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District Court 8 September 2017

R v Nguyen; R v Alzcazar

[2017] NSWDC 386

Fraud & dishonesty
SENTENCE COMMONWEALTH OFFENCES MONEY LAUNDERING YOUNG OFFENDERS OF PRIOR GOOD CHARACTER

Citation: R v Nguyen; R v Alcazar [2017] NSWDC 386
Court: District Court of New South Wales
Date: 8 September 2017
Judge: Neilson DCJ

Background

NSW Police began intercepting communications in late 2015 as part of an investigation into a money laundering syndicate operating through a contact known only as "Wilson." The syndicate collected cash representing the proceeds of crime and moved it in ways designed to avoid detection by financial and legal authorities.

Michael Nguyen was identified as a courier within the syndicate. On 27 January 2016, he met Wilson at a shopping centre car park and transferred a sports bag containing cash. The following day, police stopped Nguyen's vehicle and found $300,070 in cash that had been loaded into the car by Neil Alcazar.

Alcazar's role was that of a "banker," storing large amounts of cash on behalf of the syndicate. When police searched his residence on 28 January 2016, they found a further $299,950 in cash stored behind his bedhead, bundled in the same manner as the money found in Nguyen's vehicle. Both men were relatively young, had no prior criminal history, and pleaded guilty at an early stage.

  • What sentence was appropriate for two young, first-time offenders who each played a facilitating role (courier and banker) within a larger money laundering syndicate?
  • What was the relevant mental element for offences under s 400.9 of the Criminal Code Act 1995 (Cth), and how did it affect the offenders' culpability?
  • Whether Intensive Corrections Orders were appropriate in place of full-time custodial sentences, given the offenders' personal circumstances and the nature of their offending.

Decision

Neilson DCJ found that, although neither offender was at the top of the syndicate hierarchy, the offending was deliberate, planned, and not opportunistic. The amounts of cash involved were so large that any reasonable person would have known the funds were the proceeds of crime. His Honour accepted that both Nguyen and Alcazar not only had reasonable grounds to suspect the criminal origin of the cash but actually held that suspicion subjectively, placing them at a higher level of culpability within the s 400.9 framework.

The court drew on Ansari v R for the proposition that, in money laundering cases involving syndicates, the most important sentencing consideration is what the offender actually did, given that details of the broader organisation are often unavailable. Arora v Cobern confirmed that a person who subjectively suspects the money is proceeds of crime is more blameworthy than one who merely has objective grounds for suspicion.

Notwithstanding the seriousness of the offending, his Honour gave significant weight to the offenders' youth, prior good character, early guilty pleas, and assessed suitability for Intensive Corrections Orders. Both offenders had co-operated with authorities and shown genuine remorse. The court concluded that Intensive Corrections Orders were appropriate for the principal charges, with recognisance orders imposed for the lesser charges.

Orders Made

Michael Nguyen:
- Convicted on the charge of possessing $300,070 suspected proceeds of crime (28 January 2016, Campsie): sentenced to one year's imprisonment to be served by way of an Intensive Corrections Order (ICO), commencing 8 September 2017.
- Convicted on the charge of dealing with money suspected to be proceeds of crime valued at less than $100,000 (26–27 January 2016, Burwood): released on recognisance of $500 to be of good behaviour for two years, pursuant to s 20(1)(a)(i) of the Crimes Act 1914 (Cth).

Neil Alcazar:
- Convicted on the charge of possessing $300,070 suspected proceeds of crime (28 January 2016, Campsie): sentenced to one year's imprisonment to be served by way of an Intensive Corrections Order, commencing 8 September 2017.
- Convicted on the charge of possessing $299,950 suspected proceeds of crime (28 January 2016, Campsie): released on recognisance of $500 to be of good behaviour for two years, pursuant to s 20(1)(a)(i) of the Crimes Act 1914 (Cth).

Key Takeaways

  • Under s 400.9(1) of the Criminal Code Act 1995 (Cth), an offence can be established on purely objective grounds, without proof that the accused subjectively suspected the funds were proceeds of crime. However, subjective suspicion, where it exists, increases an offender's culpability.
  • The District Court confirmed the approach in Ansari v R: in syndicate-based money laundering cases, sentencing focuses on the offender's specific conduct and role, because evidence of the broader criminal organisation is rarely before the court.
  • Handling very large sums of cash in covert, structured circumstances supports an inference that the offender knew, rather than merely suspected, that the money was criminally derived.
  • Youth, prior good character, early guilty pleas, and genuine remorse can together support a finding that an Intensive Corrections Order is appropriate even where the offending involved deliberate participation in an organised crime syndicate.
  • A "banker" role within a money laundering syndicate, storing large volumes of cash on behalf of others, attracts criminal liability under s 400.9(1) on the same basis as an active courier role.

Legislation and Cases Referenced

Legislation:
- Criminal Code Act 1995 (Cth), ss 400.9(1) and 400.9(1A)
- Crimes Act 1914 (Cth), ss 20(1)(a)(i) and 20AB(1AA)(a)(ix)

Cases:
- Ansari v R [2007] NSWCCA 204
- Arora v Cobern [2015] WASC 440
- R v Olbrich (1999) 199 CLR 270 (cited within Ansari)
- Assafiri v R [2007] NSWCCA 159 (cited within Ansari)