed by Hill and Rummery in Canberra, who told him that he did do such work. Hill and Rummery had acted for Mr Fragopoulos for many years. At about this time Mr Fragopoulos left a note for Mr Duff introducing Brendan Godfrey to him. 41 In February 2002 Mr Watson, Mr Cary and Ms Quince introduced themselves to Mr Duff. They had called at his office without any appointment. He was engaged with another client and asked them to make an appointment, which they did. 42 On 15 February Mr Godfrey saw Mr Duff and gave him a great deal of information about the purchase of 'V' by Mr Cary and Ms Quince. There was no evidence that Mr Godfrey had ever met Mr Cary or Ms Quince. Mr Godfrey told Mr Duff that: 1. ATSIC required a valuation as it would be financing Mr Cary and Ms Quince; 2. there would be an intermediate purchaser between Mr Headon and Mr Cary and Ms Quince; 3. that this would probably be Mr Fragopoulos or someone nominated by him; 4. because of the structure of the transaction, both contracts had to be exchanged simultaneously and the settlements had to be simultaneous; 5. the contract price would be $750,000 in the sale from Headon to the intermediary and $2.8 million in the sale from the intermediary to Cary and Quince; and 6. this difference in price arose because Ms Quince, being Aboriginal, had unlimited access to water pumping rights, and Mr Carey who had both the knowledge and the equipment to construct irrigation works, would do so in a way that would increase the value of the property significantly. 43 The Crown case is that Mr Godfrey was involved in devising the structure of the transaction using the intermediary as a means to deceive ATSIC. Mr Glissan, who has appeared for him, has pointed out that the evidence does not inevitably lead to that conclusion, without the admission made by Mr Godfrey in his plea of guilty. 44 Mr Duff realised that the proposed arrangement would give rise to the imposition of capital gains tax on the intermediate purchaser, and referred Mr Godfrey for an advice in the matter. 45 Mr Duff later received formal instructions to act on a sale to Mr Cary and Ms Quince. Mr Cary and Ms Quince met Mr Duff and signed documents in his office. Mr Duff was then subsequently told that the purchaser would be Riverina Excavations Pty Limited, a company controlled and owned by Mr Camm. At about the same time, Mr Headon and his solicitors were given the same information. 46 These solicitors, Perrots, prepared a contract for the sale of land from Headon to Riverina Excavations Pty Limited for $750,000. Ms Marr, the conveyancing clerk handling the transaction, said that she understood that the company was the nominee of Mr Cary and Ms Quince, and that she was not aware of any other sale. 47 The contracts for the sale of 'V' from Headon to Riverina Excavations Pty Ltd and from that company to the Carys, are both dated 15 March 2002, although it appears that they were signed on some other date. 48 The contract for the sale to Cary and Quince provides for a deposit of $700,000. This was never paid. The agent shown on the contract was a firm, River Agents, of which Mr Camm was the principal at the relevant time. The front page of the contract might create the impression that a deposit of the sum shown had been paid and Mr Camm said that he understood that the deposit was paid "in-kind", whatever that expression may mean. He was asked about this and could not give a satisfactory explanation. 49 On 15 March 2002 Duff was instructed that a "rebate" of $600,000 was payable to Mr Cary and Ms Quince on settlement. His evidence was that such rebates are unusual but not unknown. He could not say whether these instructions were received from Mr Cary, from Ms Quince, from Mr Camm or from someone else. At first he thought the instructions came from Mr Cary but in cross-examination he conceded that they may have come from Mr Watson or Mr Fragopoulos. At the same meeting Mr Duff was instructed to prepare a written direction from the purchasers to pay $150,000 to Skybase (Vic) Pty Ltd. This is a company controlled and owned beneficially by Mr Godfrey. Mr Duff said that it was probable that he received that instruction from Mr Fragopoulos. 50 Mr Camm admitted that he had generated the front page of the contract sent to Mr Duff. He knew that no cash deposit had actually been paid and the only rational inference is that, in providing the contract and other documents to Mr Duff, he was acting in a way calculated to lead ATSIC and its representatives into the belief the cash deposit had been paid. 51 On 24 February 2002, Mr Petch inspected 'V'. He prepared a valuation, which purported to be a market valuation. On 11 March 2002, Mr Jackson at ATSIC received that valuation, which stated that the property was valued at $2.6 million. The valuation purported to relate to a "fully irrigated property", although it clearly did state, in the body of the report, that the only water licence related to the pumping of water for stock and irrigation purposes. This valuation is totally at variance with the valuation at $800,000 made only a short time afterwards by Mr Egan. 52 Ultimately Mr Headon sold the property to Riverina Excavations Pty Limited for $750,000 and that company resold to Mr Cary and Ms Quince for $2.8 million. ATSIC and its solicitors were never told of the intermediate purchaser or that the price actually paid to Mr Headon was $750,000. 53 The settlement was completed on 3 May 2002. ATSIC provided $2.1 million and on the direction of Riverina Excavations Pty Limited: $718,544 was paid to Headon; $60,000 was paid to Petch, $150,000 was paid to Skybase (Vic) Pty Limited A total of $510,977.63 was paid to Riverina Excavations Pty Limited and another company controlled by Mr Camm, and $454,694.68 was paid to the trust account of Hill and Rummery. 54 Much of that last amount was subsequently paid, on the instructions of Mr Cary and Ms Quince, to Mr Watson and to discharge debts owed by Watson to his solicitors and others. Other smaller amounts were applied to the payment of stamp duty and legal fees. The balance was paid to Mr Cary's bank account and used to discharge his obligations to the Commonwealth Bank. The Australian Government Solicitor paid the stamp duty on both contracts and the transfers with cheques handed over on settlement and originating from ATSIC loan funds. 55 The consideration for the transfer from Riverina Excavations Pty Limited to Cary and Quince is shown at $2.8 million. The consideration in the transfer form from Headon to Riverina Excavations Pty Limited is blank. 56 As a result of these transactions Mr Cary and Ms Quince obtained the title to 'V', subject to an obligation to repay the loan of $2.1 million by instalments, and Mr Cary received a considerable amount of cash. None of the instalments due to ATSIC was ever paid. Mr Camm, or companies controlled by him, received $511,000, give or take a few dollars, and his evidence was that he paid half that to Watson. Petch received $60,000, Skybase (Vic) Pty Limited, on behalf of Mr Godfrey, received $150,000 and thus each of the offenders received a benefit directly or indirectly from ATSIC. 57 The defence case did not deny many of the events put to the jury in the Crown case, but both Mr Camm and Mr Cary stated that they had acted at the behest and suggestion of Watson and that they did not know that the purpose of the scheme was to obtain a benefit from ATSIC dishonestly. 58 Mr Cary said he was gullible and was manipulated by Mr Watson, whom he trusted. He said that he did not know that Watson had included false information in the application form, or that he had omitted significant and material information from it. He said he was unaware that the purpose of introducing an intermediary into the purchase price of 'V' from Headon was to deceive ATSIC. He said that he believed, on the basis of what he was told by others, that he and Ms Quince could acquire rights to pump water from the river and irrigate 'V' with some of the money received from ATSIC, so that the value of the property in their hands would be far greater than it would be in the case of a purchaser who did not have the water rights that they believed Aboriginal people had. Clearly the jury did not accept this explanation. 59 Mr Cary said he did not know that Mr Camm was involved in the purchase of 'V', nor that he was involved with the company, Riverina Excavations Pty Limited. He said that over the period immediately before and after settlement of the purchase of 'V', he spoke to Mr Camm on a number of occasions, but he said that this was about a proposal of a development of land at North Leeton for Aboriginal housing and a shop. Mr Camm confirmed this, but the evidence, in any event, is quite consistent with the finding of guilt. 60 Mr Camm told the police that he had arranged for Mr Petch to make valuations, first of 'N' and secondly of 'V', and that these valuations would not be accurate reflections of their value because he, that is Camm, understood that the financier, ATSIC, would only lend if the purchase price of the property to be used as security was greater than the amount of the loan of $2.1 million that ATSIC had approved. Mr Camm also told the police that it was not unusual for valuations to be provided in this way and that he did not think it was dishonest. 61 He also said that he was the witness to the signatures of Mr Cary and Ms Quince on the purchase contract. He remembers that he met them in a park and witnessed the signatures there. He acknowledged that it is a highly unusual practice for the vendor of a property to witness the purchaser's signature. He says that he created the front page of the contract. He was a director of Riverina Excavations Pty Limited and he, himself, did the conveyancing work in relation to 'V'. 62 He said that he had obtained the signatures of Mr Cary and Ms Quince before he obtained the signature of the vendor, Mr Headon, because he wanted to be sure that he was not landed with the property, which was a property he did not want. He wanted some assurance that after he paid Headon $750,000, he would be able to dispose of the property at a profit. 63 Mr Camm said that he believed he had not done anything dishonest, or that anything he did or said was false or dishonest. He said that he had been approached by Mr Watson to do a number of things. This included first, arranging for Mr Petch to make a valuation of 'N'. Later, he said, Mr Watson approached him and mentioned the use of an intermediary purchaser. Mr Camm said that he suggested the use of Riverina Excavations in the transfer of 'V' from Mr Headon to Mr Cary and Ms Quince. 64 His evidence was that, at the time, he was an estate agent and in some financial difficulty, and he was anxious to gain commission on two sales of the property. Given the amount involved, the commission was considerable. He believed, on the basis of what Mr Watson told him, that Mr Cary and Ms Quince, being Aboriginal, would have special rights to harvest water and that this would give them a significant advantage. He knew that 'V' had previously been used for growing irrigated crops, but he also knew that the water licences, apart from a right to pump for stock and domestic purposes on 'V', had been sold many years previously. He appreciated the value of the rights, which he understood Ms Quince would enjoy if she became the owner of 'V'. He also thought that ATSIC would use the property by, what he described as "parking" water rights, which could be used in other ways for the benefit of Aboriginal people. Because of his knowledge of the trade in water rights, he said he could see why it would be possible to give 'V' a much higher value than its dry land value if some right to pump or harvest water could be attached to it. He said that, by persuading Mr Petch to value 'V' as if water rights attached to it, he was not doing anything dishonest. Rather, he was following a practice, commonly used by valuers, where they attach what he described as a "developed value" to land, rather than the market value. 65 He knew that no deposit had actually been paid and he knew that Mr Watson had arranged for Petch to be paid $60,000 for his valuation, a valuation which Mr Petch conceded was false and misleading. 66 Mr Camm said that he wanted to make sure that he would receive his fee. He and Mr Petch therefore agreed that they would get Mr Cary and Ms Quince to sign an agreement purporting to commit Camm and Petch the right to agist stock on 'V'. Camm believed, quite wrongly, that such an agreement would entitle him to enter a caveat in the Land Titles Office, which would prevent Mr Cary and Ms Quince dealing with 'V' until he and Petch were paid. 67 The figure of approximately $600,000 payable to Mr Cary and Ms Quince, which was described as a "rebate", was clearly a subterfuge used to inflate the amount which ATSIC would advance. Cary said that he understood that this was an amount, which he was to receive as working capital, or as collateral which would enable him to purchase machinery and make improvements on 'V'. Camm said that he believed the sum represented the deposit that he understood had been provided by Cary and Quince, and the jury clearly rejected both these explanations. 68 The evidence given at the trial, as I have indicated, has convinced me beyond reasonable doubt, that the guiding force behind these offences was Lindsay Watson. He devised the idea of obtaining funds from ATSIC; he devised the idea of using the loan payment to obtain cash (including a large payment to himself), and if he did not execute the plan himself, he fostered and encouraged the use of artificial devices to lead ATSIC to believe that the price of 'V' was over $2 million more than was the case. 69 Petch and Camm were willing participants and, if the fraud had not been discovered, they were well rewarded for their contributions. The scheme required a licensed valuer who was prepared to give a false or misleading valuation. Petch played that role. Once Camm was aware that he, too, could make money from the scheme, he became a willing participant, not only in arranging the services of Petch, but also in suggesting the use of his own company as the intermediary, and in using the knowledge of conveyancing practice which he had gathered as a real estate agent in order to avoid the need for using a solicitor, who might ask embarrassing questions. Once he became involved in the transaction, even though he was misled and manipulated by Watson, the jury found on perfectly adequate evidence, that he knew that what he was doing was wrong, by the standards of ordinary people. His evidence was, as I have said, that he was in financial difficulties at the time, and the prospect of making a quarter of a million dollars must have been very attractive to him. 70 There is much less direct evidence about the role played by Mr Godfrey. Most of the direct evidence about him at the trial was given by Mr Fragopoulos, who in many respects was unreliable, and by Mr Duff. Mr Godfrey certainly received a significant benefit. Nevertheless, his role was significantly less than either that of Watson or Camm. 71 It is significant that Mr Watson, Mr Camm and Mr Godfrey are all relatively well educated and sophisticated, professional people. Indeed, Mr Godfrey is extremely well educated. Their work involved them advising others and gaining their trust. 72 Harold Cary was a participant in the fraud and the jury found, again on adequate evidence, that he knew that what he was doing was dishonest by the standards of ordinary people. I have indicated that there are some aspects of the Crown case upon which I could not be satisfied beyond reasonable doubt and which I therefore dismiss in assessing the degree to which Mr Cary was involved in the transaction. His evidence, that he was guided in all financial matters by Mr Watson, is consistent with all the other evidence. However, this guidance did not amount to duress, and does not absolve him completely from responsibility for his actions. 73 The jury's verdict leaves me with no alternative but to accept that Mr Cary did not act with reasonable prudence and that he participated in the scheme from which he gained a significant benefit, not only in the purchase and development of the farming property, but also in discharging his debt to the Commonwealth Bank, and he must be therefore regarded as significantly culpable. 74 His evidence that he was not good at reading was not challenged, and I accept that he had problems with reading complex documents, if in fact he read them at all. Much of this case involved documents, and this leads me to the conclusion that Mr Cary may well have had a very limited understanding of many of the fraudulent matters in which Mr Watson involved him. He is relatively unsophisticated and poorly educated. His life before these events had been spent driving trucks and earthmoving equipment, after growing up on a farm and working on farms. He was not financially sophisticated. Clearly he dreamed of running his own farm and being able to use his skill and experience to grow irrigated corps. This was his fantasy and his ambition and he was easily seduced by a plausible and trusted adviser. Nevertheless, I do not regard his criminality as being as significant as either that of Watson or Camm, because his dishonesty was a product of his gullibility and misplaced trust in the advice of Watson. 75 Mr Godfrey pleaded guilty after the matter had been listed for trial. Certainly, by his plea, he reduced the length of the trial quite significantly and as Mr Glissan, who appears for him today, has pointed out, his admission by his plea puts some matters beyond doubt that the Crown may well have had difficulty in proving. 76 Today I have heard some significant subjective matters about each of these offenders. Mr Cary does have a record of some previous convictions. Some of them are serious offences. One of them involves a series of valueless cheques and although it is dishonest, it is of very little significance compared to the seriousness of this particular offence. He is a man who, as he said, grew up in the Leeton area on a farm. After he left the farm, his engagement was very largely in trucking and earthmoving and he is currently working in the furniture removal business in Queensland. He has spent considerable time in Queensland, both in driving trucks and in working with earthmoving equipment. He has had a history of financial involvements which shows that he has had a lot of problems in the past. He is well regarded in the community and by his employer. 77 More significantly, in his case, is the fact that his partner of twenty years, Ms Quince, who is the mother of children with him and for whom he has acted for many years as a father to her children, has been seriously ill. Her poor health was apparent at the trial and there is evidence a certificate from the medical authorities in Queensland, that she is still undergoing treatment. 78 Mr Camm is also a man who has had a number of problems since these matters came to light. It appears that as a result of the police investigations, his marriage, which had lasted some time, dissolved and he left the Leeton area, where he had grown up, and moved to Tamworth. Fortunately, there he found another relationship, which he has been in for some time. Indeed, he and his partner, who gave evidence here today, were planning to get married in 2005 but they postponed the wedding until the outcome of these proceedings had become known. At the trial, Mr Camm gave evidence that he had sold his real estate business in Leeton in the course of the events giving rise to the charges. He has not subsequently worked as a real estate agent, although that is his ambition. He has been working in Tamworth as the manager of an animal products company, and he is clearly highly regarded. He has no previous convictions. 79 Mr Godfrey is a person who, until these matters came to light, would have been regarded as a person of outstanding character. He grew up in fairly poor circumstances but he was able to go to university. After completing his studies he became a teacher for a while and then joined the Commonwealth Public Service, rising to the position of Deputy Secretary of a Commonwealth government department, which is a very senior position. The material before me suggests that he left the Commonwealth Public Service because the diligence with which he carried out his duties made him unacceptable to his political masters, so he left the Commonwealth Public Service and started in business as a consultant. Mr Deagan, his former superior in the Commonwealth Public Service, and who had known him for a much longer period, is now the Chairman of the Commonwealth Transport Commission and in fact arranged for the meeting of that body to be postponed so that he could give evidence today on Mr Godfrey's behalf and he spoke of him as a person who was well known for his diligence and sense of duty, and indeed, his ethical behaviour. It is unfortunate that in these courts, one sees frequently people who have previously been of outstanding character but who yet commit crimes, and while their previous good character is a matter that must be taken into account, it does not provide an excuse or a justification for that. 80 Mr Godfrey, also as a result of the police investigations, is said by his treating psychiatrist to be suffering from an anxiety disorder with depressed mood. It is quite clear that someone who is facing charges of a serious nature, such as these are, is not going to be unaffected and it is hardly surprising that this should affect their mental health. Quite apart from that, Mr Godfrey has had problems with his heart, for which he has been undergoing treatment, and he is a man of some 63 years of age. Those are all factors that I must take into account. 81 S 16A of the Crimes Act requires me to consider a number of matters, which I will do. The first is the nature and circumstances of the offence. The facts I have set out in some detail, because I think it is important to do so. This was a serious fraud. The Commonwealth entity paid out $2.1 million without proper cause to do so. All Australian taxpayers suffered this loss. It does not matter that ATSIC and its consultant Mr Irlam were at times inefficient, indeed possibly negligent, in their stewardship of public funds. ATSIC was a body set up with the purpose of assisting Australians who have suffered discrimination for centuries, by giving them financial support which was not otherwise available. As a result of this fraud $2.1 million was not available to support many deserving Aboriginal and Islander people who lost their chance to obtain loans which could have been vital for them. 82 The fraud was opportunistic in the sense that Mr Watson, in my view, saw the opportunity to take advantage of slack financial controls and lack of economic discipline. Once he saw that chance, Watson saw that there was an opportunity to benefit himself as well as his clients. He undertook a highly planned and sophisticated scheme. When the plan was to substitute 'N' for 'J', a false valuation was required, and Camm was happy to participate in this by securing the assistance of Petch. When the opportunity came to defraud ATSIC of more money by using a far less valuable property, 'V', as security, the offenders took that opportunity and realised the fraud. 83 Significant amounts were involved. It is a fraud on the Commonwealth of a serious nature. I have been referred to a number of cases involving fraud on the Tax Office and on Social Security. Those are usually continuing frauds extending over a period of time with varying degrees of sophistication. This is not a fraud of this type. It was, as I have said, opportunistic, but it was highly sophisticated and required considerable thought. It is, in my view, extremely important that members of the public realise that, just because a body is set up by Parliament for public purposes, it is not therefore fair game for anyone who wishes to commit a fraud. 84 There were not a series of criminal acts, in the sense of continued frauds, as there are in the case of some social security frauds, but the activities which gave rise to these charges took place over a considerable period. There were no particular victims of the offence other than the Aboriginal and Islander people who did not get loans, and the taxpayers who had to make good the loss. 85 I must take into account the degree to which people have shown contrition to the offence and Mr Godfrey certainly has done so by his plea of guilty, which is the strongest and most valuable evidence of remorse. Both he and Mr Cary have agreed, at different stages, to settle proceedings brought against them under the Commonwealth Proceeds of Crime legislation for recovery of the amounts involved, and that is significant. It appears that Mr Godfrey, at least, has repaid any amounts that he received. Mr Cary also has, since the jury found him guilty, agreed to the repayment of funds that may have been available. It is not clear to me that there is any degree to which any of these offenders have cooperated with law enforcement agencies in the investigation of the offence. Certainly Mr Cary and Ms Quince were cooperative and assisted the police, as far as I can see, when they were being investigated. 86 There is a need to ensure that people are adequately punished for the offence and the deterrent effect in relation to general deterrence is important. 87 Personal deterrence is usually a factor, but I think it is highly unlikely, on the evidence before me, that any of these offenders will commit a similar offence in the future. That also means that the prospects of rehabilitation, such as that expression may apply here, are good. 88 These are all mature persons. As I have said, Mr Godfrey is highly educated, has been a senior public servant and is not in the best physical or mental condition. There is evidence that Mr Camm is not in the best physical condition and I have already mentioned the illness of Ms Quince. 89 I have also mentioned the antecedents of the various offenders. I have, as is common in these cases, before me today, some material, which was not previously available, about how each of these offenders are regarded in the community. Mr Camm, in particular, has provided evidence about how this offence and its investigation have impacted on him and how previously he was a person of good character. Some emphasis was put on the probable effect that this sentence or orders that I am considering would have on the person's family or dependants. Ms Parsons, Mr Camm's partner, has given evidence about how this would affect her and her evidence is that her household would be disrupted by losing the person who has acted as a father to the children and Mr Cary is in a similar position. 90 As I have said, in terms of relative criminality there are, in my view, distinctions to be drawn between the position of the three offenders in this offence. If Mr Watson was the architect of the offence, as I have found, Mr Camm and to some extent Mr Godfrey, were essential tradesmen, and Mr Cary, in my view, was the labourer. That will be reflected in the sentences that I impose. 91 I am required by the Commonwealth legislation to consider whether in this case there is any alternative to a custodial sentence or a sentence of imprisonment. In my view, the offences are so serious that there is no realistic alternative to sentences of imprisonment, but the terms of that imprisonment and the conditions upon which they are to be served, will be different. 92 Mr Cary was involved in these offences from the beginning and was essential to all of them. As I say, he was gullible, but he was still aware that what he was doing was illegal, according to the jury's verdict, and he must be sentenced accordingly. He will be sentenced to a term of three years imprisonment, but he will be released upon recognizance after serving a term of one year and six months and that will reflect the effect that his imprisonment will have on his partner and his family. The sentence will commence today and it will expire on 15 May 2011. The date upon which he is to be released on recognizance will be 15 November 2009. That recognizance will be in the sum of one thousand dollars. 93 Mr Camm was, in my view, more culpable than Mr Cary because of his knowledge and understanding. He will be sentenced to a period of four years imprisonment, but there will be a non-parole period of two and a half years. The sentence will commence today and will expire on 15 May 2012. The non-parole period will expire on 15 November 2010. 94 Mr Godfrey will be sentenced to a term of imprisonment, but I will direct that he be released immediately upon entering into a recognizance. But for his plea, I would have sentenced him to a term of two years and six months imprisonment. Because of the plea, the sentence will be one year and ten months, but pursuant to s 20(1)(b) of the Commonwealth Crimes Act I direct that he be released upon giving security in the amount of $10,000. 95 The sentence will commence on 23 May 2008 and expire on 22 March 2010. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.