STATE OF TASMANIA v RACHEL NAOMI PERRI 9 DECEMBER 2021
COMMENTS ON PASSING SENTENCE JAGO J
Rachel Perri has pleaded guilty to 25 counts of computer-related fraud contrary to s 257B(c) of the Criminal Code, and one count of fraud contrary to s 253A of the Criminal Code. The 25 counts of computer related fraud were committed in the course of her employment as a practice manager with Tasmanian Veterinary Services Pty Ltd (trading as Tasmanian Animal Hospitals). The single count of fraud relates to her submitting an on-line application to Virgin Money (Citigroup Pty Ltd), for a Visa credit card using her husband’s personal details and driver’s licence number. The frauds committed by the defendant on Tasmanian Veterinary Services Pty Ltd and Citigroup Pty Ltd total $970,221.47. The fraudulent behaviour continued over the course of three years and four months. It only ended when there was a restructure within the business and her position became redundant.
Throughout this period, the defendant conducted 475 fraudulent transactions which resulted in $940,221.47 being debited from Tasmanian Veterinary Services business accounts and credited to various bank accounts, credit cards and personal loan accounts in her name. Additionally, the defendant used the Virgin Money Visa card she had fraudulently obtained, to make purchases and payments to her benefit in the amount of $24,218.08.
Between 9 February 2016 and 7 June 2019 the defendant accessed and utilised two separate bank accounts belonging to Tasmanian Veterinary Services to conduct the fraudulent transactions. The main business Commonwealth bank account was used for the majority of the defendant’s offending. From that account there were 450 dishonest transactions. A second Commonwealth bank account, also belonging to Tasmanian Veterinary Services, was utilised on a further 25 occasions.
As practice manager, the defendant was in a trusted position. Her duties included processing payroll, human resources, account management, and she was solely responsible for the payment of business expenses and associated liabilities from the two Commonwealth bank accounts operated by the business. The defendant used various methods in an attempt to conceal her offending. They included:
(a) Fraudulent amounts being recorded in MYOB (the accounting system used by Tasmanian Veterinary Services) against various creditor expenses accounts. Payment was purportedly made to the creditor using the ComBiz business banking system, but the creditor’s bank account number was changed to one of the bank account numbers held by the defendant.
(b) Further, fraudulent amounts were recorded in MYOB against creditor expense accounts that were not used by the business, or were false. Payment was then made for that purported expense but again the bank account number to which the payment was directed was one of the bank accounts held by the defendant.
(c) Thirdly, the defendant would record fraudulent entries in the form of reimbursement to the owners of the business and then direct payment for such reimbursements to one of her own bank accounts.
(d) Fourthly, the defendant would create fraudulent payments purportedly for the benefit of creditors of the business, but then direct those payments to one of her own bank accounts.
To hide her dishonest behaviours, the defendant would generate false entries in MYOB to offset the fraudulent transactions. She would create false reimbursements and false creditors and would create false entries in MYOB to offset the payments made. She would process payments in MYOB for a higher amount than the genuine transaction, and would bank deposits for items such as supplier rebates and training incentives, so as to offset the false withdrawals from the business’s bank accounts.
By utilising these various methods the defendant was able to ensure the bank reconciliations balanced, and suspicion was not raised as to the fraudulent transactions.
The degree of planning and deceit involved in the defendant’s fraudulent behaviour was significant, in my view. For a period of over three years she was able to utilise her position of trust to commit repeated acts of dishonesty. The sophisticated methodology the defendant used to cover her fraudulent activities was such that even though Tasmanian Veterinary Services used external accountants to review the accounts at the end of each financial year and prepare relevant income tax returns, the fraudulent activity was not detected.
On 12 June 2019, the defendant’s position was made redundant following a restructure of the business.
In August 2019, anomalies were discovered in banking transactions following a query from one of the Directors regarding a reimbursement. This led to the company’s Chief Financial Officer conducting a substantial audit of the accounts and associated banking transactions relating to the business’s bank accounts. The audit involved many hours of investigation. It was not completed until 27 May 2020.
On 24 April 2020, the Virgin Money Visa credit card was cancelled after police discovered the application was fraudulent. The amount owed on the credit card as at that date was $24,218.08. Business records indicated the defendant had used the credit card to make purchases and payments to her benefit. She had made one fraudulent transfer of monies from Tasmanian Veterinary Services accounts to that credit card on 7 September 2016 in the sum of $2,736.20.
On 20 November 2019, Tasmania Police executed a search warrant at the defendant’s residence. Following that search, the defendant participated in an electronic record of interview. Immediately upon the allegation being explained to her she admitted guilt. She went on to make full admissions to the offending telling police, among other things:
(a) She had been playing a gambling game on Facebook called Hearts of Vegas for the past four years. The game involved her purchasing virtual coins or credits to be used in the game. The credits could never actually be turned into real money.
(b) She could not explain why she played the game when there was no prospect of monetary gain.
(c) She also said “I got myself into so much trouble but decided that I might as well keep going until I got caught … I couldn’t see a way out … I never thought that I would get away with it … I was waiting for a knock on the door from police”.
(d) The defendant said she was humiliated by what she had done.
(e) She admitted to having a ten year gambling addiction that had resulted in her incurring considerable financial losses.
Subsequently the defendant co-operated with police, provided them with her mobile phone, laptop and associated passwords, together with her email address, Apple ID and Facebook account logins and passwords. Her co-operation, and her admissions, count in her favour.
The defendant was arrested on 22 July 2020. She first appeared in the Hobart Magistrates Court on 14 December 2020 and was committed to this Court on 7 June 2021. By 31 August 2021 she had indicated through her counsel that she would be pleading guilty to the charges.
I accept the defendant’s plea of guilty is an early one. It is indicative of her acceptance of responsibility, facilitates the course of justice and avoids the need for what would be a lengthy and potentially complicated trial. Although there had been a substantial internal audit conducted by the Chief Financial Officer of Tasmanian Veterinary Services, and a thorough investigation by Tasmania Police, had the matter proceeded to trial it is feasible that further forensic accounting would have been necessary. The plea of guilty has mitigatory value in the sentencing process.
The defendant is now 49. She has two adult children. She maintains the support of those children. Following the detection of her fraudulent behaviour, however, her marriage came to an end.
The catalyst for Ms Perri’s offending appears to be the need to satisfy a severe gambling disorder. There is no evidence the commission of the crimes arose from need, but nor is there any suggestion the crimes were committed to support an extravagant lifestyle. Tendered on the sentencing hearing was a forensic psychiatric report prepared by Dr Michael Jordan. Dr Jordan opines the defendant suffers from a severe gambling disorder. It appears as though she has suffered from this gambling disorder for most of her adult life.
In his report Dr Jordan notes, inter alia:
“[5] Ms Perri indicated that she had not partaken in any further gambling type behaviour since November 2019. Prior to that she described two decade long periods of intense gambling. Throughout those periods she was often cognitively preoccupied with the pursuit of gambling and had made repeated albeit unsuccessful efforts to control her gambling. She noted that when she attempted to pull back on her gambling, she had become restless but accepted that she had gradually been spending increased amounts of money on the pursuit over many years …”.
By way of gambling history, Dr Jordan’s report notes as follows:
“[10] Ms Perri indicated that she accessed the Launceston Casino ‘the day I turned 18’ … she very quickly became thrilled by various gaming machines but in particular pokies in and around that period. She recalled on one of those early sojourns into the Casino, how she won $26.00 from a starting point of $1.00 and ‘it went on from there’. She continued to concentrate on poker machines in that era but soon ran into financial difficulties. That provoked her stealing funds from a contemporaneous employer which she stated was approximately $30,000 over a 1 to 1½ year period. She would eventually be charged and convicted with a significant number of stealing offences related to the acquirement of those funds.
[11] The legal process had the effect of Ms Perri attempting to reduce her gambling and … for the next approximate 10 year period (between the ages of 25 and 35), she resisted all gambling opportunities.
[12] Ms Perri returned to gambling again towards the end of the 2000s … she quickly began to accumulate debt again and estimated that approximately 10 years ago she had debt of approximately $200,000. She indicated that she had taken out a suite of loans and at one stage had nine separate credit cards. … She recalled one session where she spent almost 16 hours continuously playing a machine.
[13] Ms Perri’s gambling habits changed with the advent of mobile phones and various gambling apps. In 2014 Ms Perri began on-line gambling and a particular game known as Hearts of Vegas. This game allows the player to access an electronic poker machine and funds were provided by virtual coins… … The winnings as virtual coins cannot be redeemed for any monetary benefit.
[15] Between 2014 when she began using the app and 2017 when she indicated that she started to draw funds from her employer, she continued to accumulate debt. This continued to take the form of multiple credit cards and at least three personal loans. By 2017 Ms Perri was struggling to make the minimum payments on the various credit cards and loans and this appeared to precipitate her fraudulent activity.
[18] Ms Perri would meet all those criteria placing her level of (gambling) disorder in the severe category. Ms Perri has had significant problems with gambling for extensive periods of her adult life. It is noted that it led to previous legal transgressions when younger and this pattern has occurred again. It is considered that her gambling disorder was the most significant factor in her fraudulent activity. As has been outlined above, most of her more recent gambling interactions have been essentially mindless with no hope of any financial gain. … Ms Perri merely gambled for the joy of gambling. The level of fraudulent activity is very significant and again is testament to the severity of Ms Perri’s gambling disorder.”
I take into account the entirety of Dr Jordan’s report. I accept the defendant suffered from a severe gambling disorder. It is necessary to consider the extent to which this mitigates sentence. In Johnstone v Tasmania [2011] TASCCA 9, Blow J (as he then was) noted at paragraphs 13 and 14:
[13] Much has been written as to whether, for sentencing purposes, a gambling addiction should be treated as a mitigating factor and, if so, what weight should be given to that factor. Redlich JA undertook a thorough review of the principal authorities in R v Grossi (2008) 23 VR 500 at pars[47] – [57]. At the risk of oversimplifying, I think it can be said that the following principles emerge from his Honour’s analysis:
- In the words of Redlich JA at par[52],’It would be an unusual case where evidence of addiction to gambling would have any significant effect upon the importance of the element of general deterrence.’ (See also R v Powell (2001) 81 SASR 9; Assi v R [2006] NSWCCA 257 at par[27]; Garnsey v Stamford (2002) 131 A Crim R 427 (Underwood J (as he then was)) at pars[11] – [15].)
- Stealing because of a gambling addiction should be regarded as less morally culpable than stealing because of pure greed, or stealing in order to fund some other criminal activity: R v Grossi at par[51]; Vu v R [2006] NSWCCA 188 at par[74] per Hall J; R v Henry (1999) 46 NSWLR 346 at par[225].
- Gambling addiction has been treated in the same manner as conditions induced by drugs or alcohol which, as a general rule, do not require any significant moderation of sentencing considerations such as denunciation and deterrence: R v Grossi at par[53].
- A gambling addiction, like any other mental condition, may or may not reduce moral culpability. Whether it should do so and, if so, the extent to which it should do so, will usually depend upon the nature and effect of the symptoms, its effect on the mental capacity of the offender, and the nature and seriousness of the offences committed: R v Grossi at par[55].
[14] In this case the learned sentencing judge was not provided with a report from a psychiatrist or psychologist, though she was provided with a pamphlet that outlined some of the characteristics of a gambling addiction. However the facts as to the appellant’s gambling activities during the relevant 6½ weeks spoke for themselves, and the Crown did not dispute an assertion by defence counsel that his conduct was attributable to a gambling addiction. In the light of R v Grossi and the cases referred to by Redlich JA, I do not consider that this Court should treat as mitigatory the fact that the appellant offended, and offended on a massive scale, because of a gambling addiction. However I do regard it as very significant that he had no insight into his gambling addiction, nor as to the extent of the losses he was causing, until after he ceased offending. There are a number of very powerful mitigating factors that are relevant in this case, but the gambling addiction, of itself, is not a significant one.”
Further, in Deakin v Tasmania [2016] TASCCA 19, Wood J noted:
“[39] There was no assertion in the plea in mitigation before the sentencing judge that the gambling habit had impaired the appellant’s mental functioning or contributed to the offending conduct. The sentencing judge was not provided with a report from a psychiatrist or a psychologist that established a nexus between the appellant’s gambling habit and his offending, or that suggested that his habit had any effect upon his mental functioning. Even if such a nexus had been established and his mental functioning had been affected, there would have been a need to assess the nature and severity of the symptoms and whether his impaired mental functioning had any of the effects stated in Verdins at [26]. Impaired mental functioning may reduce an offender’s moral culpability if it had an effect such as impairing an ability to exercise appropriate judgment, or to think clearly, or to appreciate the wrongfulness of the conduct. In any case, the nature and seriousness of the offence may suggest that moral culpability is still significant, and general deterrence must remain an important objective.”
Bearing those authorities in mind, I note that here there is no suggestion in the report of Dr Jordan that the gambling disorder from which the defendant suffered was to such an extent as to impact upon Ms Perri’s mental functioning. There is no proper basis to consider that the factors enunciated in Verdins are enlivened.
Certainly the gambling addiction provides a motive for the commission of the crimes and an explanation for their occurrence. I do not consider the Court should place any significant mitigatory weight upon the fact the defendant offended in the manner she did, because of her gambling addiction. Gambling being the motive for the offending remains a relevant factor when assessing her criminality and moral culpability, but this has to be tempered against the fact that the offending occurred over an extended period of time and involved a very large amount of money. The defendant had a degree of choice to exercise as to how she might finance her addiction, and she chose on 475 separate occasions to defraud an employer who had placed considerable trust in her.
Moreover, I am satisfied the defendant had insight into what she was doing, knew she should stop, and elected not to. This is apparent from the comments she made to police in her record of interview when she said – “I got myself into so much trouble but I decided that I might as well keep going until I got caught”. In light of this, in my view, any reduction in moral culpability is slight, at best.
And of course, the defendant has a prior conviction for stealing from an employer to fund her gambling habits. She was convicted in the Launceston Court of Petty Sessions on 23 February 1998 for 25 charges of stealing on complaint 22919/97, and a further 3 charges of stealing on complaint 20245/97.
She received by way of sentence 12 months’ imprisonment wholly suspended on condition she commit no offence of stealing for a period of 3 years on the first complaint, and a 2 month period of imprisonment concurrent and also wholly suspended, on condition she commit no offence of stealing for 3 years on the second complaint. I am told the offences relate to stealing from her then employer, Bruce Stevenson’s Toyota. The defendant was employed as a clerk and stole money that she had received for payment of a motor vehicle and stole funds that were daily takings that she was responsible for banking. Regard is had to the length of time that has passed since those convictions, the considerably smaller amount of money involved, and the age of the defendant at the time those offences occurred. The defendant cannot claim, however, that she is of prior good character. She has stolen money from an employer before to fund a gambling addiction.
I have taken into account the character references provided on behalf of the defendant. Those references indicate that she is well-regarded, competent and professionally capable. Ms Perri has been able to obtain employment since the commission of these crimes. She was, until being placed in custody, employed as a practice manager at the Hobart Animal Hospital. She has held that position of employment since August 2019. The references indicate her employers are aware of these crimes, but nevertheless consider her a valued and skilled employee. In my view, the references carry little weight in the sentencing process, particularly when measured against the very serious offending committed by the defendant over a long period of time, and the fact she has previously stolen from an employer. These factors negate any claim of good character. The fact she is obviously a capable employee, however, is relevant to the prospects of rehabilitation, if the defendant is able to successfully address her gambling disorder.
It is noteworthy that Ms Perri has not repaid any of the stolen money to Tasmanian Veterinary Services nor Citicorp. She has made some repayments on other outstanding bank and credit card debts but that is of no assistance to the victims here and does not provide any redress for them. It is unlikely they will receive any payment. It is possible a small proportion of the loss may be recovered from the sale of real estate, but the home owned by the defendant and her husband is heavily mortgaged. Her husband will be entitled to some of the equity in the home. Repayment of the loss in those circumstances is unlikely.
I accept Ms Perri is now remorseful for her conduct. Her early plea of guilty, and co-operation with police, is reflective of that. She has also made a number of comments to others, referred to in the references, suggesting she is remorseful for her behaviour. But again, the value of that remorse in the sentencing process has to be measured against the fact Ms Perri continued with her offending behaviour over a very long period of time in circumstances where she must have appreciated the impact her dishonest behaviour would have on the well-being of a small business and its partners.
I take into account the fact Ms Perri has been endeavouring to address her gambling addiction. She has been attending Gamblers Anonymous for a period of about two years. She has also been seeking psychological assistance and undertaking cognitive behaviour therapy. It is likely that Ms Perri will require ongoing assistance given the severe nature of her gambling addiction. As noted in Dr Jordan’s report, “Ms Perri will always remain susceptible to future periods of gambling. Her degree of gambling disorder is at the most extreme end and will always leave her vulnerable into the future.” Her efforts at addressing her gambling addiction count in her favour, but personal deterrence remains an important sentencing consideration.
The defendant’s crimes have had a significant effect upon the business Tasmanian Veterinary Services. I have read the victim impact statement prepared on their behalf. It is trite to say a loss of this magnitude from a small business has an enormous impact, let alone the feelings of betrayal that have been experienced as a consequence of the defendant’s behaviour.
This is a case of very serious fraud involving a very substantial amount of money taken over a long period of time, by an employee in whom a high level of trust was reposed by her employer. General deterrence and denunciation are predominant sentencing considerations. The defendant committed a gross breach of her employer’s trust. As practice manager she was solely responsible for the payment of business expenses and associated liabilities for the business. In a sustained, deliberate and methodical manner, she used her knowledge of the operations of the business to dishonestly benefit herself and conceal her fraudulent behaviour over several years. Throughout that time the defendant committed numerous acts of dishonesty. She actioned 475 fraudulent transactions. She did not voluntarily desist from her fraudulent behaviour. It only stopped when her position was made redundant.
In all of those circumstances, a substantial term of imprisonment must be imposed. In the hope the efforts made by the defendant to curb her gambling addiction may prove sustainable, I will make allowance for parole. I will impose one sentence. It is, in my view, the most appropriate way to reflect the entirety of the criminal conduct and take into account principles of totality.
Rachel Perri you are convicted on each count in the indictment. I make compensation orders in favour of Citigroup Pty Ltd in the sum of $24,218.08 and in favour of Tasmanian Veterinary Services Pty Ltd as trustee for the Tasmanian Animal Hospital Services Trust in the sum of $940,221.47, such amounts to be payable within 28 days.
You are sentenced to imprisonment for a period of 6 years commencing on 22 November 2021, the date you went into custody. I order that you are not eligible for parole until you have served 3 years and 6 months of that sentence, which is the minimum time I consider justice demands you should serve having regard to all the circumstances.