Former Dual Australia claims manager Josie Gonzalez pleaded guilty to gaining financial advantage by deception when she was just 21, decades before she and her husband Alvaro were found guilty of defrauding the underwriting agency of $17.4 million.

A plea hearing at the County Court of Victoria today was told that in 1995 Gonzalez faced 51 instances of falsifying employee documents to gain financial advantage by deception, which were rolled into one charge to which she pleaded guilty and received a two-year good behaviour bond.

The offence involved $21,000 and occurred when Gonzalez, now 45, was a student. No further details were provided at today’s hearing.

Josie Gonzalez and her husband Alvaro have been in custody for 65 days after being found guilty by a jury on 14 charges each of cheating Dual.

Three of the charges, involving claims of more than $50,000, see them deemed “continuing criminal enterprise offenders” under Victoria’s Crime Act. The maximum penalty for these is a 20-year sentence.

Josie’s defence barrister Alan Hands, who revealed Josie began working for the Department of Education as a freedom of information officer in 2014, conceded that “both parents are looking at a significant time in jail”.

Alvaro’s defence barrister Peter Kilduff admitted the gravity of the fraud is “serious” and said “clearly a term of imprisonment is appropriate given the jury’s verdict.”

Judge Paul Lacava said he is finding sentencing the couple difficult, because although their fraud was “very serious,” the case is unusual in that it involves two parents being convicted of the same crimes and being jailed at the same time.

The fraud, conducted over more than two years, was uncovered when Josie took maternity leave in 2013. The pair have two daughters, aged six and 11.

“That makes it difficult,” Judge Lacava said. “I have been very concerned about the fact that I have the parents of two young children before me, and I am very mindful of that,” he said.

Josie and Alvaro, 51, returned all the money taken from Dual under a civil deed six years ago and Dual CEO Damien Coates declined to give a victim impact statement. Still, Judge Lacava said the full rectification made to Dual was not evidence of remorse in Josie’s case.

“She hasn’t been remorseful at all,” he said. “In fact, she said the whole Crown case was false.

Josie’s evidence was “a litany of lies punctuated only by moments of prevarication.”

The judge described Josie as a very hard worker who managed to become top in her field after attending Latrobe and Monash universities, but added there was a “dilemma". He said her insistence on her innocence in the face of “compelling evidence to the contrary” suggests “there’s something wrong, there’s just something missing”.

“I just have this feeling there’s a missing piece in relation to your client,” Judge Lacava told Mr Hands. "I feel as if I’m sentencing without the whole story.”

Mr Hands said Josie, the daughter of Italian immigrants, is not coping in prison, sees her daughters on visits once a week, and is earning $30 a week cooking meals for staff.

“Her fall has been pronounced from working for a large company,” Mr Hands said.

In contrast Alvaro, who was born in Uruguay and has no prior criminal record, is coping in prison, has been upgraded to a single cell and is using his time to complete courses in IT, business, food handling and horticulture, Mr Kilduff said.

He recently lost his brother to lung cancer and his 82-year-old father suffers from Alzheimer’s disease, though he still attends prison visits with Alvaro’s mother, who is 79.

The married couple began falsely billing Dual a few months after Josie joined Dual in November 2010. In her testimony, she claimed Alvaro worked 16,500 hours in a little over two years providing legal work for Dual, equating to 126-hour weeks. He charged $1000 an hour despite having less than two years’ legal experience.

The jury was told during the trial that Josie instructed other more experienced lawyers that their fees were too high, even though they were half the hourly rate or less than her husband was charging Dual.

More than 400 invoices were submitted to Dual from Jaag Lawyers, a law firm the couple set up to defraud the company. Dual was the only client of Jaag, an acronym of Josie and Alvaro Gonzalez. Josie allocated Jaag 90% of the legal work done on Dual’s top 30 claims and instructed accounts payable to refer to Jaag Lawyers only as “counsel“ even though other law firms were formally named in invoices and files.

Mr Kilduff suggested it is “inexplicable how (the fraud) wasn’t detected in the early days”, while Prosecutor Andrew Grant responded that Josie was “implicitly vouching for the validity of that invoice” when she forwarded fraudulent payment advices to Dual’s accounts team who “acted on her say-so.”

Judge Lacava agreed, saying the authorisation process “had a degree of trust built in and that’s what gets to the heart of this case”.

The pair remain in custody. The sentencing date has not yet been fixed.