R v Huang; R v Siu

[2007] NSWCCA 259

New South Wales
Court of Criminal Appeal

CITATION:	R v Huang, R v Siu [2007] NSWCCA 259
HEARING DATE(S):	28/03/2007, 30/07/2007
JUDGMENT DATE:	4 September 2007
JUDGMENT OF:	Simpson J; Howie J; Hislop J
DECISION:	In respect of the respondent Huang: (1) The Crown appeal is allowed. The sentence imposed by Charteris DCJ is quashed. (2) The respondent is sentenced to imprisonment for 5 1/2 years to date from 18 December 2005. There is to be a non-parole period of 3 years 4 months to expire on 17 April 2009, the date upon which the respondent is eligible to be released to parole. In respect of the respondent Siu: (1) The Crown appeal is allowed. The sentence imposed by Geraghty DCJ is quashed. (2) The respondent is sentenced to imprisonment for 5 years to date from 9 March 2007. There is to be a non-parole period of 2 1/2 years to expire on 8 September 2009, the date upon which the respondent is eligible to be released to parole.
CATCHWORDS:	Criminal Law - Sentencing - Crown Appeal - Money Laundering - whether sentences are manifestly inadequate.
LEGISLATION CITED:	Financial Transactions Reports Act 1988 - s 31(1) Criminal Code Act 1995 (Cth) - s 400.3(1), 400.3(2), 40.3(a), 400.4(1), 400.4(a), Div 400 of Chapter 10 Crimes Act 1914 (Cth) - s 20(1)(b)
CASES CITED:	R v Z [2006] NSWCCA 342 R v Wall [2002] NSWCCA 42 Ibbs v The Queen (1987) 163 CLR 447 R v Hutton [2004] NSWCCA 60 Ansari v R [2007] NSWCCA 204 R v Assi [2006] NSWCCA 257 R v MAK and MSK (2006) 167 A Crim R 159 R v SZ [2007] NSWCCA 19
PARTIES:	Regina v Bin Huang Regina v See Hon Siu
FILE NUMBER(S):	CCA 2006/5486 (formerly 2006/2235); 2007/3288 (formerly 2007/937)
COUNSEL:	P. Neil SC/C. Ng - Crown S. Odgers - Respondents
SOLICITORS:	Commonwealth DPP - Crown Legal Aid Commission - Respondents
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	06/11/0128; 05/11/1093
LOWER COURT JUDICIAL OFFICER:	Charteris DCJ, Geraghty DCJ
LOWER COURT DATE OF DECISION:	01/09/2006, 9/03/2007

2006/5486 (formerly 2006/2235)
2007/3288 (formerly 2007/2937)

SIMPSON J
HOWIE J
HISLOP J

TUESDAY 4 SEPTEMBER 2007

REGINA v Bin HUANG

REGINA v See Hon SIU

Judgment

1 THE COURT: These are Crown appeals from sentences imposed upon co-offenders, Bin Huang and See Hon Siu. In each case the Crown asserts the sentence is manifestly inadequate. The appeals raise common questions, and it is convenient to consider them in the one judgment. Mr Odgers SC represented both respondents at the hearing of the appeals.

2 The Crown appeal against the sentence imposed upon the respondent Huang was heard on 28 March 2007. The Court was informed that the Director of Public Prosecutions was considering an appeal against the sentence imposed upon the respondent Siu who had been sentenced on 9 March 2007. The parties agreed that we should not deal with the appeal against Huang’s sentence until we were aware of the position regarding Siu and that, if there were an appeal by the Crown in respect of the sentence imposed upon him, it would be appropriate for the same bench to deal with both matters. Hence the Court reserved after hearing argument in the matter of Huang until the situation in respect of Siu’s sentence was clarified. An appeal was lodged by the Crown against Siu’s sentence on 5 April 2007. We heard the Crown appeal against the sentence of Siu on 30 July 2007.

3 A third alleged co-offender, Chen, is to stand trial in September 2007.

The respondent Huang

4 This respondent pleaded guilty to an indictment alleging that between 14 January 2003 and 4 November 2003, at Sydney New South Wales, [he] dealt with money and intended that the money would become an instrument of crime, namely an offence against section 31(1) of the Financial Transactions Reports Act 1988 and at the time of the dealing the value of money was $1,000,000 or more, namely $3,088,311.00, contrary to sub-section 400.3(1) of the Criminal Code Act 1995 (Cth). The maximum penalty for such an offence is imprisonment for 25 years and/or a fine of $165,000.

5 The facts of the matter were that between 14 January and 4 November 2003 the offender conducted 335 banking transactions. Each involved a sum of less than $10,000. Each transaction was conducted at either a Commonwealth or Westpac Bank. The total amount of money conveyed to Hong Kong, and China generally, as a result of Huang’s activity was $3,088,311 achieved by those 335 bank transactions. The respondent’s motive was financial, as he received a fee for each transaction. These fees totalled approximately $30,000.

6 On 1 September 2006 Charteris DCJ sentenced the respondent to imprisonment for three years to commence on 18 December 2005. He directed the respondent enter a recognizance at the expiration of one year and nine months pursuant to section 20(1)(b) of the Crimes Act 1914 (Cth) to be of good behaviour for three years. These orders would result in the respondent being released from custody on 17 September 2007.

7 His Honour found

(a) The respondent believed that the money had been acquired through a genuine business venture in Australia and that the sole purpose of forwarding the funds overseas in sums of less than $10,000 was to avoid Australian Taxation. It was accepted by the Crown that the funds were not illegally obtained.

(b) The offence was objectively very serious having regard to the considerable sum involved, the number of transactions, the period over which it occurred and that it involved considerable planning and organisation though it was not an activity that could be described as sophisticated.

(c) The principal used the respondent and others as a runner or courier to present the cash at the bank. His Honour accepted, however, that the respondent was a “very much-trusted employee” of the principal who was given possession of large sums of money. It is apparent that he did not breach that trust placed in him by the principal. The respondent played an important role.

(d) The respondent had gambled to excess in Australia and that was the cause of his need for funds which led to him being tempted to involve himself in the behaviour for which he was before the court. The offender was in some way in denial as to the extent of his gambling difficulty.

8 His Honour also found

(a) The respondent was born on 27 October 1967. He was educated to the equivalent of year 12 standard in China and also completed a two-year Diploma in English Studies. He has an excellent command of English. He came to Australia from China in December 1989 and in 1994 was granted permanent residency. In 1996 he became an Australian citizen. He married in 1997 and the marriage ended in divorce. He married a second time and his second wife has returned to China due to her employment commitments. He has a minor criminal record, with fines for two stealing offences and a driving matter. He was also before the Local Court in 1998 for contravention of apprehended violence orders, which related to his first marriage. The funds that were banked by the respondent were provided by the principal in whose seafood business the respondent worked.

(b) The respondent had provided assistance to investigating authorities which was “extremely valuable” and “truly exceptional”. This material included admissions as to many particular transactions which would have been very difficult for the authorities to establish. The respondent’s current classification in prison was of “non association” and he would be subject to protective custody in the future, which would be burdensome. A discount slightly above 25 percent to reflect his cooperation, both past and future, with the authorities was allowed.

(c) He was satisfied the respondent “has great contrition”. He allowed 25 percent for the plea of guilty and also a discount for contrition of a month or so.

(d) The respondent did not require any further personal deterrence though the Criminal Code required significant penalties to be imposed, and general deterrence loomed very much.

9 His Honour took as his commencing point a sentence of 6½ years which he reduced by 25 percent for the plea of guilty and also a small discount for general contrition. This reduced the sentence to four years and nine months with a non-parole period of three years. He then allowed a discount slightly above 25 percent for cooperation with the authorities, thus reducing the head sentence to three years and he reduced the minimum period to be served to one year and nine months.

The respondent Siu

10 This respondent pleaded guilty to an indictment alleging that between 6 May 2003 and 14 July 2003 at Sydney, [he] dealt with money and intended that the money become an instrument of crime, namely an offence against section 31(1) of the Financial Transaction Reports Act1988 (Cth), and at the time of the dealing the value of the money was $100,000 or more, namely $556,400, contrary to sub-section 400.4(1) of the Criminal Code Act1995. The penalty for this offence is imprisonment for twenty years and/or a fine not exceeding $132,000.

11 The facts of the matter were that between 6 May 2003 and 14 July 2003 the respondent conducted 59 structured transactions. He approached the Commonwealth and the Westpac Banks at various branches in and around Sydney, depositing amounts of just less than $10,000, ranging from $9,700 to $9,400. The total amount transmitted to Hong Kong bank accounts as a result of his conduct was $556,400. The motive was financial, as the respondent received a fee for each transaction. The total fee received was something less than $3,000.

12 Geraghty DCJ sentenced the respondent to a period of imprisonment of two years and eleven months to commence on 9 March 2007. The Judge directed that he be released at the expiry of one year of that sentence, namely on 8 March 2008, upon entering into a recognizance pursuant to section 20(1)(b) of the Crimes Act1914 (Cth) to be of good behaviour for a period of three years from 8 March 2008.

13 The sentencing judge found the overall enterprise was very sophisticated with large amounts of money being illegally transferred to Hong Kong. The respondent’s role was not that complex and he was told what to do by the principal. His Honour found that the respondent’s role in this enterprise was limited and that he was on the edge of the enterprise, although an important component of it, since he was a “well-trusted player” for those who were illegally sending money to banks in Hong Kong.

14 His Honour had no doubt that the respondent knew he was involved in illegal activity. Initially he believed the moneys he was depositing were proceeds of an abalone business. However, he left the enterprise before he was charged because in effect he had become aware that the enterprise was likely to involve more than abalone and could be serious and dangerous. His Honour considered that, even if the respondent believed the funds came from abalone trading, from his earlier involvement in that trade he must have known it was illegal.

15 His Honour found:

(a) The respondent was sixty-four years of age and on a disability pension at the time of the offence. He had been raised in Hong Kong and had moved to Australia in 1982. He was a married man. He had limited English and was in poor health, suffering from a number of medical conditions. He had a prior criminal record for illegal activities in relation to the abalone trade.

(b) There had been an early plea of guilty, the utilitarian value for which should result in a 25 percent discount.

(c) The respondent’s contrition and remorse expressed to various people was limited to his regret that he had been exposed by the police and charged.

(d) The respondent had originally given assistance to the police but then had withdrawn his willingness to participate. Later, he again agreed to cooperate. However, his assistance was never availed of due to his lack of credibility and reliability as a witness. His Honour considered there should be some allowance made for his willingness, however variable, to cooperate, but since his assistance was not used, this consideration should be quite limited.

(e) A discount of 35 percent for the plea, expressions of remorse and subjective cooperation was appropriate.

(f) A full time custodial sentence would be much harder for the respondent than for a healthy young male by reason of his medical conditions. His Honour took that factor into consideration.

(g) The respondent had no psychiatric, gambling or drug problems and the likelihood of re-offending was “somewhat low”.

(h) The offence was committed between May and July 2003, the respondent was charged in April 2005 and thereafter there were many adjournments, none of the delay being caused by the respondent. His Honour took into account the delay as a mitigating factor.

(i) There were special circumstances, being the respondent’s age, health, lack of facility with English, and the fact that his family resided in Victoria.

(j) General deterrence for these particular offences was a very important consideration.

16 In sentencing the respondent, his Honour took a notional starting point of four and a half years, which he reduced by 35 percent for the discounts previously referred to.

17 His Honour considered the question of parity between this respondent and the co-offender, Huang. He concluded there was a considerable difference between the respondent and Huang, namely that the transaction amount in Huang was over $3,000,000, with the result that the maximum sentence was imprisonment for 25 years rather than 20 years; the offences by Huang were committed over a longer period than those by the respondent; Huang was more involved in the enterprise and was much younger and his state of health was not compromised, as was the respondent’s.

The Crown submissions

18 The fundamental submission put by the Crown in each appeal was that the commencement point taken by the sentencing judge was too low to reflect the offender’s criminality having regard to the maximum penalty applicable to the offence. In particular the Crown relied upon the decision of this Court in R v Z [2006] NSWCCA 342 as indicating the seriousness of the conduct in which each of the respondents engaged. Special leave to appeal to the High Court against that decision has been refused; see [2007] HCATrans 49. It was also submitted that too much weight was given to subjective circumstances, and in particular, in the case of Huang, to his gambling addiction. In the case of Siu the Crown submitted that the judge sentencing him was too concerned to achieve parity with the sentence imposed upon Huang, yet the sentence imposed upon that respondent was manifestly inadequate.

19 The Crown drew the Court’s attention to the relevant principles that operate in a Crown appeal and the discretions that are available to this Court in determining such a matter. It quoted in the written submissions from a number of decisions setting out the principles that are to be applied in such a case including the passage from R v Wall [2002] NSWCCA 42 where Wood CJ at CL sought to summarise the matters relevant to the determination of an appeal alleging that a sentence is manifestly inadequate.

The submissions on behalf of the respondents

20 It was submitted by Mr Odgers SC on behalf of both the respondents that the Court should have regard to the offence that each of the respondents set out to commit in dealing with the money intending that it become an instrument of crime. This was a breach of s 31(1) of the Financial Transactions Reports Act (the FTR Act). He noted that the offence was committed by two or more reportable transactions of amounts of less than $10,000 and that the maximum penalty for any one offence was Imprisonment for 5 years.

21 Mr Odgers referred to the breadth of the money laundering sections in Division 400 of Chapter 10 of the Code by reason of the definition of the various terms used in the offence-creating provisions. It was submitted that the range of conduct, which can be encompassed by the offence, is so broad that it extends from the merely trivial to the very serious. It was submitted that within this range of conduct the activity of the respondents fell toward the lower end. Mr Odgers gave examples of what he suggests were the possible absurd results that could flow from the breadth of the offences and the stated maximum penalties.

22 He referred to the decision of the High Court in Ibbs v The Queen (1987) 163 CLR 447 stressing the importance of discriminating between the seriousness of offences by the conduct of the offender and not simply the fact that the offence committed falls into a particular category of offence for which a general maximum penalty has been prescribed. There is no implication, it was submitted, that the fact that an offender committed an offence under the money laundering provisions means that no regard should be taken of the actual criminal activity intended to be carried out, here being a structuring offence in breach of the FTR Act.

23 In relation to the respondent Huang Mr Odgers stressed the findings of the sentencing Judge in the respondent’s favour as set out above. He also submitted that the respondent’s belief that the funds were lawfully obtained was of especial significance. In this regard he contrasted the case of R v Z where the respondent knew that the money was the result of drug trafficking. Although he conceded that tax evasion is serious criminal activity and the respondent knew that he was assisting in that criminal conduct, it was a far cry from helping to dispose of the proceeds of serious criminal activity. Mr Odgers stressed that the respondent’s gambling problems made him vulnerable to becoming involved in criminal activity and was a mitigating factor.

24 In relation to the respondent Siu, Mr Odgers referred to cases in this Court considering sentences imposed for breaches of s 31(1) of the FTR Act. In R v Hutton [2004] NSWCCA 60 for 21 offences totalling $427,393 the appellant was sentenced to 3 years 6 months with a non-parole period of 18 months. It was submitted that in light of this sentence and others referred to the respondent’s sentence could not be viewed as inadequate in light of the findings made by Judge Geraghty.

25 Mr Odgers conceded that the respondent Siu was aware that the money was the proceeds of illegal activity but noted that he had not been dealt with for an offence in relation to the proceeds of crime. But he accepted that the source of the money is a relevant factor where the offender knows that the money was illegally obtained. However, he stressed that illegal abalone fishing was not in the same league of seriousness as that involving the distribution of illegal drugs as was the case in R v Z.

Determination

26 The nature and scope of offences of money laundering under Division 400 of the Criminal Code were considered recently by this Court, as presently constituted, in Ansari v R [2007] NSWCCA 204. That case involved a Crown appeal against sentences imposed upon two respondents convicted after trial of two charges of conspiracy to commit offences under s 400.3(2). They were co-offenders of Z. One of the points that was noted in determining that appeal was that Z. was not sentenced on the basis that he was aware that the money that he delivered to the Ansari brothers was the proceeds of drug trafficking. It may have been and he may have known that it was, but it was not a fact relied upon by the Court in determining the sentence that ought to have been imposed upon him.

27 Before referring to what was stated in Ansari about the offences in the Division, it is necessary to make reference to the relevant provisions of the Code so that the offences committed by the respondents can be seen against the scheme of the section. Section 400.3 is as follows:

400.3 Dealing in proceeds of crime etc -- money or property worth $1,000,000 or more

(1) A person is guilty of an offence if:
(a) the person deals with money or other property; and
(b) either:
(i) the money or property is, and the person believes it to be, proceeds of crime; or
(ii) the person intends that the money or property will become an instrument of crime; and

(c) at the time of the dealing, the value of the money and other property is $1,000,000 or more.


Penalty: Imprisonment for 25 years, or 1500 penalty units, or both.

(2) A person is guilty of an offence if:
(a) the person deals with money or other property; and
(b) either:
(i) the money or property is proceeds of crime; or
(ii) there is a risk that the money or property will be-come an instrument of crime; and

(c) the person is reckless as to the fact that the money or property is proceeds of crime or the fact that there is a risk that it will become an instrument of crime (as the case requires); and
(d) at the time of the dealing, the value of the money and other property is $1,000,000 or more.


Penalty: Imprisonment for 12 years, or 720 penalty units, or both.

(3) A person is guilty of an offence if:
(a) the person deals with money or other property; and
(b) either:
(i) the money or property is proceeds of crime; or
(ii) there is a risk that the money or property will be-come an instrument of crime; and

(c) the person is negligent as to the fact that the money or property is proceeds of crime or the fact that there is a risk that it will become an instrument of crime (as the case requires); and
(d) at the time of the dealing, the value of the money and other property is $1,000,000 or more.


Penalty: Imprisonment for 5 years, or 300 penalty units, or both.

(4) Absolute liability applies to paragraphs (1)(c), (2)(d) and (3)(d).

28 As Simpson J pointed out in Ansari, the section in effect provides for six separate offences: three concerned with dealing in money or property that is proceeds of crime and three concerned with dealing in money or property that is to become an instrument of crime. The offences are further broken down in relation to the mental element of the offender: belief/intention, or recklessness, or negligence. The prescribed maximum penalty depends upon the culpability of the offender’s mental state concerning the source of the money, for offences involving proceeds of crime, or what is to become of it, for offences involving an instrument of crime. Hence the respondent Huang was liable to a maximum penalty of 25 years, because of his intention to deal with the money as an instrument of crime, this being the most serious of the mental states with which the section is concerned.

29 The same structure applies to offences involving more than $100,000 by the provisions in s 400.4. The respondent Siu was liable to a maximum penalty of 20 years imprisonment because he was charged with intending that the money with which he dealt, $556,400, would be used as an instrument of crime. This is the most serious offence under s 400.4.

30 In Ansari, Z. and the Ansari brothers were liable to imprisonment for 12 years. This was because, although they intended to deal with money in excess of $1 million, the mental element of the offence was recklessness as to the use of that money as an instrument of crime. In other words they were dealt with on the basis that they were reckless as to whether the money would be used for a criminal purpose, in each case a structuring offence contrary to s 31(1) of the FTR Act. On the count for which Z was sentenced, being the second count against the Ansari brothers, the amount of money to be involved was about $2 million but it was never actually dealt with by Z. or the brothers because police arrested Z. before he could obtain it. The Ansari brothers were sentenced on the basis that they knew the money was to be used for tax evasion but there was no evidence as to their knowledge of the source of the funds. There was no finding in that respect in the case of Z.

31 Howie J, with whom the other members of the Court agreed, stated the following in relation to the offences within Division 400:

[118] Division 400 of Pt 10.2 of the Code is entitled "Money laundering". For the purposes of the Division the term "instrument of crime" is defined in this way; "money or other property is an instrument of crime if it is used in the commission of, or used to facilitate the commission of, an offence that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence)". There is also a definition of "proceeds of crime" being "any money or other property that is derived or realised, directly or indirectly, by any person from the commission of an offence that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence)". There is a wide meaning given to the term "dealing with money or other property" in s 400.2. It includes receiving or disposing of the money, importing it into or exporting it out of Australia and engaging "in a banking transaction relating to money or other property".

[119] The offences within the Division, therefore, apply to a large range of activity in relation to money or other property to be used in connection with, or arising from, serious crime. Not only is there a very wide ambit in relation to the conduct caught by the offences but there is also a substantial range of criminal activity to which the money or property could relate, being limited in effect to an indictable offence of the Commonwealth or a State or Territory. The offences are not concerned only with the source of the money or property that is dealt with but also its ultimate use. The offences cover money obtained illegally or to be used for illegal purposes or dealt with in a manner that is illegal.

[120] With offences that are so wide ranging in their scope it becomes somewhat difficult to imagine an offence falling within the worst category of its kind against which any particular offence can be measured. It might be thought that dealing with money that is to be used for the purposes of terrorism might be within the class of the most serious offences encompassed by the sections in the Division. But it is perhaps not so difficult to conceive of offences that will form the bulk of conduct falling within the scope of the Division that would come before the criminal courts. The most obvious will relate to money obtained as a result of drug activity and that is being dealt with in order to make it more difficult to track or identify as the proceeds of a particular crime. It may also be money that has been legitimately earned but is to be dealt with in such a way as to disguise its source in order, for example, to defraud the taxation office.

[121] But frequently it will be impossible for the authorities to identify the origins of the funds or what is ultimately to be the use made of them, yet it can be shown that the manner of dealing with them was a breach of the law, such as to avoid the mandatory reporting conditions under the Financial Transactions Reporting Act. It may be the case that the persons dealing with the money do not know its source or ultimate destination and do not care provided they are being paid for rendering a service.

[122] The legislation itself has attempted to structure offences to give some guidance as to the seriousness of the conduct by reference to the applicable maximum penalty for each offence. The scheme is that the greater the sum of money involved, the more serious the offence. But the legislation also takes into account the mental state of the offender, so that an offence involving the intentional dealing with proceeds of crime or instruments of crime is more serious than one where the state of mind is recklessness as to the criminal nature of the property. Therefore s 400.3(1), where the amount involved is more than a million dollars and where the offender believes that the property is the proceeds of crime or intends that it will become an instrument of crime, provides for the most serious of the money laundering offences carrying a maximum penalty of imprisonment for 25 years and/or 1500 penalty units.

[123] It is likely that an offender before the court for sentencing for an offence within the Division will be a person facilitating the laundering of the money or actually involved in that process, rather than the owner of the money or the beneficiary of the laundering. The prosecution may not be able to show that the offender knew of the source of the money or its ultimate destination. In Assafiri v R [2007] NSWCCA 159 an analogy was drawn between money laundering offences and drug importations in that both types of offences usually reveal a hierarchy of persons involved in the conduct who have different roles to play and different gains to be made from the commission of the crime. The most important consideration in sentencing an offender for an offence under this Division will be to consider what the offender did, because there may be little or no evidence before the court as to the organisation behind the offence, the source of the funds or the ultimate use to made of them: see R v Olbrich (1999) 199 CLR 270 at [19].

[124] However according to normal sentencing principles, if the Crown wants to submit that the particular offence is aggravated by a circumstance that makes it more serious than objectively it would appear to be from the bare conduct of the offender, for example because the money with which the offender dealt was known by him to be intended to support terrorism, then the Crown should prove that fact beyond reasonable doubt. On the other hand, if the offender seeks to mitigate the seriousness of the apparent conduct by some fact, for example that the offender believed the funds were to be used for a humanitarian purpose, then it would fall to the offender to prove that fact on the balance of probabilities. Where however the accused denies the offence or there is no evidence as to his state of knowledge of the source of the funds, the purpose of dealing with the funds or their ultimate destination, the Court must simply deal with the matter on the objective facts as proved by the evidence………….

32 Notwithstanding the Crown submissions to the contrary before this Court, we are of the opinion that the offender’s belief as to the source of the funds will always be a relevant consideration regardless of whether the offender is charged with an offence concerned with the proceeds of crime or an offence concerned with property being used as an instrument of crime. Where it is the latter, the belief as to the source of the funds or its nature is less relevant because the offence is directed at the use to be made of the funds. So the offence of the respondent Siu was aggravated because he believed that the funds were as a result of illegal activity, albeit the activity was not of the utmost seriousness.

33 The understanding of the offender as to what was to be the destination of the money or the purposes for which it was to become an instrument of crime is also a relevant consideration. In the present case it was a significantly aggravating factor that the respondent Huang believed that he was actively involved in dealing with the money for the purpose of evading the payment of tax. But as was stated in Ansari, this is not a matter that is decisive of the seriousness of the particular offence or the appropriate penalty.

34 The amount of money involved is clearly a highly significant matter because the legislation uses it as the principal means of dividing the offences into categories and it is the primary identifier of what is the maximum penalty for an offence. The only difference between an offence falling within s 400.3(a), and carrying a maximum penalty of 25 years, and an offence falling within s 400.4(a), and carrying a maximum penalty of 20 years, is the amount of money or the value of the property with which the offender dealt.

35 Of course the number of transactions carried out by the offender in committing the offence and the period over which the transactions occurred are significant because they indicate the extent of the offender’s criminality. Generally speaking a number of transactions involving small amounts of money will be more serious than a single transaction of a larger amount. The latter may be seen as an isolated offence.

36 We are of the opinion that in the case of each of the respondents his criminality fell generally within the midrange of offending covered by the relevant sections. Money laundering on the scale in which both respondents were involved should be considered as serious criminal activity that is at the very heart of organised, professional crime syndicates. It warrants severe punishment not the least in order to reflect general deterrence of a very significant degree. When the activity is engaged in for profit, over a significant period of time and with a large number of transactions, the prior good character of the offender is of less significance than might otherwise be the case.

37 Sentences that have been imposed for offences in breach of s 31(1) of the FTR Act are not a helpful guide to the sentence to be imposed for an offence contrary to s 400. This is not simply because of the difference in the maximum penalties prescribed for the different offences. Depositing sums of money in breach of the provisions of that Act to the extent that was embarked upon by the respondents and taking into account their knowledge of the purpose of the transactions imbues their criminal activity with a completely different complexion.

38 Each of the respondents was well aware of the illegality of his conduct: Huang knew that the funds were to be used for an illegal purpose and Siu knew they were obtained as a result of illegal activity. The respondents were prepared to become involved in serious criminal conduct for profit. They were not isolated acts of offending. There were 59 separate illegal transactions undertaken by the respondent Siu over a period of about two months. There were 335 illegal transactions entered into by the respondent Huang over a period of about 11 months.

39 The respondent Siu dealt with over $550,000 slightly over half of the amount of money that would have taken him into the higher penalty of a s 400.3 offence and over five times the amount of money bringing him within a s 400.4 offence. The respondent Huang dealt with over $3 million, more than three times the amount that brought him within a s 400.3 offence. Neither of them was a principal in that they did not own or have an interest in the money with which they dealt. Although that is clearly a matter that reduces the culpability of each, they were both involved in the principal’s illegal conduct to a very substantial degree. Both Judges who dealt with the respondents made findings that they were important and trusted participants in the enterprise.

40 In R v Z the Court was of the opinion that the respondent’s offending warranted a starting sentence of 7 years imprisonment before discount as against a maximum penalty of 12 years. As we have already noted that sentence was not based upon any knowledge of Z. as to the source of the funds. It involved what was to be a single act of dealing with money, so far as Z. was concerned, and the offence was not carried out. He was not a principal in the offence but was to obtain and courier the money to the Ansari brothers. Z. suffered from a mental disorder that mitigated to some degree the sentence to be imposed upon him. He was to be kept in protective custody because of his former membership of the Israeli army.

41 In Ansari the Court was of the opinion that the sentence that ought to have been imposed on each brother should have been 9 years on each of the two counts. They were principals in the money laundering in that they were receiving the money in order to “wash it” on behalf of the owners of the money for profit. The first offence involved somewhere over $1 million, although the sentencing judge did not determine the exact amount, and the second offence was to involve at least $2 million. They were convicted after trial.

42 In the case of the respondent Huang, it was of little, if any, mitigation that the offence was a result of gambling. In R v Assi [2006] NSWCCA 257 it was stated [27]:

………….Although [the appellant’s] gambling habit may explain his fall into such serious criminal conduct and give some hope of rehabilitation in the future, it has been held to be a rare case where an offender can seek mitigation of penalty based upon an addiction to gambling, even where it is pathological: R v Molesworth [1999] NSWCCA 43……..

Because of the numerous criminal activities committed by the respondent over a substantial period of time, this is not the rare case where the respondent’s problems with gambling should be seen as significantly mitigating his criminality.

43 The respondent Huang should be considered as more than a mere courier or runner to deliver the money to the bank having regard to his involvement in depositing the money in false accounts. But even if he were limited to that role, in light of the large number of illegal activities and the very significant amount of money involved such a role would not be a matter of very great mitigation. Judge Charteris was in error in determining that a separate and quantifiable discount was appropriate for contrition: see R v MAK and MSK (2006) 167 A Crim R 159. Discounts totalling 54 per cent for pleas and assistances were unjustified: see R v SZ [2007] NSWCCA 19.

44 None of these errors might themselves singly or in combination justify this Court intervening especially in light of the fact that the respondent was to be released to parole in September next. But the sentence is manifestly inadequate as a result of the notional starting sentence chosen by his Honour before applying discounts. The Judge’s starting point was 6½ years. In our opinion it should have been at least 11 years although we believe that a more appropriate starting point was between 12 and 14 years. We have chosen the lowest possible figure because this is a Crown appeal. We are prepared to grant the respondent a discount of 50 per cent for the plea and assistance, although we acknowledge that this is a very generous finding notwithstanding that the respondent will spent his time in some form of protective custody.

45 The lowest sentence that it was within the Judge’s discretion to impose upon the respondent Huang to reflect his criminality and against a maximum penalty of 25 years was 5½ years. There should be a non-parole period of 3 years 4 months. We emphasise that this is a lenient sentence imposed mainly because of discretionary factors arising from a successful Crown appeal.

46 In the respondent Siu’s case the Judge was in error in describing the respondent’s conduct as “one of the least serious” of criminal conduct that could be encompassed in the section. As we have indicated, money laundering on a scale of that embarked upon by the respondent, involving over a half a million dollars and repeated criminal acts over a period of three months, was very substantial criminal activity and warranted a severe, deterrent sentence. The offence was committed for profit, but the amount received by him was of little significance, other than that it disclosed his position in the enterprise. There was limited mitigation in the respondent’s age and medical condition. His medical problems were largely present at the time of the offending and neither age nor physical illness is a licence to commit crime particularly over a period of three months. The delay in the respondent being charged was of little significance unless it could be shown to have disadvantaged the offender in some way.

47 The starting sentence before applying discounts should have been at least 8 years although we believe a more appropriate starting point was between 9 and 11 years. As this is a Crown appeal, we have adopted the lowest sentence in the available range. The respondent was entitled to a discount for the plea of 25 per cent. The Judge also gave the respondent the benefit of a discount of 10 per cent for past assistance. A total discount of 35 per cent was overly generous, especially as the Judge took into account in fixing that discount remorse and because of the lack of any benefit from his proffered assistance. But we are prepared to grant him the same discount. The head sentence should have been at least 5 years. In coming to the view that the Court ought to intervene and in fixing the sentence, we have taken into account an affidavit of the respondent as to his medical problems while in custody. The sentence is the very least that could be imposed upon the respondent to reflect his criminality.

48 The non-parole period imposed by the Judge was about a third of the head sentence. That was manifestly inadequate. The Judge found special circumstances, but that was a finding that only applied in respect of sentencing for State matters. These included the respondent’s age and “compromised state of health” but these were matters principally to be taken into account in determining the head sentence. But as we have already noted, they lose much of their significance because they were present at the time of the offending. The fact that his family was in Victoria and that the respondent was isolated by his lack of English were of limited significance in light of his offending in this State over a period of three months. Some reduction in the usual ratio should be allowed but not to the degree determined by the sentencing judge. The minimum sentence must adequately reflect both the offender’s criminality and the significance of general deterrence. There should be a minimum term of 2½ years. Again it should be noted that the sentence imposed upon the respondent is considerably reduced from that which ought to have been imposed in the District Court.

49 Judge Geraghty was keen to address parity between the two respondents. To some degree that issue should take care of itself because they were sentenced under different offences with different maximum penalties. A proper determination of the criminality of each and their subjective circumstances should have resolved any issue of parity between them. One major difference was that Huang received an overall discount of the sentence of 54 per cent where as Siu was given a discount of 35 per cent. That has resulted in there not being a very substantial difference between the head sentence to be served by Huang and that by Siu. However, by reason of Siu’s personal circumstances he is to serve less than Huang before being eligible for release to parole.

50 The Court makes the following orders:

In respect of the respondent Huang

1. The Crown appeal is allowed. The sentence imposed by Charteris DCJ is quashed.

2. The respondent is sentenced to imprisonment for 5½ years to date from 18 December 2005. There is to be a non-parole period of 3 years 4 months to expire on 17 April 2009, the date upon which the respondent is eligible to be released to parole.

In respect of the respondent Siu

1. The Crown appeal is allowed. The sentence imposed by Geraghty DCJ is quashed.

2. The respondent is sentenced to imprisonment for 5 years to date from 9 March 2007. There is to be a non-parole period of 2½ years to expire on 8 September 2009, the date upon which the respondent is eligible to be released to parole.
**********