Sentencing for fraud and fraud-related offences

The Attorney General has asked us to review sentencing for fraud and fraud-related offences in New South Wales, especially but not limited to offences in Part 4AA of the Crimes Act 1900 (NSW), and to make any recommendations for reform that we consider appropriate.

This page includes some background information and questions to guide preliminary submissions.

The terms of reference and Attorney General's media release are now available.

To be kept updated about this review, you can join our mailing list.

Questions to guide preliminary submissions

We are calling for preliminary submissions that address the issues raised by the terms of reference. 

Submissions are due by Monday 31 January 2022.

In particular, we invite submissions on the following questions:

• What factors should courts take into account when sentencing for fraud?
• Are the purposes and principles of sentencing being applied appropriately in sentencing for fraud? Why or why not?
• Are the maximum penalties for fraud offences under Part 4AA or other fraud offences adequate? Why, or why not?
• Are the sentences imposed by the courts for fraud offences under Part 4AA or other fraud offences adequate? Why or why  not?
• Does sentencing for fraud appropriately respond to the needs of fraud victims?

The main provisions (Part 4AA)

Part 4AA of the Crimes Act sets out four offences.

The main provision, s 192E, states that a person is guilty of fraud if they, by any deception, dishonestly obtain another's property or obtain any financial advantage or cause any financial disadvantage. This offence has a maximum penalty of 10 years imprisonment.

Two offences apply where a person engages in a specified activity with the intention of obtaining another's property or obtaining any financial advantage or causing any financial disadvantage. Each has a maximum penalty of 5 years imprisonment. The specified activities are:

• dishonestly destroying or concealing any accounting record (s 192F), and
• dishonestly making or publishing (or concurring in making or publishing) any statement (whether or not in writing) that is false or misleading in a material particular (s 192G).

The final offence states that an officer of an organisation is guilty of an offence if, with the intention of deceiving the organisation's members or creditors about its affairs, they dishonestly make or publish (or concur in making or publishing) a statement (whether or not in writing) that to their knowledge is or may be false or misleading in a material particular (s 192H). This offence has a maximum penalty of 7 years imprisonment.

All offences under Part 4AA are to be tried summarily unless the prosecutor or the accused elects otherwise. When finalised in the Local Court the jurisdictional maximum of 2 years applies for each offence and the total term of sentences for multiple offences cannot exceed 5 years.

Part 4AA was inserted in the Crimes Act via the Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009 and commenced in 2010. The amendments replaced a number of existing offences and was intended to bring NSW more into line with the national approach to fraud as set out in the Model Criminal Code (1995). However, some aspects of the Model Criminal Code were not adopted and NSW continues to rely on the common law for some elements of offences.

The new provisions were reviewed and analysed by Judicial Commission of NSW: R Johns, Sentencing in fraud cases, Research Monograph 37 (2012).

Some sentencing statistics for the main fraud offence (s 192E)

Only s 192E has sufficient data for meaningful statistics. NSW Bureau of Crime Statistics and Research (BOCSAR) data indicates that in 2019 approximately two-thirds of all finalised charges for fraud and fraud-related offences were for offences under s 192E (a total of 13,326 finalised charges). The other Part 4AA offences are sentenced no more than 20 times a year on average.

BOCSAR data indicates that in the 2.5 years from the commencement of the sentencing reforms in September 2018 until March 2021:

• The Local Court has sentenced offenders on 4647 occasions where the fraud offence (s 192E) was the principal offence. The Local Court imposed a sentence of imprisonment in 759 cases (16%), an intensive correction order in 581 cases (13%), a non-custodial order in 2269 cases (49%), and a fine in 1038 cases (22%).
• The District Court has sentenced offenders on 80 occasions where the fraud offence (s 192E) was the principal offence. The outcomes reflect the more serious nature of offences that are tried on indictment in the District Court. The District Court imposed a sentence of imprisonment in 55 cases (68%), an intensive correction order in 14 cases (18%), and a non-custodial order in 12 cases (15%).

Other fraud offences

The NSW fraud offences outside of Part 4AA range widely in maximum penalties (from fine only offences to 10 years' imprisonment). These fraud offences do not come before the courts as frequently as the s 192E offences.

BOCSAR data for 2019 identified finalised charges for 232 discrete offences (70 Commonwealth and 162 NSW) that fit within the category of fraud or related offences. Leaving aside the 13,326 finalised charges for s 192E, these represented 5,799 finalised charges (855 Commonwealth and 4,944 NSW).

In 2019, NSW fraud offences involving between 100 and 800 finalised charges included:

• identity offences under the Crimes Act 1900 (NSW) (maximum penalties ranging from 3 to 10 years)
• making false or misleading entries in a work record for a heavy vehicle (maximum penalty: $10,000)
• larceny by clerks or servants (maximum penalty: 10 years)
• providing false or misleading information to pawnbrokers and second-hand dealers (maximum penalty: $5,500)
• using a false document (maximum penalty: 10 years)
• embezzlement by clerks or servants (maximum penalty: 10 years)
• larceny by a bailee (maximum penalty: 5 years)

In relation to sentencing for other fraud offences, statistics from BOCSAR covering both NSW and Commonwealth fraud and fraud-related offences show that, in the 5 years from 2016-2020:

• offences involving deceptive business or government practices were sentenced as a principal offence on 203 occasions. Of these 6.9% resulted in a sentence of imprisonment, 43.8% resulted in a non-custodial sentence, and 46.8% resulted in a fine.
• offences involving forgery and counterfeiting were sentenced as a principal offence on 410 occasions. Of these 29% resulted in a sentence of imprisonment, 58.3% resulted in a non-custodial sentence, and 12% resulted in a fine.
  

These two categories of fraud offences involve a wide array of offences and maximum penalties. The category of deceptive business or government practices includes, for example:

• claiming to be a registered health practitioner while not registered (maximum penalty: 3 years)
• impersonating a police office (maximum penalties ranging from 2 to 7 years)
• carrying on the business of motor dealer while unlicensed (maximum penalty: 12 months)
• wearing or possessing a police uniform when not a police officer (maximum penalty: 2 years)
• representing ability to do residential building or specialist work without a relevant contractor licence (maximum penalty for individuals: $2,200 or 12 months for a second or subsequent offence)
  

Scope of the review

Commonwealth offences are not part of our review. However, the sentencing principles applied by the courts when sentencing for Commonwealth offences will generally also be relevant to sentencing the NSW offences.

Commonwealth fraud and fraud-related offences include:

• obtaining property or financial advantage by deception (under s 134.1 and s 134.2 of the Criminal Code (Cth))
• obtaining financial advantage without being eligible (under s 135.2 of the Criminal Code (Cth))
• possessing or uttering counterfeit money (under s 7 and s 9  of the Crimes (Currency) Act 1981 (Cth)), and
• possessing or dealing in goods with false trade marks (under s 148 of the Trade Marks Act 1995 (Cth)).      
  

We also note that some fraud can be resolved outside of the criminal justice system. These resolutions are not part of our review.