Director of Public Prosecutions v Guirguis

[2018] VCC 1383

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

AT MELBOURNE
CRIMINAL JURISDICTION

CR 17-01231

DIRECTOR OF PUBLIC PROSECUTIONS

v

MINA GUIRGUIS

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JUDGE:	HIS HONOUR JUDGE CARMODY
WHERE HELD:	Melbourne
DATE OF HEARING:	28 August 2018
DATE OF SENTENCE:	31 August 2018
CASE MAY BE CITED AS:	DPP v Guirguis
MEDIUM NEUTRAL CITATION:	[2018] VCC 1383

REASONS FOR SENTENCE
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Subject:  CRIMINAL LAW   

Catchwords:  Customs –offences- importation of tobacco – evasion of duty.

Legislation Cited:  Crimes Act 1914 (Cth), Customs Act 1901 (Cth)

Cases Cited:R v Zhang [2017] SASCFC 5, R v Saleh [2015] NSWCCA 299, Young v The Queen [2016] VSCA 149, Hussein v The Queen [2016] VSCA 212, DPP v Hong [2015] VCC 344, DPP(CTH) v Long [2017] VCC 1306, R v Lee [2015] NSWDC

Sentence:Total Effective Sentence 18 months imprisonment direct that upon entering a recognisance release order in the sum of $3,000 to be of good behaviour for three years.

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Ms R. Avis	Director of the Commonwealth Public Prosecutions
For the Accused	Mr C. Farrington (Plea) Mr S. Andrianakis (Sentence)	Stephen Adrianakis & Associates

HIS HONOUR:

1Mina Guirguis, on 28 August 2018 you pleaded guilty to the following charges on the Indictment: 

Charge 1, possess tobacco products on 25 August 2016, knowing that the goods were imported, with the intent to defraud the revenue; and

Charge 2, possess tobacco products on 14 November 2016, knowing that the goods were imported, with the intent to defraud the revenue. 

2Each of these charges has a maximum penalty of ten years' imprisonment.  I note here that in 2012 Parliament increased the maximum penalty from two years to ten years' imprisonment.  These charges are serious offending.

Circumstances of your offending

3The full circumstances of your offending are set out in the summary of prosecution opening for the plea, dated 1 August 2018.  This document was Exhibit “A” on the plea.  Your counsel, in his submissions on your behalf, does not dispute the facts contained in that summary.  I will refer to the prosecution opening in these reasons for sentence.

4In October 2015, Mainpack Pty Ltd (trading as Trade Mark Investigation Services or TMIS) commenced a test purchase operation relating to an online tobacco merchant, TMIS made six test purchases between 27 October 2015 and 15 June 2016, with two more on
27 September and 4 November 2016.  Each order was for four cartons and arrived via express parcel from Victoria.  Each of the cartons received were cigarettes made for foreign markets including cartons marked "Duty Free."

5The first six orders were sent from M. Guirguis, 5 Colburn Court in Hillside, Victoria.  The last two orders were sent from Min Zaman, 292 Lygon Street, Carlton.  On each occasion the correspondence was received from [email protected], confirming that the goods had been sent.  The website, was at all relevant times registered to you.  You also owned and operated a Lebanese restaurant and shisha bar, known as Min Zaman, located at 292 Lygon Street in Carlton.

6Trade Mark Investigation Services is a tobacco industry-funded organisation.  TMIS and other tobacco industry stakeholders referred these findings to Australian Border Force for investigation.

7On 25 August 2016, at 7 am, Australian Border Force attended at your home at 5 Colburn Court, Hillside for the purpose of executing a search warrant and seizure warrant.  The ABF seized 47,160 cigarettes from your home together with your phone and laptop.  The cigarettes were of various brands including Canyon, Dunhill, Double Happiness, Esse, Gizeh, Marlboro, Otto 8, Yee-Yee and Zaghoul.  The cigarettes were located in the lounge room, kitchen, garage, boxes near the front door, a storage room under the staircase and the boot of the car parked at the property. 

8ABF officers also seized items connected to the operation of the website such as the order books and receipts from Australia Post for the purchase of mailing satchels. 

9During the execution of these warrants, ABF interviewed you at your home.  You stated the following:

·You did not import the cigarettes but bought them from two Chinese men.

·The Chinese men came to your restaurant and sold you the cigarettes cheap.

·There were a number of them.

·You did not have the telephone details of the cigarette vendors.

·That you paid an average of $100 per carton.

·That you had been buying cigarettes from them for about five years and selling cigarettes at the same time.

·That you had sent cigarettes via Australia Post.

·You did not know if the cigarette vendors had paid the duties.

·You had no account with your suppliers.

·All transactions were in cash.

·That you never asked if the duties had been paid on the tobacco.

·It was not your business whether they did.

·You did not want to expose yourself or your family to danger by revealing your supplier's names and contact details.

·That you stored the tobacco at home and in your storage unit in Tullamarine.

·That after receiving the order, you would place it in a bag and put it in the post.

·You put the warnings on each carton.

·You make about $75,000 profit from the website with annual turnover of approximately $600,000 to $700,000.

·Money from the website goes into a bank account on Mina Online Trading, which is a company that runs the website.

·You had an agreement with the Department of Health that allowed you to run the website, and the Department of Health put conditions on how you ran your business and gave you authority to run the website.

·That you wondered how the cigarettes were so cheap, but you did not ask any questions.

·That Jian, James and Tom, are the Chinese men who sell you the cigarettes.

·That your suppliers may have paid less taxes and that you do not buy cigarettes from British American Tobacco or Phillip Morris because they do not want to work with you.  It was not because they were too expensive.

10At 8.56 am on 25 August 2016, the ABF officers attended Storage King facility in Tullamarine, for the purpose of executing search and seizure warrants on units leased by you.  The ABF seized a total of 227,120 cigarettes from your unit at Storage King, and those brands included Canyon, Double Happiness, Esse, Gizeh, Manchester, Marlboro, Memphis, Otto, Shishi, Westend and
Yee Yee.  The total duty payable on the cigarettes seized on that date was $147,378.87. 

11ABF officers examined your phone and found text messages sent to, and received from, a Gilbert Bol Bol. You were conducting the cigarette and tobacco reselling business in an open and transparent manner.  The domain name, the business address, the home address and the bank accounts all lead back to you.  You were not charged at that time.

12On 27 September 2016, you participated in what is described as a voluntary interview with the ABF officers.  You stated the following on that occasion:

·You bought tobacco from Gilbert.

·Gilbert proved the tobacco was legal by showing you invoices from Customs.

·Gilbert said that he had a contract with Customs and you rang Customs because you had an account with them as well.

·Customs confirmed that Gilbert had paid his bills.

·Gilbert provided you with the receipts all the time.

·Gilbert imported the stock from China.

·Most of the stock you had was imported.

·That you did not believe Gilbert had sold you smuggled tobacco.

·That you rang Customs to check if Gilbert had paid the invoices on the cigarettes.

·You did not know how much profit Gilbert makes from you.

·Someone inside Customs is corrupt - a Lebanese man named Andrew, you said. 

·You did not know or care why Gilbert was selling cigarettes at a loss.

·You had receipts from Gilbert which you produced.

·Your safe, which contained business papers, included receipts for your tobacco that had been stolen some months before.

·You knew Gilbert's product was imported, but you did not know it was smuggled.

13Despite these interactions with the ABF and the obvious concerns about the legality of your tobacco and cigarette selling business, you continued to trade after 25 August 2016. 

14Payment of $118,251.80 was lodged in the bank account of Mina Online Trade Pty Ltd between 26 August 2016 and 22 September 2016.  The description of many of these payments referred to cigarettes. 

15At 7.08 am on 14 November 2016, ABF officers executed search and seizure warrants at your home.  They seized a total of 2800 cigarettes from your home.  The cigarettes were found in the study and in the boot of the vehicle parked alongside the property.  During the execution of this warrant, the ABF officers interviewed you again.  You stated the following:

·That you imported cigarettes;

·the last delivery to your restaurant was maybe three weeks ago;

·that you would buy cigarettes and loose-leaf tobacco locally; 

·that you could not remember the name of the local supplier and would not say how you met them, as you did not want other people to get into trouble;

·imported tobacco was always cheaper than the local one;

·that there were no cigarettes at the restaurant;

·that you could not remember where the documentation was for the cigarettes you had sent through your website recently;

·that you ordered cigarettes from your contact in China, Carly Zhou, and received them maybe three weeks ago via email; 

·that you imported everything including cigarettes and plain tobacco;

·no one else was providing you with tobacco;

·you collected the cigarettes from Zhou at the post office; and

·you buy cigarettes overseas and locally, but you could not remember the name of the local people.

16The ABF officers then arrested you and conveyed you to ABF Headquarters and conducted a further interview under caution. You stated as follows:

·Any tobacco you imported, you declared and paid duty on.

·Your also imported cigarettes and paid duty on those.

·You said that you did not know why the ABF records did not show any of these payments.

·You stated that you could not remember the brand of the cigarettes you imported except for Marlboro and Davidoff.

·You said that you also bought them locally, mainly from Gilbert.

·You only bought cigarettes from Gilbert in approximately August.

17At 10.08 am on 14 November 2016, the ABF executed a search and seizure warrant at Min Zaman, which is your restaurant.  ABF officers seized a further 72,800 cigarettes.  The brands included Figure, Specta and Yee Yee.  The total duty payable on those cigarettes seized was $44,447.31.

18On 14 November 2016, you were charged with a number of offences. On 19 June 2017 you were committed to stand trial at the County Court on
30 April 2018.  On that day you pleaded guilty to a revised indictment which contained the two charges which are currently before this court.

Personal circumstances

19You are now 41 years old.  At the time of your offending you were 39 years old.  You were born in Egypt.  You have two older brothers.  Shortly after your mother died in Egypt you moved to Australia with your father and your two older brothers in 2000.  You were 23 years old at that time.  Your father passed away in 2015.

20When you first arrived in Australia you commenced a Diploma of Education at Latrobe University, specialising in mathematics.  In 2003, you commenced as a relief teacher.  In 2004 to 2006, you were a Year 12 mathematics teacher. 

21In 2007, you changed direction in life and purchased a Subway franchise.  You were good at this type of business and opened two further Subway stores in Frankston and Brighton.  You ran a number of Subway franchise awards in that time.  They were Exhibit “2” on the plea.

22In 2011, you sold out of your Subway stores and purchased Min Zaman, a Lebanese restaurant operating in Lygon Street, Carlton.  This restaurant business was run parallel with your business.  Unfortunately, in October 2017, there was a kitchen fire at the restaurant and it is now closed down.  The Landlord and its insurer are currently negotiating the repair and renovation of the restaurant premises and your plan is to reopen the restaurant Min Zaman.

23You are married to Kristen Kaldis.  You have two young boys aged eight and four years old.  Your wife is presently studying a Diploma of Nursing.  You still maintain your registration as a teacher, which I note expires on 30 September this year, which is Exhibit “4” on the plea. 

24Your two brothers are successful businessmen who run their own food-related businesses.  Your brother Aziz attests to your hardworking approach to life and that you are a good family man.  That was Exhibit “3” on the plea.

25You have no prior convictions and there are no outstanding matters to be brought before the courts.  You have been a person of previous good character.

Sentencing considerations

26The most significant consideration in sentencing a Federal offender such as yourself is s.17(a) of the Crimes Act, which provides as follows:

"The court shall not pass a sentence of imprisonment on any person unless the court, having considered all other available sentences, is satisfied that no other sentence is appropriate in all the circumstances of the case."

27A term of imprisonment is the only appropriate sentence for your offence.

28Section 16A of the Crimes Act sets out a non-exhaustive list of factors the court must take into account and take into consideration when sentencing a Federal offender such as yourself. There are many factors I must take into account, which are set out in s.16A of the Crimes Act.  These factors include:

(a) The nature and circumstances of your offence;

(b) If your offence forms part of a course of conduct consisting of a series of criminal acts.  In this case two discrete charges of possession;

(c) Any loss, injury or damage resulting from the offence.  In this case it's loss to the Commonwealth revenue;

(d) The degree to which a person has shown contrition for the offences.  In your case the remorse is confirmed by your plea of guilty and your cooperation with the police or the ABF;

(e) That you pleaded guilty to the offence;

(f) That the deterrent effect of any sentence or order under consideration may have on you.  That is, specific deterrence to yourself;

(g) That the deterrent effect that any sentence or order under consideration may have on other persons.  That is, general deterrence;

(h) The need to ensure that you are adequately punished for your offending.

(i) Your character, antecedents, age, means, physical and mental condition;

(j) The prospects of your rehabilitation; and

(k) The probable effect any sentence or order under consideration would have on your family. 

29You have indicated a plea of guilty to the present charges before the court and have done so.  You confirmed your intention to plead guilty at the hearing here on 30 April 2018.  Your plea does have a utilitarian value for the orderly and effective administration of justice.  There is a certainty of outcome and the resolution of the substantive issues raised by your offending.  Your plea allows for the preservation of the court and investigators' resources to deal with other matters and your plea vindicates a public confidence in the legal process set up to protect the community.

30Your plea is also a clear indication and acknowledgment by you that you accept responsibility for your criminal behaviour on these two occasions.  Your plea also recognises that you are willing to facilitate the course of justice in the community, and I accept that your plea to these charges indicates and demonstrates remorse on your part.  Your plea of guilty in this case is particularly significant given the number of witnesses who would be required to attend court.

31At the time of your offending you were 39 years old.  You have been in Australia since 2000.  You have no prior convictions either in Australia or in your country of birth.  There are no outstanding matters to be dealt with by the courts in relation to you.  You are to be sentenced as a person of previous good character.

32I am required to take into account current sentencing practices in respect of the charge of defrauding the Commonwealth by smuggling of tobacco products.  In 2012 the Parliament increased the maximum sentence fivefold to the current ten years' imprisonment.  This penalty also applies equally to importing and possession charges. 

33You, of course, are charged with possession on two separate days.  There is no allegation that you are involved in importing of the tobacco products.  Your criminality is that you buy from the importers.

34The prosecution has helpfully provided me with authorities on sentencing for tobacco-related offending.  The cases of Zhang, Saleh, Young, Hong, Long, Lee are all cases dealing with importation and greater amounts of money and cigarettes than yours.  I find that the role of an importer is far more serious than the role of a person, such as yourself, who was in possession of tobacco products with the intent to defraud the revenue.  This factor alone distinguishes your case from those authorities and the penalties handed down in those cases.  However, without resellers like yourself, the importers of these products would have no market. 

35Your case is unusual in the sense that the usual features of guile, cunning and sophistication of criminal offending are absent.  You presented the business through a domain name, You openly had the cigarettes at your restaurant, home and storage facility.  All of these premises are directly traceable to you.  The bank accounts and the payments are made in your name.  It was a case of all roads lead to you. 

36Even after you had been interviewed at your home by the ABF in relation to Charge 1, you continued on your merry way until the search warrant execution on 14 November 2016, which is Charge 2.  At first blush, this was an example of blatant offending by you, which you carried out in a calculating and industrious manner.

37A closer reading of your interviews with the authorities leads me to the conclusion that there was a level of naivety in your offending and you have a concern about the welfare of your family if you were to disclose the source of your tobacco products.  The total of your duty payable on the cigarettes seized on both days was $191,826.18.  Your offending is serious.

38In assessing the seriousness of these revenue offences, I am required to assess the following matters:

(1) Your role as an offender. 

You were charged with possession of the cigarettes on two separate days.  You operated your own cigarette selling business, and the prosecution does not allege you imported these cigarettes.

(2) Sophistication of the offending.

I have previously dealt with this matter.  Your criminal acts lack any level of sophistication.  You operated your cigarette selling business out in the open.

(3) The period of offending.

You have been charged with possession on two specific dates.  The opening refers to a wider period of time and your admissions are to operating a cigarette selling business over a period of years.  The sentence I impose is to be restricted to those days of offending.

(4) The quantity of tobacco possessed and the duty defrauded. 

You have possessed a significant amount of tobacco and cigarettes.  The duty repayable was a total of $191,826.18; and

(5) The loss of revenue repayment.

There has been no repayment of the loss of revenue by you.  The cigarettes have been seized by the ABF.  There has been no use of false identities or other illegal means in your activity.  As I have said, you operated completely in the open.  You were selling tobacco and cigarettes within Australia.  Whilst you have not made any money from the possession of the seized cigarettes for which you face sentence, you have admitted to making approximately $75,000 from your website in your interview with the ABF on 25 August 2016.

39Overall, your offending is serious but not to the level of seriousness of the cases I was referred to by the prosecutor.  It is important that general deterrence is given significant weight when imposing a sentence on you.

40I see your prospects of rehabilitation as being good.  You have no prior convictions.  You have good family support and responsibilities.  The appropriate sentence in your case can be marked out by the imposition of a term of imprisonment to be wholly suspended, combined with a community corrections order with conditions of unpaid community work.

41Would you stand, please.

42On Charge 1, you are convicted and sentenced to 18 months' imprisonment.  Upon entering a recognisance release order in the sum of $3000 to be of good behaviour for three years, you are to be released immediately.

43On Charge 2, you are convicted and placed on a community corrections order.  The condition of that order is that you perform 200 hours of unpaid community work and that you are to report within 48 hours at the Melton Community Corrections Centre.

44That is it.

45MS AVIS:  Your Honour, I missed how long the community corrections order was for.

46HIS HONOUR:  Two years.

47MS AVIS:  Two years?

48HIS HONOUR:  Yes.

49MS AVIS:  The other order that the Crown seeks is a forfeiture ‑ ‑ ‑

50HIS HONOUR:  Yes, sorry, I forgot about that.

51MS AVIS:  I also have a draft recognisance release order as well for Your Honour.  As I understand, it was forthwith with a $3000 surety; is that correct?

52HIS HONOUR:  That's correct.  Yes, 3000 surety, and it's for a period of three years.

53MS AVIS:  Three years?

54HIS HONOUR:  Yes.

55MS AVIS: I'll just get my instructor - just in regards to the draft order in regards to the forfeiture under s.205D(2) of the Customs Act, it relates to a number of products that were seized. Clarity for the record, it relates solely to tobacco products ‑ ‑ ‑

56HIS HONOUR:  Yes.

57MS AVIS:  ‑ ‑ ‑ including cigarettes, loose-leaf tobacco and molasses tobacco.

58HIS HONOUR:  Molasses of tobacco.

59MS AVIS:  Molasses tobacco rather than molasses, which are different products.

60HIS HONOUR:  Yes, thanks.  Thank you.

61MS AVIS:  Can I just confirm for my instructor, it is a three-year recognisance release order, $3000?

62HIS HONOUR:  Correct, and eighteen months.  And eighteen months.

63MS AVIS:  Eighteen months good behaviour?

64HIS HONOUR:  No, 18 months sentence to be released immediately.

65MR ANDRIANAKIS:  Yes.

66MS AVIS:  Yes.

67HIS HONOUR:  Yes.

68MS AVIS:  Eighteen months' imprisonment forthwith.

69HIS HONOUR:  I have made those orders.  Do I have to declare a s.6AAA?

70MS AVIS:  You are not required to.

71HIS HONOUR:  No.

72MS AVIS:  You can if you wish to.

73HIS HONOUR:  No, I wasn't going to.

74MS AVIS:  I'm being corrected.  Rather than a surety, it's a recognisance of $3000.

75HIS HONOUR:  Yes.

76MS AVIS:  And then there's a draft order.  It's just that it was amended on the draft order.

77HIS HONOUR:  Thank you.

78MS AVIS:  Your Honour, my instructions are that the Crown's position is that they'd prefer a 6AAA declaration if Your Honour is minded to give one.

79HIS HONOUR:  Yes, certainly.  But for your plea of guilty, Mr Guirguis, I would have sentenced you to a period of imprisonment of three years, and you would have been required - that is a total of three years, and you would have been required to serve 12 months of it in prison.

80MS AVIS:  If Your Honour pleases.

81HIS HONOUR:  There are two documents - sorry, Mr Andrianakis, if you wouldn't mind approaching the ‑ ‑ ‑

82MR ANDRIANAKIS:  I will, Your Honour.

83HIS HONOUR:  Thank you.

84MR ANDRIANAKIS:  Thank you, Your Honour.

85MS AVIS: Your Honour, just finally, under s.16F of the Crimes Act, you are required just to explain in regards to the terms of the recognisance release order.

86HIS HONOUR:  I am about to, but thank you for you reminding me, Ms Avis. 
I was going to explain two things to him.

87Mr Guirguis, in relation to the recognisance, that is, the three years and the
18 months which you are not required to serve immediately, all right, that means (1) you have got to be good behaviour for three years.  If you are not, you face the risk of the 18 months.  Is that clear?

88OFFENDER:  Yes, sir.

89HIS HONOUR:  In relation to the community corrections order, you are convicted and you are to perform 200 hours of unpaid work.  I just want to make it very clear, and this is being transcribed, if you do not do that work, I will breach you on the CCO and I will sentence you.  Are you clear about that?

90OFFENDER:  I will do the work.

91HIS HONOUR:  Yes, all right.  You can step out of there now. 

92OFFENDER:  Thank you, sir.

93HIS HONOUR:  Finally, I did forget to say, if you breach the recognisance release order, you will have to pay the $3000 and be re-sentenced.  When you have got copies of those orders, you are free to go. 

94MR ANDRIANAKIS:  Thank you, Your Honour.

95HIS HONOUR:  Thank you very much, Ms Avis and Mr Andrianakis, for your assistance.

96MS AVIS:  As Your Honour pleases.

97MR ANDRIANKIS:  Thank you, Your Honour.

98HIS HONOUR:  And Ms Goh.  Thank you.

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