Regina (CTH) v Nahi Nasri Gazal

Facts

1. The parties presented an agreed Statement of Facts and an agreed set of Additional Facts that can be summarised as follows.

Overview

1. In or about February 2011 the Australian Federal Police (AFP) commenced an investigation into the activities of the offender and Andreh Georges. The offender was the Chief Executive Officer of a company Gazal Telecom Australia Pty Limited (Gazal Telecom). Mr Georges was a friend and business associate of the offender.
2. On 5 March 2011 the offender and Mr Georges collected a box containing a quantity of cash from a money remitter TSS Worldwide, located at Pendle Hill. The box contained somewhere between $504,000 and $800,000 (the cash).
3. Between 5 March 2011 and 12 May 2011 the offender deposited approximately $405,000 of the cash into bank accounts of Gazal Telecom.
4. Between 7 March 2011 and 17 March 2011 Mr Georges deposited approximately $79,100 of the cash into three bank accounts controlled by him. He then transferred the majority of this amount into the bank accounts of Gazal Telecom.
5. In total, $484,100 of the cash was deposited into bank accounts controlled by the offender and/or Mr Georges.
6. Between 23 March 2011 and 7 April 2011 the offender transferred a total of $350,000 of the $484,100 into two separate overseas bank accounts, nominated by Muhammad.

Arrangements to collect the money

1. The AFP had been lawfully intercepting the offender's telephone calls. Between about 25 February 2011 and 5 March 2011 the offender was in regular telephone contact with Muhammad. They discussed collecting a sum of money from a person referred to as "the Indian guy" who was the operator of, or worked at, TSS Worldwide.
2. On 2 March 2011 the offender sent Mr Georges to TSS Worldwide to make arrangements in relation to the collection of the money. Later that day, the offender and Muhammad discussed the provision of a code number to be relayed at the time of the collection of the money.
3. On 3 March 2011 the offender informed Mr Georges of the code number. Later that day the offender told Muhammad that there had been a problem that the code number and that he had not been provided with the money. The offender suggested that they should threaten the Indian guy.
4. On 4 March 2011 the offender sent Mr Georges to TSS Worldwide again to check when the exchange was taking place. Mr Georges reported to the offender that the person said that the code number also had the words "box eight". Neither the offender nor Mr Georges understood the reference to the words "box eight" at that time.
5. At 5:51 AM on 5 March 2011 Mr Georges called the offender and told him that the guy had just called him. He told the offender that they had to be at Woolworths at Pendle Hill at 7:15 AM and to have the code number with him.
6. At 6:43 AM the offender telephoned Muhammad and asked him if he had found out what the term box eight referred to. Muhammad replied that he had not. The offender then said to Muhammad "listen to me for a minute now… I am borrowing the money from you as a loan… You are lending it to me for business, correct?" To which Muhammad replied, "Alright. Yeah."
7. At about 7:24 AM the offender telephoned Muhammad and said, "they want $10 with the number". The offender provided Muhammad with the serial number of a ten dollar note in his possession.
8. At about 8:03 AM the offender had a further conversation with Muhammad as to his progress with contacting the other party.
9. At about 8:04 AM AFP officers observed the offender and Mr Georges parked in a vehicle (the offender's vehicle) on Pendle Way at Pendle Hill. A short time later they were observed driving into Stapleton Avenue and stopping next to another vehicle. An unidentified man of Indian appearance (UM1) entered the offender's vehicle through the rear passenger door. UM1 then got out of the offender's vehicle and returned to his vehicle. The vehicle was then travelling convoy to a factory in the Gilba Road, Girraween. At about this time that the offender telephoned Muhammad and told him that the guy had taken the $10 note and they were following him now.
10. At the factory a man of Indian appearance approached the offender's vehicle and gestured to Mr Georges to open the boot. The man then picked up a cardboard box and placed it into the boot of the offender's vehicle.
11. At 8:17 AM the offender telephoned Muhammad and told him that they had been given a box with "eight hundreds" in it. He told Muhammad, "that's why they called it an eight box, because it's eight hundred in a box".
12. The offender and Mr Georges then returned to Mr Georges' residence in Granville. They took the box out of the car, went into the laundry and closed the door. They opened the box on the washing machine. It contained a bag of rice on top and underneath a quantity of cash. The offender took money out of the box and placed it in a backpack that was given to him by Mr Georges.
13. The AFP observed the offender leave the premises carrying a bag, which he placed into the rear of a vehicle. He then drove to his home unit in Macquarie Street Sydney.
14. At 8:59 AM the offender told Muhammad that he had received "about eight hundred".
15. Source and Destination of the Funds
16. On 7 March 2011 Muhammad told the offender that the Indian guy should have more money available for collection.
17. The offender telephoned Mr Georges. The offender told Mr Georges that he was having difficulties transferring money to Lebanon via the bank. The offender asked Mr Georges to go and speak to the Indian guy.
18. Later that day, Mr Georges returned to TSS Worldwide at Pendle Hill. He was told that the Indian guy was not there. Mr Georges said he would return the next day.
19. On 9 March 2011 the offender had a telephone conversation with Muhammad. They discussed the transfer of money to Lebanon. The offender told Muhammad that he would transfer the money via America and that "At the end of next week, everything will be in Lebanon".
20. In a further telephone call on 9 March 2011, Muhammad asked the offender to provide another telephone number so that the "people who handed the money over" could get in touch with him.
21. On 10 March 2011 the offender and Mr Georges had 2 telephone conversations in which they discussed the fact that they had not received $800,000. They believed that they in fact received about $500,000.
22. Between 10 March 2011 and 14 March 2011 the offender and Muhammad had numerous telephone conversations about the offender receiving less than $800,000. Muhammad told the offender that a loss of $300,000 was not something that they could bear. The offender told Muhammad to make sure that they understood that he could not send two million in a week. On 14 March 2011, the offender told Muhammad that he received $504,575.
23. At about this time the offender was in discussions with BankWest about whether he could transfer funds to Lebanon in the sum of $100,000. On 15 March 2011 a relationship manager at BankWest sent the offender an email to the effect that approval was required pursuant to the anti-money laundering legislation before a transfer to Lebanon could be affected.
24. On 15 March 2011 the offender had a telephone conversation with Muhammad. Muhammad told the offender that the guys had recorded $800,000 against them. The offender told Muhammad that sending the money would take time. In a further telephone conversation later that day, Muhammad asked the offender if he had received $504,000 how much would he transfer. The offender asked Muhammad, "how much was his cut?" Muhammad told the offender to take "22" and transfer the rest.
25. At about 4:01 AM on 17 March 2011 the offender received a call from representatives of the owners of the money. The offender referred to himself as "Ronnie". The caller said that he was calling from Panama.
26. Later that day the offender received a further email from the relationship manager at BankWest seeking further information about the purpose of the transfer of the money. In reply the offender stated that his office had made a mistake when they filled in the application and that the funds would be transferred to his sister as a loan for a period of six months.
27. At 9:54 AM on 18 March 2011 the offender received a telephone call from a man who identified himself as Jose Herrero-Calvo. They arranged to meet later in the day.
28. At 11:20 AM AFP officers observed the offender meet with Mr Herrero-Calvo in Surry Hills for about 20 minutes.
29. Later that day the offender received a further email from BankWest informing him that his request to transfer money to Lebanon had been denied. The offender forwarded the email to Muhammad. The offender then had a telephone conversation with Muhammad. The offender told Muhammad that he had discussed with Mr Herrero-Calvo the problems with the short-payment and that there was an opportunity to send money for his people in return for commission. In a further telephone conversation later that night Muhammad told the offender to ask for 14% commission. The offender suggested that sending money somewhere other than Lebanon would be a good idea.
30. On 19 March 2011 the offender and Muhammad had a telephone conversation. Muhammad told the offender that the guy on the other side was threatening to kill him because he wanted the money. The offender replied that he was giving them "clean money". The offender insisted on paying the money over through legal means, ie by bank cheque or bank transfer. Further telephone conversations to the same effect took place over the following days. The option of transferring money to Dubai, Switzerland or Italy was discussed.
31. At 10.09pm on 21 March 2011, Muhammad sent an SMS to the offender providing bank account details for a company Delfina International Pty Ltd (Delfina) at an OCBC Branch in Singapore.
32. On 22 March 2011 the offender telephoned Mr Georges. The offender asked Mr Georges to bring everything had left in cash to him to transfer anything he had in the bank to the accounts of Gazal Telecom. The offender then made enquiries with Westpac Telephone Banking as to how he could transfer money overseas electronically from the accounts of Gazal Telecom. He was informed how to conduct the transfer and advised that there was a limit of $50,000. Later that day the offender had a telephone conversation with Muhammad. He told Muhammad that he had transferred $150,000 that he had "cleaned".
33. On 24 March 2011 the offender received an SMS from Muhammad providing bank account details for a company Mass Joy Industries Ltd (Mass Joy) with Citibank in Hong Kong. Between 28 March 2011 and 7 April 2011 the offender transferred the sum of $200,000 in $50,000 tranches to Mass Joy's account. Investigations revealed that the transfers were conducted from a computer with a static IP address registered to the offender.
34. In early May 2011 the offender discussed with Muhammad chasing the Indian guy for money. On 8 May 2011 the offender and Muhammad discussed what they had each received from the transaction. The offender told Muhammad that he had received "25". Muhammad replied that he had not received a cent. Muhammad asked the offender to send him $10,000 and the offender agreed to do so.
35. At about 12:40 PM on 18 May 2011 Mr Georges attended TSS Worldwide at the request of the offender. The Indian guy was not there.
36. At about 2:30 PM the offender told Mr Georges that if you didn't pay tomorrow there was going to be a big problem.
37. At about 4:45 PM Mr Georges went back to TSS Worldwide.
38. On 24 May 2011 Mr Georges told the offender that he went and saw him but he doesn't have anything. Mr Georges told the offender that he had showed him a receipt from the Australian Federal police that they had taken about 1.9 and that he was going to court on the 15th of next month for having 300,000.
39. At about this time the offender had discussions with Muhammad about a transfer of $50,000 to a company Sky Electronics Technology Ltd with an account in Hong Kong. The offender maintained he had sent the money but this was disputed.

Arrest

1. On 22 August 2012 the AFP executed a search warrant at the business premises of Gazal Telecom. The offender was arrested and charged and declined to participate in a record of interview.

Evidence of Andreh Georges

1. Mr Georges was called to give evidence in the sentence proceedings on 30 June 2016 and was cross-examined. Mr Georges received a discount on his sentence for assisting the authorities. He had prepared a detailed statement and it was intended that he would be called at the offender's trial. The salient points to be taken from Mr Georges' oral evidence are as follows.
2. When Mr Georges attended TSS Worldwide prior to 5 March 2011 he was expecting to be given a cheque, rather than cash, on the basis of what he had been told by the offender. He gave evidence that he would not have attended TSS Worldwide alone if he thought he was picking up cash. Mr Georges accepted that he became aware that he was picking up cash a few days before 5 March 2011 when there was discussion about a code and the provision of a bank note.
3. The cash was not counted on the day they received it.
4. Mr Georges was told by the offender that the purpose of dealing with the money remitter was to receive the proceeds of a loan from a third party to be used by the offender in his business. The offender had been telling Mr Georges that he was trying to get a loan for about 12 months before receiving the cash. According to what Mr Georges had been told a property belonging to one of the offender's family members was being refinanced and the loan was intended to be a bridging loan.
5. Mr Georges was given cash and asked to bank it. He was not asked by the offender to bank it in amounts under $10,000, but that was what he did. He was left with about $150,000 in cash that he returned to the offender when he asked for it. The offender told him that "someone was there to pick it up".
6. The offender told Mr Georges that there was pressure on him to return the money. The offender said that his family overseas and his son had been threatened. The offender told Mr Georges that his son had a gun drawn on him. Mr Georges was told those things at around the time when he was asked to return the cash, which was in a telephone call on 22 March 2011.
7. Mr Georges understood that the loan was for $800,000 to $1 million.
8. Mr Georges agreed that there were attempts made to investigate the transfer of the funds to Lebanon as early as 7 March 2011, ie 2 days after receiving the cash. Mr Georges made enquiries with the National Australia Bank (NAB) and the St George Bank.
9. Mr Georges agreed that the first mention of the money being a loan in his statement was the reference to the offender speaking to Muhammad on the telephone on 5 March 2011 set out at [19] above. He maintained that he knew that the offender had been after a loan for 1-2 years prior to that.

The offender's evidence

1. The offender gave evidence on 30 June 2016 and was cross-examined on 29 November 2016 and 23 February 2017. I will not outline the parts of his evidence that repeat the matters set out in the Statement of Facts or in the history to the medical practitioners unless it is necessary to do so.
2. The offender gave evidence that he was introduced to Muhammad by his brother. They had not met and all of their contact took place over the telephone. The purpose of the introduction was to arrange a business loan. The offender's credit history including his bankruptcy did not allow him to use conventional lenders.
3. The offender gave evidence that he had been speaking to Muhammad for about 6 to 8 months prior to March 2011. They had initially discussed a loan of $1 million that had over time been reduced $800,000. It was to be repaid with interest of between 8.5% and 10%. The deal then changed to require the offender to repay $200,000 immediately, leaving him with the sum of $600,000. The negotiation was concluded in about January 2011 and Muhammad advised the offender to collect the money from TSS Worldwide at Pendle Hill.
4. From his discussions with Muhammad, the offender expected to receive a cheque. That expectation changed a day or a few hours before collecting the money on 5 March 2011, when Mr Georges was told he would get a "box of eight".
5. The offender and Mr Georges took the box to Mr Georges' house and found the cash. They did not count it. They divided it up. The offender told Mr Georges to bank the cash he was given. The offender could not physically carry all of the cash.
6. The offender proceeded to bank the cash in amounts of $25,000 or less. He chose those amounts because he was concerned that he may be robbed. He had experience of an employee being robbed of about $30,000 in cash a number of years earlier. That robbery was reported to the Police at Liverpool. The offender gave evidence that he would have taken all of the money to the bank at the one time, if there was someone to go with him to carry it.
7. The offender asked Mr Georges to return all the cash he had left on 22 March 2011 because his son had been threatened. The offender said that he was also threatened by Mr Herrero-Caldo when they met.
8. The offender's son, Nathan, telephoned the offender at work and told him that two guys had come up to him, they had a gun and told him if the offender did not pay the money they were going to hurt him. The telephone call took place sometime between 18 and 22 March 2011. The offender gave evidence that the full amount of $800,000 was demanded through Nathan.
9. The offender was told by Muhammad that the people who had provided the money were going to kill him if they did not get the full amount of $800,000 back.
10. The offender gave evidence that there was $504,000 in the box. He knew that from about 10 March 2011 and he told Muhammad about it.
11. The offender took the threat to Nathan seriously. He did not go to the Police because of his past experiences with them. He did not want to make a big deal of it, he wanted to pay them the $800,000 and get out of it.
12. When the offender met Mr Hererro-Caldo he was told that they wanted the $800,000 and that they were not playing games.
13. The offender asked his ex-wife to give him the cash that he had given her at an earlier time. She gave him $130,000 in cash. At that time he also had about $150,000 to $165,000 in cash. The offender gave evidence that he started banking that money too.
14. At about this time the offender decided that he wanted to give the money back in a cheque and that he wanted a receipt. If he was to give the money back in cash then he wanted a meeting and the recipient to sign a receipt and to provide identification. The offender gave evidence that the option of transferring the money to foreign bank accounts was discussed later. The offender wanted a record of the transaction because otherwise it was too risky.
15. The offender gave evidence that he returned $400,000 of the money in cash, to an associate of Muhammad's who came to Australia, by the name of Mizar Saifeddine. The offender went with Mr Saifeddine to TSS Worldwide on 25 March 2011. They waited for about 2 hours but the Indian guy did not arrive.
16. The offender transferred the sum of $350,000 to foreign bank accounts as directed by Muhammad.
17. The offender gave evidence that he has a stent inserted in one of his coronary arteries. He has insulin dependent diabetes and suffers from depression. He has been taking a combination of anti-depressant medication since 2003. He has also been prescribed anti-anxiety medication and was taking a high dose of that medication in 2011.
18. The offender had operated a caravan business from 1986. In 1993 he commenced a business manufacturing caravans, known as "Gazal Caravans". At the height of its operation it employed 300 people and had two factories, one in Ingleburn and one in Dandenong, Victoria. The company was liquidated in 2001 and as a result the offender began to experience the symptoms of depression. The offender went to Lebanon for 2 years and on his return in 2003 he recommenced the caravan business on a smaller scale. The company was placed into voluntary receivership in 2007. At that time the offender's marriage to Terese failed. The offender currently owns and operates a telecommunications business known as Wire Networks.
19. The offender gave evidence that he was very, very sorry and had been very stupid in picking up the money. He should have left the box in the street.
20. In cross-examination the offender agreed that he participated in a record of interview with the AFP on 29 May 2015, continuing on 2 June 2015.
21. In cross-examination the offender gave evidence that he had only telephone contact with Muhammad. He trusted Muhammad because his brother had done business with Muhammad in Lebanon for 8 years.
22. He said that the loan amount was initially $1.4 million and was reduced on a number of occasions, eventually to $600,000. The offender did not know why the agreement provided for the immediate transfer back of $200,000. The term of the loan was to be 12 months, but that could be renewed for another 12 months.
23. The offender agreed that he told the AFP in his record of interview that he understood that the money could have been part by cheque and part in cash. He understood that would be the case if the amount provided was more than $800,000. The offender gave evidence that "the deal was a cheque".
24. The offender agreed that he had to provide a code being the serial number of a $5 note in his possession and his driver's licence.
25. The offender denied that he set out to receive the cash and then transfer it back through a bank account.
26. The offender was taken to a telephone intercept of a conversation between himself and Muhammad on 25 February 2011. The offender accepted that they discussed arranging for money to be transferred through bank accounts out of Australia. He gave evidence that the reference to "clean" in that conversation was a reference to a cheque. He denied being involved in a scheme to move the funds out of Australia (the scheme). The offender agreed that there was no reference to a loan in that conversation. He referred to Muhammad as a person who was supposed to be able to organise a loan of $2 million or $3 million.
27. The offender was unsure when he went to Pendle Hill if he was going to receive cash or a cheque.
28. The offender agreed that he had told Muhammad that he had received $800,000. The offender was taken to telephone intercepts of conversations between himself and Muhammad on 10 March 2011 where the provision of further funds by the Indian guy was discussed. The offender referred back to the original negotiations where he thought that he may get $1.4 million. The offender denied that Muhammad's references to further money were part of the scheme.
29. The offender agreed that the only reference to the money being a loan, before he picked it up was in his discussion with Muhammad on 5 March 2011. The offender agreed that on 4 March 2011 he did not know how much money he was going to receive, other than the reference to "box eight" or a "box of eight".
30. The offender agreed that he deposited $10,000 of the cash at the city branch of BankWest on Saturday 5 March 2011. He gave evidence that was the limit of the amount he could deposit on a Saturday. The offender denied that he was fabricating his evidence on this point. The offender gave evidence that he did not believe that BankWest would have accepted all of the cash in the box at the one time. He denied fabricating his evidence on this point. He gave evidence that it was his preference to deposit $25,000 at a time for security reasons.
31. The offender agreed that he did not know that there was less than $800,000 in the box until 10 March 2011, because he did not count the cash.
32. The offender agreed that he told Muhammad in a telephone conversation on 5 March 2011 that he would transfer the money to him in the next couple of days. The money was not transferred because the offender could not transfer money to Lebanon.
33. The offender gave evidence that he had an option to renew the loan because he was waiting on a settlement.
34. The offender gave evidence that he thought that his son was threatened on the same day or the day after he met Mr Hererro-Caldo for coffee on 18 March 2011.
35. The offender did not accept that he had tried to mislead the BankWest officer by representing that the $100,000 bank transfer to Lebanon was the repayment of a loan to his sister. He maintained that he did owe that money to his sister and that she had taken a mortgage as security.
36. The offender agreed that he suggested in the course of a telephone conversation with an unidentified male on 10 March 2011 that he would "bash" the Indian guy for the short payment. He gave evidence that he was telling the caller what he wanted to hear because they were chasing him for the money. They were pressuring him and they threatened his son.
37. The offender agreed that he said the same things to Muhammad during the course of a telephone conversation on 10 March 2011, because that is what Muhammad wanted to hear.
38. The offender gave evidence that Muhammad kept calling him for a period of months afterwards. The offender denied discussing the scheme with Mr Hererro-Caldo. He said what he did to Mr Hererro-Caldo to get him off his back and to buy time. The offender gave evidence that he was threatened on a number of occasions by Mr Hererro-Caldo.
39. The offender agreed that there was no reference in the telephone intercepts to him telling Muhammad that his son had been threatened. The offender gave evidence that he was using a number of different telephone lines to communicate with Muhammad and that he told him many times.
40. The offender gave evidence that in 2014 when he was hospitalised at Royal Prince Alfred Hospital following an overdose that he denied suicidal intention because he did not want to be locked up.
41. The offender agreed that he took some tablets whilst in Court in November 2015. The offender commenced a trial before his Honour Judge Woods QC and a jury. The offender was self-represented. The offender agreed that the trial judge had refused an application for an adjournment. The offender maintained that the episode was a suicide attempt.
42. Nathan Gazal gave evidence and was cross-examined.
43. In March 2011 Nathan was 15 years of age and attending school. At about 4pm on a day in early March 2011 he was walking to the bus stop. A car pulled up beside him and 2 men jogged up behind him. One of them asked him if he was Nathan. He said yes and the man said, "your dad has our money, if he doesn't return it soon there's going to be trouble". The man lifted up his t-shirt and Nathan saw the handle of a gun. The men left. Nathan saw that they were driving a black BMW.
44. Nathan gave evidence that he called his father straight way at his office. He went home and talked about the incident with the offender when he got home. He spoke to his mother a few days later about the incident.
45. Nathan gave evidence that he has been with his father when he has been to the hospital after attempting suicide.
46. In cross-examination, Nathan denied making up his evidence to help his father.
47. Teresa Gazal gave evidence and was cross-examined. She is the offender's ex-wife and the mother of his 2 sons. The offender and Ms Gazal were married in 1990 and separated in 2007.
48. Ms Gazal noted a change in the offender's mental state when he went bankrupt in about 2001. After that he would regularly spend all day in his pyjamas and stay in bed. Ms Gazal was present when the offender took overdoses on 3 separate occasions. The first time was in 2001 and the others were in 2003 after they returned from Lebanon. He also had his stomach pumped twice when they were in Lebanon.
49. Ms Gazal was of the opinion that the offender's mental state has deteriorated since 2003.
50. In March 2011 the offender called Ms Gazal at her mother's house. He told her that Nathan had been threatened. She asked him if he had gone to the Police. He said he had not because of the problems he had with them in the past. Ms Gazal understood that he was referring to a time when they lived at Rose Bay when the company failed and a number of disgruntled customers parked their caravans out the front of their house.
51. The offender only told Ms Gazal that Nathan had been approached. He asked her for the cash he had given her at the time of their divorce. He had given her $150,000 in cash at that time. She gave him back $125,000.
52. The offender told her that he had borrowed money from a man named Muhammad and that instead of receiving $800,000 he received $500,000 and instead of a cheque he had received cash and after a few days they wanted the money back.
53. Ms Gazal had a conversation with Nathan. He told her that he had been approached by 2 men in Rose Bay. She did not go to the Police because the offender told her not to and he didn't want to expose Nathan to harm.
54. In cross-examination Ms Gazal said that she did not go to the Police notwithstanding that Nathan was only 15 years of age. Ms Gazal denied that the threat to Nathan did not occur and that she had only given that evidence because of her close relationship with the offender.

Medical and other evidence

1. The offender tendered a report of Dr Olav Nielssen, psychiatrist, dated 16 June 2016. The offender saw the psychiatrist once for the purpose of preparing the report.
2. The offender gave a history that he had come to Australia with his older brother from Lebanon in 1983. He went into business with his brother developing a shopping centre before going into business manufacturing caravans.
3. In 2000 the offender got into financial difficulty. The company went into liquidation and he told the psychiatrist that he lost $50 million. He reported suffering severe depression after going bankrupt. He reported 2 suicide attempts in a four-week period in 2001. He then went back to Lebanon for a period of time.
4. When he returned to Australia he tried to get back into the caravan market with the help of a financial backer. In 2006 that company failed and ASIC disqualified him from being a director. In 2007 the offender separated from his wife. He then lived for two and half years with his son in a studio apartment. The offender described himself as being in a state of panic and taking anti-anxiety medication. In 2009 he decided to start a communications company.
5. In 2011 the offender needed funds to inject into the company. He contacted his brother who was running a marble factory in Lebanon. His brother put him in touch with someone who could lend him money. He told the psychiatrist that it was his understanding that he would be borrowing the sum of $800,000 and that he expected to receive the funds by way of a cheque. He then received a box with $400,000 cash in it. The people who loaned the money maintained that he had received sum of $800,000 and they threatened to harm his son. He said that he took the threats seriously and sold part of the company to give them money. He then got charged with the money laundering offence. He told the psychiatrist that the money he sent was "my money".
6. He told the psychiatrist that he collected the money from a money remitter. He did not question getting the money in cash because he had sold caravans on numerous occasions to "Gypsies" for hundreds of thousands of dollars was used to doing business in cash. He told the psychiatrist that the references to the money being "clean" referred to it being his own money.
7. The offender reported a history of anxiety and panic attacks from 2000. He had been taking antidepressant and antianxiety medication at relatively high doses from that time. He often had problems with memory and concentration and on occasions became lost and confused about what he was supposed to be doing. He had trouble falling asleep and staying asleep, took little pleasure from life and was socially withdrawn. He had no appetite and lost weight. He reported attempting suicide in late 2014 after which he was admitted overnight to Royal Prince Alfred Hospital. He again attempted suicide in 2015 and was treated in St Vincent's Hospital.
8. The offender has been seeing a psychologist, Tom Gross for treatment of his panic disorder. He has continued to take antidepressants, antianxiety medication and sedatives.
9. The offender reported his panic attacks manifesting with intense anxiety and fear that he was about how the heart attack. He often had a headache, felt faint, experienced heart palpitations and felt tight in the chest.
10. Dr Nielssen diagnosed the offender as suffering from depression, an anxiety disorder and a panic disorder. The psychiatrist opined that his judgement and awareness of events may have been affected by his moderate doses of benzodiazepine medications. The psychiatrist concluded that the offender requires long-term treatment with antidepressants medication and supportive counselling. He noted that the offender has developed a dependence on anxiety relieving medications and should probably attempt withdrawal from the treatment once his current stressors have abated.
11. The offender tendered a report of his treating psychologist, Tom Gross dated 28 April 2016. The offender has been undergoing counselling on a weekly basis with Mr Gross since November 2014.
12. The psychologist opined that the offender was suffering from major depression with significant symptoms of anxiety. He has difficulty sleeping, getting out of bed, is of low mood, has suicidal thoughts, panic episodes and a profound sense of helplessness including the inability to have a positive outlook for the future.
13. The psychologist noted that the offender had an admission to Royal Prince Alfred psychiatric unit following an overdose of antidepressant medication and several other admissions to St Vincent's Hospital following panic episodes. The offender reported to the psychologist that he has been on antidepressant medication for the past 13 years.
14. The psychologist received a history that the offender was born in Lebanon. He came to Australia at age 20, following the death of his father two years earlier. He came with his older brother Nabil who was 17 years older than the offender and considered to be the head of the family. The psychologist opined that the offender first suffered symptoms of depression when there was a breakdown in the relationship with his brother. The offender's business collapsed in 2006 in his marriage breakdown shortly thereafter. He remarried after a short time but that second marriage also broke down after about three years.
15. At the time of the report the offender was living with his two sons. The offender believed that his difficulties in the past 10 years had had a detrimental effect on their lives.
16. The offender told the psychologist that he had insulin-dependent diabetes, high blood pressure and high cholesterol is cause coronary artery disease. He has undergone surgery to have a stent placed in one of his blocked arteries. The offender reported still experiencing difficulty when walking uphill.
17. The psychologist expressed concern for the offender's welfare. He believed that a custodial sentence would exacerbate the offender's depression significantly at that he would be at some risk of taking his own life. The psychologist noted that there was a history of a suicide attempt at a time when the offender was due to appear in court in respect of this matter in late 2015.
18. Mr Gross was gave evidence on 23 February 2017 and was cross-examined.
19. The psychologist had informed himself from his contact with the offender, together with the concerns of his family and in particular his partner. The offender had consulted with the psychologist weekly from November 2014 and then fortnightly from 2016.
20. In cross-examination the psychologist accepted that the offender could receive treatment for his mental condition in custody, if that was an appropriate sentence. The psychologist accepted the description of the offender taking pills in Court when the matter was called on for trial and he was self-represented. He gave evidence that the matters put to him about the circumstances of that episode were consistent with the history that had been given to him by the offender. The psychologist was of the opinion that the offender's actions were indicative of the level of anxiety he was experiencing from the court proceedings. The psychologist did not resile from his opinion that the offender would find a custodial sentence difficult.
21. Overall, the psychologist was a very impressive witness. It was clear that he had a deep and extensive understanding of the offender's psyche. I have no hesitation in accepting Mr Gross' evidence.
22. The offender tendered a number of medical records and a report from his general practitioner, Dr Mordecai dated 1 May 2016. The report confirmed that the offender suffers from insulin dependent diabetes, migraines, hypertension, depression, coronary artery diseases and gastritis. The general practitioner express concern to the offender should he have to serve a term of full-time imprisonment. He believed that special consideration for a community-based punishment should be considered on medical grounds.
23. The offender tendered a number of character references. The referees all speak very highly of him as a man of character and integrity. A number of them recount their experience of his mental condition.

Resolution of the factual issues

1. The offender must prove any factual matter to be taken in mitigation on the balance of probabilities: R v Olbrich (1999) 199 CLR 270 at [27].
2. The offender was taken to the transcripts of the telephone intercepts. The effect of the telephone intercepts was set out in some detail in the agreed facts. It would offend the De Simoni principle to rely on the telephone intercepts to prove that the offender had a different state of mind to that required for the commission of the offence: Shi v R [2014] NSWCCA 275 at [42]-[48]. The only issue to be determined is whether the content of the telephone intercepts was inconsistent with the mitigating facts sought to be proved by the offender.

Was the money a loan?

1. I do not accept that the offender has proved on the balance of probabilities that the cash was given to him as a loan for the reasons that follow.
2. First, the only reference to a loan in the telephone intercepts was on 5 March 2011 immediately before the receipt of the cash and is set out at [19]. The comment made at that time was a leading suggestion. Muhammad's response indicated an acceptance of the statement but did not indicate to me that it had been discussed extensively before 5 March 2011. So many aspects of what happened in the relevant period were discussed between the offender and Muhammad, often on multiple occasions in the one day. I find it implausible that if the arrangement was a loan that it would not have been recorded in the telephone intercepts. The absence is sought to be explained by the offender's evidence that they were also conversing on other telephone lines. In my view that evidence was false and invented by the offender to deal with the absence of the discussion of the provision of the cash as a loan and other matters that I will come to.
3. Second, the offender's evidence about the terms of the loan and the history of the negotiations was unconvincing. The evidence about the terms of the loan did not specify the principal, the term, the precise interest rate or the repayment arrangements. The term could be extended at the election of the offender. There was no evidence to determine if the loan was repayable over time or in a lump sum. There was no suggestion of the provision of any security. The interest rate was not specified, but said to be between 8.5 and 10%. The offender gave evidence that the purpose of the loan related to the refinance of a property and at other times that it was required as a capital injection into Gazal Telecom. Mr Georges understood it to be bridging finance. There was no evidence about the property that was to be refinanced or why the refinance was necessary or desirable. The uncertainty surrounding the negotiations and the term of the loan make it unlikely that the loan was a bridging loan or necessary to effect the refinance of a property. The injection of capital into Gazal Telecom appears to me to be contradictory to the refinance purpose. The immediate repayment of $200,000 of the amount advanced is nonsensical and the offender could not explain why that was a term of the alleged arrangement. The offender also gave evidence that he did not know how much money he would be receiving on 5 March 2011. Whilst I accept Mr Georges' evidence that the offender told him that the money was a loan that had been Mr Georges' understanding for a long period of time. Mr Georges' was not privy to the telephone conversations between the offender and Muhammad. Considering the evidence as a whole on this issue, I find the evidence that the provision of the cash was a loan to be implausible and improbable because the terms of the alleged loan were uncertain, uncommercial and the evidence was inherently inconsistent.
4. Third, the content of the telephone intercepts was inconsistent with the offender's evidence. The content of the telephone intercepts was the only available contemporaneous evidence. It is clear that the offender and Muhammad were discussing a scheme where money was given to the offender and transferred back to an overseas destination, rather than a loan. The offender had made enquiries of BankWest and had directed Mr Georges make enquiries of NAB and St George Bank concerning the transfer of funds to Lebanon in the period before the short payment was identified on or about 10 March 2011. On 9 March 2011 the offender told Muhammad that the money would be transferred to Lebanon on by the end of the following week. They discussed a "cut" or "commission" for undertaking the task. Crucially on 22 March 2011 in a telephone conversation with Muhammad to which he was taken in cross-examination, the offender referred to their deal being 5%. It is clear from that conversation that the offender expected to be able to keep 5% of any money he received as payment for transferring it offshore. [1] There were discussions about the receipt of further funds at a later time that were not a reference to the payment of the proceeds of the alleged loan. The offender reported to Muhammad that he discussed with Mr Hererro-Caldo the prospect of receiving and dealing with other sums of money in the future.
5. Fourth, in the period following 5 March 2011 the offender acted inconsistently with the notion that the provision of the cash was a loan. At no time did the offender discuss with Muhammad or undertake to return the $200,000 immediately after receiving the cash. The offender did not counter demands for the repayment of the money immediately with any comment to the effect that he was entitled to retain the money for a period of at least 12 months. The offender proceeded to transfer overseas the money that had been deposited in the local bank accounts by himself and Mr Georges.
6. Fifth, the offender's course of conduct throughout the relevant period reveals a demonstrated pattern of dishonesty. The offender admitted in evidence that he told the people that he was conversing with that what he told them was not true and that he told them "what they wanted to hear". The offender informed BankWest originally that he wanted to transfer money to Lebanon for business purposes. He subsequently told BankWest that his office had made a mistake and that the transfer was to be provided to his sister as a loan from period of six months. In cross-examination the offender tried to justify the second of those statements, saying that at the time he did owe his sister money. That evidence was inconsistent with what he had told BankWest. The offender refused to accept that he had tried to mislead the BankWest. On the evidence, it is clear that both of the statements made to BankWest were untrue. The offender told Mr Georges that his family overseas had been threatened and that a gun had been drawn on Nathan. There is no evidence to suggest that any of the offender's family who were resident overseas was threatened and the statement that Nathan had a gun drawn on him was false.
7. Sixth, the offender gave inconsistent and unbelievable evidence. In my view the often gave evidence that he believed assist him and that evidence was contradictory with other evidence he had given. The following are some examples of that type of evidence, they are not exhaustive. The offender gave evidence that his reference to "clean money" in the telephone intercepts was a reference to the fact that he was transferring his own money or the money of Gazal Telecom. On the evidence, that statement was false. Whilst it was money coming from the bank account of Gazal Telecom, it was in the account by reason of the deposits of the cash made by Mr Georges and the offender. I do not accept the offender's evidence that he would have banked the entirety of the cash if there was someone available to carry it to the bank for him. Mr Georges to that time had done all that was asked of him. If the offender had wanted Mr Georges to carry the cash for him, there is no reason on the evidence that he would not have willingly done so. I do not accept the offender's evidence that he did not go to the police because of his prior dealings with them. It is more likely that he did not go to the police because he knew that he was involved in illegal activity. The offender also gave evidence that was inexact and inconsistent, especially as to the amounts of cash involved at various times. For example, he gave evidence that he returned $400,000 in cash to Mr Saifeddine when he came from Lebanon. However, he also gave evidence that he contributed $150,000 or $165,000 in cash to that amount and that Teresa gave him $130,000 of that cash. The total was then between $280,000 and $295,000, as opposed to $400,000. If the offender acted as he said he did, by giving Mr Saifeddine a substantial sum of cash, then in my view he would have known the precise amount of that payment. On the offender's case, he was being put under considerable pressure to repay the amount $800,000, yet he did not keep a record of the sum he gave to Mr Saifeddine and in the end, failed to repay about $100,000 to persons who had threatened his son with physical harm. I do not accept the offender's evidence on this point because it is improbable and is internally inconsistent.
8. Seventh, by reference to the offender's demeanour I do not accept his evidence. The offender's evidence was often contradictory. He appeared to me to answer questions dismissively. He did not listen to the question, was often argumentative and did not make a genuine effort to answer the question that he was asked.

Was Nathan Gazal threatened?

1. I do not accept Nathan Gazal's evidence that he was threatened in the manner that he described for the following reasons.
2. First, the evidence is based on a premise that the perpetrators of the threat could identify Nathan on a public street and approach him. In my view that premise is possible, but unlikely. There is no basis in the evidence for that premise.
3. Second, the reference to showing Nathan the handle of a handgun in the perpetrators pants is possible, but unlikely. I am not persuaded even on the balance of probabilities by Nathan's description of what occurred. The evidence in my view was more likely informed by fiction than reality.
4. Third, it is apparent that Nathan and the offender are very close. Nathan has supported the offender through some very difficult times, including at least 2 suicide attempts. Nathan had a powerful motive to give untruthful evidence, namely the protection of his father, and I am satisfied that he did so.
5. Fourth, it is likely that the threat was concocted by the offender and imposed on Nathan (who was 15 years of age at the time), to extract the cash from Teresa for the offender's benefit. It would have been difficult for Nathan to resile after the event as to do so would have involved betraying his mother.
6. Fifth, there was no consistency in the evidence about what was involved in the threat. The offender told Mr Georges that the gun was drawn on Nathan. The offender told Teresa that Nathan was "approached" but there was no evidence that she was told Nathan was threatened.
7. Sixth, there was no reference in the telephone intercepts to the fact that Nathan was threatened. On 18 March 2011, Muhammad told the offender on multiple occasions that he had received death threats and that the people were going to come to his house. I find it unbelievable that the offender did not respond that his 15 year old son had been threatened, if that had in fact occurred. I do not accept the offender's evidence that this is explained because he was communicating with Muhammad on other telephone lines, for the reasons I have already given.
8. There was nothing about Nathan's demeanour as a witness that has led to my ultimate conclusion on this issue, but that is not necessary. I am not persuaded on the balance of probabilities that Nathan was threatened in the manner he alleged.

Did the offender act differently to what was intended by reason of the circumstances that arose?

1. I am not satisfied that the offender acted any differently to what was intended based the alleged threat to Nathan because I am not satisfied that the threat occurred.
2. I am satisfied that there was some pressure brought to bear on the offender by reason of the circumstances of a short payment of the $800,000. I accept the evidence of the offender and Mr Georges that they did not count the cash when they received it. I accept their evidence that they received a sum of cash that was less than $800,000, but I cannot ascertain how much they received with any precision because the evidence does not permit me to do so. The fact that a short payment was of concern to them and discussed with Muhammad is reflected in the telephone intercepts.
3. In my view, the offender did act differently to what had been intended because he believed that he had been deceived and he wanted to record the repayment of the money because he was distrustful of the people he was dealing with.
4. I am satisfied that the offender felt under pressure to repay the sum of $800,000 by what Muhammad had told him and by reason of what Mr Hererro-Caldo said to him.
5. The change in the ultimate destination of the funds was brought about by the offender being prevented from transferring the funds to Lebanon, by operation of the law. I am satisfied that it was always intended that he would transfer the whole amount of the money he received back to the owners of the money within a short period. In other words the difference was immaterial for the purposes of the offence committed.

Did the offender repay a sum of his own money?

1. I cannot determine on the evidence the exact amount of cash the offender received.
2. I am satisfied that Mr Saifeddine came to Australia and spent time with the offender, including a lengthy visit to TSS Worldwide on 25 March 2011.
3. There are some references in the telephone transcripts to repaying some amount in cash. I am prepared to infer that payment was to be made to Mr Saifeddine.
4. The transactional evidence demonstrates that the offender transferred $350,000 to the accounts nominated by Muhammad. The offender gave evidence that he gave between $280,000 and $295,000 to Mr Saifeddine, although he also gave inconsistent evidence that he banked that money too. The offender gave evidence that he received the sum of $545,000 in cash on 5 March 2011. The difference between the amount received and the amount dispersed is between $85,000 and $100,000.
5. On the offender's own case the maximum amount that came from his own funds was $100,000 and not the sum put forward of $280,000 to $295,000.
6. I accept Teresa Gazal's evidence that she gave the offender $125,000 when she asked him too.
7. I am not satisfied that the offender contributed any of his own money to repay the owners of the cash, although it is possible. It is more likely that any contribution made from outside the funds be received, belonged to Teresa Gazal.

Consideration

1. I must have regard to Part IB Crimes Act 1914 (Cth) (the Act) in passing sentence and in particular the matters provided for in section 16A of that Act.
2. A court determining a sentence in respect of any person for a federal offence must impose a sentence that is of a severity appropriate in all the circumstances: section 16A(1) of the Act. The Court must take into account the matters listed in section 16A(2) that are relevant and known to the Court: R v El Karhani (1990) 21 NSWLR 370. The list of factors in section 16A(2) of the Act is not exhaustive and common law principles apply to the sentencing of federal offenders: Johnson v The Queen (2004) 78 ALJR 616 at [15].

Objective seriousness of the offence

1. The objective seriousness of the section 400.9(1) offence is determined by the amount of money involved, the mental element proved for the offence and the maximum penalty: R v Ly [2014] NSWCCA 78 at [86].
2. In the present offence the amount of money was well in excess of $100,000. The offender had reasonable grounds to suspect that the cash was the proceeds of crime by reason of his extended dealings with Muhammad and the fact that the cash was received in a cardboard box and concealed under a bag of rice. The receipt of the cash involved considerable planning. The offender was in extended telephone contact with Muhammad for a period of months beforehand. The offender arranged for Mr Georges to attend TSS Worldwide on a number of occasions. The intent of the transaction was that the offender would receive a financial benefit through the payment of commission. I am not satisfied beyond reasonable doubt that he ultimately received a benefit. The offender attended the bank on a number of separate occasions to deposit the cash. The offender then arranged 7 separate transfers of $50,000 each to overseas bank accounts via the internet. The effect of those transfers was that the cash was effectively laundered. The transactions were not structured in such a way to avoid detection.
3. It was submitted on behalf of the offender that the AFP could have prevented the transfer of the funds to the overseas bank accounts. The evidence does not permit me to accept that submission. Whilst it is clear that he AFP had the offender under surveillance the telephone calls that were intercepted were conducted in Arabic. There is no evidence that the AFP knew of the content of those conversations at or about the time they took place or shortly thereafter. I cannot ascertain what the AFP knew at the time when the money was transferred to overseas between 24 March 2011 and 7 April 2011. It is apparent from the translation of the relevant telephone conversations that the translations were provided a number of months after the relevant events.
4. It is not an aggravating factor that I have determined the factual dispute for the most part adverse to the offender. He cannot however rely on the mitigating facts.

Deterrence

1. The penalties imposed for money laundering offences must reflect a very significant degree of general deterrence.
2. General deterrence may be attributed less weight in cases where the offender suffers from mental condition because such an offender is not an appropriate person to be made an example of: Muldrock v R (2011) 244 CLR 120 at [53]-[54]. The authorities do not mandate an entire disregard of general or specific deterrence by the sentencing judge: The extent of the reduction depends on the circumstances of the case: Palijan v R [2010] NSWCCA 142 at [27], R v Scognamiglio (1991) 56 A Crim R 81, R v Wright (1997) 93 A Crim R 48 and R v Lawrence [2005] NSWCCA 91.
3. The factors that are relevant to the assessment include the nature and extent of the mental condition suffered, whether the offender acted with knowledge of what they were doing and the gravity of their actions and whether the community require protection from the offender by reason of the mental condition suffered.
4. The offender has suffered from depression for over 10 years. He has also experienced anxiety symptoms for a long period. He was been reliant on high doses of anti-anxiety medication in 2011 when the offence was committed. I consider the extent of his mental condition to be of moderate severity. There is no evidence that the acted without knowledge of what he was doing or the gravity of his actions. To the contrary the inference that I would draw from the content of the telephone intercepts was that the offender knew what he was doing and was determined to bring it into effect. There is some suggestion that the dosages of the anti-anxiety medications may have inhibited his thought processes, but I do not accept that such contribution was significant. The community does not require protection from the offender by reference to his mental condition. This is a case where the offender's moral culpability is reduced to a very minor degree by reason of his mental condition.
5. Specific deterrence remains relevant in the sentencing exercise. The offender has a prior conviction relating to his business activities. The offender must realise by reference to the penalty imposed for this offence that he cannot continue to operate his business concerns without regard for the law. The offender has accepted treatment for his mental condition, however as I have said the causal connection between his mental condition and the offending conduct has not been established.

Other matters

1. The offender entered a plea of guilty: section 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. For Commonwealth offences the Court must consider the offender's willingness to facilitate course of justice and not the utilitarian value of the plea of guilty: Cameron v The Queen (2002) 209 CLR 339 at [14]. In assessing the willingness of the offender to facilitate the course of justice the strength of the Crown case against the offender is a relevant consideration: Danial v R [2008] NSWCCA 15 at [27]-[28]. That enquiry may reveal whether the plea was a recognition of the inevitable or truly motivated by willingness to facilitate the course of justice: Lee v R [2012] NSWCCA 123 at [58]. As part of facilitating the course of justice the court can also take into account the fact that the guilty plea has saved a witness or witnesses from giving evidence at trial: Cameron at [79]. The Court is not required to specify quantifiable discount for the offender's plea of guilty in relation to a Commonwealth offence but to do so is not an error: Lee at [58] and Markarian v The Queen (2005) 228 CLR 357 at [24]. The offender entered a plea of guilty after the matter had been listed for trial on a number of occasions and after a trial had commenced before Judge Woods QC.
2. I am satisfied that the offender's plea of guilty represented some willingness to facilitate the course of justice. The appropriate discount is 5%.
3. The offender in his evidence expressed remorse for his actions. The plea also indicates remorse. I am satisfied that the offender gave false evidence in his attempt to prove the mitigating facts and as a result, I have not placed much weight on his expressions of remorse.
4. The offender is presently 52 years of age. He suffers from diabetes, high blood pressure, high cholesterol and coronary artery disease. He suffers from depression and anxiety. His mental condition is long standing and has culminated in a number of suicide attempts. The offender's physical and mental condition will make any time spent in full-time custody more onerous on him and they should both be taken into account in mitigation of any sentence imposed. The offender has one previous conviction for acting as a director of a company whilst he was bankrupt. He received a suspended sentence for that offence. The character references indicate that he was still held in good standing in some parts of the community.
5. The co-offender Mr Georges was sentenced to a term of imprisonment consisting of 12 months, to be released on a recognisance release order after serving 6 months. Mr Georges was not the principal in the offence. He dealt with the cash under the offender's direction. He did not have any dealings with persons higher up the chain or transfer any of the money overseas. I accept the submission made on behalf of the offender that the parity principle cannot be relied on by the Crown.
6. There was a delay of about 18 months in bringing the charge. The offender was not arrested until August 2012, the offence having been committed between about February and May in 2011. I have taken that into account in mitigation of the penalty to be imposed.
7. The offender conceded that the only appropriate sentence was of imprisonment is appropriate, but submitted that it should be served by way of an Intensive Corrections Order (ICO).
8. An ICO is an available sentencing option: section 20AB Crimes Act 1914 and clause 6 Crimes Regulations 1990. I am satisfied that the comparative cases to which I was referred do not establish a pattern to the effect that the State appellate courts have decided that an ICO would be an inappropriate sentencing option.
9. An ICO is a form of imprisonment and it involves a number of punitive elements: R v Pogson (2012) 82 NSWLR 60 at [108]. It is not appropriate to focus on those elements to impose such an inherently lenient sentence in cases of serious offending: R v Cahill [2015] NSWCCA 53 at [114]. In my view an ICO is not a punishment of appropriate severity in all the circumstances of the case.
10. The appropriate term of imprisonment is 20 months that will be discounted by 5% to reflect the plea of guilty.

Sentence

1. The offender is convicted.
2. I impose a term of imprisonment of 19 months to date from 24 March 2017. The offender is to be released on a recognisance to be of good behaviour on 23 January 2018 after serving 10 months of that term of imprisonment. The term of the recognisance is 9 months in the sum of $500.
3. I am obliged to explain the effect of the orders I have made.
4. Mr Gazal that means that you are sentenced to a term of imprisonment of 19 months. You will be released after serving 10 months on 23 January 2018 on a good behaviour bond for 9 months. You do not need to lodge the $500 now. If you breach the good behaviour bond you could be brought back to Court and resentenced and you could be required to forfeit $500 on that occasion.

Endnote

1. Exhibit 11 p 363-368. 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: 16 May 2018