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District Court 16 April 2019

R v CN

[2019] NSWDC 966

Fraud & dishonesty
CRIME MONEY LAUNDERING 4 FORM 1 OFFENCES OFFENDERS EARLY PLEA OF GUILTY NO PRIOR CRIMINAL RECORD

Citation: R v CN [2019] NSWDC 966
Court: District Court of New South Wales
Date: 16 April 2019
Judge(s): Tupman DCJ

Background

The offender, an Australian citizen originally from Vietnam, was identified during a NSW Police and Crime Commission strike force investigation into a transnational criminal money laundering network operating in Sydney. Using telecommunications intercepts and physical surveillance, police linked the offender to a Hawala banking system through which large quantities of cash were collected from clients in Australia and equivalent value transferred to overseas representatives, without physically moving the money. He used nine different phone services and participated in approximately 329 separate transactions over just under 10 months.

The offender pleaded guilty in the Local Court at an early opportunity to six rolled-up charges of recklessly dealing with the proceeds of crime, each representing a month of activity, contrary to s 193B(3) of the Crimes Act 1900 (NSW). He also asked the court to take into account four additional Form 1 offences of the same character. Across all ten counts, the total amount of proceeds laundered was approximately $20,566,849.

After his arrest in March 2017, the offender participated in a record of interview and admitted his involvement. He encouraged his wife to cooperate with police, and he signed an undertaking to give evidence against his overseas controller in any future proceedings.

Legal Issues

  • What is the appropriate level of objective seriousness for rolled-up offences of recklessly dealing with the proceeds of crime involving very large sums and numerous transactions?
  • What discount applies for an early guilty plea to charges of this complexity?
  • What discount applies under s 23 of the Crimes (Sentencing Procedure) Act 1999 for past and future assistance to authorities?
  • How should the principle of parity apply given sentences previously imposed on co-offenders from the same syndicate?
  • What weight should be given to the offender's subjective circumstances, including rehabilitation prospects, family impact, and absence of prior convictions?

Decision

Objective seriousness

Tupman DCJ found that each of the six substantive offences was at least at the middle of the range for offences of recklessly dealing with the proceeds of crime (at [31]). The level of recklessness was high and approached knowledge (at [24]). The offending involved significant and sophisticated planning as part of an organised criminal group, very large sums, and a high number of individual transactions per month (at [24]). The offender's role was comparable to a courier in a drug syndicate: not a principal, but an essential and active participant who earned at least $60,000 in commissions over 10 months (at [25]). His financial motivation constituted a separate aggravating factor, as did the organised and sophisticated nature of the syndicate (at [26]).

Guilty plea discount

The court applied a 25% discount for the utilitarian value of the early guilty plea, consistent with R v Thompson; R v Houlton [2000] 49 NSWLR 383 (at [38]). The utilitarian value was assessed as significant because a trial involving 329 separate transactions would have been lengthy and would have required extensive surveillance and intercept evidence (at [38]).

Assistance discount under s 23

The court assessed an additional 20% discount for assistance: 10% for past assistance and 10% for future assistance (at [49]). The offender made full admissions immediately after arrest, encouraged his wife to provide an induced statement implicating herself and the controller, and signed an undertaking to give evidence in future proceedings (at [42]-[45]). The court accepted the assistance was valuable, truthful, and reliable, and noted it related not only to the charged offending but potentially to other syndicates (at [47]). An overall discount of 45% was applied (at [49]).

Parity with co-offenders

Four co-offenders from the same strike force had previously been sentenced. Tupman DCJ found the offender's overall offending was more serious than the most comparable co-offender: his 329 transactions over 10 months totalling over $20 million exceeded that co-offender's eight transactions totalling over $11 million (at [52]). However, the offender presented a more favourable subjective case, including no prior record and excellent rehabilitation prospects, compared to a co-offender who had a prior drug supply conviction and received an aggregate term of 6 years with a non-parole period of 4 years (at [53]).

Subjective circumstances and special circumstances

The court accepted the offender had no prior criminal record, had complied fully with bail conditions since April 2017, maintained full-time employment as a kitchen manager, cared for his children, and volunteered with a charity (at [40]). His prospects of rehabilitation were assessed as excellent (at [40]). The court accepted his remorse was genuine and that the offending was largely motivated by financial stress following his wife's second birth, though it found he quickly came to understand the criminality of his conduct and continued regardless (at [36]). Special circumstances were found to justify altering the statutory ratio between the non-parole period and the balance of the sentence (at [56]).

Sentence

Applying a starting point of 5 years for the most serious offence (sequence 44, covering over $9 million including Form 1 matters) and 4 years for each remaining substantive count, then reducing by 45%, the court arrived at indicative sentences of 2 years and 9 months for sequence 44 and 2 years and 2 months for each of the five remaining counts (at [54]-[57]). Full accumulation would have produced an excessive aggregate of over 13 years (at [55]). The court imposed an aggregate sentence of 4 years and 6 months with an aggregate non-parole period of 2 years and 3 months (at [56]).

Orders Made

  • The offender is convicted.
  • Sentenced to an aggregate term of imprisonment of 4 years and 6 months pursuant to s 53A of the Crimes (Sentencing Procedure) Act 1999 (NSW), commencing 2 April 2019 and expiring 1 October 2023.
  • Aggregate non-parole period of 2 years and 3 months, commencing 2 April 2019 and expiring 1 July 2021.
  • Parole period of 2 years and 3 months, commencing 2 July 2021 and expiring 1 October 2023.
  • Indicative sentences: sequence 44 (2 years and 9 months); sequences 47, 48, 49, 51 and 52 (2 years and 2 months each).
  • Form 1 offences (sequences 45, 46, 50 and 53) taken into account when sentencing for sequence 44.

Key Takeaways

  • Rolled-up charges for recklessly dealing with the proceeds of crime involving very large sums and hundreds of individual transactions will be assessed as at least the mid-range of objective seriousness, even where the offender does not occupy a principal role in the syndicate (at [24], [31]).

  • The District Court confirmed that a 25% utilitarian discount for an early guilty plea is appropriate under R v Thompson; R v Houlton where a trial would have been particularly complex, lengthy, and dependent on telecommunications intercept and surveillance evidence (at [38]).

  • Under s 23 of the Crimes (Sentencing Procedure) Act 1999, a 20% discount for assistance is available where an offender makes immediate and full admissions, encourages others to cooperate, provides intelligence beyond the charged offences, and undertakes to give future evidence, even where no controlled operation is involved and no proceedings against the named target are yet pending (at [47]-[49]).

  • Financial motivation for money laundering offences is a distinct aggravating factor and does not arise automatically from the nature of the offence itself (at [26]).

  • Where co-offenders from the same syndicate have been sentenced, parity principles operate alongside differences in objective involvement and subjective circumstances, meaning a more active participant with a superior subjective case may ultimately receive a sentence not vastly different from a less active participant with a poorer one (at [52]-[53]).

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW): s s 193B(3);
- Crimes (Sentencing Procedure) Act 1999 (NSW) : ss 23 , 53A.

Cases
- R v Thompson; R v Houlton [2000] 49 NSWLR 383