Speyer v POLICE - [2020] SASC 41

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
SPEYER v POLICE
[2020] SASC 41
Judgment of The Honourable Auxiliary Justice David
19 March 2020
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - GROUNDS FOR INTERFERENCE - SENTENCE MANIFESTLY EXCESSIVE OR INADEQUATE
CRIMINAL LAW - SENTENCE - SENTENCING ORDERS
Appeal against sentence.
The appellant was convicted of two counts of engaging in transactions involved tainted property in circumstances in which he ought reasonably to have known that the property was tainted contrary to s 138(2) of the Criminal Law Consolidation Act 1935 (SA). He was sentenced to a term of imprisonment of six months and one week which was partially suspended and was ordered to serve one month of that sentence. The sentence was backdated to the date that the appellant was taken into custody which equated to one month and five days.
The appellant appeals on the basis that:
1.   The learned Magistrate erred in imposing a sentence of imprisonment.
2. The learned Magistrate erred in imposing a manifestly excessive sentence of imprisonment.
3.   The learned magistrate erred in failing to find good reason to wholly suspend the term of imprisonment.
4.   The learned Magistrate erred in not taking into account time spent in custody.
Held, per David AJ, dismissing the appeal:
The sentencing Magistrate was correct in his assessment of the seriousness of the offending having regard to the wording of the criminal provision which does not require actual knowledge and the sentence was not manifestly excessive.
The failure of the sentencing Magistrate to adjust the sentence to one month and five days to be served given that was the time spent in custody as distinct from one month is not an appealable error in light of the fact that the appellant was to be released at the date of sentence.
Criminal Law Consolidation Act 1935 (SA) s 138; Sentencing Act 2017 (SA) s 26, s 96(4), referred to.

SPEYER v POLICE
[2020] SASC 41
Magistrates Appeal: Criminal

DAVID AJ: This is an appeal against sentence. The appellant pleaded guilty in the Magistrates Court to two counts of engaging in transactions involving tainted property in circumstances in which he ought reasonably to have known that the property was tainted contrary to s 138(2) of the Criminal Law Consolidation Act 1935 (SA) (“the Act”). His offending consisted of allowing the use of his bank account for the purposes of tainted money being deposited and then transferred to third party accounts overseas. The total amount of money involved over the two transactions was $97,147.38.
On 5 November 2019, the sentencing Magistrate imposed a term of imprisonment of nine months which he reduced to six months and one week because of the appellants pleas of guilty. Pursuant to s 96(4) of the Sentencing Act 2017 (SA), he ordered that the appellant serve one month of that sentence and the balance be suspended upon him entering into a bond to be of good behaviour in the amount of $500 for a period of two years. The term of imprisonment was backdated to commence on 1 October 2019, the date the appellant was taken into custody.
He now appeals against that sentence.
The charges and legislation
I set out in full s 138 of the Act:
138—Money laundering
(1)A person who engages, directly or indirectly, in a transaction involving property the person knows to be tainted property is guilty of an offence.
Maximum penalty:
In the case of a natural person—Imprisonment for 20 years.
In the case of a body corporate—$600 000.
(2)A person who engages, directly or indirectly, in a transaction involving tainted property in circumstances in which the person ought reasonably to know that the property is tainted is guilty of an offence.
Maximum penalty:
In the case of a natural person—Imprisonment for 4 years.
In the case of a body corporate—$120 000.
…
As can be seen, the difference in penalty between subsection (1) and subsection (2) is substantial. This is due to the different states of mind that have to be proved. In pleading guilty to two offences contrary to s 138(2), the appellant is not to be dealt with as a person who knew that the property, in this case the money, was tainted but rather that he ought reasonably to have known that was so.
The appellant was originally charged on Information as follows:
1.On the 29^th day of March 2017 at Munno Para in the said state, engaged directly or indirectly in a transaction involving property, namely $9,000 which was deposited by Whitewater West Australia into Jason Speyer’s ANZ Bank Account […] and withdrawn from the Munno Para ANZ Bank, that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
2.On the 30^th day of March 2017 at Elizabeth in the said state, engaged directly or indirectly in a transaction involving property, namely $5,000 which was deposited by Whitewater West Australia into Jason Speyer’s ANZ Bank Account […] and withdrawn from the Elizabeth ANZ Bank, that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
3.On the 30^th day of March 2017 at Munno Para in the said state, engaged directly or indirectly in a transaction involving property, namely $65,000 which was deposited by Whitewater West Australia into Jason Speyer’s ANZ Bank Account […] and send by international transfer to Japan, that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
4.On the 3^rd day of April 2017 at Munno Para in the said state, engaged directly or indirectly in a transaction involving property, namely $200 which was deposited by White West Australia into Jason Speyer’s ANZ Bank Account […] and withdrawn, that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
5.On the 3rd day of April 2017 at Munno Para in the said state, engaged directly or indirectly in a transaction involving property, namely $13,000 which was deposited by White West Australia into Jason Speyer’s ANZ Bank Account […] and sent by international transfer to South Africa, that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
6.On the 18^th day of April 2017 at Elizabeth in the said state, engaged directly or indirectly in a transaction involving property, namely $1,000 which was deposited by Whitewater West Australia into Jason Speyer’s ANZ Bank Account […] and transferred into another ANZ account held by Jason Speyer namely […], that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
7.On the 18th day of April 2017 at Elizabeth in the said state, engaged directly or indirectly in a transaction involving property, namely $1,000 which was deposited by Whitewater West Australia into Jason Speyer’s ANZ Bank Account […] and transferred into another ANZ account held by Jason Speyer namely […], that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
8.On the 18th day of April 2017 at Elizabeth in the said state, engaged directly or indirectly in a transaction involving property, namely $2,000 which was deposited by Whitewater West Australia into Jason Speyer’s ANZ Bank Account […] and transferred into another ANZ account held by Jason Speyer namely […], that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
9.On the 18th day of April 2017 at Elizabeth in the said state, engaged directly or indirectly in a transaction involving property, namely $2,000 which was deposited by Whitewater West Australia into Jason Speyer’s ANZ Bank Account […] and transferred into another ANZ account held by Jason Speyer namely […], that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
10.On the 18^th day of April 2017 at Elizabeth in the said state, engaged directly or indirectly in a transaction involving property, namely $45,000 which was deposited by Whitewater West Australia into Jason Speyer’s ANZ Bank Account […] and transferred to Japan by international transfer, that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
11.On the 18th day of April 2017 at Elizabeth in the said state, engaged directly or indirectly in a transaction involving property, namely $14,000 which was deposited by Whitewater West Australia into Jason Speyer’s ANZ Bank Account […] and transferred to South Africa by international transfer, that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
12.On the 20^th day of September 2017 at Munno Para in the said state, engaged directly or indirectly in a transaction involving property, namely $92,117.38 which was deposited by Angleshaw Pty Ltd into Jason Speyer’s Commonwealth Bank Account […] and transferred to Hong Kong by international transfer, that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
13.On the 21^st day of September 2017 at Munno Para in the said state, engaged directly or indirectly in a transaction involving property, namely $5,000 which was deposited by Angleshaw Pty Ltd into Jason Speyer’s Commonwealth Bank Account […] and sent to United Sates of America by international transfer, that he ought to have reasonably known to be tainted property.
Section 138(2) [of the] Criminal Law Consolidation Act 1935
This is a minor indictable
He pleaded guilty to counts 12 and 13 and the other counts were withdrawn. The rationalisation of that course becomes clear from a recitation of the background facts.
Background facts and basis for the plea
The background facts leading to this offending are unusual, if not bizarre. The basis of the plea and the background facts are as follows.
In March 2016, the appellant “met” a person he believed to be called Elizabeth Hunt on Facebook. He was led to believe that she was deaf and unable to communicate by phone, hence all communications between them were online. He then commenced an online relationship with her. This was reciprocated and he was led to believe that they were in a romantic relationship and would marry. I interrupt the narrative to point out that there was probably no such person as Elizabeth Hunt and that she was created by the perpetrators of this scheme. At one stage, a photograph of a female purporting to be her was sent to the appellant.
As the online relationship continued, on a number of occasions the appellant transferred money to her amounting to over $4,000. She then asked him to assist her with her deceased father’s estate by paying off various creditors. On 27 March 2017, $92,280 was transferred into his ANZ account for that purpose. On 12 April 2017, $65,250 was also transferred into his ANZ account. It is agreed that he did not know the monies were tainted. In fact, the money which was transferred on 27 March 2017 was sourced from a company known as Whitewater West Australia. On 25 March 2017, the email account of the managing director of that company was hacked by people unknown who transferred the money to the appellant’s bank account. It is agreed, however, that the appellant had no knowledge of the hacking of the email account resulting in that money being transferred. In fact, he did not know these monies were tainted. As directed by “Elizabeth” he transferred monies which he had received into those accounts to varies creditors.
On 21 April 2017, a fraud investigator from ANZ contacted the appellant by telephone and indicated the funds were highly likely to have been stolen and his ANZ account was frozen. Nevertheless at “Elizabeth’s” request, he opened a fresh account with the Commonwealth Bank and, on 19 September 2017, $98,147.38 was transferred into his Commonwealth Bank account. It is agreed, that unbeknown to the appellant, this money came from the bank account of a superannuation fund in Victoria. It was obtained by unknown persons hacking that account. On 20 September 2017, at “her” direction he completed an international transfer of $92,147.38 to a Hong Kong company. The transfer of this money is the subject of count 12. Also at “her” direction, he completed an international transfer of $5,000 to an account in America. That transaction is the subject of count 13. It is agreed for the purposes of the plea that the appellant did not know that the total amount of $98,147.38 transferred into his Commonwealth Bank account was tainted property. He believed it was, as explained by “Elizabeth”, monies from her father’s estate and he thought he was sending the money to creditors of that estate. The basis of the plea is that after the phone call from the ANZ fraud investigator on 21 April 2017, and after his ANZ account was frozen, the appellant ought to have reasonably known any further transfer of monies at “Elizabeth Hunt’s” request would involve tainted money.
As can be seen, counts 1 to 11 involved transactions before he was warned by the investigator from ANZ and the prosecution did not continue with those matters. The plea involved those two transactions which took place after his ANZ account was frozen and he was clearly warned.
Matters personal to the appellant
The appellant was aged 41 at the time of sentencing and grew up in Elizabeth Downs. He left school part way through year 11 to look for work as he struggled at school. Although it was never formally assessed, he seemed to have had a learning disability. Since leaving school he has had various jobs, including short term labouring, landscaping and cement labouring. In essence, most of his work has been causal labouring. He has had a serious alcohol problem which arose after a relationship breakdown. He was in a relationship from the age of 20 as a result of which a son was born when he was 25 but shortly afterwards, it broke up. His partner at the time cut off access and the stress of the breakup and not having access to his son led to his alcohol use escalating and him becoming dependent upon it. In 2016, he sought help from DASSA but unfortunately, after detoxing for 11 days, he resumed drinking. His alcohol problems have continued throughout his interactions with the person he believed to be “Elizabeth Hunt”. His present working situation is uncertain. He has a number of convictions for alcohol related driving offences but he has no previous convictions or appearances for matters of dishonesty. A number of references of good character were tendered to the sentencing Magistrate who took them into account.
Sentencing remarks
The sentencing Magistrate quite properly sentenced on the basis that there was no suggestion that the appellant was involved in the fraudulent taking of money. Furthermore, that he was not to be sentenced on the basis that he in fact knew that the money was tainted property. Consistent with the appellant’s plea, the sentencing Magistrate made it clear that the appellant was to be sentenced on the basis that he ought to have reasonably known that money was tainted property. He also accepted the submission that the appellant believed that the entity known as “Elizabeth Hunt” was a real person and also, he felt a genuine romantic attachment to that person which he thought was reciprocated. However, the special Magistrate then made these remarks:
The fraudulent taking of money through electronic means over the Internet commonly referred to as cybercrime is a serious and growing problem. The potential losses from such crimes are enormous and so too is the cost to business and the community generally. There are other costs to business and the community for developing means to protect against and detect such fraudulent conduct. While you are not to be punished as a perpetrator of cybercrime it must be recognised that the involvement of individuals such as yourself who become involved in laundering proceeds of cybercrime provides a means by which the perpetrators can access the funds and reduce the risk of detection. Your role was an integral part of the criminal process.
The circumstances in which you became involved in laundering the money are relevant to the degree of your culpability. Your counsel described the hoax perpetrated by “Elizabeth Hunt” as elaborate in its nature. He said that it was elaborate in the sense that it was convincing to you.
However, it ought to have been known to you that the money was tainted at least by the time you were spoken to by the ANZ investigator. You were informed that it was highly likely that the money was stolen and was being laundered through your account. That information should have caused you to consider more carefully your conduct and the nature of the connection between you and the person you believed to be “Elizabeth Hunt”.
He then added the fact that the appellant did not know that the property was tainted, bearing in mind the warning that he had been given from the investigator from the ANZ, and his communications and knowledge of “Elizabeth Hunt” were wholly unreasonable in the circumstances.
The Magistrate considered that this was offending that required a term of imprisonment as a substantial quantity of money was involved and the appellant was well and truly given notice about the likelihood of the illegality of the funds because of the warning by the ANZ investigator. Pursuant to s 26 of the Sentencing Act 2017 (SA) he then imposed one sentence of nine months imprisonment which he reduced to six months and one week on account of his plea of guilty. He then partially suspended the sentence in the way described above and backdated it to the date the appellant was taken into custody.
Appeal
I set out the grounds of appeal:
1.The learned Magistrate erred in imposing a sentence of imprisonment.
2.The learned Magistrate erred in imposing a manifestly excessive sentence of imprisonment.
3.The learned Magistrate erred in failing to find good reason to wholly suspend the term of imprisonment.
4.The learned Magistrate erred in not taking into account time spent in custody.
The first two grounds can be dealt with together. Mr Katsaras, counsel for the appellant, argues that there was an error in imposing a sentence of imprisonment or alternatively, if there was no such error the term of imprisonment which was imposed was manifestly excessive. Mr Katsaras argues that in a sense the appellant was a victim himself because he had paid $4,000 over a period of time to “Elizabeth Hunt”. This took place over about a year before the offending. Added to that Mr Katsaras emphasised that a term of imprisonment was not justified because the appellant was an unsophisticated man with an alcohol problem and was unknowingly duped into committing the offences. He emphasised the fact that the appellant did not know that the property involved in this offending was tainted. He also argues that even if the term of imprisonment is justified it was manifestly excessive because the appellant did not know that what he was doing was wrong and he was an unwitting pawn for devious scammers. He argues that a starting point of nine months was, in all the circumstances, manifestly excessive.

In my view, the sentencing Magistrate was correct in his assessment of the seriousness of this offending, even allowing for its bizarre nature and the gullibility of the appellant. The very section itself is concerned with behaviour short of actual knowledge that the property was tainted. In many ways, this could be described as a relatively serious example of this offending, bearing in mind that the appellant had ample warning that the property was tainted. He had had his account frozen and he ignored the investigator’s warning and opened an account with a different bank. Despite his lack of intelligence as described by Mr Katsaras, he did not make obvious enquiries as to why it was necessary to have his bank account in Australia used to transfer monies in the way described to him. I agree with the sentencing Magistrate as to the serious and growing problem of cybercrime. I endorse the remarks he made concerning that problem. It is a particularly nasty form of theft because of the anonymity of the perpetrators and the potential for enormous losses. In this case the amounts were not insignificant and the victims were the members of a staff superannuation fund.
I find that the sentencing Magistrate was correct in imposing a term of imprisonment and that term that he imposed was not manifestly excessive. In relation to grounds 3 and 4, in the exercise of his discretion the Magistrate made allowance for the appellant’s alcoholic problems and lack of education and indeed his infatuation with “Elizabeth Hunt” by suspending all but one month of the sentence. I can find no error in the exercise of that discretion.
Mr Katsaras further argues that the sentencing Magistrate erred in not taking into account time spent in custody. The appellant spent a period of one month and five days in custody, from 1 October 2019 until the day he was sentenced on 5 November 2019. The Magistrate did not deduct that period from the head sentence but rather backdated the sentence of imprisonment to be served to 1 October 2019. Mr Katsaras argues that although the term of imprisonment to be served was one month, at the date of sentence, he had served one month and five days. The backdating of the sentence by one month until 1 October 2019 meant the appellant spent an extra five days in custody.
The questions of backdating a sentence and making allowance for time spent in custody in setting a term of imprisonment are discretionary matters. There is clear authority that in almost every occasion time spent in custody, as a matter of fairness should be reflected in the term of imprisonment. However, in the present case, as the appellant was going to be released at the date of sentence, the failure of the sentencing Magistrate to adjust the sentence to one month and five days to be served as distinct from one month is not an appealable error.
Conclusion
I dismiss the appeal.