PHAN -v- THE STATE OF WESTERN AUSTRALIA [2019] WASCA 163 (21 October 2019)

1. The appellant seeks leave to appeal against his sentences on two grounds, both of which allege inferred error. Ground 1 in effect contends that the total effective sentence of 5 years 6 months' imprisonment infringes the first limb of the totality principle. Ground 2 contends that the individual sentence for the property laundering offence is manifestly excessive.
2. On 21 October 2019, we heard the appellant's application for leave to appeal on those grounds. At the conclusion of the hearing, we made orders refusing leave to appeal on both grounds and dismissing the appeal. These are our reasons for making those orders.

1. The following facts were read by the prosecutor, admitted by the appellant and accepted by the sentencing judge.[1]
2. The appellant normally resides in Melbourne with his co-accused. On Monday 3 September 2018 he flew into Perth, obtained a hire car and drove to his accommodation at the Crown Metropol Perth.

1. During 4 - 7 September 2018, the appellant deposited 'structured' amounts of cash into the bank accounts of persons unknown to him on 72 occasions. He did so knowing that the money was the proceeds of an offence. In total, the appellant deposited $431,825 at various financial institutions within the Perth metropolitan area. All except one of the cash deposits were under $10,000.
2. The reference to 'structuring' payments relates to the requirements of s 43 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). That section requires banks to report a cash transaction of $10,000 or more to the Chief Executive Officer of the Australian Transaction Reports and Analysis Centre (AUSTRAC). Deposits of less than $10,000 do not attract that automatic reporting requirement.[2]
3. At approximately 11 am on Friday 7 September 2018, the appellant and his co-accused were at the Perth branch of the Commonwealth Bank of Australia. They attended with the common purpose of making structured cash deposits. As a result of their suspicious behaviour, Commonwealth Bank staff contacted police and advised that two people had been observed making numerous structured cash deposits into third party bank accounts. Police attended the branch, where the appellant and his co-accused were located and arrested.
4. The deposits were made as part of what is known as the 'cuckoo smurfing' money laundering method. This is designed to enable criminals to transfer wealth through the bank accounts of innocent third parties without their knowledge, by making use of corrupt international money remitters operating overseas. The method involves four steps:

(1) A legitimate customer deposits funds with an alternative remitter in a foreign country for transfer into another customer's Australian bank account. This is a legitimate activity and is often a cheaper and faster alternative to using a mainstream bank.

(2) Unknown to the customer, the alternative remitter is part of a wider criminal syndicate involved in laundering illicit funds. The alternate remitter, whilst remaining in the foreign country, provides details of the transfers, including the amount of funds, to a criminal associate based in Australia. This includes the account details of the intended recipient in Australia.

(3) The Australian operative deposits illicit cash profits from Australian crime syndicates into the bank account of the customer awaiting the overseas transfer. After an account balance check, the customer believes that the overseas transfer has been completed as legitimately arranged.

(4) The established criminal network accesses the legitimate money that was initially deposited with the alternative remitter. The illicit funds have now been successfully laundered.

1. During their investigation, police discovered that a number of structured cash deposits were also made by other co-accused in Perth during that time. In total, over that four-day period, the appellant and those other co-accused made 254 deposits totalling $1,278,420. Police also conducted a review back to 1 July 2018 of the accounts deposited into during that four-day period. It was identified that other co-accused had previously utilised those accounts to make structured deposits in Perth in August 2018.
2. The appellant's offending involved the making of the 72 deposits of a total amount of $431,825. The money was derived by criminal organisations from criminal activities on a significant scale.

Possession of a thing reasonable suspected to be unlawfully obtained

1. During a search of the appellant's bag at the Commonwealth Bank, police located $32,278.20 in bundles of $50 notes. Police also located the key to the appellant's hire car, which was parked nearby and searched. In the car, police found $292,050.05 in two suitcases, and the appellant's wallet which contained $2,100.05. These amounts, totalling $326,428.30, were reasonably suspected of having been unlawfully obtained.
2. One of the suitcases was consistent in appearance with a suitcase previously seen on CCTV footage being brought in by the appellant and another identified male on 4 September 2018.
3. The appellant's co-accused was also found with $42,418.90 in cash on her person, and with the appellant was jointly in possession of the cash located in the car.
4. Police also found deposit slips and ledgers for the approximate total of about $1.3 million, with which the group of offenders was involved.

1. Also at the Commonwealth Bank branch, police located two iPhones in the appellant's pants pocket. The appellant was asked to provide access to the mobile telephones, as police reasonably suspected that they contained records that would afford evidence in relation to the serious offence for which he was arrested. The appellant refused to provide access codes.
2. On Friday 14 September 2018, police obtained a data access order in relation to the two iPhones. On Monday 17 September 2018, the data access order was served on the appellant. The appellant provided police with two different personal identification numbers to access the devices, both of which were attempted in front of the appellant and did not unlock the devices.
3. The appellant was required to comply with the data access order by the end of 17 September 2018, but failed to provide access to either device. The appellant refused to comply with the order because he did not want to implicate himself, and knew that police would find incriminating evidence on his phones.

1. The sentencing judge made the following findings as to the appellant's role in the offending.[3]
2. The appellant's role was to launder the money. He knew that the money was the profits of criminal enterprise in Australia, and his role was to assist in moving it overseas. He was not at the top of the syndicate, in terms of the persons who were to benefit from the repatriation of the profits. The appellant was to be paid some amount of money, but the sentencing judge could not determine how much. The appellant was trusted with well over $1.5 million in cash by the persons who were to benefit from the repatriation of that money.

1. The appellant was 37 years old and from Vietnam, where his parents still live. He came from an impoverished background and had a limited education.
2. In about 2000, the appellant migrated to Australia to join his brother. He tried, unsuccessfully, to further his education in Australia. He worked in a bakery for a while. The appellant's partner has two children, whom he regarded as his stepchildren.
3. Because of his financial circumstances at the time, the appellant became involved in cannabis growing in Sydney. In July 2011, the appellant was convicted in New South Wales of cultivating cannabis and other offences. He was sentenced to a total of 36 months' imprisonment.
4. After the appellant's release from prison, he was deported to Vietnam. The appellant was desperate to return to Australia because his partner and stepchildren were here. The appellant obtained a false passport under a different name and, in 2015, returned to Australia illegally.

1. The sentencing judge recognised the appellant's pleas of guilty as mitigating factors, and applied a discount of 25% under s 9AA of the Sentencing Act 1995 (WA). His Honour also recognised as a mitigating factor that the appellant's experience of imprisonment will be more difficult because he was separated from his family and had no visitors.[5]
2. The sentencing judge regarded the fact that the appellant offended while in Australia illegally and operating under a false name to be an aggravating feature of the offending.[6] The grounds of appeal and submissions do not contend that the sentencing judge erred in regarding this an aggravating factor.
3. The sentencing judge considered that the appellant's prior record, whilst not aggravating, meant that the appellant was not entitled to any credit for prior good character. In his Honour's view, personal deterrence was an important consideration in sentencing the appellant.[7]
4. The sentencing judge concluded that the seriousness of the appellant's offending was such that a sentence of immediate imprisonment was the only appropriate sentencing option.[8] Again, there is no challenge to that conclusion in this appeal.
5. The sentencing judge noted that none of the appellant's co-offenders had been dealt with, so that considerations of parity did not arise for his consideration.[9]
6. The sentencing judge then imposed the sentences referred to at [1] above. His Honour would have imposed a sentence of 2 years 4 months' imprisonment on count 2, but reduced it to 1 year 4 months for reasons of totality.[10]

1. The principles relating to grounds of appeal alleging inferred error are well established. They were summarised in Kabambi v The State of Western Australia,[11] and need not be repeated here.

1. It is convenient to begin by considering ground 2, which alleges that the individual sentence of 4 years 2 months' immediate imprisonment for the property laundering offence is manifestly excessive.
2. As noted above, the maximum penalty for the offence is 20 years' imprisonment. The sentence imposed by the sentencing judge was roughly 20% of the maximum available penalty.
3. The appellant's submissions accept[12] that the following matters, referred to in Tan v The State of Western Australia,[13] are relevant in assessing the relative seriousness of an offence against s 563A(1)(b) of the Code:

(1) The most important consideration is what the offender did, as there may be little evidence before the court as to the organisation behind the offence, or the source of the funds or their ultimate intended use.

(2) The number of transactions carried out and the period over which the transaction(s) occurred are significant, in that they may indicate the extent of the offender's criminality, whereas a single transaction may reflect an isolated offence.

(3) Also relevant is the degree of authority reposed in the offender, the role of the offender in the particular money laundering arrangement, and the amount of money involved in the offending.

1. The present case represents a serious example of a property laundering offence. The appellant was involved in 72 structured transactions over 4 days involving $431,825. He was trusted with well over $1.5 million in cash. While the appellant was not given any particular authority, he was well aware that he was part of a larger organised operation, and that the money was the proceeds of criminal activity. The offence cannot be regarded as a result of naiveté, and was not an isolated lapse of judgment.
2. In Tan, the court also noted that:[14]

Money laundering is 'vital to the functioning of organised criminal syndicates' and the money launderer is an 'important cog in the wheel of organised crime'. Thus, money laundering is an offence in respect of which general deterrence is given significant weight.

The laundering of the proceeds of criminal activity is the lifeblood of organised crime. To state the obvious, the ultimate object of much of the criminal activity in which such organisations engage is to obtain money in a form in which it can be used without alerting the law enforcement authorities. The laundering of the proceeds of criminal activity is often the essential final step in achieving that object. This underscores the importance of general deterrence in sentencing for offences of this kind.

1. In the present case, personal deterrence was also an important consideration in sentencing the appellant. Further, apart from a plea of guilty, there was little mitigation to be found in the appellant's personal circumstances.
2. The appellant submitted that he was vulnerable to exploitation as, being in Australia illegally under an assumed identity, he could not obtain a tax file number or access government benefits. That is not a mitigating circumstance. The appellant's inability to obtain a legitimate income was self-inflicted, and is something that he must have anticipated when he re-entered Australia illegally.
3. There is no established customary sentencing pattern for offences against s 563A(1)(b) of the Code. The only cases in this court dealing with appeals against sentence for this offence are Tan and Wong v The State of Western Australia.[16] However, Wong involved a total effective sentence of 15 years' imprisonment, principally for the possession of possession of a large quantity of methylamphetamine with intent to sell or supply. It is not comparable to the present case. The sentence imposed for count 1 in the present case is broadly consistent with those imposed in Tan, but that is only one case. A single case or a smaller number of cases is of little assistance in the sentencing exercise and cannot establish the range of sentences customarily imposed.[17]
4. However, as the court recognised in Tan:[18]

As the parties acknowledge, the absence of directly comparable cases does not prevent this court from deciding that an individual sentence is manifestly excessive. It simply means that the question of manifest excess must be approached by reference to the maximum sentence for the relevant offence, the place which the offending conduct occupies on the scale of seriousness of that kind, and the personal circumstances of the offender. (citations omitted)

1. Having regard to the maximum penalty, the criminality involved in the appellant's offending and the appellant's personal circumstances, we are not satisfied that the sentence imposed for count 1 was unreasonable or plainly unjust. Ground 2 has no reasonable prospect of succeeding.

1. Nor are we satisfied that the total effective sentence failed to reflect the overall criminality involved in all of the appellant's offending, having regard to all of the circumstances including those personal to the appellant. Some degree of accumulation of the individual sentences was clearly appropriate in this case, particularly having regard to the refusal to comply with the data access order.
2. This court has recognised that a cumulative sentence will often be appropriate for failure to comply with a data access order. In Chadburne v The State of Western Australia the court held that a cumulative sentence was justified, observing:[19]

Cumulacy of this sentence was called for in order to avoid the result that a person apprehended in the course of committing serious offences might refuse to comply with an order that will produce evidence of the offending without any practical adverse consequence if the offences can be proven by other means. The experience of this court is that encrypted BlackBerry devices are commonly used by those in the illicit drug trade. There is a public interest in ensuring that offenders cannot frustrate the exercise of the statutory power to require access to data with impunity. Considerations of general and personal deterrence justified the imposition of a cumulative sentence in this case.

1. In the present case, the sentencing judge did not impose a cumulative sentence for the offence of failing to comply with a data access order. However, that offence does add to the overall criminality involved in all of the offences, and remains relevant when considering whether the total effective sentence is disproportionate to that overall criminality.
2. The offending the subject of count 2 was also serious, involving a very significant amount of cash.
3. In our view, it is not reasonably arguable that the total effective sentence of 5 years 6 months' imprisonment was, in all of the circumstances, unreasonable or plainly unjust.

1. For the above reasons, we were not satisfied that either ground of appeal had any reasonable prospect of succeeding. We therefore refused leave to appeal on both grounds and dismissed the appeal.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[2] See the definition of 'threshold transaction' in s 5.

[11] Kabambi v The State of Western Australia [2019] WASCA 44 [21].

[12] Appellant's Submissions, pars 13, 19

[13] Tan v The State of Western Australia [2019] WASCA 112 [49].

[16] Wong v The State of Western Australia [ 2019] WASCA 8.

[17] Pureau v The State of Western Australia [2017] WASCA 115 [74].

[19] Chadburne v The State of Western Australia [2017] WASCA 216 [69], applied in Slade v The State of Western Australia [2019] WASCA 65 [50].