Mr G Thomas (Counsel for the offender)
File Number(s): 2016/254384
[2]
Judgment
RS Hulme AJ said in R v Saleh [2015] NSWCCA 299:
"Pre‑meditated offending for the rewards or benefits that criminality may bring, is a calculated risk. As the cases mentioned show, the rewards are not infrequently enormous. The criminality is often difficult to detect and it is impossible to believe that many people do not get away with it. Accordingly it behoves the courts to ensure that penalties imposed on those who are caught are high enough to operate as a real disincentive to others tempted to offend."
Mohamad Mourad, was born in January 1986, has no criminal record, and has pleaded guilty to two offences under s 233BABAD(1) of the Customs Act 1901 (Cth), of importing tobacco products with intent to defraud the revenue. These offences carry maximum penalties of ten years imprisonment.
The first offence involved the import of 1449 kilograms of Molasses tobacco defrauding the revenue of $961,730, The maximum fine applicable was $4,808,000.
The second count related to 375 kilograms of the same substance, evading the payment of duty in the sum $251,880. The maximum fine applicable, in that instance was $1,259,000.
He spent no time in custody since his arrest in August 2016.
The offending arose out of his operation as the sole director of a business operating under the name of Ozzy Hookah Pty Limited, which specialised in the sale of items used to smoke Molasses tobacco. He arranged the import of goods on the basis that they did not contain tobacco.
In relation to the first count, between 29 April 2015 and 24 September 2015, he arranged for the import of 59 cartons which contained different flavoured Molasses tobacco. He provided documents to Customs which did not declare that the shipment contained tobacco. He arranged for the documents and packaging to be falsely labelled and described as containing non‑tobacco molasses. He conveyed to Customs that the tobacco had been sent by the supplier by mistake. He sought to evade the duty of $961,000.
In relation to the second count between 1 March 2016 and 25 May, he imported air cargo with the weight of 396 kilograms in the false name of Tony Barter. The goods were described as purely herbal and not containing tobacco. He arranged for them to be packaged so as to conceal the fact that they contained tobacco, and using the false identity, he again sought to claim that the tobacco had been sent as a result of a mistake by the supplier. He sought to evade duty of some $251, 880.
He acknowledged in evidence before me today that he knew that what he was doing was illegal and that was indicated first, by a text message that he sent on 4 May 2015 in which said:
"Cause I need to sell here and be undercover. Cause I can get in trouble with government. I must sell very low profit and off my hands straightaway"
His knowledge of the illegality of his conduct was reinforced when he was spoken to by Border Force officers in September 2015, and notwithstanding that he went ahead and committed the second course of offending in the following year before being arrest in August.
The agreed facts run to 12 closely typed pages, setting out a considerable quantity of detail which it is unnecessary to consider for the purposes of this sentencing.
The offender and his wife gave evidence today and a number of documents were tendered by Mr Thomas of counsel on his behalf. His wife wrote a reference and gave evidence today. She describes him as hardworking and a good father. He had told her about his involvement in these offences at an early stage of their relationship which commenced in late 2016.[12]
I take account of references from the offender's brother-in-law , who has operated a substantial business and describes him as a good and hardworking man with community values, and a highly respected citizen. I take account of the reference from his accountant, Mr Hamdan, and from the offender's father, who is the proprietor of the family automotive repair business. He went only so far as to say that his son had spoken to him a few years ago and asked him if he would let him operate part‑time, on an online basis, the selling of Hookah smoking pipes and products. He knew that he ran this business from their apartment above the automotive repair workshop. He has noticed a change in his behaviour since the offending and he has expressed his regret and a willingness to not again break the law to his father, his wife and to me in court today. That is one of the few aspects of his evidence that I do accept. I think the prospects of him re‑offending are fairly slim, given the experience that he has had.
I take account of his academic record. As he said, he was a good student at TAFE and at school, and is clearly an intelligent man. He has, since his arrest, attended on a number of occasions for treatment from a clinical psychologist, Mr Borenstein, initially in January 2017. He said that he went to St George Hospital on five separate occasions after his arrest with symptoms of excessive perspiration, breathlessness, heart palpitations and hypertension and he is experiencing anxiety and panic attacks. He does not drink alcohol. The history given to Mr Borenstein was affirmed in evidence today. He was married in July 2017. His wife had twin boys in April 2018. He said that he became involved in the offending because he was experiencing emotional and financial stress at the time. The picture that was portrayed through his evidence and the history is that he was operating under some type of feudal arrangement where his father forces him to buy properties in his name, pays him a very small amount of money so that he is struggling on $160 a week, of which $80 a week is being spent on nappies.
Notwithstanding that, he gave evidence of having some significant funds of nearly $40,000, available to him at the time that he made the purchases of the tobacco which is the subject of the offences. He said that the cost of, the first shipment, was about $40,000 plus shipping and the second was about $13,000 plus shipping, with the total for shipping being about $30,000. Having initially asserted that he paid for that out of his own savings, he then said that he had financed it partly with a $25,000 loan from his sister.
He acknowledged that he didn't think that the false name and the false details related to Tony Barter would be traced back to him at the time that he used them. He asserted that even though by May 2015 he knew that what he was doing was illegal that something pushed him to do it, which is a scarcely credible proposition.
There is no evidence of any financial hardship. There is evidence only of a supportive family environment in which the family is expected to work and reside in family businesses and properties, and nothing to suggest that it should be a spur for criminal activity. The best he could put it was that he definitely would not commit offences such as this again. Despite having acknowledged that he knew what he was doing was illegal, he nevertheless went ahead and did it not once but twice.
He was born in Sydney and is the eldest of four children of Lebanese parents. There is no history of trauma or abuse and there was a satisfactory family upbringing. He went to school and then attended TAFE.
Mr Borenstein describes a depressed mood and anxiety leading up to the offending because he felt desperate, pressured and he was in a low mood. His symptoms have been magnified since his arrest. He did express a fear of a possible custodial sentence, particularly the effect of that sentence on the family business.
Mr Borenstein says that he has been responsive to some psychological therapy including cognitive behaviour therapy and he takes an antidepressant, although there is no evidence as to the source of the prescription for the antidepressant.
He did express guilt and remorse to Mr Borenstein and I accept those expressions of remorse.
The parties have prepared helpful submissions and Mr Thomas of counsel has comprehensively expanded in oral submissions on the matters to be put on behalf of his client.
I must of course sentence in accordance with Part 1B of the Crimes Act 1914 (Cth) and impose a sentence that is of an appropriate severity in all of the circumstances under s 16A of the Act and not impose a sentence of imprisonment unless there is no other alternative..
The factors to be taken into account in sentencing for serious revenue offences as summarised in R v Zhang (2017) 265 A Crim R 113 at [37] including the role of the offender, the sophistication of the offending, the period over which the offences were committed, the quantity of tobacco imported, and the amount of duty evaded, whether the revenue loss has been repaid, whether the offending involved other illegalities such as the use of false identities, whether the defendant was involved in the distribution and sale of tobacco products within Australia, and the extent to which the defendant gained financially from his or her offending. Chivell AJ said that those factors should be taken into account when sentencing for this type of offence.
As the Crown points out the agreed facts show that even though he told the Border Force Officers that he did not import tobacco his text messages between March 2014 and May 2015 refer to the importation of tobacco products in relation to count 1. He again denied being involved in the importation of tobacco in August 2016 when spoken to. I accept, as the Crown puts, that both of those statements were made with the intent to deceive and were false, to the knowledge of the offender, at the time they were made.
I take account of the purpose of the 2012 amending legislation which involved a very significant increase in the comparable penalties. The legislature suggested that the penalties must provide a strong deterrent to criminals involved in this activity, as well as demonstrating the seriousness with which the government views frauds against the Commonwealth and its harm against the community.
The substance of the offence is the intent to defraud the revenue and that was clearly demonstrated in this case. The motivation for financial gain is not put as a matter of need by Mr Thomas, but more as a matter in which he was motivated by the need to gain some form of financial independence from his family constraints. He points to the absence of evidence as to an excessive or expensive lifestyle and the absence of any actual financial loss, but it is inevitable that the offences were committed ultimately for financial gain.
It is common ground that, in accordance with the relatively recent decision in Xiao v R [2018] NSWCCA 2 , a 25% discount on any term of imprisonment should be allowed for the willingness to facilitate the administration of justice.
General and specific deterrence are very important matters in this type of sentencing exercise as I have already indicated by reference to the statements of Hulme J in R v Saleh [2015] NSWCCA 399.
I must of course take into account his good character prior to the commission of the first offence, his antecedents, age, means and physical and mental condition. There is no evidence of significant hardship to the offender's family by the imposition of any sentence beyond what would normally be a consequence of a person in the circumstances of this offender.
Both parties directed a considerable degree of attention to a number of supposedly comparative cases. Reference has also been made to Young v The Queen [2016] VSCA 149, Samardali v The Queen [2018] WASCA 220, R v Zhang (2017) 265 A Crim R 113. Many of the cases have involved a review of other supposedly similar cases. In the search for consistency one must not, as the High Court said in Hili v The Queen; Jones v The Queen (2010) 242 CLR 520, attempt numerical equivalence and the sentences imposed in individual cases depend, of course, on the objective and subjective circumstances of each particular case, so that it cannot be said that there is any fixed guideline or range of sentence in this type of case. However, a clear trend does emerge from the cases to which I have referred.
As Mr Thomas correctly submits, the ultimate controversy in the matter is whether on a proper assessment of all the relevant factors in available sentences the Court is unable to discharge the s 17A mandate that it cannot impose a sentence of imprisonment unless satisfied that no other sentence is appropriate. To deal with that question one acknowledges Mr Thomas' acceptance of the very high level of objective seriousness and the need for general deterrence to play an important part in the sentencing process. He acknowledges the high monetary value of the evaded duty and that the offences involved planning over a period months and the use of false documents and packaging to avoid detection, and that they involved specific intent to defraud the revenue and were committed for financial gain. He characterises the degree of planning as no more than no more of the type commonly used to commit this type of offending. That does not minimise the significance of the level of planning and sophistication involved in this, simply to say that it occurs in other offences.
It is true that there is no evidence that he was the member of any highly organised or sophisticated criminal syndicate with corrupt Customs contacts or access to confidential information; they were committed on his own volition for his own benefit; and the fact that the false details used on the second offence were able to be easily uncovered is not a matter of significant mitigation. Whether one describes the level of planning as unsophisticated or opportunistic does not reduce the seriousness of the matter. It is true that there was no actual financial loss or detriment suffered by the revenue, but as I have indicated the gravamen of the offence is the intent to evade the revenue.
Mr Thomas suggested that as a result of recent changes to the sentencing legislation an appropriate disposition would be to impose an Intensive Corrections Order with onerous conditions, as in the document that he proffered.
I take account of the pre-sentence report dated 12 June 2018, added to the Crown Bundle. The report contains an acknowledgment by the offender that he takes full responsibility for his offending, that he was regretful and he was stupid. He has a low-risk of reoffending, as I have already found, and he was suitable for Community Service.
In R v Kopa (2004) 145 A Crim R 159 Williams JA quoting Commissioner of Taxation v Cocaj [2004] QCA 69 in considering the appropriate penalty for these types of offences said at [3];
"The appellants set out to defraud the revenue and such conduct warrants substantial deterrent sentences in accordance with the spirit of the Act."
His Honour then went on to say at [25];
"Deliberately defrauding the revenue is a serious offence and, particularly where the amount involved is large, a significant custodial sentence is called for."
In a similar vein, Whealy J said in R v McKay [2007] NSWSC 275 at [73],
"…the real bite of general deterrence occurs only when an actual custodial sentence is imposed."
The circumstances of this case and a consideration of the various cases referred to by the parties make it inevitable in my view that a term of fulltime custody is required.
The orders that I make are:
1. The offender is convicted of each offence.
2. I impose an aggregate sentence of imprisonment of three years to commence today, expiring on 10 January 2022.
3. After serving two years he is to be released on condition that he enter into a recognisance, self in the sum of $100 on condition that he be of good behaviour for one year and be supervised by Community Corrective Services.
4. The indicative sentences are:
1. Count 1 - two years, six months.
2. Count 2 - two years, six months.
Note - These ex-tempore remarks were revised without access to the court file
[3]
Amendments
05 March 2019 - Correction to coversheet decision details.
01 April 2019 - Unique personal identifiers anonymised at [1], [12] & [13].
08 August 2019 - Deletion of "he" at [2].
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: 08 August 2019