Fung v R

Court of Criminal Appeal (NSW)|2018-09-19|Before: White JA, Price J, Wilson J

Judgment

WHITE JA: I agree with Price J.
PRICE J: Siu Ki Raymond Fung ("the applicant") pleaded guilty in the Local Court to a charge of dealing with money in excess of $1,000,000 with the intention it would become an instrument of crime, contrary to s 400.3(1) of the Criminal Code 1995 (Cth). The maximum penalty for an offence contrary to s 400.3(1) of the Criminal Code is 25 years imprisonment and/or a fine of 1,500 penalty units.
The applicant adhered to his plea in the District Court before Whitford SC DCJ ("the judge"), and asked his Honour to take into account on sentence a further two offences pursuant to s 16BA of the Crimes Act 1914 (Cth). These offences were: 1. Dealing with money in excess of $100,000, it being reasonable to suspect that the money was proceeds of crime, contrary to s 400.9(1) of the Criminal Code, which carries a maximum penalty of 3 years imprisonment and/or 180 penalty units; and 2. Possession of identification information relating to 11 persons with the intention to engage in conduct, being conduct that constitutes an offence against s 372.1(1), contrary to s 372.2(1) of the Criminal Code, which carries a maximum penalty of 3 years imprisonment.

The sentencing hearing

The sentencing hearing took place before the judge on 17 and 18 July 2017.
A document entitled Agreed Statement of Facts was tendered with the consent of the applicant. The applicant agreed to the facts in the document with the exception of those facts identified as being in dispute. The disputed facts included the Crown's assertion that 99 international money transfers totalling $4,509,455, made from 11 Commonwealth Bank accounts via Netbank to accounts in Hong Kong, were conducted by the applicant. Another disputed assertion by the Crown was that the applicant should be sentenced for possessing $2,008,275 based on $600,325 which he had deposited and $1,407,950 which Foong had deposited, which the Crown claimed that the applicant gave to Foong.
During the applicant's evidence before the judge, he said that "Johnny" told him that his business involved sending money out for his customers "because they're doing cash business and that way they can avoid taxes". [1] He said that he knew what he was doing was illegal.
In re-examination, the applicant's evidence included the following: "BARROW: When did it become plain to you how seriously your conduct was viewed? [THE APPLICANT]: Probably a couple of months after that, after the first - when I arrived. And I can see lots of - lots of cash and I'd be asking the question, 'Is it - where does the money come from? Is it from those places?' And then I said, 'Really?' And he said, 'Yes. Do you want me to show you again?' I said, 'No, that's all right.' And then that - I started realising something a bit suspicious, that's why I don't do as much deposit as the other one does, and I want to try to earn more money through the legitimate way of work to repay my debt. BARROW: Well, how do you feel about your involvement in the matter that you're before the Court for now? How do you feel about it now? [THE APPLICANT]: I feel very sorry and I feel shame and - because I didn't tell my parents I'm in gaol, and I did not tell my friends I'm in gaol; only my girlfriend knows. My son doesn't even know I'm in gaol. I tried to contact him a couple of times and he wouldn't pick up the phone and I feel devastated." [2]

The remarks on sentence

In his sentencing remarks, which were delivered after the completion of the evidence and submissions by counsel, his Honour noted that the Crown case was that the applicant was involved in a well organised and sophisticated money laundering syndicate through which he dealt with more than a million dollars in cash with the intention that it would be deposited in structured amounts less than $10,000 contrary to s 400.3(1) of the Criminal Code.
The judge found that the syndicate sought, within a very short timeframe, to transfer millions of dollars in cash of unknown origin from Australia to overseas accounts.
His Honour found that the features of the syndicate included: 1. Opening at least 11 bank accounts in false names through the extensive use of false identity documents and arranging for cash to be deposited into those accounts in amounts less than $10,000 through automatic teller machines, thereby avoiding mandatory financial reporting requirements; 2. That immediately after each set of deposits, bulk amounts of money were transferred from those bank accounts, to bank accounts in Hong Kong; and 3. That mobile phones subscribed in false names were used to facilitate those offshore transfers.
His Honour noted that there had been a dispute between the parties concerning the extent of the applicant's role in the syndicate and the degree to which it might be contrasted with Foong's role.
The judge found that the applicant personally deposited a total of $600,325 in cash into bank accounts which had been opened by the syndicate in false names, and that he did so through 72 separate transactions at numerous automatic teller machines on seven separate days over a five week period with the Commonwealth Bank of Australia.
His Honour said that the two offences which were to be taken into account on sentence were based on the applicant's possession at the time of his arrest of $557,210 in cash on his person and at his apartment, and identification information relating to the 11 false identities used to open the Commonwealth Bank accounts.
The judge found that all of the evidence pointed to the activities of the applicant and Foong being part of a broader criminal enterprise that was highly organised and sophisticated. His Honour said that whilst neither of them were principals in that broader organisation, it was common ground that the applicant and Foong "were indispensable elements in the money laundering syndicate whose ultimate purposes included the transfer by clandestine means of a very substantial amount of cash out of this country". [3]
His Honour found that the offending of the applicant and Foong was serious, and in each case integral and essential to the success of the syndicate.
When considering the Crown's submission on the applicant's role as compared to Foong, his Honour was not satisfied beyond reasonable doubt that the applicant personally created each of the accounts in the false identities. However, his Honour said that the applicant "was patently connected to the creation of those accounts through his possession amongst other things of individual details necessary for the maintenance of those accounts". [4]
The judge was not satisfied beyond reasonable doubt that the applicant was responsible for providing Foong with all of the moneys deposited by him. His Honour was however, satisfied beyond reasonable doubt that at least some of the moneys deposited by Foong were provided to him by the applicant.
His Honour could not be satisfied of the particular amount dealt with by the applicant but concluded that the amount he dealt with exceeded $1,000,000.
Included in the Agreed Statement of Facts was that an unidentified male had made 172 deposits of amounts less than $10,000, totalling $1,600,740 via automatic teller machines into the 11 Commonwealth Bank accounts between 4 August 2015 and 24 August 2015. His Honour was satisfied that there was some degree of interaction between the applicant and an unidentified male but he could not conclude that there was some high level co-ordination between them.
The judge said that the evidence plainly established the applicant's involvement in the bulk transfer of funds from the various Commonwealth Bank accounts to the overseas accounts. His Honour said that involvement was primarily through the applicant permitting the use of his internet accounts to facilitate some of those transfers, and through the applicant's admitted involvement in transmitting to somebody overseas verification codes by text messages to various telephone accounts linked to the bank accounts in false names.
His Honour said that he could not conclude beyond reasonable doubt that the applicant controlled bulk transfers of cash from those accounts to the overseas accounts.
His Honour observed that significant aspects of the syndicate's activities were centred around the apartment at which the applicant lived. His Honour found that the applicant "was much more closely involved in diverse aspects of the syndicates activities than [Foong] and that … more diverse involvement reflects him being or occupying a more highly valued or trusted position within the broader organisation than [Foong]". [5]
The judge was satisfied that the offending represented a deliberate planned course of conduct over a period of more than a month before it was interrupted by the authorities; that the applicant was involved voluntarily for personal financial gain directly or indirectly; and that he was fully aware that the conduct was criminal or at least had a strong suspicion it might have been connected to particularly nefarious criminal conduct.
Before referring to the further findings by the judge, it is convenient to refer to the applicant's subjective case on sentence, which included his testimony and medical reports of Dr Chu and Dr Siu.
The applicant was born in Hong Kong on 7 March 1973 and was 44 years old when sentenced.
In short, the medical report of Dr Chu related to the diagnosis of a tumour on the applicant's right kidney, and the report of Dr Siu provided a post-operative report which recorded that the tumour was successfully removed.
The applicant gave evidence before the judge that he lived in Hong Kong until he was 17 years of age before coming to Australia in 1991 to complete high school. He testified that he completed one year of mechanical engineering at the University of New South Wales in 1994. He then transferred to a degree in computer science at the University of Sydney in 1994, which he studied into his second year.
The applicant told the judge that with his ex-wife he has a stepson, with whom he has a good relationship. He stated that he helped raise the stepson, and in his time living in Australia would visit him frequently. The applicant also said that he has a wife who lives in Taiwan, with whom he hoped to continue a relationship following the completion of his sentence.
The applicant explained that he did not complete the computer science degree, because, in 1996 he was charged in relation to credit card fraud and had a gambling problem. He stated that he did not attend court for that offence because it was his first time in gaol; he was scared and did not have the courage to attend court in front of all his relatives. Since that time, the applicant has had little to no contact with his immediate family.
The applicant's prior criminal history reveals that he had been sentenced to terms of full-time imprisonment for offences relating to dishonesty. For an offence of making a false instrument which was committed on 28 February 2000, he was sentenced at the District Court at Sydney on 10 May 2001 to a term of imprisonment of 5 years with a non-parole period of 2 years 6 months. He was also sentenced on four counts of making a false statement to obtain money to concurrent terms of imprisonment of 18 months. The applicant was sentenced in the Central Local Court on 12 August 2010 to three concurrent sentences of 12 months imprisonment for two offences of making a false instrument and one offence of using a false instrument.
His Honour found that the applicant had a relatively extensive criminal history including two periods of full-time imprisonment, in 2001 and 2010, which denied him leniency and underlined the need for some prominence to be given to specific as well as general deterrence.
His Honour referred to "some positive aspects" of the applicant's circumstances that hopefully pointed to the possibility that he might in future maintain a law-abiding existence. These circumstances were the applicant's close relationship with his stepson, his partner in Taiwan, and his age.
On the question of parity, his Honour concluded that the applicant was more trusted and highly involved in the syndicate than Foong and must accept greater criminal responsibility.

The appeal

The Crown accepts that the judge erred by failing to take into account the utilitarian value of the applicant's plea of guilty. During the remarks on sentence, his Honour said: "[The applicant] entered his plea in the Local Court and maintained it in this Court. There does not seem to be any issue but that the plea was entered early and that there was by that fact, and the offender's conduct of the proceedings generally, a demonstrated willingness to facilitate the course of justice and an acceptance of responsibility, notwithstanding a strong Crown case. That was accompanied by some contrition worthy of favourable recognition. On sentence I will allow a discount of 20% for the reflection of those considerations in the plea." [6]
His Honour did not refer to the utilitarian value of the plea during his sentencing remarks.
The applicant was sentenced before the decisions of this Court in Xiao v R [7] ("Xiao") and Jinde Huang aka Wei Liu v R. [8] The approach taken by his Honour was consistent with the understanding of judges before Xiao which confined a guilty plea to considerations of facilitating the course of justice and remorse when sentencing for a Federal offence.
In Xiao, this Court held at [278] that in sentencing proceedings governed by section 16A of the Crimes Act, a sentencing judge is entitled to take the utilitarian value of a guilty plea into account.
By failing to refer to the utilitarian value of the plea, his Honour did not have regard to that factor and error has been demonstrated. It follows that the ground of appeal has been established. Accordingly, it will be necessary to exercise the sentencing discretion afresh.

Submissions on re-sentence

The applicant submitted that notwithstanding the need for general deterrence, for offences contrary to s 400.3(1) of the Criminal Code, the sentence imposed was significant. The applicant asked this Court to bear in mind that the amount of money involved "was not vastly greater than the $1 million threshold for the offence".
When referring to the charges on the s 16BA document, the applicant submitted that the proceeds involved in the first offence were significantly less than the principal count and the level of suspicion was less. As to the second offence, the applicant contended that the possession of the items facilitated the commission of the proceeds offence and was part of the objective gravity of that offence. The applicant argued that the charges on the s 16BA document should not significantly increase an otherwise appropriate sentence.
The applicant adverted to Huang v R [9] ("Huang") and submitted that the analysis by Beazley P of preceding cases, and the sentence imposed in that case would provide guidance to the Court.
The applicant argued that bearing in mind the periods of time in between the offences previously committed; the Court would not conclude that his prior criminal history was such that Veen v The Queen (No 2) [10] ("Veen (No 2)") would apply. It was also submitted that the Court would not look to the sentence imposed on Foong to determine whether the applicant's sentence should be increased.
A further submission was that the Court should take into account the utilitarian value of the plea and afford a greater discount than 20%.
The applicant submitted that in all the circumstances a lesser sentence was warranted in law.
The Crown contended there is no lesser sentence warranted in law and argued that the three principles set out in Kim v The Queen; Fang v The Queen [11] ("Kim") are relevant to determining the appropriate sentence, including first, that money laundering is a serious offence because of the assistance it provides to organised criminal activity. Second, that the two primary factors in determining the seriousness of an offence are the amount of money involved and the state of mind of the offender. Third, that an offence against s 400.3(1) of the Criminal Code is the most serious money laundering offence in Part 10.2 and carries a maximum penalty of 25 years.
It was the Crown's submission that having regard to the above principles, the applicant's offence was serious; that he acted deliberately and voluntarily for his personal financial gain, knowing that his conduct was criminal; and that his offence was contrary to s 400.3(1), the most serious money laundering offence.
In relation to the plea of guilty, the Crown contended that the applicant had not demonstrated why a discount greater than 20% was warranted and that there is no presumption or entitlement to a greater discount in the circumstances of this case. Further, the Crown pointed to the judge's finding that the applicant must accept greater responsibility, and argued that an unjustifiable disparity between the sentences imposed on the applicant and Foong should be avoided.
The Crown argued that the applicant's substantial criminal record for offences of dishonesty, coupled with the repeated use of false identities to illegally re-enter Australia was such that Veen v R (No 2) principles apply. The Crown contended that the applicant has manifested in his current offences a continuing attitude of disobedience of the law and Australian border controls. The Crown submitted that retribution, specific deterrence, and protection of society all indicated that a more severe penalty was warranted.
The Crown referred to the annexure to the Agreed Statement of Facts which contained details of the applicant's use of false identities to re-enter Australia after he had been deported. The Crown provided a summary of this material which included the following: 1. On 2 September 2002, at the expiration of his non-parole period, the applicant was deported from Australia. On 29 December 2002, the applicant re-entered Australia under a false name. 2. On 3 March 2003, the applicant was charged with further fraud offences and released on bail. On 13 March 2003, the applicant was deported from Australia to Hong Kong. Between 9 April 2003 and 26 February 2008 the applicant re-entered and departed Australia a number of times under a number of different names. 3. On 12 August 2010, the applicant was sentenced at Central Local Court for the further fraud offences charged on 3 March 2003. He was sentenced to a fixed term of imprisonment for 2 years. 4. On 28 July 2012, at the expiration of that fixed term, the applicant was deported from Australia to Hong Kong. 5. Between 18 August 2012 and 5 November 2014, the applicant re-entered and departed Australia a number of times under different names. On 24 August 2015, the applicant was arrested for the present offences, under the name "Yuen Hong Fung".

Re-sentence?

As specific error has been identified, it is this Court's duty to re-sentence "…unless in the separate and independent exercise of its discretion it concludes that no different sentence should be passed". [12]
In determining the sentence to be passed, the Court must impose a sentence that is of a severity appropriate in all the circumstances of the offence. [13] In addition to any other matters, the Court is obliged to take into account such of those matters in s 16A(2) of the Crimes Act that are relevant and known to the Court.
No evidence has been placed before this Court of events that have occurred since the sentencing hearing before the judge.
As the judge's findings of fact have not been challenged, I intend to adopt them on the question of re-sentence.
Section 400.3(1) is found in Part 10.2 of the Criminal Code which deals with offences called Money Laundering. The maximum penalty for the offence is imprisonment for 25 years.
Sentencing guidance for offences contrary to s 400.3(1) has been provided in cases such as R v Van Lai Nguyen [14] at [59] and Kim at [61]. Other than the maximum penalty, important considerations include the offender's belief that the money or property was the proceeds of crime; precisely what the offender did; the period of time over which the transactions constituting the offence were carried out; the amount involved in the offending and the offender's role; whether the money or property was beneficially the offender's or not, and if not, the value of any intended reward.
Another important consideration is general deterrence. In Kim, the Supreme Court of Victoria Court of Appeal (Redlich, Santamaria, McLeish JJA) observed at [61.3]: "The person who launders money is an important cog in the wheel of organised crime and such conduct warrants severe punishment in which general deterrence is to be given significant weight."
I do not agree with the applicant's submission that this Court should bear in mind that "the amount of money involved was not vastly greater than the $1,000,000 threshold for the offence". The judge was unable to be satisfied beyond reasonable doubt of the particular amount dealt with by the applicant but concluded that it exceeded $1,000,000. This does not lead to the conclusion that the amount involved was not vastly greater than $1,000,000.
Important features of this case are that the applicant engaged in a deliberate planned course of conduct over a period of more than a month with full awareness that his conduct was criminal and having at the least a strong suspicion that the money may have been derived from particularly nefarious criminal conduct. He occupied a highly valued role in a well organised and sophisticated international money laundering syndicate which successfully transmitted $4,509,455 from 11 Commonwealth Bank accounts in false names to accounts in Hong Kong. He personally deposited $600,325 in cash into these accounts through 72 separate transactions. His offending extended beyond the cash deposits as he facilitated the transfer of large sums of cash from the accounts and by text messaging bank verification codes. He provided some of the moneys deposited by Foong and was as the judge said "patently" connected to the creation of the 11 accounts. Although the money was not beneficially the applicant's, he participated in the syndicate for an unidentified financial reward. His participation was integral and essential to the success of the syndicate's money laundering.
The first offence on the s 16BA document concerns a significant amount of money, namely $557,210 in cash, which was in the possession of the applicant, and the second offence concerns identification information relating to the 11 false identities used to open the Commonwealth Bank accounts. These offences demonstrate that more weight is to be given to personal deterrence and retribution in the sentence to be imposed. [15]
There is little in the applicant's subjective case that warrants leniency other than his plea of guilty and expression of remorse. I would allow a 25% discount for the utilitarian benefit of the early plea, the facilitation of justice, and remorse.
The judge assessed his prospects of rehabilitation as guarded and no material has been advanced in this Court which suggests that any other assessment should be made.
The applicant's prior criminal history does not entitle him to leniency, but I do not regard it as an aggravating factor. Nevertheless, his repeated use of false identities to re-enter Australia and his offending highlights the need for specific deterrence.
As has been often stated, an offence contrary to s 400.3(1) is serious and general deterrence is of particular importance. [16]
The judge's assessment that the applicant was more trusted and highly involved in the syndicate than Foong and had to accept greater criminal responsibility than Foong was not challenged on appeal. It was not submitted that the difference in the sentences imposed gave rise to a justifiable sense of grievance. In the exercise of my sentencing discretion, I am of the view that the difference is justified by the part each played in the syndicate.
I am not persuaded that the cases considered by Beazley P in Huang provide much assistance to this Court. As Beazley P observed at [78], the sentences varied significantly and it was not known whether there were discounts for assistance or a guilty plea, or whether offences on a s 16BA document were taken into account.
However, I accept that the sentence imposed by this Court in Huang provides some guidance in my sentencing task. The facts disclose that during the period from 21 March to 7 May 2013, Huang converted $3,216,500 into either Chinese Yuan Renminbi or Hong Kong Dollars at several money remitters in Sydney using false identities. Huang transferred that amount out of Australia to accounts in China or Hong Kong using the same false identities.
Huang pleaded guilty to an offence contrary to s 400.3(1) of the Criminal Code which concerned six transfers that totalled $1,349,000. Nine further offences involving nine transactions totalling $1,867,500 were taken into account on sentence on a s 16BA document. Huang was sentenced to a term of imprisonment of 8 years with a non-parole period of 5 years. On appeal, Huang's sentence was quashed and Huang was re-sentenced to a term of imprisonment of 6 years 3 months, with a non-parole period of 4 years 8 months.
One of the matters of difference in Huang's case to the present case is that the principal offence in Huang concerned six transfers totalling $1,349,000 whereas the applicant's case concerns 72 separate transactions of an amount that exceeded $1,000,000 but could not be precisely identified. Although the offences on the s 16BA document in Huang were more serious than the s 16BA offences in the present case, those offences could only be taken into account on the need for personal deterrence and the community's entitlement to exact retribution.
Giving weight to all relevant factors and in the exercise of my sentencing discretion, I am satisfied that no different sentence than the sentence imposed by the judge should have been passed.

Orders

I propose the following orders: 1. Leave to appeal granted. 2. Appeal dismissed.
WILSON J: I agree with Price J.

Endnotes

Tcpt, 17 July 2017, p 26.
Tcpt, 18 July 2017, p 17-18.
ROS, 4.
ROS, 5.
ROS, 8-9.
ROS, 1.
(2018) 96 NSWLR 1; [2018] NSWCCA 4.
[2018] NSWCCA 70.
[2018] NSWCCA 57.
(1988) 164 CLR 465; [1988] HCA 14.
[2016] VSCA 238.
Kentwell v R (2014) 252 CLR 601; [2014] HCA 37 at [35].
Crimes Act 1914 (Cth) s 16A(1).
[2010] NSWCCA 226; (2010) 204 A Crim R 246.
Attorney-General's Application under s 37 of the Crimes (Sentencing Procedure) Act 1999 (No 1 of 2002) (2002) 56 NSWLR 146.
Huang [2018] NSWCCA 57 at [80]; Kim [2016] VSCA 238 at [61].

Amendments 05 October 2018 - No amendment made. system error with paragraph numbering DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 October 2018

Crimes Act 1914(Cth)s 16A(1).

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Cases Cited (11)