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Supreme Court 24 November 2020

R v Bail Applicant M

[2020] NSWSC 1685

Fraud & dishonesty
BAIL REVIEW RELEASE APPLICATION

Citation: R v Bail Applicant M [2020] NSWSC 1685
Court: Supreme Court of New South Wales
Date: 24 November 2020
Judge(s): Fagan J

Background

The applicant, a Chinese citizen holding a resident return visa and living in New South Wales since 2009, was arrested on 10 August 2020. He faced two charges, the most serious being dealing in proceeds of crime valued at approximately $28.4 million between December 2019 and March 2020, contrary to s 400.3(1) of the Criminal Code 1995 (Cth), which carries a maximum penalty of 25 years' imprisonment.

The Crown alleged the applicant served as the Australian-based coordinator of a money laundering syndicate. He allegedly directed co-offenders to collect large sums of cash from customers wishing to transfer money across jurisdictions without detection, and then arranged for that cash to be redistributed or passed on to others.

Two co-offenders featured prominently in the Crown case. Co-offender C, arrested in March 2020 with $400,000 in cash, had been under surveillance and monitored through intercepted communications. Co-offender D, who stepped into C's role after C's arrest, was himself arrested on the same day as the applicant carrying two bags containing $1 million in cash into an address associated with the applicant.

Legal Issues

  • Whether bail should be granted to the applicant, having regard to the strength of the Crown case and the risk of flight
  • Whether proposed bail conditions, including 24-hour electronic monitoring by a private company (Attenti Australia Pty Limited), were sufficient and practically workable to reduce the flight risk to an acceptable level

Decision

Issue 1: Strength of the Crown case and flight risk

Fagan J assessed the Crown case as strong, based on the statement of facts relating to the applicant's activities with co-offender C up to March 2020, including intercepted electronic communications and surveillance evidence (at [13]). The court found a very high risk of flight arising from multiple compounding factors (at [14]).

The applicant remained a Chinese citizen with a visa that permitted him to leave and return to Australia until at least 2023. His Chinese passport had been seized, but the court noted that Australian authorities had no ability to prevent the Chinese Embassy from issuing him a replacement (at [14]). Critically, Australia has no extradition treaty with China, meaning flight there would render his return to face justice negligible in prospect (at [14]).

The court also noted that the applicant appeared to have derived considerable wealth from the alleged enterprise, including a $137,000 Porsche purchased in recent times and regular cash payments for his own benefit, while having no apparent legitimate income-generating business at the time of his arrest (at [15], [18]). The scale of the untraceable cash involved, combined with the absence of legitimate financial ties to Australia, significantly heightened the court's concern about flight (at [15]-[16]).

Issue 2: Proposed bail conditions, including electronic monitoring

The applicant proposed a comprehensive set of conditions, including a form of house arrest and 24-hour electronic monitoring funded by the applicant through Attenti Australia Pty Limited. The court rejected this arrangement as unacceptable and not practically workable for an applicant facing a Commonwealth charge (at [34]).

The Australian Federal Police raised several substantial objections. The AFP had no existing contractual relationship with Attenti, whose systems had not been vetted or endorsed by the AFP (at [28]-[29]). The AFP would have had no command control over Attenti personnel, no independent ability to verify the accuracy of information provided, and no power to alter reporting frequencies (at [27]). Past incidents cited by the AFP included a case where electronic monitoring failed to prevent a bail absconder facing serious drug importation charges, and another where equipment malfunction generated false geo-fence alerts that, if acted upon, could have led to wrongful arrests (at [25]-[26]).

The court further accepted the AFP's submission that it lacks geographically dispersed community policing capacity in New South Wales and cannot divert resources from its anti-terrorism function to manage this monitoring obligation around the clock (at [30]-[34]). On those grounds alone, the court regarded the proposed electronic monitoring condition as unacceptable (at [29]).

Regarding other proposed conditions, including financial sureties totalling $130,000 from two friends and security over the applicant's real property, the court found these offered limited protection. The scale of hidden cash flows alleged against the applicant raised a real concern that sureties could be reimbursed if forfeited, diminishing the moral pressure they would ordinarily exert (at [21]). The real property was also potentially subject to forfeiture under the Proceeds of Crime Act 2002 (Cth), further reducing its weight as a bail security (at [17], [22]).

Orders Made

  • Bail refused

Key Takeaways

  • Refusing bail, the Supreme Court found that a very high flight risk can outweigh even a comprehensive and thoroughly prepared set of proposed bail conditions, where the combination of a strong Crown case, no extradition treaty with the country of the applicant's citizenship, and alleged access to large sums of untraceable cash makes conditions unworkable in practice (at [14], [35]).

  • Where an applicant is alleged to have coordinated extensive hidden cash movements, the court may decline to place the usual weight on financial sureties, on the basis that the nature of the alleged criminal enterprise raises a real concern that such sureties could be reimbursed if forfeited (at [21]).

  • A proposed condition requiring the AFP to manage real-time notifications from a private electronic monitoring company was found unacceptable where the AFP had no existing contractual or vetting relationship with that company, no command control over its personnel, and could not divert resources from anti-terrorism functions to fulfil the monitoring obligation (at [27]-[34]).

  • The prospect that real property offered as bail security may be liable to forfeiture under the Proceeds of Crime Act 2002 (Cth) can substantially reduce the weight that property carries as a bail condition (at [17], [22]).

  • Under s 400.3(1) of the Criminal Code 1995 (Cth), a charge of dealing in proceeds of crime carries a maximum penalty of 25 years' imprisonment, a factor the court weighed in assessing both the seriousness of the alleged offending and the incentive for an applicant to flee (at [13]-[14]).

Legislation and Cases Referenced

Legislation
- Criminal Code 1995 (Cth)
- Proceeds of Crime Act 2002 (Cth)

Cases
- Not stated