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District Court 14 April 2022

R v McRae

[2022] NSWDC 751

Fraud & dishonesty
CRIMINAL SENTENCE RECKLESSLY DEAL WITH PROCEEDS OF CRIME MONEY OBJECTIVE SERIOUSNESS OF OFFENCES SUBJECTIVE MATTERS

Citation: R v McRae [2022] NSWDC 751
Court: District Court of New South Wales
Date: 14 April 2022
Judge(s): King SC DCJ

Background

The offender was a young woman (aged 22 at the time of offending) who participated in an organised money laundering operation in December 2020. The scheme was directed by a central figure who received large quantities of cash representing the proceeds of crime, converted those funds into Bitcoin cryptocurrency through a Queensland-based cryptocurrency dealer, and returned the Bitcoin to those who had supplied the original cash.

The offender's role was that of a recruited cash depositor. She was flown from the Gold Coast to Sydney, accommodated at a Parramatta hotel with other participants, and used a company she had registered on the eve of the scheme to make cash deposits into bank accounts. Those funds were then swiftly transferred into accounts controlled by the cryptocurrency dealer and ultimately converted to Bitcoin. The offender made deposits totalling approximately $65,800 across two days in December 2020.

She was charged with two offences: recklessly dealing with proceeds of crime ($188,000, under s 193B(3) of the Crimes Act 1900, maximum ten years' imprisonment) and dealing with property suspected of being the proceeds of crime ($883,500, under s 193C(1) of the Crimes Act 1900, maximum five years' imprisonment). She pleaded guilty and was committed for sentence to the District Court.

  • The objective seriousness of the two offences of money laundering, having regard to the amounts involved and the sophistication of the criminal enterprise
  • The offender's specific role within a well-established, organised, and ongoing criminal group
  • The appropriate sentence, including whether the s 5 threshold (that imprisonment is the last resort) was crossed
  • Whether special circumstances existed justifying a reduction in the standard ratio between the non-parole period and the balance of term
  • The application of a 25% discount for the utilitarian value of the early guilty plea

Decision

King SC DCJ found that the overall scheme was a sophisticated and well-organised operation for laundering significant quantities of money on a regular basis. The conversion of cash to Bitcoin was described as an effective method for disguising the origins of criminal proceeds. While the offender played a relatively lower role compared to the scheme's organiser and central figures, her participation was deliberate and structured, including the registration of a company specifically used to receive and pass through the cash deposits.

The judge acknowledged that imposing a custodial sentence on a young, first-time offender was a matter of considerable concern. However, the s 5 threshold was found to have been clearly crossed. The indicative sentence for the s 193B(3) offence was two years and six months, and for the s 193C(1) offence was three years. Given that the offending was largely continuous in nature, only modest accumulation was applied.

An aggregate sentence of three years and six months was imposed. The court found special circumstances on two grounds: that this was the offender's first period of custody and she would require assistance with reintegration, and that the offender was pregnant at the time of sentencing, making it in the child's interest for the offender to be released earlier than the standard non-parole ratio would allow. As a result, the non-parole period was reduced to 50% of the total term.

The 25% discount for the utilitarian value of the guilty plea was applied to both indicative sentences.

Orders Made

  • Aggregate sentence of imprisonment of three years and six months, commencing 14 April 2022
  • Non-parole period of one year and nine months, with eligibility for parole on 13 January 2024
  • Balance of term of one year and nine months, with the total sentence expiring 13 October 2025
  • Special circumstances found, reducing the non-parole period to 50% of the total term
  • 25% discount applied to each indicative sentence for the utility of the guilty plea

Key Takeaways

  • The District Court confirmed that participation as a recruited cash depositor in a large-scale Bitcoin money laundering scheme crosses the s 5 threshold for imprisonment, even for a young, first-time offender with no prior custodial history.
  • A sophisticated, well-organised and ongoing criminal structure, including same-day fund transfers and conversion of cash to cryptocurrency, was treated as an aggravating feature elevating the objective seriousness of the offences.
  • Where an offender is pregnant at the time of sentencing, that circumstance may constitute special circumstances under the sentencing framework, supporting a reduction in the non-parole period to allow earlier release in the child's interests.
  • Under the sentencing regime applied, a 25% discount for the utility of an early guilty plea (following committal for sentence from the Local Court) was applied to the indicative sentence for each offence.
  • Modest accumulation of sentences was applied where two charges arose from offending that was continuous and similar in nature, rather than involving discrete and separate criminal acts.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1900 (NSW), s 193B(3) (recklessly deal with proceeds of crime)
- Crimes Act 1900 (NSW), s 193C(1) (deal with property suspected of being proceeds of crime)

Cases:
- Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCA 194