Application by the Commissioner of the Australian Federal Police

[2017] NSWSC 588

Supreme Court

New South Wales

Medium Neutral Citation:	Application by the Commissioner of the Australian Federal Police [2017] NSWSC 588
Hearing dates:	9 May 2017
Date of orders:	09 May 2017
Decision date:	09 May 2017
Jurisdiction:	Common Law
Before:	Beech-Jones J
Decision:	(1) Pursuant to section 49 of the Proceeds of Crime Act 2002 (Cth) (Act), the property specified in the Schedule is forfeited to the Commonwealth. (2) Pursuant to section 69(2) of the Act, the Commonwealth is granted leave to deal with any forfeited property immediately. (3)   These orders may be entered forthwith. (4)   The proceedings are otherwise dismissed.
Catchwords:	PROCEEDS OF CRIME – forfeiture order – no question of principle
Legislation Cited:	Copyright Act 1968 (Cth) Crimes Act 1914 (Cth) Proceeds of Crime Act 2002 (Cth)
Category:	Principal judgment
Parties:	The Commissioner of the Australian Federal Police (Applicant)
Representation:	Counsel: D Tynan (Applicant)   Solicitors: Australian Federal Police
File Number(s):	2014/247281

EX TEMPORE Judgment

1. HIS HONOUR: This is an application by the Commissioner of the Australian Federal Police (the “Commissioner”) under s 49 of the Proceeds of Crime Act 2002 (Cth) (“POCA”) for the forfeiture of an amount standing in a particular bank account. In the circumstances that I will describe, the application proceeded without any contradictor.

2. Before addressing whether the criteria for the making of an order under s 49 are established, it is necessary to describe the factual background and the history of the proceedings.

Haidar Al Baghdadi

3. On 1 November 2013, Mr Haidar Al Baghdadi was arrested and charged with three offences under the Copyright Act1968 (Cth), namely, making an unauthorised decoder available online contrary to s 135ASG, making a decoder available online for a subscription broadcast contrary to s 135ASH and causing unauthorised access to encoded broadcasts contrary to s 135ASJ.

4. Mr Al Baghdadi's trial commenced in the District Court on 25 June 2015, but the jury were discharged on 15 July 2015. There were various other attempts to proceed with the trial. However, for one reason or another, they were unsuccessful.

5. Eventually, on 16 February 2017, Haidar Al Baghdadi entered a plea of guilty to an offence contrary to s 135ASJ(1) of the Copyright Act. The other two offences were included on the schedule. Mr Al Baghdadi is due to be sentenced on 4 August 2017.

6. The relevant statement of facts that has been prepared for the plea of guilty includes the following:

“(a)   The Australian Broadcasting Services Act 1992 (Cth) licences the provision of subscription television services in Australia.

(b)   Subscription television licensees provide television content to customers under contractual arrangement for payment.

(c)   Broadcasts by subscription television providers are encrypted, which enables access to a broadcast only by authorised customers by the subscription television providers. Authorised subscription customers may be provided with a ‘decoder’ to decrypt an encoded broadcast. Decryption is normally achieved through the use of a smartcard being inserted by the customer into the decoder.

(d)   Card-sharing is a method of subscription television piracy which involves the sharing of the contents of a legitimate subscription television. Card-sharing networks usually provide access to every channel broadcast by Foxtel.

(e)   The cost of a legitimate subscription to access every channel broadcast by Foxtel is around $122 per month.

(f)   Between 3 January 2005 and 1 November 2013, Haidar Al Baghdadi operated and managed an illegal card-sharing network from 2 Day Technology. He is the sole trader of that business. Haidar Al Baghdadi facilitated unauthorised access to subscription broadcasts, including channels provided by Foxtel, for up to 9300 customers.

(g)   Since 2010, Haidar Al Baghdadi has received payments into his bank accounts referable to customers to whom he provided subscription services. The majority of payments are in the range of $150-$200, the price of a subscription renewal.”

7. As suggested by this summary, in broad terms, s 135ASJ(1) of the Copyright Act and the associated provisions are directed towards criminalising the conduct of those persons who provide unauthorised access to encoded broadcasts, such as that provided by pay television networks including Foxtel. The maximum penalty for such an offence is a fine of not more than 550 penalty units or imprisonment for no more than five years. The offence is an indictable offence, (Crimes Act 1914 (Cth), s 4G).

Westpac Accounts

8. Mrs Al Baghdadi is Haidar Al Baghdadi's mother. She passed away on 15 September 2016.

9. In April 2009, Mrs Al Baghdadi opened an account with Westpac (the “first Westpac Bank account”). Between 2009 and July 2012, cash deposits totalling in excess of $145,000 were made into the first Westpac Bank account. On 14 December 2011, $140,000 was withdrawn from the first Westpac Bank account and deposited into an account in the name of a company associated with Haidar Al Baghdadi. The name on the deposit slip was “Haidar”. I am satisfied that Haidar Al Baghdadi withdrew those funds.

10. In July 2012, Mrs Al Baghdadi opened another account with Westpac (the “second Westpac Bank account”). The balance of the funds left in the first Westpac Bank account, namely $5,031.32, was transferred into this account. Between July 2012 and July 2013, a series of cash deposits were made into the second Westpac Bank account. These total in excess of $268,900. As at 19 August 2014, the balance of the second Westpac Bank account was $200,229.79.

POCA Proceedings

11. On 22 August 2014, the Commissioner applied to this Court, ex parte, for, amongst other orders, a restraining order under s 19 of the POCA in respect of the funds standing in the second Westpac Bank account. On that day, Hamill J made an ex parte order under s 19 providing that the property specified in the schedule, namely the funds standing in the second Westpac Bank account, not be disposed of or otherwise dealt with by any person except in certain circumstances. His Honour also made an order under s 38 of the POCA appointing the Official Trustee in Bankruptcy to take custody and control of that account.

12. On 23 September 2014, Mrs Al Baghdadi filed a notice of motion seeking, inter alia, an order revoking the restraining order. She also sought a number of other orders all designed to remove the property constituted by the proceeds of the second Westpac Bank account from being under any restraint of an order made under the POCA. In support of her notice of motion, Mrs Al Baghdadi filed an affidavit that was sworn the same day, that is 23 September 2014. As I will explain, in her affidavit she purported to explain the source of the funds that were deposited into the first and second Westpac Bank accounts.

13. Thereafter, the course of the proceedings was complicated by difficulties experienced in compulsorily examining various individuals, Mrs Al Baghdadi's ill health and Mr Al Baghdadi's trial.

14. Eventually, on 30 November 2016, Bellew J dismissed Mrs Al Baghdadi's notice of motion for want of prosecution in accordance with Uniform Civil Procedure Rule 12.7.

15. At some point, the last step in the proceedings, namely the application before the Court today for a forfeiture order, was set down for hearing.

16. On 1 May 2017, a solicitor employed by the Commissioner telephoned Haidar Al Baghdadi. The solicitor inquired whether Haidar Al Baghdadi or his father Majed, who was the late Mrs Al Baghdadi's husband, were opposing the application or otherwise intended to appear at the hearing. Haidar Al Baghdadi advised that they would not. When the proceedings were called on today, each of them were called outside the Court but neither appeared.

Forfeiture Order

17. Subsections 49(1) and (2) of the POCA provide as follows:

(1)   A court with *proceeds jurisdiction must make an order that property specified in the order is forfeited to the Commonwealth if:

(a) the *responsible authority for a *restraining order under section 19 that covers the property applies for an order under this subsection; and

(b)   the restraining order has been in force for at least 6 months; and

(c)   the court is satisfied that one or more of the following applies:

(i)   the property is *proceeds of one or more *indictable offences;

(ii)   the property is proceeds of one or more *foreign indictable offences;

(iii)   the property is proceeds of one or more *indictable offences of Commonwealth concern;

(iv)   the property is an instrument of one or more *serious offences; and

(e)   the court is satisfied that the authority has taken reasonable steps to identify and notify persons with an *interest in the property.

(2)   A finding of the court for the purposes of paragraph (1)(c):

(a)   need not be based on a finding that a particular person committed any offence; and

(b)   need not be based on a finding as to the commission of a particular offence, and can be based on a finding that some offence or other of a kind referred to in paragraph (1)(c) was committed.

18. Thus, the first criteria for making of a forfeiture order is that the "responsible authority" for the earlier restraining order under s 19 in respect of the relevant property be the applicant for the forfeiture order. In this case the relevant "responsible authority" is the Commissioner. This criteria is clearly satisfied.

19. The second criteria for the making of a forfeiture order, is that the restraining order has been in force for at least six months. It follows from what I have stated that this criteria is also satisfied.

20. The fourth criteria is that the Court be satisfied that the Commissioner has taken reasonable steps to identify and notify the persons with an interest in the property. From what I have outlined, the only three persons who possibly have an interest in the property are Mrs Al Baghdadi, Haidar Al Baghdadi and Majed Al Baghdadi. Haidar Al Baghdadi and Mrs Al Baghdadi were each notified of the making of the restraining order and the Commissioner's intention to seek a forfeiture order by letter dated 20 August 2014. On 6 December 2016, a letter was sent to Majed Al Baghdadi informing him of the Commissioner's intention to apply for a forfeiture order. On 6 April 2017, the Commissioner arranged for personal service on Majed Al Baghdadi of a letter advising of that intention. As noted, this was all followed up with a telephone call to Haidar Al Baghdadi on 1 May 2017.

21. In the circumstances, I am satisfied that the Commissioner has, at the very least, taken all reasonable steps to identify and notify the relevant persons.

22. The third criteria that must be satisfied before a forfeiture order is made is that the Court is satisfied that the relevant property is "proceeds of one or more indictable offence" (s 49(1)(c)(i)). Although the Commissioner relied on other subparagraphs in 49(1)(c), s 49(1)(c)(i) will suffice in this case.

23. In this case, the Commissioner contended that the evidence demonstrated that the amount standing in the second Westpac Bank account is the proceeds of one or more offences against s 135ASJ(1), which, as I have explained, are indictable offences. In particular, the Commissioner contended that that material is the proceeds of Haidar Al Baghdadi’s business of providing unauthorised access to encoded broadcasts over a period of years.

24. Section 338 of the POCA provides that:

“Property is proceeds of an offence if:

(a)   it is wholly derived or realised, whether directly or indirectly, from the commission of the offence; or

(b)   it is partly derived or realised, whether directly or indirectly, from the commission of the offence;

whether the property is situated within or outside Australia.”

25. In support of his contention that the amount standing in the second Westpac Bank account is the proceeds of an indictable offence, the Commissioner pointed to the fact that the subscription service operated by Haidar Al Baghdadi for reward was conducted during the period the deposits were made.

26. The comprehensive submissions filed on behalf of the Commissioner also pointed to the following circumstances as matters which were said to overwhelmingly demonstrate that the amount standing in the second Westpac Bank account was the proceeds of one or more indictable offences, namely:

“(a)   Mrs Al Baghdadi had no known assets or interests in real property;

(b)   since 2007 Mrs Al Baghdadi failed to lodge any income tax returns with the ATO;

(c)   from 2007 to 2013 Mrs Al Baghdadi had been in receipt of a carers allowance from Centrelink. This is the only income that she has declared she received. The Centrelink payments were modest;

(d)   the deposits into Mrs Al Baghdadi's bank accounts are grossly out of proportion to her legitimate means;

(e)   there is no record of Mrs Al Baghdadi having disposed of any properties which would explain the large deposits into her accounts;

(f)   the deposits were in large amounts of cash, the majority of which consisted of $50 notes; and

(g)   it is apparent that Haidar Al Baghdadi had access to the money in Mrs Al Baghdadi's bank account and transferred a significant sum to his company.”

27. I have reviewed all the affidavit evidence which is said to support these contentions. The affidavits prove the matters asserted.

28. Considered together, all these circumstances clearly demonstrate that the Commissioner has satisfied s 49(1)(c)(i) in respect of the amount standing in the second Westpac Bank account.

29. However, even though these are civil proceedings, the Commissioner took the prudent step of placing before the Court Mrs Al Baghdadi's affidavit of 23 August 2014 which was sworn in support of her application to revoke the restraining order, as well as material obtained from the examination of Haidar Al Baghdadi and a Mr Alex Hadi in 2016.

30. In her affidavit, Mrs Al Baghdadi stated that in 2002 her mother passed away in Baghdad and that the amounts deposited into her accounts were "part of the proceeds of the 'sale' of the two houses". No documentary evidence was attached to her affidavit to support any of those assertions.

31. An accurate summary of the evidence given by Mr Hadi during his examination is set out in an affidavit sworn in support of the application. The effect of that is that during examination under oath Mr Hadi gave evidence that:

• he carried out a money transfer business called Noor Money Transfer, but he could not recall whether he had ever registered or reported his business activities with AUSTRAC.

• Mrs Al Baghdadi approached him in early 2012 and told him she wanted to bring $100,000 - $200,000 into Australia from Iraq.

• from early 2012, for a period of six months, he gave Mrs Al Baghdadi US$200,000 in instalments of $20,000 - $40,000 from money he collected from people in Australia.

• he did not give Mrs Al Baghdadi any receipts and does not have any records of the transactions.

• he did not report any transactions over $10,000 to AUSTRAC.

• he did not give Mrs Al Baghdadi any cash in 2011 and cannot recall giving her any cash prior to 29 May 2012 or after December 2012.

• Haidar Al Baghdadi had never spoken to him about transferring money to and from Iraq.”

32. The same affidavit contains a summary of the evidence given under examination by Haidar Al Baghdadi. The effect of that is that:

• he used Alex Hadi's services to transfer money to and from Iraq;

• he received $140,000 from Alex Hadi in 2011 and $120,000 or $140,000 from him in 2013;

• he failed to declare his income to the ATO; and

• deposits made into his mother's Westpac Bank accounts were proceeds of the sale of properties in Iraq, but that he had no firsthand knowledge of these matters except what his mother told him.

33. Further, during his examination, Mr Haidar Al Baghdadi produced documents which he said related to the sale of the real property in Iraq, which were contended to be the source of the funds received by his mother. In an affidavit sworn 16 June 2016, a special member of the Australian Federal Police, Domenico Rositano, referred to these documents and stated as follows:

“a.   Four of the attachments appear to be written in a foreign language. The remaining four documents appear to be English translations of the four foreign language documents (English Translations).

b.   Each of the English Translations purports to have been prepared by or on behalf of the Al-Areej Office for Legal Translation in Baghdad Iraq and certified by a Legal Translator named Jihad Al-Ta’ee who is said to be a ‘Member of Iraqi Translators Association Id. No. 1854’.

c.   The two English Translations titled ‘Sale and Purchase Contract for Residential & Agricultural Lands No 002016’ and ‘Sale and Purchase Contract for Residential & Agricultural Lands No. 0371’ indicate the following in relation to their foreign language counterparts:

i.   The foreign language documents were drafted on 28 March 2010 and 17 April 2011, respectively;

ii.   There appear to be mistakes in the second line of the second clause of each document wherein it states: ‘the second party shall admit of receiving from the second party…’ This does not appear to make sense. Also, it is unusual and coincidental that two different contracts in relation to two different properties which purport to have been prepared more than a year apart by different persons should bear the same mistakes;

iii.   Pursuant to the second and fourth clauses, the balance of the purchase price was to be paid upon completion, however there appears to be no nominated completion date nor a time frame for completion; and

iv.   Pursuant to the sixth clause, the seller bears the cost of fees and taxes associated with the sales. On the document titled ‘Sale and Purchase Contract for Residential & Agricultural Lands No. 002016’ the First Party (seller) is ‘Imad Majeed Mahal’ and the Second Party (purchaser) is ‘Sadeq Mousa Jaafar’. On the document titled ‘Sale and Purchase Contract for Residential & Agricultural Lands No. 0371’ the First Party (seller) is ‘Kareem Jaafar Abdulabbas’ and the Second Party (purchaser) is ‘Israa Abdulwahab Jebboori’.

d.   The English Translation titled ‘General Power of Attorney’ and numbered 22531 indicates the following in relation to its foreign language counterpart:

i.   the name of the person granting the power of attorney at the beginning of the document is ‘Imad Majeed Mohsin’. However, this later changes to ‘Imad Majeed Ali’;

ii.   the person appointed as attorney appears to be named ‘Fekra Mohammad Ali Alhaidri’; and

iii.   the document contains conflicting information as to the date it was executed. The document gives two different dates; namely, 2 July 2000 and 6 July 2011.

e.   The English Translation titled ‘General Power of Attorney’ and numbered 22532 indicates the following in relation to its foreign language counterpart:

i.   the name of the person granting the power of attorney appears to be named ‘Kareem Jaafar Abdulabbas’;

ii.   the name of the person appointed as attorney appears to be named ‘Fekra Mohamma Ali Alhaidri’; and

iii.   the document contains the same conflicting information regarding the date it was executed as the English Translation titled ‘General Power of Attorney’ and numbered 22531. Namely, it gives two different dates; being 2 July 2000 and 6 July 2011.”

34. I have inspected these documents myself. On their face, they support the analysis of Mr Rositano.

35. In the end result, the material provided by, and, in some respects extracted from, Mrs Al Baghdadi and Haidar Al Baghdadi does not deter me from drawing the inference sought by the Commissioner. The errors in the documentary material are significant. The discrepancies between the dates and times at which moneys were said to be received are also significant. Even allowing for the fact that the circumstances in Iraq prevailing since the death of Haidar Al Baghdadi’s mother may explain the unusual method of money transfer, there is, in the end result, a complete lack of any cogent material which is capable of supporting the assertion that the source of the funds received into Mrs Al Baghdadi's accounts with Westpac was from the sale of her mother’s houses.

34. Accordingly, I am satisfied that the property standing in the second Westpac Bank account is the proceeds of one or more indictable offences, (POCA, s 49(1)(c)(i)). It follows that the Court is obliged to make the forfeiture order sought by the Commissioner.

35. A further order is sought by the Commissioner under s 69(2) of the POCA allowing the forfeiture to be effected immediately so as to waive the 28-day stay provided for by s 69(1) that usually operates so as to facilitate appeals. In circumstances where there is no contradictor and no person with any apparent legitimate interest in the funds, I consider that that order is appropriate.

36. Accordingly, I will make orders 1, 2 and 3 in the short minutes of order. I will also note that that concludes the proceedings, so it is appropriate to make a fourth order; namely, that the proceedings are otherwise dismissed.

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Decision last updated: 12 May 2017