AFP v Zhang
[2019] VCC 1090
•22 July 2019
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE | Revised Not Restricted Suitable for Publication |
Case No. CI-13-01240
IN THE MATTER OF the Proceeds of Crime Act 2002 (Cth)
And
IN THE MATTER OF the charged suspect Wei Bin Zhan (aka Kevin Zhang)
And
IN THE MATTER OF an application by the Commissioner of the Australia Federal Police
Between
| COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE (“AFP”) | Applicant |
| And | |
| WEI BIN ZHANG | Respondent |
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JUDGE: | HER HONOUR JUDGE COHEN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 9 July 2019 | |
DATE OF RULING: | 22 July 2019 | |
CASE MAY BE CITED AS: | AFP v Zhang | |
MEDIUM NEUTRAL CITATION: | [2019] VCC 1090 | |
REASONS FOR DECISION
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Subject: CONFISCATIONS APPLICATION
Catchwords: Forfeiture order application; real property and vehicle of person whose conduct or suspected conduct constituted a serious offence; suspect charged but left jurisdiction; substituted service
Legislation Cited: Proceeds of Crime Act 2002 (Cth) ss 18, 47, 59; Criminal Code Act 1995 ss 5.4, 400.4(1), 400.4(2)
Cases Cited:Briginshaw v Briginshaw (1938) 60 CLR 336
Decision:Forfeiture order made
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Ms D Mandie | Dino Skoblar, Criminal Assets Litigation, AFP |
| For the Respondent | No appearance |
HER HONOUR:
1 This is an application by the Commissioner of the Australian Federal Police (“AFP”) pursuant to s59 for a forfeiture order under s47 of the Proceeds of Crime Act 2002 (Cth) (“the Act”).
2 On 18 March 2013, his Honour Judge Parsons made a Restraining Order under s18 of the Act in respect of:
(a) real property situated at 19/277-289 Middleborough Road, Box Hill in the State of Victoria and more particularly described in Certificate of Title Volume 10327 folio 973 (“the Box Hill warehouse”); and
(b) a 2006 Lamborghini Gallardo roadster, Victorian registration No XHG817 (“the Lamborghini motor vehicle”).
Both the Box Hill warehouse and Lamborghini motor vehicle were registered in the name of the respondent, Wei Bin Zhang (“Zhang”). The application for the Restraining Order was based on Mr Zhang being suspected of having committed an offence under s 400.4 of the Criminal Code (Cth), allegedly having dealt with money or other property which was proceeds of crime.
3 Pursuant to an Order of his Honour Judge Murphy on 18 September, 2018, the Restraining Order was varied to enable sale by the registered mortgagee of the Box Hill warehouse property. The net proceeds, $423,727, have been held by the Official Trustee since that sale, under the Restraining Order. The Lamborghini motor vehicle is estimated to currently be worth approximately $150,000.
4 The Commissioner now pursues an application for forfeiture of all of the restrained property, the application having originally been filed on 8 April 2013.
5 Before the Restraining Order was made, Mr Zhang had left Australia. He was charged in December 2013 with an offence under s 400.4(1) of the Criminal Code. He has not returned to Australia since departing on 31 March 2012.
6 A copy of the Restraining Order was originally posted to Mr Zhang addressed to him at was at the time still the residential address of his wife and children in Balwyn, on 19/3/13[1]. His wife, Qiu Qiu Yin, filed an application in July 2014 for exclusion under s 73 and for compensation under s 78 of the Act. Those applications were dismissed by His Honour Judge Carmody on 4 October 2016.
[1]Affidavit of Jane Kitt made 12/4/13
7 Mr Zhang has made no application for exclusion or compensation in respect of the restrained property.
8 On 4 September 2018, His Honour Judge Misso made an order for substituted service whereby the restraining order and all documents filed in support of the application for a restraining order, and all applications in this proceeding could be effected on Zhang by serving those documents by international post to the address:
9A, 7, Jincheng Huating
Fenghuang Road, Luohu,
Shenzhen, China (“the Shenzhen address”).
9 On 2 April 2019, his Honour Judge Carmody ordered that the applicant file and serve by post on Wei Bin Zhang any further affidavits in support of its forfeiture application on or before 4 June, 2019, and that the Commissioner’s forfeiture application be fixed for hearing on 9 July 2019.
10 I am satisfied that by the end of 4 June 2019, there had been served by international post addressed to Mr Zhang at the Shenzhen address, a letter notifying him of the hearing of this application, a copy of the Order of Judge Carmody fixing the hearing date on 9 July, 2019, and copies of affidavits in support of the application of Gino Skoblar, made 25 March 2019 and 4 June 2019, with exhibits to both affidavits.
11 A further affidavit in support of the application, of Gary Robinson sworn 7 June 2019, has been filed. I am satisfied that a copy of it and the exhibits to it were sent to Mr Zhang by international post addressed to him at the address in Shenzhen, on 11 June 2019[2]. I note that this was outside the time limit set in Judge Carmody’s Order, and there does not appear to have been any extension of that time. However, I am satisfied that this further affidavit can be expected to have arrived less than a week after the other materials, and still in time for some response to have reached the court if the Affidavit of Mr Robinson, in contrast to all of the previously supplied documentation, had caused Mr Zhang to wish to respond. I have taken into account only limited amounts of evidence from Mr Robinson’s affidavit in any event, and most are matters that are on public record.
[2]Affidavit of Stephanie Cecil made 11/6/19
Application for Order for Forfeiture
12 Under s47 (1) of the Act, a court must make an order for forfeiture to the Commonwealth if:
(a) the responsible authority for a restraining order that covers the property applies for an order under this sub-section; and
(b) the restraining order has been in force for at least six months; and
(c) the court is satisfied that a person whose conduct or suspected conduct formed the basis of the restraining engaged in conduct constituting one or more serious offences.
13 I am satisfied that the Commissioner of the AFP is the responsible authority for the restraining order that was made under s18 on 18 March 2013. I am satisfied that the restraining order has been in force for at least six months. The remaining question on which I must be satisfied is that Wei Bin Zhang engaged in conduct constituting one or more serious offences.
14 “Serious offence” is defined in the dictionary of the Act, and includes an offence under s400.4 of the Criminal Code (Cth).[3]
[3]Under (a)(ii) being an indictable offence punishable by imprisonment of 3 years or more – unlawful conduct constituted by or relating to a breach of Part 10.2 of the Criminal Code (Money Laundering), s400.4 being contained in Part 10.2.
15 Under s 47(2) of the Act, a finding for the purpose of paragraph (1)(c) need not be based on a finding as to the commission of a particular offence but can be based on a finding that some serious offence or other was committed.[4]
[4]Section 47(2) POCA
16 The applicant submits that I should be satisfied that Mr Zhang committed an offence under s 400.4 (1), being the offence with which he was charged (but has never been tried as he has not re-entered Australia). However, it would be sufficient for this application if I were satisfied that he had committed an offence under s 400.4(2), being the charge of which he was suspected when the Restraining Order was obtained.
17 Section 400.4(1) creates the offence of intentionally dealing with proceeds of crime in excess of $100,000. Section 400.4(2) creates an offence of recklessly dealing with proceeds of crime in excess of $100,000. Both are indictable offences punishable by imprisonment of 3 years or more.
18 Section 400.4 of the Criminal Code provides –
(1) A person commits an offence if:
(a) the person deals with money or other property; and
(b) either:
(i) the money or property is, and the person believes it to be, proceeds of crime; or
(ii) the person intends that the money or property will become an instrument of crime; and
(c) at the time of the dealing, the value of the money and other property is $100,000 or more.
(2) A person commits an offence if:
(a) the person deals with money or other property; and
(b) either:
(i) the money or property is proceeds of crime; or
(ii) there is a risk that the money or property will become an instrument of crime; and
(c) the person is reckless as to the fact that the money or property is proceeds of crime or the fact that there is a risk that it will become an instrument of crime (as the case requires); and
(d) at the time of the dealing, the value of the money and other property is $100,000 or more.
19 Recklessness is defined in s 5.4 of the Criminal Code AS FOLLOWS.
(1) A person is reckless with respect to a circumstance if:
(a) he or she is aware of a substantial risk that the circumstance exists or will exist; and
(b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.
(2) A person is reckless with respect to a result if:
(a) he or she is aware of a substantial risk that the result will occur; and
(b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.
Evidentiary issues
20 In determining whether Mr Zhang has engaged in conduct constituting one or more offence under s400.4(1) or (2), the applicable standard of proof is the civil standard of the balance of probabilities. However, I take into account that the nature and gravity of the matters alleged must be borne in mind, and in circumstances such as this where serious offences are alleged, the principles in Briginshaw[5] must be applied. Therefore, evidence must be of sufficient strength, clarity or cogency to enable the court to be satisfied that the necessary facts have been proved, and caution must be taken to assess the evidence in that light.
[5]Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362
21 However, the standard of proof is not beyond reasonable doubt, and s47(3) specifically provides that the raising of a doubt as to whether a person engaged in conduct constituting a serious offence is not of itself sufficient to avoid a finding by the court under paragraph (1)(c).
22 The evidence as to conduct by Mr Zhang on which the applicant relies to establish that he had engaged in an offence under s 400.4, is contained in an affidavit by Gary Robinson made 7 June 2019, and in the exhibit marked “DS-03” to an affidavit by Dino Skoblar made 26 March 2019. I have already noted that the Affidavit of Mr Robinson was not served within the time limited by Judge Carmody’s order, and why I have taken into account some limited parts of its content.
23 Exhibit “DS-03” to Mr Skoblar’s affidavit of 25 March 2019, is a copy of an affidavit made 2 December 2013 by Leigh Matthew Hunter in support of an application for a charge and warrant to arrest Mr Zhang. Annexed to that affidavit is a summary of material facts by Federal Agent Christine Jager who was the informant in respect of the prospective charges against Mr Zhang. Counsel for the Commissioner, Ms Mandie, frankly acknowledged that the content of FA Jager’s statement was hearsay. Indeed it is at least second hand if not third hand hearsay in this form. Counsel offered to call oral evidence about the same matters but that was to be from Mr Robinson, who was not immediately available, and would not himself have been giving direct evidence of most of the facts contained in FA Jager’s statement.
24 I have taken into account that in her role as Informant, FA Jager would have had responsibility to acquire and provide an overview of the evidence, drawing on first-hand information from the AFP agents responsible in the course of their duties for obtaining the evidence. All of these events occurred some seven years ago, and in my view it is unlikely that FA Jager herself, or any of the people who in fact conducted the surveillance or telephone interceptions, or made inquiries of banks, would be able to recall independently what they heard or saw. In those circumstances they would be reliant on records and their own notes or statements made at about that time. I am satisfied that the summary provided at the time it was, to a court, to obtain a charge and warrant against Mr Zhang, being the summary of the informant FA Jager, is likely to contain the best evidence now available of its factual contents. Although as an annexure to an affidavit which itself is an exhibit to another person’s affidavit, the evidence is at least second or third-hand hearsay, I have decided that the circumstances in which it came into existence make it sufficiently reliable to be the basis for the factual findings I am to consider.
Findings about alleged offending by Mr Zhang
25 From the summary of material facts by Federal Agent Christine Jager, I am satisfied that information obtained by the AFP, including surveillance, interception of telephone calls and messages between telephone services of individuals of interest, and records of banking transfers, shows that it is more probable than not (and to a high level of satisfaction) that
· Mr Zhang participated in several transfers of money from Australia to Hong Kong between January and early April 2012;
· The source of those monies in Australia was proceeds of drug trafficking;
· Mr Zhang was at least aware that there was a substantial risk that the funds he assisted to transfer were proceeds of drug trafficking, and more likely than not knew that it was;
· Mr Zhang was at least aware that there was a substantial risk that the funds – at least of a transfer on 2 April 2012, were to be used after receipt in Hong Kong to fund further supply of drugs to the same drug trafficking syndicate in Australia.
26 The facts supporting these findings are as follows.
27 The particular sums of money transferred with Zhang’s assistance came from Suky Lieu (“Lieu”), who was the main focus of the police investigation and has since been convicted of trafficking and importation charges and sentenced to 25 years imprisonment. Lieu passed substantial quantities of cash to Minh Phat Truong (“Truong”), who was Zhang’s brother-in–law. Truong would pass cash in carry bags to Why Warr Moo (“Moo”) who was one of several authorised users of an ANZ bank account of Crown Casino Melbourne known as the ANG Junket account (“the Crown ANZ Junket account”). Truong would also pass to Moo notes with details of intended accounts to which the funds were to be transferred.
28 Police monitored payments made into the Crown ANZ Junket account by Moo which were almost immediately transferred to Hong Kong Bank accounts. One was actually in Zhang’s name, and others controlled by him in that he provided their details to Truong who provided them to Moo, and Zhang also was able to withdraw cash from the one used on 2 April 2012. The police case is that Zhang withdrew the money in Hong Kong and delivered it or arranged for it to be delivered to someone called “John” for supply of further drugs to be imported into Australia.
29 I am satisfied, for the purposes of this application, from the evidence outlined in respect of each, that at least the following transfers occurred with the participation of Zhang, and that he either knew or was reckless as to the source of the funds being from drug trafficking.
(i)On 3 January 2012, a transfer of AU$95,500 from the Crown ANG Junket Account to an account at a Hong Kong branch of Bank of China. On 1 January 2012, Truong received two SMS communications from a service used by Zhang containing the details of a Hong Kong bank account in the name of a trading company. On 3 January 2012, a cash deposit of AU$95,500 was made by Moo into the Crown ANG Junket account, and a withdrawal of AU$95,500 was then made from that account by Moo to fund a telegraphic transfer for that full amount to the Hong Kong Bank account number which had been provided in the SMS from Zhang’s service to Truong two days earlier. A short time later, an amount of AU$95,500 Australian was debited from the Crown ANG Junket account and transferred to the Hong Kong account in the name of the Hong Kong Trading Company, which had been provided in the SMS.
(ii)On 9 January 2012, an amount of AU$191,000 was made by Moo into the Crown ANG Junket account, then the same sum withdrawn by Moo for a telegraphic transfer to a Bank of China Hong Kong account which was held in the name of Wei Bin Zhang. Earlier that day, before the deposit into the ANG Junket account, Truong had received three SMS communications from a service utilised by Zhang, containing bank account number and name for the Hong Kong account into which the $191,000 was later transferred by Moo. Moo later made a statement to police about his involvement in a number of transfers, in which he said that the transfer of AU$191,000 to an account of Zhang was on behalf of Truong.
(iii)On 29 March 2012, an amount of $95,500 paid into the Crown ANG Junket account by Moo then withdrawn for telegraphic transfer into a Bank of China Hong Kong account in the name “Tan, Chen Xiu”. AFP surveillance the previous day had observed Zhang accompanying Truong to a restaurant where Lieu had been present and Zhang had approached when Lieu was seen to show Truong something in his car boot, after which Lieu drove away and Truong was carrying a square white carry bag, and Zhang accompanied him back to his car and they drove together to Zhang’s then home. I am satisfied that the source of the deposit the next day by Moo into the Crown ANG Junket account was cash handed to Truong by Lieu, and that Zhang was aware that there was a substantial risk that the carry-bag of cash was proceeds from drug trafficking.
(iv)On or about 1 April 2012 (seems it may have arrived on 2 April), an amount of AU$286,500 debited from the Crown ANG junket account and transferred to the same Bank of China Hong Kong account in the name of Tan, Chen Xiu as the transfer two days earlier. I am satisfied that this transfer was to an account over which Zhang had control, and that at the time of this transfer Zhang knew that its purpose was for a payment to be made from it to the person known as “John” to fund drugs being provided to the drug trafficking network in Australia. I make these findings from the combined effect of intercepted calls and his own movements into and out of Australia on 25 and 31 March respectively. Those calls were as follows.
·On 25 March, 2012, Zhang arrived in Melbourne from Hong Kong on a Cathay Pacific flight. On that date, telephone intercepts recorded a conversation between Lieu and Truong which revealed that “Kevin” (a name I accept to be one used by, and to be referring to, Zhang) was back in Melbourne and had told Truong that he could not do it in Macau but can do it in Hong Kong, that Kevin had to go back there to do it, and there was discussion about how it could be done on time.
·On 31 March 2012, telephone communications between Truong and Moo were intercepted, containing discussion of Truong’s “younger brother” needing to leave that day, and Truong telling him to go to the airport now as there were seats and his wife was there. On 31 March 2012, Zhang left Australia on board a Cathay Pacific flight to Hong Kong.
·On 1 April 2012, intercepted phone calls revealed discussions between Truong and Zhang, and Truong and Lieu. Zhang was told by Truong to give the other person 374; Zhang repeats the number and asks if Truong has transferred 30, and Truong says it will transfer tomorrow. An hour later, Lieu asks Truong for Zhang’s number and there is discussion about it being communicated to John. There is discussion about managing to move it to arrive tomorrow afternoon.
·The following day, ( 2 April, 2012), amongst other intercepted calls, there was one between Truong and Zhang, with Truong asking Zhang if it has been done and Zhang said it just arrived. Truong asks Zhang if he had called “him” and Zhang says he will call him later to make an appointment for tomorrow as he needs to get cash. Zhang then says the money arrived and that he has made an appointment for 4.00pm tomorrow and can get cash by that time. About five minutes later, in a further phone call, Zhang called Truong asking for John’s number because the number Truong gave him does not exist, and told Truong to check it out. Shortly afterwards, Zhang called Truong asking if he had checked the phone number. There is further discussion between them about doing trade with “John”. Shortly afterwards, there is a phone call from Truong to Lieu telling Lieu that the little brother cannot get through on the phone and Lieu says people will call the little brother. Truong says little brother has it organised.
From these conversations, I am satisfied that the inference can be drawn that Zhang knew that the money he assisted in receiving and then dealing with on 2 April 2012 was part of a transfer of proceeds of drug trafficking, and further that its purpose was to pay for drugs for those traffickers. From the latter aspect I am satisfied that he knew that the funds he was dealing with were intended to be the instrument of drug trafficking.
30 There are further details of communications between relevant participants who were under surveillance or had their calls intercepted, but the above are sufficient findings on which to decide this application.
31 From the outlined matters, I am satisfied that the evidence points clearly and cogently to Zhang having been involved in each of four transfers of funds:
(i)on 3 January 2012, a sum of AU$95,500;
(ii)on or about 9 January 2012, AU$191,000;
(iii)on or about 29 March 2012, AU$95,500; and
(iv)on or about 2 April 2012, AU$286,500.
32 I am satisfied that in relation to the first two of those, Zhang at least was reckless as to the risk that the source of the funds was drug trafficking. I am satisfied to a reasonable degree of satisfaction bearing in mind the gravity of the allegations, that in relation to the third of those transfers, Zhang knew that the source of the funds was Lieu, and that it was proceeds of drug trafficking. I am satisfied in relation to the fourth transfer that Zhang knew from 25 March that he was to be involved in a transfer to Hong Kong of funds from which there were to be withdrawn in cash funds to be paid to the person named as John, and that the purpose of those funds was the purchase of drugs. That is he had knowledge that the funds in the fourth transfer were intended to be the instrument of drug trafficking. That finding is in addition to him being at least reckless as to the source of that transfer being drug trafficking.
33 Taken in combination the money or funds with which Zhang assisted was well in excess of AU$100,000. Further, the transfer of funds into an account in his name, on or about 9 January, 2012, and the transfer which required his presence in Hong Kong on 1st and 2nd April, 2012, were each individually in excess of $100,000.
34 For these reasons, and bearing in mind the gravity of the allegations, I am satisfied that the evidence established with sufficient clarity that Zhang was involved in transfers of funds in excess of $100,000, and did so at least aware that there was a substantial risk that the funds were proceeds of drug trafficking, so that I find that he committed at least two instances of an offence under s 400.4(2), and in relation to the transfer on 2 April 2012, I am satisfied that he knew or was reckless as to it being sourced from proceeds of crime and further intended that it become an instrument of further drug trafficking by being paid to John. I am satisfied that transfer alone, as well as in combination with the others, constituted an offence under s 400.4(1).
35 It follows that s 47 (1) (c) has been satisfied.
36 Being satisfied of all of the matters in s 47(1) of the Act, the forfeiture order must be made.
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