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Court of Criminal Appeal 27 October 2023

Masri v R

[2023] NSWCCA 266

Fraud & dishonesty
CRIME APPEALS APPEALS APPEAL AGAINST AGGREGATE SENTENCE

Citation: Masri v R [2023] NSWCCA 266
Court: NSW Court of Criminal Appeal
Date: 27 October 2023
Judges: Kirk JA; Fagan J; Sweeney J

Background

The appellant was one of the principals of a criminal syndicate that imported and distributed large quantities of tobacco products without paying customs duty or GST over approximately nine months from August 2018. The offending involved the purchase of 6,248 kilograms of molasses tobacco and the importation of 9.5 million cigarettes, with total unpaid duty and GST calculated at $14,736,300. The appellant travelled to Dubai to procure the cigarettes and paid $650,000 to arrange their shipment to Sydney and their release from the wharf without payment of duty.

Unknown to the syndicate, three undercover operatives (UCOs) were involved throughout the operation. The UCOs sold molasses tobacco to syndicate members, introduced the appellant to the scheme, and facilitated the cigarette importation by offering access to a supposed contact within Australian Border Force who could arrange the release of containers without duty being paid.

In the District Court, the appellant pleaded guilty to a possession offence and an importation offence under the Customs Act 1901 (Cth), with two proceeds of crime offences taken into account on sentence. After a 30% discount (including 15% for a late guilty plea), the sentencing judge imposed an aggregate term of five years' imprisonment with a non-parole period of two years and six months. The appellant sought leave to appeal against that sentence.

  • Whether the sentencing judge erred in finding that the involvement of undercover police operatives in the importation offence did not reduce the appellant's moral culpability.
  • Whether the sentencing judge erred in treating the amount of unpaid duty and GST as a loss to the Commonwealth, given that the molasses tobacco originated from previously seized stock held by authorities and the cigarette importation was a controlled operation.

Decision

On the first ground, the Court found that the sentencing judge's conclusion was open on the facts. The UCOs did not urge the appellant to commit the offence; rather, they offered a capability to bypass Australian Border Force and the appellant readily accepted that assistance. Absent their involvement, it was highly likely the appellant would have found other means to import the cigarettes without paying duty. The role played by one UCO in arranging the consignment and carriage of the goods was characterised as mechanical and performed as the appellant's agent, not as an independent driver of the offending.

On the second ground, the Court accepted that the sentencing judge did err. Because the molasses tobacco came from previously seized stock and the cigarette importation was a controlled operation, there was no actual loss to the Commonwealth revenue. The judge should not have treated the unpaid amount as a loss sustained by the Commonwealth. However, the Court held that the quantum of duty and GST intended to be evaded remained a legitimate and appropriate measure of the objective gravity of the offending, even if it could not properly be characterised as an actual loss.

Despite identifying error on the second ground, the Court concluded that no lesser sentence was warranted when the correct approach to the revenue figures was applied alongside the sentencing judge's findings on subjective factors and post-sentence developments. The appellant's positive conduct in custody, including progress through custodial classifications and employment as a factory hand, was noted but did not displace the seriousness of the offending or the significance of a directly relevant prior conviction for a similar cigarette importation fraud.

Orders Made

  • Leave to appeal against sentence granted.
  • Appeal dismissed.

Key Takeaways

  • The Court of Criminal Appeal confirmed that an undercover operative's involvement in an offence does not automatically reduce an offender's moral culpability, particularly where the offender willingly embraces the opportunity without being pressed to offend and would likely have pursued the conduct by other means regardless.
  • Where an undercover operative performs a mechanical role in executing an offence, acting effectively as the offender's agent, that participation does not diminish the offender's responsibility for the enterprise.
  • A sentencing court errs in characterising the face value of unpaid duty and GST as a "loss to the Commonwealth" when the goods in question originated from seized stock or formed part of a controlled operation, since no revenue was actually forgone.
  • Notwithstanding that error, the amount of duty and GST the offender intended to evade remains a valid and significant indicator of the objective seriousness of a revenue fraud offence.
  • In dismissing the appeal despite finding error, the Court applied the principle from Kentwell v The Queen (2014) 252 CLR 601 that leave to appeal does not compel a lesser sentence if, on a proper review of all circumstances, the sentence originally imposed remains appropriate.

Legislation and Cases Referenced

Legislation:
- Customs Act 1901 (Cth), s 233BABAD
- Criminal Code Act 1995 (Cth), ss 135.1(3), 400.3(1), 400.4(1)
- Crimes Act 1914 (Cth), s 16BA
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- A New Tax System (Goods and Services Tax) Act 1999 (Cth)
- Customs Tariff Act 1995 (Cth)
- Excise Act 1901 (Cth)

Cases:
- Kentwell v The Queen (2014) 252 CLR 601
- R v Taouk (1992) 65 A Crim R 387
- Kada v The Queen [2017] VSCA 339; (2017) 270 A Crim R 197
- Masri v R [2015] NSWCCA 243
- Mourtada v R [2021] NSWCCA 211
- Ibrahim v R [2022] NSWCCA 161
- Jomaa v R [2022] NSWCCA 112
- Chief Executive Officer of Customs v Tony Longo Pty Ltd (2001) 52 NSWLR 458