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Category: Procedural rulings

Parties: Commissioner of the Australian Federal Police (Plaintiff)
Yuchang Yuan (First Defendant)
Okari Prime Pty Ltd ACN 686 330 129 (Second Defendant)
YFW Solutions Pty Ltd ACN 686 266 133 (Third Defendant)

Representation: Counsel:
I Stojanovic (Plaintiff) (Solicitor)
Solicitors:
Australian Federal Police, Criminal Assets Litigation

File Number(s): 2025/493483

Publication restriction: Nil

JUDGMENT

1. On 19 December 2025, sitting as the Common Law Duty Judge, I made a number of urgent ex parte orders in this matter. What follows are my reasons for making those orders.

2. By Summons filed in Court with leave on 19 December 2025, the plaintiff, the Commissioner of the Australian Federal Police (“the Commissioner”), sought a number of asset preservation orders. Those orders were sought on basis that the Commissioner offered the usual undertaking as to damages. The undertaking was of particular importance in the circumstances of this case, given the potential for significant interference with the defendants’ personal and property rights.

3. The material relevant to the application was provided to my chambers on 18 December 2025, the day before the hearing of the application. It included the Summons and a supporting affidavit of Warren Wing Lon Chan, special member employed by the Australian Federal Police (AFP), sworn 18 December 2025 and filed in Court on 19 December 2025, together with an exhibit to that affidavit. On the basis of that material, I was satisfied that a proper basis had been established for the application to be heard urgently and on an ex parte basis.

4. On the issue of urgency, the evidence satisfied me that all three defendants were likely on notice of the criminal proceedings and, more specifically, the steps being taken by the Commissioner in these proceedings in relation to the freezing and seizing of assets. At the time of the hearing of the application, the first defendant, Yuchang Yuan, had been arrested and charged with recklessly engaging in conduct in relation to money or other property that is proceeds of crime valued at $1,000,000 or more, an offence contrary to s 400.3(2A) of the Criminal Code (Cth) (“Code”). He was also suspected of, but not then charged with, committing an offence of dealing with money or other property reasonably suspected to be proceeds of indictable crime valued at $100,000 or more, contrary to s 400.9(1) of the Code.

5. It is alleged that for some time before his arrest, Mr Yuan controlled two corporate entities being the second defendant, Okari Prime Pty Ltd (“Okari”), and the third defendant, YFW Solutions Pty Ltd (“YFW”), and allegedly had effective control of bank accounts in those names. It is alleged that those accounts hold funds which are suspected to be the proceeds of the above offences. It follows that the second and third defendants, by virtue of the first defendant’s suspected connections with them, were also likely on notice of these proceedings.

6. The second matter relevant to urgency is the fact that those accounts, whilst frozen by the relevant banks at the time of the hearing of the application, could have been unfrozen at any time with limited or no notice to the AFP. That is so because the accounts were frozen at the banks’ discretion. As a result, the affected individuals could readily request that they be unfrozen in order to gain access to the funds.

7. I am satisfied that the above matters give rise to a risk of dissipation of the funds in the accounts.

8. On those bases, I was satisfied that a proper basis had been established for the application to proceed on 19 December 2025 on an urgent ex parte basis.

Relief sought

9. The Summons sought a number of preliminary orders and substantive relief under the Proceeds of Crime Act 2002 (Cth) (“the Act”). I will deal with the matters in that order.

Preliminary orders

10. Dealing firstly with the preliminary orders, I granted leave pursuant to r 6.15(2) of the Uniform Civil Procedure Rules 2005 (NSW) to fix a return day and ordered that the Summons be made returnable immediately. That required a variation of the standard time for service specified in r 6.15(3), being not less than 5 days before the return day, as immediate service was required to affect an immediate return day. It was clear that service of the evidence on each defendant was imminent, noting that arrangements were made during the hearing of the application for sealed copies of the documents to be provided to the solicitor for the Commissioner for that purpose.

11. The second preliminary order sought by the Commissioner was for the Summons to be heard and determined without notice pursuant to s 26(4) of the Act. Section 26(1) requires a responsible authority to give written notice of an application for a restraining order covering property to the owner the property if that owner is known. The Commissioner is a “proceeds of crime authority” and, having made the application for the restraining orders over the subject property, is a “responsible authority” for the purposes of s 26(1): Pt 6-2 Dictionary. In short, the Commissioner was responsible for and engaged in an ongoing and complex investigation of what is suspected to be a large-scale money laundering scheme involving numerous individuals and corporate accounts.

12. Section 26(3) restricts the Court from hearing an application for a restraining order absent compliance with s 26(1), unless the exception in s 26(4) applies. That exception is that “The Court must consider the application without notice having been given if the … responsible authority requests the Court to do so”. That exception applies because the Commissioner sought and obtained an order that the application be heard and determined without notice. Accordingly, I made the order sought in the form of paragraph 2 of the Summons.

Substantive orders

13. I now turn to the substantive orders sought pursuant to ss 18, 19 and 38 of the Act.

14. The Commissioner sought that certain property not be disposed of or otherwise dealt with by any person, namely property which was suspected to be under Mr Yuan’s effective control (s 18(2)(c)) and suspected to be the proceeds and/or instrument of his alleged offences (s 18(2)(d)). Effective control is defined at s 337 to include situations where there is no legal or equitable estate or interest in the property, nor right, power or privilege in connection with it. The subject property is particularised in Schedules 1 and 2 of the Summons as choses in actions enforceable against the relevant banks in respect of accounts in the names of Okari and YFW respectively, together with any interest earned thereon.

15. Section 18(1)(a) sets out the Court’s obligation to make a restraining order when each of the criteria of subss (c)-(f) are made out:

18 Restraining orders – people suspected of committing serious offences

When a restraining order must be made

(1) A court with *proceeds jurisdiction must order that:

(a) property must not be disposed of or otherwise dealt with by any person; or

…

if:

(c) a *proceeds of crime authority applies for the order; and

(d) there are reasonable grounds to suspect that a person has committed a *serious offence; and

(e) any affidavit requirements in subsection (3) for the application have been met; and

(f) the court is satisfied that the *authorised officer who made the affidavit holds the suspicion or suspicions stated in the affidavit on reasonable grounds.

16. The Commissioner is a proceeds of crime authority and applied for the restraining orders, as is required by s 18(1)(c).

17. There were reasonable grounds to suspect that each of the defendants had committed serious offences as is required by s 18(1)(d). A serious offence is defined in Part 6-2 to include an “indictable offence punishable by imprisonment for 3 or more years” involving unlawful conduct constituted by or relating to a breach of Part 10.2 of the Code. Offences contrary to ss 400.3(2A) and 400.9(1) are serious offences. They carry maximum penalties of 12 years and 3 years imprisonment respectively and are contained in Part 10.2 of the Code which pertains to money laundering.

18. During the hearing, the solicitor for the Commissioner referred to several authorities on the statutory interpretation of “reasonable grounds”. In R v Rondo [2001] NSWCCA 540; (2001) A Crim R 562, Smart AJ at [53] enunciated three clear principles of interpretation:

“(a) A reasonable suspicion involves less than a reasonable belief but more than a possibility. There must be something which would create in the mind of a reasonable person an apprehension or fear of one of the state of affairs covered by s.357E. A reason to suspect that a fact exists is more than a reason to consider or look into the possibility of its existence.

(b) Reasonable suspicion is not arbitrary. Some factual basis for the suspicion must be shown. A suspicion may be based on hearsay material or materials which may be inadmissible in evidence. The materials must have some probative value.

(c) What is important is the information in the mind of the police officer stopping the person or the vehicle or making the arrest at the time he did so. Having ascertained that information the question is whether that information afforded reasonable grounds for the suspicion which the police officer formed. In answering that question regard must be had to the source of the information and its content, seen in the light of the whole of the surrounding circumstances.”

19. Those principles are concisely stated in George v Rockett (1990) 170 CLR 104; [1990] HCA 26, albeit in the context of the Criminal Code (QLD). There, Mason CJ, quoting Hussien v Chong Fook Kam (1970) AC 942, stated at [14]:

“Suspicion … ‘in its ordinary meaning is a state of conjecture or surmise where proof is lacking: ‘I suspect but I cannot prove.’’ The facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief, yet some factual basis for the suspicion must be shown.”

20. I accept and adopt those principles.

21. On the issue of reasonable grounds, Mr Chan’s lengthy and detailed affidavit clearly establishes the background to and ongoing nature of the investigation, the property involved in the alleged money laundering scheme and the alleged roles of various individuals, corporate entities and bank accounts.

22. The substance of the allegation is that the scheme involved using the personal details of two different individuals to register both Okari and YFW and open a bank account in each of those corporate names, all in April 2025. As at the date of swearing the affidavit, one of those individuals was on an Australian student visa and the other was suspected of illegally staying in Australia beyond an expired Australian bridging visa. Neither individual was believed to have had any dealings with either of the corporate entities or the bank accounts. Each was alleged to be a straw director of the respective company. As to Mr Yuan’s alleged involvement, the AFP executed a search warrant at his Sydney residence on 14 November 2025 and found, amongst other items, bank cards in the names of each straw director and each corporate entity and two mobile telephones with numbers associated with Okari and YFW. Mr Yuan provided an explanation for possessing those telephones, that he merely found them at Parramatta Westfield a month prior and did not have access to them. That explanation appears to be inconsistent with evidence of Mr Yuan transporting those telephones to and from his workplace on several occasions. Mr Yuan was suspected to have controlled each corporate entity and to have had effective control of each account.

23. The AFP obtained bank statements for Okari and YFW which record amounts credited to and debited from the relevant accounts totalling about $9,000,000 and $22,000,000 between April and October/November 2025. Mr Chan believes, based on the evidence of several high-volume transactions recorded in the accounts, that that the accounts were layering accounts, used to obscure the origins of illicit funds. His belief was supported by there being no evidence of ordinary business transactions in the accounts, although I note that the AFP’s investigation is at an early stage and that there may be other bank accounts associated with the companies which may record legitimate business transactions.

24. I am satisfied, as is required by s 18(1)(f), that Mr Chan is an authorised officer under Part 6-2 of the Act. He is an AFP special member who, per the gazetted notice dated 5 March 2020, is authorised by the Commissioner of the AFP. I am further satisfied on the basis of the material in and annexed to Mr Chan’s affidavit that he held the suspicions to which he deposed on reasonable grounds.

25. Finally, I am satisfied that the affidavit requirements in s 18(1)(e) were met. The Commissioner’s application was supported by an affidavit of an authorised officer, Mr Chan, which set out and stated the relevant suspicions held by him and included the grounds upon which the suspicions were held by reference to the lengthy history and trajectory of the investigation and the identification of relevant individuals, corporate entities, accounts and business records.

26. The establishment of those matters meant that there was no discretion available to refuse to make the restraining orders sought under s 18. Accordingly, for the above reasons, I made the orders sought.

27. The Commissioner also sought orders that the property in Schedules 1 and 2 not be disposed of or otherwise dealt with by any person, pursuant to s 19. Section 19(1) and (2) set out identical criteria to s 18 for the making of restraining orders, instead referring to property suspected of being proceeds of indictable offences. In considering whether to grant those orders, I accept that the relevant property was either or both “proceeds” – having been realised, directly or indirectly, from the commission of the offences, wholly (s 329(1)(a)) or partly (s 329(1)(b)) – or an “instrument” – having been used, or in connection with, the commission of the offences (s 329(2)(a)). The property indeed became proceeds pursuant to s 330(1) and/or an instrument pursuant to s 330(2).

28. In The Commissioner of the Australian Federal Police v Tjongosutiono [2018] NSWSC 48, N Adams J considered at [107] that the statutory basis to make an order under s 19 accords to the same “low” basis discussed above in the context of s 18:

“The statutory basis to make a restraining order under s 19 of the Act is a low one. A restraining order “must” be made by the court if it is satisfied that there are “reasonable grounds to suspect” that the property is either the proceeds of an indictable offence or an instrument of a serious offence. Thus, if the court is satisfied there is a basis for the relevant “suspicion”, there is no discretion; the order must be made. The meaning of “suspicion” in this context is well established. In George v Rockett (1990) 170 CLR 104; [1990] HCA 26, the High Court approved the definition of “suspicion” given by Lord Devine in Hussien v Chong Fook Kam [1970] AC 942…”

29. I consider that the matters and evidence to which I have already referred in respect of the s 18 considerations apply equally to the s 19 considerations. Accordingly, for the same reasons, I made the further orders sought.

30. Section 38 specifies that the Court may order the Official Trustee, namely the NSW Trustee and Guardian, to take custody and control of property, or specified property, covered by a restraining order if it is satisfied that that is required. For the reasons I have already expressed, there was no reason on the material before me not to make such orders with respect to the property in Schedules 1 and 2.

31. Finally, it should be noted that these reasons contain only a brief summary of the evidence contained in the extensive affidavit material. The material, which I have taken into account in its entirety, clearly satisfied me of the bases upon which I made the orders.

Orders

32. For the above reasons, I made orders on 19 December 2025 in terms of the draft short minutes of order, a copy of which was signed and dated by me, sealed and provided to the solicitor for the Commissioner.

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