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District Court 2 February 2018

R v Bekdache

[2018] NSWDC 9

Fraud & dishonesty
CRIMINAL LAW SENTENCE LOSS TO THE COMMONWEALTH ATTEMPTS TO REDUCE TOBACCO CONSUMPTION PRIOR GOOD CHARACTER HARDSHIP TO 3RD PARTIES

Citation: R v Bekdache [2018] NSWDC 9
Court: District Court of New South Wales
Date: 2 February 2018
Judge: Berman SC DCJ

Background

The offender, a 35-year-old man with no prior criminal history, was sentenced for a single offence of importing tobacco products with the intention of defrauding the Commonwealth of revenue, contrary to section 233BABAD(1) of the Customs Act 1901 (Cth). The duty evaded totalled $947,894.40, just under $1 million.

The offender used his position as a director of a legitimate family power tools business to arrange the importation of over 1,200 kilograms of flavoured molasses tobacco from China through a shipping container. He organised a freight forwarder, a customs broker, and associated documentation. Australian Federal Police officers arrested him at the storage facility as he was transferring boxes from the container onto a flatbed truck.

The offender claimed in unsworn statements to a community corrections officer and a psychologist that he had been coerced into the scheme by organised crime figures who threatened him and his family. The sentencing judge rejected this account on the balance of probabilities, finding the offender had played the role of a principal in the importation.

  • What is the appropriate sentence for a first offender who evaded nearly $1 million in customs duty through a planned, large-scale tobacco importation?
  • What weight should be given to the offender's claim of coercion by organised crime, made only in unsworn statements?
  • How should the court treat third-party hardship, specifically the impact on the offender's family, as a mitigating factor?
  • Should the offender's offer to repay the evaded duty reduce the prospect of full-time imprisonment?
  • What discount applied by reason of the offender's early guilty plea and assistance to authorities (the content of which was kept confidential)?

Decision

Berman SC DCJ found that the objective gravity of the offence was high. Evading nearly $1 million in duty on an addictive and harmful substance was at least as serious as personal income tax evasion or social security fraud of the same magnitude, and arguably more serious because tobacco importation simultaneously undermines two government objectives: revenue collection and public health.

The court rejected the coercion claim. Because the claim was made only through unsworn out-of-court statements, the Crown had no opportunity to cross-examine the offender on it. The material was insufficient to establish the account on the balance of probabilities.

On hardship to the offender's family, the court acknowledged the impact but characterised it as commonplace rather than exceptional. His Honour noted that the offender had proceeded with the scheme knowing imprisonment was a real consequence, and observed that there was "something a bit distasteful" about seeking judicial compassion for a family whose hardship stemmed from the offender's own choices. The offender's healthy personal finances, noted in the psychological report, were also relevant to the weight of that claim.

The offender's offer to repay the duty evaded was taken into account but the court made clear that the capacity to pay could never be a reason to avoid imprisonment that a less wealthy offender would face. His prior good character, community contributions, early plea, and cooperation with authorities (addressed in a confidential exhibit) were all treated as mitigating factors. Taken together, those factors produced a sentence approximately 40% below what would otherwise have been imposed.

Orders Made

  • The offender was sentenced to 2 years and 6 months imprisonment, commencing 1 February 2018.
  • He is to be released after serving 12 months, on a recognizance in the sum of $5,000 to be of good behaviour for the balance of the sentence.
  • One day of pre-sentence custody was taken into account.

Key Takeaways

  • Importing tobacco with intent to defraud revenue carries aggravating features beyond ordinary revenue fraud: the offence simultaneously undermines both the Commonwealth's revenue base and its public health objective of reducing tobacco consumption through duty-based pricing.
  • Unsworn statements of coercion made to community corrections officers or psychologists, where the Crown has no opportunity to cross-examine the offender, will generally be insufficient to establish that account on the balance of probabilities.
  • Family hardship as a mitigating factor receives limited weight when the consequences were foreseeable at the time of offending, and may be further reduced where the offender's financial position does not support claims of genuine need.
  • The District Court was emphatic that an offer to repay evaded duty, while a relevant consideration, cannot operate as a mechanism to purchase a non-custodial outcome: parity between wealthy and less wealthy offenders requires that financial capacity not determine whether imprisonment is imposed.
  • A discount of approximately 40% from the otherwise appropriate sentence reflected the combined effect of an early guilty plea and cooperation with authorities, though the precise nature of that cooperation was subject to suppression.

Legislation and Cases Referenced

Legislation:
- Customs Act 1901 (Cth), s 233BABAD(1)
- Customs Amendment (Smuggled Tobacco) Bill (referenced in parliamentary debate cited during sentencing submissions)

Cases:
- Three appellate decisions cited by the Crown (one each from New South Wales, Victoria, and South Australia) were considered but are not identified by name in the judgment.