The offender Mr Dimitrios Tertsis is for sentence on a single offence under the Customs Act (Cth) 1901 being an offence under s 233BABAD(1) of importing tobacco with intention of defrauding the revenue.
The maximum penalty for that offence is ten years imprisonment. The maximum penalty is of course an important guidepost in the sentencing exercise to which I have had regard.
I intend on account of the offender's plea of guilty to allow a 25% discount by reason of the utilitarian value of that plea. There is of course no specified percentage in Commonwealth matters but nonetheless that is the discount that I consider appropriate in this case.
[2]
FACTS
Turning to factual matters, the Agreed Facts note that the offender arrived in Australia from Greece in November 2019 and thereafter was involved with others in the preparation for, and importation of, two shipping containers which contained tobacco products. He did so with the intention of avoiding the payment of Customs duty. Each container was intercepted by Australian Border Force and were found to contain a total of 16 million cigarettes. The Customs duty relating to them was $17,904,800.
The offender, a Greek citizen, was recruited to participate in the offences by a Georgios Machalias who had arrived in Australia on the same day in November 2019 as the offender. There is no evidence, however, as to how they came to know each other.
R v Tertsis [2023] NSWDC 442 | Case summary | Zoe
Mr Machalias is also a Greek citizen. He left Australia in late-2019 and has not returned to Australia. It is not known whether Mr Machalias gave directions to the offender about the imports or whether both Machalias and the offender acted on the directions of another man, Paul Validis, who was directly involved in the purchase of the tobacco that was in the containers. As I have said the offence involved two containers.
The first container was shipped from Singapore to Sydney in late September 2021 via Malaysia. Its documentation recorded that it contained 14,000 pail buckets. However, following X-ray, the container was found to contain 600 cardboard boxes concealed at the rear of the container behind a large number of plastic buckets. Inside the boxes there was found 6 million Canyon brand cigarettes comprising 5.2 million premium cigarettes, 700,000 standard cigarettes and 100,000 menthol.
The container was being shipped to a company called Agora Trading Pty Ltd, an entity which had been incorporated in the name of Machalias about six months after he left Australia. The company was one over which the offender exercised control and was created solely for the purposes of importations.
In preparing for the arrival of the first container the offender caused Agora Trading to enter into a rental agreement for two storage units at Kennards in Chullora. In dealing with Kennards, the offender used the name "James". He also provided Kennards with two mobile phone numbers on which he could be contacted, one of which was subscribed in the name of Mr Machalias.
The offender operated a number of accounts with the Commonwealth Bank which were used to make payments in furtherance of the importation. One of them was in the name of Mr Machalias and had been opened more than a year after his departure from Australia. The account in the name of Machalias was used solely for the purposes of meeting expenses associated with the importation enterprise. It received funds either by over‑the‑counter cash deposits or by transfers from a CBA account in the name of International Rising Pty Ltd of which Machalias was the sole director.
In addition to using the CBA account in the name of Machalias to make seven payments to Kennards this offender used the account to pay $5,539 to GSA Freight Logistics which acted as the freight forwarder for Agora Trading. That payment was made by the offender on the day that the container arrived at Port Botany.
Of that sum, $2,994 related to duty and taxes payable to the Commonwealth based on the declared importation of the buckets said to have been in the container.
In the days before the arrival of the container a payment in that amount had been made by a Customs broker named Century Customs Services which was acting on the instructions of GSA Freight Logistics and in reliance on documents provided by Agora Trading. Century Customs Services were provided with an authority from Agora Trading which was purportedly signed by Mr Machalias as well as a false invoice relating to 14,000 buckets which was consistent with the information on the waybill. The author of the false documents, however, is not known.
The container arrived at Port Botany on 29 September 2021.
About three days later, this offender called Kennards at Chullora to seek permission for the container to be delivered there at some stage in the coming week.
Between 6 and 8 October 2021 a number of bookings were made with Fast Track Deliveries, a transportation company, by somebody using the name of Agora Trading relating to the collection and transfer of the container.
The identity of the person with whom Fast Track Deliveries dealt is not apparent, however, the offender made at least three telephone calls to Kennards around this time to provide updates about the container's likely arrival date.
Around this same time the offender was seen travelling in a vehicle driven by Paul Validis in which vehicle ABF officers subsequently found a USB device containing documents relating to the importation as well as a business card for Kennards Chullora.
During a later search of Mr Validis' residence, ABF officers seized an iPhone on which were found numerous communications between Validis and the offender, as well as WhatsApp conversations with a Mr Da Silva which related to the purchase and shipping of Canyon brand cigarettes. One of those messages which was received by Validis from Da Silva in March 2021 related to this importation and was in the following terms:
"Container cost 4000 USD (you can sell the container after).
Singapore Malaysia 2000 USD
Transloading including changing paperwork and container 6000 USD
Freight to Sydney from Singapore through Malaysia 6200 USD
Total equals 18,200 USD for first container
You can pay them direct. You can pay in Singapore dollars"
I note of course that the reference to USD is evidently a reference to United States dollars.
In July 2021, Validis used a Westpac account which he controlled to make two payments to the total of $22,780 to an account held by Mr Da Silva in Vietnam. Another payment in the amount of $20,807 was made to Da Silva by Harry Soumelidis who was an associate of Validis with whom this offender also came to be associated whilst he was in Australia. During a search of Mr Validis's residence, ABF officers found a key marked "WH" to a warehouse in Ingleburn which was apparently where the offender resided for most of the time he was in Australia and which had been leased by Machalias as a director of International Rising Proprietary Limited the day before he left Australia.
The offender used a CBA account in the name of that company, (International Rising), to make payments for rent and utilities on the warehouse from late December 2020. The first container was delivered to Kennards Chullora on 9 October 2021. CCTV captured the offender unpacking the container along with other males. That CCTV footage also captured the offender's surprise upon learning that the cigarettes which had been removed by ABF officers were not in the container. Subsequently, the offender abandoned inside the Kennards Storage Units the "cover load" of red plastic buckets and he had no further contact with Kennards Chullora.
The customs duties payable on the six million cigarettes inside this container was $6,714,300. It is an agreed fact that at no stage did the offender, Machalias, Validis or Agora Trading have the means to pay that sum.
Turning then to the second importation. While Validis had sourced the Canyon cigarettes directly through Mr Da Silva, Validis was also able to source other brands of cigarettes through contacts in the United Arab Emirates. Mr Validis, with the help of others including Mr Da Silva then caused more cigarettes to be shipped to Australia via Singapore. From around mid-March 2021 Validis engaged in WhatsApp communications with contacts in the UAE for the purchase of about 1,000 boxes of Mac brand cigarettes for an amount of USD 85,000.
Between 16 and 19 August 2021, Validis used a Westpac account that he controlled to make three payments to a total of about $113,000 to an account in the UAE in furtherance of the purchase of the cigarettes. In early September 2021 Validis approved a bill of lading in relation to the shipment of Mac brand cigarettes from UAE to a consignee in Singapore named Octa Metal Pipe which had been nominated by Mr Dasilva. At the same time, Validis used WhatsApp to send a copy of the bill of lading to this offender and this bill of lading indicated that the contents of the shipment to Singapore was cigarettes.
As part of the agreement between Validis and Dasilva, it was understood that Octa Metal would then on-ship the container to Sydney on the basis that it was a consignment of food packaging. To help substantiate this, the offender assisted Validis to create false packing lists and invoices relating to the purported purchase from Octa Metal of 1,365 "packing boxes (pizza)" weighing 14,288 kilograms. No payment however was ever made to Octa Metal for this purported purchase.
In late September 2021, with the assistance of Dasilva, a booking was made for the shipping of a 40 foot shipping container to Sydney from Singapore. In the days before this booking, two payments to a total of $49,143 were paid to a freight forwarder. The first payment of $25,000 was made by Validis's associate Mr Soumelidis. The second payment for the balance of the amount was made by Mr Validis himself.
On 27 September 2021, a representative of the Orient Overseas Customer Line sent an email to International Rising Proprietary Limited seeking to confirm that the bill of lading was correct. It was this offender who replied to that email in which he nominated Bluetongue International as the customs broker. Throughout his involvement with Bluetongue, the offender used the name (described in the statement of facts as an alias) of "James".
In the first week of October 2021, Bluetongue exchanged a number of emails with the offender so as to gather documents and information needed to submit an import declaration to the ABF. During those exchanges, the offender provided Bluetongue with invoices and other documents that he knew to be false. These documents were also found in the possession of Validis when his car was later searched.
On 8 October 2021, Bluetongue used the information and documents provided by the offender to lodge an import declaration from which a liability of $3,198 in duties and taxes arose, based of course upon the falsely declared contents of that container. Later that day, Bluetongue sent an invoice to International Rising Proprietary Limited for that sum plus its fees which the offender caused to be paid.
The second container arrived on 17 October 2021. Unknown to the offender, in the days before the arrival of the container, ABF staff had conducted searches of Validis's premises and of the Ingleburn warehouse where the offender mostly resided. Although the offender's personal effects were at the warehouse, he was not present at that location on 14 October 2021, which presumably is the day that the Australian Border Force carried out their searches. It is noted that while Validis was in the presence of ABF members, the offender tried to call him multiple times. In the days after the container arrived, the offender continued to exchange emails with Bluetongue about the progress of the container and its delivery to the Ingleburn warehouse.
The second container had, however, been intercepted and was found to contain ten million MAC branded cigarettes packed into 1,000 different boxes comprising three million MAC black red cigarettes and seven million MAC black gold brand cigarettes. The customs duty payable to the Commonwealth in relation to the importation of those ten million cigarettes was $11,190,500 in circumstances where the applicable rate of duty was $1.11905 per cigarette stick. At no stage over the offending period did the offender, Machalias, Validis or International Rising Pty Ltd have the means to meet that liability.
The offender was arrested on 14 September 2022, in other words, nearly a year later, whilst working at a business operated by Mr Validis's associate, Harry Soumelidis. Those then are, in summary, the agreed facts.
[3]
OBJECTIVE SERIOUSNESS
As this is a Commonwealth offence, I direct myself to the provisions of s 16A(2) of the Crimes Act 1914 and the various paragraphs of that sub‑section insofar as they are relevant to the circumstances of this case. Paragraph (a) refers to the nature and circumstances of the offence.
In R v Zhang [2017] SASCFC 5, the South Australian Court of Criminal Appeal, after referring to relevant factors identified in the New South Wales decision in R v Saleh [2015] NSWCCA 299, collated a number of factors to be considered in sentencing for an offence of the kind now before the Court.
Firstly, the offender's role. In this regard it is conceded by the Crown that the offender was not an architect or instigator or significant beneficiary of the plan, and I accept those concessions. However, I am satisfied that the offender played an important and trusted facilitating role. There was some suggestion that the offender may have had limited knowledge of the nature of the enterprise or at least of its scale. However, I do not entirely accept this. As I have said, the offender was, in my view, in a trusted position. He arrived in Australia from Greece on the same day as Mr Machalias, who had a more senior role, I accept, than this offender. This offender rented and paid for the units at Kennards. He operated bank accounts, including one in the name of Mr Machalias. He told Kennards when to expect the first container and the import of that first container was done in the name of Agora Trading, over which, as noted in para 8 of the Statement of Facts, the offender exercised control. Also, he exchanged messages with Validis about the purchase and shipment of the Canyon brand cigarettes and showed surprise when he found that the cigarettes were not in the first container which he helped to unpack. Furthermore, he abandoned the buckets from that first container at the Kennards storage unit. Those buckets clearly were simply a ruse to cover the importation or at least an attempt to do so. In relation to the second container, the offender received from Validis a bill of lading which referred to cigarettes being imported, and the offender helped Validis create false documents as a cover for the real contents of that second container, after which he replied to emails confirming the correctness of the bill of lading. Also, it was the offender who nominated Bluetongue as the customs broker and it was he who gave them invoices and other documents he knew were false. It was also he who paid Bluetongue.
In my view, the overwhelming inference is that the offender had clear knowledge, well before the first shipment and throughout the process of the second shipment, that the true intention was to import tobacco products with the intention of defrauding the revenue. This is also consistent with part of the contents of para 1 of the agreed statement of facts, which states that from his arrival in Australia in November 2019 the offender was involved with others in the preparation for an importation of two shipping containers into Australia, each of which was found to contain tobacco products and, further, that the offender did so with the intention of avoiding the payment of customs duties that would have otherwise been payable.
While the offender may not have known the exact quantity of cigarettes or the exact amount of duty avoided, I am satisfied beyond reasonable doubt that he knew that there was a very large quantity and that the duty sought to be avoided would also be very large. He also knew that someone intended to make a lot of money out of the sale of the cigarettes. However, I am unable to be satisfied beyond reasonable doubt that the offender's reason for travel to Australia was solely to be involved in this enterprise. Nor am I satisfied that in using the name "James" this was intended to operate as an alias.
In my view, the offender performed an important role which was in the nature of a facilitator or foreman responsible for things like appointing Customs agents, making payments, arranging storage and carrying out various other logistical matters.
In terms of any identifiable hierarchy, however, I accept that he was towards the lower end. I am not able to be satisfied that he was to be involved in the sale of the cigarettes or was to share directly in the proceeds of sale, although I have no doubt that he expected to be rewarded financially to some degree. How much I cannot say. I accept, however, that he was subject to the direction of others who had a more senior role than him and who, apparently, have not been charged.
The second matter referred to in the Zhang decision that I quoted earlier is the sophistication and scale of the offending. In this regard, the scale of the offending, that is, the quantity of tobacco and the amount of revenue avoided, was very large. There was a degree of sophistication by reason of the use of companies, multiple bank accounts and false documents. While there was no evidence that this offender was a principal, the fact is that he was part of an organised group of persons whose actions were aimed at defrauding the revenue of very substantial sums. It therefore cannot be said that the offending was only part of a small-scale or short term operation.
Thirdly, by reference to the Zhang principles, there is the period over which the offending occurred. As already noted, the period was considerable, it being a period of at least several weeks in the case of this offender.
Fourthly, by reference to the Zhang principles, the quantity of tobacco imported and the amount of duty avoided. As I have already noted, there was a total of 16 million cigarettes and a total of nearly $18 million in revenue avoided. On the other hand, none of the tobacco ended up in the community, although it was clearly the intention of the offender and others that it should have.
Fifthly, by reference to the Zhang factors, I have considered the question of whether the loss to the revenue has been repaid. Of course, there has been no payment of the import duties in this matter.
The sixth matter referred to in Zhang is whether the offending involved other illegality such as the use of false identities. While the offender used the name "James", which is described in the statement of facts as an alias, I understood the Crown to accept, in submissions this morning, that as this is an equivalent of the Greek name Dimitrios, this submission was no longer pressed, and so I proceed on the basis that that name was not being used as an alias.
Seventhly, by reference to the Zhang factors, the question of whether the offender was involved or proposed to be involved in the distribution and sale of the tobacco. While I have suspicions that he may well have been intending to be involved in that aspect, there is insufficient evidence for me to be satisfied about that beyond reasonable doubt.
Eighthly, by reference to Zhang factors, the extent to which the offender gained financially. While I have no doubt that the offender received some financial benefit and expected to receive more if the importations had been successful, I am not able to make any finding as to what that benefit was.
In regard to the various matters that I have noted and, in particular, the very large scale of the operation and the offender's role in it, I assess the offence as being comfortably within the mid-range of objective seriousness.
Paragraph (e) of s 16A(2) of the Crimes Act refers to any injury, loss or damage arising from the offence. In this regard, the obvious loss, injury or damage in this matter arises from the general government revenue which is collected for the community of Australia as a whole, being deprived funds that should have been available to support services and programs essential to the general working of the Australian community. On the other hand, the tobacco, with its potential harm to the community, was intercepted and, therefore, that aspect of harm has been avoided, although not by reason of any actions by the offender.
Paragraph (f) of s 16A(2) refers to the degree to which the person has shown contrition. Although the offender has pleaded guilty to the offence, there appears to have been a fairly strong case against him, and so I do not see his plea of guilty as being much more than an acceptance of the inevitable. The Sentencing Assessment Report notes that the offender expressed some insight into the harm that unvetted tobacco might have involved, if it had gone into the community. However, the offender also tried to minimise his role and knowledge when speaking to the author of the Sentencing Assessment Report, claiming ignorance of what was in the container, and so I have some concern about the genuineness of anything that he is reported to have said.
On the other hand, he is supported by a letter from the Chaplain at Bathurst Correctional Centre, which says he wishes to amend his life and not return to prison. On balance, I accept that there is some, although limited, contrition.
Paragraph (g) of s 16A(2) refers to the guilty plea, the timing of that plea and the degree to which these things resulted in any benefit to the community, any victim or witness. It is accepted in this matter that the offender entered an early plea of guilty and, as I have said, I intend to allow a discount of 25% on account of the utilitarian value of that plea. Given the strength, however, of the Crown case, I do not consider that the plea of guilty is a demonstration of remorse or of a willingness to facilitate the course of justice but, rather, as I have said, an acknowledgment of the inevitable.
Paragraph (h) of s 16A(2) refers to any co-operation, and in this matter the offender refused to speak to police on his arrest and there has been no co‑operation.
Paragraphs (j) and (ja) of s 16A(2) refer respectively to the deterrent effect on the person and the deterrent effect on others. There is no doubt, as has been said in numerous cases, for example, R v Saleh which I earlier cited, that general deterrence is a fundamentally important element in sentencing for this type of offence, and it has not been argued to the contrary. As to personal deterrence, the offender is likely to be deported and is unlikely to ever be able to re-enter Australia. However, this is not a matter to which I am entitled to attach any real significance, and so I remain of the view that personal deterrence is of some importance in this case.
Paragraph (k) of s 16A(2) refers to the need for adequate punishment and, as with any sentencing exercise, I am of course required to address the need for adequate punishment for an offence. In this case, the offence carries a maximum of ten years' imprisonment, making it an offence that Parliament has declared ordinarily to be a serious one.
[4]
SUBJECTIVE MATTERS
Paragraph (m) of s 16A(2) refers to the character, antecedents, age, means and physical or mental condition of the offender. The offender is now aged 59. As far as I am aware, he has no prior criminal history. He is a citizen of Greece, although he apparently spent some time during his childhood in Australia. He came to Australia in 2019 most recently on a tourist visa and, since then, apart from his involvement in this offence, has engaged in some work here. As noted in the Sentencing Assessment Report, he has essentially no social contacts in Australia.
A letter from the Chaplain at Bathurst Correctional Centre notes that the offender is always polite and courteous and has expressed a desire to amend his life and not return to prison. Beyond these matters, I know little about the offender, his background or his current mental and physical health. On the evidence there is, in my view, nothing that can be said to mitigate the offender's moral culpability, which I assess as being fairly high. It is likely that the offender will be deported upon serving the minimum period of his sentence, but this is not a matter to which I am entitled to give any weight in sentencing.
Paragraph (n) of s 16A(2) refers to the prospects of rehabilitation. The Sentencing Assessment Report notes an assessment that the offender is of low risk and, as I have already said, as far as is known he has no criminal history. In the circumstances, I think he has reasonable prospects of rehabilitation.
[5]
DETERMINATION
Turning then to my final determination in this matter, I am satisfied, for the purposes of s 17A of the Crimes Act 1914 that no penalty other than imprisonment is appropriate. I take into account, however, that in serving his sentence in Australia, the offender is rather isolated as his family and other contacts are in Greece. This has, and will continue to make his time in custody more difficult. I have taken this aspect into account, in particular when determining the minimum period which the offender should spend in actual custody.
In determining the term of his sentence, I have had regard to statistics provided by the Judicial Information Resource System as well as a number of appellate and other decisions, including those on a table provided to me by the Crown. Mr Tertsis, if you could stand up and I will announce the sentence.
I impose a head sentence of three years three months. I impose a non‑parole period of 18 months. Those will date from 14 September 2022. The head sentence, therefore, will expire on 13 December 2025 and the non‑parole period will expire on 13 March 2024.
So, Mr Tertsis, as I have said, the minimum period that you must serve in custody will be until 13 March next year, and you should expect, provided you are of good behaviour, to be removed from prison at that stage. However, it is likely that you will be taken into the custody of Immigration officials.
Is there anything else I need to do?
SCARD: Nothing arising in terms of further orders, your Honour. I just wondered, without wishing to be pernickety, whether or not you formally convict the offender.
HIS HONOUR: It follows from the sentence that I've imposed, but for abundant caution, yes, I convict the offender of the offence.
SCARD: May it please.
HIS HONOUR: I thank the lawyers for their assistance, the Court will adjourn.
[6]
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Decision last updated: 23 October 2023