CDPP v Boillot [2018] VSC 739 (6 December 2018)

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COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS

v

CHRISTIAN BOILLOT

JUDGE:	Hollingworth J
WHERE HELD:	Melbourne
DATE OF HEARING:	27 November, 6 December 2018
DATE OF SENTENCE:	6 December 2018
CASE MAY BE CITED AS:	CDPP v Boillot
MEDIUM NEUTRAL CITATION:	[2018] VSC 739

CRIMINAL LAW – Conspiracy to offer to bribe foreign public official – Plea of guilty – Prior good character – Little need for specific deterrence – General deterrence – Very substantial delay – Offending not committed for personal gain – Parity considerations – Sentenced to 2 years and 6 months’ imprisonment, to be released immediately on a recognisance release order – Criminal Code 1995 (Cth) ss 11.5(1) and 70.2(1).

APPEARANCES:	Counsel	Solicitors
For the CDPP	Mr R Maidment QC	Commonwealth Director of Public Prosecutions

For Mr Boillot	Mr C Mandy SC	Doogue & George

1 Christian Boillot, you have pleaded guilty to one charge of conspiring with Note Printing Australia Limited, Securency International Pty Ltd and others, to offer to bribe a foreign public official of Bank Negara Malaysia, in order to obtain or retain business in Malaysia.^[1] The period of your involvement in the conspiracy was between 1 October 2001 and 24 December 2003.

2 At the relevant times, NPA and Securency were subsidiaries of the Reserve Bank of Australia. NPA’s business included printing banknotes for the RBA and other central banks, using polymer substrate supplied by Securency.

3 You were employed in the international sales and marketing section of NPA from some time in the 1990s until January 2002, at which time you were appointed to a banknote specialist support position with Securency. You stayed in that role until December 2003.

4 The Malaysian conspiracy was one of several conspiracies entered into by Securency and/or NPA in South East Asian countries. In each affected country, one or both of the companies engaged a local agent to assist in obtaining contracts to supply their products to the local central bank. The local agents were remunerated by way of success-based commissions. The parties to each conspiracy agreed that the local agent would offer part of the commission to one or more bank officials, with the intention of improperly influencing them in the exercise of their duties.

5 The RBA had been paying substantial commissions to overseas agents since the early 1990s, before the incorporation of Securency. During the late 1990s and early 2000s, the boards of the RBA, Securency and NPA were well aware that very substantial, success-based, commission payments were being made to local agents (including in Malaysia) to obtain contracts with overseas banks. I do not know the extent to which individual board members knew or suspected that some part of the agents’ commissions were to be used to offer bribes to foreign bank officials;^[2] nor is it necessary for me to determine that for the purposes of sentencing you. It is sufficient to note that I am not sentencing you on the basis that you were the architect of the Malaysian conspiracy, or that you were involved in making any high level decisions about how the two companies would do business overseas.

6 In 1999 and 2000, NPA and Securency negotiated and entered into separate agreements with a Malaysian man, Abdul Kayum Syed Ahmad (“Kayum”), and his company, Aksavest Sdn Bhd, appointing them as their agent in Malaysia. The agency agreements provided that the agent was to be remunerated in the form of success-based commission. The agent was to bear the cost of any expenses incurred in order to obtain contracts. The conspirators were well aware that the agent would use part of the commission to offer illegitimate benefits to one or more officials of the Malaysian bank. Most of those arrangements had been entered into before December 1999 (the date when the foreign bribery provisions were introduced into the Crimes Act 1914 (Cth), and it became illegal under Australian law to pay or offer to pay bribes to foreign officials).

7 You joined the conspiracy in late 2001, when you first became involved in marketing to Malaysia. On numerous occasions over the next two years, you met or communicated with Kayum and others about the proposed arrangements with Malaysian bank officials. You were well aware that what you and others were doing was illegal, and was not something that should be openly discussed or documented.

8 The conspiracy ended in December 2003, when NPA entered into a contract to supply the Malaysian bank with 160 million 5 ringgit polymer banknotes. NPA used Securency’s polymer substrate in manufacturing the banknotes, and the contract price of $15.2 million included a price for that substrate.

9 NPA paid the agent commission totalling $2.19 million, which represented 17% of the contract price.

10 I have already sentenced Securency, NPA and Myles Curtis (the former CEO of Securency) for their respective parts in the Malaysian conspiracy. Similar Malaysian conspiracy charges against two former NPA managers, John Leckenby and Barry Brady, have been permanently stayed as a result of orders made by the High Court on 8 November 2018.^[3] You are the last person to be sentenced in respect of the Malaysian conspiracy.

(b) You were actively and centrally involved in the Malaysian conspiracy for just over 2 years; and

12 Although the gravamen of the offence of conspiracy is the agreement to participate in organised criminal activity, you participated in the conspiracy to promote your employer’s business, in a corporate culture where that was expected of you. That does not excuse your conduct, but it does mean that your moral culpability is less than that of other offenders who conspired purely for their own financial gain.

13 Before I turn to consider your personal circumstances, I wish to say something about the effect this offending has had on others. The prosecution rely upon the significant adverse effects that all of the foreign bribery offences have had on two “whistle-blowers”, James Shelton and Brian Hood.

14 Mr Hood joined NPA as its company secretary, the year after you had left. When he became aware of the companies’ illegal activities, he raised his concerns with the CEO, the NPA board, and a number of RBA officials. His attempts to report what was happening, and to change the corporate culture, were met with hostility and resistance. He was eventually made redundant.

15 Mr Shelton joined Securency in 2007, as the director of business development. When he realised that he was expected to take part in foreign bribery as part of his role, he too became extremely concerned. He raised the matter with the Australian Federal Police in 2008, but they appear to have done little to investigate his reports at that time. Mr Shelton was dismissed in late 2008.

16 As I have noted on earlier occasions, the corporate cultures at both NPA and Securency involved secrecy and a denial of responsibility for any wrongdoing; staff were discouraged from examining too closely the arrangements in relation to overseas agents. Given the corporate cultures in which they were operating, Mr Hood and Mr Shelton both showed tremendous courage in raising their concerns about the foreign bribery activities with appropriate people. In each case, their concerns were dismissed or not followed up on. Their careers suffered as a consequence of their attempts to do the right thing.

17 Unfortunately, given their number, size and complexity, the various foreign bribery court proceedings have lasted for many years longer than anyone might have anticipated, without there having been any public acknowledgement of the very important role played by Brian Hood and James Shelton in exposing what happened within Securency and NPA. I can readily accept that what has happened to them since they raised their concerns has caused both of them considerable personal distress, professional hardship, and financial loss.

18 However, you were only one of a number of people involved in foreign bribery activities within the two companies. You were not involved in the conspiracies in Indonesia, Vietnam or Nepal. You were not a high level decision maker, or a founding member of the Malaysian conspiracy. You had left before Hood and Shelton started working at the companies. You were not somebody to whom they made any complaint about what was happening. Furthermore, the prosecution did not seek to rely upon the harm caused to Hood and Shelton when the court was sentencing the two companies, or your boss, Curtis – all of whom bear far greater responsibility for that harm than you do. Absent any good reason why you should be singled out for punishment in this way, it would be quite unfair to give this factor particular weight in sentencing you.

20 You were born in France in 1951, and are now 67 years old. You were educated in France, and in various places in Africa where your naval officer father was posted. You became a father at the age of 17, and married a year later, after your daughter was born. After completing one year of compulsory military service, you went into the workforce to support your young family. One of your early employers paid for you to complete an economics degree.

21 At the age of 28, you started working in the banknote printing industry, with a French company. Seven years later, you moved to Australia, where you worked as a banknote expert with a company in the Amcor Group. A few years later, NPA employed you to help expand its export business. Selling polymer banknotes into Asian markets was a stressful and highly competitive business, requiring lots of international travel, and your family life suffered. Your marriage ended in about 1996.

22 In 1999, you left Australia with your then 16 year old son, and based yourself in France; you were still working for NPA. Your by then adult daughter also returned to France around the same time.

23 At the start of 2002 you moved from NPA to Securency. During 2002, you were instructed to move to Kuala Lumpur, until the completion of the first contract with the Malaysian bank. You left Securency at the end of 2003.

24 You subsequently worked for a couple of years with a Swiss company, which produced polymer banknotes. After that, you started up a small company storing, repairing and transporting racing boats for sailors all around Europe.

25 You have no prior criminal history and have, prior to this offending, been of good character. Your career as a respected corporate officer has been destroyed by your own actions.

26 You were arrested in Germany in July 2011, and extradited to Australia. The lengthy committal proceedings against you and many other former NPA and Securency employees ran for more than 112 sitting days, between August 2012 and mid-2014. Various complex pre-trial applications and interlocutory appeals occurred in this court between 2014 and 2017. The subsequent, successful, High Court appeal by four other accused men was not completed until November 2018.

27 The prosecution do not suggest that the very substantial delay between your being charged and your plea is in any way your fault. I accept that you have, throughout the proceedings in the Magistrates’ Court and this court, acted in an efficient and economical fashion, and have not contributed to any of the delay.

28 Courts have long recognised that the prospect of a sentence hanging over one’s head during the period of delay can be a punishment in itself. When sentencing Curtis, I took into account some particular effects that the long delay had had on his mental health and his life generally. In your case, the period of delay between your arrest and your sentencing has some unique features which did not apply to other accused.

29 Although you have dual French and Australian citizenship, you had moved back to Europe and re-established your life there for some years before your arrest. That is where your children and grandchildren were living, and where you had built up a successful boat business. You were also in a relationship with a French woman.

30 Since your extradition in 2011, you have not been allowed to leave Australia; indeed, you have only been allowed to leave Victoria to travel interstate on four occasions, with the consent of the AFP. You have been subject to very regular, and at times quite onerous, reporting obligations, over many years.

31 Over the intervening seven years, you have not seen your two children or grandchildren, and your boat business has dwindled to the point where it is close to bankruptcy. After only seeing your partner intermittently for four years, you broke off that relationship, because of the uncertainty surrounding your situation.

32 As a condition of your bail, you were required to provide a stable residential address. Through a mutual friend, it was arranged for you to live with a family in Melbourne; none of you expected that the arrangement would continue for as long as it has.

33 While all of the individual accused have been subject to regular obligations to report to police as a condition of bail, the others have been free to live with their families, and carry on their daily lives from their own homes. On the other hand, you have been living in a state of limbo for the past 7 years, uncertain and anxious as to when you will be able to return home and resume your life.

34 It is also a relevant sentencing consideration that, during the period of that delay, you have not committed any further offence.

35 You pleaded guilty to this charge on 27 November 2018, following an indication that, if you pleaded guilty, I would not be likely to impose a sentence of imprisonment that commences immediately.

36 You are entitled to a discount on the sentence to be imposed on you, by reason of your guilty plea. A guilty plea is taken to indicate a willingness to facilitate the course of justice. In Victoria, a sentencing court can also have regard to the utilitarian value of the plea in sentencing for federal offences such as this one; that is to say, the court can have regard to the cost and inconvenience to the community which has been avoided by the plea.^[4]

37 Whilst this is by no means an early plea, there is still a substantial utilitarian value in your plea. Since the recent High Court decision in Strickland, you are the only remaining accused in relation to the Malaysian conspiracy. It is possible that, as a result of the High Court’s findings about the illegality of some of the actions of the AFP and the Australian Crime Commission, you may have been successful in seeking the exclusion of evidence, or a stay of the charge against you. At the very least, by pleading guilty, you have spared the community the time and cost of a trial that would have been likely to run for many months, even with only one accused.

38 I accept that it is highly unlikely that you will re-offend, and your prospects of rehabilitation are excellent. Specific deterrence does not feature as a significant sentencing consideration in your case.

39 Although there is no evidence before the court as to the prevalence of foreign bribery offences, general deterrence and denunciation are usually very important sentencing considerations in all cases involving “white collar” crime. Such offences are usually hard to detect. They have often been committed by persons who had been regarded as being of good character and reputation. Because such offenders generally have good prospects of rehabilitation, specific deterrence is often not a very relevant consideration. In such cases, courts generally place great weight on the need to deter others from engaging in similar conduct.

40 However, the weight to be afforded to any particular factor (including general deterrence) in the instinctive synthesis sentencing process must depend on the circumstances of each individual case. Frequently, as here, there are conflicting elements which bear upon the sentencing of an offender.

41 Parity with the sentences imposed on co-offenders is also a very important sentencing consideration. Equal justice requires that like should be treated alike. But, if there are relevant differences in culpability, or in the personal circumstances of co-offenders, due allowance should be made for them.

42 As corporate offenders, NPA and Securency could only have financial penalties (not imprisonment) imposed on them, so their sentences are not relevant for parity purposes. However, the sentences imposed on other natural persons for similar or related offending are relevant.

43 In October 2013, I sentenced Radius Christanto, the former Indonesian agent, on a single charge of conspiring with Securency and others to bribe a foreign official of the Indonesian central bank.^[5] He was sentenced to 2 years’ imprisonment, which was effectively suspended by his being released on a recognisance release order.

44 In October 2017, I sentenced Curtis, the former Securency CEO, on one rolled up charge of conspiring with Securency and others to offer bribes in Indonesia and Malaysia, and one charge of false accounting in Malaysia.^[6] He was sentenced on the conspiracy charge to 2 years and 6 months’ imprisonment (on which he was released on a recognisance release order), and on the false accounting charge to 6 months’ imprisonment (which was wholly suspended).

45 In the cases of both Christanto and Curtis, the prosecution submitted that sentences which did not involve immediate imprisonment would be appropriate. Nor did the prosecution press for immediate imprisonment in the cases of David Ellery^[7] and Clifford Gerathy^[8], two former Securency employees who pleaded guilty to the same Malaysian false accounting charge as Curtis did. In sentencing each of those four accused, the court accepted the prosecution’s submission that the sentences should be wholly suspended. However, in your case, the prosecution submit that I should find that a sentence of immediate imprisonment is the only appropriate penalty. I reject that submission, primarily on the basis that it would offend parity principles, and give rise to a justifiable sense of grievance on your part. I will focus on issues of parity with Christanto and Curtis, as they were convicted of similar conspiracy charges to you.

46 You, Christanto and Curtis were all aged in your 60s at the time of sentencing. You had all been law-abiding citizens, whose professional careers and reputations have been totally destroyed by your offending and the subsequent publicity. You all have low prospects of re-offending.

47 As far as the seriousness of the conspiracy offending is concerned, Curtis’s offending was far more serious than yours, because he was party to conspiracies in two different countries, and over almost double the period of time; he was also senior to you within the corporate structure.

48 Christanto offended purely for his own very substantial financial gain, having made more than US$3 million from his involvement in the Indonesian conspiracy. You and Curtis were both hard-working employees, who offended in order to promote your employer’s interests, in what were very competitive markets. I regard that as an important point of difference, in terms of moral culpability.

49 All of you are entitled to a discount for pleading guilty. Christanto was entitled to the largest discount, because his was a very early plea, which was accompanied by genuine remorse and an undertaking to assist the CDPP in the prosecution of former employees of NPA and Securency. Based on the assessment of Rohan Pike, the chief investigator at the AFP, as to the value of Christanto’s co-operation, Christanto received a substantial sentencing discount for his undertaking to assist the prosecution in other cases.^[9] Like you, Curtis did not plead at an early stage, or demonstrate remorse, so he received a smaller discount than he might otherwise have received. That said, there is a very substantial utilitarian value to all of the pleas, given the extraordinary size and complexity of these conspiracies.

50 Like Christanto, you co-operated in your extradition to Australia, following your arrest.

51 Christanto spent 42 days in custody in Singapore, in conditions of some hardship, before his extradition to Australia. You have spent a total of 84 days in custody - 72 in Germany, before your extradition to Australia, and a further 12 days in Australia before you were granted bail. After initially arguing that only the time you spent in Australian custody should be treated as pre-sentence detention,^[10] the prosecution now submit (and the defence agree) that all 84 days should be treated as pre-sentence detention, for consistency with what happened in Christanto’s case. The fact that you have spent that period of time in custody is also something to which I have had regard in determining an appropriate sentence for you.

52 Curtis suffered from serious symptoms of post-traumatic stress disorder, as a result of having been caught up in a terrorist incident while in India on a business trip for Securency; the unchallenged application of the Verdins principles resulted in his receiving a very substantial discount on the sentence that would otherwise have been imposed. Christanto was suffering from a number of serious medical problems, as well as anxiety and depression; however, his mental health problems were not of the same severity as Curtis’s. You are not suffering from any mental health problems.

53 Delay was not relevant in the case of Christanto. It has substantial relevance to Curtis and you, for the reasons already discussed.

54 Given all of those matters, it would be unjust to single you out for the imposition of a term of immediate imprisonment, given the sentences imposed on the related offenders.

55 In saying that, I am in no way suggesting that suspended sentences should be treated as the norm for offences under the foreign bribery provisions. The various NPA and Securency conspiracies, and their subsequent prosecutions, have a number of quite particular features that are unlikely to be replicated in other cases.

56 For the offence of conspiring to offer to bribe a foreign public official, I sentence you to imprisonment of 2 years and 6 months.

57 I order that you be released forthwith on a recognisance release order, with the condition that you be of good behaviour for 2 years.

58 That means you will not be taken into custody today. However, if during the period of your recognisance release order you commit another offence which is punishable by imprisonment (whether in or out of Victoria), it is very likely that you would be taken into custody to serve the whole of the sentence of imprisonment.

59 I declare, pursuant to s 6AAA of the Sentencing Act that, but for your plea of guilty, I would have sentenced you to a sentence of 3 years’ imprisonment, with a minimum non-parole period of 2 years.

60 I declare that the period to be reckoned as already served under this sentence is 84 days, not including today.

61 I direct that these declarations and their details be entered in the records of the court.

^[1] Contrary to ss 11.5(1) and 70.2(1) of the Criminal Code Act 1995 (Cth). The maximum penalty is 10 years’ imprisonment, and/or a fine of not more than $66,000.

^[2] When I sentenced NPA and Securency in 2012 for their parts in the various conspiracies, it was done on the basis that the prosecution accepted as an agreed fact that the respective boards of directors had no knowledge of the illegal conduct being carried out by the companies’ “high managerial agents”. From what I have learned since then, I have some reservations about the accuracy of that agreed fact.

^[3] In Tony Strickland (a pseudonym) & Others v CDPP [2018] HCA 53 (“Strickland”). Pseudonyms were used in the Strickland decision (and in the Court of Appeal decision which was under appeal) because non-publication orders had been put in place by this court, to protect the fair trial rights of all of the alleged co-conspirators. Those orders were all revoked on 28 November 2018, after you – the final accused person – pleaded guilty.

^[4] Director of Public Prosecutions (Cth) v Thomas [2016] VSCA 237; (2016) 315 FLR 31. The contrary position has been taken in NSW and the ACT.

^[9] In fact, as I later found in CDPP v Brady & Others [2016] VSC 334 at [1136]- [1141], the value of Christanto’s co-operation was considerably less than Pike had assessed it to be, given that much of Christanto’s witness statement had come about as a result of inappropriate conduct by Pike.

Supreme Court of Victoria

CDPP v Boillot [2018] VSC 739 (6 December 2018)