Author: Martin, B. Date: 27/02/1998 Venue: Australian Institute of Judicial Administration Conference - Perspectives on White Collar Crime: Towards 2000
The opportunity to address the topic of prosecution issues in relation to White Collar Crime Towards 2000 is a welcome one. A substantial portion of the practice of my Office is the prosecution of what may be termed White Collar Crime. By way of example, my Office prosecutes fraud in the areas of taxation, social security, health insurance, nursing homes, customs and Corporations Law. Many of these cases are large document intensive cases that may be years in the investigating. The documents may not tell the full story and indeed are frequently deliberately misleading. The methods and techniques used by white collar criminals to commit these offences varies widely - from the crude to the extremely sophisticated. Months of work is often required to reconstruct the events which may need to be proved circumstantially and through inference. In short many are difficult, large cases which require the commitment of substantial resources together with great perseverance and dedication in both investigation and prosecution. The general public expects and is entitled to receive prompt and efficient Government action in the investigation and prosecution of these cases. Irrespective of the manner in which the crime is committed, it is our objective to prosecute these offences consistently, competently and in a way that ensures that the facts of the matter are presented to the Court clearly and in a readily understandable form. In the main the Commonwealth DPP operates within the State judicial systems. While across Australia our practice is substantial, we have limited ability and opportunity to change how the State systems operate. However, within the parameters of those systems, we are able to influence to a degree how our cases are presented and conducted. We have developed and are continuing to develop techniques and procedures to improve the efficiency and effectiveness with which we conduct large and complicated prosecutions. In the time available today I would like to address some of those techniques and procedures and to outline our experience to date. I would also like to touch upon our expectations for the future.
The Early Involvement of the Prosecutor in the Investigation
Perhaps the most obvious and important feature of my Office is that of independence. While under the Director of Public Prosecution Act 1983 I remain answerable to the Attorney-General, there is no political control over the day to day exercise of my statutory functions. Further, the Courts have generally indicated their unwillingness to supervise the exercise of prosecutorial discretion that I or my officers exercise. The existence of this independence is vital to my position. It ensures that decisions to prosecute are independent of the wishes of the investigative agency and made on an objective and consistent basis without the fact or appearance of partiality or improper influence. For that reason, the role of the prosecutor and the investigator are distinct and separate. However, especially in the case of large complex fraud cases, there is good reason for the prosecutor to become involved in the investigation at a comparatively early stage. The size and complexity of many investigations require the investigator to employ some form of project management in order to successfully complete the investigation within an acceptable time. Even where such techniques are utilised, however, there is always the possibility, and often the likelihood, that the prosecutor will disagree with the focus and scope of the investigation. It is both frustrating and conducive of delay if parts of the investigation need to be revisited or evidence gathered at a later time when it could have been achieved much more conveniently and efficiently earlier in the investigation. While the prosecutor is not an investigator and it is essential that the prosecutor remain independent and not step over the line into the area of the investigation, the early involvement of the prosecutor can assist the investigator to, inter alia:
- identify the likely issues;
- characterise the alleged conduct - is it criminal or merely sharp business practice?;
- identify the likely evidence required;
- focus the investigation;
- define the parameters of the case;
- identify suitable charges;
- brief counsel as and when necessary;
- change the direction of the investigation where necessary;
- terminate the investigation (at least as far as criminal proceedings is concerned) where appropriate.
The aim of our involvement is to endeavour to ensure that the referral of the case for prosecution proceeds as seamlessly as possible and in a manner that both minimises resource wastage and maximises resource utilisation. In many of the large investigations conducted by the ASC in relation to the corporate collapses of the 1980s the DPP has worked closely with the ASC. On reflection, it is clear that such co-operation has had a positive result in those cases. Much hard work was involved in achieving this successful interaction. It has been necessary to formulate and adhere to protocols governing our involvement in the investigation. On occasions, tensions have arisen between investigators and prosecutors. Usually these tensions have been resolved by sensible dialogue and communication at appropriate levels. Many ASC investigations proceed to completion without reference to the DPP. The need to involve the DPP only arises at the time the ASC decides that a matter being investigated may have a criminal focus. The initial decision whether to investigate a matter remains one for the ASC. At a relatively early stage in the investigation, however, the DPP is apprised of the nature of the investigation and is available to give advice to the ASC in relation to matters of law, evidence and the use of investigative techniques such as search warrants. There is a constant flow of information between the ASC and DPP designed to assist the progress of the matter. In large complex cases the DPP is almost inevitably aware of the nature of a matter and the evidence well in advance of the formal referral of the brief. It should be mentioned that the flow of information does not cease once the matter is referred to the DPP and charges are laid. The DPP is responsible for keeping the ASC informed of the progress of the case. This occurs through a formal liaison process as well as communication at the case officer level. The lessons learned with the ASC in the investigation and prosecution of large corporate collapses can be transposed to our relationships with other Commonwealth investigative agencies they have already been used as a basis upon which to develop our relationship with a number of those other agencies.
Preparation of the Case
In the preparation and presentation of the case for court, the DPP has the opportunity to add value to the process of prosecuting complex matters. In presenting our cases we attempt to think laterally and, within the parameters of the present systems and laws, we endeavour to determine how the case can be presented clearly and in a manner that will be understandable to the lay person. In large and complex cases our aim is to reduce the case as much as possible to its fundamentals (an aim frequently not embraced by the defence!) . While the means and manner of fraud may change, often the underlying basic issue is that of the dishonesty of the alleged perpetrator. It is our function to present this as clearly and simply as possible. It is unreasonable to expect a jury to cope with a case of any magnitude unless, from the outset, they are confident they understand the essential issues. The technique of "bringing the case together at the end" will not work in large paper intensive cases. The jury must be able to easily and comfortably follow the evidence as it is being led and to appreciate the issues to which that evidence is being directed. Even if the jury is comfortable with its understanding of the issues, it will only remain comfortable if the prosecution is able to deliver the evidence with the clarity and simplicity promised. Often this delivery must be rigorously pursued and sustained in the face of defence tactics calculated to divert the attention of or confuse the jury. One technique we have successfully adopted in a number of trials to assist in the presentation is the use of computers to display documentary evidence and to pictorially represent fund flows and company structures. The use of computers to assist presentation of our cases was first trialed in the prosecution of the "bottom of the harbour" cases in the 1980s. Since then substantial developments of the system have occurred both in the extent of the use of computers and in the manner in which they are utilised. CLARITY is the acronym given to our Courtroom Presentation system. The DPP has used CLARITY in a number of trials in NSW, WA and Victoria, as well as numerous committals. The facilities available in the Supreme Court in Victoria were utilised to use CLARITY in the recent trial of Douglas Reid. Essentially it involves the display of documents that will be tendered as exhibits on large computer monitors or screens for counsel, judge and jury. Diagrammatic representations of complex commercial transactions can be displayed on the monitors to assist the jury to understand those transactions and the case being built by the prosecution. The benefits of CLARITY do not stop at the advantage of simplifying and clarifying the issues to be considered by the jury. The use of CLARITY has the potential to save substantial periods of court time. By way of illustration, in the seven week trial of James Albert Crowl in the NSW District Court, it was estimated that through the use of the system two weeks of hearing time were saved through the use of the system. The value of CLARITY to the defence should not be overlooked. It has been advantageous and effectual for the defence in attempting to make their points and produce their exhibits. The cooperation of the defence in the use of CLARITY has a great impact on the usefulness of the system. In those cases where defence counsel have objected to the use of the system or have been generally uncooperative as to its use, the effectiveness of the system has been markedly reduced. Not all cases require or will benefit from the use of CLARITY. The system requires and will quickly absorb substantial resources. Care must be taken with the selection of cases having regard to the objectives to be achieved. CLARITY is only one part of what is generally described as litigation support. We are increasingly finding that many organisations are utilising computer systems in their investigations. These systems, which should be included as part of litigation support, are PC based systems that assist both investigators and prosecutors to:
- analyse evidence;
- prepare briefs;
- respond to requests for information;
- assist in the creation of certain court documents eg exhibit lists ; and
- provide quick access to imaged documents and their details.
At the Commonwealth level, a committee comprising the heads of Commonwealth Law Enforcement Agencies (referred to as HOCOLEA) has set certain standards to assist in the transfer of electronic information between Commonwealth law enforcement agencies. Further, the DPP works in conjunction with investigative agencies to ensure that our information technology systems are compatible with those used by investigators and that the information stored on these litigation support systems can be easily transferred. The use of these systems assists in the preparation of the case for hearing and enables the prosecutor to sort and arrange the evidence in the most efficient and comprehensive form. Even where CLARITY or other litigation systems are used, the prosecutor must be aware of and utilise other aids which will assist in the presentation of the case. In many large matters the use of schedules and charts in both electronic and hard copy forms may be required. Key documents in hard copy should be provided to the jury to enable leisurely consideration. Experience to date demonstrates that jurors applicate the availability of their own hard copies of such documents in conjunction with the screen images.
Choice of Charges
The choice of charges is a difficult area. It is important to keep the prosecution within manageable limits while maintaining an adequate reflection of the alleged criminality. The choice of charges is invariably linked to the focus of the prosecution. The focus of the prosecution is often set in the investigation phase and frequently involves difficult decisions as to which matters should be investigated. By way of example, in one matter investigated by the ASC approximately 26 separate areas of criminality were initially identified. Three were selected for investigation. The other areas were rejected for investigation on the basis of difficulties in gathering evidence (some of which was located overseas), the age of the allegations etc. Only two aspects proceeded to prosecution. While aspects of alleged criminality were not pursued, the investigation was properly and clearly focussed thus enabling the matter to be investigated far more efficiently and quickly. It is unwise to be prescriptive about the maximum number of charges that can or should be brought against a defendant. The prosecutor has an overriding responsibility to ensure that the number of substantive counts included in an indictment is kept to manageable proportions. An undesirable and inappropriate practice is to "overload" an indictment in the hope of inducing an offer of a plea to some of the counts. It is vital to be selective about the counts included in an indictment and to ensure that they adequately reflect the criminality alleged, will not result in an unfair trial and will not confuse the jury. In this respect the task must be approached logically and a measure of common sense must be maintained. In a recent study by Dr Chris Corns on the anatomy of long criminal trials, the author examined five complex and lengthy trials. He recommended that the prosecution should adopt a "minimalist" approach to the framing of presentment and indictments in terms of the number of charges and counts. One of the cases examined by the study was that of Crowl, a matter conducted by my Office. Dr Corns noted that perhaps the most important decision taken to reduce the length of the trial was to minimise the number of charges and counts laid. Initially, some ninety six charges were laid against the accused. The charges laid at committal focussed on the obtaining of money and the expenditure of that money. At trial, the indictment contained twenty four counts concerning twelve transactions relating to the obtaining of the money. Two counts related to each transaction and were laid in the alternative. These counts were selected on the basis that the Crown case had to be as clear and strong as reasonably possible (without confusing the jury) in order to demonstrate the general nature of the offences committed. In seeking to establish the requisite mens rea for each of the primary counts, it was part of the Crown case that the accused may not have been dishonest at the beginning of the relevant transactions, but became dishonest during the transactions leaving no doubt that by the sixth transaction he was acting dishonestly. At the end of the prosecution case the Crown submitted that, in relation to the first five transactions, the jury should be asked to bring in a not guilty verdict on the primary counts (the alternative counts were left to the jury and guilty verdicts were returned). Dr Corns questioned whether it was necessary for the Crown to rely on all twelve transactions rather than relying only on four or six transactions. Even if only four or six representative transactions had been relied upon, the evidence concerning all transactions would still have been adduced in order to prove the mens rea through the course of the conduct. Irrespective of whether six or twelve transactions should have been charged the reduction from the original ninety six counts represents a good example of selective use of charges in order to focus the prosecution and keep the trial within manageable limits while properly reflecting the alleged criminality. Another practice that we generally attempt to avoid at trial is that of indicating either alternatives within a count or alternatively putting alternative counts in relation to an indictment. It is in cases such as Crowl where there is room for the jury to be genuinely undecided about the criminality on the available facts that this practice may be appropriate. The prosecution must be confident in its case and the evidence to establish the alleged wrongdoing. It is generally inappropriate to provide the jury with all the evidence and invite it to make a selection of which offences have been proved. We must know our cases and be confident enough to present those cases clearly and definitively.
Charge Bargaining and Plea Bargaining
Charge bargaining denotes negotiations between the defence and the prosecution in relation to the charges to be proceeded with. It is to be distinguished from consultation with the trial judge as to the sentence the judge would be likely to impose in the event of the defendant pleading guilty to a criminal charge. Consultations with the Judge as to a possible sentence may be described as "plea bargaining" and are to be avoided (R v Marshall  VR 725). While the prosecution must demonstrate care and consideration in the selection of charges to be laid, circumstances may change and new facts come to light which make it appropriate to proceed on fewer charges or accept a plea to only some of the charges. Often it will be in the interest of justice that the prosecution accept an offer to plead to some of the charges and discontinue others. Before such an agreement is reached we need to be satisfied that:
- the charges to be proceeded with bear a reasonable relationship to the nature of the criminal conduct of the accused;
- the charges provide an adequate basis for an appropriate sentence in all the circumstances of the case; and
- there is evidence to support the charges.
In many cases, the interest of justice will be served if a defendant pleads to charges agreed in the circumstances described above and the community is not put to the burden of funding a long and expensive trial. Accordingly, in appropriate circumstances, this Office will quickly consider any proposal and put its position to the defence. However, the process is not one of "negotiation". The DPP is concerned with appropriately reflecting the prosecutions perception of the public interest and its position in relation to disposition of the matter generally. Not infrequently discussions concerning a possible plea include a request that the prosecution not oppose a defence submission to the court on sentence that the appropriate penalty is immediate release or lies within a nominated range. Alternatively, the defence may indicate that the defendant will plead guilty to an existing charge or charges if the prosecution will not oppose such a submission. It is not objectionable for the prosecution to agree to such a request provided the sentence or range nominated is considered to be within acceptable limits of a proper exercise of the sentencing discretion. Great care is required in this area and the prosecution must be careful to avoid any agreement which has the effect of failing to provide the court with proper assistance on sentence (see for example R v Nelson Rowatt Chad (CCA, 13 May 1997, Unreported). There seems merit in the view that some cases warrant the prosecution taking a more proactive role in relation to charge bargaining. At an appropriate stage in the case it may be appropriate for the DPP to indicate to the defence what pleas it would accept in satisfaction of the indictment and, in that instance, the nature of the submissions it would make to the court on sentencing. This is a delicate area and care needs to be taken. Provided the process is sensitively handled, however, it has the potential to result in early disposition of cases thus avoiding wastage of scarce court time.
Disclosure of the Prosecution Case and Other Material
Recent years have seen considerable improvement in the attitudes and practices of prosecuting authorities in connection with full and early disclosure of the Crown evidence and other relevant material. Numerous guidelines as well as protocols have been formulated and issued. In many jurisdictions State procedural law governs the topic. Accordingly, my comments need to be read as being subject to the procedures laid down in State law. Most attention was naturally centred on disclosure in indictable matters. In my view the same early disclosure of the Crown case should occur in summary matters. However the test is formulated, there is a public interest in ensuring that at an early stage the defendant is aware of the nature of the case against him and the evidence that will be lead. To reveal the nature of the evidence to be adduced should not be regarded as a tactical disadvantage. Early disclosure is an important factor in securing early pleas and shortening trials. Disclosure of other unused material can also assist in achieving early resolution. Speaking in broad terms, the prosecution has always had an obligation to disclose other relevant material. That duty has been the subject of many decisions and is canvassed in prosecution guidelines. What remains controversial is the extent to which the prosecution should disclose unused material gathered during the course of the investigation that it judges is irrelevant in the broadest sense or in respect of which it is unable to make a positive judgment that it will either detract from the prosecutions case or possibly assist a line of defence the defendant may wish to pursue. By way of example, in many large corporate matters investigated by the ASC literally rooms of documents have been gathered. Documents are selected to form the basis of the prosecution case. Many are rejected as being clearly irrelevant to the case. The prosecution may, however, be left to guess whether any other documents might be relevant to the case the defendant proposes to run. Unknown to the prosecution there may be a legitimate interest for the defendant or his representatives to examine that material with a view to locating possible assistance for the defence. Our practice to date in relation to large and complex corporate prosecutions has clearly been to favourably consider defence requests to inspect those unused documents. There seems little point in denying access to those documents unless considerations such as public interest immunity or privacy dictate otherwise. As a matter of policy reflecting the duty of the prosecution, the "open" approach ensures a complete discharge of that duty. From a practical point of view, early disclosure of such other material assists in avoiding the all too request and late requests by the defence that the trial be delayed or postponed in order to peruse the documents. In addition, the approach may help to engender a spirit of cooperation. It is a natural reaction for a person denied access to documents to wonder what is in them and to draw the conclusion that something in those documents may well assist their case. On the other hand, on those occasions when defendants have availed themselves of the opportunity to consider the unused documents readily made available, in numerous instances they have quickly come to the view that the documents offered would not assist their case and inspection is either truncated or extremely selective. Cooperation in this area is an essential part of future strategies. It is inappropriate to have a process of discovery such as exists civil procedures but, as a general proposition, the prosecution must be willing and prepared to accommodate legitimate defence requests to peruse unused material gathered during the investigation of large complex fraud cases.
Right to Silence
A discussion of prosecution issues towards 2000 would not be complete without mentioning the much debated issue of the right to silence. I have no doubt that reform is needed. The ability of the well funded defendant to put the prosecution to proof on every conceivable issue involves a cost that the prosecution and community can no longer afford. Reform can be achieved without unfairly affecting the essential rights of defendants. In 1992 the Standing Committee of Attorneys-General (SAG) agreed on a package of legislative and administrative measures to deal with complex criminal trials in general and complex fraud trials in particular. The broad aims of the proposals were:
- to allow Judges to exercise greater control over the pre-trial process as well as the actual trial;
- to shorten trials;
- to narrow the issues to be decided by the jury;
- to streamline the presentation of evidence to the jury, including permitting evidence to be presented in a form which will aid the jurys comprehension of the evidence.
Most States possess pre-trial procedures under the control of the court designed to achieve those broad aims. The Victorian Crimes (Criminal Trials) Act 1993 provides that the prosecution must provide a comprehensive prosecution case statement to the accused and the court.5 In reply, the accused must, within the time set at a directions hearing under the Act, prepare a defence response to the prosecution statement.6 The defence response, which is served on the prosecution and filed in the court, indicates facts and inferences in the prosecution case statement that are in issue, contains copies of statements of any expert witness that the defence intends to call at the trial, replies to any proposition of law in the prosecution case statement and contains any particular proposition of law on which the defence intends to rely. Of Course the defence may place all matters in issue and may decline to concede or agree to any facts or elements of the offence.7 However, if the defence subsequently does not seriously contest that evidence, the Judge may have regard to this in sentencing as indicating a lack of remorse on the part of the offender.8 Notwithstanding that incentive, a reluctance to fully co-operate remains evidence in many trials. Where there has been a preliminary hearing under s5 of the Act counsel for the accused has the right of reply to the opening speech of the prosecutor.9 The purpose of the reply is set down in the legislation. It is to indicate the facts and inferences with which issue is not taken and to outline the issues in the trial. The Judge may limit the length of the prosecutors opening speech or the reply of counsel for the accused. The impetus for reform has recently gained momentum. The issue is being examined by a number of State governments and law reform commissions. Members of the judiciary have added their voices to the calls for reform. The legal profession generally, however, remain strongly resistant to change. The right to silence of both the investigative stage and in court has been modified by s34 and 35 of the UK Criminal Justices and Public Order Act 1994. If during questioning under caution a defendant fails to mention any fact relied on in defence at trial, and it is a fact which the defendant could reasonably be expected to mention, the court "may draw such inferences from the failure as seem proper". The drawing of an adverse inference is discretionary. It appears that if the defendant maintains silence throughout and merely puts the prosecution to proof, s34 does not apply. I have considerable reservations about the modification at the investigative stage if adverse comment is based on a failure to answer any or particular questions. If a defendant answers questions and fails to mention obviously relevant facts later used in defence, the prosecution is entitled to comment adversely on the basis of recent invention. Obvious dangers exist, however, in drawing adverse inferences in circumstances where the defendant has declined to answer. There is no judicial supervision and the ramifications of abuse of power are obvious. If a modification based on the failure to answer is to be introduced, it must be accompanied by strong safeguards. For example, the questioning must be under caution and recorded on video. A Judge must always possess the discretion to prevent a comment if the drawing of the inference would be unfair or misleading. It is not difficult to envisage circumstances such as the interviewing of a mentally impaired person where the protection of the Judges discretion would be essential. In my view, however, modification along the lines of the Victorian procedure, but with effective sanction, can occur at a later stage without unfairly affecting the rights of defendants. I emphasise the word "unfairly". If a defendant has appeared in court, is represented and has been provided with the statements, documents etc to be relied upon by the prosecution, in my view it is not "unfair" to require the defendant to disclose in advance of the trial the essence of the defence and to agree evidence or facts that are not in dispute. Subject to the discretion of the Judge to cater for circumstances in which it would be unfair to permit adverse comment, a failure to disclose etc would give rise to the ability of the prosecutor and the Judge to comment adversely. That ability is the "effective sanction" to which I referred. As we move toward 2000, a realistic and balanced approach is required. Those sections of legal profession resistant to change cannot continue to base opposition on the assumption that modification of or interference with a long-standing " fundamental right " is necessarily " unfair ". Finally I mention what is almost inevitably a forlorn hope that if change is to occur the various States agree upon a common approach.
In addition to specific law reform discussed, and the hope that our Corporations Law will be simplified, perhaps the biggest challenge is to position my Office to take advantage of technological assistance in both preparing and presenting cases of white collar crime to the courts. The lightning pace of technological advancement rendering equipment and programs almost obsolete at the time of purchase makes this a difficult exercise. In addition, the expense involved in providing appropriate equipment is such that we must endeavour to ensure that the most appropriate equipment and programs are selected which will be useable for a significant period. While the defence may still jibe about "the unlimited resources of the Crown", such resources do not exist. Close cooperation between the prosecution, judiciary and defence is required in relation to the use of technological aids. Standards should be agreed between relevant governments and law bodies as to the use of the equipment and the protocols involved. Evidence laws must keep pace with the developments. As we move towards 2000, there exist strong indicators that white collar crime is a serious social problem and its impact upon both our economy and community is increasing. It is unacceptable to say that such crime is too hard to prosecute, takes too long or is not worth the effort. It is incumbent upon the prosecution to ensure that cases of such crime are prosecuted fairly and diligently and with vigour. We will be striving, however, to ensure that such cases are not unduly lengthy and unduly complex. We will be aiming to achieve the greatest possible efficiency and to present cases that are focused, understandable and reflective of the criminality.
I gratefully acknowledge the assistance of Graeme Davidson, Senior Assistant Director, Corporate Prosecutions, who researched and prepared this paper.