NSWCC v Crotty

[1999] NSWSC 146

CITATION:	NSWCC v CROTTY & ANOR [1999] NSWSC 146
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	13179/94
HEARING DATE(S):	16/2/99; 17/2/99
JUDGMENT DATE:	17 February 1999
PARTIES :	NSW Crime Commission Barry Francis Crotty Jennifer Margaret Crotty
JUDGMENT OF:	Wood CJatCL

COUNSEL :	I.D. Temby QC/N. Buscombe for Plaintiff Defendant in person
SOLICITORS:	J.M. Giorgiutti for Plaintiff Defendant in person
CATCHWORDS:	CRIMINAL LAW - confiscation of criminal proceeds - assets acquired through involvement in serious crime-related activity involving indictable offence - standard of proof required by Criminal Assets Recovery Act 1990 to obtain orders for proceeds assessment and assets forfeiture.
ACTS CITED:	Criminal Assets Recovery Act 1990 ss 6 222 25 27 28 Drug Misuse and Trafficking Act 1985 s 25
DECISION:	(1) Assets forfeiture made in relation to residential property, subject to defendant's aplication for leave to exclude premises from the order;; (2) Proceeds assessment order in sum of $731,700; (3) Defendant to pay plaintiff's costs, including any reserved costs.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

No. 13179/94

WOOD CJ at CL

WEDNESDAY 17 FEBRUARY 1999

NEW SOUTH WALES CRIME COMMISSION v BARRY FRANCIS CROTTY & ANOR

Proceedings under the Criminal Assets Recovery Act 1990 were brought by the New South Wales Crime Commission (“the Commission”) against the defendant, in connection with his conviction of the offence of supply a prohibited drug under s 25(1) of the Drug Misuse and Trafficking Act 1985. The Commission sought a proceeds assessment order against the defendant, and an assets forfeiture order in respect of residential premises jointly owned by him and his wife.

HELD (finding for the Commission):

(1) On the face of the defendant’s conviction, and of recorded conversations made by an undercover police operative pursuant to warrants, the Commission has established an overwhelming case for the orders sought, according to the standard of proof required by the Criminal Assets Recovery Act 1990. The conviction is a matter of record; and the conversations contain clear and unambiguous admissions by the defendant as to his importation and subsequent sale of heroin during the period specified by the Act. The defendant has made no attempt to explain this material, and the conversations are corroborated by other evidence relating to his travel records.

(2) It follows that an assets forfeiture order must be made in relation to the residential property.

(3) However leave should be granted to the defendant, under the circumstances, to apply for an exclusion order on grounds of hardship to dependants or spouses pursuant to s 25(4) of the Act.

(4) In order to make a proceeds assessment order under s 27 of the Act:
(i) regard must be had to matters specified in s 28(1) of the Act, including “moneys acquired” and the market value of the drugs. Section 28(4) precludes the taking into account of any expenses or outgoings incurred in relation to the illegal activities. Money “derived” or “acquired” is the amount which passes through the hands of the offender;
(ii) a “broad brush” approach needs to be taken to the assessment, as there will rarely be records from which a precise calculation of the proceeds of crime can be made.
Fagher (1989) 16 NSWLR 67; Pepin (1996) 86 A Crim R 327, considered; New South Wales Crime Commission v Yenice (Supreme Court of NSW, 5 November 1997, unreported), followed.

(5) There is no reason to make any reduction on account of the possibility that the defendant had a partner, as the role of that person was not detailed in the conversations, and there is ample evidence to show that the defendant played the pivotal role in the importation and sale of the drugs.

ORDERS PROPOSED

(1) Assets forfeiture order made in relation to the residential property, subject to defendant’s application for leave to exclude the premises from the order;
(2) Proceeds assessment order in the sum of $731,700;
(3) Defendant to pay plaintiff’s costs, including any reserved costs.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

No. 13179/94

WOOD CJ AT CL

WEDNESDAY 17 FEBRUARY 1999

NEW SOUTH WALES CRIME COMMISSION v BARRY FRANCIS CROTTY & ANOR

JUDGMENT

1 HIS HONOUR: The New South Wales Crime Commission brings these proceedings under the Criminal Assets Recovery Act 1990 for a proceeds assessment order against Barry Francis Crotty and for an assets forfeiture order in respect of premises situated at 5 Makim Street, North Curl Curl, being lot 18 in Deposited Plan 12515 and being the whole of the land in Certificate of Title Folio Identifier 18/12515 of which Mr Crotty and his wife, Jennifer Margaret Crotty, are joint registered proprietors.
2 The orders are sought pursuant to a summons filed in this Court on 15 December 1994, which was served on 4 January 1995 upon Mr and Mrs Crotty, together with a copy of an affidavit of Robyn Gray and a sealed copy of a minute of orders made by Spender AJ on the same day as that which the summons bears.
3 The six year limitation period for the claims which are brought under sections 22 and 27 of the Act dates back accordingly to 15 December 1988.
4 When the application came on for hearing yesterday, Mr Crotty renewed the request for an adjournment that had been made before Barr J and refused on the preceding day. After that renewed application was refused by me, he and his wife, who was present in the Court, declined to participate any further in the proceedings and then withdrew. The matter proceeded ex parte.
5 The evidence tendered before me shows that Mr Crotty became the subject of an operation by the Drug Enforcement Agency, in the course of which an undercover buy was made from him, on 14 June 1994, of a quantity of cocaine. He was arrested and charged in relation to that transaction with the offence of supply a prohibited drug under section 25(1) of the Drug Misuse and Trafficking Act 1985. He was convicted of that offence on 16 December 1998 following entry of a plea of guilty on 17 March 1998.
6 The quantity of heroin sold exceeded the indictable quantity of five grams, and as a consequence Mr Crotty has been shown to have been involved in a serious crime-related activity, involving an indictable offence, within the meaning of section 6(2)(b) and 3(c) of the Criminal Assets Recovery Act, so as to attract the jurisdiction of this Court to make the orders sought.
7 The restraining order made by Spender AJ on 15 December 1994 remains in force, as appears from the affidavit of Robert John Davis sworn 9 February 1995 and read in these proceedings.
8 So far as the supply of cocaine is concerned, the evidence reveals that, on 2 May 1994, Mr Crotty met an undercover police operative at Wentworth Park, Glebe, and supplied him with a sample of 0.59 grams of cocaine and 1.5 grams of cannabis leaf.
9 At subsequent meetings, Mr Crotty discussed arrangements for the supply of further quantities of cocaine, as well as the supply of heroin, and made mention of prior importations by himself of heroin that he had purchased in Thailand. Some of those conversations were recorded pursuant to warrants.
10 On 13 May, Mr Crotty said:
"Too bad you weren't around a couple of months ago. I had three kilograms brought in myself. I can tell you now because I can't be busted for it now. I got rid of it through a guy at 85 an ounce."
11 The reference to "85 an ounce" may be taken to be $8,500 per ounce. The current price, he went on to say in this conversation, was 75 ($7,500) an ounce, although three years ago he said he was getting 10 ($10,000) an ounce.
12 During the conversations on 19 May, 8 June and 10 June that were recorded, Mr Crotty explained to the undercover operative his modus operandi for bringing heroin into the country. He said that he had used a specially-designed harness worn around the groin area to carry the drugs. Additionally, he said that in order to avoid attracting attention he carried a briefcase; described himself in the PAX cards as a company director; avoided carrying or wearing silver or coins; used Tiger Balm to deter drug-sniffer dogs; and adopted the strategy of flying to Bangkok, where he stayed overnight and purchased the heroin, before flying on to the United Kingdom, where he spent a few days before returning to Sydney by a flight which permitted him to pass through Bangkok or Singapore in transit without leaving the aircraft, thereby escaping the need for any further entry being made in his passport which might show that his last destination had been in a country where drugs might have been acquired.
13 During the course of these conversations, Mr Crotty encouraged the undercover operative to join him in one such trip. In this regard, he described the precautions that they might take, including booking through separate travel agencies, being seated separately on the aircraft, staying at different hotels, and avoiding waiting around the luggage carousel. Additionally, he encouraged the undercover operative to have a haircut and to remove his moustache.
14 He stated that he had usually acquired three quarters of a kilogram or one kilogram, on his earlier trips, and made mention of having sold them for prices between $8,000 and $10,000 per ounce, with a net return of roughly $200,000. At one point he said that the planned trip with the undercover operative would be his fifth and last trip.
Enquiries of Immigration confirmed that Mr Crotty had in fact made four trips of the kind which he described, as follows:
Depart Sydney Flight Arrival at Sydney Flight
17/11/91 QF1 23/11/91 QF10
24/06/92 QF1 02/07/92 QF2
06/04/93 QF5 13/04/93 QF2
10/08/93 QF1 19/08/93 QF10
15 The evidence revealed additionally that in the PAX Cards for these flights, Mr Crotty described himself either as a "P/Officer" or as a company director. He was neither.
16 On 10 June 1994, Mr Crotty met the undercover operative and was given $AUD3,000 to purchase an airline ticket for a further flight. Armed with this sum he attended a travel agent and purchased a return airline ticket in his name that was routed Sydney/Bangkok/London/Sydney leaving Sydney on 29 June 1994.
17 On 14 June 1994 the buy of the cocaine was made in two instalments, the first in an amount of 29.1 grams, for which $4,300 was paid, and the second in an amount of 56.9 grams for which $9,000 was paid.
18 Another person, Gary Raymond Hanley, was suspected by surveillance police to be assisting Mr Crotty in this deal, in the sense that it was to his premises that Mr Crotty was seen to return on more than one occasion while the transaction was going down. Each man was apprehended and of the marked buy money, $1,000 was recovered from Mr Crotty, and $8,600 was recovered from Mr Hanley, who also was found to be in possession of 10 grams of cocaine.
19 The evidence otherwise shows that between 1989 and 1992, Mr Crotty had lodged income tax returns in which he variously described himself as a "credit officer" and "building consultant" and in which he disclosed gross annual income from employment, and social security benefits, not exceeding $25,000.
20 The evidence further showed that his wife was an unemployed housewife and that, in December 1994, they had four children, two of whom were aged under eighteen years, and the elder two of whom were then aged eighteen and twenty-one years.
21 Further, it appeared that the home in North Curl Curl, the subject of the restraining orders, was purchased on 20 December 1991 for $210,000, that purchase being financed in part through a loan of $124,000 from the St George Bank Ltd.
22 Finally, there was evidence from Detective Inspector Drury to the effect that, during the period November 1991 to August 1993, a conservative wholesale price for three kilograms of cocaine, that is roughly four importations of 750 grams each, was in the order of $630,000, calculated at $6,000 per ounce. That this is a conservative estimate is confirmed by the references, by Mr Crotty, in the recorded conversations, to the fact that he had sold the heroin he had imported at prices varying between $8,000 and $10,000 an ounce.
23 In my view, the Crime Commission has established, on the face of the conviction of Mr Crotty, and the recorded conversations, an overwhelming case for the orders sought. The fact of his plea and subsequent conviction, during the relevant period, for an offence of supply involving an indictable quantity of cocaine, is a matter of record. Within the recorded conversations there are clear and unambiguous admissions by Mr Crotty, as to his importation and subsequent sale of heroin, on at least four occasions, also occurring during the period specified by the Act.
24 Mr Crotty has made no attempt to answer or explain any of this material - I can see no reason why the conversations recorded should not be taken at face value, particularly having regard to the considerable detail supplied. Moreover the account he gave in those conversations was corroborated by the PAX Cards completed in his hand, by the travel records over the relevant period, by the purchase of an air ticket routed in the very same way he had described, and by the fact that no apparent reason exists, by reference to any legitimate business activity or employment disclosed in his income tax returns, for him undertaking the several overseas trips involved. Further, the limited duration of those trips is consistent with the admissions made in those conversations.
25 I am accordingly satisfied that the relevant ingredients which would entitle the Crime Commission to the orders sought have been established, according to the standard of proof required by the Act.
26 So far as section 22(2) of the Act is concerned, I find that the person (Mr Crotty) whose suspected serious crime-related activity formed the basis of the restraining order was, during the relevant period, engaged in a serious crime-related activity of the prescribed kind.
27 It follows that an assets forfeiture order must be made in relation to the residential property at North Curl Curl, the subject of that restraining order. I so order.
28 In view of the course that the proceedings have taken, however, I consider it appropriate, should Mr and Mrs Crotty so request it, that leave be granted to them to apply for an exclusion order pursuant to section 25(4) of the Act.
29 For similar reasons, I am satisfied that the case is one where I am required to make a proceeds assessment order under section 27(2) of the Act. For the purpose of making the assessment, I am required to have regard to the matters specified in section 28(1) of the Act, including "the moneys acquired" by Mr Crotty because of his illegal activities, as well as the market value of the drugs involved in his illegal activities, which encompass both the cocaine supply and also the importation and supply within this country of heroin. I am not to take into account any expenses or outgoings incurred in relation to those activities (section 28(4)).
30 The present case is not one based upon asset betterment principles. Rather, the claim is pursued upon the basis of the wholesale price received for the heroin, and the difference between the buy moneys of $13,300 for the cocaine and the sum of $9,600 recovered, namely $3,700.
31 Reference has been made, in decisions concerning proceedings brought under similar legislation, to the inevitable broad brush approach that needs to be brought to the assessment of the value of the benefits or moneys received from illegal activities: See Fagher (1989) 16 NSWLR 67 and Pepin (1996) 86 A Crim R 327. This is in recognition of the circumstance that those involved in such criminal activities rarely, if ever, keep books of account or other documents from which any precise calculation of the proceeds of crime can be made.
32 The need for a broad brush approach to the present Act was confirmed by Callaway AJ in New South Wales Crime Commission v. Yenice, Supreme Court New South Wales, 5 November 1997, unreported. I see no reason to depart from that approach.
33 As I have recounted earlier, Mr Crotty has, in recorded conversations, fixed the price he received for the heroin at prices ranging between $7,500 and $10,000 per ounce. Detective Inspector Drury placed a more conservative figure upon the commodity of $6,000 per ounce. In my view, a figure of $7,000 per ounce may properly be adopted, in this case, as a conservative estimate, allowing for some possible exaggeration by Mr Crotty in order to attract the interest of the undercover operative in joining in or financing a further importation.
34 Taking a similarly conservative approach in assuming that the four importations admitted were each of three quarters of a kilogram, approximating a quantity of three kilograms which Mr Crotty referred to in the recorded conversations as being an amount that he had brought in by himself, the proceeds or benefit acquired would be calculated as follows:
4 x 26 ounces x $7,000 = $728,000.
35 Some reference was made, in the recorded conversation, on 19 May 1994 to Mr Crotty having had a partner at some stage in the importation and sale of heroin. The role of that person, if such a person existed, is not detailed in the conversations, nor is it made clear when it was that such person made the last of the trips mentioned.
36 What is clear, however, is that Mr Crotty was the driving force in effecting the purchase of the heroin, in carrying the drugs, in clearing them through Customs, and in arranging for their resale. There is nothing in the conversations to suggest that the co-offender Hanley, in relation to the cocaine supply offence, had anything to do with the heroin dealings, or that he was the partner referred to.
37 Moreover, there is the admission earlier mentioned that Mr Crotty brought in three kilograms of heroin by himself.
38 So far as he made reference to borrowing moneys or securing funding and expenses from elsewhere, those costs are required to be excluded. Moreover, the terms of section 27(1), as well as section 28(1) and (4), state that it is the amount of money that is "derived" or "acquired", ie the amount which passes through the hands of the offender, - that is to be assessed as the proceeds in respect of which an order under section 27 is to be made.
39 Accordingly, I see no reason to make any reduction on account of the possibility that Mr Crotty had a partner, or that he derived any portion of the proceeds of his illegitimate activities, as an agent for, or otherwise on behalf of some other person. To the sum of $720,000 assessed in the manner previously explained, I add the sum of $3,700, being the difference between the sum received by Mr Crotty for the controlled buy of the cocaine and the sum later recovered.
40 While, theoretically, a claim could have been made for the full amount of the buy, the Crime Commission has fairly confined its claim, in this regard, to that portion of the buy moneys which were received by Mr Crotty but not recovered. Accordingly, I will make a proceeds assessment order in the sum of $731,700.
41 I note that Mr Crotty does seek leave in relation to exclusion of the premises from the forfeiture order. In order to give effect to that application and otherwise to give effect to these reasons, I will make orders in accordance with the short minutes prepared by counsel for the Crime Commission, which I have signed and will date today.
42 I formally make an order that the defendants pay the plaintiff's costs of the proceedings.
43 That order is to include any reserved costs.

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