Director of Public Prosecutions v Liu
[2024] VCC 1213
•7 August 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-23-01654
CR-23-00429
CR-23-01655
| DIRECTOR OF PUBLIC PROSECUTIONS And | |
| DIRECTOR OF PUBLIC PROSECUTIONS (COMMONWEALTH) | Prosecution |
| v | |
| BOLIANG LIU | Defence |
| And TAO ZHOU | Defence |
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JUDGE: | HIS HONOUR JUDGE CAHILL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19 July 2024 | |
DATE OF SENTENCE: | 7 August 2024 | |
CASE MAY BE CITED AS: | DPP v Liu & Anor | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1213 | |
SENTENCE
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Subject:Dealing with property reasonably suspected of being proceeds of crime contrary to section 400.9 of the Criminal Code Act 1995 (Cth)
Catchwords: Criminal Law – plea of guilty – dealing with property reasonably suspected of being proceeds of crime – obtaining financial advantage by deception – delay – deportation – no criminal record - Liu dealt with $33,652,549 in cash - Zhou dealt with $30,145,223 in cash.
Legislation Cited: Criminal Code Act 1995 (Cth); Migration Act 1958 (Cth); Sentencing Act1991 (Vic); Crimes Act1914 (Cth).
Cases Cited:Samarakoon [2018] VSCA 119; Surtees v R [2022] VSCA 42; DPP v Estrada [2015] VSCA 22; R v Nikodjevic [2004] VSCA 222; R v Guden [2010] VSCA 196; Shi v R [2014] NSWCCA 276; Wong v R [2013] VSCA 32; Harmeet Singh v R [2016] VSCA 163; Kao v The Queen [2019] VSCA 84; R v Jiao (2015) 251 A Crim R 236; R v Biba [2021] VSC 327; Hiu Mei Lam v R [2021] VSCA; 241; Ansari [2007] NSWCCA 204; R v Merrett, Piggott and Ferrari (2007) 14 VR 392; R v Pham (2015) 256 CLR 550; Hili v The Queen (2010) 242 CLR 520.
Sentence:Mr Liu: five years and six months imprisonment with a non-parole period of three years and six months
Mr Zhou: state offences – 12 months imprisonment - federal offences – three years and four months imprisonment with a non-parole period of two years and two months
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APPEARANCES: | Counsel | Solicitors |
| Commonwealth Director State Director of Public Prosecutions | Mr M Wilson Mr G Buchhorn | Commonwealth Director of Public Prosecutions Solicitor for the Director of Public Prosecutions |
| Defence for Mr Liu Defence for Mr Zhou | Mr C Marshall Mr A Malik | Marshall Jovanovska Ralph Criminal Lawyers Valos Black & Associates |
HIS HONOUR:
1 Boliang Liu (‘Liu’) you have pleaded guilty to four federal offences, namely:
(a) two charges of dealing with money, more than $100,000, reasonably suspected of being proceeds of crime contrary to s 400.9(1) of the Criminal Code Act 1995 (Cth);
(b) one charge of dealing with money, more than $1,000,000, reasonably suspected of being proceeds of crime contrary to s 400.9(1AB) of the Criminal Code Act 1995 (Cth); and
(c) one charge of dealing with money, more than $10,000,000, reasonably suspected of being proceeds of crime contrary to s 400.9(1AA) of the Criminal Code Act 1995 (Cth).
2 Tao Zhou (‘Zhou’), you have pleaded guilty to four federal offences, namely:
(a) two charges of dealing with money, more than $100,000, reasonably suspected of being proceeds of crime contrary to s 400.9(1) of the Criminal Code Act 1995 (Cth);
(b) one charge of dealing with money, more than $10,000,000, reasonably suspected of being proceeds of crime contrary to s 400.9(1AA) of the Criminal Code Act 1995 (Cth); and
(c) one charge of dealing with money, more than $1,000,000, reasonably suspected of being proceeds of crime contrary to s 400.9(1AB) of the Criminal Code Act 1995 (Cth).
3 The maximum penalty for an offence under s 400.9(1) is three years imprisonment.
4 The maximum penalty for an offence under s 400.9(1AB) is four years imprisonment.
5 The maximum penalty for an offence under s 400.9 (1AA) is five years imprisonment.
6 Mr Zhou, you have also pleaded guilty to two state offences:
(a) one charge of obtaining financial advantage by deception, contrary to section 82 of the Crimes Act 1958 (Vic); and
(b) one charge of attempting to obtain a financial advantage by deception, contrary to sections 82 and 322M of the Crimes Act 1958 (Vic).
7 The maximum penalty for the offence of obtaining financial advantage by deception is 10 years imprisonment.
8 The maximum penalty the offence of attempting to obtain a financial advantage by deception is five years imprisonment.
Circumstances of offending [1]
[1] The circumstances of your offending are set out in the Federal prosecution opening dated 9 July 2024 (Exhibit A) and State prosecution opening dated 28 June 2024 (Exhibit B). They are agreed facts.
9 You committed your crimes between July 2020 and October 2021.
10 Liu, you operated money remittance business.
Charges one, two and three
11 Your customers provided you with large sums of cash, which you received into numerous bank accounts, which were under your control. In exchange, you provided your customers with Chinese RMB, deposited into their overseas accounts.
12 Each individual deposit was made in an amount of $10,000 or less to avoid the reporting requirements of the Financial Transaction Reports Act 1988 (Cth).
13 None of the bank accounts were in your name. You used accounts in the name of your mother and father, a friend and in the name of a company, which you incorporated in September 2020, registering another associate as the sole director and secretary.
14 From your home, at Burwood, you received cash, counted it and distributed it.
15 On 6 October 2021, a customer brought one million dollars in cash to your home. [2] In later messages, you told him you could exchange $300,000 within two days. [3] You also told him you it was safe to deal with $1 million, up to $1.5 – $2 million a week; you said larger sums could cause trouble. [4]
[2] Prosecution Opening for Plea (CDPP) (Exhibit A), [36].
[3] Ibid, [37].
[4] Ibid.
16 On 7 October 2021, a police officer, working covertly, said he wanted $100,000 cash converted to bitcoin. You told him you could not take on more business until you had finished helping a client with a large amount of cash. You said you had the capacity to deal with $1 million a week. [5]
[5] Ibid, [38].
17 At times, you collaborated with Wei Wang who ran a similar remittance business.
18 Wang dealt in cash and cryptocurrency.
19 You, Zhou, were a money runner for Liu and Wang.
20 You allowed your personal and company bank accounts to be used to receive cash deposits at the direction of Liu and Wang (charge five) and collected cash from them and made deposits at ATMs into bank accounts at their direction (charges six and eight). They paid you a commission for your services.
21 You made each deposit in an amount of $10,000 or less to avoid the statutory reporting requirements.
22 There are several circumstances which make it reasonable to suspect the money each of you dealt with was proceeds of crime including:
(a) you dealt with considerable sums of money, in cash;
(b) you made the banking transactions using bank accounts in the names of “appropriated identities” and a multiplicity of bank cards;
(c) you made the transactions in amounts of $10,000 or less to avoid the statutory financial reporting requirements;
(d) neither of you kept business records of the transactions; and
(e) the volume of cash you dealt with, millions of dollars, was grossly disproportionate to your legitimate income.
23 By your guilty plea, each of you accepts it was reasonable to suspect the money you dealt with was the proceeds of indictable crime. [6]
[6] Samarakoon [2018] VSCA 119, [27].
Liu
24 Between 7 July 2020 and 16 February 2021, you received $16,699,975 when cash deposits were credited to 32 different bank accounts which you controlled. None were in your name (charge one).
25 Each deposit was made in the sum of $10,000 or less.
26 Between 19 February 2021 and 13 October 2021, you received $4,331,790 when cash deposits were credited to 6 bank accounts which you controlled (charge two). Again, none were in your name and each deposit was made in the sum of $10,000 or less.
27 Between 19 February 2021 to 13 October 2021, you received $11,707,207 when cash deposits were credited to 22 bank accounts, which you controlled (charge three). Again, none were in your name and each deposit was made in the sum of $10,000 or less.
28 Zhou collected cash and made deposits into your nominated bank accounts under your direction. Your instructions to him were captured in WeChat conversations. [7]
[7] Above n 2, [67] – [69].
29 On one occasion, on 26 September 2021, CCTV captured Zhou get out of your car with a grey backpack, at Burwood Village, where he used CBA ATMs to deposit cash almost continuously for an hour. [8]
[8] Ibid, [64].
30 On another, on 28 September 2021, you gave him directions to collect sums of cash from your home and cautioned him to be careful. Later, he reported to you he had made deposits into two bank accounts which you controlled. [9]
[9] Ibid, [68] and [69].
31 Your offending was the receipt of large amounts of cash into bank accounts which you controlled.
32 While you are not to be sentenced for transferring money out of any bank accounts or engaging in money remittance activities, the existence of your remittance activities is relevant to understand the context in which you received cash deposits into your bank accounts. [10]
[10] Ibid, [18].
33 Your money laundering activities came to an end on 14 October 2021 when police arrested you.
34 They searched your home and found $913,577 in cash (charge four).
35 They also found genuine and false identification documents, a large number of Visa and Master bank cards in various names, two cash counting machines, two mobile phones, several expensive watches, and the key to a Porsche 911 motorcar.
36 You bought the car on 7 September 2021. You traded a 2020 BMW X7 SUV for it and paid $107,000 as a changeover price. Four days later you talked about the car with your father. He counselled you about keeping a low profile. You told him it cost you two months earnings from your business,[11] equivalent to approximately $50,000 a month.
[11] Ibid, [110] and [111].
37 In another conversation you told him, when business was busy, you were earning “almost 300,000 a month”, a reference Chinese yuan, also equivalent to approximately $50,000 AUD. [12]
[12] Ibid, [70.b].
38 Your declared taxable income from your earnings as a financial advisor was:
(a) $19,940 in 2016;
(b) $2,600 in 2017;
(c) $31,199 in 2018; and
(d) $28,599 in 2019.
39 In another conversation, your father speculated the source of the cash was “Russian black money”. You responded “we don’t worry where the shit is coming from. I never asked, save the trouble… I don’t think it’s important.” [13]
[13] Ibid, [70.b].
Arrest and interview
40 When police questioned you, you denied any involvement in money laundering.
41 You said you lived in Tasmania and were only visiting Melbourne.
42 To explain the cash counting machines and large amounts of cash found at the Roslyn Street address, you said people brought large amounts of cash to the house to play poker.
43 You denied any knowledge of the entities or persons, associated with you, which were used to open bank accounts to receive cash deposits.
44 You denied buying the Porsche 911. You claimed it belonged to your mother.
45 You were charged and remanded in custody.
46 On 20 September 2023, there was a committal hearing. At its conclusion you pleaded not guilty to the charges then before the court.
47 On 29 February 2024, you agreed to plead guilty to the charges now on the Indictment.
Zhou
48 During the offending period, two companies, registered with you as the sole director and shareholder, were set up and opened bank accounts.
49 You allowed your personal and company accounts to be used to receive cash deposits, which were later transferred to bank accounts controlled by Liu and/or Wang for use in their respective money remittance businesses. [14]
[14] Ibid, [30] and [53].
50 Between 16 July 2020 and 27 January 2021, you received cash deposits, totalling $12,733,951, which were made into 20 bank accounts, which were your personal and company bank accounts (charge five).
51 It is not alleged you made the deposits or that you used the cash for your own purposes. [15]
[15] Ibid, [53].
52 It is not alleged Liu or Wang had any dealings with this cash. [16]
[16] Ibid, [54].
53 You also deposited cash at CBA ATMs at the direction of Liu and Wang. You were, in effect, their “money runner”; you collected cash from them, or on their behalf, and went to bank branches, mainly in Melbourne’s eastern suburbs, where you made multiple cash deposits into multiple bank accounts for them.
54 Between 15 March 2021 and 17 May 2021, you deposited $10,587,220 in cash at various CBA ATMs in the eastern suburbs (charge six).
55 You made 66 visits to CBA bank branches to deposit cash. Each deposit was made in an amount of $10,000 or less.
56 CBA CCTV shows you attending the ATMs with a backpack and depositing cash, often over an hour or more. [17]
[17] Ibid, [57].
57 On 18 May 2021, police intercepted your car while you were driving it.
58 You had, in your possession:
(a) a black backpack;
(b) $180,000 in cash;
(c) Six Master and Visa cards in various names; and
(d) Four mobile phone handsets.
59 Your possession of $180,000 in cash is the dealing the subject of charge seven.
60 In 2016, you filed a tax return which declared $7,312 income from working in aged care.
61 You have not filed any income tax returns for the 2017, 2018, 2019, 2020 or 2021 years.
62 You admit, when police intercepted you, you were on your way to a bank to deposit the cash using ATMs.
63 Police arrested you and charged you. You were released on bail.
64 Between 7 July 2021 and 13 October 2021, while you were on bail, you deposited $6,651,052 in cash at various CBA ATMs in the eastern suburbs (charge eight).
65 You made 75 visits to CBA bank branches to deposit cash. Each deposit was made in an amount of $10,000 or less.
66 Again, CBA CCTV shows you attending the ATMs with a backpack and depositing cash, often for over an hour. [18]
[18] Ibid, [63].
67 Again, like charge six, your unlawful dealing with the money was the cash deposits you made.
68 Wang and Liu paid you a commission to make the cash deposits at ATMs for them.
69 On 7 April 2021, Wang told you “30 today. Wage 900” and “give you 1500 in commission”. And on 30 September 2021, you charged Wang “400” for “15 pieces [which] were deposited”. [19]
[19] Ibid, [75].
70 On 23 September 2021, in a conversation with his father, Liu pondered whether he should pay you a higher commission so you might get a better car. He said, “he drives an old car… (He) earns the least money here, but bears (the most) risks”. [20]
[20] Ibid, [70.d].
71 On 14 October 2021, when police executed search warrant at Liu’s home, they found you seated at a poker table in the lounge room.
72 In your wallet, you had eight Mastercard and Visa cards in various names. In your backpack, you had $2,680 in cash and three mobile phones. [21]
[21] Ibid, [94].
73 At your home, in Box Hill, police found more Mastercard and Visa cards, in your name, a cash counting machine and a quantity of SIM cards.
74 You used several phones, subscribed in different names, to access online banking apps to monitor cash deposits you made into the various accounts. [22]
[22] Ibid, [19].
75 When police interviewed you, you largely exercised your right to remain silent.
76 You said Liu was your friend, but denied working for him. You said you were a self-employed international trade advisor and played poker.
77 When police alleged you were involved in multimillion dollar cash deposits, you said, “I think there is some misunderstanding” and “I really don’t want to mislead you”. [23]
[23] Ibid, [112].
78 You were charged with a number of offences and remanded in custody.
79 On 28 January 2022, you were admitted to bail.
80 The conduct conditions of your bail required you:
(a) not to access bank or financial accounts other than the accounts held in your name; and
(b) not to possess identification documents or bank debit or credit cards held in the name of anyone other than yourself.
81 On 22 February 2022, you applied to the Bank of Queensland, at its Box Hill branch, to open a personal bank account, and a business bank account.
82 In your application form, you stated your business was a consultancy which connected Chinese and Australian buyers and sellers who traded in various commodities, and you needed access to a merchant terminal facility and international telegraphic transfer facility for your business.
83 The next day, the bank opened a personal account for you and issued you a debit card.
84 About a week later, they opened two business accounts for you.
85 The bank contacted FISERV, a global financial services company, to request a merchant terminal to process credit or debit card payments for you.
86 On 1 April 2022, you applied for a merchant terminal with FISERV.
87 You represented:
(a) you would use the terminal for your consulting business;
(b) each transaction would represent a genuine sale of your goods and services; and
(c) each cardholder would authorise the amount of a transaction to make a payment to you.
88 On 25 June 2022, FISERV issued you a merchant terminal which enabled you to remotely process credit or debit card payments.
89 On 29 and 30 June 2022, you used your Bank of Queensland card to obtain two payments to test the terminal’s operation.
90 On 1 July 2022, you processed 93 credit and debit card payments, in amounts ranging from $118 to $968, using 53 different cards. The countries of origin of the cardholders were Singapore, the Philippines and Taiwan. FISERV processed the transactions and deposited $37,513 into your business account. You transferred $35,513 to your personal account and paid your lawyer $1,000.
91 On 2 July 2022, you processed 85 credit and debit card payments, using 38 different cards. The country of origin of all cardholders was Singapore. FISERV processed the transactions and deposited $39,891 into your business account. You transferred $40,000 to your personal account.
92 On 3 July 2022, you processed 63 credit and debit card payments, using 29 different cards. The country of origin of all cardholders was Singapore.
93 The large number of transactions you processed, with only a few days, was a red flag. FISERV suspended payments totalling $123,655.59 to your account.
94 You processed 251 transactions using the data from 126 overseas cards. Cardholders disputed 241 of them because they had not authorised the payment from the card.
95 In many cases, the cardholder did not have the card because it had been lost, stolen or never received. In other cases, the cardholder had the card but denied authorising the relevant transaction.
96 In all, FISERV paid you $100,798, in respect of 113 fraudulent transactions (charge one), and withheld payment of $119,973, in respect of 128 fraudulent transactions (charge two).
97 You appropriated the monies which FISERV had paid you, either in cash withdrawals from your personal account or by ATM withdrawals and payments to third parties.
98 None of the monies have been recovered.
99 Police arrested you on 9 August 2022.
100 At your home, they found the Visa debit card, which the Bank of Queensland had issued to you, together with the documents relating to your bank accounts with the Bank and a copy of your FISERV merchant agreement application form.
101 When police questioned you, you said you had opened the bank accounts and used FISERV’s payment services for your consulting business. You said you paid an agent to build your business. You said the agent generated invoices and you processed all 253 transactions, (including the two “test” transactions). You admitted you transferred the money, which FISERV released to you, to your personal bank account.
102 You claimed clients of your business authorised the transactions.
103 You were arrested and remanded in custody.
104 On 20 September 2023, at the committal hearing, you pleaded guilty to money laundering charges in materially the same form as the charges on the Indictment before the court.
Criminal record
105 Neither you, Liu, or you, Zhou, has a criminal record.
Personal circumstances – Liu
106 You were born in April 1987 in Beijing, China.
107 You were 32 and 33 years old when you offended. You are now 37.
108 You are an only child. Your parents separated when you were very young, and your grandparents raised you. After you completed high school equivalent, you studied English and worked part time.
109 In 2009, you came to Australia on student visa. You completed a Bachelor of Commerce degree at Deakin University and then a Masters in Commerce at Sydney University.
110 You then completed a TAFE course followed by a two-year internship with a Glen Waverley real estate agency. You then obtained registration as an estate agent in Victoria and started your own business. You had a business partner in China to assist you.
111 Your customers, who were almost entirely investors from mainland China, purchased properties from large building developers.
112 In 2017, to extend your stay in Australia, you obtained a skilled regional Visa which required you to study in Tasmania. Your mother came to Australia to help run the real estate business in your absence. You completed a leadership course and then returned to Melbourne.
113 In 2016, you had married a Chinese national whom you had met during a return visit to China in 2015. You have two children with her, a boy and girl who were born in 2017 and 2018 respectively.
114 Your wife and children live in China.
115 At the time of the arrest, you intended to seek permanent residence in Australia and relocate them here.
116 Since your remand in custody, you have spent most of your time at Fulham prison where you have completed some educational programs in English.
117 You are a Chinese citizen. Your Australian Visa has now expired. It is likely you will be deported after you have served the sentence I will impose. While you are likely be denied your wish to settle your wife and children in Australia, your mother, who suffers poor health, wants you to return to China to help care for your children and her. [24]
[24] Letter of Tian Je dated March 6, 2024 (Exhibit L2).
Defence submissions – Liu
118 All Counsel made comprehensive written and oral submissions. While I have considered them carefully, I will refer to them only briefly. [25]
[25] Written submissions (CDPP) (Exhibit C); Written submissions (DPP) (Exhibit D); Written submissions (Liu) (Exhibit L1); Written submissions (Zhou) (Exhibit Z1).
119 Mr Marshall, who appeared on your behalf, in written [26] and oral submissions, accepted the seriousness of your offending, involving you dealing with substantial amounts of cash, over many months, warrants the imposition of a term of imprisonment with a non-parole period fixed.
[26] Written submissions (Liu) (Exhibit L1).
120 In mitigation of penalty, he relied on the following factors:
(a) your guilty plea;
(b) onerous custodial conditions during the pandemic; [27]
(c) your isolation as a foreign national; [28]
(d) your previous good character;
(e) delay in sentencing; [29] and
(f) risk of your deportation. [30]
[27] Surtees v R [2022] VSCA 42.
[28] DPP v Estrada [2015] VSCA 22, [38].
[29] R v Nikodjevic [2004] VSCA 222.
[30] R v Guden [2010] VSCA 196.
121 He referred to Shi v R[31] , where a sentence of four years and nine months imprisonment with a non-parole period of two years and seven months was imposed for s 400.9(1) offences, which involved dealings in cash totalling $35,865,175, as a comparator.
[31] [2014] NSWCCA 276.
Personal circumstances – Zhou
122 You were born in July 1981 at Beijing, China. You were aged between 37 and 38 years when you offended. You are now aged 41.
123 Your personal circumstances are set out in the psychological report of Sandra Cokorilo who assessed you on 22 May 2024. [32]
[32] Report of Sandra Cokorilo dated 5 June 2024 (Exhibit Z5).
124 You are an only child. Your father is a painter and teacher. Your mother was a nurse and the family’s primary breadwinner.
125 When you were about six years old, your father was jailed for two years as a political prisoner following the Tiananmen Square protest.
126 It disrupted your schooling for a time.
127 After your father was released from prison, the family returned to Beijing where you completed high school and then undertook English studies at a tertiary level.
128 In 2005, you migrated to Australia where you completed a certificate three in nursing. While you studied, you had part-time jobs in hospitality and at a mental health residential facility.
129 You then started a Bachelor of Nursing through Deakin University. During the course, you borrowed money from an aunt to re-sit exams you had failed. Ultimately, you did not complete the degree and your student visa was cancelled.
130 You were in a three and half year relationship until 2009 when your partner ended it. The breakup was hard for you. You started gambling, playing poker.
131 In 2012, you began a relationship with a woman, who assisted you to apply for permanent residency.
132 In 2015, you had a child with her.
133 After you left university, you worked as a nurse and, later, started a wedding photography business with your partner. The business failed and your relationship was strained.
134 You worked for a real estate company for two years between 2015 and 2017.
135 In 2017, you returned to China to await the outcome of your permanent residency application. In 2019, you obtained permanent Australian residency and returned.
136 Shortly after, your partner ended your relationship.
137 You kept weekly contact with you daughter. You started a new business selling veterinary surgical tools. The business failed when the pandemic hit. You worked briefly in hospitality, and as masseur, until pandemic related lockdowns ended that work.
138 You told Ms Cokorilo you got involved in the money laundering because you were under financial pressure, because of substantial university fees owed to your aunt and the failed business, and that you had no other way to earn an income. You said you thought “things were a little bit dodgy” but not criminal.
139 She believes, as you faced various academic, relationship and financial challenges, your mental health deteriorated.
140 She also believes you suffer ADHD, with problems of impulsivity, which contributed to those problems.
141 Somewhat positively for your rehabilitation, you reported an improvement in your depressive and anxiety symptoms since you were remanded in custody as you feel less pressure and responsibility. You spend time working, reading and exercising. You have also completed a suite of Atlas remand programs. [33]
[33] Bundle of ATLAS Remand Program Certificates (Exhibit Z6).
142 You have developed a problem with your eyesight and are awaiting a specialist appointment for examination. [34]
[34] Medical certificate of Optometrist Christopher Hely dated 31 October 2021 (Exhibit Z4).
143 To Ms Cokorilo, you expressed remorse for your crimes. You now accept you had underestimated the potential seriousness of your actions and their consequences.
144 In relation to your deceptions on FISERV, you said, soon after you were released on bail, a businessman offered to pay your legal fees, in relation to your criminal charges, and to help your parents, who were under financial pressure, in exchange for you allowing him to use your accounts for his transactions. You said he instructed you to download the software to use the merchant terminal.
145 In a letter to the court, you mother confirmed you were struggling financially during the pandemic. She also confirmed she had her own financial pressures due to a property dispute. Your father and her both suffer poor health. She is very anxious about your imprisonment. [35]
[35] Letter from Jia Li dated 24 May 2024 (Exhibit Z3).
146 Your aunt, who is a registered Chinese doctor, and an Australian citizen, encouraged you to migrate to study nursing. She sponsored you. She feels guilty that you did not complete your nursing degree. Instead, you got interested in financial investments which, as she wrote, ended up with you “associating with the wrong people and engaging in illegal activity”. [36]
[36] Letter of Ke Li (Exhibit Z2).
147 She was shocked to learn of your crimes. She knows you as a kind and selfless person who is devoted to your daughter, who misses you.
Defence submissions
148 Mr Malik, who appeared on your behalf, acknowledged your offending is objectively serious.
149 He also acknowledged, because you continued to offend while on bail following your first arrest, specific deterrence is an important sentencing consideration
150 He submitted, nevertheless, considering your subordinate role, your modest compensation and your financial hardship, when you offended, your moral culpability is lower than Liu’s.
151 In mitigation of penalty, he relied on:
(a) your previous good character;
(b) your early guilty plea and remorse;
(c) hardship in custody during the pandemic; and
(d) the risk of deportation.
Prosecution submissions
Federal offences
152 Mr Wilson, who appeared for the Commonwealth Director of Public Prosecutions submitted, because your federal offending involved:
(a) a course of conduct
(b) of dealing with considerable sums of cash
(c) in a multiplicity of transactions
(d) using multiple bank cards and bank accounts
(e) with a degree of organisation and planning
(f) over a protracted period
(g) for financial gain
it was objectively very serious.
153 He accepted because your role, Zhou, as a subordinate, was less than Liu’s, as a principal, that your moral culpability, Zhou, is lower than Liu’s.
154 He accepted your guilty pleas were both entered at a relatively early stage, albeit yours, Zhou, was made earlier than Liu’s, and, accordingly, attracts a discount for its utilitarian value and its facilitation of the course of justice.
155 He accepted, for both of you, your lengthy remand, served during the lengthy lockdowns of the pandemic, has been additionally onerous.
156 He accepted, because of the likely prospect of your deportation, the burden of your sentence will be greater and you may lose the opportunity to permanently settle in Australia.
157 He submitted, while your prior good character is a matter to your credit, the weight given to it should not undermine the need for general deterrence and punishment in your sentence.
158 He submitted I should be guarded about your prospects of rehabilitation because you engaged in a sustained course of illegal conduct for financial gain. And, in your case, Zhou, because you offended while were on bail
159 He provided me with a helpful table of comparative cases which indicate a range of sentences from 12 months, where the amount dealt with was $249,450 to 4 years and nine months, in one case involving $6,297,187 [37] and another involving $35,865,175, [38] which have been imposed for s 400.9 offences.
State offences
[37] Wong v R [2013] VSCA 32.
[38] Shi v R [2014] NSWCCA 276.
160 Mr Buchhorn, who appeared for the Victorian Director of Public Prosecutions submitted your State offending is a serious example of deception offences considering:
(a) you obtained or attempted to obtain more than $200,000;
(b) using the data of a significant number of overseas credit and debit card holders, namely 126;
(c) to transact a large number of unauthorised payments, 41;
(d) in a planned and sophisticated scheme;
(e) which was detected only when the cardholders disputed payments made from their accounts.
161 He submitted, considering you offended contrary to express bail conditions, which prohibited you using bank accounts or cards not in your own name, your moral culpability is high.
162 He acknowledged you are entitled to a sentencing benefit for your guilty plea; although it could not be considered early because it was made after a contested committal hearing.
163 He submitted, although you expressed remorse to Ms Cokorilo, your explanation to her that you allowed a “well-respected Chinese businessman” to “use” your account to obtain the monies, appears to minimise your actual role, considering you opened two bank accounts, you applied for a merchant terminal and you obtained payment on the various bank cards using a FISERV app.
164 He helpfully referred me to a number of Court of Appeal decisions and sentences of this court for deception offences, with similarities and dissimilarities, which show a range of prison sentences from 10 months to 3 years.
Consideration
165 Under the money laundering division of the Criminal Code Act 1995 (Cth), [39] the offences created by s 400.9 fall at the lowest of the scale of money laundering offences. It requires proof that the offender dealt with money and it is reasonable to suspect that the money was proceeds of crime.
[39] Criminal Code Act 1995 (Cth), Division 400.
166 Section 409(1) creates an offence of dealing with money, $100,000 or more.
167 Effective from 17 February 2021, offences under s 400.9(1AA), dealing with money, $10 million or more, and s 400.9(1AB), dealing with money, $1 million or more, were added to the Criminal Code.
168 The requirement that it is reasonable to suspect that the money is proceeds of crime is an objective test. [40]
[40] Samarakoon v R [2018] VSCA 119, [63]
169 An offence under s 400.9 does not require proof of any subjective criminality.[41]
[41] Shi v The Queen (2014) 246 A Crim R 273, [44]-[45]; see also Harmeet Singh v R [2016] VSCA 163 [47].
170 Accordingly, you are not to be sentenced as if you had knowledge, or were reckless or negligent, as to the source of the money you dealt with. [42]
[42] Kao v The Queen [2019] VSCA 84, [68]
171 This is reflected in the maximum penalties:
(a) $100,000 or more, 3 years' imprisonment;
(b) $1 million or more, four years imprisonment; and
(c) $10 million or more, five years imprisonment.
172 Nevertheless:
(a) money laundering is a serious offence; [43] and
(b) general deterrence is an important sentencing consideration.[44]
[43] R v Jiao (2015) 251 A Crim R 236, [66]; Samarakoon [2018] VSCA 119, [88].
[44] Ibid.
173 The value of the proceeds of crime is also a paramount consideration.[45] Here, the sums of money you both dealt with are eye-watering.
[45] Arjuna Samarakoon [2008] VSCA 119, [68]; R v Jiao (2015) 251 A Crim R 236, [66].
174 To assess the moral culpability of each of you, it is important to examine what you did in the commission of your crimes [46] and what profit or reward you received. [47]
[46] Ansari [2007] NSWCCA 204, [123]-[124].
[47] Samarakoon, [69]
175 Liu, between 7 July 2020 and 14 October 2021, in a 15 month period, you dealt with $33,652,549 in cash.
176 Zhou, between 16 July 2020 and 13 October 2021, in periods of six, two and three months, you dealt with $30,145,223 in cash.
177 The last episode occurred while you were on bail for dealing with suspected proceeds of crime.
178 Charges one, two and three, against you, Liu, and charges five, six and eight, and the two state charges, against you, Zhou, are rolled up counts. They involved a course of criminal conduct comprising a large number of discrete instances of money-laundering. In your case, Liu, receiving cash deposits (charges one, two and three), and, in your case, Zhou, allowing your accounts to be used to receive cash deposits (charge five) and depositing cash (charges six and eight).
179 In addition, police caught each of you with a large sum of cash – Liu $913,577 and Zhou $180,000 - which was to be laundered but for police intervention.
180 Liu, you were the principal of your own money remittance business.
181 Your customers provided you with Australian dollars in cash in exchange for Chinese yuan.
182 In a sophisticated operation, you set up more than 30 bank accounts, none of which were in your name, to receive cash deposits, totalling more than $30 million, over a 15 month period.
183 Because the cash deposits were limited to $10,000 or less, to avoid the bank’s statutory financial reporting requirements, you received deposits of money in more than 3,000 transactions.
184 You are not to be sentenced for your money remittance activities. However, the operation of that business puts the cash deposits you received into context.
185 It is not alleged you had any knowledge of the sources of the funds. It appears you were aware the source of the funds, which you received, was suspicious but you were indifferent to the provenance of them.
186 Zhou, in relation to the Federal offences, yours was a facilitative role.
187 Under the direction of Liu and Wang, you visited bank branches where you made more than 3,000 cash deposits at bank ATMs.
188 You made more than 100 visits to bank branches, where you use multiple bankcards, to make the deposits. You used several phones, not in your name, to monitor the transactions in online banking apps.
189 You deposited $12,733,951 into your personal and company bank accounts (charge five) and deposited $17,231,272 into accounts which Liu and Wang controlled (charges six and eight).
190 It is not alleged that you had any knowledge of the sources of the cash. Like Liu, you had your suspicions.
191 Given the volume of cash transacted, the number of discrete transactions and the period over which the two of you offended, a suspicion that the sources of the cash were illicit must have been obvious to both of you.
192 Zhou, it is not alleged money was yours. You were ”the money runner”.
193 However, it is plain you were paid a commission. How much is not known.
194 There is no evidence of your unjust enrichment. You were driving an old car.
195 On the other hand, you, Liu, were driving an expensive motorcar. You had three expensive watches at your home. Communications between your father and you, Liu, suggest you were earning up to $50,000 a month when business was busy.
196 Zhou, as well, between 30 June 2022 and 4 July 2022, you obtained $100,798 by deception on the financial services provider, FISERV, and attempted to obtain $119,973.
197 In relation to your deceptions, you processed 251 payments using the data of 126 credit or debit cards. 241 payments were fraudulent. The cardholders had not authorised payment to you. Their cards were lost, stolen or never received.
198 None of the $100,798 you obtained was recovered.
199 Your attempt to obtain $119,973 was only frustrated when FISERV detected your dishonesty.
200 It is an aggravating feature that, you were on bail, after you had been charged with money laundering offences,
(a) when you committed the offending the subject of charge eight; and
(b) when you fraudulently used the FISERV merchant terminal to obtain, and attempted to obtain, monies to which you were not entitled.
201 I am mindful neither of you is to be sentenced as an offender who believed, or was reckless or negligent, as to whether the money was proceeds of crime. [48]
[48] Arjuna Samarakoon [2008] VSCA 119, [66].
202 Considering the substantial sums of cash you dealt with, and your respective roles in the money-laundering operation, I assess the objective seriousness of your offending to be above mid-range.
203 You, Liu, were principal and made substantial profits. Your moral culpability was high.
204 You, Zhou, were a subordinate and benefited much less.
205 Your moral culpability, although elevated for the offences which you committed on bail, is lower than Liu’s.
206 I must sentence both of you for the Commonwealth offences in accordance with part 1B of the Crimes Act 1914 (Cth).
207 I am required to impose a federal sentence that is of a severity that is appropriate in all the circumstances of your offending. [49]
[49] Section 16A of the Crimes Act1914 (Cth).
208 In doing so, must have regard to the non-exhaustive list of matters in sub-s16A(2) of the Crimes Act1914 (Cth), insofar as they are relevant and known to the court.
209 A term of imprisonment is the sentence of last resort. [50]
[50] Section 17A(1) Crimes Act1914 (Cth).
210 A sentence of imprisonment is the only appropriate sentence. Your counsel did not argue otherwise.
211 There are mitigating factors which moderate the sentence I will impose.
212 Firstly, your guilty pleas have high utilitarian value. The timing of each of them is relevant to the measure of sentencing discount to which you are entitled. I also accept they are your indication of some remorse.
213 Secondly, prison was harder for all prisoners, during the pandemic, due to removed prison visits, reduced prison programs and increased isolation, with the risks of COVID-19 infection in a confined environment.[51]
[51] R v Biba [2021] VSC 327, [38].
214 Thirdly, as Chinese nationals, given the prison sentences I will impose, you are now liable to deportation,[52] which will cause you anxiety during your incarceration and, if you are deported, you will lose the opportunity to continue to reside in this country, which each of you has made your home. [53]
[52] Migration Act 1958 (Cth), s 501(3A).
[53] Hiu Mei Lam v R [2021] VSCA 241, [38].
215 Fourthly, each of you has led a previously blameless life. While it is relevant, particularly in the assessment of your prospects of rehabilitation, it is of less significance in this case because your otherwise good character, to a degree, provided you with the opportunity to commit these crimes. [54]
[54] Ansari [2007] NSWCCA 204, [136].
216 Fifthly, it is three years since you committed these crimes. During this period, you have suffered a natural anxiety in relation to your future, which is additional punishment. [55]
[55] R v Merrett, Piggott and Ferrari (2007) 14 VR 392, [35]-[37].
217 Your rehabilitation is an important sentencing consideration. While your offending was sustained and protracted, your otherwise good character is a strongly protective factor for your rehabilitation. I have some confidence neither of you will reoffend.
218 Parity is another relevant sentencing consideration.
219 Zhou, your role in the money-laundering scheme, while crucial was less important than Liu’s. Your lower moral culpability justifies the imposition of lower sentences. I will do so in a way which avoids an unjustified sense of grievance for Liu.
220 Because each of you is to be sentenced for several offences, totality is also an important sentencing consideration.
221 It is additionally important in your case, Zhou, because you are to be sentenced for additional state offending.
222 In the case of each of you, I have moderated the individual sentences and the orders for cumulation to ensure your total effective sentence is an appropriate measure of your overall criminality.
223 I have also had regard to the importance of consistency in sentencing,[56] and to comparable cases [57] from intermediate appellate courts across the Commonwealth to obtain guidance as to the identification and application of relevant sentencing principles and to discern sentencing patterns and a range of sentences against which to examine your sentence. [58]
[56] R v Pham (2015) 256 CLR 550, [23], [26]; Hili v The Queen (2010) 242 CLR 520, [24]-[25].
[57] Including Table of Comparative Cases (Exhibit C).
[58] R v Pham (2015) 256 CLR 550, [26].
224 Parsimony is another relevant sentencing consideration. While your sentence must be of an appropriate severity, it must be no more severe than is required to achieve sentencing objectives.
225 Mr Lui and Mr Zhou, by the sentence I impose I must denounce your conduct, punish you and deter you and others from committing crimes of the same or similar kind. I must also look to your rehabilitation.
226 Considering the circumstances of your offending, your personal circumstances and antecedents, and endeavouring to produce a sentence which reflects and promotes the purposes of sentencing in a manner appropriate to you.
227 Mr Lui:
(a) on Charge 1, dealing with money, $100,000 or more ($16,699,975), reasonably suspected of being proceeds of crime, you are sentenced to 2 years and three months imprisonment, which is to commence one-year and six months before the expiration of the sentence on charge three (nine months cumulation);
(b) on Charge 2, dealing with money, $1 million or more ($4,331,790), reasonably suspected of being proceeds of crime, you are sentenced to two years and nine months imprisonment which is to commence on two years before the expiration of the sentence on charge one (nine months cumulation); and
(c) on Charge 3, dealing with money, $10 million or more ($11,707,207), reasonably suspected of being proceeds of crime you are sentenced to three years and six months imprisonment which is to commence today. This is your base sentence.
(d) on charge 4, dealing with money, $100,000 or more ($913,577), reasonably suspected of being proceeds of crime you are sentenced to 1 year and nine months imprisonment which is to commence one-year and three months before the expiration of the sentence on charge two (six months cumulation).
228 Your total effective sentence is five years and six months imprisonment.
229 I direct you serve a minimum period of three years and six months before you are eligible for parole.
230 I declare you have already served 1028 days of your sentence by way of presentence detention.
231 While there is some artificiality in the process, I declare, under s 6AAA of the Sentencing Act1991 (Vic), but for your plea of guilty, I would have imposed a total effective sentence of seven years and six months imprisonment and fixed a minimum non-parole period of five years.
232 Mr Zhou:
State offences
(a) On charge one, obtaining financial advantage by deception, you are sentenced to 1 year and 6 months imprisonment;
(b) On charge two, attempting to obtain a financial advantage by deception, you are sentenced to 9 months imprisonment;
233 I direct three months of the sentence I have imposed on charge two be served cumulatively with the sentence I have imposed on charge one.
234 Your total effective sentence for the two state offences is 1 year and 9 months imprisonment.
235 I declare you have served 184 days of the sentence by way of presentence detention.
236 By making these orders, I intend six months of your total effective sentence of 1 year and 9 months be served cumulatively with the sentences I will impose on the federal offences.
237 You have remaining 652 days of detention which I will declare as presentence detention in respect of your federal offences.
Federal offences
(a) on Charge five, dealing with money, $100,000 or more ($12,733,951 received), reasonably suspected of being proceeds of crime you are sentenced two years imprisonment which is to commence one-year and eight months before the expiration of your sentence on charge six (four months cumulation);
(b) on Charge six, dealing with money, $10 million or more (deposited $10,580,220), reasonably suspected of being proceeds of crime, you are sentenced to two years and six months imprisonment which is to commence today. This is your base sentence;
(c) on Charge seven, dealing with money, $100,000 or more (possessed $180,000), reasonably suspected of being proceeds of crime you are sentenced to 12 months imprisonment which is to commence 10 months before the expiration of your sentence on charge five (two months cumulation); and
(d) on charge eight, dealing with money, $1 million or more (deposited $6,651,052), reasonably suspected of being proceeds of crime you are sentenced to two years imprisonment which is to commence one-year and six months before the expiration of your sentence on charge seven (6 months cumulation).
238 Your total effective federal sentence is three years and six months imprisonment.
239 I direct you serve a minimum non-parole period of two years and three months.
240 I declare you have already served 652 days of your federal sentence by way of presentence detention.
241 While there is some artificiality in the process, I declare, under s 6AAA of the Sentencing Act1991 (Vic), but for your plea of guilty, in respect of the state offences, I would have imposed a total effective sentence of one year and six months imprisonment and, in respect of the Federal offences, I would have imposed a total effective sentence of five years imprisonment and fixed a minimum non-parole period of three years and six months.
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