Director of Public Prosecutions v Lu
[2024] VCC 1424
•10 September 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-23-00904
CR-23-00905
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| XIABAO LU & XIUWEN SHEN |
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JUDGE: | HIS HONOUR JUDGE KELLY | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19 July 2024 | |
DATE OF SENTENCE: | 10 September 2024 | |
CASE MAY BE CITED AS: | DPP v Lu; Shen | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1424 | |
REASONS FOR SENTENCE
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Subject:CRIMINAL LAW
Catchwords: Commonwealth Offending – Cause Loss to Commonwealth Entity – Evading GST and Customs Duty – Differences in Quantum between Co-Offenders – Protracted Offending – Rolled-Up Charges – Full Restitution – Youth – Excellent Prospects of Rehabilitation – Delay – Risks of Deportation – Disparity in Sentences – Comparable Cases.
Legislation Cited: Criminal Code Act 1995 (Cth); Crimes Act 1914 (Cth); Sentencing Act 1991; Migration Act 1958 (Cth)
Cases Cited:DPP (Cth) v Thomas (2016) 53 VR 546; Worboyes v The Queen (2021) 96 MVR 344; DPP v Kuol [2017] VCC 1516; R v Bandjak (2011) 109 SASR 315; R v Mills [1998] 4 VR 235; Azzopardi v The Queen (2011) 35 VR 43; Guden v R (2010) 28 VR 288; Karam v The King [2024] VSCA 164; DPP (Cth) v Gregory (2011) 34 VR 1; Hili v The Queen (2010) 242 CLR 520; DPP (Cth) v Rowson [2007] VSCA 176; DPP (Cth) v Goldberg [2001] VSCA 107; DPP (Cth) v Milne [2001] VSCA 93; Totaan v The Queen (2022) 297 A Crim R 224; Ryan v The King [2022] SASCA 110; R v Ibbetson [2020] QCA 214; R v Latemore [2019] QCA 55; Bransby v The Queen [2010] WASCA 165; R v Hogan (Supreme Court of Victoria Court of Appeal, Phillips, Hayne & Callaway JJA, 11 March 1997); DPP v Dahl [2017] VCC 600; DPP v Kuol [2017] VCC 1516; DPP v Deng [2018] VCC 1439; DPP v Ater [2018] VCC 965; DPP v Winpea [2018] VCC 898; DPP v Acieny [2018] VCC 1220; DPP v Arop [2018] VCC 1235; DPP v Ilheng [2018] VCC 1261.
Sentence: Xiabao Lu: 22 months imprisonment. Released on Recognisance Release Order with a $5,000 recognisance and to be of good behaviour for 24 months.
Xiuwen Shen: 14 months imprisonment. Released on a Recognisance Release Order forthwith with a $2,000 recognisance and to be of good behaviour for 15 months.
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Ms S. Holmes (plea) | Commonwealth Director of Public Prosecutions |
| For Lu | Mr J. Gullaci SC | Paul Vale Criminal Law |
| For Shen | Ms S. Locke Mr C. Yang (sentence) | Paul Vale Criminal Law |
HIS HONOUR:
Introduction
1Ms Xiabao Lu and Mr Xiuwen Shen you have each pleaded guilty to one rolled up charge of engaging in conduct with the intention of dishonestly causing a loss to a Commonwealth entity which carries a maximum penalty of 10 years' imprisonment and or a penalty of $133,200.[1]
[1] Contrary to s 135.1(3) Criminal Code (Cth) (‘The Code’).
Summary of Offending
2Your offending was summarised by the Prosecution at your plea.
3Between 3 July 2022 and 14 November 2022, you each purchased a number of goods which were duty and GST-exempt due to your declared intention to leave the country with them. On five occasions you each then attended Melbourne Airport, submitted duty free receipts declaring an intention to leave the country on flights bound for New Zealand. Instead, you either remained in Australia and retained the goods or you departed for New Zealand without the goods and returned almost immediately. You thereby evaded customs duty and GST in relation to a substantial quantity of luxury items.
4You, Ms Lu evaded $191,211.01. You, Mr Shen evaded $60,504.96. The total loss to the Commonwealth was $251,715.97 in GST and Customs duty.
5I note that this is not a joint commission case. You have each been charged as a principal and you are not jointly responsible for the dishonest acts of the other.
The Alleged offending
6On 3 July 2022 you both attended Melbourne Airport having purchased a number of duty-free goods from the Lotte Duty Free shop in Melbourne. You had tickets for a flight to Queenstown, New Zealand. You submitted your purchase receipts at the duty-free counter.
7Your flight was cancelled, and no alternative flight was booked. You had not taken to the airport the goods you declared to customs that you intended to export. This contravened the obligation in the Sealed Bag Declaration you had signed. Instead, the goods had been stored either at your Port Melbourne address or a storage unit you had rented.
8Ms Lu, you evaded $30,138.06 and Mr Shen, you evaded $7,598.83 in duties and taxes respectively on this day.
9On 4 August 2022 you employed the same strategy. You had again made several large purchases of duty-free goods and you had booked a flight to Queenstown. You deposited your receipts at the duty-free counter and the docket collection counter. This time you boarded the plane, each carrying a small suitcase but without any checked luggage. ABF investigators confirmed you returned to Australia on 4 August without any luggage. You therefore breached the export obligation in your Sealed Bag Declarations. The undertakings each of you gave to the Commissioner of Taxation and Comptroller-General of Customs were false.
10You, Ms Lu evaded $20,179.74 and you, Mr Shen evaded $7,047.28 in duties and taxes on this day.
11On 16 August you had purchased a large volume of goods from Lotte, attended Melbourne Airport and checked your luggage before providing 63 receipts to the attendant at the duty-free counter.
12Ms Lu, you indicated that the receipted items were in your checked baggage. This was physically impossible given the estimated weights of the items purportedly being exported.
13You both breached your Sealed Bag Declarations. You, Ms Lu evaded $29,110.83 and you, Mr Shen evaded $17,495.42 in duties and taxes respectively.
14On 25 October 2022, having purchased items from Lotte Duty Free, you attended Melbourne Airport, checked in your luggage and handed 73 receipts to the duty-free counter. When the attendant asked where your goods were, you, Ms Lu, told her they were inside your checked in baggage.
15Some of the receipts lodged related to goods you declared were being exported on flight JQ219, which was scheduled to leave on 4 October, but was cancelled. You did not comply with your obligation to return these goods to the point of purchase within 48 hours of that flight's cancellation.
16ABF investigators conducted a covert examination of your checked baggage prior to your flight on 25 October. They found your bags only contained personal effects, a small quantity of cosmetic goods, clothes and a personal computer.
17At the time of departure, you had breached the Sealed Bag Declarations including the undertaking to export the goods.
18As a result, you Ms Lu evaded $47,862.29 and you, Mr Shen evaded $23,451.52 in duties and taxes respectively.
19On 14 November, you had again purchased a large quantity of goods from Lotte Duty Free. You attended the airport where you were both seen carrying handbags. You attended the duty-free counter, handing the attendant 56 receipts before boarding your flight.
20You flew to Auckland. Upon returning to Melbourne on the 14th you attended the baggage claim area and collected two small suitcases.
21It was not physically possible for you to have exported the goods you claim to have exported. Your Sealed Bag Declaration forms were thus false as was the
undertaking to export the goods.
22On this occasion, you Ms Lu evaded $63,920.09 and you, Mr Shen evaded $4,911.91 in duties and taxes respectively.
Investigation and arrest
23The ABF investigation commenced in July 2022. The AFP executed search warrants at your Port Melbourne address and two storage units on 16 November, seizing a trove of luxury goods and cosmetics which you had declared had been taken out of the country on the nominated flights. 8,658 of the items seized are products sold by Lotte.
24You were both arrested and interviewed at the Melbourne West Police Complex, during which you both made admissions.
Circumstances of offender – Lu
25Ms Lu, your circumstances were summarised in the report of Mr Patrick Newton which was tendered at your plea.[2]
[2] Report of Mr Patrick Newton dated 10 May 2024 (‘Newton Report’).
26You were born in Shanghai and are an only child. Your childhood was relatively strict but happy. Your parents were both busy business owners, and you spent much of your formative years in the care of your grandparents.
27You attended local primary and secondary schools in China. Your parents worried about your ability to cope with the ultra-competitive Chinese tertiary education system and in 2008 you moved to Australia with your mother to complete Years 11 and 12 at Wesley College. Your father remained in China until 2012, when he joined you with your grandmother following the death of your grandfather.
28You graduated with a Bachelor of Commerce from Melbourne University and worked in the family business before establishing your own import/export outfit targeting the Chinese diaspora.
29You told Mr Newton that your father died suddenly of a heart attack in 2020, which caused both you and your mother profound grief. She became bedbound and you became her primary carer for two and a half years. You currently live with your mother and partner at your mother’s house and you remain her primary caregiver.
30
You have had several significant relationships. You are currently engaged to
Mr Shen, your co-accused. You are in love and intend on marrying at the conclusion of these proceedings.
31You have struggled with anxiety since childhood and this has elevated your blood pressure. This condition was first observed when you were aged 12 or 13 and you were prescribed medication at age 18. Your blood pressure has been significantly affected by these proceedings. Despite medication, your blood pressure remains severely elevated according to your GP.
32You have recently started treatment with a psychologist to manage your anxiety. You are confident that this will help.
Character Reference
33Ms Lu, I was provided with a character reference from your mother, Ms Yi Zheng dated 18 July 2024. In it, Ms Zheng writes about your father's passing in 2020 and the grief she carries with her. She describes the way you have cared for her for the last two years and describes you as respectful, disciplined and selflessly dedicated to others. She described the muscle atrophy in her legs and her ocular misalignment which affects her ability to drive. She says that due to her limited English, she is hindered from independently managing tasks such as shopping, household expenses and banking transfers. She says she has no one else to rely on aside from you. She writes that you will likely never appear before the courts again and notes that you have engaged positively in psychological treatment to understand the factors that contributed to your offending. She affirms that you hope to become someone who contributes positively to society.
Circumstances of offender – Shen
34
Mr Shen, you are a permanent resident of Australia having moved here with your parents and younger brother in 2016. You report having a close loving and stable relationship with your family, having lived with them until you moved in with
Ms Lu.
35You completed high school in Melbourne and commenced study at RMIT University, however you left after a year due to your poor English.
36You have worked constantly since 2018. You worked as a packer at Australia Premier from 2018 to 2021. In 2022, you worked night shifts at McDonald’s and day shifts at Lotte Duty Free. In November 2022, you obtained full-time work in dispatch and operations at Quatius Logistics in Truganina.
37I am told you have since found work as the Second In Charge at Olam Food Ingredients, a company supplying local supermarket chains with roasted nuts. You hope to return to RMIT University and complete a Bachelor of Business in Logistics and Supply Chain Management.
38You have a close and loving relationship with your mother. You have stable accommodation with Ms Lu in Port Melbourne. Your relationship with your father has deteriorated as a result of your offending and you no longer have contact with him.
Prosecution Submissions
39Ms Holmes for the Commonwealth submitted that an actual and immediate term of imprisonment is appropriate for both of you, taking into account my primary obligation to impose a sentence of a severity appropriate in all the circumstances of the offence pursuant to s16A(1) of the Crimes Act 1914 (Cth) ('The Act') and the matters listed in s16A(2).
40She submitted that you are each charged as principals pursuing a joint criminal enterprise.
41She conceded that you, Mr Shen, deserve greater leniency than your co-offender given your reduced role, your youth and the possibility of your deportation.
Defence Submissions — Lu
42Mr Gullaci SC with Ms Brown on behalf of you, Ms Lu, submitted that a Recognisance Release Order pursuant to s20(1)(b) of the Act is open and within range.
43I was provided with a bundle of sentencing remarks from this court relating to a scheme by childcare providers to defraud Commonwealth revenue. The cases illustrate current sentencing practices for offending which the parties agreed was commensurate with, and analogous to, yours. In eight of the ten sentences, three resulted in an immediate sentence of imprisonment. Two were found to be at the very top of the hierarchy. Each of these comparators predate the increase in maximum penalty from 5 to 10 years gaol. I will have a little more to say about these cases later in these remarks.
Defence Submissions — Shen
44Ms Locke submitted on your behalf, Mr Shen, that it is open to sentence you to a much lower sentence of imprisonment, one which allows for your immediate release on a Recognisance Release Order having regard to your age, remorse, previous good character, employment history and family support.
Gravity of Offending & Moral Culpability
45Ms Holmes for the Commonwealth submitted that the offending is serious given the quantum involved. She submitted that it relevantly involved many purchases, over approximately four months and five attendances at the airport to lodge the claims. She submitted that the offending demonstrates a level of understanding of the system, was sophisticated, organised and protracted. The offending involved a number of overseas trips undertaken for the sole purpose of masking fraud.
46Ms Holmes characterised your offending, Ms Lu, as that of a sophisticated businesswoman using the products from Lotte to run a cosmetics retail operation.
47Mr Gullaci submitted that you, Ms Lu, did not initiate this scheme. You were introduced to it by others. It continued after you stopped. He emphasised that you had not obtained all the items purchased in your name. Your credit card was not linked to some receipts relied on by the prosecution to establish the quantum of your offending. I have been provided examples of purchases that cannot be said to have been made by you. I accept that your credit card was not used to effect each purchase. I also accept that the scheme encouraged others to nominate your flight details to enable them to access duty-free goods which, like yours, were not exported, thereby evading duty.
48Ms Locke also conceded the aggravating factors identified by the prosecution however submitted that you, Mr Shen, were introduced to the scheme by more senior employees at Lotte Duty Free after commencing work there. She submitted that you were initially uncomfortable and tried to resist involvement in the scheme but became ensnared and persisted, doubtless seduced by the easy money to be had.
49Ms Locke noted your attempt to resign in October 2022. At arrest, you had prepared a formal letter of resignation. She submitted that you, like Ms Lu, did not make all the purchases or obtain all the items purchased in your name. Ms Locke submitted that your offending is significantly lower than that of Ms Lu’s, due to your lesser role and lower quantum attributable to your offending.
50Ms Holmes conceded at the sentence indication hearing that the scheme was in operation prior to your involvement in it and it continued after you both stopped. That leads inexorably to the conclusion that neither of you devised this scheme and that it did not depend on your participation to continue. Lotte benefitted from your engagement in the scheme and you both benefitted also. Neither of you can be said to be architects or essential cogs.
Guilty Plea & Worboyes
51You have both entered pleas of guilty which entitle you to a mitigation of sentence reflecting the utility these pleas provide to the court.[3] You are both also entitled to the dwindling dregs of the Worboyes discount.[4]
[3] DPP (Cth) v Thomas (2016) 53 VR 546.
[4] Worboyes v The Queen (2021) 96 MVR 344, 356-357, [39] (‘Worboyes’).
52In addition, I take the early pleas of guilty – and the fact that offers to plead guilty had been made as early as March 2023 – as indicators of genuine remorse.
Remorse
53It was argued that you have both expressed considerable shame for your offending. I have already acknowledged your early pleas of guilty.
54In addition, Ms Lu, you have made full restitution of the loss suffered by the Commonwealth arising out of your offending and Mr Shen's.
55This money has been held in trust since 29 November 2023. An offer to make full restitution was made in March 2023. You might be accused of trying to buy your way out of prison and I note the remarks of Carmody J about the need to ensure that rich and poor alike are treated equally,[5] but full restitution has restored the Commonwealth to the position it occupied before your offending, it has wiped away any gains you made, it is reflective of your shame and contrition and it informs my assessment of your prospects of rehabilitation.[6] You are entitled to substantial moderation of your sentences to reflect the steps you have taken to repair the damage wrought by your offending.
[5] DPP v Kuol [2017] VCC 1516, [32].
[6] E.g., R v Bandjak (2011) 109 SASR 315, 330-1 [80].
56The prosecution concedes the sincerity of your remorse in their written submissions. In sentencing Federal offenders this remorse can justify reducing the need for specific deterrence. It can be used to inform prospects of rehabilitation.[7] You have both done what can be done to make good the damage you have caused. Your sentences will be reduced to reflect the value of this mitigatory feature.
[7] Ss 16A(2)(f), (j), (n) Crimes Act 1914 (Cth).
Youth
57Mr Shen, you were 21 when your offending commenced and you are now 24 years old. Ms Locke submitted that your relative youth justifies a reduction in sentence in accordance with the principles in Mills[8] and Azzopardi.[9] It was also submitted that your youth is a mitigatory feature distinguishing you from Ms Lu.
[8] R v Mills [1998] 4 VR 235 (‘Mills’).
[9] Azzopardi v The Queen (2011) 35 VR 43 (‘Azzopardi’).
58You are not a young offender as that expression is defined in the Sentencing Act,[10] but you are a youthful offender.
[10] S 3(1) Sentencing Act 1991.
59You were youthful and young when you commenced work at Lotte. You had misgivings about the scheme your superiors were pursuing, but you felt powerless to defy them. That is understandable given that you were a junior employee and immature. At the time of your offending, you were deferential to those in authority, dutiful and compliant even where your scruples warned you against what you were doing. Your youth, remorse, and the relative modesty of your role make your rehabilitation a critical feature of the sentence I am to impose.
Prospects of Rehabilitation
60Ms Lu, you have excellent prospects of rehabilitation. You have no prior or subsequent offending history and an exemplary record of hard work, entrepreneurial nous, community engagement and pro-social anchors. You have strong familial support and your mother depends heavily on you. There is, she tells the court, no-one to fill the breach in the event of your incarceration. I accept that ensuring she is cared for operates as a bulwark against any further offending and provides you with a powerful incentive to remain in the community discharging that vital role.
61Mr Shen, your prospects of rehabilitation are also excellent. You are a relatively young man with an excellent prior character and no prior or subsequent criminal history. Your fiancé is unstintingly supportive, and you are implacably remorseful for your behaviour.
Delay
62You were both arrested on 16 November 2022 and this prosecution has been hanging over your heads ever since.
63Mr Newton diagnosed you, Ms Lu, with generalised anxiety disorder ('GAD').[11] He believes that your anxiety has a number of causes, including frequent rumination relating to the current proceedings. Relevantly, Mr Newton writes that the combination of factors including concern for your mother’s welfare, the ongoing legal proceedings and your father’s death which predates your offending result in a 'level of anxiety that is considerably in excess of that normally evident in individuals facing criminal charges for the first time.'[12] I am satisfied that you have experienced enduring anxiety and distress from these proceedings 'hanging over your head'.
[11] Newton Report (n 2) 7 [38].
[12] Ibid 7 [34]-[36].
64Ms Lu, you have also made significant efforts at rehabilitation since you were charged. You have undergone psychological treatment, you have maintained employment and run a successful business. You have not reoffended. Your sentence will be moderated to account for the anxiety you have suffered and the rehabilitative efforts you have made.
65Mr Shen, you have maintained employment throughout these proceedings, including most recently at Olam Food Ingredients and you have not reoffended. Your sentence will also be moderated to acknowledge your rehabilitative efforts and the progress you have made since you were charged.
Verdins
66Mr Gullaci disavowed reliance on limbs 1-4 of Verdins. However, he did submit that limbs 5 and 6 are enlivened. The prosecution accepts that there is a proper foundation for the engagement of these two limbs and I have adjusted your sentence, Ms Lu, considering the additional hardship you would experience undergoing a prison term with your levels of anxiety.
67Ms Locke did not seek to rely on the principles in Verdins in your case, Mr Shen.
Risks of Deportation
68Mr Shen, you are a permanent resident of Australia, and therefore at risk of deportation following your sentence.[13]
[13] By a combination of ss 501(3A)(a)(i), (6)(a), (7)(c) Migration Act 1958 (Cth)
69Ms Locke argued that this risk can be considered for the two purposes identified in Guden.[14] You moved here in 2016 with your parents and siblings. You maintain a loving and close relationship with them, save for some recent estrangement from your father. You have built a life for yourself here and intend to marry Ms Lu, an Australian citizen. I accept that the threat of losing the opportunity to permanently settle here will weigh very heavily on you. I have mitigated your sentence in light of this additional burden.
[14] Guden v R (2010) 28 VR 288.
70Your family lives in Australia. Your father travels to China, but you have no ties to that country since leaving it. Your father has disowned you and would not support you in China if you were forced to live there. Deportation would cause you great anguish. I have ameliorated the sentence to account for this hardship.
Family Hardship
71Ms Lu, as I have noted elsewhere, you have for two years or more undertaken the responsibility of assisting your mother with the tasks of daily living. You are her sole support. A period of imprisonment would cause great family hardship.
72According to s16A(2)(p) of the Act, I must consider 'the probable effect that any sentence or order under consideration would have on any of the person's family or dependants.'
73There will be profound hardship to your mother if you are sentenced to imprisonment immediately served. The Prosecution did not seek to be heard on this matter in light of the findings in Totaan.[15] I accept that your relationship with your mother is very close and that she is exceedingly vulnerable and dependant on you. That fact has also affected my assessment of the impact on others of the imposition of a term of imprisonment to be served immediately.
[15] Totaan v The Queen (2022) 297 A Crim R 224 (‘Totaan’).
Disparity
74Some disparity in your sentences is warranted. Mr Shen, you had a lesser role in the scheme and the benefit you derived was more modest. You are a youthful offender and you have had to process the possibility of deportation upon completing your sentence.
75Ms Lu, you have limbs 5 and 6 of Verdins as mitigatory features and the family hardship occasioned to your mother in the event that you are imprisoned. These factors work to reduce your sentence, but not to the point where it ought to be commensurate with Mr Shen's. That is because your offending is somewhat larger in scale, you are older and more senior and you were operating a business selling the items you had purchased duty-free from Lotte.
Approach to sentence
76Following the plea hearing I was provided with the case of Karam v The King by the prosecution on 3 September 2024.[16] In it, the Court of Appeal cautions against two stage sentencing where there has been a sentence indication hearing, reasoning:
The only effect such an indication can have upon the sentence subsequently to be passed by the sentencing judge is found in s209 of the Act — that is to constrain the sentencing judge from imposing a more severe sentence than the maximum total sentence indicated. The sentence indication is not an opening bid for future negotiation, nor is it a benchmark for additional deductions at the plea hearing. Not only is this approach tantamount to two stage sentencing and incompatible with the instinctive synthesis approach, but there are also strong public policy reasons why this approach must be eschewed. Canny defence practitioners may hold back one or more mitigating factors for the second hearing. The sentence indication process was never intended to be treated in this way. Beyond placing a ceiling on the overall sentence that can be imposed, it has no relevance to the instinctive synthesis of the sentencing judge.[17]
[16] Karam v The King [2024] VSCA 164.
[17] Ibid, [42].
77In response, I was provided with joint submissions on both behalf's. It was submitted that a sentencing judge imposes the appropriate sentence having considered all the relevant considerations. They submitted that there are instances where additional material may be relied upon at plea that is not available at the sentence indication stage and pointed to remorse as an example and instances where a psychological report is obtained that deliberately declines to interrogate the offender's response to their offending given the possibility that a trial may still proceed.
78The Prosecution responded with an email on 5 September 2024 accepting the state of the law as outlined in the Defence submissions.
Sentencing Principles
79Section 16A(1) constrains me to impose a sentence that is appropriately severe in the circumstances. I need to inform myself of the matters in s16A(2) which are relevant to each of you.
80Your offending occurred over a four-month period. It involved a cascading series of discrete choices and acts to facilitate a relatively sophisticated scheme defrauding the Federal government of the revenue due to it. It was deliberative, protracted and you were confronted at each step with the need to make discrete decisions to keep going. You were required to book flights and on five occasions you left Australia. You knew when doing so that what you were embarked upon was weighty and wrapped in layers of deception and false representations to the country which had welcomed you both as immigrants, had housed and educated you.
81Your conduct calls for denunciation to curb its recurrence.[18] Section 16A(2) does not permit me to give greater effect to one factor over the others.[19] I am obliged to consider each matter that is relevant and known to the court.
[18] E.g., DPP (Cth) v Gregory (2011) 34 VR 1, 15-6 [53]; Hili v The Queen (2010) 242 CLR 520, 540 [63]; DPP (Cth) v Rowson [2007] VSCA 176, [24]; DPP (Cth) v Goldberg [2001] VSCA 107, [51]; DPP (Cth) v Milne [2001] VSCA 93, [12]-[13].
[19] Totaan (n 15) 246 [83], 249-50 [100].
82The Commonwealth has provided a table of comparable cases.
83Ryan was
an unsuccessful appeal by a 46-year-old man against a sentence
post-trial of six years' imprisonment for 13 dishonesty charges constituted by filing false Business Activity Statements over a period of five years.[20] He obtained $330,295.86 and the ATO clawed back 98,000. The appellant had no relevant prior convictions and a decent work history. He was not contrite; he made no repayment or offers of assistance and had not rehabilitated. He was motivated by greed. This case is graver than yours in every respect.
[20] Ryan v The King [2022] SASCA 110.
84Ibbetson
concerned a dismissed appeal against a sentence of two and a half years to be released on recognisance after 10 months following conviction for 11 counts of attempting to or obtaining a financial advantage by deception.[21] Ibbetson was the sole operative of a tax scheme which misappropriated $200,553 over
13 months. No offer of restitution had been made, nor had any assistance been provided to the authorities. The Appellant had no prior criminal history, and at the time of sentence had made progress in treating her addiction and mental health concerns. Again, the quantum is higher, the offending period is longer, there was no restitution. It is readily distinguishable.
[21] R v Ibbetson [2020] QCA 214.
85Latemore concerned an unsuccessful appeal by a 48-year-old man against a sentence of two years six months imprisonment to be released after four months following conviction for a series of deceptions over a period of almost four years where he lodged false Business Activity Statements to receive just under $140,000 in refunds.[22] He had relevant prior convictions having previously served State sentences for offending during the same period as the Commonwealth offending and had made no effort to repay. The court accepted that the offending was due to undiagnosed mental and physical conditions which caused erratic behaviour, and that the appellant had excellent prospects and was unlikely to reoffend. Nonetheless, the Court found that the quantum and the duration warranted imprisonment. His criminal history, the persistence of his offending and his failure to repay are all distinguishing features.
[22] R v Latemore [2019] QCA 55.
86Bransby was an unsuccessful appeal by a 35-year-old man against a sentence of four years six months relating to a scheme lasting a year which involved the use of 11 different business entities to misappropriate $334,707 in GST refunds, although the total amount sought was $446,867.[23] No restitution or assistance was provided beyond full admissions in the initial interview, and the appellant had relevant prior convictions for fraud and theft. A 25 per cent discount was awarded for the early and fast-tracked plea of guilty. Again, the relevant criminal history, failure to pay, quantum and duration are features distinguishing your cases from his.
[23] Bransby v The Queen [2010] WASCA 165.
87The final case referred to the court was the 1996 case of Hogan.[24] Here the appellant unsuccessfully appealed a sentence of three years three months for State and Commonwealth offences which involved a series of false claims to obtain grants ostensibly for the development of a nursing agency amounting to $249,022.26 There was an early plea and the appellant had medical conditions rendering imprisonment considerably more difficult than for the average offender. She had decent prospects of rehabilitation and an extensive work history, as well as dependants. She also had a relevant criminal history, with part of the sentence under appeal including the enlivening of a previously suspended sentence imposed less than two years before the extant offending. The court found that the sentence was not manifestly excessive. Again, this case is readily distinguishable from yours.
[24] R v Hogan (Supreme Court of Victoria Court of Appeal, Phillips, Hayne & Callaway JJA, 11 March 1997).
88I was also referred by Mr Gullaci to several comparable cases stemming from an investigation by the AFP named Operation Caulis. The investigation targeted childcare businesses where fraudulent time sheets were submitted claiming care which had not been provided or where the hours had been inflated, causing a loss to the Commonwealth. Three providers and 10 educators were charged. Each offender was a member of the Sudanese Australian community, the majority holding asylum and refugee status. Most of these cases dealt with offending ranging over a period of five to seven months.
89In Dahl,[25] the offender was sentenced to 12 months imprisonment, but released immediately under a recognisance release order for two years. She was an educator and had provided fraudulent time sheets producing a loss to the Commonwealth of $82,813.70. She had no relevant prior convictions and entered an early plea. She was assessed as sixth in the hierarchy of educators. The offender had significant mitigation, including a background of profound adversity, fleeing Sudan as a refugee. She was a mother of five children with limited family support. She had not made restitution at the time she was sentenced, had not assisted the authorities and had not provided an undertaking.
[25] DPP v Dahl [2017] VCC 600.
90In Kuol,[26] the offender was sentenced to a term of imprisonment for 12 months suspended for two years by operation of immediate release on a recognisance release order. She was an educator and rated fourth in the hierarchy. She had provided fraudulent time sheets producing a loss to the Commonwealth of $119,657.54. The offender had no prior convictions and entered an early plea. She had a background of significant adversity, fleeing Sudan as a refugee and surviving internment in the infamous Kakuma refugee camp. She was a single mother of three children. She had not made restitution at the time of sentence and had not assisted the authorities.
[26] DPP v Kuol [2017] VCC 1516.
91Ater,[27] concerned an offender who was sentenced to a two-year community correction order. He was an educator who submitted fraudulent childcare claims causing a loss to the Commonwealth of $36,605.80. He was assessed as ninth in the hierarchy, at the very bottom rung, had no relevant prior convictions and entered an early plea. He fled Sudan as a refugee at eight years of age and witnessed significant violence as a child. Having settled in Australia, he supported six children, was in a stable relationship and held full-time work. He had not made restitution and had not assisted, or undertaken to assist, the authorities.
[27] DPP v Ater [2018] VCC 965.
92In the case of Winpea,[28] the offender was sentenced to nine months' imprisonment released immediately on a recognisance release order. The offender provided fraudulent timesheets causing a loss of $48,844.78 to the Commonwealth. He pleaded guilty at an early stage and had no prior convictions. He was assessed as eighth in the hierarchy. He had a history of trauma and displacement, including exposure to the civil war in Libera and separation from his partner and children in 2002 when fleeing to the Ivory coast. He was interned in a refugee camp for eight years before moving to Australia. He had been unable to locate his family. He had not made restitution and had not assisted the authorities.
[28] DPP v Winpea [2018] VCC 898.
93In the case of Arop,[29] the offender was sentenced to twelve months' imprisonment wholly suspended for two years by release on a recognisance release order. He had caused a minimum loss to the Commonwealth of not less than $64,712.50. He entered an early plea of guilty, was an Australian citizen, having originally arrived in Australia in 2010 on a tourist visa. He was married and had five children with no prior criminal history and excellent prospects of rehabilitation. He had not made restitution and had not assisted the authorities.
[29] DPP v Arop [2018] VCC 1235.
94In Iheng,[30] the offender was sentenced to 18 months' imprisonment to be released on a recognisance release order after six months. He had caused a loss to the Commonwealth of $134,688.28. He pleaded early and was ranked third in the hierarchy. He was of prior good character. He came to Australia as a refugee on humanitarian grounds having spent five years in a refugee camp in Egypt upon fleeing the conflict in South Sudan. He had seven children, all of whom were in the custody of their mother following separation. He had not repaid the money and had not assisted the authorities.
[30] DPP v Iheng [2018] VCC 1261.
95I have also had regard to the related cases of Acieny,[31] and Deng.[32]
[31] DPP v Acieny [2018] VCC 1220.
[32] DPP v Deng [2017] VCC 1783.
96The parties agree that the offending in the cases above is the closest analogue to yours and can be relied upon to reveal current sentencing practices, noting that the maximum penalty increased from five years to 10 in 2018. It is also accepted that your roles are analogous to the 'educators' sentenced in these cases. They include instances where the quantum is higher than yours, Mr Shen, and the offending persisted for longer, but which yielded dispositions short of actual gaol terms. They do not have the mitigatory feature of full restitution. Nonetheless, the prosecution maintains that you should both serve actual custodial terms. I have not been provided with any cases dealing with instances of evading customs duty.
Sentence
97Ms Lu, Mr Shen please stand.
98Ms Lu, on Charge 1, engaging in conduct with the intention of dishonestly causing a loss to a Commonwealth entity, you are convicted and sentenced to imprisonment for 22 months. I direct that you be released forthwith upon entering a recognisance to be of good behaviour, fixed in the amount of $5,000 for a period of 24 months.
99Mr Shen, on Charge 1, engaging in conduct with the intention of dishonestly causing a loss to a Commonwealth entity, you are convicted and sentenced to imprisonment for 14 months. I direct that you be released forthwith upon entering a recognisance to be of good behaviour fixed in the sum of $2,000 for a period of 15 months.
100The Prosecution have sought a Reparation Order in the amount of $191,211.01 for you Ms Lu, and $60,504.96 for you Mr Shen. These orders are not opposed; I order that each offender make reparation to the Comptroller General of Customs in the amounts I just nominated.
101Mr Yang, do you want an opportunity to explain the recognisance release order to - - -
102MR YANG: Yes, if I could.
103HIS HONOUR: I will stand down.
104I will just indicate the 6AAA. But for your pleas of guilty, I would have sentenced you Ms Lu to a term of two years, six months imprisonment, to be released on a recognisance release order for two years after serving 12 months. I would have sentenced you, Mr Shen to a term of imprisonment of 15 months, to be released on a two-year recognisance release order after serving five months.
105I will stand down.
106(Short adjournment.)
107HIS HONOUR: Mr Yang, you have explained the effect of the orders to both Mr Shen and Ms Lu?
108MR YANG: Thank you for that opportunity, yes I have, thank you.
109HIS HONOUR: Very well. Are there any ancillary orders?
110PROSECUTOR: There are no other ancillary orders sought, Your Honour.
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