Mr Cranston is due to be sentenced for his involvement in the tax fraud conspiracy and money laundering conspiracy; however, as noted by NSW Supreme Court Justice Anthony Payne, legal aid funding for Mr Cranston’s sentencing hearing has been withdrawn by the Commonwealth Attorney-General’s Department — as confirmed last week by A-G Mark Dreyfus — meaning that sentencing has had to be adjourned.

Five other persons have also been convicted as part of the long-running proceedings pertaining to the fraudulent scheme: Adam Cranston’s sister Lauren Cranston (the son and daughter of former deputy tax commissioner Michael Cranston, who is not accused of wrongdoing), Jason Onley, Patrick Willmott, and lawyers Dev Menon and Sevag Chalabian.

In late March, and following the lifting of a non-publication order, it was revealed that Sydney-based lawyer Mr Chalabian was last year sentenced to 12 years imprisonment for his role in the $105 million Plutus tax fraud conducted over a three-year period.

He was found guilty of dealing in proceeds of crime worth $1 million or more and received a non-parole period of seven years and six months.

As reported by Lawyers Weekly’s sister brand Accountants Daily, here and here, Mr Wilmott has received a nine-year term of imprisonment, while Ms Cranston was sentenced to eight years in jail.

Earlier this morning (Tuesday, 9 May), in a procedural ruling, Payne J reflected that, given the public interest in “such a significant case”, His Honour felt compelled to explain why sentencing must be adjourned.

In May 2021, the Commonwealth agreed to provide legal aid funding to Mr Cranston, given that — as Payne J submitted — “if the Commonwealth wanted to prosecute Mr Cranston for what appeared to be very serious federal tax fraud, the federal authorities would need to bear the costs of two separate federal trials or the Commonwealth would have to provide legal aid to Mr Cranston”.

VIEW ALL

One year later, the federal Attorney-General’s Department “cast doubt on the continuation” of such legal aid; however, then-A-G Michaelia Cash stepped in to ensure it continued.

Now, however, and “without any notice to the court”, legal aid for Mr Cranston’s “then-imminent” sentencing hearing was withdrawn by the Commonwealth, and it was suggested that Legal Aid NSW should instead provide legal aid for Mr Cranston’s sentence proceedings.

Last week, Payne J expressed “surprise and disappointment” at the decision, particularly given that His Honour understands that approximately $37,000 or senior counsel and solicitor sentencing hearing attendance and preparation, together with about $11,500 for disbursements, will be required for the final days of preparation and proceedings.

“If legal aid funding by the Commonwealth is not restored, and is replaced by Legal Aid NSW funding, there is a risk that new counsel would be briefed. If that were to occur, the costs to the community would be exponentially higher as the new counsel would need to acquaint themselves with the issues from a year-long trial,” His Honour posited.

“That is, there is a risk that withdrawal of legal aid funding by the Commonwealth, even assuming Legal Aid NSW steps in, may result in duplication and a waste of scarce public resources.”

More importantly, Payne J went on, delays caused by the withdrawal of legal aid by the A-G’s Department “affect the community”.

“Mr Cranston has been convicted of involvement in dishonestly taking over $105 million of federal tax money, which should have been available to the whole community. I am anxious, on behalf of the community, to proceed to sentence Mr Cranston as soon as practicable,” His Honour proclaimed.

“As I have already said in sentencing his co-offenders Lauren Cranston and Patrick Willmott, tax fraud offences of this kind are corrosive of our society. They are difficult to detect and difficult to successfully prosecute. The community is entitled to know, and know as soon as practicable, about the sentence to be imposed on Mr Cranston for his very serious offending.”

One of the most important purposes of sentencing for serious tax offending of this kind, Payne J espoused, is general deterrence: “To send a message to others who might be tempted to steal from the tax system that the courts will not tolerate that behaviour.”

“The longer the sentence hearing for Mr Cranston is delayed, the more diluted that message of general deterrence will become,” His Honour warned.

Given the withdrawal of legal aid funding, the NSW Supreme Court will be unable to hand down a sentence before the end of the financial year, the court noted.

Payne J stood over the sentencing proceedings concerning Mr Cranston for 13 June.