Director of Public Prosecutions v Kim
[2015] VCC 1849
•15 December 2015
| IN THE COUNTY COURT OF VICTORIA | Revised (Not) Restricted (Not) Suitable for Publication |
AT MELBOURNE
CRIMINAL JURISDICTIONCR-14-00942
CR-14-00943
CR-14-00944
CR-14-00946
| THE QUEEN |
| v |
| MAE JA KIM MOON JA KIM ZHE FANG HUAN WEN YE |
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| JUDGE: | HIS HONOUR JUDGE MEREDITH |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 11 December 2015 |
| DATE OF SENTENCE: | 15 December 2015 |
| CASE MAY BE CITED AS: | DPP v Kim & Ors |
| MEDIUM NEUTRAL CITATION: | [2015] VCC 1849 |
REASONS FOR SENTENCE
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Subject:Money laundering by continuing offence under s 400.5(1) Criminal Code
Catchwords:
Legislation Cited:
Cases Cited:
Sentence:---
APPEARANCES: | Counsel | Solicitors |
| For the Director of Public Prosecutions | Mr D. Holding | |
| For Accused Kim | Mr R. Backwell | |
| For Accused Kim | Mr C. Thomson | |
| For Accused Fang | Mr A. Lewis | |
| For Accused Ye | Mr L. Dean |
HIS HONOUR:
1Mae Ja Kim, Moon Ja Kim, Huan Wen Ye, and Zhe Fang, you have all pleaded guilty to a charge under s.400.5(1) of the Criminal Code (Cth) (‘Code’; commonly referred to as money laundering, that between the 8 February 2013 and the 2 July 2013 you dealt with money that was and you believed to be the proceeds of crime, and at the time of your dealing, the value of the money was $50,000 or more. The maximum penalty for this offence is 15 years' imprisonment.
2You were each originally charged with a more serious offence of money laundering under s.400.4(1) of the Code of dealing in proceeds of crime worth $100,000 or more.
3I was told by prosecuting counsel that this was the first occasion that a money laundering offence was charged on the basis that, the proceeds of crime were realised from an offence against s.10 of the Sex Work Act (Vic), of deriving a material benefit from the earnings of sex work when not licensed to do so and, the dealing in the proceeds of crime occurred on an ongoing and continuous basis.
4The offence against s.10 of the Sex Work Act has a maximum penalty of 5 years' imprisonment. I was told that a money laundering offence was charged in order to reflect the full criminality of the conduct involved.
5Your matters were listed for trial before me commencing on 8 September 2015, and preliminary legal argument took place over approximately nine days. I ruled against a challenge made by all defence counsel concerning the manner in which the prosecution were pleading the case against you, and I made a further ruling concerning the admissibility of some telephone intercept material. Settlement discussions commenced on 17 September, and agreement was reached on 18 September. This led to the resolution of all of your matters, and the reduction of the charge from an offence against s 400.4(1) of the Code to an offence against s 400.5(1) of the Code.
6Given some of the arguments raised on the plea, it is necessary that I refer to some legal principles in these sentencing remarks, which have become quite lengthy.
7In Elias v R [2013] HCA 31, the High Court emphasised that courts are required to pay due regard to the discretion which prosecuting agencies have with respect to the selection of a charge. This discretion flows from the separation of powers between the executive and judicial arms of government, and the public interest in the prosecution of serious as charged by the prosecuting agency.
8At paragraph [32] of that decision the court stated:
“The fact that it is possible to identify another offence having a lesser maximum penalty which might have been charged does not make the decision to prosecute for the offence charged unjust. Nor is there substance in the appellants’ complaint that the sentencing judge in each case was constrained to impose an excessive sentence as the result of the prosecutor’s decision to proceed with the common law count. In a case in which an offenders conduct is of a minor character, the sentencing judge is not constrained to impose a lengthy sentence because the common law offence has a high maximum penalty.”
9And so the paragraph continues.
10The circumstances of your offending were extensively canvassed on the plea hearing, and a summary of these circumstances was tendered. This will remain on the court file, and accordingly I will summarise them relatively briefly.
11The offence of money laundering to which you have all pleaded guilty requires proof that the monies dealt with were proceeds of crime, and proof of your knowledge of that fact. It is agreed amongst the parties that the monies in this case became proceeds of crime through a contravention of s 10 of the Sex Work Act. The manner in which the monies in question came to be proceeds of crime, and the circumstances establishing your knowledge of that fact, are relevant.
12Mae Ja Kim, your dealing with the money is particularised as you possessing and disposing of money obtained from the commission of the offence of illegally deriving a benefit from the earnings of sex work. Your possession of the money comes as a result of contravening s.10 of the Sex Work Act. Your disposal of the money involves a range of expenditure, some of a personal nature, and some connected with maintaining the state of affairs necessary to enable the offence under s.10 of the Sex Work Act to continue, for example, payments made to underlings involved in the ongoing operation of the criminal scheme which generated the illegal funds.
13You, Mae Ja Kim, headed a syndicate whose members included your three co-accused, who respectively are your sister, your former husband, and an associate. Your syndicate facilitated the use of sex workers in four inner city Melbourne brothels. The sex workers would be paid according to the sexual services which they provided. They were measured in half hour units, and a percentage of their earnings would be diverted to your benefit and use. This was an elaborate and sophisticated scheme.
14The four brothels in question were: 39 Tope Street, South Melbourne, known as “39 Tope”; 43 Tope Street, South Melbourne, known as “Topes Treasures”; Tender Touch at 122 Dynon Road, West Melbourne; and the Candy Club at 392 Victoria Street, Richmond.
15Over the charged period you, Mae Ja Kim, were participating in intercepted telephone conversations where you discuss recruiting women from South East Asia to work in the sex industry with promises of good pay and conditions. You used 12 phones subscribed in false names during the police investigation of you. Your co-accused also used phones subscribed in false names. Unlicensed “Managers” or “Overseers” would be appointed to supervise the work of the sex workers who worked in the brothels in question. The managers would record the work undertaken by the sex workers and you, Mae Ja Kim, would ultimately acquire a percentage of the moneys paid to the sex workers.
16Regular meetings would take place whereby the managers would be paid in cash and discussion referable to this business would take place. Rostering was kept of approximately ten managers who would manage the conduct of between five to ten sex workers each.
17There are no charges that sex workers were in Australia on unlawful visas, however you, Mae Ja Kim, are recorded on intercepted phone calls discussing the nature of the work that visa applicants should put on their visa applications. Occupations such as ‘farm labourer’ are suggested by you to maximise the applicant’s prospects of obtaining a two year working visa. This serves to highlight the extent of your involvement in the ongoing scheme which generated the funds that you are charged with.
18A number of the sex workers would incur debts to you, for example airfares or expenses related to their coming to Australia. Once they arrived in the country, they would then undertake sex work. Their work in brothels was not said to have been illegal, however your involvement was, as you were not licensed under the Sex Work Act.
19In intercepted phone calls you can be heard having discussions aimed at maximising the units of work that sex workers would undertake. You can be heard discussing matters such as: fines for underperforming sex workers; the assignment of workers to particular brothels, which would influence the workers’ earning capacity; the rostering of sex workers; and the sacking of underperforming workers. As you took a percentage of the workers payment, your economic interests were best served by encouraging a greater amount of work to be undertaken by the sex workers. Those workers who were in debt to you were obviously placed in a position of increased vulnerability due to the pressure placed on them to work at an increased rate. Various intercepted phone calls reflect your endeavours to maximise the sex work undertaken.
20The licensing and regulation of the sex industry serves to protect both the sex workers and their clients. The scheme of regulation of the sex industry by the Sex Work Act and other means aims to give the sex workers a degree of control over their work environment, for example to enable them to choose to provide services and to control the nature of their work. The regulation of the industry is aimed at minimising the risks of exploitation. You operated outside of this regulatory framework.
21Each of you: Moon Ja Kim, Huan Wen Ye, and Zhe Fang, accept that you aided and abetted Mae Ja Kim in her dealing with the proceeds that had been derived from the sexual services provided by the sex workers. You each either assisted or encouraged Mae Ja Kim in her dealing with the proceeds of crime.
22You, Moon Ja Kim, would often work at the Tender Touch brothel, and would collect moneys from the workers, pay the managers and transfer profits to Mae Ja Kim. You occupied a supervisory role at the Dynon Rd brothel, organised rosters for workers, provided instruction to workers, and kept records. You were involved in discussions with Mae Ja Kim concerning her business plans and discussed pay rates for the workers.
23You, Huan Wen Ye, assisted in providing accommodation for the workers, and were involved in the management of the overseers at the Candy Club brothel. You arranged for transport for the workers, kept records of services such as meals or washing provided to workers to enable deductions to be made to cover their expenses, and were involved in record keeping for the Candy Club. You assisted with rostering, kept records, and transferred cash to Mae Ja Kim.
24You, Zhe Fang, worked at the 39 Tope St brothel as an approved manager. Whilst occupying a lawful role in the brothel, you were also able to assist in unlawful activity by collecting documents, cash, and book keeping. You regularly appear in intercepted phone conversations discussing the quantum of moneys being generated by the provision of workers and the calculation of profit and payments. You can be heard relaying day to day problems with rostering and discussing the performance of workers.
25On the plea hearing, I was referred to the case of Thorn [2009] NSWCCA 294. Thorn was charged with 11 counts of dishonestly obtaining a financial advantage and one of attempting to do so by making false claims for refunds under the GST legislation. He was also charged with one count of money laundering under s 400.4(1) of the Code. Thorn was prosecuted at a time when the Code did not allow for joint liability. Thorn and his partner Till lodged a series of bogus business activity statements. Out of a total of 26 fraudulent BAS statements, only 11 could be proven to have been lodged by Thorn. The money which formed the basis of the money laundering charge was (i) the proceeds of Thorn’s deception charge and (ii) money that related to refunds that were fraudulently obtained but distinct from the substantive offences that Thorn was charged with. Howie J, with whom Campbell JA and Rothman J agreed, considered this to be "an unusual case" of a money laundering offence, with an overlap between that and the fraud offences. At paragraph [27]. Howie J said: “This was an unusual use of a money laundering offence. To the extent that there was an overlap with the fraud offences the charge represented the use of the funds that had been dishonestly obtained under those offences. The criminality was very much in the obtaining of the funds not in their use. It is somewhat analogous to a robber being sentenced for both the robbery and being in possession of the stolen goods. ... ”
26At paragraphs [30] – [31] His Honour states why he was of the view that the money laundering offence was of a technical nature.
27At paragraph [31] His Honour referred to the fact that the applicant merely transferred the money obtained by the fraudulent claims from company accounts to his personal account, or withdrew it from an ATM so he could use it. There was nothing done to hide the source of the funds or to change their nature, Thorn was simply gaining access to them. His Honour described this as a highly technical version of the offence.
28The court reduced the sentences imposed on Thorn, but notwithstanding these observations, nevertheless retained, in respect of the money laundering offence, a sentence of imprisonment for two years and eight months, which was partially cumulated on the other sentences imposed. The sentence imposed and its partial cumulation suggest that the court recognised that the criminality involved in the money laundering offence warranted additional punishment and recognition.
29Your cases are different to Thorn’s in a number of respects. For example, unlike Thorn, there have not been charges laid in addition to the money laundering offence that cover the manner in which the money that you dealt with was realised.
30In Majeed v The Queen [2013] VSCA 40, at paragraph [36], the Court of Appeal provided guidance for sentencing judges concerning money laundering offences. The court said:
“First, of course, it is necessary to consider just where the offence sits in the grading of the offences within the scheme provided by s 400 of the Code. Secondly, the precise circumstances of the money laundering must be considered. Those circumstances include (inter alia) the role of the offender in the particular money laundering arrangement; whether the offender was the author or instigator of the arrangement; the degree of authority reposed in the offender in carrying out the arrangement; the precise actions of the offender which constituted the dealing for the purposes of the offence; the period of time over which the offence was committed; the number of transactions involved; and the amount involved in the offending. Thirdly, where possible, it is relevant to take into account the degree of the awareness or belief, which is the foundation of the relevant mental state alleged against the offender.”
31The money laundering on which I must sentence you involved a number of transactions, some of which were vital to the continued operation of the ongoing criminal enterprise. The transactions occurred over a significant period of time, and your pleas of guilty, as does the evidence, demonstrate that each of you knew of the illegal source of the funds.
32It is apparent from the whole of the evidence that you, Mae Ja Kim, were at the apex of the syndicate vis-a-vis your co-offenders.
33Each of you: Moon Ja Kim, Huan Wen Ye, and Zhe Fang, however, performed roles that were essential to the continued operation of the syndicate, and in your own ways, you each played an integral part in its operation. Each of your conduct was integral to the laundering of funds generated from the work of sex workers. These women were placed in a situation of potential vulnerability and the potential for their exploitation was ripe. Aside from the fact that you Mae Ja Kim are at the apex of the laundering enterprise vis-a-vis your co-offenders I see no legitimate basis on which to distinguish the culpability of the rest of you simply on the basis of the roles which each of you performed.
34Having regard to the whole of the evidence, I am satisfied that the quantum of money dealt with is toward the upper range of between 50,000 but less than $100,000. In particular, I rely on intercepted phone calls that discuss amounts of around $10,000 per week being generated from just one brothel, see for example, intercepted calls involving Fang and Mae Ja Kim (Call No.2181) wherein Fang tells Mae Ja Kim that from two of the brothels, No.39 and 43, the amount of money she is getting weekly is $30,000; call 3346 wherein Fang and Mae Ja Kim discuss $11,000 being generated from no 39; call No.742 wherein Fang and Moon Ja Kim discuss takings from No 39 and 43 for two days and this totalling $34,000 from which $24,000 had to be paid to the managers.
35In addition, documentary evidence, including a document recovered during the search of premises, indicates that $36,430 was generated from no 39 in a week, out of which payments not said to be proceeds of crime were made of $15,820, and payments said to be proceeds of crime, being payments to managers of $9,455, were made, and what is said to be $11,155 in profit was generated. In addition, other documentary evidence suggests that an extensive number of workers were managed during the charged period.
36General deterrence, that is deterring others who would offend in a similar manner, needs to be adequately emphasised in my sentencing of you. In my view all of you, exhibit a high level of moral culpability.
37Turning to your personal circumstances:
38Mae Ja Kim, you are now 41 years of age and have no prior convictions. You were born in Yanji in China. Much of your background is contained in a psychological report of Ian Mackinnon tendered on your behalf. Mr Mackinnon had the assistance of an interpreter during his interview of you. You left school at the age of 14 to assist your mother in her work as a retailer of clothing and household items. You were engaged in this for a number of years.
39Both of your parents are now deceased. Your brother has a disability and is in an institution in China. Your sister, who is your co-accused Moon Ja Kim, has been in Australia since late 2005 or 2006.
40According to Mr Mackinnon you “continue” to financially support your brother’s child, your nephew. Your counsel did not seek to rely on this aspect of the psychological report on your plea. The claim that you continue to support this child is somewhat at odds with what was put on the plea of your sister Moon Ja Kim and evidence called on that plea.
41In your 20’s, due to financial pressures, you worked as a prostitute to support your family in China. In 2004 you came to Australia on a working holiday visa. You had little English skills and worked in the sex industry.
42You had ceased this work by the time of your marriage to your husband, your co accused Huan Ye. Mr Mackinnon states that you were married in 2008 and “they have remained together since then”. Mr Mackinnon refers to you residing with your husband in a rented Melbourne apartment, and that you have “been with your husband for 11 years”. This is at odds with what was put on the plea of Mr Ye, and the circumstances of your arrest, where both of you were apparently living at separate residences. Your counsel submitted that it simply referred to the close relationship that still exists between yourself and your now former husband.
43You were remanded in custody on these matters for a total of 513 days, the best part of 17 months, and given your limited English you found this an isolating and distressing experience. I accept that you have a limited command of the English language, and communicate in either Mandarin or Korean. It was during your remand that your father died and your inability to attend to his funeral arrangements has been an upsetting matter for you.
44Mr MacKinnon states: “Ms Kim explained that she had been recruited by a man she believed was a licensed brothel operator, and in this context she believed she was not working illegally”.The assertion that you believed you were not working illegally is at odds with intercepted phone calls where, for example, you are expressing concern at the potential police investigation of you and your concerns flowing from this. You have not satisfied me of this potentially mitigating fact, and I do not sentence you on the basis that I accept the assertion contained within the report.
45The psychologist further states: “Ms Kim reported that she has never been financially well off and life in both China and in Australia has always been a struggle. Ms Kim stated that she does not own any property nor any other significant financial assets.” To the extent to which that raises, either expressly or impliedly, that you were financially struggling during the time of your offending, I reject it. The evidence referred to on the plea clearly indicates you enjoyed a lavish lifestyle.
46The psychologist reports that since you were released on bail, you have been training as a masseuse at a studio operated by your sister Moon Ja Kim, and that you work casually as a kitchen hand.
47Moon Ja Kim, you were born in Yang Li in Central China and are now 58 years of age. You are the eldest of three siblings, with your youngest sister being Mae Ja Kim, your co-accused. Your father and mother were from South and North Korea respectively, and moved to China early in their relationship, where you were born.
48The middle sibling of your family, your brother Young Cheol Kim, is in an institution in Yang Li, China. He is 48 years of age and, I am told, has a disability as a result of a car accident. Your brother has a 14-year-old son, Jun Wu Kim, whose mother, I am told, has abandoned him and he resides with a family friend in China, Ms Un Kim. Evidence was led on the plea concerning the domestic arrangements of your nephew and I will return to this later in these reasons.
49You were married to your first husband who was an electrician, and during this time you operated a hairdressing salon in China. You have one son, Xing Jin, who is charged in relation to these proceedings, however, with the agreement of the prosecution, his matter has now been adjourned to October 2016. You ultimately divorced your first husband, and in 1995 you married a Korean man and moved to Seoul with your second husband. In Seoul you worked in a restaurant, ran a coffee shop and were trained in remedial massage. In 2000, you and your second husband were divorced, and in 2006 you came to Australia on a holiday to visit your son, Xing Jin, who had already moved here. In Australia you met a man named Tang Sham, who was originally from Hong Kong. He worked in the restaurant industry, and you married him later in the year of your arrival in Australia and you settled in Melbourne. You undertook further massage training in Melbourne and worked in a massage centre in Northcote. You are an Australian citizen. Your third husband, Mr Sham, ultimately sold his restaurant business and returned to Hong Kong in 2009.
50You were working as a prostitute at the brothel at 122 Dynon Road, West Melbourne, from 2009 to 2011. You divorced in 2011, and then worked as a cleaner specialising in cleaning residences which had been vacated.
51During the offending period you were working at the 122 Dynon Road brothel. During this period you commenced organising for the grant of a planning permit to enable you to set up a remedial massage centre. You were absent from the jurisdiction between 24 February and 9 April 2013, and it is not suggested that you were aiding and abetting Mae Ja Kim during this period. It is apparent that your aiding and abetting was for a shorter span of time than that of your co-offenders, and I have taken this into account.
52You were arrested on 2 July 2013 and remanded in custody for 56 days. Your English language skills are limited, and you communicate in Korean. You found custody difficult and isolating. When bailed, it was a condition that you surrender your passport, and this meant that you were unable to attend your father’s funeral after his death on 25 October 2013. I accept that this was difficult for you. A permit was ultimately issued for your remedial massage business in early-November 2013. and you are working fulltime with this entity, known as Elite Medical Therapy, where you ran the business and perform remedial massage. Two others are also employed within the business. I was told the business is viable and you had expectation of making a profit this financial year.
53Evidence was given on your plea by a witness, Mr Ming Ji Lu. This concerned the fact that you had been requesting him to facilitate payments in the sum of $500 per month to China since September or October 2014. These were to make provision for you nephew, Jun Wu Kim. On the basis of the evidence and submissions, which I do not propose to recite, I am of the view that your incarceration and failure to continue to provide the $500 per month does not constitute exceptional circumstances of family hardship as that term has been described in the various authorities dealing with this issue. I am of the view that there is an insufficient evidential basis to maintain this submission.
54You offered to plead guilty to the current charge on 17 September 2015. On that day you also indicated you were prepared to cooperate by making a statement which would implicate your co-accused Ye and Fang. Discussions were ongoing with those acting on behalf of your co-offender, Fang, and it was made known to Fang’s counsel that you had indicated that your cooperation may have implicated Fang. Your potential cooperation was not communicated to the legal representatives of Ye. I do take into account, in your favour, your indication that you were prepared to cooperate with the prosecuting authorities for a brief period of time prior to the resolution of the matter.
55Two properties have been restrained under the Proceeds of Crime legislation. I am told that these were purchased some time prior to the charged period. One of these properties was sold some time ago, and I am told that you have lost only a small equity of several thousand dollars in that property. On your plea, it was initially put that the need for the sale arose because you were unable to tenant the property because it would constitute a breach of the restraining order. That was later clarified to the effect that the restraining order did not prevent you from tenanting the property. Whilst I accept that this property was acquired by you prior in time to the charged period of your offending, given the state of the evidence, or rather the lack of it before me, I am unable to take into account your loss which was put from the Bar table as being several thousand dollars. With respect to the second property, I have been told that the forfeiture of that property will be the subject of dispute by you. Given the state of the evidence, and the submissions made before me, I am not in a position to take into account your potential loss of this property, as there is currently an insufficient evidential basis for me to do so.
56In short, there is no evidentiary basis on which I could assess either the loss already suffered by you, or the likely outcome of the pending forfeiture application, or the punitive effect which might result from any forfeiture.
57Huan Ye, you were born in Shanghai and are now 34 years of age. When you were around five or six years of age, your father came to Australia to study interpreting and translating. You did not see your father for the next four odd years. You are an only child, and at 10 years of age, you and your mother came to join your father in Australia where you lived together in a small flat in Melbourne. When you were in Year 7, your parents purchased a milk bar, and the family lived behind the milk bar with you working there before and after school hours and on weekends.
58You were selected to attend University High School from Year 10 and you went on to complete a Bachelor of Science majoring in actuarial mathematics at Melbourne University. You met your co-offender, Mae Ja Kim, through another acquaintance in early-2004, and married her in November 2004. You completed your science degree in 2004, and in the following year commenced a Master of Practising Accounting at Victoria University with a view to becoming a Certified Practising Accountant. Around this time you had set up a small business involving the importation of Korean clothes, and you would also assist students and friends of Mae Ja Kim, who I was told had come to Australia to work in the sex industry. Many of these people had limited English language skills, so you would assist them by doing things such as their shopping, driving them around and other odd-jobs. You assisted them in finding accommodation and commenced renting apartments, initially in your own name, to sub-let them to sex workers. This business grew to include you providing furniture as well as apartments and various other services. The formation of this business, and your relationship with Mae Ja Kim, provided the setting in which you became involved in the conduct to which you have pleaded guilty over the charged period.
59You were arrested and remanded in custody from 2 July 2013 to 9 February 2014, inclusive, a total of 224 days. You found this to be a confronting experience. Written testimonials tendered on your behalf speak of the difficulties you encountered on remand and the sense of shame which your conduct has brought to both yourself and your family members. After your release on bail, you became engaged in the study of Buddhism and, I am told, reflected on the path which your life had taken. You have been living with your mother and father, and were supported in court by your father during the plea hearing. You were able to obtain some labouring work, however, due to difficulties with your joints, you have not been able to continue with that work. Your father has written a testimonial where he attests to the shame which you feel, and that you are in the process of committing yourself to Buddhist teachings. In your case, I am of the view that the evidence demonstrates a degree of remorse not evident in relation to your co-accused, and I have weighted this appropriately in the sentence I will impose on you.
60Zhe Fang, you were born in China in 1998, and are now 27 years of age. You are an only child, with your parents having left China when you were two years of age to go to Korea for work. You were raised by your maternal grandmother. You completed high school in China to Year 12 level and did well in your studies. You did two-and-a-half years of a degree in information technology whilst in China. You were ultimately granted a student visa to come to this country, and you arrived in Australia in 2009 at the age of 21. You had no friends or family in Australia, and your English skills were limited on your arrival. You studied for one-and-a-half years at a private institute undertaking a graphic design course. You then enrolled in an accounting course with the Central Queensland University, and have completed two of the three years of this course. You then transferred to Southern Cross College, where you studied accounting for one-and-a-half years until your arrest. Your student visa was cancelled on your arrest, and you have not been able to resume studies since. You were married in 2011, however the marriage failed after your arrest and your consequent remand in custody.
61You have spent 163 days in custody by way of presentence detention. You found this to be a difficult experience. Part of this involved a 25-day period of you being kept in the cells below the Magistrates’ Court, where you were locked in your cell for 23 hours per day. I have taken this into account. On your release, you experienced some difficulties with respect to living arrangements as a result of your student visa having been cancelled. I have taken this into account.
62The parties agree that you will be deported, and as such any expectation of a future life which you had in Australia is no longer open to you. I have taken this into account.
63Written submissions, which I will exhibit, were relied on by the prosecutor on behalf of the Commonwealth Director, stating that I could not take into account a purely objective assessment of the utilitarian value of each of your pleas of guilty.
64This was said to reflect the majority view in Cameron’s case 209 CLR 339. It is necessary that I deal with this submission. Cameron was charged with a drug offence against Western Australian law. This was picked up by the Commonwealth Places (Application of laws) Act, which vested the District Court of Western Australia with Federal jurisdiction in matters under that Act.
65W.A sentencing legislation provided for a reduction of a sentence on a plea of guilty. This was known as the fast track plea system. In Cameron, a majority of Justices of the High Court were of the view that a subjective willingness to facilitate the course of justice could be taken into account in mitigation of penalty on a guilty plea, as distinct from an objective assessment of the savings of the cost of a trial to the community.
66Their Honours Gaudron, Gummow and Callinan JJ, at paragraph [12] and following of Cameron stated:
“Although a plea of guilty may be taken into account in mitigation, a convicted person may not be penalised for having insisted on his or her right to trial. The distinction between allowing a reduction for a plea of guilty and not penalising a convicted person for not pleading guilty is not without its subtleties, but it is, nonetheless, a real distinction, albeit one the rationale for which may need some refinement in expression if the distinction is to be seen as non-discriminatory.”
67It is difficult to see how a person who has exercised his or her right to trial is not being discriminated against by reason of his or her exercising that right if, in otherwise comparable circumstances, another’s plea of guilty results in a reduction of the sentence that would otherwise have been imposed on the pragmatic and objective ground that the plea has saved the community the expense of a trial. However, the same is not true if the plea is seen, subjectively, as the willingness of the offender to facilitate the course of justice.
68Reconciliation of the requirement that a person not be penalised for pleading not guilty with the rule that a plea of guilty may be taken into account in mitigation requires that the rationale for the rule , so far as it depends on factors other than remorse and acceptance of responsibility, be expressed in terms of willingness to facilitate the course of justice and not on the basis that the plea has saved the community the expense of a contested hearing.”
69The prosecution submit that in the joint judgement of Cameron, their Honours were of the view that in order to avoid both the discrimination amongst offenders and the penalization of an an offender for pleading not guilty, a subjective willingness to facilitate the course of justice was required of an offender, in addition to other subjective attributes that may accompany a plea of guilty, for the plea to have a mitigatory effect.
70In McHugh J’s judgement, His Honour referred to the potential for discrimination by granting a discount for a “bare plea of guilty." That is: a plea of guilty unaccompanied by the existence of remorse, contrition, or an intention to facilitate the course of justice.
71His Honour stated that it was "at least arguable” that it is discriminatory to treat convicted persons differently when the only difference in their circumstances is that one group has been convicted on pleas of guilty and the other group has been convicted after pleas of not guilty. His Honour further stated that a plea discount based on: the objective fact of saving the expense of a defended trial, inconvenience to witnesses and delay to other cases in the court lists, may offend the principle of equal justice. Due to the fact that this issue was not the subject of any point taken by the Director in Cameron’s case, His Honour was of the view that it would have to be determined on another day.
72Kirby J at paragraph [93] and following, did not deal with the issue of whether a discount for a plea of guilty on purely objective utilitarian grounds is appropriate, as it was not the subject of full argument on the appeal. His Honour made the observation, without deciding, that by virtue of the operation of the Cth Places Act, Cameron’s offending was against a law of the State of WA which was picked up and applied as a Federal law. His Honour stated that: “There appears to be nothing in the general sentencing principles of the Federal Act ( Cth Crimes Act; s 16A(2)(g)) that is inconsistent with the principles that have been stated concerning discounts for pleas of guilty applicable to a case within State jurisdiction.” Earlier in His Honour’s judgement, he referred to the applicability of a discount for a plea of guilty relating to utilitarian factors, see paragraphs [65] – [68] and at paragraph [82] His Honour stated: "As I have shown there are other considerations of the public interest that warrant a discount. Remorse, when present, is icing on the cake.”
73The prosecution submit that the NSW Court of Appeal have endorsed what is said to be the approach of the majority in Cameron’s case, and that a plea of guilty is to be taken into account as recognition of an offender’s willingness to facilitate the course of justice, see Tyler v R (2007) 173 A Crim R 458, Sharma (2002) 54 NSWLR 300, and Lee v R [2012] NSWCCA 123.
74In DPP v Gow [2015] NSWCCA 208, however, Basten JA did not accept this proposition and Hamil J agreed with His Honour Basten JA.
75As I am exercising Federal jurisdiction in this case, Victorian sentencing law is picked up and applied pursuant to the Judiciary Act unless it is inconsistent with Federal law.
76Under Victorian sentencing law, an objective assessment is to be made of the extent to which a plea of guilty has facilitated the course of justice, and this may be taken into account irrespective of the existence of a subjective intent to do so.
77No notice under the Judiciary Act, referring to a constitutional issue, has been filed in this case.
78No argument was advanced by the prosecution concerning the meaning and content of s.16A(2)(g) Crimes Act (Cth), nor was any argument advanced as to whether the requirement under Victorian law to which I have previously referred arises from s.5(2)(e) Sentencing Act (Vic) or elsewhere.
79Counsel for each of you urged me not to accept the Commonwealth Director’s submission, and referred me to the case of Phillips v R [2012] VSCA 140, a case involving offending under State law. I was also referred to the application of the principles set out in Phillips, to the sentencing of Federal offenders in Peng [2014] VSCA 128, Alam [2015] VSCA 48, and KMD [2015] VSCA 255. In these cases which deal with Commonwealth offending, what I have earlier described as the Victorian approach has been applied. In none of these cases, however, was the point in question raised by the Commonwealth Director.
80In fact, during discussion prior to you entering your pleas of guilty, I made reference to an appropriate reduction of your sentences resulting from the facilitation of the course of justice arising from any guilty pleas which you might enter. This was not corrected by counsel appearing on behalf of the Director. My understanding is that it is only comparatively recently that the Director has commenced to take this point in Victoria.
81I was told on the plea that in two Courts of Appeal this issue has been argued, in the ACT and NSW, and that the respective courts have reserved their decisions concerning this. I was told that the Commonwealth Director has instituted a prosecution appeal regarding a judge of this court’s decision not to accept an identical sentencing submission to that made before me. I have no information concerning when judgement may be delivered in any of these matters. I do not consider it desirable, in all the circumstances of your cases, to delay my sentencing of you further.
82Given the position which I occupy in the court hierarchy, and the present state of authority, in my view I am bound by the approach adopted by the Victorian Court of Appeal. It will be for a higher court to determine whether that approach is invalid, and whether Cameron is of broad application or a decision confined in its application given that Cameron’s case involved an offence under WA law and the application of the WA fast track plea system as it existed at the time of Cameron's case.
83I wish to make it plain, however, that in the circumstances of this case, it makes no difference to the sentencing outcome which of the two approaches I adopt.
84I make it plain that none of you are disadvantaged by my sentencing of you in keeping with the Victorian practice of forming an objective assessment of the utilitarian value of your guilty pleas. For each of you, the mitigatory effect of your guilty pleas would be the same if I had upheld the Commonwealth Director’s submission.
85In other words, I have arrived at the same level of discount for each of you but by a different route than that suggested by the Director, and in the particular circumstances of this case, the result would be the same applying either of the two approaches.
86Notwithstanding that your guilty pleas came after your trials had commenced, and that I had made rulings against your interests, your pleas of guilty occur in the broader context of a money laundering case which has not been previously put in this manner, and your testing of the case’s legitimacy in preliminary argument is understandable given the reality of your forensic positions.
87Counsel for the Director submitted that I ought to find that each of you possessed a subjective intention to facilitate the course of justice in the circumstances of your individual cases, and in terms of all of your pleas of guilty, I find that you all possessed this intention.
88Were I to sentence you consistently with the Director’s submission, then the utilitarian benefits which have flowed from your pleas would have informed the extent of the mitigatory effect I would have allowed, consequent on my finding that each of you intended to facilitate the course of justice by your guilty pleas. As to the appropriateness of this see Phillips v R (2012) 222 A Crim R 149, at pp.158-159, paragraph [36] point no 7. In forming this assessment, amongst other matters, I would have had regard to: the fact that absent a plea of guilty, the prosecution would have been put to its proof and would have had to call evidence with respect to this; the likely length of your trials and their relative complexity.
89As I have rejected the Director’s submission, however, the sentencing discount for your pleas of guilty incorporates both a subjective and objective component. The overall discount incorporates your subjective willingness to facilitate the course of justice, and amongst other matters, an objective assessment of the value of your guilty pleas, having regard to the fact that absent a plea of guilty, the prosecution would have been put to its proof and had to call evidence with respect to this, the likely length of your trials and their relative complexity.
90I accept that for all of you, your pleas of guilty evidence some remorse, and they are an acceptance of responsibility by each of you for the wrongfulness of your conduct.
91There has been some delay between the end period of your offending, July 2013, and my sentencing of you today. I accept that you have all undergone a degree of strain having the matter hanging over your heads, and that a process of rehabilitation has commenced for each of you during this time. I have taken this into account for each of you and weighted it accordingly. I am of the view that for each of you, your rehabilitative prospects are reasonably good.
92Both of you, Mae Ja Kim and Moon Ja Kim, have given undertakings to give evidence in accordance with statements that you made to investigators.
93Mae Ja Kim, amongst other things, your statement refers to dealings with one of the four brothel licensees that you suppled sex workers to. In general terms, you refer to having done this with “the full knowledge and permission” of this person. You also refer to discussing with him the supplying of sex workers for a brothel he was opening in Cairns. This never eventuated, and your statement compliments telephone intercepts where you can be heard discussing these arrangements.
94Moon Ja Kim, amongst other things, your statement refers to dealings with one of the four brothel licensees regarding sex workers provided to this brothel by the syndicate of which you were a member. Amongst other things you say: “Because my English was limited I only had a few conversations with the relevant person about providing sex workers as well as the control and management of the sex workers Mae Ja Kim provided to work at the relevant location.” You also refer to having discussed with Mae Ja Kim the potential supply of workers for the Cairns brothel, however you had no discussions with the brothel licensee concerning this.
95There are many statements of high authority regarding the social utility in rewarding those who cooperate and adopt what is commonly referred to as the role of an ‘informer’. In the circumstances of each of you, I do not consider, however, that your cooperation is motivated in any significant way by feelings of remorse.
96The cases recognise the need to encourage others to assist the authorities in the investigation and prosecution of criminal behaviour, and to do justice to the individual informer having regard to the circumstances of the particular case. I am of the view that you are entitled to a discount in the sentences which I would otherwise have imposed but for your informing, and I have reduced the sentences which I will impose on you accordingly. I accept that you experience a degree of apprehension concerning your safety, and I have taken this into account in your favour. In fixing the extent of the discounts in your cases, I have had regard to the submissions made on your behalf, as well as the material tendered by the prosecution concerning the value of your information and the circumstances surrounding the giving of your undertakings.
97In my view, for all of you, no sentence other than a term of immediate imprisonment is appropriate.
98Mae Ja Kim I sentence you to 4 years' imprisonment and direct that you are to be released after you have served a period of 2 years and 6 months by way of recognisance, the terms of which I shall explain.
99Moon Ja Kim I sentence you to 3 years and 2 months' imprisonment and direct that you are to be released after you have served a period of 2 years' imprisonment by way of recognisance, the terms of which I shall explain shortly.
100Regarding you Mae Ja Kim and Moon Ja Kim, your sentences need to have the discount for your future cooperation and pleas of guilty stated.
101So far as your pleas of guilty are concerned, but for them, I would have sentenced you, Mae Ja Kim, to 6 years' imprisonment, with the expiration of 4 years' imprisonment before you were eligible for release.
102But for your plea of guilty, Moon Ja Kim, I would have sentenced you to 4 years and 4 months' imprisonment, with the expiration of 3 years and 2 months' before you were eligible for release.
103So far as your future cooperation is concerned, Mae Ja Kim, but for this I would have sentenced you to a term of 4 years and 10 months' imprisonment, with the expiration of 3 years and 2 months' imprisonment before you were eligible for release.
104Moon Ja Kim, but for your future cooperation, I would have sentenced you to a term of 3 years and 8 months' imprisonment, with the expiration of 2 years and 5 months' imprisonment before you were eligible for release.
105Huan Ye, I sentence you to a term of 3 years and 8 months' imprisonment, and fix a period of 2 years before you are eligible for release by way of recognisance. But for your plea of guilty, I would have sentenced you to a term of 4 years and 6 months' imprisonment, with the expiration of 2 years and 6 months' imprisonment before you were eligible for release.
106Zhe Feng, I sentence you to a term of 3 years and 8 months' imprisonment, and fix a period of 2 years and 3 months' imprisonment before you are eligible for release by way of recognisance.
107But for your plea of guilty, I would have sentenced you to a term of 4 years and 6 months' imprisonment, with the expiration of 2 years and 10 months' imprisonment before you were eligible for release.
108For all of you, your recognisance release orders will be for a period of 2 years and the amount of the recognisance will be $5,000.
109I am required to explain the purpose and effect of a recognisance release order. The order will grant you conditional freedom after the term specified in the order has been served by you. The conditions are that you be of good behaviour for a period of 24 months. If you breach the recognisance release order, you will be brought back before the court, most likely before me, to be dealt with for that breach, and may be resentenced on the original charge on which you have been released. The order may be extended or revoked, and you may be required to serve the remaining term of imprisonment. A breach would also mean that the sum of $5000 may be forfeited.
110So far as your presentence detention is concernd, I will make the following declarations:
111513 days referable to you Mae Ja Kim, 56 days referable to you Moon Ja Kim, 224 days referable to you Huan Ye, 163 days referable to you Zhe Fang. Yes?
112MR LEWIS: Your Honour I think it's 164 now since my client was remanded yesterday.
113HIS HONOUR: Yes. That will be the case for all, sorry. So I will add one day to those declarations and have them entered in the records of the court to reflect that. That will be 514, 57 and 225 respectively. All right. Now you will have to prepare the recognisance release orders, if there is any defect or correction required in the orders, you can let me know when I come back. I will stand down, or if there are any further orders that needs to be made, if you can bring them to my attention, or any matters which you are of the view need to be corrected. All right. I will stand down.
114(Short adjournment.)
115HIS HONOUR: Yes, Mr Holding.
116MR HOLDING: Your Honour my instructor's completed the relevant documents, if I could hand those up?
117HIS HONOUR: All right. Thanks, have you all had a look at them?
118MR BLACKWELL: Yes, sir.
119MR LEWIS: Yes, Your Honour.
120MR HOLDING: Yes, Your Honour.
121HIS HONOUR: If you could have your clients enter into those please.
122MR THOMSON: Your Honour can we approach the dock, just for (indistinct)?
123HIS HONOUR: Yes, certainly. All right. Is there anything further?
124MR THOMSON: There is Your Honour, we were given notice by email yesterday that the Crown will seek an order for a forensic sample to be taken from scrapings. I understand that will oppose, all of us, the making of any such order is not appropriate in this case.
125HIS HONOUR: Do you want to come back next and argue that?
126MR THOMSON: I don't know when the Crown wants to make the application, they need to go on an affidavit and explain why it is warranted in this case, Your Honour.
127MR HOLDING: It's not an application that will be made in this court I'm instructed Your Honour.
128HIS HONOUR: All right. Aside from that, nothing else?
129MR THOMSON: No, Your Honour.
130HIS HONOUR: All right. If you could remove the prisoners please? I would just like to express my gratitude to the interpreters, thank you for your assistance throughout the proceedings and for today. Thanks counsel, all right.
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