A former manager of a listed corporation recently
learnt the hard way that our courts take white collar
crime seriously regardless of the corporate victim’s size
or financial position (Pereira v R [2018] NSWCCA 171).
Byran Pereira was the procurement officer and fleet
manager of Coca-Cola Amatil Ltd. Using various methods, including receiving secret commissions and other
benefits, he defrauded his employer of $3.2 million over
11 years.
Mr Pereira pleaded guilty to various offences under
the Crimes Act 1900 (NSW). In sentencing him to an
aggregate sentence of six years’ imprisonment, with a
non-parole period of four years, Williams J of the
District Court of NSW had regard to the following
significant aspects of the offending which:
- led to the loss of a substantial amount of money of
approximately $3.2 million;
- took place over 11 years from 2004 to 2015;
- was motivated by greed and committed for financial gain;
- involved premeditation and considerable planning,
with a high degree of deception and sophistication
over a long period of time; and
- was aggravated by the fact that Mr Pereira, as a
senior executive in a large company, was in a
position of trust.
What if the corporate victim is big enough
to absorb the loss?
Mr Pereira appealed his sentence to the NSW Court
of Criminal Appeal, where he argued that his offending
—and Coca-Cola’s loss—were not substantial because
the company had made hundreds of million dollars a
year in profits during the 11 years he was committing his
crimes.
Although Mr Pereira managed to avoid contending
that his choice of a large corporate victim was a
mitigating feature, he submitted that Coca-Cola’s capacity to absorb the loss was relevant to the assessment of
the objective seriousness of the offence.
The Crown countered by saying that Mr Pereira was
in effect arguing that the objective seriousness of an
offence is mitigated because it could have been worse—
and that would be wrong (both as a matter of legal
principle, not to mention morally).
The NSW Court of Criminal Appeal agreed with the
Crown, concluding that:
"Although the applicant denied that he was putting the
matter as a mitigating feature, that is the effect of the
argument. Had the victim here been a small company that
perhaps went into liquidation as a result of the frauds, that
may have been an aggravating matter. From an objective
point of view, a fraud involving a little over $3 million is
objectively serious and the fact that [Coca-Cola] was able
to absorb the losses does not make the offending less
serious."
What we can learn from this decision
The deliberate and sophisticated theft of a substantial
sum of money by a trusted employee over a long period
is a serious crime regardless of the size or financial
health of the corporate victim, and the courts will
sentence offenders accordingly.
The size or financial health of the corporate victim
will, in our view, assume greater significance if the white
collar criminal offence was a cause of a corporate
victim’s financial hardship or collapse. In either case, the
corporate victim can also consider making a claim for
victim’s compensation against the perpetrator to recover
its losses.
It is not uncommon for white collar criminals to try to
justify their behaviour on the basis that it is not that
serious in the context of the organisation’s size. This is
why raising awareness among and educating employees,
particularly in large organisations, that the courts do, in fact, take such offending very seriously can help to
reduce the likelihood of corporate fraud. Employees are
arguably more likely to think twice about offending
when they know the seriousness of the consequences.
A useful addition to corporate fraud or anti-
corruption policies, training programs, internal communications and the like, is a specific reference to the fact
that the courts will not show leniency towards offenders
because their employer possesses strong financial resources.
It is also a good idea to include details of the maximum
sentences for key fraud offences.
This article was first published in Inhouse Counsel, Volume 23 No 3&4, June 2019