Director of Public Prosecutions v Cheng

[2018] VCC 1295

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted
Suitable for Publication

AT MELBOURNE
CRIMINAL JURISDICTION

CR 18-00471

DIRECTOR OF PUBLIC PROSECUTIONS

v

QIU CHENG
WEE CHONG TAN

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JUDGE:	HER HONOUR JUDGE RIDDELL
WHERE HELD:	Melbourne
DATE OF HEARING:	11 July 2018
DATE OF SENTENCE:	16 August 2018
CASE MAY BE CITED AS:	DPP v Cheng & Anor
MEDIUM NEUTRAL CITATION:	[2018] VCC 1295

REASONS FOR SENTENCE
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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Mr K. Armstrong (Plea) Ms L. Skoblar (Sentence)
For Accused Cheng	Ms A. Burt (Plea) Mr T. Battersby (Sentence)
For Accused Tan	Ms H. Cooper (Plea) Ms N. Allison (Sentence)

HER HONOUR:

1Qiu Cheng and Wee Chong Tan, you have each pleaded guilty to possessing goods, being tobacco products, knowing that they were imported with the intent to defraud the revenue.

2The facts are as follows.  On 10 August 2017 you both attended at commercial factory premises located at 106 Derrimut Drive, Derrimut, Victoria, for the purpose of unpacking the contents of two 20 foot shipping containers which contained a total of 4,200,000 illegally imported cigarettes concealed within.

3That illegal importation evaded customs duty thereby defrauding the revenue.  Goods imported into Australia for which an equivalent local product exists are subject to government administered levy or customs duty.  That duty is an Australian dollar amount calculated with reference to a prescribed percentage rate set out in the Commonwealth Customs Tariff Act 1995.  Tobacco in the form of cigarettes is classified with a duty rate of 61 cents per stick, hence the importation of the cigarettes in this case evaded $2,851,741.20 in customs duty.

4The background to those events is as follows.  M & P Depot Pty Ltd was a company registered in Australia on 12 December 2016.  It is a bogus company operating as a front for a tobacco importation syndicate and with no other legitimate business in Australia.  On 15 March 2017 M & P Depot commenced a five year lease of the factory premises at Derrimut.

5Between 14 April 2017 and 4 August 2017 there were a total of four sea cargo importations with consignee details, "M & P Depot", delivered to the Derrimut factory.  The first three contained office furniture.  Consignment 4 which arrived in Australia on 4 August 2017 was similarly described as office furniture.

6On 5 August 2017 that consignment was examined by Australian Border Force officers.  Two containers were each packed with an estimated 385 boxes, the fronts of which were marked with pictures of cube shelving and labels referencing display cabinets.

7Examination of those boxes found that the outer rows did in fact contain flat packed cabinets.  However the inner rows contained cartons of Triple 8 branded cigarettes.  Each box held 50 cartons and each carton held 200 cigarettes.  Therefore each container contained 2.1 million cigarettes with the total of 4,200,000 cigarettes in the consignment.

8ABF officers repacked the containers and a managed delivery occurred on
10 August 2017 at the Derrimut factory.  Mr Tan signed for the consignment and both Mr Tan and Mr Cheng were arrested at the factory in the process of unpacking the containers.

9Mr Wee Chong Tan is a 38 year old Malaysian national born 8 February 1980.  He arrived in Australia via Gold Coast International Airport on 5 August 2017 with a Malaysian passport and a tourist visa.  He declared that he was planning to stay in Australia for a period of five days and gave an address of 1118 Gold Coast Highway, Palm Beach, Queensland, namely the Palm Beach Hotel.

10However he flew to Melbourne's Avalon Airport one day later.  He was there met by Mr Cheng who drove him to an address of 3 Albert Crescent, Mulgrave.  Mr Cheng paid for the rental of that room. 

11Mr Qiu Cheng had already been in Australia since 8 April 2017, also arriving via Gold Coast International Airport on that day.  He is a 30 year old Malaysian national born 2 February 1988.  He arrived on a Malaysian passport with a tourist visa.  He gave an address of 2323 Gold Coast Highway, Mermaid Beach, Queensland, namely the Ocean Blue Motel.  This location has been identified as a place connected to individuals involved in the importation of tobacco and specifically another co-accused in this matter, Yung Cheng Fang.

12Mr Cheng indicated on his inward passenger card that his occupation was sales and that he intended to stay in Australia for a period of five days.  Despite this declaration, on the day after his arrival Mr Cheng was identified through CCTV footage as making a Deposit into the account of M & P Depot in Balwyn, Melbourne. Through the period 9 April 2017 and 10 August 2017 Mr Cheng made numerous deposits into the M & P Depot bank account variously using false names. 

13On 10 August 2017 ABF officers and officers of the Australian Criminal Intelligence Commission conducted surveillance of the Derrimut factory and observed the following.

14At approximately 12.04 pm Mr Cheng and Mr Tan arrived together in gold Nissan Pulsar SWX 855 driven by Mr Cheng.  Mr Tan exited the vehicle and
Mr Cheng drove away.  At approximately 1.29 pm the consignment was delivered.  Mr Tan opened the front electronic gate and roller doors with keys and remotes and signed for the delivery.

15Call logs reveal that Mr Cheng called Mr Tan four times between 1.30 and
2 pm.  After the delivery Mr Tan left the factory for a brief period and was in communication with Mr Cheng.  Mr Tan then returned to the factory at 2.19 pm.  Call logs show Mr Cheng and Mr Tan had two further conversations at that time.

16Forensic examination of the phones of both men show that a photograph taken by Mr Tan and which depicts the inside of the container was taken at 2.30 pm.  The photograph was sent to Mr Cheng's phone.  Minutes later Mr Cheng re-attended at the factory.

17At approximately 3.30 pm ABF officers executed a search and seizure warrant.  The factory was completely empty save for the two containers.  Both accused were present and in the process of unpacking the containers.  Officers noticed a strong smell of tobacco.  One container had been partially unpacked with the outer rows still in place.  However the middle rows had been removed.

18Four boxes remained in the rear of the container and these contained Triple 8 branded cigarette cartons.  Examination of the boxes stacked against the factory wall showed that those towards the front of the stack contained the flat pack furniture while those at the back contained Triple 8 branded cigarette cartons.

19Given the weight, density and different rattle sounds of the furniture boxes it would have been obvious to those unpacking that there was a distinct difference between the two types of boxes.

20Both Mr Cheng and Mr Tan were in possession of keys to the factory and mobile telephones.  Mr Cheng was initially questioned by ABF officers through a Mandarin speaking interpreter.  He stated that he resided at a rental property in Ferguson Street, Mitcham; that he works part-time at the factory for a person named Kim who he met at a restaurant; that Kim had asked him to unload the container the day prior and that he visited the factory the day prior.

21He stated that he met Mr Tan for the first time at the factory.  He stated that the gold Nissan belongs to Mr Kim and that he did not know what was in the boxes nor asked Mr Kim what he was unloading.  There were a number of statements proven to be untrue in that conversation.

22Mr Cheng was later formally interviewed.  He stated that he was studying English however did not know the address or name of the institution where he studied.  He stated that he works to pay for his study and that this work involved moving cabinets.  He maintained that a man named Kim had offered him the work the day before and that he had met Kim for the first time in a restaurant in Chinatown around 5 pm on that day when they were both dining.

23He claimed also that the vehicle was given to him by Kim the day before,
9 August, and that he had not previously driven it.  He stated he was being paid $200 to unpack the container and that Mr Kim had taken him to the factory and given him the keys.

24Again he claimed he met Mr Tan for the first time at the factory on 10 August.  He claimed he did not know Mr Kim's phone number and that Mr Kim had called him from a public telephone.  Mr Tan declined to take part in a formal record of interview.

25On the same day ABF officers executed a search warrant at the residential premises of Mr Cheng in Ferguson Street, Mitcham.  Witnesses confirmed
Mr Cheng had been driving a gold or green Nissan Pulsar car.  Seized at the address were items including a black HP laptop and two handwritten receipts located in the room used by Mr Cheng, one being a rental agreement signed in the name "Beau" for the dates 6 August to 2 September.

26On 14 September 2017 ABF officers executed a search warrant at the residential premises of Mr Tan in Albert Crescent, Mulgrave.  The lessor of the premises stated that he had advertised a room for rent on a website "Ye Ye" on 5 August 2017.  He was contacted by a male person on a mobile phone number.  That mobile phone number belongs to Mr Cheng.

27On 6 August 2017 Mr Tan and Mr Cheng arrived at the address where
Mr Cheng paid $1140 in cash for four weeks' rent.  During the search of the Mulgrave address ABF officers seized documentation and personal belongings of Mr Tan, including amongst other things travel itinerary with a booking date of 3 August 2017 for Mr Tan to travel from Singapore to the Gold Coast arriving on 5 August 2017 and with an intended return date of 9 August 2017.

28An activation order for SIM card, a mobile phone, receipt for goods purchased at a Coles supermarket, including a fly buys number which was later identified as being registered to Mr Cheng.  A Commonwealth Bank letter addressed to Mr Tan Chong of 3 Albert Crescent, Mulgrave dated 7 August 2017 confirming account information.

29Forensic examination of Mr Tan's mobile phones confirmed accounts with WeChat and contacts therein including for Mr Cheng.  Included in the files and photographs were photographs taken by Mr Tan on 10 August 2017 depicting the inside of the Derrimut factory, including the two containers of the consignment.

30Forensic examination of the mobile phones seized from Mr Cheng revealed a total of 14 phone calls between Mr Cheng and Mr Tan between 6 and 10 August 2017 and additional communication between the two co-accused via online platform, WeChat.

31The pictures located on the phone included a photo of an ANZ ATM deposit slip dated 10 April 2017 and evidence demonstrating Mr Cheng's attendance at the Derrimut factory on 3 August 2017, namely a week before the unpacking of the relevant consignment.

32ANZ ATM deposit slips seized from Mr Cheng's premises confirmed monies paid into an account run by M & P Depot showing Deposits in Balwyn in April 2017, in Chadstone in March, April and May 2017, and Glen Waverley in May and June 2017.  These deposits ranged between $500 and $2570.

33ANZ bank records of M & P Depot when analysed confirmed that the two accounts in that name were opened on 13 December 2016.  Depositors listed included the name Jaz Cheng and Yit Cheng, both being identities of Mr Cheng.  The banking statements show all deposits outlined above, namely from Balwyn, Chadstone and Glen Waverley.

34CCTV footage later obtained showed Mr Cheng making deposits at Balwyn ANZ branch on 6 August 2017 and at Waurn Ponds on 11 July 2017 where he deposited amounts of $1300, $2500 and $5000, each time using false names.

35Both accused have been in custody since their arrest on 10 August 2017.  The maximum penalty for the offence against s.233BABAD(2) of the Customs Act (Cth) is ten years' imprisonment.  The explanatory memorandum accompanying the introduction of that section highlights the need for penalties to provide a strong deterrence against illegal importation.

36Courts have confirmed that the principle of general deterrence is particularly relevant given the difficulties of detection.  That difficulty creates significant enforcement and investigation costs for the Commonwealth of Australia and consequently the tax payer. In that sense and in relation to the general defrauding of the revenue these are not victimless crimes as the on flow flows to tax payers within this country.  Further in relation to tobacco the legislature has indicated a desire to discourage use of tobacco by imposing increased duties and therefore importation such as this one which make tobacco available at cheaper prices undermine that goal.

37Smuggled tobacco also creates a risk for the success of legislative health measures intended to mitigate the harmful effects of tobacco use.  In the New South Wales Court of Criminal Appeal decision of Saleh[1] the court emphasised the importance of general deterrence stating that pre-meditated offending for the rewards or benefits that criminality may bring is a calculated risk.

“… the rewards are not infrequently enormous.  The criminality is often difficult to detect and it is impossible to believe that many people do not get away with it.  Accordingly it behoves the courts to ensure that the penalties imposed on those who are caught are high enough to operate as a real disincentive to others tempted to offend.”[2]

[1]R v Saleh [2015] NSWCCA 299

[2] Ibid at para [47]

38In sentencing offenders for matters such as this, determination of role is an important consideration.  Another co-offender, Mr Fang, was dealt with in this court on 31 May 2018.[3]  His involvement related to another single container consignment imported by the same syndicate and delivered to a rental factory in Dandenong South on the same date, namely 10 August 2017.

[3] [ 2018] VCC 762

39That container contained 2,016,000 cigarettes and evaded customs duty and GST of $1.2 million approximately.  Mr Fang had been in Australia since 21 July and followed the same path via the Gold Coast to Melbourne despite having a return flight booked and declaring his intention to remain in Australia for five days.

40Her Honour Judge Hogan in sentencing Mr Fang concluded that he was in Australia for the sole purpose of participating in the delivery of the tobacco.  He was a trusted agent of the syndicate, acting autonomously, attending the factory to sign for the container, possessing keys to the factory, unpacking the container and taking instructions from others.

41Mr Fang had taken a number of preparatory steps for his involvement, namely opening a bank account and hiring a car and booking a motel room close to the delivery location.  Mr Fang was sentenced to two years' imprisonment to be released after serving 12 months' imprisonment on a recognisance release order for two years in the sum of $2000. He was a 23 year old at the time of sentence and had no prior convictions.  He entered an early plea. 

42By their pleas of guilty both Mr Cheng and Mr Tan admit knowledge of the illegally imported contents of the containers though I accept that neither man knew the specifics of quantum, nor of the amount of revenue defrauded.

43Neither was involved in the actual importation.  Although both men are to be sentenced on an indictment which alleges a single date, namely 10 August 2017, that is not to say that I should not view their behaviour on that day in a realistic context by taking into account the preparatory steps taken by each of them in the preceding timeframe.

44Such consideration provides information as to their roles.  It is apparent from the material before me that both Mr Cheng and Mr Tan were minions to a bigger syndicate involved in illegal importation of tobacco.  However, much like crop growers or crop sitters in commercial cultivation cases they represent the necessary manpower required for those up the chain of command to succeed in their illegal enterprise.

45Pointers to their trusted positions include the fact that both were in possession of keys to the factory.  Mr Tan was present alone for the purpose of receiving and signing for the containers.  Both were engaged in their unpacking.  Mr Tan was in communication with Mr Cheng in relation to the arrival of the consignment and part of his task included taking photographs of the containers and their contents.

46Given Mr Tan's very recent arrival in Australia, his false declarations as to his intended length of stay in this country and his immediate travel from the Gold Coast to Melbourne the conclusion can safely be drawn that he was in Australia for the purpose of taking delivery of the illegally imported tobacco.

47The prosecution submit here that Mr Cheng's role is greater than Mr Tan's and that both men played greater roles than Mr Fang.  I do not see a lot of distinction between the actual roles played by Mr Fang and Mr Tan.  However there are two important sentencing considerations.

48First, Mr Fang was a young offender, almost half the age of Mr Tan.  Second, the quantum of tobacco possessed by Mr Fang was almost exactly half the amount of that located at the Derrimut factory with Mr Tan and Mr Cheng.

49Although it was argued that dividing up the consignment between the two men results in a similar amount to Mr Fang, both Mr Cheng and Tan are liable for the overall quantum of cigarettes there were dealing with and thereby the total amount of duty evaded.

50In relation to Mr Cheng he had been in Australia for a number of months.  While it would not be possible to conclude to the requisite standard what his original purpose was in coming here, he was immediately involved with M & P Depot as shown by the banking activity which occurred the next day.

51Ongoing banking activity demonstrates that connection over those months, as does his use of the gold Nissan, a vehicle registered to another person apparently connected to the syndicate.  He attended the Derrimut factory a week before delivery and was trusted to look after Mr Tan by way of collecting him and delivering him to a rental accommodation. Mr Cheng's general involvement with the syndicate was evidently more extensive than his co-accused. 

52I do not accept that Mr Cheng was in a supervisory role in relation to Mr Tan.  Their contact goes as far as him picking up Mr Tan at the airport, delivering him to the rental accommodation, paying for that accommodation and having phone and online contact during a period of days and in the relevant timeframe of delivery on 10 August.  It may be that they were equal players.  It may be that Mr Cheng was the lackey, tasked to look after Mr Tan.  There is simply no evidence to precisely determine that, and nothing which would allow me to conclude to the requisite standard that he was supervising Mr Tan.

53The large quantum of cigarettes, contract with professional Customs brokers and freight transporters, leasing and use of a commercial factory to the unpack the goods signify that this was a large scale professional enterprise, as does the delivery received by Mr Fang on the same day.  No doubt it was committed for financial gain on a large scale by other persons, and on some lesser known scale by the accused who are before me.  It is not possible in this case to determine exactly what that profit was to be for either of these accused.  In relation to Mr Tan, he apparently expected to receive $10,000 to $20,000, an amount similar to Mr Fang.  You did not of course receive any money ultimately.

54Although there is no evidence to the contrary, in light of the level of his involvement with M & P Depot and Mr Kim over a period of months, the claim by Mr Cheng that he was to be paid $200 to unpack the container is difficult to accept.  That claim was elaborated on during the plea, namely that he was paid $200 daily by Mr Kim for performing a variety of menial tasks, including banking. He says he thought the banking related to rental monies.  Regardless of the exact amount he was to be paid, Mr Cheng was involved for financial gain. 

55Both in his record of interview and in submissions to this court Mr Cheng contended he was in Australia for the purpose learning English and to send monies back to his family in Malaysia. No documentary support was provided to substantiate his claim of enrolment as a student.  He could not in fact name the institution or the address.  I do not accept that he was here for the purpose of studying.  Ultimately however I cannot and do not make an adverse finding as to whether there were reasons for remaining in Australia beyond his involvement with the tobacco importation.  Put simply there may or may not have been.

56It was submitted on behalf of Mr Cheng that he is very worried about his mother and family in Malaysia.  His mother is 65 years old and has developed diabetes.  She receives ongoing medical treatment and it is foreshadowed that she may require hospitalisation and treatment which is said to be valued at 10,000 Ringgit.

57No documentation was provided to support this claim.  Mr Cheng's older brother and younger sisters reside with their mother.  They all contribute financially to the family.  None have been in trouble with the law.

58Both Mr Tan and Mr Cheng have been in custody since 10 August 2017 and both are working within the prison environment. 

59As the Court of Appeal said in Saleh those who undertake operations such as this regardless of their role take a calculated risk.  Those who undertake such operations in another country must accept as part of the risk that they will likely be imprisoned in a foreign country where they do not speak the language and where they are removed from their family.  Having taken that risk they cannot then complain about those consequences. Isolation in custody, while it may engender sympathy, cannot be a proper basis for mitigating penalty in these circumstances.[4] 

[4] See DPP (Cth) v Peng [2014] VSCA 128

60It is almost inevitable that both men will be deported at the conclusion of any sentence.  I accept that the prospect of deportation is a factor which may add to the impact of a sentence of imprisonment on an offender.

61I note in the psychological assessment report of Dr Aaron Cunningham dated 3 July 2018 Dr Cunningham opines that from a psychological perspective
Mr Cheng would benefit from a disposition that facilitated his rehabilitation.  He says he would benefit from returning to his supports in Malaysia, re-engaging with family supports would reduce his risk and improve his prospects for rehabilitation.

62Dr Cunningham also notes that Mr Cheng reported a stable family life in Malaysia despite some lack of employment and that he struggled somewhat in Australia being culturally and emotionally isolated and he now reports he is motivated to return to his family in Malaysia.

63I accept that specific deterrence must play a part in the sentencing synthesis given there was clearly premeditation and planning involved in the scheme, including at the level of these offenders.

64Neither man has prior convictions.  Both have reasonable prospects of rehabilitation and no doubt that is enhanced by their experience of imprisonment in this country and the deterrent effect that it is apparently having on them.

65Both men entered early pleas of guilty.  Given the level of investigation and the number of witnesses who are named on the indictment such plea has a utilitarian benefit in avoiding a trial.  I accept both men have expressed their remorse in relation to their involvement in this offending.

66Mr Cheng is still a relatively young man, aged only 30 and without any prior criminal record.  No doubt a term of imprisonment spent in a foreign country has been a difficult experience for him.  He was described in custody as feeling teary, helpless and hopeless.  He is described by his counsel as feeling remorseful and I accept those descriptions.  Hopefully the experience has served its purpose and in his circumstances, as I have said, my view is that his prospects of rehabilitation are reasonably positive. 

67Mr Tan is a 38 year old man born and raised in Malaysia.  I have received a letter from his girlfriend, Tan Wi Chong, who asks that he be given the opportunity to return to Malaysia and look after his daughters and mother.

68His mother is elderly and seriously ill in the last stages of a lung disease and possibly of her life.  She too wrote asking that he be allowed to come home to see her one last time.  Mr Tan is a single father to two daughters who are now aged six and eight years old.  Their mother left the girls in his care at the finish of that relationship.

69His older daughter has epilepsy and needs care and medication to control her illness.  Ms Chong writes that Mr Tan's daughters miss him a lot.  In Malaysia he was working as a truck driver but previously qualified as a graphic designer and was engaged in that profession.

70He too is apparently desirous of returning to Malaysia.

71MS ALLISON:  Mr Tan has instructed that his mother passed away on Sunday.

72HER HONOUR:  I am very sorry to hear that.

73MS ALLISON:  He is further worried about his daughters and who is caring for them.

74HER HONOUR:  Yes.  I have been informed today by Mr Tan that his mother in fact passed away last Sunday and that he therefore is even more concerned about the care of his daughters in Malaysia.  No doubt that only emphasises his desire to return home.

75In imposing sentence for this offence I must ensure that it is adequate to punish for the severity of this crime.  4,200,000 cigarettes and the sum of excise duty sought to be evaded, namely over $2,800,000, are extremely significant amounts.

76I have given consideration to the matters outlined in s.16A of the Crimes Act 1914 Commonwealth. I have taken into account in relation to both men their personal circumstances, together with the roles they each played and the gravity of the overall offending. I have also taken into account parity and the desirability of consistency in sentencing.

77There was no dispute taken that an immediate custodial sentence was the only appropriate disposition.  The prosecution did not contend however that a term of imprisonment with a non-parole period was warranted.

78If you could now stand please, Mr Tan?  Thank you.  Mr Tan, on one charge of possession of tobacco products knowing that they were imported with intent to defraud the revenue you are convicted and sentenced to be imprisoned for a period of 24 months commencing today.

79I order that on the expiration of a period of 14 months you be released upon entering into a recognisance to be of good behaviour for a period of two years with yourself as surety in the sum of $2000, without such security being required to be deposited.

80Do we have the pre-sentence detention figure?

81MS ALLISON:  Your Honour, I calculate the pre-sentence detention at 371 days.

82HER HONOUR:  That is agreed.  I declare a period of 371 days pre-sentence detention to be time reckoned as already served under the sentence imposed this day.  In relation to s.6AAA I declare that but for your plea of guilty the sentence I would have imposed would be a period of 28 months with 20 months to be served before being released on a recognisance release order in the sum of $3000.  You can be seated, Mr Tan.

83Mr Cheng, if you would stand?  Mr Cheng, on one charge of possession of tobacco products knowing that they were imported with intent to defraud the revenue you are convicted and sentenced to be imprisoned for a period of
26 months commencing today.  I order that on the expiration of a period of
18 months you be released upon entering into a recognisance to be of good behaviour for a period of two years with yourself as surety in the sum of $2000 without such security being required to be deposited.

84I declare a period of 371 days pre-sentence detention to be time reckoned as already served under the sentence imposed this day.  In relation to s.6AAA but for your plea of guilty the sentence I would have imposed would have been a period of 30 months' imprisonment with 22 months to be served before being released on a recognisance release order in the sum of $3000.

85You can have a seat, Mr Cheng, thank you.  Do counsel have any issues?

86MS ALLISON:  No, Your Honour.

87MR BATTERSBY:  No, Your Honour.

88MS SKOBLAR:  I have prepared some draft forms and I will fill them in with Your Honour's sentence for signing.

89HER HONOUR:  Thanks very much, Ms Skoblar, I will sign that in chambers.

90MS SKOBLAR:  Sorry to bother Your Honour but the accused need to sign the form before Your Honour does.

91HER HONOUR:  Of course, yes.

92MR BATTERSBY:  Your Honour, may I approach my client?

93MS ALLISON:  May I approach Mr Tan, Your Honour?

94MR BATTERSBY:  Your Honour, I will just hand that form to you.

95HER HONOUR:  Thank you very much.  Thank you very much, counsel.

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