The Queen v Christanto

1 Radius Christanto, you have pleaded guilty to one charge of conspiring with others to bribe a foreign public official, in order to obtain business with the Bank of Indonesia, contrary to ss 11.5(1) and 70.2(1) of the Criminal Code 1995 (Cth). It is now my duty to sentence you for that offence.

2 You have pleaded guilty to conspiring with Securency International Pty Ltd and some of its former senior employees. Securency was established in Australia in 1996. At the time of the offence, Securency was jointly owned by the Reserve Bank of Australia and a British company, Innovia Films BVBA.

3 Note Printing Australia Limited was incorporated in 1998, and is a wholly-owned subsidiary of the Reserve Bank. NPA's business includes printing finished banknotes for the Reserve Bank and some other central banks, and producing banknote security materials. NPA prints banknotes using polymer substrate supplied by Securency.

4 In 1982, you became the Indonesian agent for De La Rue, a large producer of paper and cotton banknotes, and a competitor to the supply of polymer banknotes. Your role involved promoting several aspects of De La Rue's banknote business, such as banknote counting and sorting machines. However, you were not involved in promoting De La Rue's banknote paper.

5 De La Rue terminated your agency in late 1998, after it became aware that you had signed an agency agreement with Securency. The Securency agreement came about in the following circumstances.

6 In late 1997, Securency first contacted you to discuss the possibility of your becoming its Indonesian agent. Over the next year, you had various discussions and meetings with Securency employees, about how polymer banknotes could be promoted to the Bank of Indonesia.

7 At Securency's suggestion, you hired an Indonesian lobbyist, who was perceived to have more access than you to political decision makers. Discussions around this time, including with Securency employees, clearly envisaged that it would be necessary to pay money to influence political decision makers.

8 At the lobbyist's request, you provided him with cash payments totalling 1.5 billion rupiah,[1] for a donation to the ruling political party and for the lobbyist's own success fee. Securency employees assured you that you would easily recover your expenses when you were paid your commission. At one stage, you were told that your commission would be 20% of the contract price, if that price matched what the Reserve Bank paid NPA for its banknotes.

9 In November 1998, Securency entered into a written agency agreement with your company, PT Aneka Star, appointing your company as its sole agent in Indonesia to promote and obtain orders for polymer substrate. According to the written agreement, the rate of the success fee commission would be determined on an order-by-order basis. In fact, you regarded the written agreement as a mere formality, the true arrangements being the subject of a verbal agreement between you and Securency employees.

10 From late 1998 and throughout 1999, you had frequent dealings with Herman Susmanto, the director of the Bank of Indonesia's Currency Circulation Department. In early 1999, you brought Mr Susmanto to visit the offices of Securency and NPA in Melbourne, and to meet with employees of the Australian companies. Mr Susmanto is the relevant "foreign public official", to whom you conspired to provide a benefit, for the purposes of this offence.

11 Over the following months, you had frequent dealings with Mr Susmanto and Securency employees, with a view to securing a polymer banknote contract with the Bank of Indonesia. Both you and the relevant Securency employees clearly understood and agreed that payments would have to be made to Indonesian bank officials in order to secure such a contract, and that you would be reimbursed for such payments via the commission which would be paid to you in due course.

12 On 1 June 1999, the Bank of Indonesia executed an agreement with Securency and NPA, for the supply of 100,000 rupiah polymer banknotes.

13 Between July 1999 and May 2000, NPA received total payments of almost US$28 million from the Bank of Indonesia in respect of the 100,000 rupiah polymer banknotes. From those payments, NPA paid Securency more than AU$13 million, for the supply of substrate and other expenses incurred in the production of the banknotes.

14 Between 6 August 1999 and 6 June 2000, commission payments totalling US$4.775 million were paid into an account controlled by you. This was equivalent to about 17% of the total sales under the Indonesian bank contract. The amount you received between January and June 2000 (during the conspiracy period) was US$3.82 million.

15 Some part of the commission you received reimbursed you for benefits you had provided to Mr Susmanto and other bank officials throughout the negotiation period, including by way of expensive computers, travel and golf tournaments. Some part of the commission reimbursed you for cash payments made to political decision makers and the lobbyist.

16 The parties have agreed, for the purposes of sentencing you, that you:

(a) Made cash payments with a value of between US$200,000 and $250,000; and

(b) Provided other benefits with a value of between US$400,000 and $500,000,

in order to promote the polymer bank notes. Some of those payments were made, or benefits were provided, before the conspiracy period, and some during it.

17 It is hard to be exact on the evidence before me but, as best I can estimate, you retained at least US$3 million for yourself, from the commission payments made to you during the conspiracy period.[2]

18 Various foreign bribery provisions (including s 70.2) were introduced into the Criminal Code with effect from 17 December 1999. They were introduced as a result of Australia having signed the OECD Anti-Bribery Convention in the previous year.

19 At the time that you entered into the agreement with Securency and some of its employees, to provide an illegitimate benefit to Indonesian bank officials, s 70.2 had not yet come into force. Accordingly, you are not being punished for conduct which occurred before 17 December 1999.

20 However, after the foreign bribery provisions were introduced, the conspiracy continued. You have pleaded guilty to being a party to a conspiracy between 17 December 1999 and on or about 6 June 2000 (which was the date on which you received your last payment pursuant to the conspiracy).

21 The maximum penalty which may be imposed on you is imprisonment for 10 years and/or a fine of not more than $66,000.

22 As a federal offender, you are to be sentenced in accordance with the Crimes Act 1914, in particular s 16A of that Act.

23 The court is required to impose a sentence that is of a severity appropriate in all the circumstances of the offence. Section 16A(2) contains a non-exhaustive list of the matters which the court is required to consider, including the following:

(b) The degree to which the offender has shown contrition for the offence;

(d) The degree to which the offender has co-operated with law enforcement agencies in the investigation of the offence or other offences;

(e) The need to ensure that the offender is adequately punished for the offence;

(f) The character, antecedents, age, and physical or mental condition of the offender;

(h) The prospects of rehabilitation of the offender.

24 Even though general deterrence and denunciation are not mentioned as relevant factors in s 16A(2), to the extent that they are not inconsistent with the Crimes Act, general common law sentencing principles such as these apply in the sentencing of federal offenders.

25 General deterrence is usually a very important sentencing consideration in cases involving "white collar" crime, including cases involving bribes and secret commissions. Offences concerned with the commercial or public morality of the community are usually hard to detect. They have often been committed by persons who had been regarded as being of good character and reputation. And, because such offenders generally have good prospects of rehabilitation, specific deterrence is often not a very relevant sentencing consideration. In such cases, courts generally place great weight on the need to deter others from engaging in similar conduct.

26 But it does not follow that general deterrence must be the most important sentencing consideration in all such cases. The weight to be afforded to any particular factor in the instinctive synthesis sentencing process must depend on the circumstances of each individual case. Frequently, as here, there are conflicting and contradictory elements which bear upon the sentencing of the offender.

27 You are the first natural person to be sentenced under the foreign bribery provision. That means that there are no comparable cases, and no sentencing "tariff" in relation to the offence.

28 Although your offence could not be described as being in the worst category for such offences, it is nevertheless a serious example of the offence:

(a) The conduct was deliberate, sophisticated, carefully orchestrated and concealed;

(b) You were an active participant in the conspiracy over a period of some 6 months;

(c) You received a very substantial financial benefit from your participation in the conspiracy; and

(d) The offence was intended to, and did, cause the corruption of a foreign public official.

29 In some cases involving bribes or secret commissions, the size of the bribe offered or paid may be very important in assessing the objective seriousness of the offence. But some care needs to be taken in that regard when sentencing under the foreign bribery provision. Bribes may be offered to foreign officials in countries of very different wealth; so, a relatively small bribe may still have a very substantial corrupting effect in a poor country.

30 The prosecution accepts[3] that the primary purpose of the foreign bribery provisions is to deter bribery by Australian individuals and companies engaged in foreign trade. A foreign citizen, such as yourself, is not the primary target of this legislation, but may nevertheless commit an offence under these provisions in certain circumstances.

31 Your original agreement with Securency and its employees, and most of your activities in relation to the promotion of polymer banknotes, occurred prior to the introduction of the foreign bribery provisions. What had previously been legal suddenly became illegal on 17 December 1999. Your actions also occurred in a cultural context, in your own country, in which the payment of bribes in order to secure business was a commonplace occurrence. I accept that you were not aware that your activities after December 1999 might involve a breach of Australian law. Although ignorance of the law is not a defence, in sentencing you I have borne in mind the rather unusual circumstances of your offending.

33 You were born in October 1948 in East Java, Indonesia, one of seven children born to parents of Chinese background. You are now almost 65 years old.

34 Your parents encouraged you and your siblings to pursue educational achievement, as a means of escaping from your childhood poverty. You studied hard, became fluent in Indonesian, Cantonese and some other Asian languages, and won a scholarship to attend university.

35 After obtaining tertiary qualifications in the United States of America, Singapore and Japan, you worked for 2 years for a large Japanese corporation. In 1976, you returned to Indonesia, where you started a small trading business, selling cement. Your business activities expanded quickly over the next 3 or 4 years, and you built a small factory to manufacture bank security equipment, as well as importing various security and other technological equipment.

36 You met your wife in 1979, and remained together until 1998. After the separation, you had primary care of your four children, who are now aged between 27 and 32. Your children have pursued high academic achievements and successful careers of their own.

37 Apart for this offending, you have otherwise been of good character. In addition to raising your children, and providing employment through your business activities, you have actively contributed to your community through your long term engagement in sporting and other activities.

38 You have never previously been involved in the criminal justice system in any country.

39 That said, the role of good character is of lesser importance in crimes of this nature, given that most "white collar" offenders were previously of good character, prior to the relevant offending.

40 The allegations that Securency and NPA had been involved in bribing foreign officials became public in Indonesia during 2010. Newspaper articles alleged that your involvement with the companies had breached Australian laws; that came as a surprise to you.

41 The publicity surrounding your involvement in this offence has had the practical effect of leading you to withdraw from business altogether. You retired from work in 2010. In 2011, you moved to Singapore, where two of your children live, in order to seek medical treatment and avoid the press.

42 You suffer from a range of chronic health conditions.

43 In 2010, you suffered a heart attack. You have been diagnosed with ischemic heart disease, hypertension and hyperlipidemia. Despite undergoing cardiac stenting, you still have substantial narrowing of your left cardiac artery. You continue to receive medical treatment for your heart disease, and may need to have coronary artery bypass surgery in the future.

44 In 2012, you developed lung cancer, which required surgery to remove part of your right lung. Although the cancer is currently in remission, it leaves you short of breath and vulnerable to chest infections, including pneumonia.

45 You have developed a degenerative spinal condition, which interferes with movement and causes ongoing pain in your neck.

47 Until relatively recently, you had not suffered from anything other than normal mood variation. However, you have become somewhat preoccupied with your health problems, and the impact they are having on your life. And the shame and "loss of face", which you have experienced as a result of this prosecution, has caused you to cut yourself off from some of your social networks. The combined effect of these pressures has led to your developing symptoms of anxiety and depression, including periods of suicidal ideation. You have been prescribed an antidepressant and tranquiliser to deal with these symptoms.

48 Mr Patrick Newton, a forensic psychologist who assessed you for the purposes of sentencing, diagnosed you as suffering from chronic Adjustment Disorder with Mixed Anxiety and Depressed Mood. He said your distress goes well beyond the level typically seen in individuals facing such charges, and believes it is vital that you continue to access appropriate psychiatric or psychological treatment.

49 There is no dispute that your chronic medical conditions, combined with psychological problems, mean that you would be likely to find incarceration more onerous than a prisoner without those conditions.

Early plea and past co-operation with investigating authorities

50 In May 2009, the Australian Federal Police ("the AFP") began their investigation into the activities of Securency and NPA in several countries, including Indonesia.

51 In May 2010, an anonymous person calling themselves "Radius Claymore" sent the AFP numerous documents, which appeared to be your business records. The documents contained a strong indication of illegal activities, and led to the police beginning to compile a brief of evidence for Indonesia.

52 In late 2011, Australian authorities began compiling a brief of evidence, to support an application for your extradition from Singapore. The extradition request was sent to Singapore in early 2012.

54 Within a few months, your lawyers were discussing with the prosecution the possibility of your assisting the AFP with their investigations. As part of those discussions, you admitted providing benefits to foreign officials, offered to plead guilty to an appropriate charge, and offered to return to Australia voluntarily. However, given that the formal extradition process had begun, your offer to return voluntarily was unable to be accepted.

55 In March 2013, after you had recovered from your lung cancer surgery, you met with AFP investigators in Singapore, over a period of 5 days, and provided a detailed account of your conduct, and of relevant documents. You came to the interview well prepared, and provided the AFP with more detail than they had anticipated. You subsequently provided the AFP with further information.

56 The AFP believe that you have given them a full and frank account of events. You have significantly contributed to the prosecution's understanding of what happened in Indonesia, and in some other countries in which Securency and NPA conducted business. Your version of events has been recorded in a 69 page witness statement, which the AFP are confident is "highly accurate".

57 On 18 July 2013, you consented to the filing of a direct indictment in this court.

58 I accept that your plea was made at the earliest possible opportunity.

59 Given the secretive nature of the offence, the enormous volume of documentary and other evidence which would have been involved in any trial, and the fact that this would have been the first trial under s 70.2, your plea has a very substantial utilitarian value.

60 I also accept that the plea and your co-operation are indicative of genuine remorse, acceptance of responsibility, and a willingness to facilitate the course of justice.

61 You also chose not to contest Australia's extradition request, and have co-operated fully in the extradition process. You may have been able to raise various legal arguments, and to rely on your health, to delay or even defeat extradition. Your co-operation has saved significant time and Commonwealth resources. It also, and importantly, allows your evidence to be led in the committal hearings of former Securency and NPA employees, which are currently underway in the Melbourne Magistrates' Court. Your complete co-operation in the extradition process is a matter which the court can take into account. It is further evidence of contrition, remorse and a willingness to facilitate the administration of justice.

62 You are entitled to a substantial discount on the sentence to be imposed on you, to reflect these matters.

63 In addition to the very high degree of co-operation and assistance already provided to the AFP, you have provided a written undertaking to provide future assistance, in a form acceptable to the prosecution. The assistance offered includes:

(a) To give evidence in accordance with your witness statement, in any proceedings against former Securency and NPA employees;

(b) To provide the AFP with any further statement they may require; and

(c) To confer with the prosecuting authorities, as required, in relation to such proceedings.

64 The undertaking has very significant value, given the nature and complexity of the conspiracy. You are the first person in the "inner sanctum" of participants in this conspiracy to come forward and give a direct account of what happened in Indonesia.

65 According to the AFP, you will provide "detailed and credible explanations" of numerous pieces of correspondence, which will support and lend weight to the prosecution's case theory.

66 Your assistance is not limited to Indonesia. In describing the bribing methodology used by former Securency and NPA employees, the AFP believe you have also helped support the interpretations drawn by the AFP in the Nepal, Malaysia and Vietnam cases against former employees.

67 The AFP believe that given your openness, honesty and desire to admit your past indiscretions, combined with your excellent memory, you will be a key Crown witness in any committal hearing or trial.

68 In sentencing you, I accept the AFP's assessment of the very significant value of your undertaking, and have reduced your sentence to reflect all of these matters.

69 As with many "white collar" offenders, I accept that you have good prospects of rehabilitation, and that need for specific deterrence is very low.

70 You have already spent a total of 42 days in custody in Singapore in connection with this offence.

71 When you were arrested by Singapore police on 4 May 2012, pursuant to the extradition request, you spent 20 days in custody before being released upon bail.

72 On 27 August 2013, after you had formally consented to extradition, a Singapore Court committed you to detention, pending your formal surrender to Australian authorities. You were detained for 22 days. On this occasion, given your health problems, you were detained in the Changi Prison Hospital, where you were chained to you bed for most of each day.

73 In sentencing you, I bear in mind that, although the two periods of detention were not particularly lengthy, the conditions of detention were substantially harsher than they would have been in an Australian prison.

74 It is common ground that the period of 42 days spent in detention in Singapore should be treated as pre-sentence detention for the purposes of this sentence.

75 General deterrence and the need for adequate punishment clearly have an important role to play in sentencing you, for what is a serious example of the offence. But so too do:

(a) Your plea at the earliest possible opportunity, combined with genuine remorse and contrition;

(b) Your very substantial past co-operation with investigating authorities, including with the provision of information, the extradition process, and your consent to a direct indictment;

(c) The very high value of your undertaking to give evidence and provide assistance in the future in proceedings in Victoria;

(e) The additional hardship of undergoing a custodial sentence in a foreign country; and

(f) The duration and nature of your past detention in custody in Singapore.

76 Balancing as best as I can the principles of sentencing enunciated in the Crimes Act, I have concluded that the appropriate sentence is that you be imprisoned for a period of 2 years' imprisonment. I order that the whole of the sentence be suspended for the period of 2 years.

77 That means you will not be taken into custody today. However, if during that 2 year period, you commit another offence which is punishable by imprisonment (whether in or out of Victoria), it is very likely that you would be taken into custody to serve the whole of the suspended sentence of 2 years' imprisonment.

78 Pursuant to s 6AAA of the Sentencing Act 1991 (Vic), I declare that, if you had not pleaded guilty, and also not offered future co-operation, I would have sentenced you to imprisonment of 5 years, with a minimum non-parole period of 3 years and 4 months.

79 Pursuant to s 21E of the Crimes Act, I declare that, if you had pleaded guilty, but not undertaken to co-operate in the future, I would have sentenced you to imprisonment of 3 years and 6 months, with a minimum non-parole period of 2 years and 6 months.

80 Further, I declare that the period to be reckoned as already served under this sentence is 42 days, not including today. I direct that there be noted in the records of the court the fact that such declaration was made and its details.

[1] An amount agreed to be equivalent to between about US $200,000 and $250,000, depending on which exchange rates are adopted.

[2] This amount was substantially more than your co-conspirators had understood that you would be retaining for yourself. But, it is not suggested that anything turns on that for the purposes of sentencing you.

[3] Based substantially on the second reading speech by the Attorney-General, and in the absence of any purpose or objects provision in the amending Act itself.