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Court of Criminal Appeal 14 July 2010

Schembri v Regina

[2010] NSWCCA 149

Fraud & dishonesty
CRIMINAL LAW SENTENCE NO ADDITIONAL CRIMINALITY CRIMINAL LAW SENTENCE NO ADDITIONAL CRIMINALITY

Citation: Schembri v Regina [2010] NSWCCA 149
Court: NSW Court of Criminal Appeal
Date: 14 July 2010
Judges: Beazley JA, Kirby J, Johnson J

Background

The appellant was convicted by a jury of nine counts of obtaining a financial advantage by deception and six counts of attempting to do so, all arising from lodging false GST refund claims with the Australian Taxation Office. She was also convicted on a seventeenth count of dealing with the proceeds of crime, specifically handling $100,000 or more derived from those same GST fraud offences.

At first instance, the District Court sentenced the appellant to an aggregate term of seven years imprisonment, with a non-parole period of four years. The sentence for count 17 was structured to run cumulatively (that is, one after the other) with the sentences on the other counts, extending the overall term beyond what it would have been had all sentences run concurrently (at the same time).

The appellant sought leave to appeal against sentence on three grounds. By the time of the hearing, only one ground remained: that the sentencing judge erred by not making the sentence on count 17 wholly concurrent with the sentences on counts 1 to 15.

  • Whether the sentence imposed for the money laundering offence (count 17) should have run concurrently with the sentences for the principal fraud offences, rather than cumulatively
  • Whether charging a defendant with a money laundering offence that arises from exactly the same facts as the principal offence represents appropriate prosecutorial practice

Decision

The Crown conceded ground 3 before the hearing, accepting that the money laundering count arose from the same facts as the principal offences and involved no additional criminality. The Court of Criminal Appeal agreed the concession was properly made and quashed the sentence on count 17, re-sentencing the appellant so that the money laundering sentence concluded on the same date as the last sentence otherwise imposed. The non-parole period was adjusted accordingly.

Beyond resolving the appeal, the Court took the opportunity to reinforce its disapproval of the prosecutorial practice of charging money laundering as an additional offence where it arises from the same facts as the principal offending and adds nothing in terms of distinct criminality. The Court noted this was at least the third time in a year it had criticised such an approach.

The Court referred to its earlier decisions in Thorn v R and Nahlous v R, both of which had addressed the same problem. In Thorn, Howie J observed that money laundering offences were designed by parliament to target those who deal in the proceeds of another person's criminal activity to conceal its origins. In Nahlous, the Court stated that where receipt of money flows directly from the principal offending and does not constitute a separate act of criminality, a separate charge and separate penalty are not warranted.

The Court noted that the charges in this case predated those earlier decisions. Nevertheless, given the significance of the issue, it directed that a copy of its remarks be brought to the attention of the Commonwealth Director of Public Prosecutions.

Orders Made

  • Leave to appeal granted
  • Appeal allowed
  • Sentence on count 17 quashed; by way of re-sentence, a term of 2 years imprisonment imposed to run from 20 October 2012 to 19 October 2014
  • Non-parole period quashed and reset at 3 years and 5 months, to conclude on 19 March 2012

Key Takeaways

  • Where a money laundering charge arises from exactly the same facts as the principal offences and involves no additional criminality, a cumulative sentence on that charge is not appropriate.
  • The Court of Criminal Appeal confirmed that money laundering provisions are directed at conduct where a person deals in the proceeds of someone else's crime to conceal their origin, not at an offender who simply receives the proceeds of their own principal offending.
  • Under the principle articulated in Nahlous v R, a single act can in theory constitute two offences, but where it does not produce a separate act of criminality, a separate charge and separate penalty are unwarranted.
  • In allowing the appeal, the Court made plain that layering a money laundering charge over a principal offence to extend the overall sentence is a practice it has now criticised in at least three decisions.
  • The Court directed that its remarks be brought to the attention of the Commonwealth Director of Public Prosecutions, signalling the institutional significance it attached to the issue.

Legislation and Cases Referenced

Legislation:
- Criminal Code Act 1995 (Cth), s 134.2(1) (obtaining a financial advantage by deception)
- Criminal Code Act 1995 (Cth), ss 11.1 and 134.2(1) (attempt to obtain a financial advantage by deception)
- Criminal Code Act 1995 (Cth), s 400.4(1) (dealing with proceeds of crime, $100,000 or more)
- Criminal Code Act 1995 (Cth), s 400.6(1) (dealing in proceeds of crime, referenced in Nahlous)
- Copyright Act 1968 (Cth), ss 135ASB(1) and 135ASC(1) (referenced in Nahlous)

Cases:
- Thorn v R [2009] NSWCCA 294
- Nahlous v R [2010] NSWCCA 58