District Court New South Wales Medium Neutral Citation: R v STEPTO [2012] NSWDC 56 Hearing dates: 10 February 2012 Decision date: 17 February 2012 Before: Berman SC DCJ Decision: Sentenced to imprisonment with an aggregate sentence consisting of a head sentence of 5 years and a non-parole period of 3½ years Catchwords: CRIMINAL LAW - Sentence - Obtain benefit by deception - Corruptly giving a reward - Giving knowingly false evidence - Parity - Delay Legislation Cited: Crimes (Sentencing Procedure) Act Category: Sentence Parties: The Crown Terrence Stepto Representation: Mr D. Drewett - The offender Director of Public Prosecutions File Number(s): 2009/187744 Judgment 1HIS HONOUR: Appearing for sentence today is Terrence Stepto. Together with his co-offender, Damon Job he was responsible for defrauding Mr Job's then employer, what was then the Roads and Traffic Authority, of a very large sum of money indeed. This offender then lied about his misconduct when giving evidence to the Independent Commission Against Corruption. 2The charges that Mr Stepto face span many years, from October 2003 to April 2006. The offender's motivation was not need, but simply a desire to provide a reasonably nice life for him and his family, using the money he fraudulently obtained to buy cars, his house and to take his family on holidays. 3 His first steps towards improper conduct came when Mr Job, a close friend of the offender's for many years and who worked at the RTA, approached the offender with a proposition. Mr Job had the key to a tender box. He suggested that this offender tender for some work with the RTA and to assist the offender to get the work Mr Job would open the tender box before tenders had closed, so that he and Mr Stepto could use otherwise secret information to come up with a tender price which was likely to be accepted. The offender does not face any charges in relation to that conduct but it was the first step in a lengthy period of improper and then illegal conduct. 4Counts 1 to 7 concern what are known as candy bars. They are coloured striped poles which are inserted into the roadway as part of tidal flow operations conducted by the RTA. The RTA would pay $68 for a new candy bar and $28 to have one repaired. Between 21 October 2003 and 6 May 2005 companies controlled by the offender invoiced the RTA seven times for the supply of new candy bars at $68 each. In fact what were supplied were not new candy bars but second hand, repaired, candy bars. The invoices were approved by Mr Job. The seven counts relate to these seven invoices. The loss suffered by the RTA when combined was about $54,000. 5The eighth count on the indictment relates to paying Mr Job a corrupt benefit for having approved the false invoices. 6It was about these offences that the offender later lied to ICAC when they conducted an inquiry in April 2006. In an effort to cover up his wrongdoing and that of Mr Job the offender lied to ICAC by telling them that a man by the name of Brendan Beehan supplied new candy bars to him which he then on supplied to the RTA. This was of course completely false. 7Lest it be thought that, having lied in April 2006 the offender realised that what he had done was wrong and wanted to correct things, he lied further about the same matter in a further hearing conducted by ICAC in September 2006. The offender does not face a separate charge in relation to that later lie but it is, of course, relevant to the criminality of his first lie earlier that year that he failed to correct things when given the opportunity. 8Counts 9 to 13 relate to what were described as Railcorp shutdowns. This is a shorthand expression to refer to the situation where Railcorp performs maintenance which causes train routes or train stations to close. When this occurs buses are provided by the State Transit Authority, or private contractors, to transport passengers instead of them being transported by trains and these additional services require the creation of special event clearways and the like. Railcorp is required to co-ordinate the shutdowns with the RTA. What should have happened, if things were done correctly, was that the State Rail Authority should have paid this offender for some work which it did. The RTA should then have invoiced the offender and Stepto should have paid the RTA for work done relating to the Railcorp shutdowns. However, Job arranged matters so that the RTA itself carried out work in relation to the special event clearways, but the State Rail Authority paid Stepto for that work. Through this means the offender invoiced Railcorp, seeking payment for monies to which he was not entitled. 9In fact it was this scheme which eventually led to the offender and Mr Job coming unstuck. As is often the case, Job's criminality was discovered when he went on leave. The offender sent an email to another RTA employee about the shutdown, but because that employee had never heard of the offender's company, investigations commenced. 10Counts 9 to 12 concern the false invoices raised by the offender and Count 13 relates to monies paid by the offender to Mr Job as a reward for his involvement. 11Counts 14 to 20 relate to tidal flow work done, and then not done, at Mays Hill. What the offender effectively did was to invoice the RTA for work he did not do and more importantly had no entitlement to. Once more it was Mr Job's involvement that allowed the fraudulent scheme to operate successfully. He authorised payment of seven separate invoices totalling more than $93,000 and, indeed, on two occasions increased the amount payable for work that was never even done. 12Count 21 relates to the offender's payment to Mr Job for having approved those false invoices. 13It appears that the offender repaid the loss caused by these particular false invoices. Without admitting that he had done anything illegal he offered to pay back to the RTA the loss that the false invoices had occasioned. He did this by continuing to do work for the RTA for no payment. In his evidence the offender said that he paid back about $97,000 and that there were associated costs with running the business in order to make those payments of about $60,000. 14The next count, Count 22, relates to some work that the RTA awarded to a company controlled by the offender through the improper intervention of Mr Job. Part of the regular monies that the offender transferred to his co-offender were as a reward for having arranged it that the offender would get this work after the RTA's required processes had been bypassed. 15As a result of his lengthy and varied criminal conduct the offender has now pleaded guilty to twenty three charges, eighteen charges of obtaining a benefit by deception which carry a maximum penalty of five years imprisonment, four counts of corruptly giving a reward which carry a maximum penalty of seven years imprisonment and one count of giving knowingly false evidence which carries a maximum penalty of five years imprisonment. 16The offender is now forty-seven years of age. He had the benefit of a stable and supportive upbringing as he grew up. He had the support of his parents, indeed they were present in court to support their son. They have each suffered health problems in recent times, his mother having both knees replaced and his father being diagnosed with bladder cancer. 17The offender has been married but he separated from his now ex-wife in 2009. Since he went into custody his two children, now twelve and ten, have gone to live with their mother. 18The offender left school in Year 10 and has been in either regular employment or running his own businesses since then. Upon his release from custody he hopes to take up a job offer from a friend of his to do work in management and sales. 19As the pre-sentence report notes Mr Stepto presented as a man who appeared to have been afforded a stable and supportive family environment and reported no factors that contributed to his offending. 20As I mentioned above the offences began in 2003. It is now 2012 and so the offender is being sentenced for wrongdoing which occurred many years ago. He cannot gain much benefit from the circumstance that he and Mr Job were able to cover up his wrongdoing until 2006, but following the ICAC inquiry in 2006 there has been a significant delay between the detection of his wrongdoing and his ultimate sentence. That delay has various causes, among them are the offender's late plea of guilty, the delay in bringing charges, applications for adjournment made by the offender's lawyers and finally the fact that the Court of Criminal Appeal reserved for a significant period of time before handing down a decision relating to the sentencing of the offender's co-offender, Damon Job. It has to be recognised that this offender therefore has had this matter hanging over his head for a long time. 21The offender's plea of guilty was late. It came the day after his matters were listed for trial, although the possibility of him pleading guilty was communicated to the Crown a few days earlier. The offender gave evidence in the proceedings before me that he had not been advised by his former lawyers that he could get a larger discount for pleading guilty early. He blames them and false information he was told by his co-offender, for only pleading guilty late. I note that I have not heard from either of Mr Stepto's former lawyers and so his assertions concerning the failure to advise him, consistent with what I understand to be the bar rules, are untested. The Crown did not seek to call his earlier lawyers because it was the Crown's position that the reason advanced by Mr Stepto for his late plea did not affect the circumstance that there was limited utilitarian benefit to the criminal justice system. I accept the Crown's submission. This is not a case where things such as mental health issues prevented the offender making a reasonable decision as to whether he should plead guilty or not. He knew from the very beginning that he was guilty, and his decision to only plead guilty after the trial was due to commence was a voluntary one. I will discount the sentence I would otherwise have imposed by approximately ten per cent to reflect the utilitarian value of his plea. 22Of course the plea of guilty is also relevant to the question of remorse. One of the reasons the offender gave for not pleading guilty earlier was because he preferred to be around to wind his business up. He gave evidence that he regretted that he ever started on the path he found himself on and recognised that he had affected everyone close to him, his children, his mother and his father. I am satisfied the offender is remorseful. 23The offender had no prior convictions, although given the lengthy period of offending and the number of offences he committed, the weight to be given to that circumstance is clearly reduced. 24The offender's evidence differed in some respects from the evidence given by his co-offender whom I also sentenced. As is common, each tried to shift some of the blame onto the other. It is this circumstance which suggests a clear desirability for co-offenders to be sentenced at the same time and in the same proceedings. Conducting sentencing proceedings in that matter avoids the problem of inconsistent findings. However these offenders were not sentenced together. So in these proceedings I have uncontradicted evidence from the offender which suggests that Mr Job's criminality is greater than I found it to be when I sentenced him. Notwithstanding that some might find the logic difficult to accept, I will sentence this offender on the basis that I accept what he said. 25I mentioned before when outlining the offender's crimes that he had repaid some of the loss occasioned to the RTA. The offender has now been declared bankrupt and is unable to make further repayments at present, in part because some of the proceeds of the sale of the offender's businesses was received by his co-offender. He gave evidence that he wanted to try to repay more to the RTA in the future. 26The offender gave evidence that whilst on remand he had been moved from place to place within the prison system, evidence which I hear with distressing regularity from other remand prisoners. He spoke about an incident which occurred in Bathurst gaol where he was falsely suspected by other inmates of being a prison informer, as a result of which he spent one month on protection. He described that month like serving his sentence in a public toilet. Having been in protection and having been identified by other inmates as having served part of his sentence there, there is a risk that in future he will need to enter protection again and there is a risk that that will involve harsher conditions of custody than apply in the general prison population. 27I have left until last one of the most important issues regarding the offender's sentence. It concerns the question of parity. As I mentioned before the sentence I imposed on Mr Job was the subject of an appeal to the Court of Criminal Appeal which was successful. Both I and the Court of Criminal Appeal reduced Mr Job's sentence by forty per cent to reflect both his early plea of guilty and his offer of assistance to the authorities. The correct starting point before those discounts were taken into account was, according to the Court of Criminal Appeal, an overall sentence of seven years. Quite appropriately both the Crown's submissions and those of Mr Drewett used that seven year term as a starting point. Mr Drewett submitted that when the differences between his client and Mr Job were taken into account, Mr Stepto would receive an overall term lower than that of Mr Job, but the Crown submitted to the contrary. 28Of course the differences between the overall cases for this offender and that of Mr Job are fairly obvious, as are the similarities. Two of most important differences concern the fact that this offender lied to ICAC and faces a charge in relation to that conduct. But on the other hand it was not he, himself, who breached the trust of his employer. As far as that latter aspect is concerned I regard the criminality of a person who himself, or herself, breaches an employer's trust to be higher than that of a person who is involved in a criminal scheme but whose conduct does not itself represent a breach of trust enjoyed by that person. Although this offender's conduct is made worse because, to his knowledge, it involved his co-offender's breach of trust, it is not as bad in this regard as the offender who himself breached that trust. This is a significant matter which, notwithstanding the extra offence committed by this offender concerning ICAC, will lead to him receiving an overall term of imprisonment which is less than that of the starting point suggested by the Court of Criminal Appeal for Mr Job of seven years after taking off, of course, ten per cent for Mr Stepto's plea of guilty. 29I propose to use the aggregate sentencing provisions now to be found in the Crime (Sentencing Procedure) Act to sentence this offender. 30For each of the offences of obtain benefit by deception the head sentence I would have imposed for not imposing the aggregate sentence would have been two years. For each of the four counts of corruptly giving a reward I would have set a head sentence of two and a half years and for the single count of knowingly given false evidence to the Independent Commission Against Corruption I would have set a head sentence of two years. 31The aggregate sentence that I impose is a head sentence of five years with a non-parole period of three and a half years. That is a modest reduction from the statutory ratio but the overall non-parole period is, I consider, the least which properly reflects the offender's criminality. 32The aggregate sentence will commence from 24 March 2011 and the offender will thus be eligible to be released to parole on 23 September 2014. 33I make an order that the offender's fingerprints are to be taken. ********** 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. Decision last updated: 03 May 2012