R v Zhen Chi CHEN

CATCHWORDS: CRIMINAL LAW - sentence after trial - money laundering

Criminal Code (Cth) LEGISLATION CITED: Financial Transactions Report Act (Cth) Crimes Act (Cth)

PARTIES: Crown Zhen Chi CHEN

G Long SC (Crown) COUNSEL: P McGuire (Crown) I Barker QC (Offender)

SOLICITORS: Director of Public Prosecutions (Cth) C V Jeffreys (Offender)

1 The offender is Zhen Chi Chen. He is known as Peter Chen. He was born on 20 October 1965. He was aged about thirty-eight years when he committed the subject offence, for which I am to impose sentence upon him, and he is aged forty-two years five months now.

2 The offender is the third child of his parents' four children. He has an older brother and an older sister and a younger sister. His parents and his siblings are alive. He has a close relationship with his parents and siblings.

3 The offender was born in a small rural village in Guangdong Province in China. His parents were farmers. He and his siblings were raised in a happy and supportive environment.

4 The offender attended primary and secondary schools in Guangdong Province. He was an average student academically. He obtained the Chinese equivalent of the New South Wales year twelve Higher School Certificate.

5 After leaving school, the offender left mainland China and went to Hong Kong, at where he was employed in a restaurant business of his older sister.

6 In 1989, after five years in Hong Kong, the offender migrated to Australia, settling in Sydney. In due course, his parents and sisters migrated to Australia. His parents live in Sydney. One of his sisters lives in Sydney, but I do not know where his other sister lives. His brother lives in Hong Kong.

7 After arriving in Australia, the offender obtained employment in a business of a relative. In due course, he established his own seafood business, purchasing and canning abalone and supplying it to restaurants in Australia, Singapore, Hong Kong and China.

8 The offender married his wife during 2006 and his wife gave birth to their first child during July 2007. His wife and their child are dependent upon him.

9 The offender enjoys good physical and mental health, albeit that he is anxious about the sentence that will be imposed upon him and the effect that his imprisonment will have upon his parents, his wife, and his child. Notwithstanding the conclusion of the psychiatrist, I am not prepared to accept that the offender suffers depression or that, if he does, it will make imprisonment for him more onerous than it otherwise should be.

10 The offender has not abused intoxicating liquor or any prohibited drug and he does not have any gambling problem.

11 The offender has an unblemished character and reputation.

12 At some time before May 2003 the AFP and the Australian Crime Commission became interested in the affairs of Bin Huang and, through him, the affairs of the offender.

13 From mid January 2003 Mr Huang had attended at various branches of the Commonwealth Bank and the Westpac bank around Sydney and he had transferred various amounts of money, all less than $10,000, in cash, to the accounts of various people, six in all, one of whom was the brother of the offender, at banks, four in all, in Hong Kong.

14 On various occasions between 30 May 2003 and 2 December 2003 police seconded from the New South Wales police force to the Australian Crime Commission followed Mr Huang from 141 Ninth Avenue, Belfield, to various branches of the Commonwealth Bank and the Westpac bank around Sydney at where he transferred amounts of money to the accounts of the people at banks in Hong Kong.

15 On 19 August 2003 an officer of the Australian Crime Commission installed a fixed camera on premises opposite 141 Ninth Avenue, Belfield, which premises were occupied by the offender and his parents, to record the comings of people into and the goings of people from 141 Ninth Avenue, Belfield.

16 Between 4 September 2003 and 17 December 2003 the telephone landline into 141 Ninth Avenue, Belfield, was monitored and conversations and facsimile transmissions on the landline were intercepted and recorded.

17 Between 9 January 2004 and 20 February 2004 the telephone landline into 19 Passey Avenue, Belmore, into which premises the offender and his parents had moved after leaving 141 Ninth Avenue, Belfield, was monitored and conversations and facsimile transmissions on the landline were intercepted and recorded.

18 On 1 March 2005 the offender was arrested and, after being arrested, he was taken to the Surry Hills police station, at where he was charged with, inter alia, the offence of dealing with money of $1,000,000 or more intending it to be an instrument of crime and, after being charged, he was remanded in custody, bail refused, to appear before a magistrate in the Central Local Court in Sydney on 2 March 2005.

19 In about October 2005 Mr Huang was arrested and, after being arrested, he, like the offender, was charged with an offence of dealing with money of $1,000,000 or more intending it to be an instrument of crime.

20 On 11 December 2005, 3 February 2006, 15 March 2006, and 11 May 2006 Mr Huang was interviewed by officers of the Australian Crime Commission about the various amounts of money that he had transferred to the accounts of people at banks in Hong Kong.

21 In course of time, on 17 February 2006 the offender was granted bail and on 20 February 2006 the offender was released from prison. He had been in prison, bail refused, from his arrest on 1 March 2005 to 20 February 2006, a period of 11 months 20 days.

22 On 14 June 2006 Mr Huang was interviewed again about the money that he had transferred to accounts of people at banks in Hong Kong. On this occasion he was shown a total of 1,442 international money transfer application forms, of which he selected 333 as transactions that he had conducted, with the rest being transactions that he had not conducted or transactions that he had a doubt about whether he had conducted. He confirmed that the money that he had transferred overseas had been provided to him by the offender and that he had been instructed in the method that he was to use to transfer the money overseas by the offender.

23 On 22 December 2006 the offender appeared before a magistrate in the Central Local Court at Sydney for a committal hearing. It was to be a paper committal hearing. Not surprisingly or unexpectedly, as the Crown's case was not challenged, he was committed to appear in this court in the Downing Centre in Sydney on 25 January 2007 for arraignment.

24 In due course, on 20 September 2007 the offender appeared before me in this court in the Downing Centre in Sydney to stand his trial. The Crown Prosecutor presented an indictment which charged the offender with the offence of dealing with money of $1,000,000 or more intending it to be an instrument of crime. The offender pleaded not guilty to the charge. A jury was empanelled.

25 After the jury had been empanelled, but in the absence of the jury, I conducted a voir dire as to the admissibility of some evidence that the Crown Prosecutor wished to adduce and to which the offender objected. After hearing evidence and then submissions from the Crown Prosecutor and the offender's solicitor, I allowed the Crown Prosecutor to adduce some of the evidence to which objection was taken and refused to allow him to adduce some other of that evidence.

26 On 21 September 2007 the trial before the jury commenced. The jury heard evidence from twenty-two witnesses, all called by the Crown Prosecutor, and it received sixty-three exhibits, fifty-four presented by the Crown Prosecutor and nine presented by the offender's solicitor, over seventeen days between 21 September 2007 and 17 October 2007, the addresses of the Crown Prosecutor and the offender's solicitor over three days, 17 18 and 19 October 2007, my summing-up over two days, 19 and 22 October 2007, and it returned its verdict of guilty on 27 October 2007. After taking the jury's verdict, I revoked the offender's bail and fixed 13 December 2007, later changed to 1 February 2008, for the sentencing proceedings.

27 The jury, by its verdict, must have accepted the evidence of Mr Huang that between 14 January 2003 and 4 November 2003 he had conducted 333 international money transfer transactions transferring overseas money amounting to $3,088,311 that had been provided to him by the offender using the method that the offender had instructed him to use, for the doing of which he was paid about $90.00 for each transaction that he conducted on behalf of the offender.

28 Although it is not for me to say whether or not the jury's verdict is correct, I say that its verdict of guilty did not surprise me as the Crown's case was strong to the point of being overwhelming, with Mr Huang's evidence being, to some extent, corroborated and largely unexplained.

29 On 1 February 2008 the offender appeared before me on the sentencing proceedings. I received documentary material from the Crown Prosecutor and the offender's senior counsel and I heard evidence from the offender's wife and submissions as to sentence from the Crown Prosecutor and the offender's senior counsel, after which I stood over the sentencing of the offender to today.

30 I am now to impose sentence upon the offender for the offence of which the jury has found him to be guilty.

31 The offence of dealing with money of $1,000,000 or more intending that it become an instrument of crime is an offence against s 400.3(1) of the Criminal Code (Cth), for which the prescribed penalty is imprisonment for a maximum of twenty-five years or a fine of a maximum of $165,000 or both. I think that it is obvious and fair to say that the offence committed by the offender is a very serious offence.

32 The evidence presented to the jury allows me to find that: (1)Mr Huang conducted 333 international money transfer transactions transferring various amounts of money, all less than $10,000, in cash, to the accounts of six people, one of whom was the brother of the offender, at four banks in Hong Kong. (2)The transactions were conducted on various occasions over a period of about ten months from 14 January 2003 to 4 November 2003. (3)The total amount of money transferred overseas by Mr Huang on behalf of the offender was $3,088,311. (4)Mr Huang received the money that he transferred overseas from the offender. (5)Mr Huang was instructed as to the method to be used by him to transfer the money overseas by the offender. (6)Mr Huang reported to the offender about the money that he had transferred overseas. (7)Mr Huang was paid about $90.00 by the offender for each transaction that he conducted for the offender. (8)As between Mr Huang and the offender, Mr Huang was the agent and the offender was the principal in relation to the transactions conducted by Mr Huang. (9)The offender's intention in providing Mr Huang with the money to be transferred overseas and in instructing Mr Huang as to the method to be used in transferring the money overseas was to avoid the cash reporting requirements of the Financial Transactions Reports Act (Cth).

33 However, the evidence presented to the jury does not allow me to find that the money provided by the offender to Mr Huang to be transferred overseas by him was money that was either lawfully or unlawfully obtained by the offender or was money to which the offender was lawfully entitled or in which the offender had a lawful interest.

34 As the offence committed by the offender is an offence against the law of the Commonwealth, I am required, in determining an appropriate sentence to impose upon the offender for the offence, to take into account the several factors set out in s 16A of the Crimes Act (Cth) and any other relevant factor.

35 As to the factors set out in s 16A of the Crimes Act, I say these things. (a) I have outlined the offence and the circumstances in which it was committed. (b) I note that the subject offence is the only offence to be considered. (c) I consider that the offence was a planned offence, which consisted of a series of criminal acts. (d) I note that there was not any victim of the offence. (e) I note that no one suffered any injury, loss or damage from the offence. (f) I record that the offender has not shown any contrition for committing the offence. (g) I record that the offender did not plead guilty to the offence. (h) I note that the offender did not assist any law enforcement agency in the investigation of the offence or any other offence. (j) I expect that the sentence will have a significant deterrent effect upon the offender. (m) I have outlined the age, antecedents, employments, health and character of the offender. (n) I accept that the offender has his family support but I cannot say whether he has a good or reasonable prospect for rehabilitation or whether he has a good or reasonable chance that he will not re-offend. (p) I accept that the offender's imprisonment will have a significant effect upon his parents, his wife and his child, all of whom are dependent upon him, but this effect is not unusual or exceptional, rather it is usual and expected.

36 One factor not mentioned in s 16A of the Crimes Act is general deterrence. I see general deterrence as being very important. It is something that cannot be ignored or undervalued. People who may think of transferring amounts of money of less than $10,000 in cash so as to avoid the requirements of the Financial Transactions Reports Act and so as to avoid detection of the money must be deterred from doing so by the sure and certain knowledge that, upon detection, and after conviction, a sentence of imprisonment is likely to be imposed.

37 Another factor not mentioned in s 16A of the Crimes Act is parity between Mr Huang and the offender. Mr Huang was charged with the same offence as that with which the offender was charged. Mr Huang assisted the Australian Crime Commission in the investigation of the offence.

38 Mr Huang pleaded guilty to the offence. Mr Huang offered to assist the Crown in the prosecution of the offender. Mr Huang was accepted to have been "a runner" or "a courier" for the offender, albeit to have been "a trusted employee" who "played an important role", and to have been contrite for what he did. Mr Huang was sentenced at first instance to imprisonment for three years, with a non-parole period of one year nine months and a parole period of one year three months. However, on appeal by the Crown, on the ground of inadequacy, Mr Huang was sentenced to imprisonment for five years six months, with a non-parole period of three years four months and a parole period of two years two months.

39 In giving its judgment (see 2007 NSWCCA 259) the Court of Criminal Appeal said (in paragraph 44) that the sentencing judge's "starting point" was imprisonment for six years six months but "it should have been at least eleven years" notwithstanding that "a more appropriate starting point was between twelve and fourteen years" and that the lowest possible starting point was chosen because the appeal was by the Crown. The court allowed a discount in sentence of fifty per cent on account of the guilty plea and the assistance to law enforcement agencies, albeit that it commented that "this is very generous".

40 The offender's senior counsel submitted that the evidence does not allow me to find that the offender was "the mastermind of the operation". The Crown Prosecutor did not submit that the offender was the mastermind of the operation, only that he was the principal towards Mr Huang in relation to the transactions conducted by Mr Huang for the offender. I agree with both the offender's senior counsel and the Crown Prosecutor.

41 The offender's senior counsel submitted that, although Mr Huang was paid by the offender for what he did for him, the evidence does not allow me to find that the offender benefited from what he did . The Crown Prosecutor submitted that, although there is nothing to show whether the offender benefited from what he did and, if he did, what was the benefit or reward, the inference can be drawn, from the fact that the offender paid Mr Huang for what he did for him, that there must have been some benefit or reward to the offender from doing what he did. I agree with the Crown Prosecutor. I doubt that the offender would have done what he did unless there was a benefit or reward to him from doing so, although the evidence does not allow me to say what was that benefit or reward.

42 The offender's senior counsel submitted that, although Mr Huang had given evidence that the offender had told him that his reason for transferring the money overseas was "to avoid paying tax", the evidence does not allow me to find that the offender's purpose in doing what he did was to evade the payment of income tax. The Crown Prosecutor submitted that, whatever had been the offender's specific purpose for transferring the money overseas, the evidence allows me to find that his general purpose was to avoid detection of the monies by "the relevant authorities". Although I doubt that I need to find what was the offender's specific purpose for doing what he did, I consider that the evidence allows me to find that the offender did what he did to avoid the reporting conditions of the Financial Transactions Reports Act and thereby to avoid detection of the monies by the Australian Taxation Office.

43 The offender's senior counsel submitted that in light of the decision of the Court of Criminal Appeal in relation to Mr Huang, the appropriate starting point is imprisonment within the range from twelve to fourteen years with imprisonment for twelve years being the more appropriate sentence. The Crown Prosecutor submitted that, as the offender was the principal in relation to Mr Huang, providing him with the money to be transferred overseas and instructing him as to the method to be used to transfer the money overseas, the starting point for the sentence to be imposed upon the offender should be higher than the starting point of between twelve and fourteen years referred to by the Court of Criminal Appeal in its judgment in the appeal related to Mr Huang. I agree with the Crown Prosecutor. The appropriate starting point for the sentence to be imposed upon the offender must be higher than twelve to fourteen years.

44 What, then, having regard to what I have said about the offence and the offender, is an appropriate sentence to impose upon the offender for the offence?

45 I have determined, taking into account the objective seriousness of the offence, the subjective features related to the offender and to the other factors, to all of which I have referred, that the appropriate sentence to impose upon the offender is imprisonment for sixteen years six months.

46 As to apportionment of a sentence of imprisonment for sixteen years six months into a non-parole period and a parole period, the usual apportionment produces a non-parole period within the range sixty to sixty five per cent and a parole period within the range thirty five to forty per cent. I fix a non-parole period of ten years six months and a parole period of six years.

47 However, as the offender spent a period of eleven months twenty days in prison between his arrest on 1 March 2005 and his release on bail on 20 February 2006, I reduce the period of sixteen years six months by eleven months twenty days to fifteen years six months ten days with a non-parole period of nine years six months ten days and a parole period of six years.

48 Accordingly, Zhen Chi Chen, for the offence of dealing with money of $1,000,000 or more intending it to be an instrument of crime, of which the jury found you to be guilty, you are convicted. I sentence you to imprisonment for fifteen years six months ten days. I fix a non-parole period of nine years six months ten days from 22 October 2007 to 1 May 2017 and a parole period of six years from 2 May 2017 to 1 May 2023. I order that you be subject to supervision by the New South Wales Probation and Parole Service whilst on parole during the parole period.

49 Mr Chen, I am required by s 16F of the Crimes Act to explain to you the sentence that I have imposed upon you. The jury found you to be guilty of the offence commonly called money laundering. I agree with the jury's verdict. I have convicted you of the offence. I have imposed a sentence of imprisonment for fifteen years six months ten days for the offence. I have reduced the starting period of sixteen years six months by the period of eleven months twenty days that you have spent in custody between your arrest and your release on bail to the period of fifteen years six months ten days. I have fixed a non-parole period of nine years six months ten days from 22 October 2007 to 1 May 2017, on which day you will be eligible to be released on parole. On your release from prison on parole you will be subject to the terms of parole for six years. You will be required to be of good behaviour during the period of parole. If you offend within the period of parole you will breach that parole and you will be returned to custody to complete the sentence.

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