CDPP v Nguyen [2023] VCC 421

1. Between 2 June 2019 and 8 October 2019, Australian Border Force ('ABF') conducted surveillance on you and Ms Tran. Both of you were observed travelling on numerous occasions between your home address in Derrimut, and the following locations:
   • Dubai Gifts shop in Thomastown, where both you and Ms Tran were observed on numerous occasions standing at the counter and serving customers;
   • The rolling house, where you and Ms Tran paid workers to roll and package tobacco and cigarettes;
   • Storage King in Thomastown, where numerous boxes of illegal cigarettes were located during a search warrant;
   • Storage King in Caroline Springs, where 336 boxes of a loose leaf plant material called lotus leaf, amounting to 4,080 kilograms, were located during a search warrant. The lotus leaf was used as a filler for rolling cigarettes;
   • Ms Tran's parents' home, where more boxes of loose lotus leaf were located.
2. You were observed on numerous occasions loading goods including boxes and bags, and transporting them between the above addresses.
3. 'Dubai Gifts and Tobacconist Pty Ltd' was registered as a business with ASIC on 2 September 2019, with Ms Tran listed as the sole Director and Secretary. The business was registered to your home address in Derrimut.
4. On 5 September 2019, Ms Tran visited the real estate office that managed the lease for Dubai Gifts. She stated that she had taken over the business and wished to pay the rent. She paid $2,566.50 on that day.
5. You were recorded as the sole director of an import company, Dang Khoa Imports, registered on 26 May 2017. This company was used to import numerous consignments of lotus leaf and tea, including two intercepted consignments on 20 May 2019 and 25 July 2019, each containing between 2,400 - 3,100 kilograms of plant material, consistent with the lotus leaf material located at the above addresses and used as a filler in the production of cigarettes.

1. Between 3 June 2019 and 21 October 2019, Ms Tran's telephone was intercepted pursuant to a warrant. A large number of calls and text messages were intercepted involving Ms Tran discussing the sale or the purchasing of tobacco as well as the operations of the business. In these intercepted calls and messages, you were referred to as 'Jimmy'.
2. These intercepted calls revealed:
   • Ms Tran presented herself as the owner of a cigarette sales business, and you as the person largely in charge of collecting and transporting the goods that were being purchased and sold.
   • Ms Tran liaised with the customers and suppliers, and instructed you to collect and distribute stock.
   • Ms Tran kept a record of sales of stock in a ledger book.
   • Ms Tran sourced her tobacco from overseas.
3. Examples of the conversations include:
   • On 16 August 2019, Ms Tran called you and discussed the sale of cigarettes and the running of the business. The two of you also had discussions about the types of cigarettes including 'Venti', 'Manches,' 'Menthol', and 'Red' which are illegal. The two of you discussed giving empty packets to Linda, an employee working at the rolling house. You and Ms Tran discussed the work Linda should be doing. You stated that you gave her 'one hundred kilos' and 'four boxes of empty packs', referring to loose leaf tobacco and empty cigarette tubes used to make cigarettes.
   • On 16 August 2019**,** Ms Tran discussed the stock of tobacco with someone unknown, stating 'You know all this is not local. All overseas stock. Not local you know yeah'.
   • On 17 August 2019, a male phoned Ms Tran and discussed you going to collect seven boxes of cigarettes for the store, and discussed brands including 'Double happiness' and 'Memphis' which are illegal brands of cigarettes. They discussed a price of $14,460 for the cigarettes.
   • On 18 August 2019, you called Ms Tran and discussed the movement of stock. Ms Tran stated she was going to the rolling house, and you asked where to store 'stuff' being a reference to the storage of tobacco. Later that day, you again called Ms Tran and said 'I've still got to get the stuff and turn back for Linda to make American Flag so that there will be stuff to sell in the morning' referring to Linda making illegal cigarettes for you and Ms Tran to sell.
   • On 22 August 2019**,** a male called Ms Tran offering to supply cigarettes. Ms Tran responded that she had the supply already sorted.
   • On 29 August 2019, Ms Tran called a female and stated 'Nowadays everything is okay. I now only work with overseas stuff, I don't work with local stuff no more'.
   • On 4 September 2019, Ms Tran called a male and discussed selling 'Double Happiness' cigarettes to him for $90. Later in this conversation they discussed purchasing tobacco from overseas, Ms Tran stated 'We buy a lot from overseas'.
   • On 17 September 2019, Ms Tran called a female and discussed you moving and storing the tobacco, stating 'my husband Hien got them mixed up when storing them. He wasn't very mindful you know'.
   • On 15 October 2019, a male called Ms Tran offering to sell her tobacco, he stated 'I have 130 kilo of overseas one... I wanna sell it to you, you know' to which she responded 'Yeah... how much is it. Your own... Because I get them very cheap... I swear to god I pay 140 now, all my tobacco yeah'.

1. Between 22 October 2019 and 28 October 2019, ABF executed search warrants at various addresses associated with you and Ms Tran.

1. On 22 October 2019, a search warrant was executed at Dubai Gifts. Tobacco including 105,985 cigarettes, 5.401 kilograms of loose leaf and 23.051 kilograms of molasses tobacco was located and seized.
2. The cigarette stock was located in hidden compartments under the counter. Legitimate stock was kept visible within the shop.
3. A brown book/ledger was located, containing handwritten payments and tobacco prices. This included the costs for specific cigarette brands, both legal and illegal. It also included various phone numbers and notes about money and payments.
4. Two employees at the shop were spoken to by ABF. One of the employees stated that you came into the store every day. Both employees were aware, that in addition to selling legitimate tobacco that was on display, the store stocked and sold illegal cigarettes. They stated that they sold the illegal cigarettes according to the price list kept underneath the register, written by Ms Tran.
5. A customer present at the store was spoken to. She stated she had been a customer of Dubai Gifts for about 12 months. She came to purchase American Blues, which she purchased for $28 for a box of 100. She used to buy legitimate Longbeach packets for about $55 per pack of 40.

1. On the same date, 22 October 2019, a search warrant was executed at your home residence. A total of 1,743,900 cigarettes and 384.984 kilograms loose leaf tobacco was located and seized. Also seized were 194,100 unfilled cigarette tubes, note books containing calculations regarding various brands of cigarettes and amounts of money owed to various people, and a Storage King agreement form in your name with an alternate contact of Ms Tran' son.

1. On 22 October 2019, a search warrant was also executed at the Kings Park address. These premises were leased on 7 April 2017 in Ms Tran's name.
2. The house was set up with workstations, upon which rolling machines and tobacco was located. Large numbers of boxes with rolled cigarettes were located throughout the house, as well as loose tobacco and lotus leaf filler. A total of 22,700 cigarettes and 447.847 kilograms of loose leaf tobacco was seized. Also seized were:
   • 486,300 unfilled cigarette tubes.
   • Approximately 658 kilograms of filler including lotus leaf and taro tea.
   • Numerous cigarette rolling machines.
   • One large, electronic scale.
   • A compost mixer with remnants of tobacco and plant material inside.
   • A diary containing records of boxes against dates, as well as notes about monetary amounts by month and a list of phone number contacts.
   • A spiral notebook containing a ledger of tobacco and amounts.
   • Numerous notes, being 'recipes' for mixing tobacco with filler in order to roll the cigarettes.
3. Linda, one of the workers, was present during the search. She stated that:
   • She had known you and Ms Tran since 2016.
   • She commenced working and living at this address approximately three years ago. She started making cigarettes for you and Ms Tran immediately.
   • Others who worked at the house left because they were unhappy about their living conditions and were not being paid on time.
   • Recently, she had been living with three other people at the house. All of them worked for you and Ms Tran, rolling cigarettes. Their job was to mix tobacco with other products and fill empty cigarette tubes.
   • She was paid $3 by Ms Tran for each box of 100 rolled cigarettes. On average she would make approximately 30-50 boxes per day.
   • You would come to the house and collect the boxes containing the filled cigarettes and would usually drop off more tobacco and boxes labelled 'taro leaf' or 'lotus leaf'.
   • You would mix the tobacco with the filler and tell them to use it to make cigarettes. However, approximately two weeks prior to the search warrant, you showed them how to mix the tobacco.
   • When she first started working for Ms Tran, she asked if the work was legal and was told it was fine. At some point she realised it was illegal, but felt she had no choice but to continue making cigarettes as she was living in Australia unlawfully.
   • The notebooks at the premises were used by her to keep a record of how many boxes of cigarettes she and the other workers made.

1. On 22 October 2019, a search warrant was conducted inside a Toyota HiLux vehicle registered to Ms Tran. This vehicle had been observed being driven on many occasions by you and Ms Tran. A total of 68,240 cigarettes were located and seized.

1. On 22 October 2019, a search warrant was executed at the storage unit at Thomastown leased in Ms Tran's name. A total of 658,860 cigarettes in boxes were found and seized.

1. On 23 October 2019, a search warrant was executed at a storage unit in Caroline Springs leased in your name. A total of 336 boxes of loose leaf plant material consistent with lotus leaf, amounting to 4,080 kilograms, was located and seized.

1. On 24 October 2019, a search warrant was conducted at a residence leased in Ms Tran's name and where her son resided. A total of 12,233 cigarettes and 28.89 kilograms of loose leaf tobacco was found. Also found were five cigarette rolling machines and 1,100 unfilled cigarette tubes.

1. On 24 October 2019, a search warrant was executed at Ms Tran's parent's home in Lalor. Numerous boxes containing 3,560.73 kilograms of loose leaf plant material, not containing tobacco, 68 'Rollo' brand flat pack cardboard boxes and 112,000 cigarette tubes were found and seized.
2. During the search warrant, Ms Tran's father stated that her daughter had asked him if she could store the boxes of tea in his garage.

1. During the search warrant at your home address on 22 October 2019, you participated in a record of interview. You stated:
   • You go by the name Jimmy.
   • Dang Khoa Imports was your company. You imported tea and had hired two storage units to store the tea, but some of it went rotten and was thrown away.
   • You sometimes drove the HiLux.
   • Your wife worked as a manicure/pedicurist. Currently both you and your wife were unemployed. When asked how they afforded the rent on their house and their cars, you stated 'don't know'.
   • When asked further about whether your wife worked anywhere else, or at a shop, or if you were involved with cigarette manufacturing or selling, you declined to answer and in the rest of the interview, you exercised your right to silence.

1. You were born in Vietnam in 1975 and are the youngest of five siblings. You were two years old when your father passed away. Your mother remained single and had the responsibility of raising six children in difficult conditions involving financial and emotional hardship. As a result of financial struggles you were unable to continue with your education. You left school in Grade five and commenced working as a labourer to support your family.
2. Regrettably, you also lost your mother when you were aged 16. She passed away in a motor vehicle accident. Some 20 years ago, one of your brothers passed away.
3. You were married in Vietnam and had three children. The marriage did not last. You continued to work as a labourer in Vietnam until you moved to Australia in August 2007.
4. You have lived in Australia since 2007. You met Ms Tran in 2009 and got married in 2012. You had two children together. Your first son born in 2013, died unexpectedly at the age of four months. Your second son is now aged eight. Also living with you are Ms Tran's two children from her previous marriage aged approximately 17 and 16, and your three children from your first marriage, now aged approximately 19, 17 and 15. As confirmed by your counsel in court, you are now an Australian citizen.[1]
5. In 2021, you lost your sister to COVID-19. Your three surviving siblings remain in Vietnam.

1. Mr Watson-Munro assessed you on 16 February 2022 and 15 March 2022.[2] He describes you as someone with a complex clinical and developmental history, characterised by longstanding symptoms of depression, anxiety and low self-esteem. He detailed the tragic loss of your parents at important junctures in your life. These losses have established a long standing depressive disorder which has been compounded by the further, more recent loss of your two siblings and your four month old child. You have sought to self-medicate your symptoms of depression and anxiety by using cannabis and drinking heavily. You have been drinking since the age of 20. You described to Mr Watson-Munro suicidal thoughts.
2. According to Mr Watson-Munro you continue to suffer from a severe and recurring Depressive Disorder and have features of an Anxiety Disorder. You have had no meaningful mental health treatment until recently.
3. You were referred by your family doctor for psychological counselling. You commenced counselling with Dr Sandra Nguyen in July 2022. I have had regard to Dr Nguyen's treatment report dated 30 August 2022.[3] You have engaged so far in six counselling sessions and they are continuing. Dr Nguyen states that the counselling has focussed on helping you process your long standing depression and grief related to the numerous deaths that you have had to mourn. The counselling has also helped you develop coping strategies without resorting to alcohol and drug use.

Gravity of the offending and sentencing purposes

1. Offences against the revenue undermine the integrity of the taxation system and impose unfair burdens on those who pay taxes. It is not, therefore, a victimless crime.
2. In sentencing, prominence must be given to general deterrence. Those who contemplate committing this crime must understand that serious consequences will follow, and in most instances, sentences of imprisonment will result.[4]
3. Legislative provisions which deal with the importation, distribution and sale of tobacco are aimed at regulating a harmful product. Illicit importations undermine that regulation and prevent inspection of the tobacco for potentially harmful contaminants.[5]
4. I am sentencing you for possessing a significant quantity of tobacco between 2 June 2019 and 24 October 2019. As I stated at the sentence indication hearing, and repeated at the plea hearing, I reject your counsel's submission that your role in the offending was analogous to that of a mule.
5. You were involved with your wife in a well thought out and sophisticated operation involving the preparation and the sale of illegal tobacco. The offending involved careful planning, including the leasing of various premises to facilitate the offending.
6. You played a significant role. You were responsible for the importation of lotus leaf and tea through your importation company, and the manufacture of the cigarettes at the rolling house. You and Ms Tran employed people to produce the cigarettes. Initially you provided the prepared mixture of tobacco and filler to the workers who produced the cigarettes. Later, you provided the workers with instructions on how to undertake the mixing, and the proportions of tobacco and filler needed to produce the cigarettes. You were responsible for loading and transporting boxes of tobacco and filler products between storage facilities, the rolling house, and the shopfront where the tobacco was ultimately sold. The offending was committed over a period of about five months and you were jointly in possession of 2,611,918 cigarettes and 890 kilograms of loose leaf tobacco. Duty payable to the Commonwealth in the sum of $3,596,038.99 was evaded. The loss of revenue has not been repaid. Plainly, this offending was committed for financial gain.
7. You had the opportunity to consider your actions and desist but did not do so. I regard your moral culpability as high.
8. I note that Ms Tran pleaded guilty to an offence of possessing tobacco knowing that it was imported with intent to defraud the revenue contrary to s 233BABAD(2) of the Customs Act 1901 (Cth). This offence carries a maximum term of 10 years' imprisonment. Ms Tran was sentenced to a term of 2 years' imprisonment with a recognisance release after 14 months.[6]

• 48 While your plea of guilty was not entered at an early stage, it nevertheless has utilitarian benefit. You pleaded guilty immediately following a sentence indication. Your matter had not been set down for trial. By pleading guilty you have saved court time and expense. Further, your plea of guilty has assisted in reducing the backlog of trials that this Court faces. The Court must encourage those who are guilty to so plead by providing an actual and palpable discount on sentence.[7]

1. Your youngest son had turned six on the day his mother, Ms Tran, was sentenced to imprisonment.
2. While Ms Tran was in prison for a period of 14 months, you were responsible for looking after all the children. In particular, you looked after your youngest son who is now aged eight.
3. I have had regard to the psychological report relating to your son, prepared by Dr Grech and dated 26 September 2022.[8] As a result of his mother's incarceration, your son developed separation anxiety and disturbed adjustment. He told Dr Grech that he missed his mother and was extremely distressed. During his mother's absence from his life, you looked after your son and developed a particularly close bond. Your son reported to Dr Grech that you would play with him, which included kicking the footy and soccer ball, and that you would take him out to eat. Your son described you as a 'good person...he loves me...he always has time to play with me'. He told Dr Grech that he had overheard conversations about the possibility of you going to prison.
4. The possibility of your incarceration has adversely impacted your son. He has suffered nightmares, has been visibly distressed, suffered a loss of appetite and has struggled to sleep.
5. Dr Grech describes the impact of you being incarcerated as being potentially profound on your son's mental wellbeing.
6. Dr Grech is of the opinion that your son would experience significant separation anxiety and his psychosocial development would be interfered with. It would also impact on his academic progress, in which he is already encountering challenges.
7. Section 16A(2)(p) of the Crimes Act 1914 (Cth) provides that a court must take into account:

'the probable effect that any sentence or order under consideration would have on any of the person's family or dependants.'

1. In interpreting this section, it is now clear that the hardship on family members does not need to be exceptional in order for it to be taken into account.[9]
2. I take into account the adverse impact upon your young son, as articulated by Dr Grech, if you were to be incarcerated.

No criminal history, delay and good prospects of rehabilitation

1. You appear before the court with no criminal record. More than three years have elapsed since the offending. You have remained on bail since your arrest and charge on 22 June 2020. There has been no subsequent offending and there are no pending matters. You have been looking after your family and have voluntarily sought counselling to address long standing grief and related depression and anxiety issues. I regard your prospects of rehabilitation as good.

1. Your counsel, based upon Mr Watson-Munro's psychological reports, initially submitted that all the principles in R v Verdins[10] were engaged. However, with the exception of reliance upon principle five of Verdins, the submission was eventually withdrawn. I accept that your long-standing depressive disorder and associated anxiety, would result in actual imprisonment weighing more heavily upon you than it would on a person enjoying normal health.
2. As I remarked at the plea hearing, it is not appropriate for a psychologist to tell the court that Verdins principles are engaged. They are matters, based on submissions, to be determined by the sentencing judge.[11]

1. It is not suggested that parity has any meaningful role to play in the sentencing exercise. Ms Tran pleaded guilty to an offence of possessing tobacco products knowing that the goods were imported with intent to defraud the revenue, contrary to s 233BABAD(2) of the Customs Act 1901 (Cth). This was plainly a more serious offence carrying a maximum penalty of 10 years' imprisonment and/or a fine not exceeding $17,980,194.95.
2. You have pleaded guilty to an offence that carries a maximum penalty of 5 years' imprisonment and/or a fine of $17,980,194.90. The prosecution is only required to prove that you possessed the tobacco reasonably suspected not to have had duty paid on it.
3. Whilst you played a significant role in the offending, I accept that Ms Tran was the head of the operation and in charge. She was the one who had established contacts and sourced the tobacco from overseas, as well as maintaining the business records.

1. I have read the sentencing cases referred to me by the prosecution. None of them deal with the offence for which you fall to be sentenced. I was told by the prosecution that no one has been previously sentenced in respect of this offence contrary to s 308-10 of the Taxation Administration Act 1953 (Cth).[12]
2. Ultimately, previous sentences are not precedents but helpful yardsticks. They also articulate the important sentencing objectives in offending involving the evasion of revenue.
3. In Tran v The Queen [2021] VSCA 292, the Court of Appeal stated:

However, some care must be taken to account for the different nature of the offending captured by each provision, so as to ensure that the offending in question is truly comparable.

1. You have pleaded guilty to an offence that attracts a maximum term of imprisonment of five years. This offence, unlike the offence to which Ms Tran pleaded guilty to, does not require knowledge that tobacco was imported with the intent to defraud the revenue. It merely requires the prosecution to prove that you possessed the tobacco reasonably suspected not to have had duty paid on it.
2. In considering the ultimate sentence, I have had regard to all relevant matters and principles. I have taken into consideration the matters listed in s 16A of the Crimes Act 1914 (Cth).
3. Your offending demands the imposition of a term of imprisonment. However, I have determined that I can release you immediately on a recognisance release order (RRO).
4. Mr Nguyen, can you please stand up.
5. On charge 1, you are convicted and sentenced to a term of 20 months' imprisonment. Pursuant to s 20(1)(b) of the Crimes Act 1914 (Cth), I order that you be released forthwith upon you entering into a recognisance in the sum of $2000 to be of good behaviour for a period of two years from today.
6. Mr Nguyen, whilst you are being released immediately, that is conditional on you remaining to be of good behaviour for the next two years. If you commit a further offence during the next two years, then unless you can show reasonable excuse for the further offending, you will be dealt with for that breach. If you breach the order, you may have to pay the $2000, and you may have to serve the 20 month term of imprisonment which I have imposed. Do you understand that?
7. Offender: Yes, Your Honour.
8. I also inform you that you, or an authorised person, may apply to the court to vary or discharge the recognisance release order in accordance with s 20AA of the Crimes Act 1914 (Cth).
9. Do you agree to be of good behaviour for the next two years?
10. Offender: Yes, Your Honour.

1. Pursuant to s 6AAA of the Sentencing Act 1991, I indicate that had you pleaded not guilty and been convicted, you would have been sentenced to a term of 2 years and 3 months' imprisonment with release on a RRO after 9 months on the condition that you be of good behaviour for a period of 2 years.

[1] Mr Watson-Munro's report suggests Mr Nguyen is concerned about deportation as he is a permanent resident. It was confirmed in court that is no longer the case and that Mr Nguyen is now an Australian citizen.

[4] Barakat v DPP (Cth) [2020] VSCA 185, [54].

[5] Tran v The Queen [2021] VSCA 292, [7].

[6] This was the sentence imposed by the Court of Appeal following a successful appeal - Tran v The Queen [2021] VSCA 292.

[7] Worboyes v The Queen [2021] VSCA 169; (2021) 96 MVR 344.

[9] Totaan v R [2022] NCWCCA 75; Mohamed v The Queen [2022] VSCA 136; Rodgerson v The Queen [No 2] [2022] VSCA 154.

[10] R v Verdins [2007] VSCA 102; (2007) 16 VR 269 ('Verdins').

[11] O'Connor v The Queen [2014] VSCA 108.

[12] This offence came into force on 25 August 2018.