R v Menzies [2023] NSWDC 535 | Case summary

ARREST OF MANSUS KNIGHT

On 27 July 2021, Mansus Knight received a text message to advise that his CBA account had been locked. On 28 July 2021 at about 3pm, Mansus Knight was arrested at the Commonwealth Bank of Australia in East Gardens and entered into custody.
It was the offender who used the Internet to purchase the gold in 13 transactions as well as the $20,000 transferred to his own account, using the money fraudulently transferred into the Knight bank account.
In the days following the purchase of the gold, the offender repeatedly contacted ABC Bullion Company to arrange to collect the gold. On 4 August 2021, the offender attended at the ABC Bullion Company premises to try and collect the purchased gold then held for him. He was arrested at those premises and then had with him a document which indicated the gold purchase receipt numbers.
The story advanced by both the co-offender and this offender was that Knight had won in some unidentified form of gambling or a Lotto win all the funds which he had then discovered in his account and which, on the offender's advice that gold was a good investment, he then wished to so invest. However, because he could not operate on his ABC bullion account, Mr Menzies had stepped in to allow the gold purchases to be made through his ABC Bullion account.
Called at trial was Ms Victoria Rupp, who gave evidence that she had been informed in April/May 2021 by Mr Menzies that he had an involvement in Business Email Compromise Fraud with persons in Nigeria who could infiltrate the email systems of businesses and falsely change banking details from legitimate details to false details to allow for legitimate payments to be diverted to a false bank account. Mr Menzies informed Ms Rupp that he did not have a role in the actual interception: it was to be done by the Nigerians but that he was to arrange to have a Commonwealth bank account into which the funds would be deposited and from which he would then retrieve the monies. It became evident from cross-examination of Ms Rupp in the trial that prior to any actual transfer of funds from Destination NSW Ms Rupp had informed an Inspector of Police, Tracey Hall, that the offender had communicated the above to her.
Tendered as an exhibit in the defence case was Exhibit M1, being a series of Facebook messages on 2 and 3 June 2021 between Ms Rupp and Tracey Hall in which amongst other things she communicated what she had been informed by the offender.
There is a statutory defence to s 193C(2) provided by sub para (4), which provides it is a defence to a prosecution for an offence under this section if the defendant satisfies the Court that the defendant had no reasonable grounds for suspecting that the property was substantially derived or realised directly or indirectly from an act or omission constituting an offence against the law enforced in the Commonwealth, a state or a territory or another country. An accused does not have to prove this beyond reasonable doubt but must satisfy the jury on the balance of probabilities that he/she had no such reasonable grounds.
The offender in an ERISP stated, in summary, to the effect that late on 23 July or in the early hours of 24 July 2021, his cousin Mansus Knight had attended at his residence as a result of Mr Knight being unable to utilise his ABC Bullion account to deal with the unexpected gambling or Lotto win, and that in those circumstances Mr Menzies would assist him by making the transfers to his ABC Bullion account, and that is what then occurred. The offender in his record of interview claimed not to know anything about the source other than what he said he was told by Mr Knight: that it was an unexpected win from some unidentified source, and he was merely assisting his cousin to make sensible investments.
In the light of the evidence in the Crown case from Ms Rupp as to what had been communicated to her in April/May 2021 and communicated by her to Inspector Hall by 3 June 2021, it is not surprising that the jury found that the offender had not discharged the onus placed on him to prove on the balance of probabilities that he had no reasonable grounds for suspecting that the monies were stolen or otherwise illegally obtained.
In 12 of the transfers the amount involved was just under 75% of the maximum covered by the section of $100,000; the other two amounts, being Count 6 and Count 1, were effectively 20 to 25% of the maximum covered by the section. In my view, in each case, the amounts were significant, although of course 75% of the maximum range is more significant than 20 or 25%.
I regard each of the offences as serious, noting of course that they are actually a course of continuing conduct to move the money out of the Knight Entertainment account as quickly as possible and put it into a form where it might be more easily lost to any authority tracing it. In this matter, of course noting that none of the gold was collected as Mr Menzies was arrested at the time he attended to collect it - it being, without adding it up, somewhere in the range of 7 to 9 kilos of gold, and any actual loss was minor.
The Crown has submitted that the story advanced by Mr Knight and by Mr Menzies as to their innocence in respect of dealing with the funds was a false story concocted between them in an endeavour to protect each from being successfully prosecuted. I accept that that is the inevitable inference that must be drawn from the evidence.
Mansus Knight entered a plea of guilty to three offences, being one offence of deal with suspected proceeds of crime, $942,000, contrary to s 193C(1) of the Crimes Act, a further offence of deal with suspected proceeds of crime, being $918,709.80, contrary to s 193C(1) of the Crimes Act, and deal with suspected proceeds of crime, $20,000, contrary to s 193C(2) of the Crimes Act.
He entered pleas of guilty in the Local Court and was initially sentenced in the Local Court. He received a sentence of full-time imprisonment but appealed the sentence to the District Court. The appeal came before Hunt DCJ. Mr Knight was charged with dealing with the proceeds of the crime in the sense of the full amount being transferred into his account and then a further rolled up charge to deal with the amounts taken out of his account to purchase gold, and separately the $20,000 that went to this offender's CBA account.
The money transferred to this offender's account of $20,000 was dealt with as a Form 1 matter to be taken into account when dealing with one of the other two charges but I have not been supplied with any information as to which. Logically it should have been attached to what I have referred to as the "rolled up" charge.
On the appeal, his Honour placed some considerable weight on the agreed facts stating; " "There is no evidence the offender was involved in the interception or the manipulation of the bank account details." To the extent that the appellant has posited accounts that he just thought he got lucky by this money coming into his account, I reject those accounts."
As to the transition of the funds from the Knight Entertainment account via the offender's ABC bullion account and its conversion to gold bullion, his Honour said; "To the extent that there was a degree of sophistication in the amounts of money that were transferred to acquire gold bullion, I am not able to be satisfied beyond reasonable doubt against this appellant that it was his choice to do that. I rather suspect that the sophistication involved is attributable to Mr Menzies who, by inference, seems to have been much more involved in the fraud part, rather than simply dealing in monies."
That of course was his Honour's assessment of the situation on the evidence before him and I must make an entirely independent assessment and not be bound by his Honour's assessment.
As to Mr Knight's general circumstances, his Honour otherwise found that he had no relevant criminal history. Although there were some earlier entries, they were of an antiquity or a type that do not count in the sentencing exercise and he treated Mr Knight as a person of prior good character. There were a number of referees who spoke highly of him. He was in a long-term partnership and has had three children and had been gainfully employed in a range of things, essentially as a professional musician, for many years.
Considering the sentences that had been imposed in the Local Court as being inadequate, he issued a Parker warning before then indicating that he would increase the indicative term for each of the offences from 12 months to 16 months, and provided that the previously imposed aggregate sentence of 14 months in the Local Court would be increased to two years. He then, as required, turned his mind to ss 66 and 77 of the Crimes (Sentencing Procedure) Act and having in mind the protection of the community as a paramount consideration, his Honour believed that it was appropriate to deal with the matter by way of an Intensive Correction Order and did so, so the aggregate sentence of two years was to be served by an ICO. The only additional condition imposed was that Mr Knight attend Gamblers Anonymous on a twice weekly basis during the currency of the order.
There is of course an issue of parity in relation to this matter, but in my view there is a significant difference between the co-offender having been dealt with for two like but more serious offences in terms of the maximum provided as well as one offence on a Form 1, as opposed to this offender being dealt with for a total of 14 counts for in each case a less serious offence on the criminal calendar: that is, it has a maximum sentence of three years per offence rather than five years for the matters dealt with by Hunt DCJ.
As to subjective matters in relation to Mr Menzies, before me is his criminal history, a NSW Department of Corrective Services Convictions, Sentence and Appeals Report, a Sentencing Assessment Report under the hand of Jason Rowan, dated 5 July 2023 and a letter tendered on his behalf from an organisation titled "This N That E & Cs Pty Ltd", the reference being from the CEO Jerome Herren, dated 1 September 2023. Subjective matters are taken from that material.
The offender did not give evidence at trial or on sentence. At the time of the offence, he was some 41 years and approximately 7 months of age. He is now some 43 years and approximately 9 months of age . He has a criminal history that includes past offending in relation to assault, drugs, stalking and intimidating and driving offences. His most significant previous offence was wound person with intent to cause grievous bodily harm committed in January 2014, and in respect of which he was sentenced on 13 February 2015 in the District Court. He received a sentence of imprisonment of four years with a non-parole period of two years. He has no previous offences of a like nature to the current matters in respect of which he stands for sentence.
He has served several periods of imprisonment in the past, and at least on one occasion, in relation to offences which were eventually dismissed in 2020, having been in custody between 20 January 2020 and 30 July 2020, when the charges were dismissed. His previous terms of imprisonment were from 25 January 2014 to 23 January 2016, when he was released on parole and a further period from 27 December 2017 to 25 June 2018, when he was again released on parole. At the time of this offending, he was the subject of a two-year Community Corrections Order in relation to an offence of stalk/intimidate, the order to date from 24 October 2019 to 23 October 2021 with supervision. It was an aggravating circumstance that, while on conditional liberty, he committed these offences.
The letter from "This N That" refers to the offender as being "on a positive journey since working alongside our team at This N That," having volunteered with them for some unexpressed period of time. He is referred to as having "become a mentor within our team" and his past experiences as having guided participant youth that work within the community programs and advocacy section in a positive way. He is said to put up his hand, organise and assist, facilitating events organised by This N That.
The only indication that the writer of the reference is aware that it has been utilised or is expected to be utilised for the purpose of sentencing is his reference to "I'd like to support an ICO application and would advocate for leniency so Simon can continue to be a productive member of our team and pursue his passion alongside This N That E&C." The reference makes no note of being aware of the offender's criminal history, or anything in relation to the nature of this offending or the number of offences. It is good that the offender has made some effort while at liberty but the reference itself is of not of any significant weight in my view, in those circumstances.
This was a defended trial in relation to which there was some assistance by the offender to the conduct of the trial in that there was a significant agreed facts document which obviated the need to call evidence to prove the business email fraud which was the source of the funds. Although those matters might have been relatively easy to prove and document, the agreed facts did assist the conduct of the trial by limiting the evidence that needed to be called directly. Therefore, s 22A of the Crimes (Sentencing Procedure) Act applies and the offender is entitled to the benefit of that assistance which shortened the trial.
That assistance was perhaps somewhat counterbalanced by what to my mind were the peripheral attacks made in particular on Ms Rupp as a witness by counsel for the accused. However, I do not hold that against the accused. He is entitled to a benefit as provided by s 22A.
It was a defended trial which means there can be no discount for utility of a plea.
The material in relation to the subjective matters is in this matter very limited. The Sentencing Assessment Report indicates that the offender claims to have a Bachelor's degree in Islamic Studies and a Certificate III in Drug and Alcohol Counselling. At the time of the report being made, he was said to be unemployed and in receipt of Centrelink payments which would have been during the time post-trial and prior to my granting a detention application on the date on which the matter came before me for the sentence hearing.
At the time of the offending, the evidence in the trial was that he was in fact operating a legal brothel business at Kings Cross which he had recently taken over. I understand from statements from the bar table, which I accept, that he took over the business during the period of Covid being of significance in the community, and that business failed because of the Covid restrictions which accords with a common-sense appreciation of what happened in our community. I note of course that the brothel was a legal brothel and so no adverse inference can be drawn against the offender for his election to operate such a business.
However, having defended the matter, relying on what I regard as an untenable defence in the circumstances of the evidence, he informed the sentence assessment officer of a number of relevant matters:

ATTITUDE "Mr Menzies has minimised his involvement in the current offence claiming he did nothing wrong. Mr Menzies has consistently blamed the co-offender for the offence. Mr Menzies appeared to not consider any alternatives to manage the above offence as he said he thought the proceeds were from a legitimate Lotto win and claims he did nothing wrong."

As to any reward resulting from the offence; "Mr Menzies received an amount of money out of the proceeds from the co-offender, claiming that it was money owed to him from a previous loan."
As to insight into the impact of his offending; "Mr Menzies demonstrated no insight into the impact of his offending and continued to claim that he did nothing wrong."
As to his willingness and ability to undertake intervention; "Mr Menzies has expressed an unwillingness to undertake intervention as he again claimed to have done nothing wrong."
As to response to supervision; "Mr Menzies has expressed no desire to undertake supervision as he stated he would only be pretending as he again claimed to have done nothing wrong." … "Mr Menzies was supervised in the community in 2019 and was subject to breach action for failing to undertake Community Service work."
As to assessment of his risk of reoffending, he was assessed by Mr Rowan as being a medium to high risk, according to the Level of Service Inventory - Revised. Accordingly, there is no evidence before the Court of any remorse or contrition and the only evidence relevant to reoffending is the assessment that he is a medium to high risk of reoffending.
As to the prospect of rehabilitation, in the circumstances of his consultation or interview with the Sentencing Assessment Officer, any prospect of rehabilitation must be highly guarded as he continues to deny the commission of any of the offences.
In my view, there is a strong need in relation to this matter for the sentence to reflect both general deterrence and specific deterrence. The involvement of offenders in offending of this nature is of serious concern in the community because significant and legitimate funds can be diverted in such a fashion that they can, if fully successful, never be recovered. Here, the amount that could possibly have been so diverted was the total amount, in excess of $940,000 diverted from a government agency, and if successful, unavailable to the agency and community it was meant to benefit. It was taxpayers' money.
While there is no evidence as to who in fact caused the money to be diverted by way of the false email bank account details, there is no evidence as to what was to become of the gold. It is this offender who effected the transfer of the money into his gold bullion account so that it could be transformed into gold, which might then be relevantly untraceable if he had succeeded in collecting it on the day that he attended to do so, and the whole amount would then have been lost to the community. There is no evidence of anyone else being involved in terms of the collection of the gold or what might happen to it thereafter other than this offender, and the sentence must reflect those facts.
It would have been open to the offender, having been convicted of the offences, to elect to provide relevant information as to anyone else that was involved in this matter, either in infiltrating the email system and providing the false bank account details or what was to be done with the gold once he had collected it. On the evidence it stands that the offender was collecting the gold, purely for his own use.
Where an offender seeks to minimise or downplay their own role in relation to criminal offending, it is a matter for them as to what material they provide to the Court which might evidence that purpose. The offender has not provided any such information or material which might have assisted in that regard. Accordingly, as previously indicated, I regard each of these offences as being a serious offence, in the absence of remorse and contrition, at a medium to high risk of reoffending, and with a highly guarded prospect of rehabilitation, in circumstances where little is known of the offender's background and circumstances because he has elected not to provide such information.
I have considered the purposes of sentencing, and I have also taken into account the sentence imposed on the co-offender Mr Knight, that is, as eventually imposed by Hunt DCJ on appeal. In my view, there is a significant difference between this offender and Mr Knight, on the basis of the material that was placed before the magistrate and then Judge Hunt in relation to Mr Knight.
I accept that because this was effectively a continuing sequence of events, that is by way of transfers, 14 transfers on the one night, one after another, and the transfer from the offender's gold bullion account into gold being then held by ABC Bullion on his behalf until he collected it; that although there has to be a sentence in relation to each individual offence, there is a considerable amount of overlap.
In my view, the s 5 threshold has been passed in respect of each individual offence, and I will proceed by way of an aggregate sentence. In those circumstances, I am required to provide an indicative sentence.
In respect of each of the counts you are convicted.
In respect of each of Counts 1 and 6, the indicative sentence is six months' imprisonment.
In respect of each of Counts 2, 3, 4, 5, 7, 8, 9, 10, 11, 12, 13 and 14 the indicative sentence is in each case 18 months. Taking into account the overlap and the concept of totality, the aggregate sentence is a term of imprisonment of four years with a non-parole period of three years, having not found special circumstances.
The offender was in custody, bail refused from the date of arrest, 4 August 2021 until 31 August 2021, which is a period of 28 days. Subsequent to the trial, when the matter came before me for the sentence hearing on 1 September 2023, I granted a detention application, and he has been in custody solely in relation to this matter since then. Accordingly, backdating by 28 days from 1 September gives a commencement date in relation to the sentence of 4 August 2023. He will then be first eligible for parole three years later, on 3 August 2026 and the total term will expire on 3 August 2027.
Mr Menzies, you are no doubt aware that you will not necessarily be released on 3 August 2026 when you are first eligible for parole, but that will depend on your performance while in custody. So, you need to take every opportunity you can to improve your educational skills and your ability to find a job when released and also to ensure that you do not commit any breaches of prison discipline while in custody as that will adversely reflect on your ability to be released at the earliest possible time. I am sure, having spent several periods of time in custody previously, you are well aware of that fact.

R v Menzies

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