THE COURT OF APPEAL
[CA 56/15]
Birmingham J.
Sheehan J.
Edwards J.
BETWEEN
THE PEOPLE AT THE SUIT OF THE DIRECTOR OF PUBLIC PROSECUTIONS
REPSONDENT
APPELLANT
JUDGMENT of the Court delivered by Mr. Justice Sheehan on the 21st day of December 2015
1. This is an appeal against sentence.
2. On 18th June 2014 at the Dublin Circuit Criminal Court, the appellant pleaded guilty to seven counts of deception contrary to s. 6 of the Criminal Justice (Theft and Fraud Offences) Act 2001, and seven counts of theft contrary to s. 4 of the Criminal Justice Act (Theft and Fraud Offences) Act 2001.
3. These offences represented sample counts on a 45-count indictment, all of which related to offences of deception and theft respectively, and the evidence relating to same was given on a full facts basis.
4. On 8th October 2014, the appellant was sentenced to three and a half years imprisonment on each of the deception counts and to seven years imprisonment on each of the theft counts. The sentences were ordered to run concurrently.
5. The maximum penalty for deception is five years imprisonment and the maximum penalty for theft is ten years imprisonment.
6. The issue before this Court is whether or not there is any error in principle that would allow the court to set aside the original sentences.
7. The appellant contends, in particular, that the judge so erred by failing to adequately address the public interest in rehabilitating the appellant and further erred by failing to have adequate regard to the various mitigating factors that were advanced on his behalf.
8. In order to consider the submissions, it is necessary to set out the background to these offences which occurred between November 2003 and November 2008, as well as the personal circumstances of the appellant.
Background
9. The offences were all committed between 2003 and 2009. There were five injured parties, namely, Mr. Louis Dowley, Mr. Evan Newell, Mr. Daniel Maher, Mr. Patrick Doyle and Mr. Martin O’Brien.
10. The appellant operated what was described as a ‘Ponzi’ or ‘Pyramid’ scheme, introducing the injured parties to a variety of supposed investment opportunities. He persuaded each of them to transfer money into an account controlled by him, ostensibly for the purpose of being able to demonstrate to alleged third parties that he had sufficient funds to enable him to take advantage of a specific business opportunity.
11. The injured parties were told that monies so transferred by them would remain on deposit for their benefit for a specified period of time and would not leave the account in which they had been lodged. In addition to the return of the principal sums, the profits generated by taking advantage of the alleged opportunities, as well as any interest that accrued in respect of money held on deposit, would be shared with those who transferred the sums in question in proportion to the amount of money advanced.
12. None of these transactions were genuine. The monies transferred into the appellant’s control were neither kept on deposit nor used for the agreed purpose or purposes, but were diverted by the appellant towards a variety of ends, including the satisfaction of debts as well as personal expenditure in respect of himself and his family.
13. Eight of the counts related to Mr. Louis Dowley.
14. The first related to a proposed deal to purchase an option on a shopping centre in Manchester. The appellant contacted him in late November 2003, stating that he needed to be able to show he had sufficient funds to complete the purchase if necessary. The appellant never intended to purchase the property but simply proposed to buy and sell on the option at a profit.
15. Mr. Louis Dowley was told his money would never be at risk as it would simply remain on deposit. He was told he would be entitled to a share in the profit. He transferred €530,000 to the appellant on this basis, and later he transferred a further €250,000 to buy out the interest of a named third party who told the gardaí he had never been involved in any property deal with the appellant.
16. Five further counts on the indictment related to a proposed fictitious scheme involving the shipment of linen. The appellant told Louis Dowley that he was involved with others in the shipment of linen and that rather than purchasing insurance to indemnify the said shipments, these people would be satisfied if the appellant could gather together sufficient funds to indemnify the shipments should same be required. He induced Mr. Dowley to transfer certain sums to his account on the same terms as before. The appellant used the names of numerous supposed contacts and business associates to make the transactions appear legitimate, including an Italian shipping merchant named Stefan Guazzone and a lawyer in Monaco named James Hill. Both these people, when contacted by the gardaí, denied any involvement or knowledge of any such scheme and it is clear that none ever existed.
17. A further count related to the purchase of an option in respect of a property in Hamburg. This scheme was similar to the Manchester shopping centre option. The appellant provided Mr. Dowley with documentation and a forged letter in order to persuade him to transfer money to the appellant. The letter was purportedly written by the principal of a Paris-based estate agency known as City Investments who told the gardaí that the letter was a forgery and that there never had been a proposed option on the Hamburg property. The final count related to the proposed purchase of an option on a property at Place Vendome in Paris which was to be sold on to a Middle Eastern investor at a profit. This scheme was similar to the previous proposed property investments, and again, the matter was entirely fictitious.
18. According to the appellant’s written submissions, the total loss to Mr. Dowley was €3,065,350.
19. Another count involved a Mr. Pat Doyle who was introduced to the appellant by a Mr. Peter O’Reilly who had been a friend and former business partner of the appellant. Mr. Doyle got involved in the Paris property on the same basis as Mr. Dowley. While Mr. Doyle put in place certain documentation to protect himself, his money was also diverted to the appellant’s account and was used for a variety of purposes, including the return of funds to other creditors and paying for construction work on the appellant’s home. Mr. Doyle’s total loss was €500,000.
20. Two counts related to a Mr. Evan Newell who was also introduced to the appellant by Mr. Peter O’Reilly. Mr. Newell parted with €4.4m in respect of the Hamburg property option and was also furnished with false documentation.
21. Two counts related to Mr. Martin O’Brien who transferred and lost the sum of €685,000 in respect of the Place Vendome property option.
22. Finally, a Mr. Daniel Maher advanced €450,000 in respect of the Place Vendome option on the same terms and conditions as the other injured parties had done and his final transfer was made in November 2008.
Personal Circumstances of the Appellant
23. At the time of sentence, the appellant was 51 years old. He was born in Zimbabwe and is the second of three children who were brought up in Cork. Following secondary school, he graduated from Trinity College Dublin with a degree in Economics and Social Studies. Following graduation, he worked for a period of time in a sales and marketing company before establishing his own career in business. He was involved in a restaurant and several launderettes and a taxi company in Dublin. He was also involved in a number of property deals during the 1980s and 1990s.
24. He had disposed of most of these business interests by 2005, and thereafter, he became heavily involved in investing. A number of these investments were successful.
25. Since these crimes have come to light, his wife has divorced him, and at the time of sentence he was in receipt of social welfare, receiving €188 per week in respect of Jobseeker’s Allowance. Prior to sentence, the appellant had attended at a residential treatment centre known as Forest Healthcare where he had come under the care of a Mr. O’Driscoll who provided the court with a psychological report and there was also a report from the appellant’s General Practitioner. The appellant has no previous convictions.
The Learned Sentencing Judge Erred in Principle in Failing to Adequately Address the Public Interest in Rehabilitating the Appellant
26. This Court accepts that as a general principle, and where appropriate, a sentence should incorporate a rehabilitative element. This is often achieved by suspending the final part of a sentence on terms designed to incentivise rehabilitation. This is intended to not only provide an element of hope for a prisoner, but also to incentivise good behaviour in the immediate post-release period which is often a difficult time for someone who has spent a number of years in prison. Sometimes a sentence will be suspended on terms which provide an incentive for a prisoner to use his time in prison in a productive way. For example, if a prisoner’s offending had been directly connected with issues of drug or alcohol addition, then part of a sentence can be suspended to encourage a prisoner to take responsibility for his addiction while in prison.
27. In this case, the sentencing judge did not suspend any portion of the sentence and the question that arises is whether or not she committed an error in principle as a result.
28. First of all, this case is significantly different to the vast majority of cases that come before this Court. The appellant is a University graduate, and up to 2009, a successful businessman. He did not suffer from any known addiction, and indeed, had he done so, he would have been unable to commit these crimes because they required the injured parties to place great trust in his integrity and investment skills. The psychologist’s report submitted on his behalf described his motivation as being akin to gambling, but did not suggest any addiction apart from a desire to impress others.
29. It is clear from this report that the appellant is not only remorseful, but has also reached a point in his life where he has developed a zero tolerance for any form of deception. His offending behaviour came to light and ceased six years prior to his sentence and there was no suggestion of any further offending or attempted offending in that period. In these circumstances, it could be said that the defendant is a person who is highly unlikely to reoffend on his release from prison. Although she did not specifically say so, the sentencing judge was entitled to take the view that the appellant’s rehabilitation had already occurred and that there was, therefore, no need to include an element in the sentence designed to encourage future good behaviour or to encourage any form of rehabilitation.
30. Once the appellant’s offending had come to light, he had no further opportunity to offend. In his favour is the fact that he remained in the jurisdiction, attempted to make restitution and sought to address his own personal problems. The defendant’s rehabilitation was a matter of mitigation rather than something which needed to be factored into the sentence in a separate way, and accordingly, the court holds that this ground of appeal must fail.
The Learned Sentencing Judge Erred in Principle in that she dot have adequate regard to the Various Mitigating Factors in the Appellant’s Case
31. Counsel for the appellant contends that the sentencing judge did not adequately factor into the sentence the impact that such a period of imprisonment would have on a first time offender such as the appellant and further submitted that the following mitigating factors had been given insufficient weight:
(i) His lack of previous convictions.
(ii) His guilty plea.
(iii) The remorse shown.
(iv) The level of his cooperation.
(v) The loss of social standing and family life occasioned by his actions.
(vi) The adverse publicity to which he had been subjected.
(vii) The efforts he had made and was continuing to make to recompense the injured parties in the case.
(viii) The efforts he had made to address his offending behaviour.
(ix) The length of time between the offences coming to light and the date of sentencing.
32. In the course of her sentencing remarks, the judge stated:
“The court has been advised that there are five injured parties and the consequences of these crimes for them were outlined to the court in detail on the previous occasion. The court is taking into account that information but not going to repeat it today at this sentence hearing. The court has been advised of the circumstances surrounding the commission of these offences and the court has the benefit of a number of reports, including a psychological report and also a report from a medical practitioner engaged with Mr. O’Brien’s family. Evidence in relation to each of the incidents of advancing funds involved in respect of each of the parties, as I have said, the background against which it happened, how it came to happen, the deceit behind each incidence, was given to the court, and Sergeant Martin Griffin presented the evidence to the court. And to use the words used by Sergeant Griffin on the previous occasion, the central basis on which the monies were advanced were that Mr. O’Brien would say to the relevant person ‘give me the money, I will retain it in my deposit account, it will not go anywhere else. It will not be used for any purpose other than to show that I have access to the money which would allow me to demonstrate to another person a capacity to buy which would then allow procuring option which I will then be able to flip on’. And that is what is seen during the course of the period of time indicated on the indictment: at the core of this case was the central lie that the monies were not retained on deposit in the account in the way that was promised; were not solely used to show that he had access to the funds in the way that was promised and was instead used for a myriad of other purposes which were outlined to the court on the last occasion.
The court has been advised that the maximum penalty for a deception charge is five years and ten years for theft. It appears to the court that the aggravating factors include the serious nature of the charge; the amount of monies involved; the fact that the offending occurred over a period of time; the number of transactions that were involved; the breach of trust and the consequences of these offences for the injured parties. The mitigating factors are the plea of guilty; the value of the plea of guilty to the prosecution; his expression of remorse; he has no previous convictions; the effect that this conviction will have on his ability to earn a livelihood in the future; the adverse publicity given to him as a consequence of this conviction; his previous good character; the fact that he volunteered information in 2008 and that details of same were given to the court and the efforts he has made to make good the losses to the injured parties and the fact that he has signed any documentation when he was asked to do so. The court has to mark the seriousness of the offence, but also to take into account the personal circumstances of Mr. O’Brien. And on the deception charges, the court will determine that these merit a custodial sentence of three and a half years imprisonment and on the theft charges, allowing for the aggravating and mitigating factors, the court will impose a sentence of seven years imprisonment. All sentences to be concurrent.”
33. The principle mitigating factors are the plea of guilty and the fact that the appellant is a man with no previous convictions. These matters were taken into account by the sentencing judge. However, it needs to be said that while a plea of guilty will almost always merit some reduction in sentence, and it certainly led to a reduction in this case, the level of that reduction will depend on its timing. In this case, not only was the plea received late in the day, but it occurred at a time when a period of six weeks of court time had been set aside for the trial and a significant amount of preparation had taken place. This included obtaining mutual assistance from courts in Italy, Monaco, Germany and the UK and arranging to have Embassies in Dubai and New York on standby. Commenting on sentencing in fraud cases Prof. O’Malley notes at para. 14.09 in Sentencing Law and Practice: the 2nd Ed.
“A plea of guilty especially if tendered at an early stage in the investigation and accompanied by cooperation on the part of the offender is a significant mitigating factor given that fraud investigations can be complex, time consuming and expensive.”
34. Again while the appellant had no previous convictions, this has to be seen in light of a sophisticated and elaborate scheme of offending that took place over the five year period outlined above.
35. It is clear these offences have had a devastating effect on the appellant resulting in the loss of his marriage and his family. He has suffered public disgrace and humiliation and his life has effectively been on hold since 2010. It is clear that he poses little risk of reoffending and that a sentence of imprisonment will have a significant adverse impact on him. Nevertheless the fact remains that these offences were particularly serious. The offending was planned premeditated, the loss to the victims enormous. Significant garda resources were deployed requiring 42 separate orders from the District Court authorising the disclosure of financial records and the investigation also involved the analysis of numerous bank accounts held in six different financial institutions in this jurisdiction. It goes without saying that this type of offending damages the trust necessary to enable the business community to function fairly and efficiently.
36. We hold that adequate consideration was given to the mitigating facts. While we acknowledge that the sentence is a substantial one we hold that the sentencing judge was correct in identifying seven year imprisonment as the appropriate sentence. Accordingly the appeal against sentence is dismissed.
