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District Court 18 January 2017

R (Cth) v Daniel Peter MEAD

[2017] NSWDC 1

DrugsFraud & dishonesty
IMPORTATION OF ANABOLIC STEROIDS PROHIBITED TIER 1 GOODS SMALL BUSINESS OPERATION CHINESE SUPPLIERS EFFORTS TO AVOID DETECTION USE OF THE ‘DARK NET’

Citation: R (Cth) v Daniel Peter MEAD [2017] NSWDC 1
Court: District Court of New South Wales
Date: 18 January 2017
Judge(s): Judge A Haesler SC

Background

The offender was a young man in his late twenties who had begun using anabolic steroids to build his physique after experiencing school bullying. He used his information technology skills to source raw steroid powder from suppliers in China, importing it clandestinely through the dark net, Bitcoin transactions, and false identities. Over time, his personal use expanded into a small commercial operation.

Between early 2014 and July 2015, the offender arranged multiple shipments of Testosterone Enanthate, a prohibited Tier 1 good under the Customs Act 1901 (Cth), concealed in items such as party streamers, music boxes, and hair dye packets. He also imported small quantities of methamphetamine. He converted the raw steroid powder into capsule and liquid form for sale, using fabricated NSW driver's licences to lease a PO Box, open prepaid MasterCard accounts, and otherwise mask his identity. His estimated profit was approximately $50,000.

A joint AFP and NSW Police investigation led to a search warrant executed on 10 July 2015, uncovering a hidden wall cavity containing steroids, manufacturing equipment, blank identification cards, and software used to access the dark net. The offender faced ten substantive offences spanning both Commonwealth and State law, including importation of prohibited goods, manufacture and supply of prohibited drugs, dealing in proceeds of crime, and production of false documents.

Legal Issues

  • How the court should assess the objective seriousness of each individual offence where all offences formed part of an interconnected course of criminal conduct
  • How to structure concurrent and cumulative sentences across both Commonwealth and State sentencing regimes to reflect totality without double-counting
  • Whether special circumstances existed to justify a non-parole period shorter than the statutory ratio, given the accumulation of sentences and the offender's rehabilitation prospects
  • The appropriate discount for an early guilty plea and cooperation with authorities
  • The weight to be given to the offender's good character, drug dependency, and low risk of re-offending as mitigating factors

Decision

Objective Seriousness and Course of Conduct

The court found that, although the individual quantities imported were relatively modest, each offence was carried out with planning and deception and formed part of an ongoing criminal enterprise (at [39]-[40]). The importations provided raw material for a manufacturing and supply operation in which the offender controlled each phase of the supply chain (at [49]). Sophisticated measures to avoid detection, including dark net communications, Bitcoin payments, and false identities, elevated the objective seriousness of the offending and called for significant weight to be given to general and specific deterrence (at [40], [47]). The court found that only custodial sentences of some length could meet the purposes of punishment (at [40]).

Concurrent and Cumulative Sentences: Structuring for Totality

The court recognised that where multiple offences arise from the same unlawful act, an offender should not be punished twice for common elements, but noted that sentences are not made concurrent merely because conduct forms part of one course of criminal conduct (at [56]-[57]). The court imposed an aggregate fixed term for the State offences, equivalent to the aggregate non-parole period, and accumulated the Commonwealth sentences on top of that, structuring the result so the total sentence remained just and proportionate to the totality of the offending (at [62]-[64]). The court took care to ensure that the guilty plea discount was not eroded by the accumulation process (at [67]).

Special Circumstances and Parole

The court found special circumstances warranted a considerably shorter non-parole period than the statutory ratio, citing the accumulation of sentences, the offender's positive response to custody, his trusted position in prison, and his good prospects of rehabilitation with supervision (at [62]-[63]). The court noted research indicating that supervised parole reduces re-offending compared to unconditional release (at [60]).

Mitigation: Plea, Character, and Rehabilitation

The court reduced the indicated sentences by 25 percent to reflect the utilitarian value of the early guilty plea and cooperation with authorities (at [65]). The offender's prior good character was accepted as a mitigating factor, and the psychologist's assessment of low risk of re-offending was accepted, with the court expressing confidence he could resume normal community life after release (at [71]-[73]). However, the court noted that after being dealt with leniently by the Local Court following a first arrest in August 2014, the offender had continued to offend, which diminished the leniency typically extended to first offenders (at [73]).

False Driver's Licences

The court found the offender produced fraudulent licences primarily for his own purposes to facilitate drug importation and profit-laundering, and that while there was capacity to produce them for others, the prosecution had not proved beyond reasonable doubt that licences were sold to third parties (at [52]). Accordingly, the court declined to treat sale to others as an aggravating factor. The offences were treated as serious in their own right, given the importance of driver's licences as identity documents, but also as adjuncts to the broader criminal scheme (at [51], [54]).

Orders Made

State Offences (aggregate):
- Manufacture prohibited drug (seq 001): indicative sentence of 1 year 1 month (Form 1: possess tablet press)
- Possess prohibited drug (seq 003): indicative sentence of 1 month (Form 1: possess prohibited drug)
- Deal with property suspected proceeds of crime (seq 004): indicative sentence of 5 months
- Make/possess equipment to make false document (seq 005): indicative sentence of 9 months (Form 1: possess equipment to make ID information)
- Supply prohibited drug, more than small quantity (seq 007): indicative sentence of 9 months
- Deal with identity information to commit indictable offence (seq 011): indicative sentence of 1 month
- Aggregate fixed term: 1 year 6 months, commencing 10 July 2015, expiring 9 January 2017 (special circumstances found)

Commonwealth Offences:
- Intentionally import prohibited Tier 1 goods without approval (seq 004, including three sequences on s 16BA schedule): 2 years 3 months, commencing 10 June 2016, expiring 9 September 2018
- Intentionally import prohibited Tier 1 goods without approval (seq 005): 1 year 6 months, commencing 10 February 2016, expiring 9 August 2017
- Import border controlled drug, no commercial intent (seq 006, including one sequence on s 16BA schedule): 3 months, commencing 10 January 2016, expiring 9 April 2016
- Deal with proceeds of crime (seq 008): 1 year 10 months, commencing 10 May 2017, expiring 9 March 2019
- Produce false/misleading document (seq 009): 1 year 1 month, commencing 10 August 2017, expiring 9 September 2018
- Use false customer name to receive service (seq 010): 3 months, commencing 10 May 2017, expiring 9 August 2017
- Total Commonwealth term: 3 years 2 months, commencing 10 January 2016
- Non-parole period: 1 year 4 months, expiring 9 May 2017; released to parole on that date subject to s 19AL Crimes Act 1914 (Cth)

Total effective sentence: 3 years 8 months
Total effective non-parole period: 1 year 10 months

  • Drug destruction order
  • Forfeiture of property in Schedule 2 to the Commonwealth under s 3ZQZB ss 4(d) Crimes Act 1914 (Cth) (with a stay on items 003/004 until 18 March 2017) and s 48(2)(d) Proceeds of Crime Act 2002 (Cth)

Key Takeaways

  • A small-scale but commercially structured drug importation operation, run with sophisticated methods to avoid detection including dark net access, Bitcoin transactions, and fabricated identity documents, will be treated as having materially elevated objective seriousness, even where individual quantities are relatively modest (at [39]-[40], [47]).

  • Where an offender faces multiple interrelated Commonwealth and State offences arising from the same course of conduct, the sentencing court must structure concurrent and cumulative terms so that the total sentence reflects the totality of the criminality without double-counting elements common to separate charges, and without eroding guilty plea discounts through the accumulation process (at [55]-[58], [67]).

  • Special circumstances justifying a reduced non-parole period may be found where accumulation of sentences across two sentencing regimes, combined with positive rehabilitation prospects, makes a lengthened parole period both necessary and appropriate (at [62]-[63]).

  • Continued offending after being dealt with leniently by a court following a first arrest reduces the weight available to an offender from prior good character and the leniency typically extended to first offenders (at [73]).

  • The District Court declined to treat production of fraudulent driver's licences as aggravated by sale to third parties where the prosecution had not proved that allegation beyond reasonable doubt, applying the principle that matters in aggravation must be established to that standard (at [52]).

Legislation and Cases Referenced

Legislation
- Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth)
- Criminal Code 1995 (Cth)
- Crimes Act 1900 (NSW)
- Crimes Act 1914 (Cth)
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Customs Act 1901 (Cth)
- Customs (Prohibited Imports) Regulations 1956 (Cth)
- Customs Regulations 1926 (Cth)
- Drug Misuse and Trafficking Act 1985 (NSW)

Cases
- Attorney General's Application No. 1: (2002) 56 NSWLR 146
- Abbas, Bodiotis, Taleb and Amoun v R [2013] NSWCCA 115
- Blackman and Walters [2001] NSWCCA 121
- Bugmy v The Queen [1990] HCA 18; (1990) 169 CLR 525
- Dennison v R [2011] NSWCCA 114
- Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616
- R v MAK [2006] NSWCCA 381; (2006) 167 A Crim R 159
- Markarian v The Queen (2005) 228 CLR 357
- Mill v The Queen (1988) 166 CLR 59
- Nahlous [2010] NSWCCA 58
- Nguyen v The Queen (2016) 256 CLR 656
- Pearce v The Queen (1998) 194 CLR 610
- The Queen v Pham [2015] HCA 39
- Power v The Queen (1974) 131 CLR 623
- Thorn v R [2009] NSWCCA 610