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Court of Criminal Appeal 26 November 2014

Shi v R

[2014] NSWCCA 276

Fraud & dishonesty
CRIMINAL LAW SENTENCING MONEY LAUNDERING OFFENCES SENTENCING MONEY LAUNDERING OFFENCES SENTENCING

Citation: Shi v R [2014] NSWCCA 276
Court: NSW Court of Criminal Appeal
Date: 26 November 2014
Judges: Leeming JA, Fullerton J, Bellew J (Bellew J delivering the principal judgment)

Background

The applicant pleaded guilty in the District Court to ten counts of dealing with property reasonably suspected to be proceeds of crime, contrary to s 400.9(1) of the Criminal Code 1995 (Cth), and one count under the lesser s 400.9(1A) (applicable where the amount is under $100,000). The offences occurred between September and December 2011 and involved the physical movement and deposit of very large sums of cash, totalling tens of millions of dollars, through a currency transfer business into overseas accounts.

The applicant was found to have played a significant though non-leadership role in the scheme, receiving bags of cash from another person and arranging for deposits into a foreign exchange company's bank account. The sentencing judge characterised her as a conduit who had powerful reasons to suspect, and in the judge's view actually knew, that the money was unlawfully obtained.

The District Court imposed an overall sentence of five years and six months, with a non-parole period of three years. The applicant sought leave to appeal on multiple grounds, including that the sentencing judge had committed a De Simoni error and had inadequately recognised her assistance to authorities.

  • Whether the sentencing judge breached the De Simoni principle by treating the applicant as having known the money was proceeds of crime, when the charges only required that she had reasonable grounds to suspect it
  • Whether the circumstances surrounding that finding were procedurally unfair to the applicant
  • Whether the sentencing judge had erred in assessing the applicant's assistance to authorities as merely "modest," particularly given that it led to the apprehension and prosecution of another offender and the recovery of a substantial sum of money
  • Whether irrelevant considerations had infected the assessment of that assistance

Decision

The Court of Criminal Appeal upheld the De Simoni ground. The De Simoni principle (drawn from R v De Simoni [1981] HCA 31) provides that a sentencing court must not take into account circumstances of aggravation that would have warranted a conviction for a more serious offence than the one actually charged. The applicant was charged with offences requiring only reasonable suspicion that the money was proceeds of crime. By finding that she actually knew the money was criminally derived, the sentencing judge treated her as guilty of a more serious version of the offence, contrary to the De Simoni principle. The Court found that error was established.

The Court also found error in the sentencing judge's assessment of the applicant's assistance to law enforcement. The judge characterised that assistance as "modest," but the evidence showed it had resulted in the identification, apprehension, and prosecution of another offender (Liu), as well as the recovery of a significant amount of money. The Court was satisfied that this contribution warranted substantially greater weight than the sentencing judge had accorded it, and that the judge had taken into account irrelevant considerations in minimising it.

Because error was established on both grounds, the Court re-sentenced the applicant. It reduced the individual sentences from one year and six months to one year and three months on each of the applicable groups of counts, while maintaining the same cascading concurrent structure. The overall sentence was reduced from five years and six months to four years and nine months, with a non-parole period of two years and seven months.

Orders Made

  • Leave to appeal granted
  • Appeal allowed
  • Sentences imposed in the District Court quashed
  • Applicant resentenced:
  • Counts 1, 2 and 3: 1 year and 3 months, concurrent, commencing 12 December 2012, expiring 11 March 2014
  • Counts 4, 5 and 6: 1 year and 3 months, concurrent, commencing 12 March 2014, expiring 11 June 2015
  • Counts 7 and 8: 1 year and 3 months, concurrent, commencing 12 June 2015, expiring 11 September 2016
  • Counts 9 and 10: 1 year and 3 months, concurrent, commencing 12 June 2016, expiring 11 September 2017
  • s 400.9(1A) offence: 9 months confirmed (commencing 12 December 2012, expiring 11 September 2013)
  • Overall sentence: 4 years and 9 months
  • Non-parole period: 2 years and 7 months, commencing 12 December 2012, expiring 11 July 2015

Key Takeaways

  • The De Simoni principle applies with full force in the context of money laundering offences under the Criminal Code 1995 (Cth): a sentencing court cannot treat an offender as having actual knowledge that funds were proceeds of crime where the charge required only reasonable suspicion, since actual knowledge would have grounded a more serious charge.
  • A finding that elevates the offender's mental state beyond what the charged offence requires is not merely a factual observation; the Court of Criminal Appeal confirmed it constitutes a legal error capable of vitiating the sentence.
  • Assistance to authorities that leads to the arrest and prosecution of another offender and the recovery of substantial funds cannot properly be characterised as "modest" without attracting appellate correction; the weight given to such assistance must be proportionate to its demonstrated consequences.
  • Where two discrete sentencing errors are identified, each sufficient to establish error, the appellate court is entitled to resentence and is not confined to correcting only one.
  • Under s 400.9(1) of the Criminal Code 1995 (Cth), the maximum penalty is three years' imprisonment or 180 penalty units; the lesser offence under s 400.9(1A) (amounts under $100,000) carries a maximum of two years or 120 penalty units.

Legislation and Cases Referenced

Legislation
- Criminal Code 1995 (Cth), ss 400.9(1), 400.9(1A)
- Crimes Act 1914 (Cth)
- Proceeds of Crime Act 2002 (Cth), s 48(2)

Cases
- R v De Simoni [1981] HCA 31; (1981) 147 CLR 383
- Cameron v R [2002] HCA 6; (2002) 209 CLR 339
- Green v R; Quinn v R [2011] HCA 49; (2011) 244 CLR 462
- Kentwell v R [2014] HCA 37
- Pearce v R [1998] HCA 57; (1998) 194 CLR 610
- Wong v R [2001] HCA 64; (2001) 207 CLR 584
- R v Brown [2012] NSWCCA 199
- R v Cartwright (1989) 17 NSWLR 243
- R v Glynatsis [2013] NSWCCA 131; (2013) 230 A Crim R 99
- R v Li [2010] NSWCCA 125
- R v PPB [1999] NSWCCA 360
- SZ v R [2007] NSWCCA 19; (2007) 168 A Crim R 249
- Zreika v R [2012] NSWCCA 44; (2012) 223 A Crim R 460