Richie Sambora' Judge hands down sentence March 21, 2008

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READ the full sentencing remarks from His Honour Judge Wayne Chivell in the controversial 'Richie Sambora' fraud trial.

DISTRICT COURT - ADELAIDE

BEFORE HIS HONOUR JUDGE CHIVELL

R v ROMEO PACIFICO AKA RICHARD SAMBORA

HIS HONOUR IN SENTENCING SAID:

"Romeo Pacifico, also known as Richard Sambora, you have pleaded guilty to all 19 counts on the information dated 18 July 2007 which are 18 counts of demanding on a forged instrument contrary to s.234A of the Criminal Law Consolidation Act and one count of false pretences contrary to s.195 of the same Act.

The maximum penalty for the forgery charges is 14 years imprisonment and the maximum penalty for the false pretences charges is four years imprisonment. That is on each count.

You have also asked me to take into account another 17 offences against s.234A. They involve obtaining finance in the total sum of $7,579,059.80. These offences occurred between January 1998 and April 2002. They involved obtaining money from finance companies using forged documents.

I am told that you were born Romeo Pacifico on 2 March 1964. You changed your name at the Registry of Births, Deaths and Marriages on 7 March 2002 to Richard Sambora. It would appear that you did that in order to try and obtain further lines of credit. Although that legally remains your name, I will refer to you in these remarks as Pacifico, as it would appear you have reverted to using that name.

You are now 44 years old. You were born in Adelaide. Your parents migrated from Italy, and your father built up a successful business as a concreter. Both of your parents are still alive. You had a good relationship with them. You did not get into significant trouble as a child. You attended a private school and completed year 11. You studied accounting at TAFE for two years full-time, and four years part-time. After you were qualified, you worked in the finance department of the Royal Adelaide Hospital for eight years, and also worked with your father part-time.

You left the hospital in 1990 and started up your own business using a concrete pump contracted to Fairmont Homes. It would appear that the Pickard family also financed the purchase of your first pump. Unfortunately, you struck difficult times in the early 1990s, when the housing industry suffered in the recession. In 1995, you were fortunate to get a contract with Western Mining at Roxby Downs. Initially the contract was for six months, but it was then extended. During that time, your business expanded greatly, and by 1999, you were operating a total of 12 machines which cost a total of $14 million.

By 2002, you had lost everything as a result of your offending.

The summary of facts which has been compiled by Mr Heffernan on the instructions from the Director of Public Prosecutions, and which has been admitted through your counsel, Ms McCrohan, described the offences you committed in detail. It is not necessary to repeat all of that information here, but it is obviously true that you became hopelessly over-geared, you were unable to service the repayments on the money you had borrowed, so you began robbing Peter to pay Paul, in Mr Heffernan’s terms, using forged documentation to satisfy the finance companies of your financial health.

It must be observed that these companies were very ready, or seemed very ready, to lend large amounts of money to you on what seemed to me to be relatively flimsy evidence of credit-worthiness. Indeed, the world financial system is just now coming to terms with the economic effects of a decade of irresponsible lending. However, that does not reduce in any way the moral blameworthiness of what you did. You effectively stole this money, and it does not render you any less a thief that you had credulous victims.

I will now briefly describe the details of each count on the information.

Count 1 occurred in May 1999 when you obtained $269,970 from GIO Finance by producing forged bank statements and an Australian Taxation Office assessment notice. You paid the money to Powercrete, a manufacturer of concrete pumps, and then cancelled the order and they refunded the money to you. The money was used to repay other loans for a deposit on a car, to pay for real estate and other expenses. $160,000 remains outstanding.

Counts 2 and 3 were in August 2001 when you obtained finance from Australian Integrated Finance, which I will refer to as AIF, to purchase a new concrete pump from Walker Engineering. You sold two more Powercrete concrete pumps to AIF and then leased them back. This was all done in your wife’s name, again using forged ATO invoices and bank statements. You obtained a total of $2.8 million of which $2.624 million remains outstanding.

Count 4 relates to September/October 2001 when you obtained finance from AIF to purchase four concrete pumps from Walker Engineering. This again was done in your wife’s name. You used the same information as you did in counts 2 and 3, plus further forged documents including bank statements. AIF paid $3.058 million to Walker Engineering, but the pumps were not supplied and Walker Engineering refunded the money to your bank account. Most of the money was used to pay other commitments, but $46,000 was paid on a credit card and $50,000 was used as a deposit on a Chevrolet motorcar. About $2.3 million of this money has not been repaid.

Count 5 relates to the period between November 2001 and January 2002. You obtained finance from AIF, again to purchase three concrete pumps. Again, you used forged documents, including ATO notices for your wife and bank statements. Most of the money found its way back into your accounts, which you then used to pay other financiers and lease payments on luxury cars. Indeed, some of the money was used to pay off the previous loans taken out from AIF. The total amount outstanding on these loans was $1.298 million.

Count 6 relates to the period between September 2000 and November 2000 when you obtained from Bendigo Bank $500,000 to purchase a new concrete pump. You already owed Bendigo Bank $2.5 million dating back to 1996. You used forged ATO notices and bank statements. You produced the invoice from Walker Engineering which falsely stated that you had already purchased the pump. The money was then paid by Walker Engineering to you and was used to pay off other commitments and, in turn, this loan was repaid in full using money which you later obtained fraudulently through the use of forged documents.

Count 7 relates to the period between June and July 2001. You had already borrowed money from BMW Finance over the previous two and a half years to purchase four Ferraris, one Mercedes, a BMW and a Mercedes truck. You obtained a further $459,000 to purchase a concrete pump on a truck from Walker Engineering using a forged ATO notice. The money was paid to North-East Isuzu, who kept $229,000 for the truck, and paid back the rest to you because you produced a false invoice stating that you had already purchased the pump yourself. The truck was repossessed, but the pump was never purchased. BMW Finance lost $144,000 as a result of the transaction. Most of the money was used to pay off other financial obligations.

Count 8 relates to a period between May and June 2001 when you obtained finance from Capital Finance. They paid $665,000 to Walker Engineering to purchase a new truck-mounted concrete pump on the false basis that you already had paid $270,000 deposit. The total liability on this loan was $724,000. You used forged ATO notices and bank statements in your wife’s name to induce the financier to pay the money. Walker Engineering provided a further invoice because they thought you were refinancing the equipment. They put the money in your bank account which you then used to pay off other loans and private debts. You then sold this equipment as if it was unencumbered. Capital Finance lost a total of $364,000 as a result of this transaction.

Count 9 relates to a period between October and November 2000 when you obtained finance in your wife’s name from DaimlerChrysler in the sum of $360,000, again ostensibly to purchase a concrete pump from Walker Engineering. You used forged bank statements and pretended you had already paid $311,000 deposit on the purchase. Again, Walker Engineering took the money and then credited you in relation to a different concrete pump that you had already purchased. DaimlerChrysler lost a total of $95,000 on the transaction, and the pump was never recovered.

Count 10 relates to the period between April and July 2002 when you made an application to obtain from GE Finance $737,000 to purchase a truck-mounted concrete pump from Walker Engineering. You supplied forged documents, including bank and ATO documents to induce the finance company to pay the money, but the police intervened and the money was not advanced.

Count 11 relates to 2 March 2001 when you obtained finance in the name of Antonio from McQaurie Leasing to purchase a Holden Monaro motor vehicle. The car was repossessed after they discovered that the name Antonio was an alias. You used forged documents, including a driver’s licence in the name of Antonio, and ATO documents. The finance company lost about $10,000 as a result of the transaction.

Count 12 relates to the period between March and May 2002 when you obtained finance from the National Australia Bank ostensibly for the purchase of a truck-mounted concrete pump using forged bank and ATO documents. A total of $867,000 was paid to Walker Engineering. They thought you were refinancing equipment, so they raised a further invoice for the money and then paid the money over to you. You used the money to repay other loans. The National Australia Bank lost a total of $827,000 as a result of the transaction.

Count 13 relates to the period between February and March 2001 when you obtained $869,000 from Orix Australia, again ostensibly to purchase a truck-mounted concrete pump which was in fact the same pump referred to in count 9. You used forged ATO documents in the process. The money was paid to Walker Engineering and was used to pay an outstanding account in relation to a different concrete pump. $238,000 was remitted to you which you then used to repay other loans and private expenses, real estate payments, etc. $607,000 remains unpaid to Orix as a result of this transaction.

Count 14 relates to the period between April and May 1999 when you obtained finance for the hire purchase of the same concrete pump referred to in counts 9 and count 13 from PACCAR in the sum of $790,000 using forged bank and ATO documents. The money was paid direct from Walker Engineering who had already supplied the pump to you, but they raised another invoice as again they thought you were refinancing. They paid the money direct to you which you then used to pay off other accounts, including money that was previously outstanding to PACCAR. $501,000 remains unpaid as a result of this transaction.

Count 15 relates to your obtaining $340,000 from the Rabo Bank for the hire purchase of a concrete pump, again using forged bank and ATO and accountants’ financial statements. Again, the money was paid to Walker Engineering direct and they took $250,000 which you already owed them and then returned the rest to you. The money basically disappeared into the general financial mess you were in at the time and has not been traced.

Count 16 relates to the period between April and May 1999 when the St George Bank financed you to the extent of $660,000 again ostensibly for the purchase of a concrete pump using a forged invoice from Powercrete. The concrete pump never existed. You paid $81,000 for the truck and kept the rest which you then used on general payments, including credit cards and real estate. You used forged bank and accountants’ financial statements to induce the finance company to pay you the money. $142,000 of the money remains outstanding.

Count 17 relates to the period between October and November 2001 when Service Finance advanced $660,000, again ostensibly for the purchase of a truck-mounted concrete pump. The money went to Walker Engineering, and you told them you were refinancing so they raised another invoice which you again used to present to the finance company. By an elaborate ruse, you were able to convince the finance company that you had paid $365,000 deposit on this transaction and you then kept $295,000 of the money which then disappeared into the financial quagmire that you were then in. You used forged bank and ATO documents to induce the finance company to part with the money and $426,964 remains unpaid.

Count 18 is the count of false pretences that I referred to earlier. In this case, Toyota Finance advanced $410,000 for the purchase of a truck on a hire purchase agreement. You did not buy the truck, and the pump never existed. Stillwell Trucks sent you the registration certificate on the truck so that you could insure it. You never paid for the truck and never collected it. Stillwells sold the truck to someone else after they cancelled the transaction, but you used the registration certificate to deceive Toyota Finance into thinking that you had already purchased the truck. They lost $250,000 on this transaction. A finance broker paid $75,000 in damages, presumably because of their role in the loss. The money could not be traced by the forensic accountants who attempted to unravel this mess, and it is not known where the money went.

Count 19 relates to the period between November and December 1999 when you obtained $1.07 million from Volvo Finance ostensibly for the sale and lease back of two concrete pumps. One was the same pump referred to in counts 9, 13 and 14 and the other is believed to be the one in count 15. The funds were paid to you after you presented forged ATO and bank documents to the finance company. In relation to the first pump, Walker Engineering raised an invoice which was falsely marked ‘paid in full’ for a pump which you had not paid for and the pump had not been ordered. The second concrete pump was supplied, but again the invoice was made ‘paid in full’ which was not true. A total of $969,000 remains unpaid in relation to this transaction.

On a further information which, by consent, was called up from the Magistrates Court, you pleaded guilty to one count of deception contrary to s.139A of the Criminal Law Consolidation Act. You were on home detention bail at the time this offence was committed. You had already pleaded guilty to the earlier 19 charges that I have just outlined by that time. The charge which you admit is that you obtained two mini loaders to the value of $71,000 by deception. Because the offence is aggravated by the fact that you were on home detention bail at the time the offence was committed the maximum penalty for that offence is 15 years imprisonment.

You approached DWAK Engineering using a false name about the purchase of this equipment. You then went to a company called Iden Leasing through a finance company, they then approved finance in the amount of $220,000 on the basis that you had presented false documents to them. You obtained possession of the two mini loaders, but the police intervened before you were able to get your hands on the other equipment which you had also ordered. One of the loaders had already been traded in but the other one was recovered. The prosecutor now accepts that you repaid some of the money and the balance outstanding is about $32,000.

Also associated with this charge is a further count of breach of bail to which you have also pleaded guilty. The same facts are relied upon by the Director of Public Prosecutions in relation to this charge. Because the facts involved are the same the Director of Public Prosecutions agrees that I should not impose any further penalty in relation to that count.

Apart from the 2007 offence, the total amount that you obtained, or sought to obtain, by either the uttering of forged documents, or by false pretences, was $25,639,133. Much of this money was used to pay off other loans which were included in the total. In all, the victims lost $8,742,319 as a result of your criminal behaviour.

The psychologist, Mr Balfour, has said that you do not suffer from any psychopathology, although he notes you have a depressed mood as a result of your incarceration, your marriage breakdown, the financial disaster which has befallen you, and the prospect of a prison sentence. He commented that the prospect of your re-offending very much depends upon your own decisions and not upon external factors.

You have expressed both to Mr Balfour and in the letter you wrote to me your remorse for what you have done. You accept that you have done particular damage to your family and to yourself. It is true, however, as Mr Heffernan pointed out, that you have not expressed any regret for the losses suffered by your victims, the financiers involved. While it is easy to assume that the losses they suffered will be absorbed by them as big corporations, in fact the reality is that these losses will be passed on to other consumers, other ordinary members of the community. It is therefore a cost which will have to be borne by the entire community in the longer term.

I have reviewed the authorities which have been referred to me both by Mr Heffernan and by Ms McCrohan, and the submissions they have made based upon those authorities. It is difficult to compare directly the offences imposed in the various cases as many different factors are at work in sentencing for crimes of this nature. For example, the maximum penalties vary widely; some of the offences were committed in different contexts: for example, regulatory offences against the Corporations Law, and some were committed by persons in positions of trust against elderly or vulnerable victims.

There is no doubt that these crimes constitute a deliberate, complex and sustained course of deception over more than four years. Indeed, your counsel expressly acknowledged that fact.

You were not in a position of trust, as the law describes that term, but the amounts of money you received are extremely large and there is no prospect that you will be able to repay the more than $8 million which remains outstanding.

The offending, to quote Debelle J in the case of Cavanagh was ‘premeditated, deliberate and repetitive’. It was a form of stealing and stealing on a grand scale.

You have no relevant previous convictions but that is not unusual in these cases. If you had convictions, credit checks might have prevented you from obtaining access to this money.

The sentence must act as a general deterrent to those in commerce who may be tempted to use deceit to get them out of financial trouble, as well as a deterrent to you if you might be tempted to behave in this way again.

You may feel that you intended throughout this period to repay everybody and that the situation simply went out of your control. Firstly, if you did believe that, you were wilfully deluding yourself. Secondly, to paraphrase Sulan J in the case of Dubois, while your intention may be marginally less blameworthy than that of a thief who has no such belief, that is outweighed by the cleverness and deceitfulness of the conduct.

I also do not accept that your conduct was entirely motivated by the need to repay your creditors. There is evidence of the purchase of luxury cars, for example, the repayment of very large credit card accounts which evidence suggests that at least some of the money was used to finance an expensive lifestyle. Large sums of this money remain missing and are untraceable and you have not provided a satisfactory explanation of where it all went.

I do agree with the submission of Mr Heffernan that the fact that you involved innocent parties in your offending, thereby subjecting them to the risk of investigation and possibly damage to their reputation, adds to the seriousness of your offending. I refer in particular to your then wife, and the various agents and brokers and retailers who became involved in the web of deception which you created.

You have a high work ethic and obviously a determination to succeed. I accept there is a relatively low risk you will re-offend once you are released. Having regard to the scale and the type of offending, however, a suspended sentence is out of the question.

I take into account your pleas of guilty, they were not made at the earliest opportunity and the case against you was overwhelming. However, the trial would have been a very long and complex business and it would have been extremely expensive to the community. To the extent that the expenditure of this money has been avoided you are entitled to credit for that. I also accept that your plea is motivated at least to some extent by remorse with the qualifications that I have just mentioned.

Having regard to the large number of offences involved here, all of which have the same maximum penalty, except for the false pretences charge, count 18, if the sentence for each of the 19 counts on the information were aggregated according to their individual seriousness, I would expect a sentence of between three and four years on each of the 18 counts of forgery and one to two years on the false pretences charge.

The total sentence as a result of that exercise would result in a sentence the totality of which would be oppressive and out of proportion to the seriousness of the overall offending.

In all the circumstances, I impose one sentence pursuant to s.18A of the Criminal Law Sentencing Act in respect to all 19 counts on the information, dated 18 July 2007. I start with a sentence of 15 years imprisonment. I reduce that to 12 years on account of your plea of guilty.

Having regard to the time when you first went into custody, I order that sentence commence on 3 September 2007.

As to the 2007 offence, the fact that you embarked upon a similar course of deceptive conduct while you were on home detention bail for these other offences is especially outrageous. That circumstance also makes the offence an aggravated one, as I have already mentioned, and that takes the maximum penalty from 10 to 15 years.

Again, the amount involved is substantial, the deal you constructed was complex and a number of different people and companies were drawn into it. It was premeditated and deliberate and repetitive of your earlier conduct. The fact that it was motivated by some desire to provide for your son and your aged parents, whom you had already put into difficult positions as a result of your earlier criminal behaviour, does not in any way excuse the commission of the offence.

I start with a sentence of five years imprisonment. I reduce it to four years imprisonment on account of your plea of guilty, the period of six days or so you spent in custody, and the period you spent on home detention bail. I order that the sentence be cumulative on the sentence I imposed for the earlier offences.

That makes a total of 16 years imprisonment.

As to the non-parole period, I note the comments in the Supreme Court case of Dubois where the court said that the considerations of general and personal deterrence apply just as much to the setting of the non-parole period as they do to the head sentence. Taking all the circumstances into account, I fix an overall non-parole period of 10 years, also to commence on 3 September 2007.

As I said earlier, as to the offence of breaching bail there will be a conviction without further penalty.

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