R v Guo; R v Qian [2010] NSWCCA 170 | Case summary

R v Guo; R v Qian [2010] NSWCCA 170 | Case summary | Zoe

[16]

The Offences and Sentences 4 Mr Guo pleaded guilty to an offence of recklessly dealing with the proceeds of crime under s.400.4(2) Criminal Code Act 1995 (Cth) in the following terms: "Between about 30 March 2006 and 11 May 2006 at Sydney, New South Wales, [Yun Lin Guo] did deal with money valued at $100,000 or more, reckless to risk that the money would become an instrument of crime, contrary to sub-s400.4(2) of the Criminal Code 1995." 5 The maximum penalty for this offence is imprisonment for 10 years and/or a fine not exceeding $66,000.00. On 6 October 2009, Mr Guo was sentenced to imprisonment for two years, six months and 18 days commencing on 16 October 2009 and expiring on 2 May 2012, with a period of one year and 10 months to be served by periodic detention, with Mr Guo to be released on 15 August 2011 on a recognisanze in the sum of $1,000.00 to be of good behaviour for the remaining period of the sentence. 6 Mr Qian pleaded guilty to an offence of conducting transactions so as to avoid reporting requirements under s.31(1) Financial Transaction Reports Act 1988 (Cth) in the following terms: "Between about 17 November 2005 and 18 May 2006 at Sydney, New South Wales, [Jin Hua Qian] was a party to two or more non-reportable cash transactions, namely cash withdrawals of less than $10,000, totalling $2,278,100, from Westpac Bank of Australia account number 032060-224555 in the name of Zhongyu Pty Ltd and Westpac Bank of Australia account number 0320630-283868 in the name of Hong Cai International Pty Ltd which, having regard to the manner or form in which they were conducted, it is reasonable to conclude that the transactions were conducted in that manner or form for the sole or dominant purpose of ensuring or attempting to ensure that the currency involved in the transactions would not give rise to a significant cash transaction contrary to s31(1) of the Financial Transaction Reports 1988." 7 The maximum penalty for this offence is imprisonment for five years and/or a fine not exceeding $33,000.00. On 2 October 2009, Mr Qian was sentenced to imprisonment for one year and eight months commencing on 9 October 2009 and expiring on 8 June 2011, with a period of one year and five months to be served by period detention, with Mr Qian to be released on 8 January 2011 on a recognisanze in the sum of $1,000.00 to be of good behaviour for the remaining period of the sentence.

[17]

History of Proceedings Against Respondents 8 As will be seen, the Respondents were effectively co-offenders in an elaborate scheme which operated from late 2005 to mid-2006. 9 On 18 May 2006, Mr Guo was arrested and charged by the Australian Federal Police ("AFP") and was released on bail. 10 On 18 April 2008, after partly contested committal proceedings, Mr Guo was committed for trial in the Downing Centre District Court together with a co-accused, Xiao Ping Zhang. The trial was due to commence on 7 October 2008, to be heard together with Ms Zhang and Mr Qian. Mr Guo pleaded guilty on 8 October 2008. 11 On 18 May 2006, Mr Qian was arrested and charged by the AFP and was released on bail. He was charged with one count of recklessly dealing with the proceeds of crime contrary to s.400.4(2) Criminal Code Act 1995 (Cth) and 27 offences under s.31(1) Financial Transactions Reports Act 1988 (Cth). 12 On 6 November 2007, Mr Qian waived the requirement for committal proceedings and was committed for trial at the Downing Centre District Court. On 27 June 2008, Mr Qian's trial was set down to commence on 7 October 2008, to be heard together with Mr Guo and Ms Zhang. 13 On 9 October 2008, Mr Qian entered a plea of guilty to one count under s.31(1) Financial Transaction Reports Act 1988 (Cth) with the Crown not proceeding with any other charge. 14 Thereafter, lengthy sentencing proceedings (occupying some 10 days) ensued before the sentencing Judge with respect to Mr Guo, Mr Qian and Ms Zhang, involving evidence and submissions. In lengthy remarks on sentence delivered on 2 and 6 October 2009, his Honour imposed sentences with respect to the Respondents as set out earlier in this judgment. 15 On 27 October 2009, the Commonwealth Director of Public Prosecutions lodged appeals asserting inadequacy of sentence with respect to each Respondent. 16 On 6 November 2009, his Honour sentenced Ms Zhang following her plea of guilty to one count of recklessly dealing with the proceeds of crime contrary to s.400.4(2) Criminal Code Act 1995 (Cth). Ms Zhang was sentenced to 18 months' imprisonment to commence on 6 November 2009 and expiring on 5 May 2011 to be served by way of conditional home detention, with Ms Zhang to be released on 26 November 2010 on a recognisanze in the sum of $5,000.00 to be of good behaviour for two years and six months. 17 Evidence was adduced in Ms Zhang's case from treating doctors and other specialists regarding the detrimental effect of a period of full-time custody as a result of medical conditions from which she suffered. Although the Crown lodged an appeal to this Court against inadequacy of sentence imposed upon Ms Zhang, the Court was informed that the Crown appeal has been withdrawn.

[19]

The Overall Scheme 19 The activities of Mr Guo, Ms Zhang and the Mr Qian were part of a wider scheme also involving Yufeng Cao ("Cao"), who was not charged before his return to China, Jiu Cai Ding ("Ding"), who was not charged and cannot be located, Bill Dong ("Dong") and Kwin Hong Choy ("Choy"), who were not charged. 20 Baiada Poultry Pty Ltd ("Baiada") conducted a chicken processing business in the western suburbs of Sydney. Baiada engaged B&E Poultry Pty Ltd ("B&E Poultry") to supply labourers for their business. B&E Poultry then submitted invoices to Baiada for the services it supplied. B&E Poultry employed Mr Guo as a manager at the Baiada factory for about five years. 21 In 2003, B&E Poultry then engaged Mr Guo, through his company Lin Enterprises Pty Ltd ("Lin Enterprises"), to provide the labourers for Baiada. Dong was believed to be the principal of B&E Poultry. 22 The specific events upon which the charges were brought against the Respondents extended from about 17 November 2005 until 18 May 2006, during which time Baiada had its chicken meat processing business at various locations in New South Wales, including a factory at Girraween. Baiada's workforce was unionised and its labour costs were high. To reduce its running costs, Baiada decided to contract with B&E Poultry for the provision of an unskilled workforce at the Baiada factory at Girraween to process chicken meat. Baiada also had labour supply agreements with other companies and had its own employees numbering about 2,000. Pursuant to the agreement reached with B&E Poultry, that company provided staff to fillet and marinate chicken meat at Girraween. The number of staff employed varied according to the amount of work available at any given time. The staff employed under this arrangement, from time to time, numbered from 65 up to 120 persons. So far as Baiada was concerned, B&E Poultry engaged these process workers. Baiada did not have any details of these workers, but identified them by a number allocated to them. 23 Baiada understood the supervisor for B&E Poultry to be Mr Guo. He would attend the premises when there was a production or staffing problem. Dong was believed to be the principal in B&E Poultry, but he attended the factory only rarely. In addition to Choy, there were two other supervisors representing B&E Poultry at the factory, but if there were any disputes regarding the workers, resolution of those matters would include consultation with Choy. 24 Each day, an employee of Baiada would maintain a record of the production by the workers to be agreed by Choy whereupon those figures were entered into the Baiada computer system. B&E Poultry would submit an invoice for payment based upon those figures. 25 Mr Guo, through Lin Enterprises, engaged Quang Jun Pty Ltd ("Quang Jun") to supply what were the same labourers to work at Baiada as were engaged by B&E Poultry. Quang Jun invoiced Lin Enterprises. Choy was the sole director of Quang Jun, and was also a fellow supervisor with Mr Guo, employed by B&E Poultry at Baiada. 26 After a 4% deduction for commission and other expenses, Lin Enterprises would pay the Quang Jun invoice. 27 Quang Jun engaged Zhongyu Pty Ltd ("Zhongyu") and, later, Hong Cai International Pty Ltd ("Hong Cai") to supply what were the same labourers as those engaged by B&E Poultry and Lin Enterprises to work at Baiada. Zhongyu and Hong Cai invoiced Quang Jun. 28 After a deduction of a commission and expenses, payment of these invoices were made to the relevant company bank accounts in the chain. 29 Cash withdrawals were then made from the bank accounts of Zhong Yu and Hong Cai by Mr Qian, supervised by Cao, until his departure from Australia. 30 Lin Enterprises, Quang Jun, Zhongyu and Hong Cai were shell companies that did not perform any of the work detailed on the invoices to justify their payment. 31 The trail of invoices and payments had no commercial basis but were set up to conceal the ultimate conversion of legitimate contract payments to cash. 32 A portion of the cash withdrawn was used to pay unskilled workers at Baiada in cash or cheque. However, there was a surplus of cash each week and what became of it is unclear. Zhong Yu and Hong Cai never lodged income tax returns declaring as income the money deposited to their accounts. 33 So far as Baiada was concerned, those supervising the labour force continued in their role under this contractual arrangement. There was not, at any time, disclosure to Baiada of the additional arrangements in place involving further companies by means of which the money paid by Baiada was transferred from company to company, purportedly with commissions drawn by each along the way, until reaching the final repository, at which point structured withdrawals were made so that cash could be paid to the workers at the factory. 34 There was no suggestion of impropriety on the part of Baiada or its principals or employees in the arrangements giving rise to the charges. 35 His Honour referred to the tax and other implications of the scheme (AB66-67): "I am satisfied beyond reasonable doubt that the only rational inference to draw is that this overall arrangement had as its goal the denial of taxation to which the Commonwealth was entitled and that concurrent with that goal or purpose, the workers providing services to Baiada were paid in cash without adequate records thereof and, it appears, without contributions for superannuation, and without appropriate insurance protection, although the evidence is silent upon those latter two points." 36 In a further finding concerning the impact of the offences, his Honour said (AB104-105): "As I noted earlier there is no evidence directly related to the question of superannuation and insurance protection, however, the inference to be drawn upon my assessment of the evidence speaking directly to these matters is that there was some such impact as well as the attack upon the revenue by reason of this scheme." 37 His Honour accepted the following Crown submission concerning the tax and other implications of the scheme (AB46): "The Crown submitted that when one stood back from this matrix and looked at the facts in a global fashion, what is revealed is that at the same time in respect of the same amount of money all three of these offenders were engaged upon the commission of their offences to facilitate the overall outcome sought, that is, avoidance of tax and the exploitation of the workers in this factory." 38 The sentencing Judge characterised the misconduct of the Respondents in the following way (AB14-15): "… their misconduct facilitated the success of a sophisticated arrangement whereby a small number of greedy individuals profited at the expense of the revenue and the unfortunate workers whom they exploited, denying them the rewards and protections to which they were entitled in the unpleasant and difficult services they provided preparing chicken meat products." Circumstances relative to Mr Guo 39 Over the period of the charge against him, Mr Guo dealt with an amount of $716,394.73, by depositing cheques drawn on the account of Lin Enterprises to the account of Quang Jun. Part of the proceeds of those cheques were eventually deposited into the bank accounts of Zhongyu and Hong Cai, from which cash was withdrawn by Mr Qian as part of his structuring activities. 40 On an occasion, Mr Guo was handed cash withdrawn by Mr Qian in Burwood. 41 Mr Guo continued his criminal activity over a period of two months, ceasing only because he was arrested.

[50]

(g) he used a false identity to negotiate the bank transactions, and acted with relative sophistication and with persistence, representing himself confidently to bank tellers as the owner of chicken processing factories with employees (AB22, 44-45). 64 The Crown noted the view of the sentencing Judge that the sentence to which Mr Guo was exposed ought be greater than either that of Mr Qian or Ms Zhang because of his role. In addition, Mr Guo stood for sentence for an offence carrying a maximum penalty which was twice that of the offence for which Mr Qian was to be sentenced. The Crown pointed to the finding of the sentencing Judge that Mr Guo's role was above that of Mr Qian in the scheme. It was submitted that a higher maximum penalty should have been fixed with respect to Mr Guo in view of these findings. The Crown submitted that his Honour failed to have proper regard to the criminal activities of Mr Guo in fixing sentence. 65 The Crown acknowledged that disparity of sentence between co-offenders in itself is not a ground for a Crown appeal on the basis that the Crown or the community might feel a sense of grievance because of disparity: Moore v Weibe (NSWCCA, 11 August 1992, unreported); R v Novella (NSWCCA, 23 May 1990, unreported, BC9002396). However, the Crown submitted that the sentences imposed on the Respondents resulted in an "unjustifiable disparity" so as to warrant intervention by this Court: R v Radloff (1996) 88 A Crim R 26 at 33; R v Gutierrez [2004] NSWCCA 22 at [144]-[148]; Steer v The Queen [2000] FCA 462 at [11]-[12]. 66 The Crown submitted that the sentences imposed upon Mr Guo and Mr Qian failed to adequately reflect the element of general deterrence and the legislative intent of Parliament recognising the seriousness of offences of this type. 67 The Crown pointed to statements in the second reading speeches to establish a clear legislative intent in introducing the money laundering and structuring legislation in recognition of the seriousness of these types of offences and the effect they can have upon the Australian economy, in particular given the difficulty of detection of offences of this type. 68 The Crown submitted that, in this case, the activities of Mr Guo and Mr Qian affected the ability of the Commonwealth of Australia, through the Commissioner of Taxation, to protect the revenue through the taxation system. The Crown emphasised and endorsed the finding of the sentencing Judge referred to at [38] above. 69 The sentencing Judge found that the only rational inference regarding the goal of the scheme was denial of taxation receipts to which the Commonwealth of Australia was entitled (AB66) (see [35] above). 70 The Crown pointed to the sentencing Judge's endorsement of the Crown submission (referred to at [37] above), which extended to the conduct of Mr Guo and Mr Qian (AB46). 71 The Crown submitted that an examination of other sentencing decisions for offences under the legislation breached by Mr Guo and Mr Qian fortified a conclusion that the sentence imposed upon each Respondent was manifestly inadequate.

[51]

Submissions on Behalf of Respondents 72 Mr Linegar, counsel for Mr Guo, submitted that the sentence imposed upon his client was not manifestly inadequate. 73 Mr Linegar pointed to an acceptance by the sentencing Judge that "the source of the funds was legitimate and that the ultimate destination was legitimate, but along the way the money was diminished until it was below what would have otherwise been the appropriate remuneration of these workers, with appropriate taxation taken at source and provision for other aspects of the employment relationship" (AB117). He pointed to a further finding by his Honour that "wages may have been paid to workers either in cash or by cheque but the simple fact is that the arrangement allowed the conversion of what would have been taxable income in the hands of B&E Poultry into cash income that was not declared by Zhongyu and Hong Cai at the end of the line" (AB118-119). 74 Mr Linegar pointed to the finding that Mr Guo's role was not that of a principal in the scheme, although acknowledging that he was the principal in his family company and was an "indispensable link in the chain" (AB121). Counsel submitted that this entitled the sentencing Judge to pass sentence based upon an assessment of criminality that placed Mr Guo at or below the mid range of objective seriousness for this offence. 75 Mr Linegar submitted that whilst a large sum of money passed through Mr Guo's company, a relatively small amount of 4%, and later 8%, was retained by him as commission, with the bulk of the funds being paid to the workers hired to provide the labour. 76 Mr Linegar submitted that his Honour made careful and detailed findings which provided a proper foundation for the characterisation of Mr Guo's criminality and the sentence imposed with respect to him. 77 With respect to the Crown submission concerning parity, Mr Linegar submitted that the principle in R v Radloff had no application to this case as there was no unwarranted disparity between the sentences of the Respondents, having regard to the facts and the circumstances of each offender. 78 Counsel submitted that a sentence by way of periodic detention lay within his Honour's sentencing discretion. The Respondent had pleaded guilty to a charge that alleged that he acted recklessly and this was significant to an assessment of his criminality. It was submitted that the profit gained personally by Mr Guo over the two-month period in 2006 was relatively small, and his criminality was less than that of the two principals, Cao and Choy, who intentionally defrauded the Commonwealth of much larger sums. 79 Mr Linegar pointed to subjective factors operating in Mr Guo's favour, including prior good character, his expression of remorse and health issues raised in a psychological report tendered on sentence. He submitted that appropriate regard was had to sentencing factors referred to in s.16A Crimes Act 1914 (Cth). Further, Mr Linegar submitted that the comparative cases relied upon by the Crown could be distinguished from the circumstances of this case. He submitted that the present case is not a money laundering offence related to drug dealing (R v Z (2006) 167 A Crim R 436; R v Ansari [2007] NSWCCA 204; 70 NSWLR 89) nor was it factually similar to the circumstances of R v Huang; R v Siu [2007] NSWCCA 259; 174 A Crim R 370. 80 Counsel submitted that the sentence imposed on Mr Guo was both appropriate and adequate in all the circumstances of the case, so that the Crown appeal ought be dismissed. 81 Mr Clark, counsel for Mr Qian, pointed to a number of findings concerning the conduct of his client, including the fact that he received a sum of between $5,000.00 and $8,000.00 for his actions as part of the scheme. Mr Clark pointed to the finding that Mr Qian was accompanied by someone else, who was directing and maintaining a supervisory role concerning his activities (AB43). Counsel emphasised that allowance was made for Mr Qian's plea of guilty and contrition and that the offence for which he was to be sentenced carried a maximum penalty of imprisonment for five years, half the maximum penalty faced by Mr Guo. 82 Mr Clark submitted that an examination of comparative cases in the District Court relied upon by the Crown did not advance the Crown appeal. He sought to distinguish the various cases - R v Au [2001] NSWCCA 468; R v Narayanan [2002] NSWCCA 200; R v Rule [2003] NSWCCA 97 and R v Hutton [2004] NSWCCA 60. 83 Mr Clark submitted that the detailed remarks on sentence balanced the objective seriousness of the offence, and Mr Qian's role in it, and his personal circumstances. He submitted that the length of the sentence, and the use of periodic detention, was appropriate in all the circumstances, having regard to Mr Qian's role, his previous unblemished character and his subjective circumstances. He submitted that the sentence imposed in the District Court was an available one in the exercise of that Court's sentencing discretion so that the Crown appeal ought be dismissed.

[54]

"Notwithstanding the gridlike structure of the subsections, their graded component parts and maximum sentences, they comprehend such a wide range of criminality that there is bound, I think, to be an appreciable variation in the length of sentences within and between them. It seems to me, without undervaluing the importance of the principal differentiating factors - minimum value of money or property and state of mind - that each case will have other variables that bear on sentence. Perhaps the most important will be an exact appreciation of what the offender did, what acts he performed and with what authority and over what period of time. The total value of money or property involved will be important, and whether the money or property belonged to the offender or to another. The degree of planning or deceit that led to the commission of the offence and whether actual loss resulted, and the extent of such loss, will be important. Just as there is a distinction between recklessness and belief, the precise nature of proved belief may vary so as to affect the sentence. There will be a range of possible strengths of belief, rising to certain knowledge, as in Maldonado ." 88 In R v Ansari, Howie J (Simpson and Hislop JJ agreeing), at 118-119 [119]-[124], pointed to the breadth of conduct covered by this class of offences, and adverted to some factors relevant to an assessment of objective seriousness: "119 The offences within the Division, therefore, apply to a large range of activity in relation to money or other property to be used in connection with, or arising from, serious crime. Not only is there a very wide ambit in relation to the conduct caught by the offences but there is also a substantial range of criminal activity to which the money or property could relate, being limited in effect to an indictable offence of the Commonwealth or a State or Territory. The offences are not concerned only with the source of the money or property that is dealt with but also its ultimate use. The offences cover money obtained illegally or to be used for illegal purposes or dealt with in a manner that is illegal.

[59]

124 However according to normal sentencing principles, if the Crown wants to submit that the particular offence is aggravated by a circumstance that makes it more serious than objectively it would appear to be from the bare conduct of the offender, for example because the money with which the offender dealt was known by him to be intended to support terrorism, then the Crown should prove that fact beyond reasonable doubt. On the other hand, if the offender seeks to mitigate the seriousness of the apparent conduct by some fact, for example that the offender believed the funds were to be used for a humanitarian purpose, then it would fall to the offender to prove that fact on the balance of probabilities. Where however the accused denies the offence or there is no evidence as to his state of knowledge of the source of the funds, the purpose of dealing with the funds or their ultimate destination, the Court must simply deal with the matter on the objective facts as proved by the evidence. That was the case here. The Judge was not required to find facts that were most favourable to the appellants." 89 In R v Huang, this Court (Simpson, Howie and Hislop JJ) referred, at 380-381 [32]-[36], to factors which bear upon an assessment of the objective seriousness of a money laundering offence: "32 Notwithstanding the Crown submissions to the contrary before this Court, we are of the opinion that the offender's belief as to the source of the funds will always be a relevant consideration regardless of whether the offender is charged with an offence concerned with the proceeds of crime or an offence concerned with property being used as an instrument of crime. Where it is the latter, the belief as to the source of the funds or its nature is less relevant because the offence is directed at the use to be made of the funds. So the offence of the respondent Siu was aggravated because he believed that the funds were as a result of illegal activity, albeit the activity was not of the utmost seriousness.

[65]

Financial Reporting Offences 92 The Financial Transaction Reports Act 1988 (Cth) is directed at regulating the cash economy, which can facilitate both tax evasion and money laundering. The principal object of the Act is to facilitate the administration and enforcement of taxation laws (s.4(1)) and a further object is to facilitate the administration and enforcement of laws of the Commonwealth other than taxation laws (s.4(2)), with information collected for purposes identified in s.4(1) and (2) being able to be made available to State authorities to facilitate the administration and enforcement of laws of the States: R v O'Driscoll [2003] NSWCCA 166; 57 NSWLR 416 at 420-421 [13]-[14]. 93 The mischief with which the Act was designed to deal is identified in the second reading speech as being "the underground cash economy, tax evasion and money laundering" with the legislation intended to "give law enforcement agencies the ability to monitor the movement of large amounts of cash and thus to identify tax evaders and the recipients of proceeds of crime": Leask v Commonwealth of Australia [1996] HCA 29; 187 CLR 579 at 596-597. 94 Structuring offences under the Act are difficult to detect and they call for a significant degree of general deterrence: R v Au at [7]; R v Narayanan at [89]; R v Rule at [9]-[10]; R v Edwards; Ex parte Director of Public Prosecutions (Cth) [2008] QCA 85; 183 A Crim R 83 at 84 [2]. 95 Bearing in mind the findings by the sentencing Judge that the present offences involved exploitation of workers and the non-payment to them of their lawful entitlements (see [37] and [38] above), the observations of McMurdo P of the Queensland Court of Appeal in R v Edwards, at 84 [3], are pertinent: "The Act is principally aimed at limiting tax evasion. It also provides a useful tool against the anti-social practices of organised crime and public corruption. Our federal taxation system substantially funds the public services, facilities and institutions, which are essential to the satisfactory functioning of our civil society. Its efficacy depends in large measure on compliance by ordinary citizens with the statutory requirements of the Act. Non-compliance will not always be easy to detect."

[67]

Determination of Crown Appeals 98 The findings of the sentencing Judge demonstrated that each Respondent was a participant in an elaborate and sophisticated scheme, involving phantom companies and other disguises (including a false identity), to further their criminal activities. Although different offences bearing different maximum penalties were committed by each of the Respondents, they were each engaged in varying aspects of the same criminal enterprise. 99 With respect to Mr Guo, an assessment of the objective seriousness of his crime involves consideration of factors referred to in the authorities set out at [85] to [91] above. Mr Guo dealt with an amount of $716,394.73. There was a significant degree of planning and deceit involved in the commission of his offence. Although he pleaded guilty to an offence of recklessly dealing with the proceeds of crime under s.400.4(2), the level of criminality involved for that offence may be characterised appropriately as high. It should be kept in mind that the maximum penalty of 10 years' imprisonment in s.400.4(2) applies only to offences of recklessness to a risk that the money was the proceeds of crime. It does not assist Mr Guo to contend that his crime was one involving recklessness rather than belief or intention that the money was the proceeds of crime, as the latter conduct constitutes a separate and more serious offence under s.400.4(1) with a maximum penalty of 20 years' imprisonment. Mr Guo's criminal activity continued over a period of two months, ceasing only because he was arrested. 100 Mr Guo played a pivotal role in the activities as the sole director, secretary and shareholder of Lin Enterprises. The findings of the sentencing Judge summarised at [58] to [59] above point to the objective seriousness of Mr Guo's offence. The sentencing Judge found that the overall arrangement had as its goal the denial of taxation to which the Commonwealth was entitled, with Mr Guo's misconduct facilitating the success of a sophisticated arrangement whereby a small number of greedy individuals profited at the expense of the revenue and the workers whom they exploited, denying them the rewards and the protections to which they were entitled for unpleasant and difficult work. The offence caused a significant degree of social harm - it involved anti-social practices of the type referred to in R v Edwards at [95] above. 101 His Honour's finding that there had been exploitation of workers is fortified by evidence given in the District Court concerning the difficulty in employment of workers and the placing of advertisements in the Chinese and Vietnamese press for that purpose (AB116-117). The flavour of the evidence was that a shadowy workforce identified by numbers only and not names (see [22] above) had been utilised, without proper records and being paid in cash, a situation no doubt attractive to illegal immigrants who are vulnerable to exploitation, and obliged to work without the protection of the law. 102 A clear determination of the loss to the revenue, and the actual extent of financial exploitation of the workers, is not possible because of the absence of records which could allow such a calculation. Of course, the absence of records is a consequence of the elaborate scheme in which the Respondents were very active participants. The findings of the sentencing Judge with respect to impact on the revenue and exploitation of workers are not challenged and ought be applied by this Court. 103 In my view, Mr Guo's offence was one of very significant objective seriousness. General deterrence was and remains an important sentencing factor. I have taken into account all relevant factors under s.16A Crimes Act 1914 (Cth). Even after making full allowance for Mr Guo's subjective circumstances, I am entirely satisfied that a significant period of full-time imprisonment was appropriate in his case. Clearly, a sentence of imprisonment by way of periodic detention is more lenient than full-time custody: Douar v R [2005] NSWCCA 455; 159 A Crim R 154 at 166 [173]. It was not appropriate in this case. The Crown has demonstrated that the sentence imposed upon Mr Guo, both in length and form, was manifestly inadequate. 104 Mr Qian was engaged in a protracted and persistent course of conduct utilising deception as part of this elaborate scheme. A total sum of $2,278,100.00 was withdrawn by him over a six-month period. A false name was used and Mr Qian was entirely aware of the need (to further the arrangement) to make cash withdrawals in sums less than $10,000.00. Although the monetary rewards flowing to Mr Qian were not very substantial, he was a key participant in this scheme and was aware of the wrongful nature of his activities. 105 I bear in mind the general sentencing principles for this class of offence referred to at [92]-[96] above. I also have regard to the findings of the sentencing Judge concerning Mr Qian set out at [61] to [63] above. 106 As with Mr Guo's money laundering offence, general deterrence was and remains a most significant factor on sentence for a structuring offence of the type committed by Mr Qian. It will be apparent from the recital of the facts of the offences and the history of the proceedings, that an elaborate and detailed investigation was required leading to the sentencing of the Respondents. The cases make clear that these types of offences are difficult to detect and that, as a consequence, general deterrence is a most important factor to be taken into account on sentence. 107 After making due allowance for Mr Qian's subjective case and taking into account all relevant factors under s.16A Crimes Act 1914 (Cth) , I am entirely satisfied that a significant sentence of full-time imprisonment was required in his case. In my view, the Crown has demonstrated that the sentence imposed on Mr Qian, both in length and form, was manifestly inadequate. 108 Clear error has been established by the Crown in that the sentence in each case was manifestly inadequate in the well-recognised sense that it was unreasonable or plainly unjust: Markarian v The Queen [2005] HCA 25; 228 CLR 357 at 370-371 [25]; Carroll v The Queen [2009] HCA 13; 83 ALJR 579 at [8]-[9]. 109 I have reached this conclusion without the need to resolve the Crown's submission (at [65]) by reference to a suggested unjustifiable disparity between the sentences. Rather, the conclusion of manifest inadequacy may be reached by examination of the objective seriousness of the offence in each case and the subjective circumstances of each Respondent, compared and contrasted with the sentence imposed upon each Respondent.

[69]

Resentencing the Respondents 113 The Crown has demonstrated that the sentences imposed upon Mr Guo and Mr Qian are manifestly inadequate. In each case, I am satisfied that the sentences failed to adequately reflect the objective criminality of each of Mr Guo and Mr Qian as found by the sentencing Judge, and failed to adequately reflect the element of general deterrence and the legislative intent underlying offences of these types. 114 The maximum penalty for Mr Guo's offence is imprisonment for 10 years. His offence is a serious example of a crime of this type. General deterrence is an important consideration in this case. The conduct of Mr Guo damaged the Commonwealth revenue, but also served to exploit workers in a manner which may be characterised appropriately as anti-social and causative of social harm. Mr Guo has a number of significant subjective factors operating in his favour. I have taken into account the contents of the affidavit of Mr Guo affirmed on 2 July 2010. 115 Having regard to all relevant objective and subjective factors and all relevant s.16A considerations, I am satisfied, before application of the 15% discount for his guilty plea, that a sentence of imprisonment of four years and six months with a non-parole period of two years and 11 months is appropriate in his case. After application of the 15% discount (and some rounding), the sentence to be imposed will be three years and 10 months' imprisonment with a non-parole period of two years and five months. I note that Mr Guo has been serving a sentence by way of periodic detention since 16 October 2009. He is entitled to credit for this period, albeit that the sentence has been served only by way of periodic detention. I propose that the sentence operate from that date. This approach is appropriate in this case as sentence is being increased on a Crown appeal. 116 Mr Qian's offence carries a maximum penalty of imprisonment for five years. Having regard to all relevant objective and subjective factors and all relevant s.16A considerations, I am satisfied that, before application of the 15% discount, a sentence of imprisonment of three years with a non-parole period of two years is appropriate in his case. After application of the 15% discount (and some rounding), the sentence to be imposed will be two years and seven months with a non-parole period of one year, eight months and one week. Mr Qian has been serving his sentence by way of periodic detention since 9 October 2009. In the circumstances, it is appropriate that the sentence of imprisonment commence from that date to allow him credit for time served, albeit by way of periodic detention. Again, I consider this approach to be the appropriate one in determination of this Crown appeal. 117 I propose the following orders:

R v Guo; R v Qian

At a glance

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Judgment (74 paragraphs)

Legislation Cited (4)

Cases Cited (21)

Cited By (14)