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District Court 22 February 2011

R v Tanya YOUKHANA

[2011] NSWDC 63

Fraud & dishonesty
CRIMINAL PROCEEDS OF CRIME OPERATION SCHOALE

Citation: R v Tanya Youkhana [2011] NSWDC 63
Court: District Court of New South Wales
Date: 22 February 2011
Judge: Haesler SC DCJ

Background

The offender was the sister of a woman married to a man at the centre of a major joint investigation by the NSW Crime Commission and NSW Police Force known as Operation Schoale, which resulted in charges against multiple people for significant offences. The offender's connection to the investigation arose through two distinct courses of conduct spanning 2006 and 2007.

The first involved the offender renting a house at Bilgola with no formal rental agreement and, while living there, packing approximately $2.73 million in cash into vacuum-sealed plastic bags and burying it in the garden. Police executed a search warrant in June 2007 and discovered the cash, along with items in the attic bearing the offender's fingerprints. The cash originated from her brother-in-law and his associates, and the offender knew it was the proceeds of crime.

The second course of conduct involved the offender's bank accounts. Over approximately ten months in 2006, thirty-eight cash deposits of between $9,000 and $9,900 each, totalling $347,207.51, were made into accounts in her name or jointly held with her sister. The deposits were structured to stay below the $10,000 threshold that triggers mandatory reporting to AUSTRAC, and the offender was aware of and a party to that purpose.

Legal Issues

  • What sentence was appropriate for knowingly dealing with the proceeds of crime under s 193B(2) of the Crimes Act 1900 (NSW), given the amount of cash involved and the offender's role?
  • What sentence was appropriate for conducting transactions to avoid financial reporting requirements under s 31(1) of the Financial Transaction Reports Act 1988 (Cth)?
  • To what extent should the offender receive a discount for her guilty plea, and was that plea to be treated as early?
  • Whether special circumstances existed to justify adjusting the standard ratio between the non-parole period and the balance of sentence.
  • What weight should be given to the offender's claimed altruistic motivation, given that her account was unsworn and untested?

Decision

Issue 1: The proceeds of crime offence (State)

Haesler SC DCJ treated the State offence as significantly more serious than the Commonwealth matter. The court found the secretion of nearly $2.73 million in cash to be a relatively sophisticated concealment operation, carried out with knowledge that investigators were closing in on the offender's brother-in-law. The offender's fingerprints on packing materials in the attic confirmed her active involvement in securing the cash.

The offender claimed her sole motivation was to assist her sister and brother-in-law. The court declined to accept this on the balance of probabilities, applying Olbrich, Weininger, and Qutami, noting that unsworn and untested assertions cannot be used to minimise moral culpability. The court found it defied credulity that no financial reward would accompany involvement in hiding such a large sum, though there was equally no evidence she shared in the proceeds or lived lavishly.

Issue 2: The financial reporting offence (Commonwealth)

The court assessed the Commonwealth offence as less serious. The transactions were relatively unsophisticated, there was no evidence the offender knew the money was cocaine-trafficking proceeds, and no evidence traced where the funds came from or went. Nonetheless, thirty-eight structured deposits over ten months, all just below the reporting threshold, represented a deliberate and sustained course of evasion directed at undermining the objects of the Financial Transaction Reports Act 1988 (Cth).

Issue 3: Plea discount and special circumstances

The offender received the full 25 per cent discount for her guilty plea in the State matter, as the plea was entered in the Local Court after delays attributable to earlier prosecution and defence teams rather than to the offender. A comparable benefit was applied in the Commonwealth matter. The court declined to find special circumstances warranting a reduction in the non-parole period below the standard ratio. The court reasoned that all subjective mitigating factors had already been reflected in a substantially reduced overall sentence, and that a further reduction would fail to reflect the seriousness of the offending.

Issue 4: Full-time custody

The court held that only a full-time custodial sentence could do justice to the gravity of the State offence. The offender had prior Local Court matters, but none of comparable seriousness, and the court found she was otherwise of good character. Rehabilitation was considered to be well advanced, reducing the need for extended supervisory conditions on release.

Orders Made

  • Count 1 (Commonwealth financial reporting offence): Convicted and sentenced to one year's imprisonment, with immediate release on a recognisance under s 20(1)(b) of the Crimes Act 1914 (Cth), in the sum of $200, to be of good behaviour for one year (effectively a suspended sentence of one year).
  • Count 2 (State proceeds of crime offence): Convicted and sentenced to a non-parole period of one year and six months, commencing 13 February 2011 and expiring 12 August 2012, followed by a parole period of six months expiring 12 February 2013.
  • Nine days of pre-sentence custody was taken into account.
  • Total effective sentence: two years, with a non-parole period of one year and six months.

Key Takeaways

  • Under Qutami, Weininger, and Olbrich, a sentencing court will not accept unsworn and untested assertions by an offender to minimise moral culpability, particularly where those assertions relate to motivation and cannot be verified.
  • The District Court confirmed that where an offender's claimed altruistic motive is implausible given the scale of the offending, the court will decline to make a finding in mitigation on that basis, while equally making no adverse finding if the evidence on motivation is simply silent.
  • Structuring thirty-eight cash deposits just below the AUSTRAC reporting threshold over ten months constitutes a deliberate and sustained evasion of the Financial Transaction Reports Act 1988 (Cth), even where the offender's involvement was relatively unsophisticated.
  • A full-time custodial sentence was required for the proceeds of crime offence because the sheer quantum of cash involved, nearly $2.73 million, dominated the objective seriousness of the conduct, notwithstanding significant subjective mitigating factors.
  • Where subjective factors and a guilty plea have already produced a substantially reduced head sentence, a further reduction of the non-parole period to reflect special circumstances may be declined if the result would inadequately reflect the criminality involved.

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW)
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Financial Transaction Reports Act 1988 (Cth)
- Crimes Act 1914 (Cth)

Cases
- Qutami (2001) 127 A Crim R 369
- Weininger (2003) 212 CLR 629
- Rule [2003] NSWCCA 97
- Qian (2010) 201 A Crim R 403
- Olbrich (1999) 199 CLR 270
- Segal [2006] NSWSC 621
- Au [2001] NSWCCA 468
- Edwards (2008) 183 A Crim R 83
- Saliba [2010] NSWDC 277
- Johnson [2010] NSWDC 242
- Peisley [2010] NSWDC 240
- Postiglione (1997) 189 CLR 295
- Jimmy (2010) 269 ALR 115
- Zamagias [2002] NSWCCA 17