Director of Public Prosecutions v Pan
[2022] VCC 1280
•28 September 2022
| IN THE COUNTY COURT OF VICTORIA AT Melbourne CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-19-00751
| THE DIRECTOR OF PUBLIC PROSECUTIONS | Prosecution |
| v | |
| LINCHONG PAN | Defence |
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JUDGE: | HIS HONOUR JUDGE CAHILL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 August 2022 | |
DATE OF SENTENCE: | 28 September 2022 | |
CASE MAY BE CITED AS: | DPP v Pan | |
MEDIUM NEUTRAL CITATION: | [2022] VCC 1280 | |
SENTENCE
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Subject:Dealing with property reasonably suspected of being proceeds of crime contrary to section 400.9(1) of the Criminal Code Act 1995 (Cth)
Catchwords: Guilty plea – financial services broker who collected and distributed cash totalling $5,264,300 for an international money laundering syndicate – above mid-range offending – no criminal record – family hardship – risk of deportation – 5-year delay in sentencing
Legislation Cited: Criminal Code Act 1995 (Cth); Migration Act 1958 (Cth); Sentencing Act1991 (Vic); Crimes Act1914 (Cth)
Cases Cited:Samarakoon [2018] VSCA 119; Felix Harper (a pseudonym) v Director of Public Prosecutions (Cth) [2021] VSCA 173; Shi v The Queen (2014) 246 A Crim R 273; Harmeet Singh v R [2016] VSCA 163; R v Jiao (2015) 251 A Crim R 236; Ansari [2007] NSWCCA 204; Worboyes [2021] VSCA 169; R v Biba [2021] VSC 327; Hiu Mei Lam v R [2021] VSCA 241; 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; Totaan (2022) 365 FLR 69; Ahmed Mohamed [2022] VSCA 136
Sentence: 2 years 7 months’ imprisonment to be released on a reconnaissance release order after serving one year and 4 months
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APPEARANCES: | Counsel | Solicitors |
| For the Prosecution | Mr R. Barry | Commonwealth Director for Public Prosecutions |
| For the Defence | Mr. P. Dunn KC and Mr G. Jones | Law Offices of Ellinghaus & Linder |
HIS HONOUR:
1Linchong Pan (‘Pan’) you have pleaded guilty to three 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) (‘the Code’).
Circumstances of offending
2The circumstances of your offending are set out in the summary of prosecution opening dated 19 July 2022.[1]
[1] Exhibit A: Summary of Prosecution Opening for Plea dated 19 July 2022.
3During the offending period, you operated a financial advisory and loan brokerage business, in Melbourne, and were the director of a number of companies.
4Zhengwei Zhang was a co-director of two of those companies with you.
5Between 24 May 2017 and 20 July 2017, on nine separate occasions, in Sydney, you collected cash, either on your own, or jointly with Zhang, or by procuring him to collect the cash for you, totalling $5,264,300. You then disbursed the cash to other parties in Melbourne.
6The individual amounts you dealt with ranged from $220,000 to $1,214,300.
7You were, in effect, a money remitter, in Australia, for an international money laundering syndicate which used the Hawala method to secretly move substantial sums of money internationally, using currency in different countries, without moving currency between countries or making any electronic bank transfer.
8It has been described as a money transfer without money movement.
9By moving the money in cash, the reporting requirements of the Financial Transactions Reports Act 1988 (Cth) were avoided.
10By your guilty plea, you accept it was reasonable to suspect the money you dealt with, which were considerable sums of cash involving a covert method of movement, was the proceeds of indictable crime.[2]
[2] Samarakoon [2018] VSCA 119, [27].
Charge 1 ($2,240,000)
11
Between 24 May 2017 and 5 July 2017, in three separate dealings, with either a
co-offender, Cong Xu, or Zhang, you collected and disposed of $2,240,000.
12Firstly, on 23 May 2017, you were with Cong Xu, then another member of the money laundering syndicate, at the Star Casino, in Sydney, when he deposited cash into his funds on deposit (FOD) account. Next day, he withdrew $640,000 in cash from his account and split it between two bags. He gave one bag to you. The two of you flew back to Melbourne together with the two bags of cash. In Melbourne, you disbursed $450,000 of those funds to others. Your crime was your joint possession, with Xu, of $640,000, which you then disbursed.
13Secondly, on 29 June 2017 at 8:00 am, with Zhang, you flew from Melbourne to Sydney where you took a cab to an address at Ashfield. There you collected a sports bag containing $900,000 from someone. Around 1:00PM, the two of you boarded a flight from Sydney to Melbourne carrying the $900,000 in cash between you. In Melbourne, you disbursed $850,000 to five persons. Your crime was your joint possession, with Zhang, of $900,000, which you then disbursed
14Thirdly, on 5 July 2017, at 6:45 am, with Zhang, you flew from Melbourne to Sydney where you took a cab to an address at Croydon Park. There, you collected $700,000 in cash from someone. At 10:37 am, the two of you boarded a flight from Sydney to Melbourne carrying the cash, in various bags, between you. You disbursed $650,000 of the cash to persons in Melbourne. Your crime was joint possession, with Zhang, of $700,000 which you then disbursed.
Charge 2 ($1,090,000)
15Between 31 May 2017 and 20 July 2017, you collected and disposed of $1,090,000 in cash in three separate dealings
16Firstly, on 31 May 2017, around midday, you flew from Melbourne to Sydney. During the evening, you deposited $250,000 in cash into your Star Casino account. Xu was with you. He made cash deposits into his account as well. Later in the evening, he withdrew $419,020 in cash and, at 10:00 pm, you boarded a flight back to Melbourne with the cash including the $250,000 you had deposited earlier in the day. In Melbourne, you 'offloaded' the $250,000, and, next day, flew to Shanghai. Your crime was your receipt and disposal of $250,000.
17Secondly, after a series of telephone conversations with a man named Hung ('Ken'), who arranged to supply you $340,000 in cash as part of an ongoing arrangement for which you would receive 0.5 per cent commission, which you commented was a low rate, you flew to Sydney, on 17 July 2017 at 3:54 pm. You were carrying a duffel bag with you. Around 6:30 pm, you met Ken at the airport terminal. Inside a toilet, he gave you $340,000 in cash. At 7:37 pm, you boarded a return flight to Melbourne with the cash and in Melbourne you disbursed at least some of the funds. Your crime was your receipt and disposal of $340,000.
18Thirdly, on 20 July 2017, you flew, with Zhang, from Melbourne to Sydney, taking a duffel bag and a suitcase. You arrived about 8 pm and hired a car which you drove to industrial premises at Auburn. There, you collected cash and drove back to the airport. Around 10 pm, you boarded a return flight, with the duffel bag packed with cash, to Melbourne. New South Wales police arrested Zhang at Sydney airport before he boarded the plane. He was carrying $579,150 in cash. Your crime was the receipt of approximately $400,000, up to $500,000, in cash.
Charge 3 ($1,934,300)
19Between 10 June 2017 and 23 June 2017, you arranged for Zhang to collect $1,934,300 in three separate dealings.
20Firstly, on 10 June 2017, while you were in China, using a WeChat group which included Zhang and your Malaysian based 'big boss', known as 'SuperLen' or 'brother Tien', you got Zhang to fly to Sydney where he collected $500,000 which he brought back to Melbourne on a return flight. You instructed Zhang to keep $25,000 for fees and expenses and to disburse the balance to persons in Melbourne. Your crime was to procure Zhang to collect and disburse $500,000.
21Secondly, on 18 June 2017, you got Zhang to collect $1,214,300 from an address at Eltham and gave him instructions for disbursement of the monies to others. A series of conversations intercepted from your phone indicate there was a 5 per cent gross commission for the operations. Your crime was to procure Zhang to collect and disburse $1,214,300.
22Thirdly, after you had spoken with brother Tien on 22 June 2017, you arranged for Zhang to collect $220,000 from a Templestowe address next day. Your crime was to procure Zhang to collect $220,000.
Arrest and interview
23Police arrested you on 6 December 2017 at your Mount Waverley home.
24There, they seized:
(a) a cash counter;
(b) $55,100 in cash and four Crown Casino gaming chips which were in a safe in the master bedroom;
(c) keys to a 2016 red Porsche Boxster; and
(d) a 2016 black BMW X5 wagon.
25At interview, you denied any wrongdoing.
26Next day, you were released on stringent bail conditions which included regular reporting to police.
27In March 2021, you were to stand trial on an indictment containing nine charges contrary to sub-s900.9(1).[3]
[3] Each of the nine transactions was charged as a single count.
28In November 2021, after an unsuccessful application to permanently stay the indictment,[4] you indicated your intention to plead guilty to the three charges on the indictment now before the court.[5]
[4] Felix Harper (a pseudonym) v Director of Public Prosecutions (Cth) [2021] VSCA 173.
[5] Exhibit B: Chronology.
Xu and Zhang
29On 21 January 2019, after a guilty plea, Xu was sentenced to 18 months’ imprisonment with a recognisance release after 12 months on two charges of dealing with money, being more than $100,000 or more, reasonably suspected of being proceeds of crime. His offending involved six cash transactions totalling $2,673,640.[6]
[6] Exhibit D: DPP v Xu [2019] VCC 8.
30
Zhang is scheduled to stand trial in December 2022 on five charges, contrary to
sub-s400.9(1), which reflect his alleged involvement in the transactions charged against you.
Criminal record
31You have no criminal record.
Personal circumstances
32Your personal circumstances are set out in a chronology[7] and the psychological reports of Luke Armstrong, psychologist, who assessed you on 28 March 2022[8] and 31 July 2022.[9]
[7] Exhibit 2: Chronology of Mr Pan's Personal Circumstances.
[8] Exhibit 3: Psychological Report of Luke Armstrong dated 28 March 2022.
[9] Exhibit 4: Psychological Report of Luke Armstrong dated 31 July 2022.
33You were born in November 1989 at Shanghai, China. You were 29 years old when you offended. You are now 34.
34You are an only child. You lived, in poor circumstances, in a one-bedroom apartment with your parents and grandparents until you were 12 years old. Your grandmother was your primary carer while your parents worked in a clothing factory.
35Your parents often argued about money and your father re-educated himself and, when he got into real estate, he bought an apartment. When you finished school, you commenced an English degree with an aim to apply for a student visa.
36In 2009, you arrived in Australia on a student visa. You lived with an elderly Australian couple and completed an English as a Second Language course followed by a Bachelor of Commerce, majoring in banking and finance. While you were studying, you worked three jobs and set up your own cleaning business.
37In 2013, you began working for a finance broker in Sydney.
38In 2015, your parents moved to Australia. In the same year, you married your girlfriend.
39In 2016, you started your own financial advisory loan brokering business, Wiky Pty Ltd. Wiky was your nickname.
40In 2018, your son was born.
41In December 2019, your wife and son went to China to visit her parents. Your bail conditions prevented you from leaving Australia and travelling with them. Due to COVID-19 related travel restrictions, your wife and son were unable to return to Australia until this year.
42Following your arrest, your financial licence was suspended, so, to support your family, you started a Chinese restaurant where, as the principal, you work 7 days a week.
43You also commenced postgraduate studies in law.
44Until you were remanded in custody, you were building your own home, as an owner builder, for your family.
45You are a permanent resident of Australia but not an Australian citizen.
46I received written references from a number of persons. Your referees describe you as an honest, reliable and hardworking man. According to them, you deeply regret the consequences of your actions, for yourself and for your family. You were very stressed when your wife and son were stuck in China, and you threw yourself into your restaurant to distract you from the anxiety of your separation from them and the uncertain outcome of these proceedings. As the family breadwinner, you worry for your wife and child while you are incarcerated.
47You have a significant attachment to your son.
48You told Mr Armstrong you have struggled with worry and anxiety, reactive to your family circumstances and these proceedings, which, in his opinion, have likely contributed to the re-occurrence of Vitiligo, a skin disease you suffer.
49In his opinion, you qualify for a diagnosis of generalised anxiety disorder.[10] And, in his opinion, your mental state and general health will deteriorate in prison.[11]
[10] Exhibit 4: Psychological Report of Luke Armstrong dated 31 July 2022, p.2.
[11] Exhibit 3: Psychological Report of Luke Armstrong dated 28 March 2022, p.5.
50He described you as being 'genuinely remorseful'.
51And, considering:
(a) your acceptance of responsibility for your actions;
(b) your departure from the financial services industry;
(c) your establishment of a successful restaurant;
(d) your desire for continuing education;[12] and
(e) your strong sense of responsibility to your wife and child
he assessed you to be a low risk of reoffending.
[12] You had recently enrolled in a Master of Law degree.
52In his view, '[your] presence in [your] son's life looking forward is critical for the healthy development of the child's identity'.[13]
[13] Exhibit 3: Psychological Report of Luke Armstrong dated 28 March 2022, p.5.
Defence submissions
53Your counsel, Mr Dunn KC who, with Mr Jones, appeared on your behalf, told me Xu introduced you to Super Len, who supplied the Australian banknotes which you collected and disposed of. He told me, through your client base, you found persons, all Chinese nationals, who wanted to purchase substantial items, like cars and houses, in Australia, and could provide foreign currency in China.
54He submitted you had no reason to question the source of the funds or the business practice, because the Hawala practice, of itself, is not illegal.
55In comprehensive written[14] and oral submissions, he relied on the following factors in mitigation of penalty:
(a) your guilty plea;
(b) your lack of any criminal record;
(c) your positive steps to rehabilitation;
(d) delay in sentencing;
(e) risk of your deportation; and
(f) family hardship.
[14] Exhibit 1: Defence Submissions on Sentencing dated 3 August 2022.
Prosecution submissions
56In thorough written[15] and oral submissions, the prosecutor, Mr Barry, submitted your offending was objectively very serious considering it involved:
(a) nine separate dealings;
(b) totalling $5,264,300 (more than 50 times the monetary threshold for the offences charged);
(c) in circumstances where you received and distributed cash;
(d) for financial reward; and
(e) with a degree of organisation and planning
for an international money-laundering syndicate.
[15] Exhibit E: Sentencing Submissions dated 5 August 2022.
57He submitted, considering you not only collected the cash and disbursed it to persons in Melbourne, which meant you were aware of the vast quantities of cash you dealt with, and you also engaged Zhang to help you, your role was greater than a mere courier.
58He accepted your guilty plea attracts a discount for its utilitarian value and your risk of reoffending is low.
59He also accepted your incarceration will cause hardship for your wife and son and the risk of deportation will make imprisonment harder for you.
60He provided me with a helpful table of comparative cases to indicate a range of sentences which have been imposed for s400.9 offences.
61He submitted terms of imprisonment must be imposed and a non-parole period should be fixed.
62He submitted your criminality is too serious to justify imprisonment with a reconnaissance release order.
Consideration
63Under the money laundering division of the Criminal Code Act 1995 (Cth),[16] the offence created by s400.9 falls at the lowest of the scale. It requires proof that the offender dealt with money of a value of more than $100,000 where it is reasonable to suspect that the money is proceeds of crime. Absolute liability applies to the element of reasonable suspicion. The offence does not require proof of any subjective criminality.[17]
[16] Criminal Code Act 1995 (Cth), Division 400.
[17] Shi v The Queen (2014) 246 A Crim R 273, [44]-[45]; see also Harmeet Singh v R [2016] VSCA 163 [47].
64This is reflected in the maximum penalty of 3 years' imprisonment.
65Nevertheless:
(a) money laundering is a serious offence;[18] and
(b) general deterrence is important.[19]
[18] R v Jiao (2015) 251 A Crim R 236, [66]; Samarakoon [2018] VSCA 119, [88].
[19] Ibid.
66To assess your culpability, it is important to examine what you did in the commission of your crimes.[20] The value of the suspected proceeds of crime is also a predominate consideration.[21]
[20] Ansari [2007] NSWCCA 204, [123]-[124].
[21] Arjuna Samarakoon [2008] VSCA 119, [68]; R v Jiao (2015) 251 A Crim R 236, [66].
67As well, personal benefit is a relevant factor.[22]
[22] Arjuna Samarakoon [2008] VSCA 119, [69] and [70].
68You were part of part of an international money-laundering operation which moved large amounts of cash in Australia with corresponding movement of foreign currency overseas.
69You were not the owner of the money. You collected it from agents of Super Len, and distributed it to people in Melbourne, enlisting Zhang to help you. You knew exactly how much money you were dealing with.
70You dealt with money in multiples which far exceeded the statutory threshold.
71It is obvious you committed the crimes for profit.
72There is evidence you were receiving a commission of 0.5 per cent for these transactions.
73There was a degree of sophistication to your offending. It concerned nine large cash transactions, involving interstate travel at short notice, over a period of nearly two months and came to an end only because of police intervention.
74There is no evidence you knew the source of the funds.
75However, your telephone conversations with others, on 27 July 2017, after Zhang's arrest, where you asked each of them to fabricate a story the money Zhang was carrying was loaned to him, suggests you were at least aware of the risk there was some unlawfulness attaching to your money dealings.
76I am mindful you are not to be sentenced as an offender who believed, or was reckless or negligent, as to whether the money was proceeds of crime.[23]
[23] Arjuna Samarakoon [2008] VSCA 119, [66].
77Considering your role as a regular interstate courier and local distributor, albeit for a relatively short period of time, and the substantial sums of cash you dealt with, I assess the objective seriousness of your offending to be above mid-range.
78By s 16A of the Crimes Act1914 (Cth), I am required to impose a sentence that is of a severity that is appropriate in all the circumstances of your offending.
79A sentence of imprisonment is the only appropriate sentence in your case. Your counsel did not argue otherwise.
80
I am also required to 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.
81There are substantial subjective factors which mitigate the sentence I should impose.
82Firstly, your guilty plea has high utilitarian value, especially during the public-health pandemic, because it alleviates the current strain on the justice system.[24]
[24] Worboyes [2021] VSCA 169, [35] and [39].
83Secondly, prison is 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.[25]
[25] R v Biba [2021] VSC 327, [38].
84Thirdly, your wife and son, from whom you will be absent during his important developmental years, will likely suffer hardship as a result of your incarceration[26].
[26] Totaan (2022) 365 FLR 69, [77], [82]; Ahmed Mohamed [2022] VSCA 136, [91]-[93], [99]
85Fourthly, as a Chinese national, given the prison sentence I will impose, you are now liable to deportation,[27] which will cause you anxiety during your incarceration and, if you are deported, you will lose any opportunity to continue to reside in this country which, with your wife and your parents, you have made your home.[28]
[27] Migration Act 1958 (Cth), s 501(3A).
[28] Hiu Mei Lam v R [2021] VSCA 241, [38].
86Fifthly, it is more than five years since you committed these crimes. During this lengthy period, you have suffered a natural anxiety in relation to your future, which is additional punishment. You have also have substantially advanced your rehabilitation, which will now be interrupted by your incarceration, by setting up a business outside the financial sector, building a home for your family and undertaking further tertiary education.[29]
[29] R v Merrett, Piggott and Ferrari (2007) 14 VR 392, [35]-[37].
87I accept the risk of you reoffending is low. In my view, you have excellent prospects of rehabilitation.
88While your previous good character is also relevant, particularly in the assessment of your prospects of rehabilitation, it is of less significance in this case because your otherwise good character enabled you to carry out your financial business which provided you with the opportunity to commit these crimes.[30]
[30] Ansari [2007] NSWCCA 204, [136].
89Parity is another relevant sentencing consideration.
90While Xu's offending was separate from, and more limited than yours, you both moved large sums of cash for SuperLen as part of the same money-laundering enterprise. Taking into account the dissimilarities and similarities, I have had regard to the sentence imposed on Xu in consideration of the appropriate sentence for you.
91I have also had regard to the importance of consistency in sentencing[31] and to comparable cases[32] 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.[33]
[31] R v Pham (2015) 256 CLR 550, [23], [26]; Hili v The Queen (2010) 242 CLR 520, [24]-[25].
[32] Including Exhibit C: Table of Comparative Cases.
[33] R v Pham (2015) 256 CLR 550, [26].
92Because you are to be sentenced for several offences, I also have regard to the totality principle which requires me to impose a sentence commensurate with your total criminality.
93Mr Pan, 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.
94Considering 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:
(a) on Charge 1, you are sentenced 22 months’ imprisonment which is to commence today;
(b) on Charge 2, you are sentenced to 22 months’ imprisonment which is to commence on 28 January 2023; and
(c) on Charge 3, you are sentenced to 22 months’ imprisonment which is to commence on 28 May 2023.
95By fixing those commencement dates for your sentence, I intend that your total effective sentence is 2 years and 6 months’ imprisonment.
96I direct you serve a period of one year and 3 months from today, to expire on 28 January 2024, when you are to be released on a reconnaissance for a period of 1 year and 3 months.
97I declare you have already served 54 days of your sentence by way of presentence detention.
98While 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 3 years and 4 months’ imprisonment and fixed a minimum non-parole period of 2 years and 4 months.
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