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District Court 24 July 2017

R v Foo; R v Ah; R v Chen; R v Ng

[2017] NSWDC 395

Fraud & dishonesty
CRIME SENTENCE COMMONWEALTH OFFENDERS CRIMINAL CODE S 400.9(1) FOUR NON PRINCIPALS IN MONEY

Citation: R v Foo; R v Ah; R v Chen; R v Ng [2017] NSWDC 395
Court: District Court of New South Wales
Date: 24 July 2017
Judge(s): Neilson DCJ

Background

Four Malaysian nationals pleaded guilty to charges arising from a money-laundering operation uncovered by police in Rhodes, New South Wales, on 7 July 2016. Police observed two vehicles coordinating the transfer of a black bag containing $500,170 in cash. A fifth man, who received the bag, was separately prosecuted and had already been sentenced by the time of these proceedings.

Two of the four offenders, Ah and Chen, pleaded guilty as principals to dealing with money where there were reasonable grounds to suspect it was proceeds of crime, contrary to s 400.9(1) of the Criminal Code Act 1995 (Cth). The other two, Foo and Ng, pleaded guilty to aiding and abetting that offence. All four had been in custody since their arrest, a period of approximately one year and 17 days.

The offenders occupied different roles in the scheme. Foo and Ng acted as drivers; Ah acted as a courier who physically carried the cash; and Chen occupied a low-level management role and had arranged deliveries on the same day totalling approximately $700,000. None of the offenders knew the ultimate beneficial owners of the money, and the source of the funds was never established, though the court noted it was highly likely to be proceeds of drug supply, illegal gambling, or other unlawful activity.

  • What is the proper construction and application of s 400.9(1) of the Criminal Code in a multi-offender money-laundering matter?
  • What sentence is appropriate for each offender, given their differing roles, personal circumstances, and guilty pleas?
  • How should the sentences of non-principal participants be calibrated against the sentence already imposed on the principal (Chan), who received a head term of 22 months with release on recognisance after 14 months?

Decision

Section 400.9(1) requires only that it be objectively reasonable to suspect the money is proceeds of crime. Absolute liability applies to the elements of suspicion and value, and the section expressly provides a defence where a defendant proves they had no reasonable grounds for suspicion. The court noted that this threshold, mere suspicion, is considerably lower than belief or recklessness, and sentencing must reflect that lower level of mental culpability.

Neilson DCJ nonetheless emphasised that even non-principal participants play an essential role in enabling money-laundering schemes to succeed. The cash must physically move from those who earn it to those who can benefit from it offshore, and couriers and drivers make that possible. That functional necessity, the court reasoned, explains why Parliament prescribed a maximum of three years' imprisonment even for this lower-fault offence.

Each offender's personal circumstances were examined in some depth. All four were young Malaysian nationals who had come to Australia on tourist visas, had limited English, faced financial hardship, and had been recruited into the scheme by persons not before the court. The court accepted that all were remorseful and that, as foreign nationals, they would be deported upon release. These factors were treated as mitigating, though the court was clear that financial necessity does not excuse criminal conduct.

Sentences were graduated according to role. Chen, who had a low-level managerial function and frankly admitted additional dealings totalling $200,000 that the Crown could not otherwise have proved, received the longest term. Ah, as the physical courier, ranked above the drivers in culpability. Foo and Ng, as drivers who aided and abetted, received the shortest terms. All were released on recognisance part-way through their sentences, broadly consistent with the approach taken by Craigie DCJ when sentencing the principal offender Chan.

Orders Made

  • Kok Meng Foo: convicted; imprisoned for 16 months commencing 6 July 2016 and expiring 6 November 2017; released on recognisance of $500 on 24 July 2017.
  • Kim Choy Ah: convicted; imprisoned for 18 months commencing 7 July 2016 and expiring 6 January 2018; released on recognisance of $500 on 24 July 2017.
  • Wei Bin Chen: convicted; imprisoned for 21 months commencing 7 July 2016 and expiring 6 April 2018; to be released on recognisance of $500 on 6 September 2017.
  • (Note: The sentence for Kok Chun Ng is referenced in the body of the judgment but the final formal order for Ng does not appear in the text provided to this summary.)

Key Takeaways

  • Under s 400.9(1) of the Criminal Code, the prosecution need only establish an objective basis for reasonable suspicion that money is proceeds of crime. The fault element is lower than belief or recklessness, and sentences must be calibrated accordingly.
  • A conviction for aiding and abetting an offence under s 400.9(1), pursuant to s 11.2(1) of the Criminal Code, carries the same maximum penalty as the principal offence, namely three years' imprisonment or 180 penalty units, or both.
  • The District Court confirmed that non-principal participants in money-laundering schemes, even those acting at the lowest levels, perform a functionally essential role and cannot claim their criminality is inconsequential merely because they did not own or control the funds.
  • Sentencing in multi-offender proceedings of this type is graduated by reference to each participant's specific role: management ranks above couriering, which ranks above driving or otherwise aiding and abetting.
  • Frank admissions of additional uncharged conduct, where the Crown could not independently prove that conduct, may attract a meaningful discount to reflect the utilitarian benefit to the justice system, as demonstrated by the reduction applied to Chen's head sentence.

Legislation and Cases Referenced

Legislation:
- Criminal Code Act 1995 (Cth), ss 400.9(1), 400.4(1)-(3), 11.2(1)
- Crimes Act 1914 (Cth)

Cases:
No cases were formally cited in the judgment. The decision of Craigie DCJ in the sentencing of co-offender Chan (5 May 2017) was tendered as Exhibit 1 and treated as a relevant comparator, but it is not reported in the catchwords or text as a formally cited authority.