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District Court 3 September 2010

R v Sowaid, Nada

[2010] NSWDC 193

Fraud & dishonesty
COMMONWEALTH OFFENCE FRAUDULENT CONDUCT DISHONESTLY CAUSE A LOSS FALSE IMPORT DECLARATION INTENTION PARITY

Citation: R v Sowaid, Nada [2010] NSWDC 193
Court: District Court of New South Wales
Date: 3 September 2010
Judge(s): King SC DCJ

Background

The offender was the sole director, shareholder and secretary of a company engaged in importing molasses tobacco and charcoal for use in hookah pipes. In late 2008, she arranged the importation of two shipping containers into Sydney, each declared to Australian Customs and Border Protection Service (ACBPS) as containing only charcoal. In fact, each container concealed more than 9,000 kilograms of molasses tobacco beneath layers of charcoal. No duty is payable on charcoal, but substantial duty applies to molasses tobacco.

The offender also fabricated a manufacturer's declaration for the Australian Quarantine and Inspection Service by physically cutting and pasting together elements from multiple documents to create a false composite. Documents seized from her home, including an exercise book with handwritten calculations on molasses, tax, import costs and sell prices, strongly evidenced her planning and awareness of the scheme.

A jury convicted the offender on 24 May 2010 on two counts of dishonestly intending to cause a loss to a Commonwealth entity, contrary to section 135.1(3) of the Criminal Code Act 1995 (Cth). The total customs duty evaded across both containers was $5,960,034.76.

  • Whether the sentences for the two offences should be concurrent, cumulative, or partially cumulative, given they arose from a single course of conduct but involved separate declarations and separate substantial sums of duty
  • How to assess the offender's moral culpability, including the degree of planning and her role as the directing mind of the importing company
  • What weight to give mitigating factors, including the offender's personal circumstances, against the seriousness and scale of the fraud
  • Whether the sentence imposed preserved appropriate parity with any co-offenders or comparable cases

Decision

The court found the offender's moral culpability to be very high. The scheme involved deliberate concealment over an extended period, sophisticated falsification of documents, and a financial motive. The offender was not a peripheral participant: she was the controlling mind of the importing company and personally liaised with customs clearance agents and quarantine authorities.

The court identified strong grounds for general deterrence, noting that container import fraud is difficult to detect without intensive individual scrutiny. The importation of tobacco is regulated in the public interest, and the offender had calculatedly subverted that regulation. The total duty loss of nearly $6 million was treated as a significant aggravating feature.

On the question of concurrency, the court declined to impose entirely concurrent sentences. Although both offences arose from the same course of conduct, each involved a separate false declaration and a separate substantial duty liability exceeding $2.9 million. Entirely concurrent sentences would have failed to reflect the full criminality. The court imposed substantially concurrent sentences with a six-month stagger, producing a total term of three years.

Orders Made

  • Convicted on each of the two counts
  • Count 1: imprisonment for 2 years and 6 months, commencing 3 September 2010, expiring 2 March 2013
  • Count 2: imprisonment for 2 years and 6 months, commencing 3 March 2011 (six months after Count 1), expiring 2 September 2013
  • Total effective term: 3 years' imprisonment
  • Released after 1 year and 10 months (on 2 July 2012) on entering a recognisance of $5,000 to be of good behaviour for the balance of the term, with a condition to appear for sentence if the recognisance is breached

Key Takeaways

  • A conviction under section 135.1(3) of the Criminal Code Act 1995 (Cth) for dishonestly intending to cause a loss to a Commonwealth entity, through false import declarations, may attract a maximum of five years' imprisonment per count
  • Where multiple offences arise from a single course of conduct, entirely concurrent sentences may nonetheless be inappropriate if each offence involves a separately substantial financial loss to a Commonwealth entity
  • High moral culpability was established on the facts here by the offender's role as the directing mind of the scheme, her fabrication of official documents, and her deliberate, planned evasion of duty over an extended period
  • General deterrence carries significant weight in customs duty fraud cases because of the inherent difficulty of detecting concealment within commercial container imports
  • The court treated the scale of the financial loss (nearly $6 million in evaded duty) as a central aggravating factor in calibrating the sentence above the lower range for offences of this type

Legislation and Cases Referenced

Legislation
- Criminal Code Act 1995 (Cth), s 135.1(3)
- Crimes Act 1914 (Cth)

Cases
- Ryan v The Queen (2001) 206 CLR 267
- R v Kerr [2003] NSWCCA 234
- Jimmy v R [2010] NSWCCA 60
- R v Formosa [2005] NSWCCA 363