Chen v R

Court of Criminal Appeal (NSW)|2009-03-17|Before: Beazley JA, Blanch J, Howie J

JUDGMENT OF: Beazley JA at 1; Blanch J at 2; Howie J at 3

DECISION: Leave to appeal is granted but the appeal is dismissed.

CATCHWORDS: Criminal law - Sentencing - Money Laundering - whether breach of De Simoni principle - relevance of assistance of no value.

LEGISLATION CITED: Criminal Code (Cth) - ss 11.5(1), 400.3(1), 400.3(2)

De Simoni v The Queen (1981) 147 CLR 383 CASES CITED : Ansari v R [2007] NSWCCA 204 R v Huang and Siu [2007] NSWCCA 259

COUNSEL: L K Crowley - Crown T Gartelmann - Applicant

SOLICITORS: Commonwealth DPP - Crown The Law Practice - Applicant

IN THE COURT OF CRIMINAL APPEAL 2007/00003753

BEAZLEY JA BLANCH J HOWIE J

TUESDAY 17 MARCH 2009 Jian Hua CHEN v R Judgment 1 BEAZLEY JA: I agree with Howie J. 2 BLANCH J: I agree with Howie J. 3 HOWIE J: The applicant pleaded guilty in the Local Court to an offence of conspiring to deal with money to the value of $1,000,000 or more being the proceeds of crime reckless as to the fact that the money was the proceeds of crime. This is an offence contrary to s 11.5(1) and s 400.3(2) of the Criminal Code (Cth). The maximum penalty prescribed for the offence is imprisonment for 12 years. The applicant adhered to his plea before the District Court and was sentenced by Marien DCJ (the Judge) to imprisonment for six years with a non-parole period of 3 years and 7 months. The applicant is eligible to be released to parole on 8 July 2010. 4 There were initially three grounds of appeal filed. Two further grounds were added later but one of those grounds, Ground 4, was withdrawn shortly before the hearing of the application.

Facts 5 The facts can be summarised as follows. As a result of a conspiracy involving a number of persons including Dallas Fitzgerald, $150 million was fraudulently transferred from the funds of the Commonwealth Superannuation Scheme to accounts in Switzerland, Greece and Hong Kong. One of the accounts that was to be the recipient of the stolen money was an account in the name of the Lun Tun Travel Trading Co. ("Lun Tun") with the Hong Kong and Shanghai Banking Corporation ("the HSBC"). 6 The offence with which the applicant was charged arose from an agreement between him and a number of other persons to deal with over $20 million of the stolen funds using the Lun Tun account. The funds were transferred to the account with a settlement day of 29 December 2003. Fortunately the fraud was discovered on that date and the bank did not release the funds. They were ultimately returned to the owner. Although about $3½ million was lost through the fraud, that money did not come from the Lun Tun account. 7 The applicant was involved in steps taken to establish the Lun Tun account. It was opened on 22 December 2003, two days before the stolen funds were received into it. The account was opened by Chan, the owner of Lun Tun, at the request of a person named Chao, a relative in Australia. That request was made on 20 December. Chao had himself received a request to open the account from Jiao an acquaintance at Star City Casino. Jiao had been asked by Zheng to find an account that could be used by her boss, the applicant. 8 Chao travelled to Hong Kong on 20 December and was joined by Jiao and Zheng on 22 December. There were calls made from the hotel, where these persons were staying, to the mobile phone of the applicant. That evening Zheng sent a fax to the applicant at his home. It contained details of the Lun Tun account. 9 On 22 or 23 December the applicant went with a man known as David He to a hotel in Sussex Street where they met Fitzgerald, a person involved in the theft of the funds. David He acted as interpreter at the meeting. The applicant handed Fitzgerald the information concerning the Lun Tun account. This account was one of four that was nominated for the transfer of funds in the documents by which the fraud was perpetrated. On 25 December the applicant made two calls to Zheng. 10 The applicant arranged for He and Zhang, an acquaintance of the applicant from Star City Casino, to travel to Hong Kong to assist him in dealing with the funds. The applicant paid the cost of Zhang's travel. The three men travelled to Hong Kong on 26 December 2003. Fitzgerald travelled to Hong Kong on 27 December and was met at the airport by the applicant with Zhang and He. 11 The HSBC received instructions on 29 December to receive the funds and make two payments, one of over $HK118 million into the Lun Tun account. There was another account with the bank that was to receive over $HK175 million of the stolen funds. Later that day the fraud was detected and the bank was instructed to return the funds. The applicant attended at the bank with Fitzgerald, Chao, He and Zhang on a number of occasions in an attempt to access the funds. 12 Zhang and He returned to Australia on 31 December 2003. Although the applicant was originally to return on 10 January 2004, because of the failure to obtain the funds he returned on 1 January. David He assisted the police by making an induced statement to police implicating the applicant and others in the attempt to obtain the stolen funds. He was later granted an indemnity. At the sentencing hearing of the applicant He was required to give evidence because of a factual dispute that arose as to the role of the applicant in the conspiracy. I will return to that matter later as there is a ground of appeal arising from the Judge's findings about that dispute.

Subjective matters 13 The applicant was born in China on 26 December 1965 and was subject to a childhood in poverty with his six siblings. He came to Australia in 1990 and became an Australian citizen in 2001 but he speaks little English. He maintains contact with his family in China. He married in 1994 but following a back injury and his difficulty as a result in obtaining work the marriage failed. He was divorced in 2001, however his wife has visited him in prison and they may eventually reunite. The applicant was involved in manual work in Australia until 2000 and thereafter was only casually employed. 14 The applicant told the officer preparing a pre-sentence report that after his divorce he lived a different lifestyle including frequent gambling and making criminal contacts. He claimed to be a "middle person" in the scheme to launder the funds and stated that he was promised $50,000 if he could find an account for the transfer of the stolen funds. He said that he was unaware of the magnitude of the funds and he held a lowly position in the conspiracy. 15 The applicant was sentenced in the District Court on 31 October 2006 in respect of a number of offences relating to identity theft arising from items found in a search of his premises. These matters had nothing to do with the present offence. He was sentenced to a total term for those offences of three years imprisonment from 9 March 2005 with a non-parole period that expired on 8 December 2006. 16 There were in evidence three psychological reports prepared by the same psychologist over the period 21 August 2006 to 30 May 2007. The applicant claimed to have been depressed for many years initially arising from his difficulties in assimilating into Australian society. He also has long-standing anxiety. Both these conditions were exaggerated as a result of a work-related accident that caused him a back injury. The psychologist believed that he had drifted into poor company that resulted in his criminal offences because he was "vulnerable to the manipulations and solicitations of significant others". The psychologist found that the applicant's period in custody had a salutary effect upon him. In the latest report the psychologist saw a connection between the applicant's gambling and his offending.

Was there a misapplication of the principle of totality? 17 The complaint under Ground 1 is that the sentence imposed by the Judge was made cumulative to the sentence that was imposed on the applicant in October 2006. It was submitted that all the applicant's offences were committed "during the one depressed episode in his life" which arose because of his back injury. It was argued that this fact alone justified some concurrency between the sentences earlier imposed and that imposed by the Judge. 18 There was little information before the Judge as to the facts of the offences for which the applicant had previously been sentenced. But on what his Honour knew, those offences represented completely independent criminal conduct unrelated in any real sense to the offence for which he was being sentenced. They were committed about 12 months before the present offence and were of a completely different character. 19 In those circumstances it was open for the Judge to determine that the totality of the criminal conduct could only be properly reflected by the accumulation of the sentence imposed by him on the non-parole period for the earlier sentences. This was a matter for his Honour's discretion and there is no basis for concluding that he erred in that regard.

Did his Honour breach the De Simoni principle? 20 The Judge was required to resolve a dispute of fact as to the applicant's knowledge as to the amount of money involved in the funds being transferred and the applicant's role as compared with that of David He. The Crown alleged that the applicant had recruited He but the applicant maintained He recruited him. To resolve the dispute both the applicant and He gave evidence. 21 During his sentencing remarks and when rejecting the applicant's account the Judge stated:

………I do not accept his assertion that he did not know right from the outset that this enterprise involved dealing in illegally obtained money. His own evidence that David He offered him $50,000 to find a bank account in Hong Kong clearly, in my view, demonstrates that from the beginning the offender must have known he was involved in the laundering of illegally obtained money. His assertion that he went to Hong Kong because he was afraid of David He is not consistent with the very active role he took when he got to Hong Kong. 22 The applicant complains under Ground 2 that the finding that the applicant knew the funds were illegally obtained from the outset of his involvement in the conspiracy is inconsistent with the charge to which the applicant had pleaded guilty and which alleged a conspiracy to deal in money reckless as to whether it was the proceeds of crime. Therefore, it is argued, the Judge has breached the principle arising from De Simoni v The Queen (1981) 147 CLR 383 in that he took into account a fact that was an element of a more serious offence than that for which the applicant was being sentenced. 23 It is unnecessary in resolving this ground of appeal to set out the relevant legislation or the scheme of the offences coming under s 400.3 of the Code. They are considered in detail in Ansari v R [2007] NSWCCA 204; 70 NSWLR 89. But it is obvious that there is a more serious offence arising where a person dealing with money over $1 million believes that the money is the proceeds of crime, and such an offence carries a maximum penalty of 25 years imprisonment; see s 400.3(1). Even though recklessness of a circumstance as an element of an offence under the Code can be proved by actual knowledge of that circumstance, when sentencing for an offence under s 400.3(2) the distinction must be maintained between the less serious offence involving recklessness and the more serious offence involving belief, see Ansari at [131]. 24 At the outset of his sentencing remarks, the Judge set out the offence and the relevant statutory provisions correctly. He also referred to the maximum penalty for the offence as being imprisonment for 12 years. This would not preclude a Judge from breaching De Simoni but at least it indicates the framework in which his other findings were being made. The sentence itself does not suggest that his Honour fell into the error especially when regard is had to his findings. Shortly after the passage set out above, the Judge stated:

Taking into account the role played by the offender and the large amount of money the subject of the conspiracy I assess the objective seriousness of the offence committed by the offender as being above the middle of objective seriousness for offences of this kind. I make it clear that in assessing his criminal culpability I have taken into account that with respect to the Lun Tun Travel account no loss was suffered and the offender, it is conceded by the Crown, made no financial gain. 25 The Judge later indicated that, were it not for the discount as a result of the plea of guilty, he would have imposed a sentence of 8 years. Clearly his Honour came to that decision as against a maximum penalty of 12 years. Having regard to his findings as to the applicant's criminality and the level of the objective seriousness of the offence, the undiscounted sentence was entirely appropriate. I do not believe that the Judge erroneously took into account the finding of the applicant's knowledge that the funds were illegally obtained. That finding influenced his resolution of the dispute as to the role played by the applicant but it did not have any other bearing on his assessment of the offender's criminality.

Did his Honour err in failing to have regard to the applicant's assistance? 26 Ground 5 complains that the Judge failed to take into account assistance proffered by the applicant to investigating police. That assistance took the form of a statement made to police relating to the involvement of Fitzgerald and He in "drug activity", as defence counsel described it at the sentencing hearing. 27 A police officer, Federal Agent Miller, gave evidence before the Judge and stated that the applicant was of no assistance in relation to the money laundering offence. The applicant did however supply the police with information that Fitzgerald and He were involved in the supply of drugs. Federal police did not pass on that information to State police. The officer stated that when he first spoke to David He, he was under arrest for State drug offences. The officer also indicated that it was common knowledge that Fitzgerald was involved in drugs. 28 In his sentencing remarks the Judge referred to this evidence and an exhibit that stated that the police considered that the applicant's assistance had no value. He then said:

Noting the assessment document and taking into account the evidence of Federal Agent Miller and the offender I am unable to see that the assistance or information provided by the offender to the authorities can be seen to be of such a value as to warrant any reduction or mitigation of the sentence that I would otherwise impose upon him. 29 The complaint is that even assistance that is of no value should be taken into account if it is seen as a genuine attempt to assist the police and, therefore, some evidence of contrition. The applicant does not contend that he should have been given a percentage discount but submits that the Judge was in error in disregarding it as a relevant factor that might mitigate his sentence. 30 I accept that on its face the Judge appears to have disregarded the evidence of the applicant's assistance, such as it was, simply because it was of no value and that he was in error in doing so. But the error is of little significance having regard to the nature of the assistance. Further the Judge did take into account the psychological reports before him that included a statement, referred to by his Honour, that the applicant had expressed "considerable regret for his behaviour" and that this expression appeared to be genuine. He also referred to the psychologist's opinion that there was a "significant shift in the offender's attitude" and that he "now acknowledges his wrongdoing and appears to have insight into the dynamics surrounding his offending". The Judge also referred to a letter written by the applicant that included expressions of remorse. 31 Although his Honour should not have dismissed the proffered assistance simply because it was of no value, the evidence would have only been relevant to the applicant's remorse. There was ample evidence before his Honour on that topic and the Judge did not reject it but rather said that he was taking it into account. In my opinion the error by the Judge would not have made the slightest difference to his Honour's evaluation of the applicant's contrition or the sentence that he imposed.

Was the sentence manifestly excessive? 32 As his Honour found, the applicant played a significant role in the conspiracy and it included travelling to Hong King and recruiting other persons to assist him. In Ansari, above, the following was stated:

[123] It is likely that an offender before the court for sentencing for an offence within the Division will be a person facilitating the laundering of the money or actually involved in that process, rather than the owner of the money or the beneficiary of the laundering. The prosecution may not be able to show that the offender knew of the source of the money or its ultimate destination. In Assafiri v R [2007] NSWCCA 159 an analogy was drawn between money laundering offences and drug importations in that both types of offences usually reveal a hierarchy of persons involved in the conduct who have different roles to play and different gains to be made from the commission of the crime. The most important consideration in sentencing an offender for an offence under this Division will be to consider what the offender did, because there may be little or no evidence before the court as to the organisation behind the offence, the source of the funds or the ultimate use to be made of them: see R v Olbrich (1999) 199 CLR 270 at [19]. 33 His role in the conspiracy involved making arrangements for access to over $20 million in stolen funds. The Judge found that the applicant was aware that the activity in which he was involved related to "a very large sum of money". In R v Huang and Siu [2007] NSWCCA 259, this Court said:

[34] The amount of money involved is clearly a highly significant matter because the legislation uses it as the principal means of dividing the offences into categories and it is the primary identifier of what is the maximum penalty for an offence. The only difference between an offence falling within s 400.3(a), and carrying a maximum penalty of 25 years, and an offence falling within s 400.4(a), and carrying a maximum penalty of 20 years, is the amount of money or the value of the property with which the offender dealt. 34 There was no suggestion that the Judge erred in finding that the offence was above the middle range of seriousness, and I would have thought that it was well above. It has been made abundantly clear by the decisions to which I have referred that this type of activity is to be considered as serious criminal conduct whatever the role undertaken by persons involved in it. Where, as here, the offender is "at mid level in the organisational hierarchy of the conspiracy" to deal with these funds, the criminality warranted a very severe sentence having regard to the amount of money involved and what the applicant did in an attempt to make the funds available to the persons involved in its theft. 35 I am of the opinion that the sentence imposed was within his Honour's discretion and there is no basis for this Court to interfere. Therefore, I propose that leave to appeal be granted but the appeal be dismissed. **********

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