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[2014] NSWCCA 78
Court of Criminal Appeal (NSW)
2013-12-04
Leeming JA, Hall J, Schmidt J
Original judgment source is linked above.
Date of Decision: 2013-03-06 00:00:00 Before: Acting Judge Andrew File Number(s): 2010/295928
Judgment 1THE COURT: The Crown appeals, pursuant to s 5D of the Criminal Appeal Act 1912 (NSW), against a sentence imposed upon the respondent on 6 March 2013 by the District Court. 2The respondent was charged on indictment with one offence pursuant to s 400.4(1) of the Criminal Code Act 1995 (Cth) (Code), namely that between about 7 January 2008 and 5 November 2008 she dealt with money or other property that was, and which she believed to be, the proceeds of crime and at the time of dealing the value of that money was $100,000 or more. The maximum penalty for an offence under s 400.4(1) is 20 years imprisonment or 1200 penalty units ($204,000), or both. 3In the alternative, the respondent was charged with an offence pursuant to s 400.4(2) of the Code, namely, that between about 7 January 2008 and 5 November 2008 the respondent dealt with money or other property that was the proceeds of crime and was reckless as to the fact that the money or other property was the proceeds of crime and at the time of dealing the value of that money was $100,000 or more. The maximum penalty under this provision is 10 years imprisonment or 600 penalty units ($102,000), or both. 4On 2 November 2012, after a 20 day trial, a jury found the respondent guilty of the money laundering offence under s 400.4(1). 5On 6 March 2013, the sentencing judge imposed a sentence of 3 years 6 months (expiring 1 May 2016), with a non-parole period of 2 years 4 months (expiring 1 March 2015). His Honour also made a reparation order pursuant to s 21B of the Crimes Act 1914 (Cth) in the sum of $331,862. 6The Commonwealth Director of Public Prosecutions lodged a Notice of Appeal on 28 March 2013. The single ground of appeal is that the sentences imposed upon the respondent were manifestly inadequate.
The Facts 7On 27 August 2010, the respondent, Christina My Phung Ly, was arrested and charged with the offence pursuant to s 400.4(1), and the offence pursuant to s 400.4(2) in the alternative. 8The charges related to the alleged laundering of money by the respondent in the sum of $357,568. 9This money stems from a series of frauds committed on the Australian Taxation Office (ATO), involving the identify theft of 21 taxpayers and the lodgement of 24 false income tax returns between 1 January and 24 October 2008. Each income tax return claimed tax refunds on behalf of the taxpayers upon the basis of falsely inflated details of income tax instalment payments and falsely inflated details of the tax deductions. The 24 tax refunds, totalling $357,568, were paid into seven bank accounts solely controlled by the respondent. 10Each of the income tax returns was in the name of a taxpayer who was unaware that his or her identity and tax file number was being used and had no knowledge of the lodgement or the electronic refund payment. 11The only significant source of funds deposited into the respondent's seven bank accounts was the proceeds of the tax frauds, with the exception of $2,650. All of the funds credited to the respondent's seven bank accounts during the relevant period were derived from the fraudulently obtained income tax returns. Most of the refunds were transferred between the respondent's bank accounts and then withdrawn shortly after they had been deposited. 12Nine of the 24 income tax returns lodged by the respondent were lodged by telephone via the ATO's interactive voice recognition service, known as "telefile". The voice recordings of these telephone lodgements were retained by the ATO and tendered at the trial. 13Evidence at the trial, from a voice comparison expert and a friend of the respondent familiar with her voice, established it was the respondent's voice in the nine recordings, and that in two of those recordings the respondent disguised her voice as a male voice for the purposes of lodging income tax returns in the names of male taxpayers. 14In the Crown's Submissions on Sentence it was contended that a significant full time custodial sentence was, in the absence of a finding of exceptional circumstances, the only appropriate sentence in this case. The Crown noted the seriousness of the offence, the offender's criminality, the need for general deterrence, and the large amount of money involved. 15At the date of sentencing the respondent had already spent three months and thirty days in custody in relation to the offence. 16The sentencing judge noted that in sentencing Commonwealth offenders the Court is required to have regard to the matters set out in Part 1B of the Crimes Act (Cth), specifically s 16A, which provides a check list of the matters that a court should take into account. These include:
Crown's Submissions 37The Crown case on appeal was that "the sentence imposed reveals such manifest inadequacy as to constitute latent error in principle relating to the objective seriousness of the offending, the maximum penalty, and unjustifiable disparity with appellate money laundering sentence cases, and the need for general deterrence": Crown's Written Submissions at [4]. 38The Crown argued that these proceedings involved a "high level of objective seriousness" which was "at the upper level...committed as a principal" and that the "respondent was not a mere runner or bagman and there was no issue of merely recklessness or reasonably to have known it was the proceeds of crime, she undoubtedly knew it": T1, 4 December 2013. 39It was submitted that the sentence imposed, taking into account all relevant matters, did not reflect the circumstances of the particular offence committed by the respondent, and as a result, constituted "an affront to community standards". Further, that the sentence was so "disproportionate to the seriousness of the crime as to shock the public conscience": Crown's Written Submissions at [22]. 40In this regard, the Crown argued that the sentence imposed "was as though it was a guilty plea and as though there were substantial mitigating circumstances": T 1:50 - T 2:1. The Crown in fact contended that a sentence double that which was imposed "would have been entirely defensible": T 2: 11-12. 41The Crown accepted that the sentencing judge correctly outlined the features establishing the objective seriousness of the respondent's conduct, and further accepts the sentencing judge's characterisation of the respondent's position in the offending hierarchy: Crown's Written Submissions at [12]. 42The Crown submissions noted that its appeal is "very much directed at error in the result arrived at, rather than any identifiable error in the reasoning prior to the pronouncement of sentence": Crown's Written Submissions at [22]. 43The Crown's submissions relied upon the following:
(a) Failure to translate the offending into a sentence of the severity required by law 44The Crown submitted that the objectively very serious features of the offending conduct were not adequately reflected in the sentence. 45Although the Crown accepted that the sentencing judge correctly described and characterised the offending, the Crown submitted that his Honour "failed to translate this into a sentence of the severity required by law": Crown's Written Submissions at [25]. 46The Crown noted that a primary feature of the structure of money laundering offences in the Code is that "the greater the sum of money involved, the more serious the offence": Crown's Written Submissions at [18]. The effect of this is that "an offence dealing with proceeds of crime or instruments of crime is more serious": Crown's Written Submissions at [19]. 47The Crown submitted that the respondent's criminality was at the "higher end of the scale of objective seriousness of dealings between $100,000 and $1 million, with the learned sentencing judge correctly finding little in the way of mitigation": Crown's Written Submissions at [21]. 48The Crown considered the relevant factors identified in the authorities, and in particular, the following were emphasised as being of significance:
(b) An unjustifiable disparity between the sentence imposed and sentences imposed in comparable matters
(i) Comparable cases 51The Crown provided to the sentencing judge a schedule of comparative intermediate appeal sentence cases for offences under ss 400.3(1), 400.3(3), 400.4(1) and 400.4(2) of the Code. 52The Crown submitted in the hearing of the appeal that an analysis of these penalties establishes that an "unjustifiable disparity between the sentence in the present appeal and the sentences imposed in comparable matters": Crown's Written Submissions at [27]. 53Extracted below are the relevant cases considered by the Crown in its written submissions and the sentences imposed; the facts of each case are considered in more detail later in these reasons. Case Amount of proceeds Sentence imposed R v Huang; R v Siu [2007] NSWCCA 259; 174 A Crim R 370 $556,400 5 years, with a non-parole period of 2 years 6 months. The Crown noted that the Court held that starting sentence before applying discounts for early plea and assistance should have been at least 8 years, although a more appropriate starting point was between 9 and 11 years. R v Foster [2008] QCA 90; 183 A Crim R 437 More than $300,000 4 years 6 months with a non-parole period of 2 years 3 months. The Crown noted that the Queensland Court of Appeal held the appropriate head sentence, before discounts for plea and other factors, was between 6 and 8 years imprisonment. Thorn v R [2009] NSWCCA 294; 198 A Crim R 135 $103,512 2 years 8 months. The Crown noted the Court of Appeal held the head sentence, before plea and other factors, was in excess of 3 years 7 months. Jimmy v R [2010] NSWCCA 60; 269 ALR 115 $243,952 3 years and 3 months with a non-parole period of 2 years 2 months. The Crown noted the sentencing judge considered the head sentence, before plea and other factors, was 7 years Ungureanu v R [2012] WASCA 11; 272 FLR 84 $500,000 7 years (after an unquantified discount for plea and co-operation), with a non-parole period of 4 years
54With regard to Thorn, the Crown noted there was a combination of unusual circumstances that had the effect of reducing the sentence, including:
(ii) Sentence imposed on the respondent's co-offender 61Mr Tilocca, the respondent's partner at the time of the commission of the offences, was her co-offender. 62Mr Tilocca pleaded guilty to an offence pursuant to s 400.4(2) of the Code arising from the lodgement of 19 different false income tax returns which generated 19 fraudulently obtained income tax refunds totalling $245,189. As noted above at the outset of these reasons, the maximum penalty for an offence under s 400.4(2) is 10 years imprisonment or a fine of 600 penalty units, or both. 63Although the Crown noted that "no true question of parity arises", it was submitted that the sentence imposed on Mr Tilocca "is relevant because it helps to demonstrate error in the sentence imposed on the respondent": Crown's Written Submissions at [31]. 64Mr Tilocca was sentenced to a term of imprisonment for 2 years and 9 months, with a non-parole period of 2 years, after a 10% discount for a guilty plea. Accordingly, the head sentence without the discount was slightly in excess of 3 years. 65The Crown submitted that Mr Tilocca's offending was objectively significantly less serious than that of the respondent having regard to the following factors:
(c) A failure to adequately reflect the element of general deterrence and the legislative intent of Parliament in recognising the seriousness of such offending 66The Crown submitted that the sentence imposed by the sentencing judge did not adequately reflect the principle of general deterrence, and that it "had long been recognised that general deterrence is of particular importance in sentencing for Commonwealth offences": Crown's Written Submissions at [36]. 67In support of this submission, the Crown cited the judgment of this Court in R v Huang; R v Siu [2007] NSWCCA 259; 174 A Crim R 370: "Money laundering on the scale in which both respondents were involved should be considered as serious criminal activity that is at the very heart of organised, professional crime syndicates. It warrants severe punishment not the least in order to reflect general deterrence of a very significant degree ...": at [36].
Respondent's Submissions 68The main submission for the respondent was that the sentence imposed did not involve a miscarriage of justice and was not so manifestly inadequate as to warrant appellate intervention: Bugmy v The Queen [2013] HCA 27; (2013) 302 ALR 192. The respondent's written submissions are summarised below; the oral submissions made on her behalf are addressed later in these reasons. 69In considering the table of sentences in comparable matters provided by the Crown, it was the respondent's submission that these should be treated with caution having regard to the judgment of this Court in R v Wing Cheong Li; Wing Cheong Li v R [2010] NSWCCA 125; 202 A Crim R 195: "Although the number of money laundering cases dealt with by the appellate courts is growing, it is still small. The cases do not even begin to trace the limits of the range of proper sentencing discretion. They can do no more in my opinion than produce a broad indication of the developing sentencing practice": at [40]. 70The respondent also cited the High Court's judgment in Hili v The Queen; Jones v The Queen [2010] HCA 45; 242 CLR 520, which quoted with approval Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCCA 194; 79 NSWLR 1: "[A] history of sentencing can establish a range of sentences that have in fact been imposed. That history does not establish that the range is the correct range, or that the upper or lower limits to the range are the correct upper and lower limits. ... 'Sentencing patterns are, of course, of considerable significance in that they result from the application of the accumulated experience and wisdom of first instance judges and of appellate courts.' But the range of sentences that have been imposed in the past does not fix 'the boundaries within which future judges must, or even ought, to sentence'. Past sentences 'are no more than historical statements of what has happened in the past. They can, and should, provide guidance to sentencing judges, and to appellate courts, and stand as a yardstick against which to examine a proposed sentence' (emphasis added). When considering past sentences, 'it is only by examination of the whole of the circumstances that have given rise to the sentence that "unifying principles" may be discerned'": at 537. 71Accordingly, it was argued that appellate intervention "is not justified simply because the result arrived at below is markedly different from other sentences that have been imposed in other cases": Wong v The Queen [2001] HCA 64; 207 CLR 584 at [58], cited with approval in Hili v The Queen, supra, at [59]. 72It was also submitted that such decisions do not constitute a "binding precedent", and that the issue of parity in sentencing is not available to the Crown: Respondent's Written Submissions at [16]. 73The respondent's submission was that the sentence imposed by the sentencing judge "does fall within the available range, and can, therefore, not be considered to be manifestly inadequate": Respondent's Written Submissions at [8]. 74Accordingly, the Crown's submission with regard to the available sentencing range, it was argued by the respondent, "does nothing to assist in determining the outcome of the present appeal": Respondent's Written Submissions at [15]. 75The respondent further submitted that there was nothing in the Remarks on Sentence to indicate that his Honour did not apply the relevant statutory provisions: Respondent's Written Submissions at [18]. 76The respondent's submission was that on the basis of the multitude of factors and "variables" in the present case (R v Wing Cheong Li; Wing Cheong Li v R [2010] NSWCCA 125; 202 A Crim R 195 at [41]), the sentencing judge was "perfectly entitled to arrive at the sentence imposed upon the respondent": at [20]. 77With respect to the Crown's submissions on the need for general deterrence, the respondent submitted that this was non-existent, given that there was no suggestion of "serious criminal activity that is at the heart of organised, professional crime syndicates", and further, that "where the act of laundering consists of no more than gaining access to ill-gotten gains ... general deterrence is promoted by the potential punishment for the anterior offence": at [21]-[22]. 78Finally, the respondent submitted that the correctness of Thorn did not arise for consideration, as the sentencing judge expressly stated that he distinguished the decision: "The defence referred to the decisions in Escambi v The Crown [2010] NSWCCA 159 and Thorne v The Crown [2009] NSWCCA [sic] and in my view they are distinguishable from the position here. They were cases where offenders were charged with both fraud and money laundering by dealing with the proceeds of the fraud. Those authorities are in relation to the practice of charging both of those offences where they arose from precisely the same conduct and that is not the case here": Remarks on Sentence at p 3. 79In any event, the respondent submitted that Elias did not call into question this Court's reasoning in Thorn, because this Court's reasoning in Thorn did not depend upon the availability of alternative charges, and the maximum penalties available for those charges, which, of course, was the issue considered by the High Court.
(a) Principles relevant to Crown appeals on sentence 80The issue raised in this appeal poses the question whether the result embodied in his Honour's sentencing order was unreasonable or plainly unjust. Error of this kind is usually described in a Crown appeal as "manifest inadequacy": Markarian v R [2005] HCA 25; (2005) 228 CLR 357 at [25] per Gleeson CJ, Gummow, Hayne and Callinan JJ. As discussed in Dinsdale v The Queen [2000] HCA 54; 202 CLR 321 at [61] - [62], the power to set aside sentences judged to be obviously erroneous on a Crown appeal against sentence ought normally only to be exercised where error has been very clearly demonstrated. 81A principle of particular importance in a Crown appeal against sentence is that a Court of Criminal Appeal may not substitute its own opinion for that of the sentencing judge merely because the appellate court would have exercised its discretion in a manner different from the manner in which the sentencing judge exercised his or her discretion: Lowndes v R [1999] HCA 29; 195 CLR 665 at [15]. As there noted: "The discretion which the law commits to sentencing judges is of vital importance in the administration of our system of criminal justice": per Gleeson CJ, Gaudron, McHugh, Kirby, Hayne and Callinan JJ. 82Further, the High Court has observed that: "... appellate intervention on the ground that a sentence is manifestly excessive or manifestly inadequate is not justified simply because the result arrived at below is markedly different from other sentences that have been imposed in other cases": Hili v The Queen, supra, at [59]. 83In Bugmy at [24] it was observed: "However, within a range of sentences for this offence and this offender, the weight to be given to the evidence and the various, conflicting, purposes of sentencing was a matter for Judge Lerve. The authority of the Court of Criminal Appeal to substitute a sentence for that imposed by Judge Lerve was not enlivened by its view that it would have given greater weight to deterrence and less weight to the appellant's subjective case. The power could only be engaged if the Court was satisfied that Judge Lerve's discretion miscarried because in the result his Honour imposed a sentence that was below the range of sentences that could be justly imposed for the offence consistently with sentencing standards. In that event, the Court was required to consider whether the Director's appeal should nonetheless be dismissed in the exercise of the residual discretion." 84Maximum penalties invite comparison between the worst possible case and the case before the Court at the time of sentence, and taken and balanced with all of the other relevant factors, they provide a yardstick: Markarian v R at [31]. 85In Ihemeje v R [2012] NSWCCA 269, Adamson J found that "sentencing decisions for money laundering offences may provide assistance by way of general sentencing principle for this class of offence, but do not, in my view, necessarily establish a range of sentence": at [86]. In support of this, her Honour noted the reasons of Barr AJ in R v Li [2010] NSWCCA 125; 202 A Crim R 195 at [41]: "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."
(b) Money Laundering Sentencing Considerations 86The federal money laundering offences in the Code have in recent years been considered in a number of cases. Whilst each case, of course, turns on its own facts, it is useful to set out relevant considerations before determining the ground of appeal in the present proceedings.
(c) Comparison to R v Huang; R v Siu [2007] NSWCCA 259; 174 A Crim R 370 88In determining whether the respondent's sentence was manifestly inadequate, it is useful to begin with a consideration of Siu. The offender pleaded guilty to an indictment that between 6 May 2003 and 14 July 2003 he dealt with money and intended that money become an instrument of crime, namely an offence against s 31(1) of the Financial Transaction Reports Act 1988 (Cth). At the time of the dealing the value of the money was $556,400.00 contrary to s 400.4(1) of the Code. 89The facts of the matter were that between 6 May 2003 and 14 July 2003 the offender conducted 59 structured transactions. He approached the Commonwealth Bank and the Westpac Bank at various branches in and around Sydney, depositing amounts just less than $10,000.00. The total amount was transmitted to Hong Kong bank accounts. The motive was financial but it is noted that the respondent received a total fee of something less than $3,000. 90The offender's role was not complex. He was told what to do by the principal, although he knew he was involved in an illegal activity. He was 64 years of age and was on a disability pension. He had limited English and poor health so that prison would be harder for him than for a healthy younger man, his family resided interstate, and he had a poor criminal record for illegal activities in relation to the abalone trade. He pleaded guilty at an early stage and originally gave assistance to police. He was given a discount of 35% for the guilty plea, remorse and subjective cooperation. However, general deterrence was said to be a "very important consideration": at [15]. The primary judge ultimately sentenced him to a term of 2 years 11 months imprisonment with release on recognizance after 12 months. 91This Court concluded in the Crown appeal in that case that the sentencing judge erred in considering the offender's conduct as "one of the least serious" that could be encompassed by the section. 92On appeal it was noted that the offence involved over half a million dollars and was committed for profit. It was observed that his offending was "very substantial criminal activity and warranted a severe deterrent sentence": at [46]. 93On re-sentencing the Court's approach was that the lower sentence available within the range should be adopted, as it was a Crown appeal in accordance with the then provisions governing Crown appeals. The Court considered that a preliminary head sentence of 8 years imprisonment reflected the seriousness of the offending: at [44], [47]. The mitigating factors warranted a discount of no more than 35%, which reduced the offender's head sentence to 5 years imprisonment. This was said to be "the very least that could be imposed upon Siu" to reflect his criminality: at [47]. A non-parole period one third of the head sentence was said to have been manifestly inadequate to reflect his criminality and the significance of general deterrence. Accordingly, it was held that the offender should serve a minimum of one half of the head sentence, that is, two and a half years imprisonment. The Court observed: "The starting sentence before applying discounts should have been at least 8 years although we believe a more appropriate starting point was between 9 and 11 years. As this is a Crown appeal, we have adopted the lower sentence in the available range. The respondent was entitled to a discount for the plea of 25 per cent. The Judge also gave the respondent the benefit of a 10% discount for past assistance. A total discount of 35 per cent was overly generous ... But we are prepared to grant him the same discount. The head sentence should have been at least 5 years ...": at [47]. 94The difference between Siu and the respondent in the present appeal include the following:
(d) Comparison to R v Foster [2008] QCA 90; 183 A Crim R 437 95The offender, Mr Foster, pleaded guilty to an offence of money laundering under s 400.4(1), relating to him bringing money into Australia that was the proceeds of crime. 96The offence was committed between 2 August and 14 October 2006. He was sentenced to 4 and 6 months imprisonment to commence from his detention in custody on 5 February 2007, which included a non-parole period of 2 years 3 months. He was ordered to pay reparation in the sum of AUD $214,138.47. He applied for leave to appeal against the sentence and reparation order contending that the sentence was manifestly excessive and that the reparation order should not have been made. 97The offender was aged 44 and 45 during the period of the offending. He had a relevant criminal history from the UK and USA. He had negotiated a loan to develop land in Fiji with the Bank of Federated States of Micronesia. This loan was to be used only for the development. Between 4 August 2006 and 13 October 2006 the bank acted upon Mr Foster's email requests to make a total of nine payments to entities purportedly performing work on behalf of the development company, Kai Viti Liku Beach Ltd. None of the entities had in fact performed any work in respect of a particular development within the terms of the loan agreement. 98The evidence established that the applicant had arranged for the amount of $306,722.58 (that is, $50,846 less than the amount involved in the present appeal), knowing it was the proceeds of crime, to be transferred into the relevant Australian bank accounts. His offending involved nine transactions in a period of a little over two months. Only AUD $92,634.11 was returned to the bank. The offender's enterprise was said not to have been a sophisticated enterprise, in contrast, for example, with Siu, who was involved in a sophisticated enterprise, although Siu's role was not complex, and he was told what to do by his principal: at [43]. McMurdo P (with whom Mackenzie AJA and Chesterman J agreed), stated that the applicant's offending was in some ways unsophisticated in that its ultimate discovery was inevitable: "61. ... It was, however, sufficiently devious to allow him to bring into Australia over a few months a great deal of money fraudulently obtained by him from an apparently regionally significant financial institution. General deterrence and, because of Mr Foster's concerning prior criminal history for offences of dishonesty, individual deterrence, were important considerations when determining the appropriate sentence for an offence against s 400.4. 62. A sentencing court should have regard to the circumstances of the offence from which the offence was directly or indirectly realised. Also relevant is the amount of money involved, the offender's state of belief or knowledge, and the relevant maximum penalty. The present offence was not the most serious example of laundering more than $100,000. The money was not obtained through organised crime which directly put people's physical well-being at risk such as terrorism, drug dealing, trafficking in people or child prostitution. The offence nevertheless had serious aspects. It involved defrauding a bank associates with a developing Pacific nation of a large amount of money, over A $300,000. As the learned primary judge recognised, parliament and the courts regard knowingly transferring money the proceeds of crime into Australia as serious anti-social behaviour. Mr Foster's present offending can rightly be categorised in this way." 99McMurdo P stated that the primary judge had carefully assessed all relevant factors, observing: "Although it was not necessary to adopt the mathematical approach taken at first instance, his Honour's reasoning process was transparent and unflawed. The sentence imposed, four and a half years imprisonment (discounted by 35 per cent from the seven years he would otherwise have imposed) with release after 50 per cent (that is, after two years and three months) appropriately balanced the various competing considerations. The sentence is not manifestly excessive": at [64]. 100The starting point for the sentence was accordingly 7 years before the discount of 30% was applied. 101In determining the sentence, McMurdo P observed: "In any case, it will ordinarily be relevant in determining the appropriate sentence to consider how the money dealt with is proceeds of crime, for example whether it was obtained by organised criminal activity such as drug-dealing, people-trafficking, child prostitution or terrorist-related activities. Also relevant will be the extent of the offender's belief as to or knowledge of how the money is proceeds of crime": at [60]. 102In Foster it was observed that the money was not obtained through organised crime which directly put people's physical wellbeing at risk, such as drug dealing and other activities referred to in the passage quoted above, but the offence nevertheless had serious aspects, in particular, it involved defrauding a bank. Similar observations may be made about the case the subject of the present Crown appeal. 103There were mitigating factors in Foster, which included the offender's guilty plea at an early stage and that he was serving his imprisonment in protective custody because of prior cooperation with the authorities. There were also some "redeeming features" including his support of his elderly mother and his sister who were both ill, as well as his generosity to individual Pacific Islanders.
(e) Comparison to Jimmy v R [2010] NSWCCA 60; 269 ALR 115 104The offender in Jimmy relied upon two grounds of appeal. The first alleged miscarriage of justice on the basis of alleged disparity with sentences imposed upon the applicant's co-offenders. The second asserted error in setting the non-parole period at two-thirds of the head sentence. In that case, the "dealing with money" to which the charge related involved 27 occasions in the period 26 November 2003 to 11 February 2004 when the offender took a sum of cash to a bank and arranged for it to be transferred to a bank account in Hong Kong. On each occasion the amount transferred was, deliberately, less than $10,000. The total amount remitted was $243,952 (that is, $113,612 less than the amount of $357,568 involved in the respondent's offence in the present appeal). 105The activities of the offender were part of a much larger money laundering operation that was organised in Australia by a Mr Chen. The sentencing judge found that there was no evidence that the offender had any knowledge that the money was the proceeds of illegal activity on the part of Mr Chen. However, a finding was made that the offender knew that the activity he himself was carrying out was illegal. 106The agreement the offender had with Mr Chen was that for every $10,000 he remitted he would be paid $80. That meant he would gain approximately $2,000. He did not receive cash in hand - the money went towards reducing a $5,000 debt the offender owed Mr Chen. The offender was 43 years old at the date of sentence and was 37 and 38 at the time of offending. He had no prior convictions. A finding was made that he had good prospects of rehabilitation. He had demonstrated remorse both in evidence and in his earlier actions in offering assistance. 107The offence involved 27 transactions, all except four involved an amount of $9,000 or greater, but less than $10,000. The transactions were carried out between 26 November 2003 and 2 February 2004. The transactions were carried out at nine different bank branches. On any day when the offender carried out more than one transaction, he went to a different bank for each of the transactions. 108For each of the transactions except one he used a name that was not his own. He used a total of seven different false identities. In relation to some of those transactions in assumed names, the offender had provided false identity documents to the bank officer concerned. In relation to each transaction, the offender placed a signature on the form that made application for the money to be transferred to the Hong Kong account, and gave the incorrect details concerning the transferor. 109The sentencing judge sentenced the applicant in that case to a term of imprisonment of 3 years 3 months, with a non-parole period of 2 years 2 months. His Honour found that the relevant starting point, before discounts were allowed for the offender's early plea and assistance, was a head sentence of 7 years. 110The contrasting facts in Jimmy and the present Crown appeal include the amount of money involved ($113,612 less than that involved in the respondent's offending), that Jimmy was not acting as a principal but at the direction of Mr Chen, that the amount of financial benefit received was modest compared to the amount obtained by the respondent in the present appeal, and that Jimmy had no prior convictions, had shown remorse, and had good prospects of rehabilitation.
(f) Comparison to Ungureanu v R [2012] WASCA 11; 272 FLR 84 111The offender appealed against the sentence he had received for money laundering offences, contending the trial judge had not adequately taken into account the degree to which he had co-operated with law enforcement agencies in the investigation of the offences. 112The offender pleaded guilty to one count contrary to s 400.4(1) of the Code and one count under s 53(1) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). 113The sentencing judge sentenced the appellant to a term of imprisonment on count one (the offence contrary to s 400.4(1)) comprising a term of 7 years imprisonment. This term was imposed after an unqualified discount for plea and co-operation, with a non-parole period of 4 years. 114Investigations indicated, and it was alleged, that between 29 April 2008 and 2 May 2009, by some 65 separate transactions through a number of different financial institutions in and around Perth, the appellant was involved in remitting more than $500,000 overseas, using false identities. A finding was made that the appellant was involved in sending approximately $500,000 overseas as charged. 115The offender pleaded guilty to one count contrary to s 400.4(1). There was a dispute at trial as to the quantum of money personally dealt with and the number of occasions involving the offender. He claimed he had personally only handled cash in 15 of the 65 transactions. On sentence, the sentencing judge doubted his evidence and found that he was "deeply involved in these matters". He was not the person in charge, but he was "in the thick of it all", that is, "with respect to $500,000 worth of business" and "on the basis of being part of a joint criminal enterprise". 116The observations made in the decision relevant to sentence, not the subject of challenge in the appeal, were directed to the following:
(g) Unexplained leniency 119To recapitulate, the respondent was convicted by jury after a twenty day trial of a single count of dealing with the proceeds of crime, being money in excess of $100,000, contrary to s 400.4(1) of the Code. The sentencing judge found that there were 24 tax returns, lodged in the names of 21 victims, resulting in the payment of some $357,568 to the respondent. The refunds were deposited into seven bank accounts at the same bank in the respondent's name, to which she was the sole signatory, a week or so after lodgment. Nine of the refunds had been lodged by telephone, and there was evidence that it was the respondent's voice recorded on those calls, sometimes (where the impersonated taxpayer was male) using a deeper tone. The sentencing judge said that one witness who knew the respondent "had no doubt whatsoever" that it was her voice. The sentencing judge found, with respect correctly, that the jury's verdict entailed that they were satisfied beyond reasonable doubt of those matters. 120The sentencing judge concluded that "this was objectively a very serious offence". His Honour observed that the respondent was the principal offender, a significant beneficiary, had lodged the false income tax returns personally, had been motivated out of greed rather than need, and had caused a severe and distressing impact on the twenty-one victims. He was sceptical of aspects of the psychological evidence on which she relied, noting that many aspects (including the loss of her three children from her care, and the AVO made for her protection) occurred after the offending conduct, and that the respondent had failed to establish that anxiety, depression, gambling, drug addiction or any cognitive deficiency played any part in the offending conduct. Rightly, his Honour regarded the respondent's lack of remorse or contrition even after conviction as "a worrying feature". Almost all of the relevant matters in s 16A(2) of the Crimes Act 1914 (Cth) (notably, paragraphs (a), (c), (d), (e), (f), (j), (k), and (m)) pointed towards a relatively severe sentence, against which must be balanced what the sentencing judge identified as "some prospects" of rehabilitation (s 16A(2)(n)). The sentencing judge had regard to her history of conviction for offences involving dishonesty. The sentencing judge applied s 17A, and was satisfied that no sentence other than one of imprisonment was appropriate in the particular case; no challenge was made to that conclusion, not could any such challenge properly be made. 121And yet the sentence imposed was for 3 years and 6 months imprisonment, with a non-parole period of 2 years and 4 months. The maximum penalty was 20 years' imprisonment. The sentencing judge was taken to the decisions considered above where the objective and subjective circumstances exhibited similarities to those in this case, and where sentences twice or three times as long had been imposed. The sentencing judge was also taken to decisions where comparable sentences had been imposed, but in which the objective and subjective circumstances were very different. 122Nothing in the sentencing judge's reasons explains the relative leniency of the sentence imposed compared to the "yardstick" of the maximum penalty: cf Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [31]. As the Crown put it on appeal, "the matter was one which was virtually devoid of mitigating circumstances of any kind". Nothing in the sentencing judge's reasons explains the relative leniency of the sentence imposed compared to the decisions considered above, in light of the seriousness of the respondent's criminality. 123This therefore is a relatively rare case where, to restate the language in a famous appeal as to sentence, an appellate court may infer that in some way there has been a failure properly to exercise the sentencing discretion, although it does not appear how the primary judge reached the result embodied in his order: House v The King (1936) 55 CLR 499 at 505. When the sentence imposed is considered in light of the circumstances of this offending and the personal circumstances of this offender, the conclusion that the sentence was manifestly inadequate is unavoidable. This sentence must have been the result of some misapplication of principle, even though where and how that occurred is not apparent from the sentencing judges' statement of reasons: see Wong at [58]. In short, we are satisfied that "something wrong has in fact occurred": Barbaro v The Queen [2014] HCA 2 at [27].
(h) Respondent's oral submissions 124No range? Against that conclusion, the respondent said, first, that there had only be a relatively small number of laundering offences dealt with by appellate courts, by reference to R v Wing Cheong Li [2010] NSWCCA 125; 202 Crim R 195 at [40], such that there was no "range". But the inference that the discretion has miscarried does not turn on the existence of a range, particularly where, as here, s 400.4 is broadly drafted and applies to a wide range of conduct. Moreover, the sentence imposed by this Court neither permits nor requires a determination of the bounds of the range within which it should fall: Barbaro at [28]. 125Thorn and Schembri. Secondly, the respondent maintained that the decisions in this Court of Thorn v R [2009] NSWCCA 294; 198 A Crim R 135 and Schembri v R [2010] NSWCCA 149; 78 ATR 159 "put an end to any submission" that the sentence was manifestly inadequate. 126The respondent's submission that Thorn v R [2009] NSWCCA 294, where the applicant was resentenced to a term which would have been 3 years, 6 months before discount, with a non-parole period of 2 years, 8 months, was in many respects similar to this case, cannot be accepted. The respondent also relied on Schembri v R [2010] NSWCCA 149; 78 ATR 159, which was said to be in many respects on all fours with this case. That, too, cannot be accepted. 127Thorn was concerned with one count of dealing with the proceeds of crime contrary to s 400.4(1) of the Code, 11 counts of dishonestly obtaining a financial advantage contrary to s 134.2(1) of the Code and one count of attempting to obtain a financial advantage (the attempt offence). The overall sentence imposed was 5 years, 4 months with a non-parole period of 3 years, after a 30 per cent discount for plea and assistance. The offences concerned false GST refund claims totalling $295,201.45. For reasons explained, the offence was considered to be a highly technical breach of s 400.4, with little benefit to be gained from considering the cases mentioned or the statistics indicating the range of sentences imposed for such offences. In the result, it was concluded that this was an offence towards the lowest range of the type of offending covered by the section. 128It was concluded that the appellant had not been sentenced for the fraud offences in accordance with law, which required that he be sentenced for each offence individually and that it then be determined whether those sentences should be concurrent or cumulative. In the result, he was resentenced to a term of 4 years, 2 months, after a 25% discount, with a non-parole period of 2 years, 4 months. This also does not assist the respondent in this case, given the very different circumstances and grounds of appeal here under consideration. Here the nature of the respondent's offending is very serious, unlike the low range offending which arose for consideration in Thorn. 129It follows that it is not necessary to consider the correctness of what was observed in Thorn at [31], where it was observed that "the activity came within the scope of the offence under s 400.4, because the offence is so widely drawn. But it was a highly technical version of the offence." 130In Schembri the applicant had been found guilty by a jury of 9 counts of obtain a financial advantage by deception (s 134.2(1) of the Code); six counts of attempt to obtain a financial advantage by deception (the Criminal Code Act, ss 11.1 and 134.2(1)); and one count of deal with proceeds of crime (count 17 of the indictment) being $100,000 or more (s 400.4(1) of the Code). The applicant was sentenced to an aggregate term of imprisonment of 7 years from 20 October 2008 to 19 October 2015, with a non-parole period of 4 years from 20 October 2008 to 19 October 2012. 131The only ground pressed on appeal related to the sentence imposed in relation to count 17 (which related to using the proceeds of the funds obtained as the result of nine other accounts). The Crown conceded in relation to that offence that the sentencing judge erred in imposing a sentence that was not wholly concurrent with counts 1 to 15. In the result a sentence the 2 years imprisonment was made wholly concurrent with the other sentences. 132That decision did not support the case pressed for the respondent. There the Court observed: "11 Count 17 charged the applicant with a money laundering offence which arose out of the same facts as the other offences with which she was charged. There have been at least three cases before the Court in the last year where the Court has criticised the prosecution practice of charging offenders in this way. To the credit of the Crown Prosecutor in this case, he brought those cases to our attention and made the concession to which we have referred. 12 The problem was adverted to in Thorn v R [2009] NSWCCA 294, when Howie J pointed out that money laundering offences were intended by the legislature to be directed at activity where persons were intimately involved in dealing in money that was the result of some other person's criminal activity, so as to hide its source. 13 Shortly after Thorn, this Court delivered its decision in Nahlous v R [2010] NSWCCA 58. In that case, the applicant had pleaded guilty in the Local Court to six offences contrary to the provisions of the Copyright Act 1968 (Cth) (the decoder offences) concerning the sale of, or offering to sell, unauthorised decoders. The relevant provisions of that Act were ss 135ASB(1) and 135ASC(1). The applicant also pleaded guilty to an offence contrary to the Criminal Code Act, s 400.6(1). That section is concerned with dealing in the proceeds of crime. The decoder offences each carried a maximum penalty of imprisonment for 5 years. The offence of dealing in the proceeds of crime carried a maximum penalty of imprisonment for 10 years. The applicant, on a plea of guilty, was sentenced to various terms of imprisonment of 3 to 6 years, to be served by way of periodic detention, on the copyright offences. Relevantly for present purposes, however, on the money laundering offence, he was sentenced to 20 months imprisonment. 14 The Court (McClellan CJ at CL, Howie and Rothman JJ) referred first to Thorn and noted, at [14], that there was a basis in that case for the money laundering charge: "... because it captured criminality of the applicant's co-offender, who had never been charged and yet was involved in a joint criminal enterprise with the applicant." 15 The Court then stated, importantly, at [17]: "We appreciate that a person can by the one act commit two offences and, where the two offences address different aspects of the criminal conduct, there is nothing wrong with prosecuting the two offences or, subject to the principle of totality, with imposing separate sentences for the two offences. But in our view the receipt of the money as a result of the sale did not result in a separate act of criminality that warranted a separate charge and a separate penalty." 16 Those remarks apply in this case to count 17. However, it is important to re-emphasise this Court's disapproval of such prosecutorial action. The Crown Prosecutor informed the Court that he has brought this issue to the attention of the Commonwealth Director of Public Prosecutions. We note that the charges in this case were laid and the trial conducted and sentences passed well before the decisions to which we have referred were given. Nonetheless, the matter is of such importance that we consider a copy of these remarks should be brought to the attention of the Commonwealth Director of Public Prosecutions. 133The term of the sentence imposed for count 17 was not in issue on this appeal. What was common ground between the parties, which was accepted by the Court in the above context, was that the sentence imposed for that count should have been made wholly concurrent with the sentences imposed for the other offences. These are circumstances far removed from what arises to be considered on this appeal. 134Accordingly, Thorn and Schembri are far removed from the present appeal, which concerns a prosecution on a single count of money laundering. 135Low degree of criminality having regard to elements of the offence? Thirdly, the respondent focussed attention on the definition of "deals with money or other property" in s 400.2, which extends to concealing, disposing, importing and exporting money or other property. It was said that the criminality involved in this appeal was merely withdrawing money using an ATM card, and that in particular this was "not a situation where this respondent provided comfort to a criminal enterprise". That submission does not advance the matter. 136The respondent "received" money, "possessed" money, and "engaged in a banking transactions" relating to money which was, to her knowledge, the proceeds of crime. Providing comfort to a criminal enterprise is not an element of the offence created by s 400.4. Moreover, the considerations to which the respondent points do not detract from the deliberate, sustained, wilful conduct engaged in by the respondent over a relatively lengthy period of time. It was also said that there was "no hiding, as it were, no facilitation of crime", which submission sits ill with the respondent's decision to operate no fewer than seven separate bank accounts with the same bank over the ten month period in question, into which (according to the Crown's submissions, to which the respondent did not demur) she caused 3, 3, 1, 6, 1, 6 and 4 refunds to be deposited respectively. 137Choice of charge? Finally, it was said that the difficulty arose in this case because "the Crown chose not to charge the respondent under the tax fraud legislation". This last submission echoed one recorded by the sentencing judge in his remarks, namely, that Ms Ly could have been charged with offences under s 134.1 of the Code (defrauding the Commonwealth) which carries a maximum sentence of 10 years. But that submission was, as it was put by the Crown in reply, a submission "into the very territory that Elias forbids a court to go". The High Court has made it clear that consideration of different offences for which the offender might have been convicted is merely a distraction: Elias v The Queen [2013] HCA 31; 248 CLR 483 at [36], and that it risks compromising the court's impartiality and independence to sentence by reference to an uncharged offence which the court considers the prosecution should have charged: Elias at [35]. 138As discussed in R v Wing Cheong Li; Wing Cheong Li v R at [41]: "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. Here the respondent's serious criminality was revealed by the number of the frauds involved; the amount of the money the subject of those frauds; the impact of the frauds; the planning and steps involved; the purpose of the frauds; and the actual loss which resulted." 139We have concluded in light of the terms and structure of the Code and the reasoning underpinning the sentence in each of the above comparative cases that the sentence imposed in the present case of 3 years 6 months with a non-parole period of 2 years 4 months was manifestly inadequate.
The Residual Discretion 140In determining a Crown appeal under s 5D of the Criminal Appeal Act, the Court has a residual discretion to decline to interfere with a sentence even though the sentence is erroneously lenient: Green v The Queen [2011] HCA 49; (2011) 244 CLR 462 at 465-466 at [1]-[2]. 141The onus lies upon the respondent to establish that the discretion should be exercised in his or her favour: R v Smith [2007] NSWCCA 100, [60]; R v CMB [2014] NSWCCA 5 at [110]. 142There was no evidence sought to be adduced on re-sentencing on behalf of the respondent (cf Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCCA 194; (2010) 243 FLR 28 at [162]-[180], [274]-[282] and [315] and R v Nikolovska [2010] NSWCCA 169 at [101]-[105]). The Crown appeal was filed promptly after sentence. There is no basis not to exercise this Court's residual discretion in a Crown appeal.
Resentencing 143The objective factors involved in the respondent's offending plainly constituted the offence under s 400.4(1) a very serious one. This conclusion is based upon the amount involved in the dealing, namely, $357,568, the period of time over which the offending took place, the deliberate pattern of offending, the significant financial benefit derived by the respondent, and the lack of any significant mitigating factors. 144In our assessment, the respondent's criminality in relation to the offence pursuant to s 400.4(1) is somewhat above the mid range of objective seriousness. Like the primary judge, we are of the view that no sentence other than imprisonment is appropriate: Crimes Act 1914 (Cth), s 17A(1). The psychological evidence supports an extended period of parole supervision. Having regard to the matters in s 16A(2) of the Crimes Act addressed earlier in these reasons, we are of the sentence which is appropriate in all the circumstances of this offence is a term of imprisonment of 8 years comprising a non-parole period of 4 years 6 months with a balance of term of 3 years 6 months. 145We therefore make the following orders:
Amendments 10 June 2014 - Pursuant to the slip rule, the orders have been amended as set out in R v Ly (No 2) [2014] NSWCCA 91. Amended paragraphs: Decision 10 June 2014 - Pursuant to the slip rule, the words "and a finding of special circumstances so as to vary the statutory ratio" have been deleted from the end of the 3rd sentence. Amended paragraphs: 144 10 June 2014 - Pursuant to the slip rule, the orders have been amended as set out in R v Ly (No 2) [2014] NSWCCA 91. Amended paragraphs: 145 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: 10 June 2014
R
Ly
[2014] HCA 2
[2005] HCA 25
[2007] NSWCCA 204
[2008] QCA 90
[2012] WASCA 11
[2001] HCA 64
(2013) 302 ALR 192
(2013) 87 ALJR 895
(2011) 244 CLR 462
(1936) 55 CLR 499
(2005) 228 CLR 357
(2010) 243 FLR 28