R v Wing Cheong Li, Wing Cheong Li v R

CITATION: R v Wing Cheong Li, Wing Cheong Li v R [2010] NSWCCA 125

R v Ansari [2007] NSWCCA 204 R v Huang [2007] NSWCCA 259R v Byrne (2010) QCA 33 R v Trandy, Nguyen & Ors [2009] VSCA 321 Maldonado v R [2009] NSWCCA 189 R v Jimmy [2010] NSWCCA 60 R v Siu [2007] NSWCCA 259 R v Viana [2008] NSWCCA 188 R v Chen [2009] NSWCCA 66 R v George [2004] NSWCCA 247 Postiglione v The Queen [1997] HCA 26 CASES CITED : R v Kerr [2003] NSWCCA 234 Lowe v The Queen (1984) 154 CLR 606 R v Wurramarbra (1979) 1 A Crim R 291 R v Gibson (1991) 56 A Crim R 1 R v Glen Robertson Watson (NSW CCA, 25/2/92) R v Howard & Others (1992) 29 NSWLR 242 R v Karkouer [2999] WASCA 147 R v Formosa [2005] NSWCCA 363 Pham v R [2009] NSWCCA 25 R v Woodgate [2009] NSCCA 137 R v Rajapaski [2001] NSWCCA 126

FRIDAY 25 JUNE 2010 REGINA v Wing Cheong LI Wing Cheong LI v REGINA Judgment 1 ALLSOP P: I agree with Barr AJ. 2 BASTEN JA: I agree with the orders proposed by Barr AJ and with his Honour's reasons. 3 McCLELLAN CJ AT CL: I agree with the orders proposed by Barr AJ and with his reasons. 4 In Jimmy v Regina [2010] NSWCCA 60 Campbell JA carried out a review of decisions concerned with co-offenders and the application of the parity principle. Although his Honour identified cases where the concept of parity was considered relevant to a consideration of the appropriate sentences for offenders charged with different offences [202], there are considerable problems in determining, when the offences are different, that the sentence imposed on a co-offender is erroneous because of a justifiable sense of grievance. If there is an error justifying the intervention of this Court it is likely to be because the sentence under appeal is, in all the circumstances, excessive. 5 It may be that the sentence imposed on one offender will cause the judge sentencing a co-offender, or this Court when reconsidering the sentence, to hesitate before imposing or confirming the sentence out of a concern that some issue considered to be of significance to the sentencing of the first offender may not have been fully appreciated by the judge who is required to sentence the co-offender. However, the task for the Court when sentencing a second or subsequent offender is to impose the sentence appropriate for that offence and that offender although remaining mindful of the reasons why leniency may have been afforded to another offender. 6 SIMPSON J: I agree with Barr AJ. 7 BARR AJ: The Crown has appealed against what it asserts is the inadequacy of a sentence imposed on Wing Cheong Li. Mr Li seeks leave to appeal against the same sentence, which he says is manifestly excessive. I shall refer to Mr Li throughout as the respondent. 8 The respondent stood trial in the District Court on a charge that between about 13 and 19 April 2005 at Sydney he dealt with money the value of which was more than $1m Aust which was the proceeds of crime and which he believed to be the proceeds of crime. The trial judge was Judge Woods of Queens Counsel. The trial lasted for a month in January and February 2008. In July 2008 his Honour sentenced the respondent to imprisonment for 12 years and fixed a non-parole period of 8 years. 9 The facts found by his Honour include these. A man called Serna, the principal Crown witness, was a major drug criminal from South America. He was involved with a man called Viana in importing illicit drugs into Australia. Viana's son, John Paul, had been in Australia for some time when Serna arrived in November 2004 to take control of profits from drug sales in Australia and transfer them to criminals in South America. Serna left Australia. A man called Iglesias arrived in January 2005. On 12 April 2005 the respondent arrived in Sydney from overseas, accompanied by his wife. He met Iglesias the next day and several times more after that. They went together to premises at Roseville where a large amount of money had been stored. He and Iglesias took away quantities of the money, including batches of notes worth $600,000, $750,000 and $100,000 respectively. Altogether the respondent dealt with currency notes to the value of about $2.6 million. He took advice from a man called Xian about managing the money. Some was deposited in the Bank of China and some in the Commonwealth Bank. Some was sent overseas at the respondent's direction. 10 The respondent gave and called evidence to advance a case that did not challenge those events but asserted that everything he had done was innocent. It was an element of the offence charged, assuming that the Crown should prove that the money was the proceeds of crime, that the respondent believed that it was proceeds of crime. The respondent said that he was involved in legitimate trade and business in South America. He was a restaurateur. He bought and sold goods associated with restaurants. He bought and sold businesses. His case was that he had sold land in Venezuela and that the law, the political situation and the commercial atmosphere in Venezuela, including the tendency of the value of its currency to fluctuate, made it undesirable to conduct land transactions there under local conditions. Instead, when it was desired to enter into a transaction for the sale of land, an agreement would be made for an amount stated in local currency purporting to be the true sale price but which was only a fraction of the true sale price. The true price would be payable in another currency in another country. Consequent upon the sale of the land, he expected to be paid by the deposit of a sum in US dollars into an account he had in New York. Unfortunately, that did not eventuate and his correspondent, a man called Prado Tang, said that he had cash in Australia and that if the respondent should come to Australia he would be paid. The money he had taken from the Roseville premises was owing and paid to him for the Venezuelan transaction. 11 The verdict showed that the jury was satisfied that the respondent believed that the money he dealt with was the proceeds of crime. As to the respondent's account, his Honour said this:- I cannot reach any conclusion about whether or not this exercise, as he describes it, was in fact the truth. What I am satisfied of and what the jury was undoubtedly satisfied of was that whatever his motivation for going to Australia when he went to the Roseville premises and took from the empty premises the huge quantities of money that he did, physically contained in backpacks, he believed that it was the proceeds of crime. 12 His Honour went on to summarise the directions he had given the jury on proof of belief and continued:- It seems to me possible that indeed the transaction which the accused described with the man Prado Tang was as he describes it. From one's general understanding of the difficulties of government administration and commerce in South America it is certainly possible, indeed perhaps likely that people would seek to avoid the local currencies and use an international currency. It is possible that the transaction which the accused described did involve a verbal agreement to sidestep the literal words of the contract of sale and to rely upon a gentleman's agreement between themselves as to a debt to be owed. It is unnecessary for me to finally determine this, but it is a matter which is raised by the offender's counsel as a matter of mitigation. It is put forward that it would be a mitigation of the offender's overall involvement in this crime if it were the case that I was satisfied that it started off as a legitimate arrangement, so that the accused's culpability was limited to merely taking advantage of what he knew to be a criminal source of funds to satisfy a legitimate debt. That could indeed be regarded as mitigation, but under the authorities, in order to reach that conclusion I would need to be satisfied on the balance of probabilities of the factual scenario advanced by the offender. I am not so satisfied, I simply cannot tell. It might be true. On the other hand, some other version of events might be the truth. I am simply left in the situation then of basing my sentence on a factual substratum where I am uncertain on this point. Conversely, the Crown has failed to demonstrate to the requisite standard that the accused knew that the money was drug money. Rather, I proceed simply on the basis that the jury must have concluded that he believed that the money was the fruit, in effect, of some serious indictable offence under Australian law as I explained to the jury.

S 400.3(1) (minimum value $1 million; maximum custodial penalty 25 years) 25 In R v Huang there were 335 bank transactions each of less than $10,000. The funds were not the proceeds of crime but became instruments of crime and the mental element was the respondent's intent that they should. The offender received a fee of $30,000 for dealing with the money. He was sentenced after pleading guilty and giving assistance to the authorities, and the Crown appealed against the sentence. This Court considered that an appropriate starting point before applying discounts would have been 12-14 years. 26 In R v Byrne (2010) QCA 33 the appellant was convicted of fraud and of one count of money laundering. He obtained documents belonging to a customer of a bank and by using them and other confidential information and forging the customer's signature he arranged the transfer of $1.38 m from the customer's term deposit to another account. That was the fraud. On the following day, still pretending to be the customer, he secured the telegraphic transfer of the money to an account in another name in Hong Kong. The transfer was discovered and the funds were frozen, but not before $HK1.5 m, worth about $250,000, had been withdrawn. It does not appear from the judgment what the relevant state of mind was, but I would assume that it was belief, based upon the appellant's knowledge of the fraud the previous day. On the money laundering count the sentencing judge imposed a head sentence of 6 years. That was left undisturbed on appeal but the parole period was reduced from 3 years 6 months to 1 year 6 months. The sentencing judge's starting point for the head sentence does not appear from the judgment. 27 In R v Trandy, Nguyen & Ors [2009] VSCA 321 Trandy was convicted of two counts of money laundering. The first was dealing with an amount greater than $1 m which was intended to become an instrument of crime. The amount involved was $2 m. The second count was of conspiracy to deal with an amount greater than $1 m intended to become an instrument of crime. The agreed amount exceeded $5 m. The head sentences imposed at first instance were 6 and 7 years respectively after applying discounts for pleas of guilty and other matters. On the same two counts Nguyen was sentenced, again after discounts, to head sentences of 5 and 6 years. Those head sentences were held on appeal to be appropriate, but the judgment contains no expression of the starting point adopted for the purposes of those head sentences.

s 400.4(1) (minimum value $100,000; maximum custodial penalty 20 years) 28 In Maldonado v R [2009] NSWCCA 189 the offender appealed against sentences imposed for aiding and abetting the manufacture of a commercial quantity of cocaine, trafficking in a commercial quantity of cocaine and for two counts of dealing in the proceeds of crime, one in money to the value $600,000 and the other $150,000. The sentencing judge described the money laundering offences as "mid-range". The offender was one of a group of men who arranged for the extraction of about 34 kilograms of cocaine from bags of imported fruit powder. The offender's role included ensuring that rented factory premises were suitable for the job to be done, negotiating the rent and arranging for its payment. With others he transported necessary chemicals and supplied provisions to the men undertaking the extraction. He visited the factory a number of times, paid sums of money and took away a quantity of cocaine and the residue of the extraction process. He was a trusted deputy of the principal of the syndicate. He was integrally involved in all stages of the importation, manufacture and supply of the cocaine. 29 It appears that the principal concern before the sentencing judge was with the manufacturing and trafficking offences, since each attracted a maximum penalty of imprisonment for life. The distinction between the two money laundering offences does not appear from the judgment of the Court of Criminal Appeal, though the first of them may have arisen out of what the sentencing judge described as "a very significant sale of 6 kg of the drug". Perhaps that sale was also the basis of the trafficking charge. The factual basis of the lesser money laundering count does not appear. Neither do the facts supporting an offence under s 400.5(1) which was taken into account in sentencing on the lesser money laundering count. The state of mind in each of the money laundering offences was intention; subs (1)(b)(ii). 30 The minimum money or property value under s 400.5(1) is $50,000. The maximum custodial penalty is 15 years. 31 The head sentences imposed at first instance were 10 years and 8 years. On appeal they were left undisturbed and only concurrency was changed. The dominating features on appeal appear to have been the sentences for the two drug counts. 32 In R v Jimmy [2010] NSWCCA 60 there was a single count. Twenty seven times between 26 November 2003 and 11 February 2004 the appellant took money to a bank. On each occasion the sum was less than $10,000 so that the reporting provisions of the Financial Transaction Reports Act (Commonwealth) were avoided. Altogether more than $240,000 was remitted. The sentence at first instance resulted from a starting point of a head sentence of 7 years. The appeal was concerned with the offender's claim to a legitimate sense of grievance by reference to sentence imposed on others, who were not strictly co-offenders. The appeal was dismissed. 33 In R v Siu [2007] NSWCCA 259, the offender, a co-accused of Huang, dealt in money to the value of $556,400 with intent that it should become an instrument of crime. The sentencing judge adopted a starting point for the head sentence of 4 years and 6 months. On a Crown appeal this Court held that the starting point should have been at least 8 years, and more appropriately between 9 and 11 years.

S 400.3(2) (minimum value $1million; maximum custodial penalty 12 years) 34 The respondent in R v Viana [2008] NSWCCA 188 was the respondent's co-offender, John Paul Viana. He pleaded guilty. The amount of money he dealt with was $5,050,000 and his state of mind was recklessness. The sentencing judge described his offence as mid-range and selected 6 years as a head sentence before discounting. The Crown's principal contention on appeal was that the starting point and therefore the resulting sentence was manifestly inadequate. This Court was not satisfied that the starting point was outside an appropriate range of sentencing discretion. 35 In R v Ansari the two respondents were each charged with two charges of conspiring with the other respondent and with a man referred to as Z to deal with money to the value of $1 m or more where there was a risk that the money would become an instrument of crime and when each was reckless as to the fact of that risk. The respondents were directors of a money exchange business. In October 2003 Z, who was resident overseas, visited Sydney and delivered to the respondents cash exceeding $2 m in value. They arranged for an associate to deposit the money into various bank accounts and that was done over a period of several months, always in amounts of less than $10,000 to avoid reporting provisions. 36 In June 2004 Z visited Sydney again, intending to deliver to the respondents between $2 and $3 m which was to come from the sale of drugs. Z and the respondents made an arrangement as before, but they were all arrested before the plan could be put into effect. 37 Z was charged with conspiracy under s 400.3(2) for the arrangement of June 2004, but that was the only money laundering count. Z was also charged with having possession of a prohibited import, namely MDMA, being not less than the commercial quantity, reasonably suspected of having been imported into Australia. Z pleaded guilty and assisted the authorities. His subjective case was particularly strong because he had a substantial mental illness. The sentencing judge took into account in sentencing for possessing MDMA an offence for possessing cash to the value of $15,000 reasonably suspected of having been unlawfully obtained. Z was sentenced to a fixed term of 2 years on the money laundering count and to a longer term for the possession of the imported drug. On appeal, this Court considered that there should have been a starting head sentence of 7 years for the money laundering count but confined its interference to the possession count. 38 In the Crown appeal against the sentences imposed on the Ansari brothers this Court, relying on what the court had said in Z, substituted head sentences of 7 years for each of the offences for each respondent. Adjustments to the partial concurrency of the sentences are of no present interest. 39 In R v Chen [2009] NSWCCA 66 the appellant was convicted of conspiring to deal with money worth $1 m or more. The state of mind was recklessness. The sum of money the subject of the conspiracy was greater than $20 m but the fraud was discovered and no money was lost. On appeal the sentencing judge was held correctly to have started with a head sentence of 8 years before discounting.

Consideration 40 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. Moreover, unless there are co-offenders, one may not look at the facts and result of a single case in order to show that the case under consideration is within or outside a proper range of sentencing discretion: R v George [2004] NSWCCA 247 per the Court at [48] - [49]. 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. 42 The factors that were important for the sentencing of the respondent were these. The maximum custodial sentence was 25 years' imprisonment. The amount of money involved was more than twice that required to bring the offence within subs 400.3 (1). The respondent believed that the money was the proceeds of the commission of an indictable offence, though he was not to be sentenced as though he had come to Australia with that belief or that he believed that the money came from the commission of a drug offence. Precisely what he did believe about the provenance of the money was not established. The strength of the respondent's belief was not established. The respondent's offending went over a period of days and he carried out the acts I have summarised above. 43 Although senior counsel for the Crown asserted that once the respondent had collected the money it was beneficially his, there was no finding to that effect and he could not be sentenced on that basis. 44 Bearing these matters in mind, and taking from the cited cases the limited assistance they can give, I am not persuaded that a head sentence of 12 years fell outside the proper range of sentencing discretion.

[1999] WASCA 147

(1984) 154 CLR 606

(1992) 29 NSWLR 242

[2007] NSWCCA 259

[1997] HCA 26

[2003] NSWCCA 234

[2005] NSWCCA 363

[2009] NSWCCA 137

[2009] NSWCCA 66

[2009] NSWCCA 25

[2001] NSWCCA 126