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White-Collar Offences


White-Collar Offences

This page was last updated on 24 April 2023.

1. Overview

The term ‘white-collar’ is not a statutory one. Rather, it is a term which has been judicially used to describe non-violent, financially motivated offending and offenders, particularly in relation to financial or economic offences. ‘White-collar’ offenders have been described as ‘rational, profit-seeking individuals’: DPP (Cth) v Gregory [2011] VSCA 145, [53]. Similarly, McCallum J (as her Honour then was) in R v Curtis (No 3) [2016] NSWSC 866 noted at [91] that white-collar offending is ‘a field in which, perhaps more than any other, offending is often a choice freely made by well-educated people from privileged backgrounds, prompted by greed rather than the more pernicious influences of poverty, mental illness or addiction that grip other communities.’

This page is concerned with offences which have been judicially described as constituting ‘white-collar’ offending.

In contrast to other types of federal offences, which are generally contained in the Criminal Code (Cth), white-collar offences are found across several Commonwealth Acts. This page considers sentencing principles which apply for the following categories of offences, which have typically been described judicially as ‘white-collar’:

This is not an exhaustive list of all offences which might be described as white-collar offences. Rather, the focus of this page is to describe sentencing for commonly prosecuted offences.

This page concerns the sentencing of individuals for the above offences. For the principles applicable when sentencing corporations for white-collar (and other) offences, see: Sentencing Corporations.

2. Categories of offences

2.1 Corporations Act offences

The Corporations Act 2001 (Cth) contains offence provisions that criminalise the use of inside information, market manipulation and false trading. Which offence provision may apply to particular conduct can vary depending on the position of the individual involved (for example, whether they are a director or employee of a corporation) as well as the conduct involved. For example, the use of insider information by a company director could attract liability under s 184(3) while the use of the same information by an individual not related to the company may amount to insider trading under s 1043A.

The table below contains the current maximum penalties that apply to some of the more serious Corporations Act 2001 (Cth) offences. The maximum penalties for many of the offence provisions were increased by the passage of the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018 (Cth). Sentences which pre-date these amendments should be treated carefully for the purposes of comparison.

 Market Manipulation Offences: Corporations Act 2001 (Cth) 
SectionOffenceMaximum penalty
184(1)Failure by director to exercise powers in good faith15 years imprisonment
184(2)Use of position to gain benefit or cause detriment15 years imprisonment
184(3)Use of information directors, other officers and employees15 years imprisonment
1041AMarket manipulation15 years imprisonment
1041BFalse trading and market rigging – creating false or misleading appearance of active trading etc15 years imprisonment
1041CFalse trading and market rigging—artificially maintaining etc. trading price15 years imprisonment
1041DDissemination of information about illegal transactions15 years imprisonment
1041EFalse or misleading statements15 years imprisonment
1041FInducing persons to deal15 years imprisonment
1041GDishonest conduct in relation to a financial product15 years imprisonment
1043AInsider trading15 years imprisonment

2.2 Cartel offences

The cartel conduct offence provisions were inserted into the Competition and Consumer Act 2010 (Cth) in 2009. Following amendments to the Act,1 the general offence provisions that apply to corporations are now found in ss 45AF and 45AG of the Act. The general definition of cartel conduct can be found in s 45AD(1) of the Competition and Consumer Act 2010 (Cth) which provides:

45AD Cartel provisions

(1)  For the purposes of this Act, a provision of a contract, arrangement or understanding is a cartel provision if:

                         (a)  either of the following conditions is satisfied in relation to the provision:

                                      (i)  the purpose/effect condition set out in subsection (2);

                                      (ii)  the purpose condition set out in subsection (3); and

(b)  the competition condition set out in subsection (4) is satisfied in relation to the provision.

                        …

Section 45AF provides:

45AF Making a contract etc. containing a cartel provision

Offence

             (1)  A corporation commits an offence if:

(a)  the corporation makes a contract or arrangement, or arrives at an understanding; and

                          (b)  the contract, arrangement or understanding contains a cartel provision.

Note:  Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

             (2)  The fault element for paragraph (1)(b) is knowledge or belief.

Section 45AG provides:

45AG Giving effect to a cartel provision

Offence

             (1)  A corporation commits an offence if:

                          (a)  a contract, arrangement or understanding contains a cartel provision; and

                          (b)  the corporation gives effect to the cartel provision.

Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

             (2)  The fault element for paragraph (1)(a) is knowledge or belief.

            …

In addition to criminalising the conduct of corporations,2 the cartel provisions can apply to individuals who are involved in cartel arrangements through the operation of s 79 of the Competition and Consumer Act 2010 (Cth). That section provides:

79 Offences against section 45AF or 45AG

             (1)  A person who:

                          (aa)  attempts to contravene; or

                          (a)  aids, abets, counsels or procures a person to contravene; or

(b)  induces, or attempts to induce, a person (whether by threats or promises or otherwise) to contravene; or

(c)  is in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of; or

                          (d)  conspires with others to contravene;

a cartel offence provision is taken to have contravened that provision and is punishable:

                          (e)  in a case where:

                              (i)  the provision is a cartel offence provision; and

                             (ii)  the person is not a body corporate;

by a term of imprisonment not exceeding 10 years or a fine not exceeding 2,000 penalty units, or both; or

                          (f)  in any other case—accordingly.

Offences against s 79 can also be committed by corporations who are involved with a different company’s cartel arrangements in one of the manners outlined in s 79(1).

As outlined in the section, the maximum penalty for an individual who is involved in a cartel arrangement in a manner specified by s 79(1) is 10 years imprisonment or a fine of up to 2,000 penalty units or both.

See further: Sentencing Corporations.

2.3 Bribery offences

Offences involving the bribery or influence of foreign or Australian public officials may also, in some circumstances, be described as “white collar” offending. Such offences generally relate to individuals who engage in bribery to secure a commercial advantage.

The offence of bribing a foreign public official is contained in s 70.2 of the Criminal Code (Cth) which provides:

70.2   Bribing a foreign public official

             (1)  A person commits an offence if:

                          (a)  the person:

                              (i)  provides a benefit to another person; or

                             (ii)  causes a benefit to be provided to another person; or

                            (iii)  offers to provide, or promises to provide, a benefit to another person; or

                            (iv)  causes an offer of the provision of a benefit, or a promise of the provision of a benefit, to be made to another person; and

                          (b)  the benefit is not legitimately due to the other person; and

(c)  the first-mentioned person does so with the intention of influencing a foreign public official (who may be the other person) in the exercise of the official’s duties as a foreign public official in order to:

                              (i)  obtain or retain business; or

                             (ii)  obtain or retain a business advantage that is not legitimately due to the recipient, or intended recipient, of the business advantage (who may be the first-mentioned person).

The maximum penalty for the offence is 10 years imprisonment or a fine of 10,000 penalty units or both: s 70.2(4).

Similar offences in relation to the giving or receiving of a corrupt benefit to or as a Commonwealth public official are contained in s 142.1 of the Criminal Code (Cth). The maximum penalty for an offence against s 142.1 is 5 years imprisonment.

Additionally, an offence of dishonestly influencing a Commonwealth public official in the exercise of their official duties is contained in s 135.1(7) of the Criminal Code (Cth), and the equivalent conspiracy offence is contained in s 135.4(7). The maximum penalty for each offence is 10 years imprisonment.

2.4 Tax fraud offences

There are no specific tax fraud offences contained in the Criminal Code (Cth). Offenders are instead able to be charged with general offence provisions relating to obtaining property by deception: s 134.1(1), obtaining a financial advantage by deception: 134.2(1) or conspiring to dishonestly cause a loss or obtain a gain: 135.4(1), (3) and (5), which each carry a maximum penalty of 10 years’ imprisonment. All offence provisions require the relevant conduct to be committed against the Commonwealth.3 Offenders can also be charged with proceeds of crime offences, where they have used profit generated from underlying tax fraud activities.

In addition to taxation offences captured by the Criminal Code, taxation fraud, and other taxation related offences arise under the Customs Act 1901 (Cth), the Taxation Administration Act 1953 (Cth) and the Income Tax Assessment Act 1997 (Cth).

3. Relevant factors

As with other Commonwealth offences, sentences for federal white-collar offences are subject to s 16A of the Crimes Act 1914 requiring the court to take into account all factors which are relevant and known to the court, including those noted in s 16A(2). The following factors have particular relevance to white-collar offences.

3.1 Objective seriousness

The matters relevant to objective seriousness vary depending on the form the white-collar offence takes. In general, courts determining the objective seriousness of white-collar offending have considered whether the breach was intentional or the result of recklessness, the quantum of profit involved, the length of the offending conduct, the impact of the offending on the market or third parties, and any concealment, breach of trust, or dishonesty involved in the offending: see, eg, CDPP v Joyce [2022] FCA 1423, [20].

3.2 General deterrence

Courts have emphasised the importance of general deterrence when sentencing offenders for white-collar offences.

The rationale for affording greater weight to general deterrence in sentencing offenders for white-collar offences was summarised by the Victorian Court of Appeal in DPP (Cth) v Gregory [2011] VSCA 145. The case concerned the sentence imposed for tax fraud offences, with the offender charged with two counts of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth)4 and one count of conspiring to dishonestly cause a loss to a Commonwealth entity contrary to s 135.4(5) of the Criminal Code (Cth).5 The Court stated at [53]:

In seeking to ensure that proportionate sentences are imposed the courts have consistently emphasised that general deterrence is a particularly significant sentencing consideration in white collar crime and that good character cannot be given undue significance as a mitigating factor, and plays a lesser part in the sentencing process. …  Moreover, general deterrence is likely to have a more profound effect in the case of white collar criminals. White collar criminals are likely to be rational, profit seeking individuals who can weigh the benefits of committing a crime against the costs of being caught and punished. Further, white collar criminals are also more likely to be first time offenders who fear the prospect of incarceration. … [Emphasis added]

These remarks were endorsed by the Victorian Court of Appeal when considering the sentence imposed on a company director for an offence of dishonest use of their position as director with the intention of gaining advantage in Nicholls v The Queen [2016] VSCA 300, [41]. The Court continued at [42]:

When considering sentences for crimes of dishonesty by those discharging duties under the Corporations Act, it is necessary to be mindful of the relative ease with which persons occupying positions of control and responsibility can gain very substantial financial advantages if they resort to dishonest means, and the likely harm done to multiple victims from such offending conduct.  [Emphasis added]

Similar comments have also been made by courts when sentencing individuals for insider trading offences. For example, in R v Glynatsis [2013] NSWCCA 131, a Crown appeal against a two-year sentence to be served by way of an intensive corrections order for insider trading offences, McCallum J (agreeing with Hulme CJ at CL’s reasons) noted at [79]:

The acquisition or disposal of financial products by people having the unfair advantage of inside information is criminalised because it has the capacity to unravel the public trust which is critical to the viability of the market. It is, as previously observed by this Court, a form of cheating. The fact that people of otherwise good character and compelling personal circumstances are tempted to engage in such conduct emphasises the need for the clear deterrent that insider traders should expect to go to gaol. [Emphasis added]

Similarly, McCallum J (as her Honour then was) noted in R v Curtis (No 3) [2016] NSWSC 866, in sentencing an offender for insider trading offences, at [91]:

… The efficacy of punishment as a deterrent to others has been doubted in some contexts; to a degree, I share those doubts. In my view, however, punishment by a sentence of imprisonment has real bite as a deterrent to others in the case of white-collar crime. White-collar crime is a field in which, perhaps more than any other, offending is often a choice freely made by well-educated people from privileged backgrounds, prompted by greed rather than the more pernicious influences of poverty, mental illness or addiction that grip other communities. The threat of being sent to gaol, provided it is perceived as a real threat and not one judges will hesitate to enforce, is likely to operate as a powerful deterrent to men and women of business. [Emphasis added]

In relation to offences such as bribery offences, courts have noted that there is a significant role for general deterrence to play, including to denounce the offending conduct to ensure that offending of this kind is not justified by business considerations. For example, in R v Jousif; R v I Elomar; R v M Elomar [2017] NSWSC 1299, concerning the bribery of an Iraqi official to secure government oil drilling contracts, the Court stated at [270]:

Given that Australian businesses work overseas and obtain, at times, government contracts, including for substantial infrastructure, with other countries, I consider there to be a significant role for general deterrence in the present case, both in respect of the conduct of persons such as the Elomars who hope to gain by obtaining contracts as a result of bribes, or conduits such as Mr  Jousif , who hope to make some money as a result of their facilitation. It is important that the sentence includes an element of denunciation so that those Australians who carry on business overseas appreciate that bribery of foreign officials is as serious and as criminal as bribery of local officials and can never be excused, much less justified, on the basis of a business imperative. [Emphasis added]

Similar comments have also been made in relation to cartel conduct offences committed by individual offenders.6 In Commonwealth Director of Public Prosecutions v Vina Money Transfer Pty Ltd [2022] FCA 665, Abraham J stated at [112]:

As general deterrence is a paramount sentencing consideration, factors personal to the offender such as good character and other mitigatory factors are necessarily afforded less weight than they otherwise might be. [Citations omitted]

In relation to tax fraud offences, courts have expressly noted the difficulty in detecting offences of this nature and the significant impact of the offending on the broader community. For example, in Hili v The Queen [2010] HCA 45, the High Court stated at [63]:

The applicants’ offending was sustained over a long time. It was planned, deliberate and deceitful, requiring for its implementation the telling of many lies. The applicants acted out of personal greed. The amount of tax evaded was not small. Detection of offending of this kind is not easy. Serious tax fraud, which this was, is offending that affects the whole community. As was pointed out in Ruha, the sentences imposed had to have both a deterrent and a punitive effect, and those effects had to be reflected in the head sentences and the recognizance release orders that were made. [Citations omitted]

Similar remarks were made in DPP (Cth) v Gregory [2011] VSCA 145, [53] and R v Boughen [2012] NSWCCA 17, [98] where the courts noted the self-assessment nature of the tax system as strengthening the need for general deterrence.

3.3 Good character

When sentencing offenders for white-collar offences, courts have generally placed less emphasis on an offender’s prior good character. In Kamay v The Queen [2015] VSCA 296, the Victorian Court of Appeal stated at [53]:

The applicant relies upon his relative youth, good character, loss of profession and prospects for rehabilitation.  Such factors are unexceptional in white collar crimes, including the present type of offending.  The applicant was clearly a ‘rational, profit seeking individual’ who was well aware of the risk that he may be caught, yet was driven by greed and proceeded to break the law over a sustained period.  In Director of Public Prosecutions (Cth) v Gregory, this Court emphasised the importance of general deterrence in white collar crime, especially given the ‘fear’ that the prospect of incarceration may instil in such offenders … [Emphasis added; citations omitted]

Similarly, courts have noted that historical decisions had tended to place too great a weight on the impact a sentence may have on a member of the community with good character as against the significant impact of their offending conduct. For example, in DPP (Cth) v Gregory [2011] VSCA 145, [55] the Court stated:

Whilst not directly arising in this case, there is a tendency to place a disproportionate emphasis on a dollar value concept of the loss. The results are sometimes a lack of deterrence and proportionality. Professor Freiberg has noted that the personal circumstances of the white collar criminal appear to weigh heavily in the judge’s mind at the expense of justice in the abstract, or the effect on or interest of the victim(s), and that this persistent sentencing phenomenon is spread across jurisdictions. Charles JA in DPP (Vic) v Bulfin adverted to this serious risk in sentencing white collar criminals stating that:

the consequences of discovery and punishment and the havoc that a custodial sentence usually wreaks on the lives of the white collar criminal and his or her family, may have a tendency to distract attention from the importance that general deterrence ought to carry in the imposition of sentences.

[Emphasis added; citations omitted]

3.4 Youth

The youth and immaturity of offenders who engage in white-collar offences is a matter that may attract less weight in sentencing than for other kinds of offences.7 In particular, courts have emphasised that the sophisticated nature of engaging in white-collar types of offending, tends against an emphasis on an offender’s youth. In Hartman v The Queen [2011] NSWCCA 261, a case that concerned insider trading offences, the Court stated at [93]:

We do not agree, however, that, in the circumstances of this matter, the applicant’s youth and relative immaturity have any role to play in downgrading or lessening the importance of general deterrence. We recognise that in some cases these factors may be both relevant and important on the issue … We do not consider in the present matter that they are relevant and important in that way. The applicant was operating in the adult sphere of business and commerce in every respect, and of course he was himself an educated and worldly young adult in every sense of the word. The Court cannot lose sight of the need to deter young adults from taking the significant financial advantages offered by the contemporary business world in circumstances where, at the same time, they reject the legal and moral constraints properly imposed upon their commercial behaviour. [Emphasis added]

Similar remarks were made by McCallum J when sentencing Hartman’s co-offender in R v Curtis (No 3) [2016] NSWSC 866 where her Honour stated at [31]:

Mr Curtis’s youth at the time of the offence is a relevant consideration but not one of primary significance. When Mr Hartman was sentenced, the Court of Criminal Appeal did not accept that his youth and relative immaturity lessened the importance of general deterrence. The Court considered that Mr Hartman had been operating in the adult sphere of business and commerce and was himself educated and worldly. The Court emphasised the need to deter young adults from taking the significant financial advantages offered by the contemporary business world in circumstances where, at the same time, they reject the legal and moral constraints properly imposed upon their commercial behaviour. Those remarks are of equal application here.

An offender’s age may have a particular mitigatory effect where it results in naivety or susceptibility to influence by older co-offenders. In the state case of DPP v Cook (a pseudonym) [2016] VSCA 137, the young offenders were ‘young, naïve and impressionable and … at all times controlled’ by an older co-offender: at [24]. The sentencing judge took the offender’s youth into account in finding that he saw ‘the role at the company as an opportunity to gain experience in the financial sector’, and was manipulated by the older co-offender ‘who was able to subtly indoctrinate him into the ways of the illegitimate business knowing that [the offender] had no other opportunities available to him in the financial industry’: at [41].

3.5 Victims and harm

Sections 16A(2)(d)–(e) of the Crimes Act 1914 (Cth) require a court to take into account the personal circumstances of any victims of the offence, and any injury, loss or damage that results from the offending conduct. White-collar offending may impact on unidentified persons or have broader effects which are impossible to trace to particular victims; courts have emphasised that the lack of identifiable victims does not prevent a court from taking into account the general harms caused by white-collar offences. For example, in Hartman v The Queen [2011] NSWCCA 261 the NSW Court of Criminal Appeal stated at [94]:

It needs to be remembered that insider trading not only has the capacity to undermine the integrity of the market, it also has the potential to undermine aspects of confidence in the commercial world generally.  The principles of confidentiality and trust are fundamental to the operation of many commercial transactions.  … Put bluntly, it is a form of fraud, even though its consequences may be more opaque than general fraud.8 [Emphasis added]

More broadly, courts have recognised that the profit-driven nature of offending of this kind means that money has been taken from other individuals involved in the market in some way. For example, in the context of considering insider trading offences, in Kamay v The Queen [2015] VSCA 296 the Court in noted at [48]:

We consider that it is artificial to say that there is no victim to the applicant’s offending.  The applicant’s misuse of insider information meant that others were unfairly disadvantaged.  The nature of margin FX contracts is that counterparties will enter trades within the same market, and as such, someone must suffer loss at the gain of the applicant. [Emphasis added]

Similar observations have been made in relation to cartel conduct offences.9

Courts have also emphasised that the harm caused by white-collar offences such as insider trading or other offences against the Corporations Act 2001 (Cth) is significant to victims notwithstanding the lack of physical or direct injury. In particular, in Nicholls v The Queen [2016] VSCA 300, [41] the Court referred to remarks of Justice McClellan of the NSW Supreme Court speaking extrajudicially10 at [42]:

When assessing the seriousness of a crime involving violence to an individual, the extent of the harm occasioned to the victim is a significant matter. The sentence may vary depending upon the nature and extent of the injuries inflicted on the victim. White-collar crime also impacts upon victims, sometimes many, but usually lacks any physical violence. Although mostly confined to a loss of money, that loss may have a devastating consequence for the wellbeing of the individual. Identifying and weighing the harm may prove difficult.

In R v Agius (No 14) [2018] NSWSC 1248, in sentencing two offenders for tax fraud and proceeds of crime offences,11 Adamson J assessed at [69] both the tangible and intangible harm caused by the offences to the Commonwealth:

… The tangible loss resulting from counts 1 and 2, at least in so far as it can be measured in monetary terms, is $2,622,371.56. The intangible loss is the loss of confidence in the efficacy and integrity of the taxation system, which occurs when people such as the offenders defraud the Commonwealth in this way. [Emphasis added]

For further commentary in relation to taking into account the impact on victims, see Victim of the Offence and Victim Impact Statements.

3.6 Delay

Courts have noted that white-collar offences can take significant periods of time to prosecute due to the complexity of the relevant investigations. This delay may, in some circumstances, be taken into account when sentencing an offender.

The relevant principles were summarised by McCallum J in R v Curtis (No 3) [2016] NSWSC 866 where her Honour was considering a nine-year delay between the offending conduct and the sentencing hearing. Her Honour outlined the relevant test at [45]:

… Delay itself is not a mitigating factor but may be causative of a relevant consideration, such as where there has been significant progress towards rehabilitation in the meantime. The relevance of delay will depend upon the circumstances of the individual case. Where there is an unreasonable period of delay on the part of the prosecutor between the detection of the offence and the laying of a charge, the punitive and deterrent aspects of the sentencing process should ordinarily not be allowed to prevail so as to destroy the results of any demonstrated rehabilitation. [Emphasis added]

Her Honour went on at [46] to consider the delay in the particular circumstances of the case, noting that while the delay was undesirable it was not unreasonable and had been explained by affidavit evidence outlining that the offender’s choice not to co-operate with investigators had contributed to the delay.

Courts have noted that while white-collar offences are complex, this complexity does not prevent delay from being taken into account. For example, in R v Agius (No 14) [2018] NSWSC 1248,12 a case where there was approximately a decade between the serving of a search warrant on the first offender and the sentencing hearing, Adamson J stated at [90]–[91]:

I do not regard the evidence as establishing that there was any tardiness on the part of either the AFP or the ATO in investigating potential charges against the offenders or in charging them or bringing them to trial. As referred to above, the proof of the offences required source documents, many of which could not be obtained, despite several attempts and legal proceedings, since they were located in Vanuatu. Evidence was also required from witnesses, including Mr Phillips at Macquarie, which was not readily forthcoming. Mr Rositano’s analysis of source documents also required time and resources.

Justice requires that there be a measure of understanding and flexibility where there has been, as in the present case, a significant delay between the time an offender first became aware of the risk of prosecution and the imposition of a sentence: R v Todd [1982] 2 NSWLR 517, at 519–520 (Street CJ, Moffit P, Nagle CJ at CL agreeing). This is so even where, as here, a considerable portion of the time was the inevitable consequence of the complexity of the offences committed and the associated difficulties in their investigation, prosecution and proof. I take into account that both offenders have been in ‘uncertain suspense’ for a number of years.

Courts have also taken delay into account in sentencing offenders for white-collar offences where the delay has had an impact on the offender’s mental health condition. For example, in R v Joffe [2015] NSWSC 741, the Court stated at [117]:

The delay in the investigation (3 years) and in the proceedings themselves (5½ years) is a significant feature to be taken into account. I acknowledge the submission by senior counsel for the Crown that delay, in and of itself, is not a mitigating feature. And the Crown conceded that ‘there has been demonstrated rehabilitation’ during the period of the delay. In this case, responsibility for the delay is not exclusive to one party but it would be a fruitless exercise to trawl through the history in order to assess blame. The fact is that the delay has involved a form of punishment in itself in the adverse psychological impacts that it has had upon each of the offenders. [Emphasis added]

4. Factors relevant to particular offences

4.1 Insider trading offences

When sentencing individuals for insider trading offences, courts have considered the following factors relevant when assessing the objective seriousness of the offending conduct.

4.1.1 Amount invested and realised profit

Courts have held that both the quantum of an investment and profit realised are relevant to assessing the objective seriousness of insider trading offences depending on the nature of the particular case. This was explained in R v Glynatsis [2013] NSWCCA 131. Hoeben CJ at CL (Rothman and McCallum JJ agreeing) at [52]–[54] agreed with the Crown’s submission that:

[t]he damage to the integrity of the market occurs when the investment is made, regardless of the profit ultimately realised. The profit or benefit ultimately derived from insider trading is often a relatively unimportant indicator of criminality because it is almost invariably determined by chance and events occurring, or failing to occur, after the commission of the offence. Such events are beyond the offender’s control.

… The Crown submitted that the amount invested is a product of design, whether directed to a prospective profit or some other motivation and therefore a superior indicator of criminality.

I agree with the Crown’s analysis. Clearly profit is a relevant factor and was properly taken into account by his Honour. It could become an important factor if for a comparatively small investment, a very large profit were made. In most situations, however, the better indicator of the extent of the criminality must be the size of the transaction and the best way of assessing that is by reference to the amount of money invested, or placed at risk. [Emphasis added]

This statement of principle was considered by the Victorian Court of Appeal in Kamay v The Queen [2015] VSCA 296, while engaging with a submission of the offender that the sentencing judge had placed too much weight on the profit realised through trading rather than on the amounts invested. The Court outlined at [32] that the sentencing judge had noted that the particular kind of trading the appellant had engaged in (FX derivative trading) had enabled him to make significant profits with little risk of capital. The Court went on to state at [35] that:

The short time frame within which the applicant was able to generate enormous profits is illustrative of the high quality of the information provided by Hill to the applicant. The predictable large scale profits that could readily be made from the exploitation of the confidential information provides a measure as to its value and informs the objective gravity of the offending.

This sophisticated offending was contrasted by the Court with an example where an offender made an uncamouflaged purchase of stock acting on inside information but where that information was of a lower quality: see DPP v O’Reilly [2010] VSC 138.

4.1.2 Quality of information

Courts have emphasised that the quality of information used in conducting the insider trading offence and the manner in which trades are conducted is relevant to the objective seriousness of the offending conduct. For example, in R v Joffe [2015] NSWSC 741, RA Hulme J stated at [98]–[99]:

In assessing … [the quality of information] it is appropriate to keep in mind that the essential aspect of ‘inside information’ is that if it was generally available, it might have a material effect on the price or value of the financial product in question.

A high degree of materiality would generally lead to a finding of greater objective seriousness; a low degree of materiality might, but not necessarily, lead to a finding of low objective seriousness; and knowledge by the offender of the degree of materiality would bear upon moral culpability. [Emphasis added]

4.2 Cartel conduct offences

When sentencing individuals for their role in the cartel conduct, courts have considered that the general principles applicable to sentencing for white collar crime are applicable. For example, in Commonwealth Director of Public Prosecutions v Vina Money Transfer Pty Ltd [2022] FCA 665, Abraham J noted at [114]:

 Finally, I observe that there are no comparative sentencing cases within the meaning of the concept described in Hili v The Queen [2010] HCA 45; (2010) 242 CLR 520 at [53]–[54] and The Queen v Pham [2015] HCA 39; (2015) 256 CLR 550 at [28]–[29]. This is the first occasion on which individuals, rather than corporations, fall to be sentenced for this type of offending. The shipping cartel cases of NYK, K-Line and WWO involve only corporations and have features which do not apply in this case, as I discuss below at [130]. That said, the nature of this type of offending bears similarities to features often present in other white collar crime, for example, the difficulties in detection, the complexity of the investigation, and the financial advantage sought to be gained. Principles relevant to those topics may, depending on the circumstances, be equally applicable to this type of offending. So much is reflected in the observations in NYK and later cases. [Emphasis added]

Courts have taken into account the role of the individual in the cartel as well as their knowledge of the criminality of the conduct. In Commonwealth Director of Public Prosecutions v Vina Money Transfer Pty Ltd [2022] FCA 665, [38] in relation to one of the offenders Abraham J noted:

From the earliest relevant time, Ngoc Le, as director and secretary of Vina Money, was responsible for managing and running the day-to-day operations of Vina Money at all of its branches. Ngoc Le’s sons, including Tony Le, were from time to time also engaged to do the same. In his role as director and secretary, Ngoc Le was responsible for setting the exchange rate offered to customers, and for deciding the amount of fees charged to customers. It is plain that Ngoc Le, by reason of his role in the business, was aware that Vina Money was in competition with both Hong Vina and Hai Ha. [Emphasis added]

For discussion of the principles applicable to sentencing corporations for cartel conduct offences, see Sentencing Corporations.

4.3 Bribery offences

In sentencing offenders for bribery offences, local practice (in the jurisdiction the bribe was given or received) is not relevant in assessing the seriousness of the offending conduct.

In R v Jousif; R v I Elomar; R v M Elomar [2017] NSWSC 1299, Adamson J sentenced three individuals involved in bribing an Iraqi public official with the aim of securing business contracts. The offenders had submitted that the offence was less serious as the offence had been committed in Iraq where bribery was part of the business landscape. Counsel for the offenders had sought to contrast that offending to a situation where a similar offence occurred in Australia. In rejecting the submission, Adamson J stated at [226] that:

I am, however, persuaded by the Crown’s submissions that the considerations relied on by the offenders referred to above are not mitigating and do not diminish the seriousness of the offence. Nor does the apparent vulnerability of Iraq increase it. The evident parliamentary intention when implementing Australia’s obligations under the Convention by enacting Division 70 of the Code was to make laws criminalising bribery of foreign public officials correspond to local laws criminalising bribery of local public officials. In these circumstances, it is not to the point whether corruption is thought to be more common in the nation where the foreign public official is located than in the jurisdiction which conducts the prosecution.13

In relation to consideration of the general harm of bribery offences, Adamson J at [213] referred to the Attorney-General’s Second Reading Speech, noting that:

Bribery distorts attempts at international competitive bidding, bribes themselves are non-productive and are therefore paid from profits and bribes distort trade in that contracts are not based on merit and can lead to production of poor quality goods and services. In the aid context, bribery can lead to a very poor selection of projects, and this can in turn lead to diversion of resources away from areas of greatest need.

4.4 Tax fraud offences

In sentencing offenders for tax fraud offences courts have considered specific matters that may be taken into account as extra-curial punishment. In particular, courts have held that the payment of additional penalties, namely tax shortfall penalties and interest charges under tax legislation, may be taken into account as a form of extra-curial punishment: R v Agius (No 14) [2018] NSWSC 1248, [109]–[110].14

In assessing the impact of these penalties, courts have focused on the impact of the penalties on the individuals rather than the fixed dollar amounts. For example, in R v Agius (No 14) [2018] NSWSC 1248, Adamson J noted (at [110]) that there was no evidence that additional penalties (in the order of $4.8 million) had ‘caused any financial hardship to Dr Castagna or his family’.

In contrast, in R v Mereb [2014] NSWCCA 149 Hoeben CJ at CL (McCallum and Garling JJ agreeing) rejected a submission from the prosecution that the sentencing judge had erred in finding potential tax penalties as ‘significant’ extra-curial punishment. Hoeben CJ at CL noted (at [22]) that the offenders had indicated that they would have to sell their homes to pay the penalties, noting that ‘that of itself would indicate considerable hardship and family disruption’.

See also: Hardship to the Offender.

  1. The provisions were amended and re-numbered from s 44ZZRF and s 44ZZRG see Competition and Consumer Amendment (Competition Policy Review) Bill 2017 (Cth). The maximum penalties for cartel offences committed by individuals and the civil penalty regime for corporations and individual offenders were subsequently increased by the Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 (Cth).[]
  2. For discussion see: Sentencing Corporations []
  3. As such, in addition to tax fraud, other types of charges (such as general fraud against the Commonwealth) may be able to be charged under these provisions.[]
  4. This offence was removed from the Crimes Act 1914 (Cth). Offences previously charged as defrauding the Commonwealth are now encompassed by divs 134–135 of the Criminal Code (Cth).[]
  5. These offences are able to encompass charges broader than tax fraud offences (for example social security fraud, or fraud perpetrated by individuals to obtain other benefits from the Commonwealth such as defence benefits or entitlements). This page does not address principles that relate to different categories of offending against those sections.[]
  6. For discussion of cartel conduct offences committed by corporations see: Sentencing Corporations.[]
  7. See further Age: Where immaturity does not play a part in offending.[]
  8. See also Kamay v The Queen [2015] VSCA 296, [49].[]
  9. See Commonwealth Director of Public Prosecutions v Vina Money Transfer Pty Ltd [2022] FCA 665, [113] where Abraham J quoted with approval remarks of Wigney J in Commonwealth Director of Public Prosecutions v Wallenius Wilhelmsen Ocean AS [2021] FCA 52, [242] that: ‘Cartel conduct, like other anti-competitive behaviour, is inimical to, destructive of and may lead to a loss of public confidence in, Australia’s markets and economic system’.[]
  10. Justice Peter McClellan, ‘White Collar Crime: Perpetrators and Penalties’ (Speech, University of New South Wales, 24 November 2011) 18.[]
  11. The convictions for the offences were later quashed on appeal, however the discussion of principles from the case were not challenged: Castagna v The Queen [2019] NSWCCA 114.[]
  12. The convictions in the case were set aside on appeal: Castagna v The Queen [2019] NSWCCA 114.[]
  13. The Court noted that this approach accorded with that taken in the United Kingdom citing at [30] the case of Regina v Innospec Limited 2010 WL 3580845, [30].[]
  14. The convictions for the offences were later quashed on appeal, however the discussion of principles in relation to the sentences imposed were not challenged: Castagna v The Queen [2019] NSWCCA 114.[]
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