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District Court 26 July 2019

R v LI

[2019] NSWDC 824

Fraud & dishonesty
CRIME SENTENCE FEDERAL OFFENCE OPERATION WITH AUTHORITIES GAVE EVIDENCE AT TRIAL OF CO OFFENDER

Citation: R v LI [2019] NSWDC 824
Court: District Court of New South Wales
Date: 26 July 2019
Judge(s): Norrish QC DCJ

Background

The offender, a Chinese national studying in Australia on a valid visa, pleaded guilty to possessing tobacco products knowing they had been imported with intent to defraud the revenue, contrary to s 233BAD(2) of the Customs Act 1900 (Cth) in conjunction with s 11.2A of the Criminal Code (Cth). The offence carried a maximum penalty of ten years imprisonment. The offender had been committed for trial but entered his plea of guilty on 6 February 2019.

The charge arose from events on 8 May 2017, when the offender and his co-accused, Qingtao Liu, were arrested following surveillance by the Australian Federal Police and Border Force. The tobacco products recovered numbered 7,450,400 individual cigarettes, representing evaded import duty of approximately $4.6 million and evaded GST of approximately $460,000, for a total revenue evasion of just over $5 million.

The offender had previously worked for Liu in his legitimate removalist business and came to participate in the cigarette scheme under Liu's direction. The sentencing judge had already sentenced Liu following a contested trial, and the offender had given evidence for the prosecution at that trial.

  • What sentence was appropriate for the offender given his significantly lesser role compared to the principal offender, Liu
  • What discount applied for the offender's plea of guilty and his cooperation with authorities, including giving prosecution evidence at Liu's trial
  • How the principles of parity and consistency applied as between the offender and Liu
  • Whether an Intensive Correction Order (ICO) was an appropriate disposition in lieu of full-time imprisonment, given the federal nature of the offence and the availability of that option under the Crimes Act 1914 (Cth) via s 20AB

Decision

The court found that, while the overall operation was conducted on a large commercial scale with a very substantial loss of revenue to the Commonwealth, the offender's role was materially different from that of Liu. The offender functioned as a worker or labourer, acting under the direction of Liu, who was an older and trusted family friend. The offender was not a mastermind or organiser, and his personal financial gain was modest. He had complained in private WeChat messages about his conditions, indicating limited enthusiasm for the enterprise.

A number of mitigating factors weighed significantly in the offender's favour. He was of prior good character, was studying at the University of Technology Sydney, came from a pro-social background, and presented a low risk of reoffending. A psychological report confirmed elements of naivety in his conduct. He had spent only one night in pre-sentence custody and was legally in Australia on a valid visa.

The court applied discounts for the utilitarian value of the guilty plea and, separately, for the offender's substantial assistance to the authorities, including his testimony as a witness of truth at Liu's trial. These discounts, combined with the offender's personal circumstances and the disparity in culpability between him and Liu, justified a sentence considerably below that imposed on Liu.

Having regard to all sentencing factors under s 16A(2) of the Crimes Act 1914 (Cth), the court imposed a sentence of 18 months imprisonment to be served by way of an Intensive Correction Order. The court declined to impose a recognisance release order (which would otherwise apply as a default under s 19AC of the Crimes Act 1914 (Cth) for terms of imprisonment under two years), exercising the discretion available under that provision.

Orders Made

  • The offender was sentenced to 18 months imprisonment, to be served in the community by way of an Intensive Correction Order (ICO)
  • The offender was required to report to the Burwood Community Corrections office by 9:30am on the following Monday
  • The offender was required to be of good behaviour (that is, not to commit further offences)
  • The offender was required to be supervised by Community Corrections as directed
  • The offender was required to perform 200 hours of community service work
  • The court declined to impose a recognisance release order under s 19AC of the Crimes Act 1914 (Cth), exercising the discretion under subs 4 of that section

Key Takeaways

  • The District Court confirmed that a participant's role within a large-scale importation scheme is a central factor in sentencing, with workers acting under direction attracting materially lesser sentences than organisers, even where the overall revenue loss is very substantial.
  • Cooperation with authorities, including giving truthful evidence at a co-offender's trial, constitutes a separate and significant mitigating factor in federal sentencing under the Crimes Act 1914 (Cth), attracting a discount distinct from that given for the utilitarian value of a guilty plea.
  • Parity principles require courts to identify differences in culpability between co-offenders with care, particularly where one was tried and the other pleaded guilty, and where their respective roles differed in kind as well as degree.
  • Under s 20AB of the Crimes Act 1914 (Cth), a federal court may apply state sentencing options such as an Intensive Correction Order, making full-time custody unnecessary even for serious commercial offences where the individual offender's circumstances warrant it.
  • A default recognisance release order under s 19AC of the Crimes Act 1914 (Cth) for sentences of imprisonment under two years can be displaced where the court exercises its express statutory discretion not to impose one, provided that decision is recorded.

Legislation and Cases Referenced

Legislation

  • Customs Act 1900 (Cth), s 233BAD(2)
  • Criminal Code (Cth), s 11.2A
  • Crimes Act 1914 (Cth), ss 16A(2), 17A, 19AC, 20AB(1)
  • Crimes (Sentencing Procedure) Act 1999 (NSW), s 7(1)

Cases