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District Court 17 May 2024

R v Arseniou

[2024] NSWDC 175

DrugsFraud & dishonesty
CRIME SENTENCE KNOWINGLY DEAL WITH PROCEEDS OF CRIME.

Citation: R v Arseniou [2024] NSWDC 175
Court: District Court of New South Wales
Date: 17 May 2024
Judge: Colefax SC DCJ

Background

The offender was a university student enrolled at the University of Technology Sydney who operated as a large-scale drug supplier through darknet marketplaces. Between 2021 and 2022, he dispatched packages of prohibited drugs by post to addresses across multiple Australian states. He was identified after an undercover operative placed an order on a darknet marketplace in May 2021 and received a package of MDMA in response.

Police from the NSW Cybercrime Squad placed the offender under physical surveillance in late October 2022. They observed him making two trips to Australia Post mailboxes in Girraween, where he deposited packages subsequently seized and found to contain cocaine, MDMA, LSD, and ketamine. A search warrant executed at his Greystanes home on 31 October 2022 resulted in 74 exhibits being seized, including items consistent with drug supply and various luxury goods.

Analysis of the offender's iPhone revealed four transactions between January and February 2022 in which he transferred cryptocurrency to an associate known as "Kitty Crypto" and received a total of $629,910 in cash. The sentencing proceedings addressed five principal offences across drug supply and proceeds of crime.

  • The appropriate objective seriousness of each drug supply offence under s 25(2) of the Drug Misuse and Trafficking Act 1985 (NSW), having regard to quantity, purity, and commercial nature of the conduct
  • The appropriate characterisation and sentence for knowingly dealing with the proceeds of crime under s 193B(2) of the Crimes Act 1900 (NSW)
  • The discounts applicable for an early guilty plea and assistance to authorities
  • Whether special circumstances existed to justify varying the standard ratio of head sentence to non-parole period
  • The extent to which the drug supply offences should be treated as concurrent given their common factual circumstances

Decision

His Honour addressed the five principal offences: supply of LSD not less than the large commercial quantity (12.02 grams against a threshold of 2 grams); two counts of supply of cocaine not less than the commercial quantity (497.5 grams and 418.5 grams respectively, against a threshold of 250 grams); supply of MDMA not less than the large commercial quantity (640.41 grams against a threshold of 500 grams); and knowingly dealing with the proceeds of crime ($629,910). Two additional matters involving MDMA and ketamine supply were taken into account on a Form 1.

The court applied a combined discount of 40 per cent to the indicative sentences for the drug supply offences, reflecting both an early guilty plea and the offender's cooperation with authorities. A lesser discount of 25 per cent was applied to the proceeds of crime offence, which attracted a longer indicative pre-discount sentence of six years. His Honour noted that the connection between the drug supply offences and the proceeds of crime offence was, at best, opaque on the agreed facts.

Because the drug supply offences arose from a common set of factual circumstances, His Honour applied a substantial degree of effective concurrency across those four counts as a deliberate act of leniency. An aggregate sentence was imposed commencing from the date of arrest.

The court found special circumstances warranting a variation of the usual ratio between the head sentence and the non-parole period. The offender's age, the fact that this was his first period of imprisonment, and his prospects of rehabilitation were identified as the relevant factors justifying a longer parole period.

Orders Made

  • The offender was convicted on sequences 1, 2, 3, 13, and 15.
  • An aggregate sentence of imprisonment of 7 years was imposed, commencing 31 October 2022.
  • A non-parole period of 3 years 6 months was fixed, expiring 30 April 2026.
  • The balance of sentence (3 years 6 months) runs from 1 May 2026, expiring 30 October 2029.

Key Takeaways

  • Under s 25(2) of the Drug Misuse and Trafficking Act 1985 (NSW), supply of a prohibited drug at or above the large commercial quantity carries a maximum penalty of life imprisonment and a standard non-parole period of 15 years; supply at or above the commercial quantity carries a maximum of 20 years and a standard non-parole period of 10 years.
  • Where multiple drug supply offences arise from a closely connected set of facts, a sentencing court may apply substantial effective concurrency as a deliberate exercise of leniency, rather than accumulating sentences in full.
  • A combined discount for an early guilty plea and assistance to authorities reached 40 per cent across the principal drug offences, with a reduced 25 per cent applying to the proceeds of crime count.
  • Special circumstances justifying a variation to the standard non-parole period ratio can be established by a combination of factors including first-time imprisonment, relative youth, and enhanced rehabilitation prospects on parole, consistent with the approach affirmed in DPP (C'th) v De La Rosa (2010) 79 NSWLR 1.
  • The District Court treated the darknet marketplace context and the interstate postal distribution network as relevant to the objective seriousness of the supply offences, given the commercial scale and organised nature of the conduct.

Legislation and Cases Referenced

Legislation:
- Drug Misuse and Trafficking Act 1985 (NSW), s 25(2)
- Crimes Act 1900 (NSW), s 193B(2)

Cases:
- DPP (C'th) v De La Rosa (2010) 79 NSWLR 1