R v Anquetil

[2021] NSWCCA 59

Court of Criminal Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

R v Anquetil [2021] NSWCCA 59

Hearing dates:

27 November 2020

Decision date:

09 April 2021

Before:

Bathurst CJ at [1];
Hoeben CJ at CL at [159];
Bellew J at [160]

Decision:

Appeal dismissed.

Catchwords:

CRIME – appeals – appeal against sentence – manifest inadequacy – whether there was a misapplication of principle – objective seriousness – where objectiveness seriousness above the midrange

CRIME – appeals – appeal against sentence – manifest inadequacy – comparative cases – whether comparable cases provide a meaningful range of sentences as a yardstick

Legislation Cited:

Crimes Act 1914 (Cth)

Criminal Code Act 1899 (Qld)

Criminal Code Act 1995 (Cth)

Proceeds of Crime Act 2002 (Cth)

Cases Cited:

Abbas v R [2013] NSWCCA 115; (2013) 231 A Crim R 413

Attorney General’s Application under s 37 of the Crimes (Sentencing Procedure) Act 1999 (No 1 of 2002) (2002) 56 NSWLR 146; [2002] NSWCCA 518

CMB v The Attorney General of New South Wales (2015) 256 CLR 346; [2015] HCA 9

Dickson v R [2016] NSWCCA 105

Director of Public Prosecutions (Cth)v De La Rosa (2010) 243 FLR 28

Director of Public Prosecutions (Vic) v Dalgliesh (Pseudonym) (2017) 262 CLR 428; [2017] HCA 41

Elias v R (2013) 248 CLR 483; [2013] HCA 31

Green v R; Quinn v R (2011) 244 CLR 462; [2011] HCA 49

Hili v The Queen (2010) 242 CLR 520

Kerr v R [2016] NSWCCA 218

Le v R (Cth) [2010] NSWCCA 285

Markarian v R (2005) 228 CLR 357; [2005] HCA 25

Milne v R [2012] NSWCCA 24; (2012) 219 A Crim R 237

Milne v R (2014) 252 CLR 149; [2014] HCA 4

Moodie v R [2020] NSWCCA 160

Obeid v R (2017) 96 NSWLR 155; [2017] NSWCCA 221

Oliver v R [2020] NSWCCA 26

R v Byrne [2010] QCA 33

R v Huang [2007] NSWCCA 259; (2007) 174 A Crim R 370

R v Issakidis [2018] NSWSC 378

R v Kilic (2016) 259 CLR 256; [2016] HCA 48

R v Kitson [2019] NSWSC 1109

R v Li [2010] NSWCCA 125; (2010) 202 A Crim R 195

R v Nguyen [2010] NSWCCA 226; (2010) 204 A Crim R 246

R v Pham (2015) 256 CLR 550; [2015] HCA 39

TAN v R (2011) 35 VR 109; [2011] VSCA 427

Trandy v R (2009) VSCA 321

Wong v The Queen (2001) 207 CLR 584

Texts Cited:

Nil

Category:

Principal judgment

Parties:

The Crown (Appellant)
Simon Paul Anquetil (Respondent)

Representation:

Counsel:
S Dowling SC with R Ranken (Appellant)
P Strickland SC with P Lange (Respondent)
Solicitors:
Commonwealth Director of Public Prosecutions (Appellant)
Hanna Legal (Respondent)

File Number(s):

2017/150658

Publication restriction:

(1) Pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW), the parts of these reasons for judgment which are marked as redacted on the file copy of the judgment initialled by the Chief Justice are not to be published (other than to the parties and their legal representatives) until further order of the Court.

(2) Order (1) is made on the ground specified in s 8(1)(c) of the Act.

(3) Pursuant to s 11(2) of the Act, order (1) is to apply throughout the Commonwealth of Australia.

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law Division

Citation:

[2020] NSWSC 995

Date of Decision:

31 July 2020

Before:

Payne JA

File Number(s):

2017/150658

HEADNOTE

[This headnote is not to be read as part of the judgment]

Simon Paul Anquetil (the respondent) pleaded guilty to offences of tax fraud and dealing with the proceeds of crime, which included a money laundering offence, and received a total effective sentence of seven years and six months’ imprisonment with a single non-parole period of five years. The Crown appealed against the respondent’s sentence on grounds of manifest inadequacy.

Between 2014 and 2017, the respondent engaged in a tax fraud conspiracy that involved deceiving clients into entrusting companies associated with the respondent, with large sums of money for payroll services, when in truth it was intended to misappropriate the money rather than pay it in discharge of the client’s obligations in respect of Pay As You Go Withholding amounts and Goods and Services Tax. The respondent and his co-conspirators collected a total amount of $141,291,923.08, of which only $30,883,342.47 was remitted to the Australian Tax Office (ATO), whilst $4,783,276.75 was garnisheed by the ATO. The total tax loss was therefore $105,625,304.36.

In respect of the money laundering offence, the respondent dealt with $28,192,805.20, of which he was the ultimate beneficiary of at least $12,218,148.55. The respondent laundered the money through a number of entities, including a company that was incorporated for that exact purpose. The respondent was also aware that approximately $6,392,629.10 was transferred by his co-conspirators between entrusting companies for operating expenses.

In addition, the respondent and others jointly authorised a payment of $24,244,760.64 that the respondent believed to be proceeds of crime in responding to two blackmail demands.

The key issue before the Court was whether the sentence imposed for the dealing with the proceeds of crime offences was manifestly inadequate in circumstances where the sentencing judge found the objectiveness seriousness of each offence to be above the midrange of objective seriousness for such offences. The Crown provided a summary of comparative cases in its submission to the Court. The Court dismissed the Crown appeal.

Was the sentence imposed in relation to the dealing with the proceeds of crime offences manifestly inadequate?

1. Consistency in the sentencing of federal offenders is not demonstrated by and does not require numerical equivalence with comparative cases. Rather, it requires consistency in the application of the relevant legal principles so that like cases are treated alike and different cases are treated differently: [143] (Bathurst CJ); [159] (Hoeben CJ at CL); [160] (Bellew J).

   Hili v The Queen (2010) 242 CLR 520; Wong v R (2001) 207 CLR 584; R v Pham (2015) 256 CLR 550; [2015] HCA 39, referred to.

2. A history of sentencing can establish a range of sentences that have been imposed, but the upper and lower limits in the range are not necessarily the correct upper and lower limits: [144] (Bathurst CJ); [159] (Hoeben CJ at CL); [160] (Bellew J).

   Hili v The Queen (2010) 242 CLR 520, referred to.

3. Comparative cases can and should provide guidance to sentencing judges and to appellate courts and stand as a yardstick against which to measure a particular sentence: [144] (Bathurst CJ); [159] (Hoeben CJ at CL); [160] (Bellew J).

   Hili v The Queen (2010) 242 CLR 520; Director of Public Prosecutions (Cth) v De La Rosa (2010) 243 FLR 28, referred to.

4. Appellate intervention on the ground of manifest excess or inadequacy is not warranted unless, having regard to all the relevant sentencing factors, including the degree to which the impugned sentence differs from sentences which have been imposed in comparable cases, the appellate court is driven to conclude there must have been some misapplication of principle: [145] (Bathurst CJ); [159] (Hoeben CJ at CL); [160] (Bellew J).

   R v Pham (2015) 256 CLR 550; [2015] HCA 39, referred to.

5. It is appropriate out of a wide variety of comparative offences summarised before the Court to draw attention to the most comparable case: [146] (Bathurst CJ); [159] (Hoeben CJ at CL); [160] (Bellew J).

   Hili v The Queen (2010) 242 CLR 520; Moodie v R [2020] NSWCCA 160, referred to.

6. However, when reliance is placed on a limited number of cases, care must be taken to ensure the examination is not used to fix boundaries that, as a matter of practical reality, bind the court: [146] (Bathurst CJ); [159] (Hoeben CJ at CL); [160] (Bellew J).

   Director of Public Prosecutions (Vic) v Dalgliesh (Pseudonym) (2017) 262 CLR 428; [2017] HCA 41, referred to

7. The exercise of the sentencing discretion does not involve solely a consideration of the objective seriousness of the offence and making a proportionate deduction from the maximum penalty: [149] (Bathurst CJ); [159] (Hoeben CJ at CL); [160] (Bellew J).

   Markarian v R (2005) 228 CLR 357; [2005] HCA 25; R v Kilic (2016) 259 CLR 256; [2016] HCA 48, referred to.

8. The maximum penalty is a yardstick to which attention must always be paid, but it is something which will not necessarily play a decisive role in the final determination: [149] (Bathurst CJ); [159] (Hoeben CJ at CL); [160] (Bellew J).

   R v Kilic (2016) 259 CLR 256; [2016] HCA 48; Elias v R (2013) 248 CLR 483; [2013] HCA 31, referred to.

9. Although a court is sentencing for a particular matter, it takes into account the matters for which guilt has been admitted with a view to increasing the penalty by giving greater weight to personal deterrence and retribution. But the focus must be on the primary offences: (Bathurst CJ) [151]; [159] (Hoeben CJ at CL); [160] (Bellew J).

   Attorney General’s Application under s 37 of the Crimes (Sentencing Procedure) Act 1999 (No 1 of 2002) (2002) 56 NSWLR 146; [2002] NSWCCA 518; Abbas v R [2013] NSWCCA 115; (2013) 231 A Crim R 413, referred to.

Judgment

1. BATHURST CJ: Simon Paul Anquetil (the respondent) pleaded guilty to the following counts on an indictment dated 12 February 2020:

“1. Between about 1 March 2014 and about 18 May 2017 at Sydney in the State of New South Wales and elsewhere, did conspire with others, namely Adam Michael Cranston, Lauren Anne Cranston, Devyn Michelle Hammond, Joshua Meredith Kitson, Dev Menon, Jason Cornell Onley, Daniel Rostankovski, and divers others with the intention of dishonestly causing a loss to a third person, namely the Commonwealth.

Contrary to section 135.4(3) of the Criminal Code (Cth).

…

2. Between about 1 March 2014 and about 18 May 2017 at Sydney in the State of New South Wales and elsewhere, did deal with money that was, and that he believed to be, proceeds of crime and at the time of the dealing the value of the money was $1,000,000 or more.

Contrary to section 400.3(1) of the Criminal Code (Cth).”

2. In addition, the following offence was taken into account in sentencing on count two, pursuant to s 16BA of the Crimes Act 1914 (Cth):

“Between about 1 February 2017 and about 26 April 2017 Simon Paul Anquetil did jointly commit an offence with Adam Michael Cranston, Dev Menon and Jay Cornell Onley, in that they did deal with money that was, and that he believed to be, proceeds of crime and at the time of the dealing the value of the money was $1,000,000 or more contrary to s 400.3(1) with s 11.2A(1) of the Criminal Code (Cth).

Particulars of the quantum dealt with: $24,244,760.64.”

3. The offence the subject of count one on the indictment (the tax fraud offence) carried a maximum penalty of 10 years’ imprisonment. The conspiracy involved deceiving clients into entrusting companies associated with the respondent and his co-conspirator, with large sums of money for payment services, when in truth it was intended to misappropriate the money rather than pay it in discharge of the client’s obligations in respect of Pay As You Go Withholding (PAYGW) amounts and Goods and Services Tax (GST).

4. The conspirators collected a total amount of $141,291,923.08, of which only $30,883,342.47 was remitted to the Australian Taxation Office (ATO), whilst $4,783,276.75 was garnisheed by the ATO. The total tax loss was thus $105,625,304.36.

5. So far as the offence the subject of count two on the indictment is concerned (the money laundering offence), the respondent dealt with $28,192,805.20 of which he was the ultimate beneficiary of at least $12,218,148.55.

6. In addition, the respondent and others jointly authorised a payment of $24,244,760.64 that the respondent believed to be proceeds of crime in response to two blackmail demands. It was this dealing with the proceeds of crime which the respondent requested be taken into account pursuant to s 16BA of the Crimes Act.

7. The offence the subject of count two carries a maximum penalty of 25 years’ imprisonment. It is the most serious of a series of money laundering offences contained in s 400 of the Criminal Code Act 1995 (Cth) (“the Code”), the various offences being graduated principally by the amount involved and the offender’s knowledge or belief of the source or destination of the funds in question.

8. [redacted], the sentencing judge imposed the following sentences:

1. On count one, a term of imprisonment of four years and eight months commencing on 31 July 2020 and expiring on 30 March 2025.

2. On count two, a term of imprisonment of six years to date from 31 January 2022 and expiring on 30 January 2028.

9. The total effective sentence thus was seven years and six months imprisonment. The sentencing judge fixed a single non-parole period of five years expiring on 30 July 2025.

10. The Crown has appealed against the sentences imposed on the following grounds:

“1.   The sentence imposed in relation to Count 2 is manifestly inadequate in circumstances where the sentencing judge found:

(a) that the objective seriousness of Count 2 was ‘well above the mid-range of objective seriousness’ for offences against s 400.3(1) of the Criminal Code (Cth): Remarks on Sentence dated 31 July 2020 (ROS) at [93]; and

(b) the objective seriousness of the s 16BA offence was ‘above the mid-range of objective seriousness’ for offences against s 400.3(1) of the Criminal Code (Cth) and ‘represents significant additional criminality’: ROS at [101]-[102].

2   The total effective sentence and non-parole period is manifestly inadequate.”

Factual background

11. A statement of agreed facts was prepared for the purposes of the sentencing proceedings. The sentencing judge carefully summarised these facts and there was no dispute as to either the accuracy or the adequacy of his Honour’s summary. What I have set out below is extracted from that summary.

12. As was pointed out by the sentencing judge, it must be emphasised that the facts set out below do not represent findings, even tentative findings, about any of the remaining alleged conspirators or any other persons.

The tax fraud conspiracy

13. Between February and March 2014, the respondent, Mr Onley, Mr Adam Cranston, Mr Kitson and Peter Larcombe (now deceased) had meetings in which a scheme was discussed that involved operating a payroll business as a means to misappropriate PAYGW amounts and GST that were payable to the ATO.

14. It was agreed that the respondent would set up a payroll company and Mr Kitson would help manage and run the company. Mr Kitson was to be responsible for building up the client base for the “front office” of the payroll company receiving payments from clients. The payroll company, Plutus, was incorporated on 23 April 2014 with the respondent as the sole office holder.

15. Plutus offered payroll services to legitimate recruiting companies, employers and individual contractors (together, the Client Companies) who wished to outsource their payroll obligations, including the obligation to withhold and remit PAYGW to the ATO. Throughout the period of the fraud, Plutus also collected GST from the Client Companies.

16. Plutus subcontracted these services to companies (the Second Tier Companies) incorporated by other conspirators (primarily, Mr Cranston, Mr Onley, Mr Larcombe and, from February 2015, Mr Menon). These other conspirators would primarily be responsible for managing and making operational decisions regarding the Second Tier companies. By processing the payroll, the Second Tier Companies assumed the Client Companies’ PAYGW and GST liabilities. The conspirators planned to liquidate the Second Tier companies when they accrued too much tax debt. The conspirators used Plutus and the Second Tier Companies to effect the tax fraud conspiracy.

17. Initially a Mr McIntyre, and later Mr Rostankovski, under the direction of Mr Cranston, Mr Menon and Mr Onley, were responsible for recruiting and managing the directors of the Second Tier Companies. The directors and shareholders of the Second Tier Companies were vulnerable people who were paid, bribed and/or otherwise induced under false pretences or without their knowledge to become directors and shareholders (the Second Tier Directors). They were used as directors and shareholders to conceal the involvement of Mr Cranston, Mr Onley and Mr Menon in the Second Tier Companies.

18. Although the Second Tier Directors were ostensibly responsible for the Second Tier Companies, it was the conspirators who maintained full control over these companies. The Second Tier Directors were paid monies to sign documents as and when required and were told no more than they needed to know in order to perform their passive role as the public face of the Second Tier Companies.

19. Ms Cranston and Ms Hammond operated the Second Tier Companies’ accounts from a “back office”.

20. Mr Menon was an accountant and a lawyer, working as a partner at Clamenz Lawyers (Clamenz). Mr Menon played a crucial role in the structural aspects of the conspiracies, ensuring the sub-contracting arrangements and “front office” facade were maintained, and the back office dealings remained hidden. Mr Menon’s role increased over time and by mid-2016 he had a significant role in the conspiracy. Mr Menon provided assistance to the conspirators about various key matters, such as the appointment and removal of directors, the dealing with proceeds of crime, and the frustration of the ATO’s investigation into Plutus and the Second Tier companies.

The mechanism of the fraud

21. Plutus entered into payroll services agreements with the Second Tier Companies to create the appearance of legitimate, arm’s length agreements. In reality, the conspirators used the subcontracting agreements between Plutus and the Second Tier Companies as a mechanism to transfer the gross payroll to a group of companies controlled by the conspirators from which the PAYGW amounts and GST could easily be misappropriated.

Financial Year: July 2014 to June 2015

22. In this period of the tax fraud conspiracy, the respondent undertook the administration of Plutus, with Mr Kitson attending to marketing Plutus. Other conspirators were attending to the administration of the Second Tier Companies. The respondent’s role in running Plutus included managing and making payments from Plutus’ bank accounts, transferring gross payroll monies received from the Client Companies to Keystone Pay Pty Ltd (Keystone), the first Second Tier Company to process payroll, implementing systems and managing correspondence.

23. The respondent’s responsibility for the administration of Plutus also included setting up software called “KeyPay”, which was a cloud-based payroll compliance tool commonly referred to as “the portal”. It provided a means to separate (and record) gross wages into allocations such as superannuation, PAYGW, other tax and any other employee-requested deductions such as salary sacrificing and novated vehicle leasing. KeyPay calculated the PAYGW amounts and other tax to be remitted to the ATO.

24. From approximately October 2014 onwards, Plutus hired staff to calculate and verify payroll data through KeyPay, by manually entering data, verifying Recipient Created Tax Invoices (RCTIs) against client payments and then on-sending the RCTls and pay summaries to Omni Payroll, for them to process payroll. This was at the respondent's and Mr Kitson's instruction and direction. Later, this became an automated process.

25. In approximately February 2015, Mr Kitson asked the respondent what would happen when the ATO starts “chasing the tax debt in the bottom company” to which the respondent responded with words to the effect of “before that happens, the boys will arrange a friendly liquidator who they pay off to liquidate the company. Jay knows plenty of dodgy liquidators”.

26. By June 2015, Plutus had opened a Canberra office and its staff numbers grew. Plutus had approximately 200 legitimate contractors who were having their income processed through Keystone bank accounts. Roughly $2.8 million to $3 million in collected payroll monies passed through from Plutus to Keystone each month. In June 2015, financial records show that Plutus received $2,685,631.61 from legitimate client companies and the total amount transferred to Keystone in the same month was $2,692,248.89.

22. Because the name of Keystone would no longer appear on payslips or payment summaries, Mr Kitson, Mr Onley and the respondent agreed that “our generic prepared response to any question from a contractor was Plutus had undergone a corporate restructure as it continued to grow.”

23. At a later time, the ATO made a decision not to pursue $6,903,899.06 owed to it by Keystone as it was deemed irrecoverable.

24. The total loss to the Commonwealth pursuant to the tax fraud conspiracy in the 2014-2015 financial year was $4,040,351.54.

Financial Year: July 2015 to June 2016

30. During the second year of the fraud, the respondent continued to oversee and run Plutus. In early July 2015, the respondent told Mr Kitson that Keystone would be replaced by two companies to avoid increased interest from the ATO. Previously, in April and May 2015, Mr Cranston and Mr Onley, with the assistance of Mr Menon, caused the incorporation of Uneek Consulting Services Pty Ltd (Uneek) and Sonar Consultants Pty Ltd (Sonar). The respondent was responsible for changes to the payroll system.

31. On 23 June 2015, the respondent sent an email to the named director of Uneek, Mr Spencer, requesting insurance information and enclosing a draft payroll services agreement. Under the agreement, Uneek was responsible for processing payroll funds on behalf of Plutus and remitting PAYGW and GST to the ATO. The agreement was represented as being signed on 1 July 2015 but was only signed in 2017 to seek to legitimise the subcontracting agreement when the ATO audit was being conducted.

32. Whilst the respondent controlled the Plutus bank account and managed the client company funds deposited into the account, he provided updates to Mr Onley. For example, on 7 August 2015 the respondent sent a text message to Mr Onley confirming “[w]e cracked $1m this week mate”.

33. On 14 March 2016, Mr Cranston and Mr Onley had incorporated Synep Limited (Synep) and they, along with Mr Stephens, were appointed as directors. There were two shareholding entities of Synep, one owned by Mr Onley’s wife, the other by Mr Cranston and his wife. Despite being appointed as a director, Mr Stephens played no role in the operations or decision-making of Synep.

34. On 1 June 2016, Mr Onley and Mr Cranston arranged for Synep to enter into a share sale agreement with Plutus under which Synep would purchase Plutus from the respondent for $5 million. The share sale agreement was signed by the respondent, Mr Cranston and Mr Onley, and witnessed by Mr Menon. After that, a friend of Mr Onley replaced the respondent as the director of Plutus. That friend, Mr Buckner, was told by Mr Menon and Mr Onley that the respondent would continue to have a role in Plutus after the sale of the company to Synep.

35. The respondent discussed with Mr Kitson that the respondent would need to step away as Chief Executive Officer of Plutus once it was sold. The respondent told Mr Kitson that it would be preferable to create an executive team with three general managers (Mr Kitson, and the Plutus employees Mr Munk and Mr Fox) at an equal level. This was implemented shortly after the sale of Plutus.

36. The respondent continued to manage the operations of the business and continued to have access to Plutus’ accounting system (hosted on Xero, a cloud-based accounting service) as well as transactional access to Plutus’ bank accounts throughout the conspiracy. Whenever questions were raised by administrative staff about the respondent's ongoing involvement, they were told he was consulting for Plutus at the request of Synep’s board members.

37. On 16 June 2016, Mr Cranston and Mr Onley, with the assistance of Mr Menon, caused the incorporation of five new Second Tier Companies.

38. The amount of tax misappropriated in the 2015-2016 financial year was $43,997,137.69.

Financial Year: from July 2016

39. During this third and final year of the tax fraud conspiracy, the respondent continued to oversee and run Plutus. Mr Cranston, Mr Onley and Mr Menon oversaw Plutus’ operations via Synep which they controlled, as well as managing the Second Tier Companies.

40. Regular $250,000 payments were made from Plutus to Synep, which over time were reduced to $125,000. To facilitate these payments, Plutus would generate RCTls on behalf of the Second Tier Companies which misstated the figure payable by Plutus.

41. The respondent had reduced involvement in the operations and advised the other conspirators in relation to the financial management of Plutus, despite representing to some people he was no longer involved in an executive capacity.

42. Between July and September 2016, the respondent had several meetings with Mr Onley and Mr Kitson about the pressure to liquidate Plutus. They discussed the need to represent that Plutus legitimately generated income. Mr Kitson developed a product, offered to smaller recruitment agencies, whereby Plutus would charge a payroll service fee of 1% per month. A number of Plutus’ clients started to use this product.

43. On 27 October 2016, as part of an exchange of messages between the respondent and Mr Kitson, Mr Kitson referred to Mr Onley asking to move money to Synep from Plutus. Mr Kitson said he had told Mr Onley they “weren't holding anything (other than the float for funding)”. The respondent agreed and said that he wanted at that stage to “keep everything above board” and meet company tax obligations, before getting money that had already been diverted out “when appropriate in clever ways”.

44. In November 2016, the respondent set about automating the “Plutus Cut” (defined in the statement of agreed facts as a portion of the PAYGW and GST retained within Plutus before the gross payroll was remitted to the Second Tier Companies). On 7 November 2016, the respondent commissioned a software developer in Indonesia to develop a program that automatically extracted data from the RCTIs received by Plutus from Client Companies and posted it to Plutus’ Xero platform. The respondent requested a formula be added so that a percentage would be deducted from the gross payroll and the adjusted figures would be posted to Plutus’ Xero platform. This enabled the Plutus Cut to be calculated automatically and taken from the gross payroll before the remainder was transferred to the Second Tier Companies. On Plutus’ Xero platform, the amounts would be recorded as if the gross payroll received was less than the actual figure.

45. The software was hosted on an Amazon Web Services server and the respondent was the only individual who knew the location and could control the software. When Ms Hammond noticed discrepancies caused by the Plutus Cut causing Mr Fox to question the respondent, the respondent conveyed a false explanation to him and discussed with Mr Onley arrangements to ensure Ms Hammond told Mr Fox she had been mistaken about the figures.

46. In late November or early December 2016, Mr Kitson consulted with the respondent and Mr Menon about concerns that Mr Onley, Mr Cranston or “Omni” may spend superannuation monies held in the accounts of the Second Tier Companies. Mr Kitson's concern was that the scheme was more likely discoverable by contractors if their superannuation contributions were not paid on time. The respondent and Mr Kitson withheld the superannuation payments “as a safety precaution” and the payments would be transferred to the Second Tier Companies to process as they were due. A spreadsheet with the superannuation account details for each of the seven Second Tier Companies, and tabs outlining superannuation payments in January, February and March 2017, were located on a device seized from the respondent’s residential premises.

Discovery of the conspiracy

47. Between December 2016 and January 2017, garnishee notices were issued by the ATO against the Second Tier Companies and penalty notices and garnishee orders were issued against the Second Tier Directors of Uneek and Sonar. On 24 January 2017, the respondent was issued with a default tax assessment, penalty notice and garnishee notice. The following day, the conspirators discovered that the bank accounts of the Second Tier Companies had been frozen.

48. On 7 February 2017, the respondent told Mr Menon, Mr Cranston and Mr Onley that, in a voluntary interview he had just attended with the ATO, he had “played the Peter Larcombe story”, meaning that he had blamed the conspiracy on Mr Larcombe who was by then deceased. Mr Onley said that is “what we need”. As part of this discussion, Mr Onley said that it is worse if the ATO “start to think of it actually as a scheme”. The respondent said he did not mention the name Synep and did not offer any information about it, apart from referring to the “buyers” of Plutus. The respondent said he lied when asked specifically how Plutus earned its money.

49. Also, on 7 February 2017, in conversations between the respondent and Mr Cranston, Mr Menon said that “[the ATO] will never be able to trace anything… Like anything you can justify commercially, right.” Mr Menon told the conspirators that they would have to ensure that they paid tax and that the people (apparently referring to the named directors of the Second Tier Companies) did not hurt them.

50. On 20 March 2017, Mr Kitson, the respondent and Mr Menon discussed how to remove and destroy incriminating electronic data and the respondent and Mr Kitson agreed that having non-contentious emails from a certain date onwards would be beneficial. Mr Menon suggested the respondent could feign ignorance over the finances. The respondent said he could claim that a fee was charged and not paid, and they discussed how the finances could be concealed.

51. On 26 April 2017, the ATO issued Plutus with a Notice estimating that company’s PAYGW liability as $21,858,801. The ATO also issued garnishee notices on bank accounts operated by Plutus. The respondent attended a meeting with Mr Kitson, Mr Onley and Mr Menon in which they strategised how to respond, including preparing an objection in reply to the ATO (at the respondent's request it was signed by Mr Menon), and scheduling to inform clients on the coming Monday that payroll services would cease from thereon in.

52. On 3 May 2017, the respondent and Mr Kitson attended the Plutus office and “wiped clean” five laptops, and inserted a tool, “cipher.exe”, to ensure no data could be recovered. They placed a link to the Network Attached Storage (NAS) drive on the desktop of the laptops, to make it appear as if that drive was always used by staff (rather than Google Drive which they had been using). Instead of destroying the NAS as had been discussed, the respondent encrypted that drive, and made it seem as if the NAS drive had been hacked. The respondent also investigated ways to delete all the email mailboxes.

53. In May 2017, the respondent contacted the Indonesian software developer and instructed him to remove the payment data held on Plutus Payroll's Xero account in relation to the Second Tier Companies and replace it with meaningless data. This work was never performed.

54. The total amount of tax misappropriated in the 2016-2017 financial year was $57,587,815.12.

55. The tax fraud conspiracy concluded after the AFP arrested a number of the conspirators on 17 and 18 May 2017.

The blackmail demands

56. On 1 February 2017 at Clamenz, one of the conspirators, Mr Rostankovski, with others, made a blackmail demand of the other conspirators for $5 million. He falsely represented he was acting on the instructions of directors of the Second Tier Companies and threatened media exposure of the scheme and violence.

57. The respondent attended a series of meetings with the other conspirators to discuss their response to the blackmail demand during which they agreed to pay the $5 million and decided to draft a deed to conceal the payment.

58. After the $5 million was paid, a further blackmail demand was made for an additional $20 million. Again, the respondent agreed with the other conspirators to pay the demand, and they drafted a second deed to conceal the arrangement. Over 12 weeks, a total of $24.24 million of monies owed to the ATO was transferred from Plutus to a law firm, Lands Legal, in answer to the blackmail demands.

The respondent’s knowledge of the extent of the fraud

59. During a conversation at Clamenz on 7 February 2017, the respondent participated in discussions about the extent of the tax diverted to date including the following:

“Mr Menon: You know, between all of them [the Second Tier Companies] we're talking about maybe 130 million in tax debt.

Mr Anquetil: Yeah.

Mr Menon: [by reference in part to default assessment] ... and that’s already at 50 million, plus Uneek and Sonar’s are at 40 million between both of them. You're talking about 130, 140 million ... and so a 130, 140 million remains unpaid from these 7 bottoms [the Second Tier Companies] and someone’s going to have to take liability for that.”

The respondent’s dealings in the proceeds of crime

60. The respondent dealt with the proceeds of the tax fraud in the following ways:

1. The respondent dealt with at least $14,397,622.98, which were monies obtained pursuant to the tax fraud conspiracy transferred into an account controlled by the respondent named Media and Marketing Group (Aust) Pty Ltd (MMG). The respondent further dealt with money from this account by transferring monies back to Plutus, transferring monies for the benefit of Mr Onley, Mr Cranston and Mr Menon and directly using the funds to pay for Plutus’ operational expenses and using the remainder for his ultimate benefit.

2. In addition to MMG, the respondent used a number of other companies to deal with an additional $13,795,182.22 ultimately for his benefit and for the benefit of other conspirators in the tax fraud conspiracy.

3. The respondent, together with the conspirators, agreed to use the proceeds of the tax fraud to pay the blackmail demands. the respondent jointly dealt with $24,244,760.64, transferred to the trust account of the law firm, Lands Legal, over a period of 12 weeks in payment of the demands, which were disguised as payments pursuant to a deed.

61. The respondent dealt with at least $28,192,805.20. Of that amount, the respondent was personally the ultimate beneficiary of at least $12,218,148.55.

62. In addition to the respondent's dealings in the $28,192,805.20 and $24,244760.64, the respondent was aware that monies approximating $6,392,629.10 were transferred by his co-conspirators from the Second Tier companies back to Plutus for its operating expenses. The respondent used funds from the Plutus accounts for payment of expenses for example, business class travel and hotel accommodation, which was required for the successful operation of Plutus.

63. The respondent also agreed with Mr Cranston and Mr Onley that regular payments would be made from Plutus to Synep for the benefit of Mr Cranston and Mr Onley. As a result, $7,867,500 was transferred to Synep from the Plutus company account.

Money laundering through MMG

64. On 10 April 2014, the respondent incorporated MMG. He was the sole director and company secretary. He was the authorised signatory of MMG’s bank account, and the director and named addressee on MMG’s bank statements.

65. From April 2014 until around July 2015, the respondent issued invoices on behalf of MMG, most of which were for the performance of legitimate services, but some were hyper inflated on Mr Onley’s instructions. From the time that MMG began to be used to receive Plutus’ share of the conspiracy (around 1 July 2015), it was no longer performing any legitimate services.

66. While the respondent may have initially created MMG for the purpose of laundering monies at the request of Mr Onley, the vehicle was also used for his own benefit. $2,054,289.08 of the $14,397,622.98 proceeds dealt with via MMG was for the respondent’s personal benefit.

67. The tax fraud proceeds were transferred to MMG from Plutus and the various Second Tier companies disguised as the payment of invoices. They were false invoices and were issued by or at the direction of the respondent.

68. In 2016, the respondent sought to distance himself from MMG and removed himself from the officeholder positions in MMG and transferred his shares. On 1 May 2016, Ms Ellem replaced the respondent as sole shareholder and director of MMG. Ms Ellem was a director in name only, never having consented to being a director and not knowing the respondent.

Money laundering through other entities

69. The respondent also directed payments to be made from the Plutus Payroll account to the respondent's other companies under the guise of payment for false invoices and/or loans. These monies were then either further dealt with by the respondent for the benefit of other conspirators, or retained for himself and used via direct purchases, including by debit card, cash withdrawals or further transfers to the respondent’s personal bank accounts.

The respondent’s financial gain

70. The respondent was the ultimate beneficiary of not less than $12,218,148.55 of tax fraud proceeds.

The reasons and conclusions of the sentencing judge

71. At the outset of his Honour’s consideration, the sentencing judge reminded himself that the governing principle under s 16A(1) of the Crimes Act is the imposition of a sentence which is of a severity appropriate in all the circumstances of the offence, and that it is necessary to consider the matters identified in s 16A(2) of the Crimes Act to the extent they are relevant.

72. The sentencing judge noted that the tax fraud offence carried a maximum penalty of imprisonment of 10 years and/or a fine of $108,000, and the money laundering offence a maximum of imprisonment for 25 years and/or a fine of $270,000. His Honour also noted that the maximum penalty serves as a yardstick.

73. The sentencing judge then dealt with the matters required to be taken into account under s 16A(2) of the Crimes Act, ignoring the factors which the parties agreed did not apply.

Section 16A(2)(a): The nature and circumstances of the offences

74. The sentencing judge concluded that the tax fraud conspiracy was one of the most serious offences of its kind to come before a court in this country. His Honour noted that over $105 million was lost to the revenue and pointed out that the conspiracy involved a very high level of sophistication, premeditation, planning and a very significant degree of dishonesty.

75. The sentencing judge noted (at [91]) that the respondent was a principal of the conspiracy, being one of its “key architects”. His Honour found that the respondent operated at the “apex of the hierarchy of offenders involved in the scheme” and throughout its life “performed a critical role, directing the actions of co-conspirators and unknowing participants alike.”

76. The sentencing judge stated that the objective seriousness of the money laundering offence is determined principally by the duration, quantum and conduct engaged in to effect the money laundering. His Honour rejected the Crown’s submission that the objective seriousness was at the highest level. However, the sentencing judge also rejected the respondent’s submission that the offence fell above, but not significantly above, the midrange of seriousness for this type of offence. His Honour concluded that the objective seriousness was well above the midrange, stating (at [93]) that the respondent’s dealing with the proceeds of crime was “sophisticated, organised and diverse.” His Honour described the offence as involving the incorporation of and use of existing corporate entities to transfer the proceeds of the tax fraud conspiracy for his own benefit and for the benefit of other conspirators.

77. The sentencing judge noted that in order to disguise the transfer of funds, the respondent issued, or directed the issue of, false business records. His Honour noted that it was correct, as the respondent submitted, that most of the money did not go overseas, but stated that he did not think that effected a significant reduction in the objective seriousness of the conduct.

74. The sentencing judge noted that the respondent himself dealt with not less than $28,192,805.20 and was aware that monies approximating $6,392,629.10 were transferred by his co-conspirators from the Second Tier Companies back to Plutus for its operating expenses.

75. The sentencing judge stated that the amount of money involved and the length of time over which the offending occurred are significant relevant considerations when determining the objective seriousness and gravity of the offending. His Honour said the amount of money laundered was towards the upper end of offences previously dealt with by any Court in this country. His Honour noted that the respondent was the ultimate beneficiary of not less than $12,218,148.55 and that his motivation was financial reward.

Section 16A(2)(b): Other offences (if any) that are required or permitted to be taken into account

80. In dealing with the offence to be taken into account under s 16BA of the Crimes Act, the sentencing judge stated (at [99]) that it meant the Court “should give greater weight to the community’s entitlement to extract retribution in the form of punishment for the admitted offending.” His Honour accepted the submission that the payment was not made under duress. However, his Honour found that whilst the offence was principally committed to seek to avoid detection of the crimes which had been committed, a part of the motivation was a fear of threats made to the respondent by people which the respondent believed were linked to criminal organisations.

81. The sentencing judge stated that the offence was above the midrange of objective seriousness for offences of this kind and represented significant additional criminality. His Honour stated that the sentence for the money laundering offence would reflect the total criminality and would result in a higher penalty than that which would otherwise have been appropriate.

Section 16A(2)(c): If the offence forms part of a course of conduct consisting of a series of criminal acts of the same or a similar character — that course of conduct

82. The sentencing judge stated that the respondent’s conduct occurred over more than three years, being a persistent course of conduct involving a series of serious criminal acts of the same character.

Section 16A(2)(e): Any injury, loss or damage resulting from the offence

83. The sentencing judge (at [105]) described the injury as “a collective financial injury suffered by all Australians.” His Honour also stated that “the injury that is suffered is even greater than its immediate financial consequences”, stating that “revenue fraud on the scale [of the offence in question] has a corrosive effect on our society.”

Sections 16A(2)(f) and (g): The degree to which the person has shown contrition for the offence and the offender’s plea of guilty

84. The sentencing judge stated (at [111]) that he was satisfied that the respondent’s plea of guilty was “a genuine demonstration of his remorse and contrition and ought be recognised as such.” His Honour stated that the respondent’s clear remorse was apparent also in the subjective material led on his behalf, as well as his agreement to cooperate with law enforcement authorities.

85. The sentencing judge stated (at [112]) that the utilitarian value of the respondent’s plea of guilty was “significant, given the size of the brief of evidence, the complexity of the issues and the likely length of the trial.” His Honour stated that he proposed to apply a discount of 25 per cent on the sentence he would otherwise have imposed.

[redacted]

86. [redacted]

87. [redacted]

88. [redacted]

89. [redacted]

Sections 16A(2)(j) and (ja): The deterrent effect that any sentence or order under consideration may have on the person or on other persons

90. The sentencing judge stated (at [122]) that general deterrence was a fundamental consideration because fraud on the Commonwealth revenue is “easy to commit, difficult to detect and comes at a great cost to the community.” His Honour stated (at [123]) that money laundering itself is “a serious criminal activity, vital to the success of the fraud in this case, because it moved the proceeds of crime to third parties making the detection of the underlying crime more difficult.”

Section 16A(2)(k): The need to ensure that the person is adequately punished for the offence

91. The sentencing judge concluded (at [127]) that having regard to the substantial loss occasioned by the offending, the length of the offending, the acts carried out by the offender, his attempts to conceal the offending, the sophistication and pre-meditation involved and the need for general deterrence, it was a case where a substantial term of full-time imprisonment must be imposed.

Section 16A(2)(m) and (n): The character, antecedents, age, means and physical or mental condition of the person and the prospects of rehabilitation of the person

92. The sentencing judge stated that the respondent was a person of prior good character which was relevant to his prospects of rehabilitation. His Honour said (at [129]), however, that the significance of the finding was “limited”, stating that “in white collar cases… an offender’s prior good character is of reduced significance as that good character normally places an offender in a position where they are able to commit the offence.”

93. In dealing with the respondent’s subjective case, his Honour referred to a report received from a forensic psychologist, Professor Stephen Woods, which his Honour stated (at [131]) should be understood as conveying that the respondent’s presentation was “consistent with a person suffering an Adjustment Disorder with Mixed Anxiety and Depressed Mood”.

94. His Honour stated that he took Professor Woods’ report and its conclusions into account, but proposed to give them relatively little weight. The sentencing judge noted that Senior Counsel for the respondent accepted there was no causal connection between any mental health issue and the offending behaviour. His Honour stated (at [133]) that he was not satisfied the respondent’s presentation as diagnosed by Professor Woods “warrants particular weight in the mitigation of penalty.” The sentencing judge stated that those mental health issues were really part of the respondent’s subjective background and circumstances and that he took them into account in that way.

95. His Honour noted that he also took into account a report of George Haralambous with whom the respondent had been attending psychological therapy sessions since 6 March 2019, and the report of Fleur Taylor with whom the respondent attended counselling sessions throughout 2018.

96. The sentencing judge stated (at [135]) that he also took into account letters of Dr Phillip Cremer of North Shore Vertigo & Neurology Clinic demonstrating that the respondent suffered left-side labyrinthitis in June 2016 from which he had not recovered. His Honour noted that Dr Cremer stated that the respondent would require lighting at all times in prison and, at times, repositioning treatment for episodes of vertigo. His Honour stated that Dr Cremer also stated that a sleep study report showed that the respondent had severe obstructive sleep apnoea, which generally requires the use of a CPAP machine. His Honour stated that “both the likely use of the CPAP machine and the need for periodic repositioning would make the [respondent’s] time in custody more onerous”.

97. The sentencing judge also stated that he took into account a letter from a Dr Lauren Cross, which listed medical conditions suffered by the respondent and plans for ongoing monitoring of those conditions. His Honour stated (at [135]) that the diagnosis “did not add in any significant way” to the finding he had already made about the respondent’s likely experience of custody as a result of labyrinthitis and the use of the CPAP machine.

98. The sentencing judge stated that he took into account a number of character references which were tendered.

99. The sentencing judge stated (at [138]) that he was “cautiously optimistic” that the respondent would not reoffend. His Honour said that he was initially hesitant to make that finding because the “good works and community contributions” made by the respondent started at the time when he was involved in a “cynical and destructive fraud on a massive scale upon his fellow Australians”: at [138]. The sentencing judge stated, however, that having reflected on all the evidence, he was satisfied the respondent “appears now to have adopted a different outlook on life.” In the circumstances. His Honour found that the respondent had good prospects of rehabilitation.

100. The sentencing judge described the respondent as a person of “obvious acute intelligence and ability who enjoys the continued support of a close and loving family and friends”: at [139]. His Honour stated that his approach to the proceedings indicated “both genuine remorse and insight into the corrosive effect of his offending behaviour.” His Honour noted that there had been no further offending in the period since the conspiracy was uncovered in May 2017.

Section 16A(2)(p): The probable effect that any sentence or order under consideration would have on any of the person’s family or dependents

101. The sentencing judge found that, in the absence of exceptional circumstances, potential hardship to the respondent’s family did not affect any substantial reduction in the sentence of imprisonment. His Honour accepted, however, that it was the respondent’s first time in prison and that separation from his wife and children would be onerous for him, particular in light of the present COVID-19 pandemic restrictions in gaol. His Honour stated he took those matters into account: at [142].

Comparable cases

102. The sentencing judge noted (at [143]) that “[t]he cases suggested by the Crown to provide real assistance in fixing an appropriate sentence were limited”, referring in that context to Dickson v R [2016] NSWCCA 105 (“Dickson”) and R v Issakidis [2018] NSWSC 378 (“Issakidis”).

103. The sentencing judge stated (at [144]) that he considered all the other cases referred to by the parties, but had concluded that they did not provide any particular assistance as it was clear the cases involved “a wide range of conduct.” His Honour stated that he took into account what the High Court made clear in Hili v The Queen (2010) 242 CLR 520 at [18] (“Hili”) that consistency in federal sentencing is not demonstrated by, and does not require, numerical equivalence. The sentencing judge stated that the principal case referred to by both parties in providing guidance for the tax fraud count was R v Kitson [2019] NSWSC 1109 (decision restricted). As the sentence imposed for the tax fraud offence is not the subject of any criticism in these proceedings, it is unnecessary to deal with the sentencing judge’s reasoning in this regard.

104. In dealing with the money laundering offence, the sentencing judge made the following remarks, which were the subject of some criticism during the course of the appeal:

“[149]   The Crown pointed to head sentences for money laundering of 12 years in the case of Mr Dickson and 8 years and 3 months in the case of Mr Issakidis as providing some guidance in fixing a sentence, prior to discounts, for the present money laundering offence. The Crown emphasised that the available sentence was not limited by the sentence imposed on Mr Dickson.

[150]   Mr Anquetil’s conduct in count 2, considered in isolation, is less serious than Mr Dickson's money laundering conduct because of the smaller amounts involved and the smaller personal gain, $19.6 million compared to $12.2 million. On the other hand, Mr Anquetil has asked that a serious money laundering charge be taken into account on a schedule thereby increasing the seriousness of his money laundering offence.

[151]   Having regard to all of the matters I have set out above, the appropriate starting figure in identifying a sentence, before applying any discount to Mr Anquetil's sentence, is 12 years imprisonment for the money laundering offence. After the application of discounts and the application of rounding the appropriate head sentences are 4 years and 8 months imprisonment for the tax fraud conspiracy and 6 years imprisonment for the money laundering offence.”

105. In dealing with accumulation, the sentencing judge noted (at [152]) that each offence involved “separate serious criminality.” His Honour said it was correct, however, that the facts in relation to the conspiracy to defraud and the money laundering offence overlapped. His Honour stated that he proceeded on the basis that the totality principle served to ensure that an offender in not subject to a crushing sentence. His Honour concluded that one year and six months is the appropriate amount of accumulation.

106. In those circumstances, the sentencing judge imposed the sentences to which I have referred above.

The appeal

Ground 1: the sentence imposed in relation to count two is manifestly inadequate

The submissions

a   The Crown

107. The Crown, whilst accepting the limitation on Crown appeals (see CMB v The Attorney General of New South Wales (2015) 256 CLR 346; [2015] HCA 9 (“CMB”) at [33] and [54]; Green v R; Quinn v R (2011) 244 CLR 462; [2011] HCA 49 at [36]), submitted that the present matter is one in which the Court should intervene as the sentencing for the money laundering offence was so far below the sentence which could justly be imposed, it undermines public confidence in the administration of justice.

108. The Crown referred to the finding by the sentencing judge that the offence was well above midrange (see [76] above). The Crown submitted that the finding that the amount laundered was towards the upper end of the amount the subject of any of the offences previously dealt with by any Court in the country was significant. The Crown also referred to his Honour’s finding concerning the s 16BA offence, to which I have referred at [80]-[82] above, noting the sophistication of the use of sham deeds to disguise the true nature of the payment. The Crown submitted that the sentencing judge’s remark that the sentence for the money laundering offence would reflect the total criminality and result in a higher penalty than would otherwise have been appropriate (see [81] above) reflected what was said by Spigelman CJ in Attorney General’s Application under s 37 of the Crimes (Sentencing Procedure) Act 1999 (No 1 of 2002) (2002) 56 NSWLR 146; [2002] NSWCCA 518 (“Attorney General’s Application”) at [42]-[43].

109. The Crown also referred to the statement by the sentencing judge that general deterrence was a fundamental consideration and that a substantial term of imprisonment was required (see [90]-[91] above).

110. The Crown referred to what was said by the sentencing judge concerning the decisions in Dickson and Issakidis which I have set out at [104] above. The Crown noted that the scheme in those cases involved falsely claiming depreciation expenses relating to the costs of acquiring medical technologies, which was offset against income distributed from unit trusts funded by a structured finance deal. The Crown noted that the total proceeds of the scheme was $68 million, whilst (as the sentencing judge pointed out) Mr Dickson’s personal gain was $19.6 million.

111. The Crown submitted that although the sentencing judge acknowledged that consistency in federal sentencing was not demonstrated by numerical equivalence, his Honour’s remarks in at[149]-[151] (see [104] above) showed that his Honour used the sentence in Dickson as a means by which the respondent was sentenced on count two. The Crown submitted that the sentencing judge gave “undue pre-eminence” to the single example of the exercise of the sentencing discretion in Dickson in determining the starting point for the sentence on count two, and in doing so, sought to achieve a rough numerical equivalence.

112. The Crown submitted that this approach was contrary to the principles relating to the use of comparable sentences, referring to Hili and R v Pham (2015) 256 CLR 550; [2015] HCA 39 (“Pham”). The Crown submitted that the matter was further complicated by the s 16BA offence.

113. The Crown submitted that the respondent’s subjective case was not sufficient to warrant such a departure from the maximum penalty. The Crown referred to the submissions made before the sentencing judge with respect to Dickson. These submissions were in the following terms:

“Finally, if I may briefly refer to the schedule of comparative cases, the most relevant case in the schedule is that of Dickson and the related case of Issikadis [sic, Issakidis] in that like this case there was one count of tax fraud conspiracy and the second count of money laundering conspiracy. The offence of conspiracy involved $68 million and the same amount was involved in the money-laundering.

The schemes involved considerable dishonesty and deception, the creation of fictitious persons, banks and valuation firms. It endured over an extended period of time, over six years, 6 1/2 years. So in terms of this sophistication, this duration and persisting criminal acts, it is very similar, of course, to these offences.

These offences involve more money and more people but there is a broad similarity there and in the Crown appeal and sentence the CCA imposed a total effective sentence for the two counts of Mr Dickson of 14 years with a non parole period of nine years three months and a lesser sentence, a total sentence of 10 years with a seven year non parole period was imposed in relation to Mr Issikadis [sic, Issakidis] and we commend the decision of the CCA in that appeal to your Honour and submit that that would be a point to your Honour in sentencing this offender.” (In chief.)

“In relation to comparative cases, your Honour would not regard Dickson as limiting or defining the sentence that could be imposed in relation to count 2. It is a helpful analog and it can't go any further than that, there are always differences between individual sentences and individual offences.” (In reply.)

114. It was submitted that the effect of what was said was that whilst Dickson was a helpful analogue; it was not a submission that the sentencing judge should impose Dickson or apply the same or some lesser sentence. The Crown submitted that the submission was made in the context of a limited number of vaguely comparable cases.

115. The Crown referred to the fact that the judgment in Dickson was handed down prior to the decision of the High Court in R v Kilic (2016) 259 CLR 256; [2016] HCA 48 (“Kilic”). The Crown submitted that that case concerned the approach to take to very serious offending and the maximum penalty. Whilst the Crown emphasised that it was not saying that Dickson was wrongly decided, the Crown submitted that it was possible that the Court would have imposed a somewhat different sentence had Dickson been decided after Kilic. The Crown submitted that a starting point of 12 years, which was less than half the maximum penalty for an offence above the midrange of objective seriousness, and which takes into account a very serious Schedule offence, fails to reflect the total criminality regardless of the subjective case of the offender.

116. The Crown referred in that context to the judgment of Gageler and Gordon JJ in Director of Public Prosecutions (Vic) v Dalgliesh (Pseudonym) (2017) 262 CLR 428; [2017] HCA 41 (“Dalgliesh”) at [83] where their Honours emphasised that an examination of comparable cases goes beyond its rationale when it is used to fix boundaries that as a matter of practical reality bind the court.

117. The Crown also referred to the distinction sought to be drawn by the respondent between “true money laundering” cases and other cases which fall within s 400 of the Code. I agree with the submission that the distinction is unhelpful. The seriousness of such offences will in all cases depend at least on the amount of money involved, the period of time over which the offending took place, the degree of sophistication of the activity, the extent of the deceit involved and the source or application of the funds in question. It is not helpful to put a label on different types of offences.

114. The Crown provided a summary of cases in which sentences for contravention of the money laundering offence in s 400.3(1) of the Code have been imposed. I have attached a copy of the summary to this judgment. The Crown submitted that the purpose of providing the summary was not to rehear the sentencing proceedings, but to demonstrate the correctness of the observations of Barr AJ in R v Li [2010] NSWCCA 125; (2010) 202 A Crim R 195 (“Li”) at [40] to the effect that although the number of money laundering cases dealt with by appellate courts is growing, it is still small, and the cases do not even begin to trace the range of proper sentencing discretion. It should be noted that Barr AJ went on to say that they do no more than produce a broad indication of the developing sentencing practices.

115. Somewhat inconsistently with that proposition, the Crown submitted that the cases supported the conclusion that a more serious penalty was warranted in the present case, in that the offenders in those cases were “not at the apex of the particular criminal enterprise.” The Crown also submitted that, with the exception of Dickson and TAN v R (2011) 35 VR 109; [2011] VSCA 427 (“TAN”), the amounts of money involved were significantly less.

116. Dealing with the cases in the summary, the Crown referred to R v Huang [2007] NSWCCA 259; (2007) 174 A Crim R 370. It was pointed out that the case involved substantially less money over a shorter period. Huang only received a fee of $30,000 and was not a principal. On a Crown appeal, it was held that a pre-discount starting point of six years and six months was manifestly inadequate and between 12 and 14 years was more appropriate. It was pointed out that there was no Schedule offence to take into account. The case involved 335 banking transactions of less than $10,000 and it was carried out as a result of considerable planning and organisation, although not sophisticated. The Court stated at [43] that having regard to the number of transactions, the respondent’s limited role was not of significance.

117. The Crown next referred to Trandy v R (2009) VSCA 321. The relevant charges were two offences of dealing with money of $1 million or more, being monies intended to be used as an instrument of crime. The money was to be used to provide heroin for commercial trafficking. Sentences of six years and seven years on each count were held not to be manifestly excessive.

118. The next case referred to was R v Byrne [2010] QCA 33. The amount involved was a single transfer of $1.38 million. The offender was also charged with fraud in contravention of s 408C(1)(c) of the Criminal Code Act 1899 (Qld). After pleading guilty and cooperating with the authorities, the offender received a sentence of three and a half years’ imprisonment for the fraud count and six years for the money laundering offence to be served concurrently. On appeal, although the head sentence was confirmed, the non-parole period was reduced from three and a half years to 18 months.

119. The Crown also referred to Li. The amount involved was $2.6 million. The monies, proceeds of drug dealing, were dispersed in part in Australia and in part overseas (Li at [8]-[9]). The respondent in that case had a powerful subjective case. The offender was sentenced to a period of 12 years’ imprisonment with a non-parole period of eight years. The Crown appeal and a cross-appeal by the respondent against the severity of the sentence were each dismissed. I have referred at [118] above to the remarks of Barr AJ in that case concerning the absence of any meaningful range of sentences as a yardstick.

120. The next case that the Crown referred to was R v Nguyen [2010] NSWCCA 226; (2010) 204 A Crim R 246. The respondent in that case was convicted of a count of conspiracy to import a commercial quantity of heroin, for which he was sentenced to 12 years’ imprisonment, and a count of dealing with the proceeds of crime, for which he was sentenced to a term of 10 years’ imprisonment after a discount of 20 per cent for his plea of guilty. The amount involved was $15 million. The money was routed through a money transfer company, of which the respondent was a senior person at a branch, and distributed to recipients in Australia and overseas. The sentence was increased on appeal to 13 years’ imprisonment, the total effective sentence being imposed increased from 14 years with a non-parole period of nine years and three months to 16 years with a non-parole period of 10 years and eight months. In that case, Barr AJ (at [58]) repeated the remarks he made in Li concerning the absence of a meaningful range of sentences to provide a yardstick.

121. The Crown also referred to TAN, in particular the sentence imposed on two of the co-conspirators in that case, HAT and HAH. The offence involved dealing with proceeds of crime derived from narcotics activities. The amount involved in the case of HAH was $68 million, and in the case of HAT, $57 million. The Crown pointed out that there was no Schedule offending. The sentence imposed on HAH was reduced on appeal from 12 years’ and six months’ imprisonment with a non-parole period of nine years to a head sentence of nine years with a non-parole period of five years and nine months. The primary reason for the reduction was the level of assistance provided to the authorities: TAN at [114]. HAT’s sentence was reduced from 12 years’ and six months’ imprisonment with a non-parole period of nine years to a sentence of 11 years with a non-parole period of eight years. The reduction was to ensure there was no marked disparity between HAT’s sentence and the sentence imposed on HAH (see Li at [122]). There was disagreement between the parties at the hearing as to the pre-discount starting points for these sentences. However, in a joint submission filed following the conclusion of the hearing, the parties agreed that the likely pre-discount starting point for HAH may have been more than 14 years and five months and perhaps as much as 18 years.

122. Le v R (Cth) [2010] NSWCCA 285 involved dealing with the proceeds of drug offences in which the appellant was involved. The appellant was also charged with importing a traffickable quantity of heroin and trafficking a commercial quantity of heroin and methamphetamine. The appellant was described as the syndicate leader’s right-hand man. The proceeds of crime offence involved an amount of $4.7 million. After a discount of 50 per cent for a plea and assistance, the appellant was sentenced to seven years’ imprisonment for the proceeds of crime offence. The sentence was upheld on appeal.

123. The Crown also referred to the decision of this Court in Milne v R [2012] NSWCCA 24; (2012) 219 A Crim R 237. This involved the complex scheme to avoid Capital Gains Tax. The details are set out in the attached summary. However, Mr Milne’s conviction was overturned by the High Court: Milne v R (2014) 252 CLR 149; [2014] HCA 4. In these circumstances it is unnecessary to deal with this decision any further.

124. The Crown finally referred to Oliver v R [2020] NSWCCA 26, which involved dealing with proceeds of crime in an amount of not less than $1 million. The exact amount was unable to be specified. The appellant, although she was aware the money was proceeds of crime, was not aware it was generated from the importation of cocaine. It was found that the appellant expressed neither contrition nor remorse. After a discount of 10 per cent for her plea of guilty she was sentenced to imprisonment for five years with a non-parole period of three years. Her appeal against sentence was dismissed.

125. The Crown submitted that its review of the cases could only give limited assistance as there was a wide range of criminality and conduct involved in each offence. The Crown submitted, however, that the starting point of 12 years was not sufficient to reflect the objective gravity and that that proposition was not undermined by a consideration of other sentencing decisions across Australia.

b)   The Respondent

130. Senior Counsel for the respondent sought to make the following points in relation to the appeal.

131. Senior Counsel for the respondent submitted first that the appeal did not fall within the purpose of Crown appeals, which is to lay down principles of governance and guidance. He submitted that the Crown did not point to any error of principle, or any error in assessment of the seriousness of the money laundering offence or in determining a fact relevant to such seriousness. He described the appeal as “simply a complaint about a number” and submitted that the other sentences brought to the Court’s attention did not show that the sentence imposed by the sentencing judge fell outside the sentencing discretion such that the limiting purpose of Crown appeals was satisfied.

132. Senior Counsel for the respondent also submitted that none of the findings of the sentencing judge on each of the mandatory factors required to be taken into account under s 16A of the Crimes Act were challenged, including the finding that the case was not at the top of the range of objective seriousness as distinct from well above midrange. He further pointed out that there was no challenge to the finding by the sentencing judge that the respondent had a strong subjective case. Senior Counsel for the respondent also submitted that the Crown case was essentially that as the starting point was half or virtually half the maximum penalty, that of itself bespoke error.

133. Senior Counsel for the respondent referred in that context to the Crown’s submission that, had Kilic been decided before Dickson, it would have resulted in a higher sentence being imposed in the latter case. Referring to Kilic at [19], Senior Counsel for the respondent submitted that what Kilic decided was that a sentencing judge is bound to consider where the facts of the offence and the offender lie on the spectrum from the least serious to the worst, and in determining the worst case you look at the nature of the crime and the circumstances of the criminal. Referring to that portion of the judgment to which I have referred at [74]-[79] above, Senior Counsel for the respondent submitted that the sentencing judge undertook this task.

134. Senior Counsel for the respondent noted that in Kilic, the plurality at [19] cited with approval the following passage from the judgment of plurality in Elias v R (2013) 248 CLR 483; [2013] HCA 31 (“Elias”) at [27], which he submitted correctly explained the significance of the maximum penalty:

“The maximum penalty is one of many factors that bear on the ultimate discretionary determination of the sentence for the offence. It represents the legislature's assessment of the seriousness of the offence and for this reason provides a sentencing yardstick. Commonly the maximum penalty invites comparison between the case with which the court is dealing and cases falling within the category of the ‘worst case’. As explained in Markarian v The Queen, for these reasons careful attention is almost always required to the maximum penalty. However, this is not to suggest that consideration of the maximum penalty will necessarily play a decisive role in the final determination. As also explained in Markarian, in some instances – as where the maximum sentence was fixed at a very high level in the nineteenth century – reference to it may be of little relevance. As this Court has explained on more than one occasion, the factors bearing on the determination of sentence will frequently pull in different directions. It is the duty of the judge to balance often incommensurable factors and to arrive at a sentence that is just in all of the circumstances. The administration of the criminal law involves individualised justice, the attainment of which is acknowledged to involve the exercise of a wide sentencing discretion. It is wrong to suggest that the court is constrained, by reason of the maximum penalty, to impose an inappropriately severe sentence on an offender for the offence for which he or she has been convicted.”

135. Senior Counsel for the respondent also referred to what was said in Markarian v R (2005) 228 CLR 357; [2005] HCA 25 (“Markarian”) at [31] that it was not appropriate to look first at the maximum penalty and proceed by making a proportional deduction from it. The plurality in that case stated that that was to use a prescribed maximum penalty erroneously as neither a yardstick nor as a basis for comparison of the case in question with the worst possible case.

136. Senior Counsel for the respondent submitted that the sentencing judge did not rely inordinately on Dickson. He pointed out that the sentencing judge correctly stated the appropriate principles, referring to that portion of his judgment to which I have referred at [104] above. He stated that the Crown did not invite the sentencing judge to apply a numerical equivalent and the sentencing judge did not do so.

137. Senior Counsel for the respondent submitted that the comparative cases referred to by the Crown, however analysed, did not support the proposition that the sentence was manifestly inadequate.

138. In relation to the s 16BA offence, Senior Counsel for the respondent referred to the statement by Spigelman CJ in Attorney General’s Application at [66] that the effect of inclusion on a Form 1 is to give the offence so included a significantly lower salience in the sentencing process.

Consideration

139. The principles to be applied when considering whether the sentence is manifestly excessive or inadequate have been stated in a number of decisions of the High Court. I endeavoured to summarise the principles in Kerr v R [2016] NSWCCA 218 in the following terms at [113]:

“The circumstances in which a sentence will be found to be manifestly excessive are well established. The Court will only intervene if the sentence is unreasonable or plainly unjust, such that the Court may infer that in some way there has been a failure of the sentencing judge to properly exercise the sentencing discretion: Dinsdale v R (2000) 202 CLR 321; [2000] HCA 54 at [6], [22]; Wong v R (2001) 207 CLR 584; [2001] HCA 64 at [58]; Hili v R (2010) 242 CLR 520; [2010] HCA 45 (Hili)at [59]. In that context, it must be remembered that an appellate court may not substitute its own opinion for that of the sentencing judge merely because the appellate court would have exercised the sentencing discretion in a different way: Lowndes v R (1999) 195 CLR 665; [1999] HCA 29.”

140. In Obeid v R (2017) 96 NSWLR 155; [2017] NSWCCA 221, RA Hulme J with whom the other members of the Court agreed, stated the principles as follows at [443]:

“When it is contended that a sentence is manifestly excessive it is necessary to have regard to the following principles derived from House v The King [(1936) 55 CLR 499; [1936] HCA 40] at 505; Lowndes v The Queen (1999) 195 CLR 665; [1999] HCA 29 at [15]; Dinsdale v The Queen (2000) 202 CLR 321; [2000] HCA 54 at [6]; Wong v The Queen (2001) 207 CLR 584; [2001] HCA 64 at [58]; Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [25], [27]; and Hili v The Queen (2010) 242 CLR 520; [2010] HCA 45 at [59].

•   Appellate intervention is not justified simply because the result arrived at in the court below is markedly different from sentences imposed in other cases.

•   Intervention is only warranted where the difference is such that it may be concluded that there must have been some misapplication of principle, even though where and how is not apparent from the reasons of the sentencing judge, or where the sentence imposed is so far outside the range of sentences available that there must have been error.

•   It is not to the point that this Court might have exercised the sentencing discretion differently.

•   There is no single correct sentence and judges at first instance are allowed as much flexibility in sentencing as is consonant with consistency of approach and application of principle.

•   It is for the applicant to establish that the sentence was unreasonable or plainly unjust.”

141. Although each of these cases is concerned with the question of whether the sentence was manifestly excessive, the principles apply with equal force to a claim that a sentence is manifestly inadequate.

142. Because of the criticism made by the Crown of what was said to be reliance by the sentencing judge on Dickson, it is also necessary to bear in mind the principles concerning the use of comparable cases in the sentencing exercise.

143. As was pointed out in Hili at [46]-[49], what is required is consistency in the sentencing of federal offenders. Consistency is not demonstrated by and does not require numerical equivalence. Rather, what is required is consistency in the application of the relevant legal principles. As was said in Wong v R (2001) 207 CLR 584 at 591, consistency in sentencing means that like cases are to be treated alike and different cases are to be treated differently. See also Pham at [28].

144. Further, as was pointed out in Hili at [50], [53], the first and paramount means of achieving consistency in federal sentencing is to apply the relevant statutory provisions and next, in seeking consistency, regard must be had to what was done in other cases. However, as was emphasised in that case at [54], a history of sentencing can establish a range of sentences that have been imposed, not that the upper and lower limits in the range are the correct upper or lower limits. Rather, such cases can and should provide guidance to sentencing judges and to appellate courts and stand as a yardstick against which to measure a particular sentence: see Hili at [50]-[54], citing what was said by Simpson J in Director of Public Prosecutions (Cth)v De La Rosa (2010) 243 FLR 28 at [303]-[305].

145. Further, as was stated in Pham at [28], appellate intervention on the ground of manifest excess or inadequacy is not warranted unless, having regard to all the relevant sentencing factors. including the degree to which the impugned sentence differs from sentences which have been imposed in comparable cases, the appellate court is driven to conclude there must have been some misapplication of principle.

146. In the present case, the prosecutor at the sentencing hearing focused on Dickson as the closest analogue. Consistently with what was said in Hili at [64], it was appropriate out of the wide variety of the proceeds of crime offences, which have been summarised in the submission before this Court, to draw attention to the most comparable case: see also Moodie v R [2020] NSWCCA 160 at [87]. However, when reliance is placed on a limited number of cases, care must be taken to ensure the examination is not used to fix boundaries that, as a matter of practical reality, bind the court: see Dalgliesh at [83].

147. In the present case the difficulty which arises is that in the court below the Crown submitted that Dickson was a case which, in terms of sophistication, duration and persisting criminal acts, was very similar and a helpful analogue to the present case. By contrast, on the appeal, the Crown suggested in effect that Dickson did not provide any real guidance and indeed a different sentence may have been imposed had it been decided after Kilic.

148. It is important in this context to emphasise two matters. First, the sentencing judge carefully considered all matters required to be taken into account under s 16A of the Crimes Act. Further, his Honour expressly noted the submission of the Crown that the available sentence was not limited by the sentence imposed on Dickson: see the sentencing judgement at [149], which I have set out at [104] above. His Honour’s reference at[151] (see [104] above) to “all of the matters” is plainly a reference to all the matters that he considered in dealing with the s 16A issues.

149. Second, the exercise of the sentencing discretion does not involve solely a consideration of the objective seriousness of the offence and making a proportionate deduction from the maximum penalty. That was made clear in Markarian in the passage to which I have referred at [135] above. There was nothing said in Kilic which detracted from that proposition. What was pointed out in both Kilic and Elias is that the maximum penalty is a yardstick to which attention must always be paid, but it is something which will not necessarily play a decisive role in the final determination.

141. The Crown, as I indicated, referred the Court to a wide range of sentences imposed for money laundering offences. However, the Crown conceded quite properly that a traverse of the sentences imposed in those cases can only give limited assistance as there is “a massive range of criminality and conduct involved in the offending”. I have considered all of the cases but, in my view, the widely varying circumstances do not provide a helpful yardstick to measure the sentence imposed, much less demonstrate in the present case that there has been a misapplication of principle such that the sentence was manifestly inadequate.

142. The Crown placed considerable reliance on the seriousness of the Schedule offence. As was pointed out in Attorney General’s Application at [42]-[43], although a court is sentencing for a particular matter, it takes into account the matters for which guilt has been admitted (in this case, the s 16BA offence) with a view to increasing the penalty by giving greater weight to personal deterrence and retribution, but the focus must be on the primary offences. See also Abbas v R [2013] NSWCCA 115; (2013) 231 A Crim R 413 at [22].

143. In the present case, the Crown submission essentially is that when regard is had to the maximum penalty, the sentence imposed, particularly when the s 16BA offence is taken into account, was unreasonable or plainly unjust. Although I accept, as found by the sentencing judge, that the offences were serious, falling well above the midrange, taking into account the strong subjective case and, in particular, the finding of genuine remorse and good prospect of rehabilitation, I do not think the sentence falls within that category. As I have indicated, there is nothing in the other cases to which we were referred which causes me to hold a contrary view.

144. I should add that if I were inclined to the contrary view, this would be a powerful case for the exercise of the residual discretion not to interfere with the sentence. Although I accept that the Crown did not urge numerical equivalence on the sentencing judge, the case was conducted on the basis that Dickson was in many respects analogous to the present case, a quite different approach to that taken in this Court. In these circumstances, I do not think the Crown has negated the exercise of the residual discretion: CMB at [33].

145. It follows that this ground has not been made out.

Ground 2: the total effective sentence and non-parole period is manifestly inadequate

155. The Crown, in its written submissions, stated that whilst the degree of accumulation may have been appropriate if the sentence for the money laundering offence was of an appropriate length, given its inadequacy the total effective sentence and the non-parole period failed to properly reflect the nature and circumstances of the overall offending to give effect to the need for general deterrence, punishment and denunciation.

156. No further submission was made by the Crown at the hearing.

157. Having regard to the manner in which the ground was argued in the written submissions, it is evident that it was dependent upon success on Ground 1. As that ground has not been made out, it follows that this ground also fails.

Conclusion

158. In the result, the appeal should be dismissed.

159. HOEBEN CJ at CL: I agree with the Chief Justice and the order which he proposes.

160. BELLEW J: I agree with Bathurst CJ.

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Amendments

27 March 2023 - Publication restriction lifted.

Decision last updated: 27 March 2023