The Queen v Bi

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

CRIMINAL DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CR-19-01925;
CR-19-01908
CR-19-01826; CR-19-01909
CR-19-01822
CR-19-01823; CR-19-01910
CR-19-01911; CR-19-01827

THE QUEEN

HAOCHU BI
MINGCHE WENG
LIANGLIANG YANG
RUXIN ZHENG
SHULIANG ZHENG

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JUDGE:	O'CONNELL
WHERE HELD:	Melbourne
DATE OF HEARING:	14, 15, 16, 17, 18 September, 7, 8 October & 10 November 2020
DATE OF SENTENCE:	17 December 2020
CASE MAY BE CITED AS:	The Queen v Bi & Ors
MEDIUM NEUTRAL CITATION:	[2020] VCC 2103

REASONS FOR SENTENCE
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Subject:CRIMINAL LAW
Catchwords: Dealing with money to the value of $100,000 or more reasonably suspected of being the proceeds of crime; Total cash dealt with approximately $3.25 million; Tobacco importation with the intention of defrauding the revenue; Total amount evaded by main offenders approximately $2.6 million; Sophisticated and carefully executed offending; Serious example of offences; Material distinction drawn between offenders on the basis of roles and personal circumstances; Pleas of guilty with significant utilitarian value; Third party hardship found in respect of two offenders; Deportation; Cooperation in respect of confiscation proceedings; Offending requiring emphasis on general deterrence.
Legislation Cited: Crimes Act 1914 (Cth); Criminal Code Act 1995 (Cth); Proceeds of Crimes Act 2002 (Cth); Sentencing Act 1991 (Vic).
Cases Cited:The Queen v Pan [2020] VCC 940; Kim v The Queen [2016] VSCA 238; Kao v The Queen [2019] VSCA 84; Nguyen v The Queen [2019] NSWCCA 44; DPP (Cth) v Taiber [2018] VCC 1560; DPP (Cth) v Lebdeh [2018] VCC 1913; The Queen v Choi [2017] SASCFC 54; Islam v The Queen [2016] NSWCCA 233; Almada v The Queen [2015] NSWCCA 19; Linggo v The Queen [2017] NSWCCA 67; R v Yangton Pan [2017] VCC 1842; Shi v The Queen (2014) NSWCCA 276; R v Nguyen, Pham, Truong & Nguyen [2014] VCC 455; Wong v The Queen [2013] VSCA 52; Barakat v DPP (Cth) [2020] VSCA 185; ; R v Sim [2019] VCC 168; R v Medalian [2019] 133 SASR 50; R v To [2018] VCC 2043; Hussein v The Queen [2016] VSCA 211; R v Keefer [2016] VCC 1805; R v Saleh [2015] NSWCCA 229 Markovic v The Queen (2010) 30 VR 589; Cross v The Queen; [2019] VSCA 310; Borg v The Queen [2020] VSCA 191.

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APPEARANCES:	Counsel	Solicitors
For the Commonwealth Director of Public Prosecutions	Ms R. Champion	Commonwealth Director of Public Prosecutions
For the Accused BI	Mr I. Crisp
For the Accused WENG	Mr H. Rattray	Cathay Lawyers
For the Accused YANG	Ms A. Yuan	Cathay Lawyers
For the Accused R. ZHENG	Dr T. Alexander with Mr H. Kirimof	Wiin Lawyers
For the Accused S. ZHENG	Mr T. Antos	Cherrywood Legal

HIS HONOUR:

Haochu Bi, Mingche Weng and Ruxin Zheng, you have pleaded guilty to one charge that between 21 April and 13 August 2018, at Melbourne and Sydney, you, together with unknown others, jointly dealt with money it being reasonable to suspect that such money was the proceeds of crime and at the time of dealing the value of the money was $100,000 or more (first Indictment, charge 1).
Shuliang Zheng, you have pleaded guilty to one charge that between 1 and 2 May 2018, at Melbourne and Sydney, you, together with Haochu Bi, Mingche Weng, Ruxin Zheng and unknown others jointly dealt with money it being reasonable to suspect that such money was the proceeds of crime and at the time of dealing the value of the money was $100,000 or more (first Indictment charge 2).
Liangliang Yang, you have pleaded guilty to one charge that between 9 and 13 August 2018, at Melbourne and Sydney, you, together with Mingche Weng, Haochu Bi, Ruxin Zheng, Yan Qun Pan and unknown others jointly dealt with money it being reasonable to suspect that such money was the proceeds of crime and at the time of dealing the value of the money was $100,000 or more (first Indictment, charge 3).
On a separate Indictment, you, Haochu Bi, Mingche Weng, Ruxin Zheng and Shuliang Zheng have each pleaded guilty to one charge that between 7 March and 18 August 2018 at Melbourne you jointly imported tobacco with the intention of defrauding the revenue (second Indictment, charge 1).
At the plea hearing, Ms Champion, who appeared on behalf of the Commonwealth Director of Public Prosecutions, tendered and read to the court a prosecution opening for plea of 17 August 2020, setting out the circumstances of what could loosely be described as the money laundering offending. A separate prosecution opening for plea of 30 April 2020 was tendered and read to the court in respect of the importation of tobacco offending.
Mr Crisp, on your behalf Haochi Bi, Mr Rattray, on your behalf Mingche Weng, Mr Alexander and Mr Kirimof on your behalf Ruxin Zheng, Mr Antos on your behalf Shuliang Zheng and Ms Yuan on your behalf Liangliang Yang, accepted that the openings accurately summarised the circumstances of your offending and could form the factual basis for sentence.
The following summaries are largely based upon those openings. However, it should be noted that each of the openings were detailed and lengthy and that which follows could not hope to capture all aspects of the offending.
For ease of reference, I will refer to each of you by your surname, save for Ruxin Zheng and Shuliang Zheng, who will be identified by their first name. Although it may not be entirely accurate to refer to the offending relating to dealing with money of more than $100,000 reasonably suspected of being the proceeds of crime as ‘money laundering’, for convenience I will do so as a form of shorthand.

Circumstances of offending – money laundering

In early 2018, an investigation was commenced into the activities of Bi, Weng and Ruxin utilising electronic and physical surveillance. That investigation revealed that the three of you conducted an ongoing illicit business operation involving cash collections, cash deliveries and fund transfers. These activities were designed to avoid detection by authorities.
In particular, three large collections of cash were identified as having occurred in Sydney on 26 April 2018 (approximately $1 million), on 2 May 2018 (approximately $1.5 million) and on 13 August 2018 (approximately $750,000). The sum total of cash across all collections was therefore in the order of $3.25 million.
The three of you were principals in planning and carrying out each of these cash collections, however, you enlisted Shuliang to assist with the second collection, and Yang and a further co-offender who has already been sentenced, Yanqun Pan, in relation to the third collection.
As to Ms Pan, on 23 June 2020 she pleaded guilty to her involvement with respect to the third cash collection and on 25 June 2020 was sentenced to be imprisoned for a period of 9 months. I further ordered that she be released after the service of 3 months of that sentence upon her entering into a recognizance release order for a period of 12 months in the sum of $1000. These sentencing remarks, particularly as to the third cash collection, should be read in conjunction with my reasons[1] in sentencing Ms Pan.
[1] The Queen v Pan [2020] VCC 940.
The three charged cash collections occurred in a wider context which made it reasonable to suspect the money collected was the proceeds of crime. Those circumstances included the recorded conversations between you where money transfers, cash collections/deliveries and exchange/commission rates were discussed and negotiated.
For example, Weng arrived in Australia from China on 20 April 2018. Before his arrival, on 25 March 2018 he spoke on the phone with Bi, where Bi said:
I am the son-in-law of Zheng’s… In Australia, the Taxation Office has a function to check any transactions over ten thousand dollars, then the account is checked by the Taxation Office… Also, it is quite risky if this is a funds transfer… Unless it is cash, in which case I can help you with it… Having the funds frozen is still a very real risk… And also the risk to have the transaction examined… There is a severe crackdown on money laundering in Australia at the moment… But it would not be a problem for me to get rid of two million dollars cash for you.
Weng responded, ‘It would be good if we could get hold of an account opened by… Chinese tourists… They perhaps place more scrutiny over locals’ funds movements with substantial amounts’. Bi said, ‘The customer I have found here only needs two million Aussie, and he is one of those who are always gambling… You confirm there is stock first… Then I will have no problem finding a customer for you… Actually I have quite a number of them at the moment’.[2]
[2] Prosecution Opening for Plea of 17 August 2020, at para [27].
In planning and organising the first cash collection, all three of you were in frequent communication. For example, on 21 April 2018 at 3:27pm, Weng spoke by phone to Ruxin. Ruxin said, ‘The other party is too scared to collect from Sydney. Wasn’t it said last time that the one million and five hundred thousand can be delivered here?’. Weng replied, ‘He did say so last time, but he also confirmed he could not do this on a long term basis… What do you think should be done?’. Ruxin replied, ‘If you really want to do it, just take a trip…Fly down and catch a bus back. Is it only to be collected?’. Weng asked, ‘Is it confirmed that it is needed on this side?’. Ruxin said, ‘My son-in-law has asked his friend to get the party to get a screen shot of the account to prove there is sufficient funds’. Weng said, ‘Go to collect on Sunday, the money can be given to him on Monday…’. Ruxin replied, ‘Fly there in the morning of Sunday…Two people catch a flight there early…collect the money…and catch a bus back immediately’. Weng said, ‘Right, wait for me to re-confirm this’. Ruxin then agreed.[3]
[3] Ibid, at para [31].
The reference in that conversation by Ruxin to ‘the other party’ being ‘too scared’ is said to be a reference to Bi.
The conversations captured on 25 April 2018, the day before the first collection, provide some sense of how you operated and the roles you each played. In a telephone conversation between Bi and Ruxin, Bi asked ‘Am I going to Sydney with [Weng] tomorrow? Their side has confirmed already’. Ruxin said, ‘…[Weng] will get you to book air tickets?’. Bi responded, ‘I will confirm with him for one more time’. Ruxin said ‘Just ring to ask [Weng]’.
A minute later, Bi spoke with Weng. Bi asked if they were going to Sydney tomorrow. Weng said yes. Weng asked if the time had been confirmed with Bi. Bi said it was confirmed for noon. Weng told Bi to buy tickets and said ‘I will get your father-in-law to transfer some Australian Dollars to you’.
About twenty minutes later, Weng spoke with Ruxin. Weng said, ‘The appointment is at noon tomorrow, so heading to Sydney tomorrow morning…the flight is almost ten thirty…I got your son-in-law to book it’. Ruxin said ‘…You go with my son-in-law then. How do I deal with the one hundred thousand dollars I will receive?’. Weng responded, ‘You can take it to so-and-so…Yi Ling’. Weng said he would send Ruxin the phone number.[4]
[4] Ibid, at paras [57] – [59].
It is important to point out that the reference in that passage to $100,000 does not form part of the charged conduct. Rather, it is to be taken into account only as providing context to the charged acts. There are a number of references of that type in the prosecution opening and the same approach is taken with respect to each uncharged act.

The first cash collection

On 26 April 2018 at 8am, Weng and Bi flew to Sydney with an unindicted co-offender, Yuhong Zeng. Weng rented a car at Sydney airport to be returned at Melbourne airport in two days. Bi then received instructions via text from those providing the cash to attend 39 Edward St, Bondi.
At 12:12pm that day, police observed and filmed Weng’s hire car parked opposite 30 Edward St, Bondi. They then observed a Caucasian male approach the car and speak with the occupants. The male then walked back across the road and obtained a suitcase on wheels. He walked behind your car out of sight before reappearing and engaging in conversation through the driver's window. He took what looked like a mobile phone from someone in your car and appeared to look at the screen of the phone given to him and compare it with his own phone by holding it side-by-side. He then went back behind the vehicle out of sight. Weng then got out of the car and also went behind vehicle out of sight. Eventually, the Caucasian male emerged and walked back across the road without the suitcase. Weng got back into the car and drove off.
Monitoring of Bi’s mobile phone revealed that at the time of those observations he was speaking with an unknown male about whether he had a banknote which he had apparently forgotten. He was, however, able to show a photo of the note on his mobile phone which was a necessary pre-condition to the handing over of the cash. The Caucasian male also gave him a Blackberry mobile phone and, later that day, its password. Bi then drove back to Melbourne.
The amount collected was approximately 1 million dollars. Bi had initially been offered 1.7 million. He was also offered future collections of 1.5 million dollars each day, and even as much as 2 or 3 million.
That night, Bi spoke with his mother on the phone. He said, ‘I had to go to Sydney first thing this morning... Then drove for 8 hours to get back... To collect one million dollars in cash... The boss was going with me… I was only the interpreter and driver... We are operating in the white and grey markets at the same ... I will have 200,000 if AUD $10,000,000 is dispatched every month.’ In answer to the question from his mother as to whether what he was doing was illegal, Bi responded, ‘Sometimes, it is, you know, as long as there is a customer, I don't have to do other things, money doesn't go through my account, there is no evidence whatsoever... Even if there is, it is not on me’. He went on to say, ‘Wait until I make three to found hundred thousand a month in Australia, then I will purchase a property...’.[5]
[5] Ibid, at para [92].
On 27 April 2018, $295,000 in cash was deposited in bank accounts operated by Weng and Ruxin.
On 28 April 2018, Ruxin was recorded as speaking with an unknown male in order to recruit him to assist in the business. Ruxin said that he would be:
[M]ostly collecting money and delivering money. The pay from this is rather good… The risk is not too high, because not much attention is paid to these things here... I picked you out of the people from my home town to come over... The other day, I was dealing with so much money that my back was bent... My son in law is very capable, you know, he went to Sydney two days ago to bring back one million... You just need to help with the driving... Also, count money.[6]
[6] Ibid, at para [100].

The second cash collection

On 1 May 2018, preparations were made for a further cash collection in Sydney. For example, Weng and Ruxin spoke that evening. Weng said, ‘I have received a phone call from overseas, saying the money is firm, can be picked up tomorrow. But he will contact you tomorrow morning to confirm the time. Also he said…something like they will give you another mobile phone for you to ring them, to organise a location for the handover of the money’. Ruxin responded, ‘I will leave at ten o'clock’.[7]
[7] Ibid, at para [110].
That night, Ruxin, Bi and Shuliang drove up to Sydney, arriving early on the morning of 2 May 2018. At a location near the previous collection in Bondi, they met with a man identified as ‘Frank’ and collected approximately 1.5 million dollars from him.
Arrangements were then made for further dealings to dispose of the cash collected. For example, Weng spoke with Ruxin in the early evening where Weng asked, ‘Are you still there?’, to which Ruxin responded, ‘Yes… 25 transactions have been made already, but they have not arrived yet, I am getting them to check’.[8] That night, they drove back to Melbourne.
[8] Ibid, at para [123].
On 3 May 2018, Weng and Ruxin deposited a total of $249,900 in bank accounts operated by them.
It is clear that from early May through June and July 2018, there were a number of transactions or dealings with large amounts of cash. For example, on 7 May 2018, Ruxin, his wife Ms Pan and Bi flew to Sydney to collect cash and drove back in a hired car.
Another example occurred on 15 June 2018 when Bi asked Weng whether the ‘one thousand’ was still available in Perth. Weng responded there was, if there was someone available to pick it up. Bi then said, ‘My plan with Perth is, if I can get the customer in Sydney to pick it up from Perth, then the handover can happen over there... The customer is the boss of a listed company in China who has to get the money laundered out here’.[9]
[9] Ibid at paragraph [145].
Those sorts of dealings refer to uncharged acts that contextualise the offending. As I have sought to make clear, you are not to be punished for those matters.

The third cash collection

In my sentencing remarks concerning Ms Pan, I summarised the third cash collection as follows:
In the lead up to that date (13 August 2018), lawfully intercepted telephone calls showed Mr Weng, Mr Zheng and Mr Bi making arrangements for the arrival and distribution of large amounts of cash. The prosecution alleged that late on the evening of Sunday 12 August 2018, Mr Bi spoke to you on a phone that was registered to your husband. In that telephone call, you are said to have asked for information about your flight to Sydney. You were told by Mr Bi that he would send the flight number to you shortly.
At 5:30am the next morning, you and Ms Yang boarded a flight from Melbourne to Sydney. At 7:20 am, you hired a Toyota Camry Altise sedan at Sydney Airport from a subsidiary of Hertz Rental. Upon hiring that car, you provided your real name and identification details. The rental agreement was for one day and it required that you return that car to Tullamarine Airport in Victoria.
At 8:08am that morning, your phone, or at least the phone which was being used by you at that time, was registered to a tower located at Bondi in Sydney.
During that day, 13 August 2018, telephone intercept material showed further arrangements being made by Mr Weng and your husband for the provision of a large amount of money to be received that evening. The prosecution case against you alleges that you and Ms Yang, whilst in Sydney on that day, collected approximately $750,000 in cash and drove it back to your home address at 263 Serpells Road, Templestowe. At that time, you were living at that address with your husband, Mr Zheng, your son, Shuliang Zheng, and Mr Bi.
At about 8:44pm that evening, Mr Weng arrived at 263 Serpells Road in a silver Audi sedan. He parked the car adjacent to the front door, left the vehicle and entered the house.
About six minutes later, Mr Weng left the house carrying a bag. He got into his Audi and started the ignition, at which time police intercepted his car and arrested him. A large open top brown paper bag was located in the driver's side footwell of the car. It contained $249,850 in numerous large bundles of Australian cash. This is almost exactly the same amount of cash that had been arranged by your husband to be delivered to a person who had been identified as ‘Chief Chen’ in the telephone intercept material.
At the time or shortly after Mr Weng was arrested, police knocked on the front door of the residence at 263 Serpells Road and that door was opened by your husband, Mr Zheng. A search warrant was executed and police went upstairs to the living area. As they did so, they called out 'Police, search warrant.'
Ms Yang was in the kitchen family room area at the time and seen to be carrying a bag over her shoulder. One police officer, Federal Agent Hyde, called out 'Police, don't move.' Ms Yang started running towards the back door with Mr Hyde following. He saw you in the family room, kitchen area. Ms Yang opened the back door, dropped the bag outside and closed the door. Mr Hyde saw the bag was opened and saw that it contained numerous bundles of Australian fifty dollar notes. The bag in fact contained $490,415 in cash.
In the living room, police located a cash counting machine with cash loaded in it and lying around it on the floor. A room came off the kitchen and hallway and the machine was located within two metres of the hallway door and was visible from the hallway. The amount of cash in around the machine was $9980.
Inside the house at the time were Mr Weng, Mr Zheng, Ms Yang and yourself. Mr Bi and Shuliang Zheng arrived later as the search continued. Everyone was arrested.[10]
[10] The Queen v Pan [2020] VCC 940 at [19] – [27].

I also referred to evidence recovered by investigators from the phones of Bi, Ruxin and Weng in the following terms:
On 12 August 2018 at 11:05am, Mr Bi sent a message to you (Ms Pan), 'Money collection address 90 Francis Street, Bondi Beach NSW 2026.’
On 12 August 2018 at 11:26pm, he sent you a photograph of flight QF498 booking and the message, 'When you get the car tomorrow, send me the model, colour and licence plate.'
At 8:05am on 13 August 2018, you sent him a photograph of a silver Toyota, focused on the New South Wales registration plate, CL27GC. You left an audio message with Mr Bi stating, 'Just confirming, is the car gold, yes?' The response was, 'The address is the same as the money collection address, which is the same as the $200,000 address.'
At 8:18am, you sent a message to Mr Bi, 'Tell them/him/her that we have arrived. Can collect money to change.' At 8:36am, Mr Bi messaged you, 'Arrived?' You responded, 'Arrived. Arrived at 8:10. Where we picked up the 2 pieces.' An interpreter's note states that ‘2 pieces’ is Cantonese slang for $200,000.
You sent a message also at that time stating 'Half hour arrived to airport.
It's quite fast. One hour arrived.'
On that day, at 3:25pm, Mr Bi sent you a message, 'Return the car to the Hertz at Melbourne Airport, the car rental company…’ ‘Follow the sign at the airport.' You responded by stating, 'Ok.'
Phones seized from Mr Zheng and Mr Weng at the time of their arrest contained close up images of $5 and $10 notes which were taken at times approximately coinciding with collection dates. These images focused on the unique serial numbers of those notes.[11]
[11] Ibid n 10, at [31] – [37].

Circumstances of offending – Tobacco importation

Investigators also determined that Bi, Weng, Ruxin and, to a lesser extent, Shuliang were involved in a syndicate importing tobacco products into Australia with the intention of defrauding the revenue. For that purpose, you all imported cigarettes which were concealed in legitimate consignments of floor tiles. The tiles were destroyed in the process of extracting the hidden cigarettes.
The shell company established in Melbourne to facilitate and legitimise the imports was known as Three Gold Leaf Pty Ltd (‘Three Gold Leaf’). An equivalent shell company in the name of Eastern Tiles Whole Sales Pty Ltd (‘Eastern Tiles Whole Sales’) was later established in Sydney for the same purpose.
On 11 January 2018, ASIC records show that Three Gold Leaf was registered by Linda Fu who was listed as the company director and secretary. In fact, Ms Fu was a director in name only. She was paid $5000 by a male matching the description of Bi to perform that role.
In late February or early March 2018, Bi, using the name ‘Mark’, engaged ATSL Pty Ltd (‘ATSL’) to facilitate customs clearance of future imports by Three Gold Leaf. The contact details recorded by ATSL against each consignment for Mark included the mobile phone number used by Bi.
A total of eight consignments were imported into Melbourne by Three Gold Leaf. The first three of those consignments contained tiles only. They were used by all of you as a means of legitimising the operation as a tile importing company to ensure that future consignments containing tobacco products would pass through customs undetected. Tobacco was detected concealed within five subsequent consignments.
Three consignments were imported into Sydney by Eastern Tiles Whole Sales. The first two of those consignments contained tiles only. The third was initially found to only contain tiles, but a subsequent search carried out months later located cigarettes. That third consignment was not charged and is not encompassed by the charge to which you have all pleaded guilty. Clearly, the legitimate consignments into Sydney were carried out in anticipation that subsequent containers containing tobacco would not be checked by customs.
The following table summarises the consignments imported by the syndicate including the number of cigarettes and the duty and GST evaded:

Consignment	Date of arrival	Contents	Duty & GST evaded	Offenders
Melbourne - 1	3 March 2018	Tiles only
Melbourne - 2	24 March 2018	Tiles only
Melbourne - 3	7 April 2018	Tiles only
Melbourne - 4	16 April 2018	Tiles and 360,000 concealed cigarettes	$281,342.16	WENG, RUXIN, BI
Melbourne - 5	25 May 2018	Tiles and 691,000 concealed cigarettes	$540,020.64	WENG, RUXIN, BI, SHULIANG
Melbourne - 6	7 July 2018	Tiles and 691,200 concealed cigarettes	$540,176.94	WENG, RUXIN, BI, SHULIANG
Sydney - 1	10 July 2018	Tiles only
Sydney - 2	14 July 2018	Tiles only
Melbourne - 7	6 August 2018	Tiles and 792,000 concealed cigarettes	$618,952.75	WENG, RUXIN, BI, SHULIANG
Sydney - 3	11 August 2018	Tiles and 789,600 concealed cigarettes	$617,077.14	Uncharged
Melbourne - 8	18 August 2018	Tiles and 792,000 concealed cigarettes	WENG, RUXIN, BI, SHULIANG
Total charged Total uncharged	$2,599,445.24 $3,216,522.38

Consignment 1 – Melbourne

On 3 March 2018, a container arrived into Australia with the following information supplied:
a. Address: 9 Reservoir Road Narrewarren North Victoria, 3804;
c. Company: Three Gold Lead Pty Ltd;
d. Supplier: Fuzhou Longhaode Trade Co Ltd;
e. Goods declared as ‘FAK’;
f. Goods detected ‘TILES AS DECLARED’; and
g. Phone number 0426192320.
ABF examination of the container confirmed that it contained tiles as described. However, telephone intercepts revealed that you were planning on importing cigarettes in future containers and concealing the importation from law enforcement.
On 7 March 2018, Ruxin called Bi, informing him that Weng knew someone who could take responsibility for the delivery of the cigarettes, ‘so we don’t have to shoulder all the risks’. Later that day, Bi told Ruxin that the likelihood of the consignment being x-rayed and inspected by customs was greater when it was consigned to a ‘farm address’, and directed Bi to start looking for a warehouse to rent immediately.
After the consignment arrived into Australia, a warehouse was located at 1/53 Howleys Road, Notting Hill, Victoria. The destination address for the first container was changed to this address and on 20 March 2018 the container was delivered there.

Consignment 2 – Melbourne

On 24 March 2018, a container arrived into Australia with the following information supplied:
a. Port of loading: Xiamen, China
b. Address: 9 Reservoir Road Narrewarren North Victoria, 3804;
c. Company: Three Gold Lead Pty Ltd;
d. Supplier: Guangzhou Yangtao Trading Co Ltd;
e. Goods declared as ‘Consolidation Cargo’;
f. Goods detected ‘AS DECLARED’; and
g. Phone number 0426192320
ABF examination of the container again confirmed that it contained tiles as described.
On 25 March 2018, Ruxin and Weng spoke on the phone about a container expected to arrive the following month. You discussed logistics including how to remove, store and deliver stock. The conversation was concerned with how to minimise the risk associated with your activities such as monitoring effects of ongoing supply on market rates, restricting the number of buyers and not disclosing your address to buyers.
On 28 March 2018, Weng told Ruxin that the first consignment containing tobacco was due to be dispatched the following day, having already passed Chinese Customs. A number of conversations occurred around this time between Ruxin and Weng as to the best methodology for unpacking and distributing the tobacco. These included renting short-term residential houses to unpack and distribute stock each time a container arrived, and using a passport and credit card from someone in China to make the booking so that, ‘it can’t be traced’.
Ruxin and Weng also discussed expanding the size and scale of your operations if the importation of the third consignment was successful, including setting up a third company. Ruxin noted that the containers were examined by Customs ‘at random’, and in light of this, that you should make the next container ‘bigger since this way is relatively safe’.
On 3 April 2018, the second container was delivered to the Notting Hill warehouse.

Consignment 3 – Melbourne

On 7 April 2018, a container arrived into Australia with the following information supplied:
a. Port of loading: Xiamen, China;
b. Address: 1/53 Howleys Road Notting Hill Victoria 3168;
c. Company: Three Gold Lead Pty Ltd;
d. Supplier: Xiamen Mingxinjie Import & Export Co Ltd; and
e. Goods declared as ‘TILES’.40
ABF examination of the container again confirmed that it contained tiles as declared. The container was delivered to the Notting Hill warehouse on 13 April 2018.

Consignment 4 – Melbourne

On 17 April 2018, a container arrived into Australia with the following information supplied:
a. Port of loading: Xiamen, China;
b. Address: 1/53 Howleys Road Notting Hill Victoria 3168;
c. Company: Three Gold Lead Pty Ltd;
d. Supplier: Xiamen Mingxinjie Import & Export Co Ltd; and
e. Goods declared as ‘TILES’.
ABF examination of the container detected 360,000 cigarettes contained in tiles. The total duty evaded was $255,765.60 and the GST evaded was $25,576.56. The total amount evaded was $281,342.16.
On 24 April 2018, the container was delivered to the Notting Hill warehouse. The next day, Ruxin told Weng that he had carried out the disassembly with his son Shuliang, his son-in-law Bi and a friend of Bi’s.
That evening, Weng attended the Notting Hill warehouse and told Bi to take two vehicles, both with eight hundred cartons, to distribute the cigarettes. On 25 April 2018, Bi, told Ruxin that all 175,000 cigarettes had ‘gone’.
On 8 May 2018, Ruxin, and Weng spoke about expanding the operations to Sydney. Ruxin told Weng that Bi had made an appointment with an accountant in Sydney to register a company and that once a location was found, containers would be sent immediately. The use of a new supplier was also discussed.
On 25 May 2018, Eastern Tiles Whole Sales was registered. Bi arranged for a male named Heng Soon Ngu to be listed as the company director and secretary.

Consignment 5 – Melbourne

On 29 May 2018, a container arrived into Australia with the following information supplied:
a. Port of loading: Xiamen, China;
b. Address: 1/53 Howleys Road Notting, CAN 6237;
c. Company: Three Gold Lead Pty Ltd;
d. Supplier: Xiamen Mingxinjie Import & Export Co Ltd; and
e. Goods declared as ‘CERAMIC MOSAIC CUBES AND THE LIKE’.
ABF examination of the container detected 691,000 cigarettes concealed in tiles. The total duty evaded was $490,927.86 and the GST evaded was $49,092.78. The total amount evaded was $540,020.64.
On 5 June 2018, the container was delivered to the Notting Hill warehouse. Bi and another man were present. Later that evening, Weng discussed making another order for cigarettes. On 11 June 2018, Bi told Weng and Ruxin that he had found a warehouse in Sydney for which no background or company check was required.
On 25 June 2018, Ruxin, and Weng discussed a ‘Special Police Taskforce’ targeting cigarette smuggling in Melbourne and a plan to divert future consignments to Sydney. On 30 June 2018, Ruxin spoke about the expected arrival of a container into Sydney the following week. Ruxin told Weng that Bi had arranged a warehouse in Sydney. Bi was in Sydney on 1 and 2 July 2018.

Consignment 6 – Melbourne

On 7 July 2018, a container arrived into Australia with the following information supplied:
a. Port of loading: Xiamen, China;
b. Address: 1/53 Howleys Road Notting Hill Vic 3168;
c. Company: Three Gold Lead P/L;
d. Supplier: Xiamen Mingxinjie Import & Export Co Ltd;
e. Goods declared as ‘CERAMIC MOSAIC CUBES AND THE LIKE’; and
f. Phone number 0426192320
ABF examination of the container detected 691,200 cigarettes concealed in tiles. The total duty evaded was $491,069.95 and the GST evaded was $49,106.99.82 The total amount evaded was $540,176.94.
On 9 July 2018, ATSL sent Three Gold Leaf an invoice totalling $2901.46 and the following day Ruxin instructed Bi to pay it as fast as possible to avoid delay.
On 10 July 2018, Bi told Ruxin that the Melbourne container had cleared customs without being checked.
On 11 July 2018, the container was delivered to the Notting Hill warehouse. Bi and another male were also present at the warehouse that day. Over the following days, the cigarettes were distributed to customers.
On 13 July 2018, Bi and Ruxin discussed the supply of cigarettes to cigarette and wine shops. That day, Ruxin encouraged Shuliang to promote the sale of cigarettes in exchange for a commission. Shuliang undertook to assist the following day.
On 14 July 2018, Bi and Ruxin discussed their desire for a greater share of the illegally imported tobacco market.

Consignment 1 – Sydney

On 10 July 2018, the first container imported by Eastern Tiles Whole Sales arrived into Sydney with the following information supplied:
a. Port of loading: Xiamen, China;
b. Address: 122/7 Hoyle Avenue, Castle Hill NSW;
c. Company: Eastern Tiles Whole Sales Pty Ltd;
d. Supplier: Fuzhou Shenqxinghui Trade Co Ltd;
e. Goods declared as ‘Tiles’; and
f. Goods detected ‘AS DECLARED’.
ABF examination of the container confirmed that it contained tiles as described. Three days later, Bi told Ruxin that the first Sydney container had been inspected by Customs which he described as ‘good news’.

Consignment 2 – Sydney

On 14 July 2018, the second container imported by Eastern Tiles Whole Sales arrived in Sydney. The following information was supplied as part of clearance of the container:
a. Port of loading: Xiamen, China;
b. Address: 122/7 Hoyle Avenue, Castle Hill NSW;
c. Company: Eastern Tiles Whole Sales Pty Ltd;
d. Supplier: Fuzhou Shenqxinghui Trade Co Ltd;
e. Goods declared as ‘Tiles’; and
f. Goods detected ‘AS DECLARED’.
ABF examination of the container confirmed that it contained tiles as described.
Throughout the month of July 2018, Bi was in regular contact with an unknown male to whom he spoke about the sale and distribution of large quantities of cigarettes. On 16 July 2018, he delivered cigarettes to the unknown male who agreed to pay $30,000. The unknown male tried to order more ‘White Wolf’ brand cigarettes and Bi responded that he could not continue to provide cigarettes on credit.
On 18 July 2018, Bi continued to negotiate the sale of various cigarette brands to the unknown male. That same day, Ruxin called ‘Mr Yang’, an associate in China. He asked about ‘Double Happiness’ brand cigarettes, indicating a ‘friend’ was after a large quantity.
On 19 July 2018, the unknown male indicated he had $50,000 and Bi responded that this was enough to settle the account. The same day, Weng made enquiries with an associate about renting a warehouse in Sydney, telling him it was to store building materials of up to three containers and that he would like it for one to two years.
On 29 July 2018, Bi and the unknown male discussed how many ‘Septwolves’, ‘Golden Leaf’ and ‘Yunyan’ brand cigarettes had been delivered to the unknown male. He spoke about a potential mix up and referred to the vast quantity of cigarettes they had imported. That same day, Bi called Ruxin and told him he had met with a potential major customer who specialises in supplying to retail stores. Police surveillance captured Shuliang working at the Notting Hill warehouse that day.
On 30 July 2018, Bi told Ruxin that the warehouse was too small to receive the next container and to pass onto Weng that he should hire another one.
On 1 August 2018, Bi and Shuliang spoke about a project in Sydney where Shuliang could expect to sell 20,000 cartons and take $100,000 a month.
On 2 August 2018, Bi indicated to the unknown male that he was expecting more ‘goods’ to arrive in one to two weeks time. He said he would have 800 to 900 cartons of mid-range cigarettes available. Bi negotiated a price with the unknown male and confirmed that he only accepted cash. He discussed the illegal tobacco trade in other Australian cities. He told the unknown male that he sourced his own clientele for low-range cigarettes and encouraged the unknown male to sell greater quantities of cigarettes.

Consignment 7 – Melbourne

On 6 August 2018, a container arrived into Australia with the following information supplied:
a. Port of loading: Xiamen, China;
b. Address: 1/53 Howleys Road Notting Hill Vic 3168;
c. Company: Three Gold Lead P/L;
d. Supplier: Xiamen Mingxinjie Import & Export Co Ltd;
e. Goods declared as ‘TILES; and
f. Phone number 0426192320.
ABF examination of the container detected 792,000 cigarettes concealed in tiles. The total duty evaded was $562,684.32 and the GST evaded was $56,268.43. Therefore, the total amount evaded was $618,952.75.
On 10 August 2018, the unknown male agreed to buy 900 to 1000 cartons of ‘Nanjing’ brand cigarettes from Bi. Bi informed him the handover would occur in the next two days and that the next container was expected to contain another 4000 cartons.
On 11 August 2018, the unknown male warned Bi to be cautious, but he told him not to worry. In discussion with the unknown male Bi made frequent reference to his dealings with other customers and a number of specific shops. On that day, Bi and the unknown male agreed that he would provide 1500 cartons of cigarettes for $150,000.
On 11 August 2018, consignment 7 was delivered to the Notting Hill warehouse. Shuliang was at the warehouse to receive the container. That evening, Shuliang and Bi left the warehouse in separate vehicles containing cartons of cigarettes. Ruxin and Shuliang also delivered cigarettes to a customer.
On 12 August 2018, Shuliang confirmed that the container was being unloaded that day. Police surveillance footage captured Ruxin, Weng, Bi and Shuliang exiting the Notting Hill warehouse via the front door.

Consignment 3 – Sydney

On 11 August 2018, the third Sydney container arrived into Australia with the following information supplied:
a. Port of loading: Xiamen, China;
b. Address: 122/7 Hoyle Avenue, Castle Hill NSW;
c. Company: Eastern Tiles Whole Sales Pty Ltd;
d. Supplier: Fuzhou Shenqxinghui Trade Co Ltd;
e. Goods declared as ‘Tiles’; and
f. Goods detected ‘AS DECLARED’.
Whilst initial ABF examination of the container found that it contained tiles, a secondary examination conducted 11 months later detected 789,600 cigarettes concealed in the tile packaging. The total duty evaded was $560,979.22 and the GST evaded was $56,097.92. The total amount evaded was $617,077.14.
This consignment did not form part of the charge because it was not detected until after arrest.

Consignment 8 – Melbourne

On 18 August 2018, a container imported by Three Gold Leaf arrived into Australia with the following information supplied:
a. Port of loading: Xiamen, China;
b. Address: 1/53 Howleys Road Notting Hill Vic 3168;
c. Company: Three Gold Leaf P/L;
d. Supplier: Xiamen Mingxinjie Import & Export Co Ltd;
e. Goods declared as ‘TILES; and
f. Phone number 0426192320.
ABF examination of the container detected 792,000 cigarettes concealed in tiles. The total duty evaded was $562,684.32 and the GST evaded was $56,268.43. The total amount evaded was $618,952.75.

Arrest and interview

As I indicated earlier in the context of summarising the money laundering offending, on 13 August 2018 at approximately 8:50pm, the AFP executed a search warrant at 263 Serpells Road, Templestowe. Weng, Ruxin, Bi and Shuliang were all arrested. In the course of the search of those premises, a number of items relevant to this offending were seized including 528 undeclared cartons of cigarettes, electronic devices containing evidence of tobacco importation and business records relating to Three Gold Leaf and Eastern Tiles Whole Sales.
A further search warrant executed at the Notting Hill warehouse the following day resulted in the seizure of 1652 undeclared cartons of cigarettes along with gloves, scissors and box cutters which had been used to extract the cigarettes concealed within the tiles.
Following arrest, each of you declined, as is your right, to participate in a record of interview with investigators.

The role of each offender

Having set out in some detail the offending it is I think convenient at this point to summarise in a general way what I have found to be the roles played by each of you in this offending. When I come to deal with the submissions advanced on behalf of each of you, I will deal with some more specific aspects of the parts you played in this offending.

Weng

In respect of the money laundering, you, Weng, appeared to be the ultimate decision-maker as to whether cash collections would proceed. Your role involved providing direction to Ruxin and Bi.
In respect of the tobacco importations, you were the principal offender. You made what was described as the high level business decisions supervising and directing Ruxin and Bi. You instructed them on matters related to the importation, transportation and distribution of the cigarettes. You also for example, set up the shell company and negotiated the terms of an agreement to rent a warehouse.

Ruxin

You, Ruxin, were effectively a business partner of Weng’s in the three cash collections. You were intimately involved in planning and organising each episode of offending. You enlisted Shuliang, Yang and Ms Pan to assist.
In respect of the tobacco importation, you played a senior role, effectively second in charge to Weng. Together with Weng, you sourced and negotiated contracts for the supply of the cigarettes from China. On one occasion, you attempted to recruit a Chinese national known to you into the syndicate. You also oversaw the day-to-day activities of Bi, who in turn was responsible for coordinating the receipt of consignments into Australia, unloading and disassembling them as well as the distribution of the cigarettes to customers.

You, Bi, played a very active role in the money laundering offending.. You were principally involved in arranging the physical collection of the cash and directed Ms Pan with respect to the third collection.
With respect to the tobacco importation, because you had the most proficient facility for English, your primary responsibility involved managing the logistics of the importations such as gaining customs clearance, sourcing a warehouse, unloading containers and distributing cigarettes for sale. However, you did so at the direction of either Weng or Ruxin.

Shuliang

Shuliang, your role, in respect of the money laundering offending, was limited to the collection of cash on the second occasion, albeit that there is uncharged offending which contextualises that involvement.
In relation to the tobacco offending, you essentially reported to Bi and assisted with logistics such as unloading containers and assisting with some distribution of cigarettes. Your level of participation was much more limited than the principal offenders.

Yang

Your role was limited to the third collection in respect of the money laundering offending. Although you occupied a position of trust and responsibility, for reasons that I will explain below, I take the view that your role was less culpable than Ms Pan.

Legal principles

Before moving to the subjective circumstances of each of you and the submissions made on your behalf, I should make some general observations about the nature of the offending to which you have pleaded guilty and the legal principles that apply.

Section 400.9 of the Criminal Code Act 1995

It must be borne steadily in mind that dealing with large quantities of cash objectively suspected of being the proceeds of crime is an insidious criminal activity which potentially legitimises criminal profits. For that reason, those who might be tempted to engage in such activity must appreciate that the cost of doing so will be stern punishment.
In passing sentence in respect of Ms Pan, I referred generally to the sentencing principles to be applied in cases involving money laundering by reference to decisions such as Kim v The Queen[12] and Kao v The Queen[13]. There were six propositions distilled from those cases that provide a helpful framework.
[12] [2016] VSCA 238.
[13] [2019] VSCA 84, (‘Kao’).
Firstly, Division 400 of the Commonwealth Criminal Code creates a series of offences which are structured by reference to the state of mind of the accused and the amount of money dealt with. Section 400.9, under which you were all charged, sits at the bottom of that structured series of offences.
Secondly, the maximum penalty for this offence is three years' imprisonment.
Thirdly, no mental element as to the provenance of the money dealt with needs to be proved in respect of this charge.[14]
[14] In dealing with submissions put on behalf of Weng, I deal with the relevance of the offender’s state of mind where an accused pleads guilty to this offence. See paras [155] – [158] below.
Fourthly, to sentence an offender on the basis that they knew, were reckless or negligent as to the money being proceeds of crime, would in effect sentence an offender for a more serious offence. That must be avoided.
Fifthly, an assessment of the seriousness of a particular offence will focus on the precise circumstances of what the offender did. For example, what constitutes the dealing for the purposes of the offence, over what period of time the offence was committed, the number of transactions, the amount involved, the role of the offender, whether they were the instigator, how trusted they were, and so on.
Sixthly, the amount of money involved is a highly significant, though not determinative, matter denoting the gravity of the offence.
Those six matters help guide the assessment of the seriousness of your offending. In applying those principles, I should make some general observations about the offending.
Weng, Ruxin and Bi, you were the principal offenders. You jointly dealt with 3.25 million dollars in cash reasonably suspected as being the proceeds of crime. That is a very substantial sum, some 32 times the threshold amount specified by the provision.
The charge to which you have pleaded guilty comprises three distinct episodes of offending involving three large cash collections carried out on different days and in different circumstances. Moreover, your offending was not isolated – it occurred in the context of an ongoing business in which a number of transactions were made involving large amounts of cash.
The attempts to conceal the offending were sophisticated and carefully executed. There could there be no doubt that the offending was carried out for profit. As you, Weng, said to Ruxin in the context of the second collection, ‘…do it, we should make whatever money we can...’.[15]
[15] Ibid n 2, at para [102].
Similarly, you, Bi, boasted to your mother in a conversation after the first collection that, ‘…I will have $200,000 if AUD $10,000,000 is despatched every month. 10,000,000 Australian equals to ten trips to Sydney. Actually, five trips, I will have that in five trips to Sydney’.[16]
[16] Ibid, at para [92].
There can be no question that your offending represents a very serious example of the offence of dealing with money of more than $100,000 reasonably suspected of being the proceeds of crime.
Shuliang and Yang, your involvement was limited to the single cash collections the subject of your respective charges. I note some suggestion as to greater involvement in the business by you, Shuliang, having regard to a telephone conversation you had with Bi on 30 June 2018[17], however, in the absence of other evidence, I cannot place much weight on that call alone.
[17] Ibid, at para [150].
You each dealt with substantial amounts of money: in your case, Shuliang, $1.5 million, and in your case, Yang, $750,000. You both took elaborate steps to avoid detection in each of those collections and clearly the physical dimensions of that amount of cash would have been obvious. You each performed an important task in the overall offending conducted by the principal offenders.
As I found with respect to Ms Pan, the offences committed by each of you represent quite a serious example of dealing with money of more than $100,000 reasonably suspected of being the proceeds of crime.
I will deal with your individual circumstances shortly, but I must now say something about the general principles applicable to sentencing with respect to the tobacco importation.

Tobacco importation

In respect of the tobacco importation, Bi, Weng and Ruxin, you pleaded guilty to a single rolled-up charge that represents five separate tobacco importations. In the case of Shuliang, your plea to this charge is referable to the last four importations.
The sorts of considerations that are relevant for the purposes of assessing the seriousness of your offending include the sophistication of the offending, the period over which the offences were committed, the quantity of the tobacco imported and the amount of duty defrauded or evaded, and whether the offenders were involved in the distribution and sale of tobacco products within Australia.[18]
[18] See R v Zhang [2017] SASCFC 5 per Kourakis CJ, Vanstone J and Chivell AJ at [37] – [38].
The reasons why this is a serious offence were helpfully explained by Niall JA, with whom Forrest and Priest JJA agreed, in Barakat v DPP[19]:
Because of the financial rewards that can be associated with offending of this kind (where the goods are subject to relatively high taxes and duty), the difficulty of detection and the erroneous view that offending of this kind is lower level order criminality or ‘victimless’, it is necessary to place emphasis on general deterrence. That remains so, even where the offender is otherwise of good character and unlikely to offend again. Relatedly, offending of this kind often involves, as it did in this case, premeditation and planning. There is the opportunity to reflect on the risk and reward equation. It is necessary that sentencing courts visit the offending with suitably stern sentences so as to deter those who might otherwise be attracted to the high returns fortified by the difficulty in detection.
A review of the authorities reveals the importance of general deterrence and that, as a result, custodial sentences generally are called for.[20]
[19] [2020] VSCA 185.
[20] Ibid, at [54] – [55].
Applying those considerations to the instant case, it is clear that this was an elaborate criminal enterprise. A company was established for the appearance of legitimacy and dummy importations of tiles were used to test the system and create a further appearance of legitimacy. A false identity was used to coordinate customs clearance and a warehouse was rented in an urban area to unpack the tobacco because it was believed that a rural address might attract the attention of the authorities. The business was also expanded into Sydney.
The motive for this offending must have been financial gain. Although there is no evidence as to actual quantum, clearly the importations would not have continued if they were not profitable, particularly given the risk. For reasons I will discuss when dealing with Shuliang, it cannot be suggested that the level of financial reward that he could have expected was anything approaching that likely received by the principal offenders.

Procedural history

I turn now to the procedural history of this matter. After the arrests on 13 August 2018, you were all charged and bailed in respect of these matters.
All four of you charged with the tobacco offending, Weng, Bi, Ruxin and Shuliang, entered a plea of guilty when you were committed to this Court on the basis of the hand-up brief on 9 September 2019. There is no issue that your pleas were therefore entered at an early stage in the proceedings.
Between 12 August 2019 and 14 August 2019, and on 9 September 2019, a contested committal proceeding was conducted in respect of the money laundering allegations.
On 7 May 2020, Bi indicated his willingness to plead guilty to that charge.
On 16 June 2020, Weng indicated his willingness to plead guilty to that charge.
On 3 June 2020, Ruxin indicated his willingness to plead guilty to that charge.
On 15 June 2020, Shuliang indicated his willingness to plead guilty to that charge.
On 16 June 2020, Yang indicated her willingness to plead guilty to that charge.
The pleas in mitigation took place on 14, 15, 16, 17 and 18 September, 7 and 8 October 2020 and 10 November 2020.

Personal history

I will now turn to each of your personal circumstances.

Weng

Mingche Weng, you are now 46 years of age. You were 44 when you committed these offences. You have no previous convictions either in Australia or China.
You were born in Jinjiang, a medium-size city located in south-eastern China. You describe yourself as having had a normal childhood. Your parents owned and ran a clothing and textile business in Jinjiang and were relatively well off.
You are the second of three children and both of your siblings continue to reside in China. Your older brother runs a civil construction company and is aware of your current predicament in Australia. He remains supportive of you. Your younger brother cares for your mother who is now in her 70’s, is in poor health and still resides in Jinjiang. She and your younger brother have not been told about these matters for fear that it might exacerbate your mother’s ill-health.
You attended school in Jinjiang until you were 14 years of age. You then left school and at that very young age started a business selling jewellery. You rented premises in the local shopping centre and bought and sold jewellery for a modest profit. At the age of 18 you started working in your parents clothing and textile business managing logistics. When you turned 20 you commenced a diploma in economics which you completed within two years. At 26, you purchased your own business in Jinjiang buying and selling fabrics and opened a shop for that purpose. You still own that shop which continues to operate.
In 2008, when you were about 34, you moved to a larger city, Xiamen, where you started another business exporting fabrics and clothing to other countries. You ran this business until you migrated to Australia in 2013.
You have been married now for 17 years to Liangliang Yang, a co-offender in relation to the money laundering offending, and there are two children of that marriage: a son aged 14 and a daughter aged 12. In 2013, you sold the business and family home in Xiamen and used the proceeds to help establish your family in Australia.
You settled in Melbourne renting a house in Mont Albert and purchasing a café in Box Hill. You also started a wine export business. These ventures appeared to be reasonably successful and you shortly afterwards bought a family home in Bulleen for $1.2 million. In the period 2014 to 2017, your children attended local primary schools and you bought and sold two further family homes in the same general area. You also purchased an apartment in Lonsdale Street, Melbourne for $510,000. The lease expired on the café in 2016 at which time you sold its assets, however you kept the wine export business operating.
In 2017, you decided to return to China with your family. By that stage, you and your wife had been granted permanent residency in Australia and you wanted your children to have some experience of Chinese language and culture before ultimately resuming living in Australia in 2019. You also wanted to personally oversee the sale of the wine you had been exporting and stockpiling in China. Your intention was for the children to undertake their secondary schooling in Australia in 2019.
Your counsel, Mr Rattray, explained that at the time of your return to China, you decided to use what he described as ‘alternative money remittance arrangements’ to transfer your savings back to China. In simple terms, the arrangements involved transferring money to accounts in Australia operated by Chinese nationals, after which corresponding amounts were transferred in Chinese currency to your Chinese bank accounts. It was said that this method avoided some institutional handling costs and could be negotiated at a much more favourable exchange rate.
After you successfully negotiated the transfer of your own funds, counsel suggested that you developed an interest in these alternative arrangements and the business opportunities they presented.
In late 2017, you conducted a transaction in which you asked your friend Ruxin to receive and deposit $80,000 in cash into your bank account in Australia, whilst a corresponding sum was withdrawn from your account in China. You say you made $600 profit on that transaction. That transaction apparently triggered a report to law enforcement authorities that resulted in the commencement of the investigation into you and your co-offender’s activities.
Mr Rattray further explained that an associate of yours, Qinglu Hong, became aware of your use of these alternative arrangements. He ran a number of Australian businesses and had a large amount of Australian currency that he wanted to transfer to China using these alternative arrangements. It was said that you, Ruxin and Bi discussed the opportunities this presented and decided to conduct this business primarily on behalf of Mr Hong.
It was suggested that you believed that all of the cash the subject of the money-laundering charge belonged to Mr Hong and that it was derived from his legitimate businesses as opposed to drug trafficking or some other illegal activity. Some comments in the recorded telephone conversations were said to support those contentions.[21] It follows that your moral culpability should be reduced.
[21] The specific submissions on this point were set out in the ‘Outline of Submissions in Response – Addendum’ of 17 September 2020.
Two points may be made about those contentions. First, there was some discussion on the plea as to whether I could have regard to your state of mind in mitigation given that absolute liability applies to s 400.9(1)(b) and (c) of the Criminal Code. Ms Champion, relying upon Kao, submitted that an offender’s state of mind as to the provenance of the cash was irrelevant for sentencing purposes. In my view, Kao does not establish that an offender’s state of mind cannot mitigate sentence. At the very least, that question remains open.
In any event however, and this is the second point, I am not at all satisfied that you believed the provenance of the 3.25 million was legitimate. There may be some comments in the recorded conversations that might support that position, but they are isolated, lack context and are wholly unsupported by any direct evidence. In the absence of a sufficient evidential foundation, I cannot proceed on the basis that you believed the source of these funds was legitimate.
It follows that you will be sentenced on the basis that the cash that you dealt with was reasonably suspected to be the proceeds of crime. Further, consistent with what was expressly stated in Kao[22], you will not be sentenced on the basis that you knew, or were reckless or negligent, that the cash was the proceeds of crime. To be clear, your state of mind neither mitigates nor aggravates your offending and will be treated as being neutral.
[22] Ibid n 13, at [67].
In a similar vein it was put that you had transferred $750,000 to China using the alternative remittance arrangements which was now lost ‘as a direct result of his offending’.[23] As I indicated in discussion, in the absence of evidence which is capable of being tested, I cannot accept that assertion.
[23] ‘Outline of Submissions on Plea in Mitigation’ of 3 September 2020, para [64], and ‘Affidavit in Support of the Applications of Compensation and Exclusion’ of 18 March 2019, paras [16] – [17].
In relation to the tobacco charges, Mr Rattray explained that you met with a man in China, Youhong Zeng, and agreed to become his agent in Australia for his business of exporting Chinese tobacco into Australia. It was clear to you from the outset that the importation and distribution of the tobacco was illicit because it did not pay Australian taxes. It was said that you were to receive $10,000 AUD for each container arriving in Australia.

In his written submissions, Mr Rattray put your role in the following terms:
WENG instructs that his role in the offending was in many ways to be ZENG’s man in Melbourne. He was to ensure, as best he could, that the containers exported by ZENG were received in Melbourne and that they were safely stored until they could be distributed to sellers by BI. WENG was expected to remain in regular contact with ZENG and to pass him information from BI about the market for illicit tobacco in Melbourne.[24]
[24] ‘Outline of Submissions on Plea in Mitigation’ of 3 September 2020, para [59].
The prosecution took issue with these assertions and pointed to evidence which was inconsistent with you merely overseeing the arrival of the containers. The evidence summarised above when setting out the circumstances of this offending demonstrated, it was submitted, that you were clearly involved in the distribution and sale of cigarettes by supervision of orders, movement and sale.
I accept the prosecution submissions on this point. The objective evidence shows that you played an active ‘hands on’ role that went well beyond what was suggested in your instructions to counsel. To take but one example from the summary of prosecution opening:
On 25 April 2018, at around 5pm, RUXIN told WENG that he had completed dissembling ‘half’. He confirmed to WENG that he was at the warehouse and had carried out the disassembly with his son (SHULIANG), his son-in-law (BI) who had returned from Sydney by that stage, as well as a friend of BI’s.
Later that evening, WENG physically attended the unpacking location and told RUXIN that it was quite risky to be unpacking the stock at night. RUXIN responded that they ‘can’t be seen anyway, people can’t see from the outside.’
At one point, BI sought instructions from WENG in relation to the distribution of the cigarettes. WENG told BI to take two vehicles, both with eight hundred cartons.[25]
[25] Summary of Prosecution Opening For Plea of 30 April 2020, paras [39] – [41].
There were many other examples that make this point, such as going to the warehouse where the tobacco was unpacked, discussing unpacking and distribution with Bi, and discussing the risk of detection with Ruxin.
Mr Rattray sensibly accepted that each set of offending was serious, but submitted that the money laundering offence should be regarded as being less serious, bearing in mind that you cannot be sentenced in respect of that matter as if the cash the subject of that charge was actually the proceeds of crime. Rather, the gravamen of that charge, as I have indicated, is concerned only with dealing in cash that is reasonably suspected to be the proceeds of crime. In that context, he also submitted, the principle of totality needed to be carefully applied.
It was acknowledged that you appeared to play the most significant role of all the offenders in respect of the cash dealing offence but that nevertheless, your moral culpability should be assessed as being in the middle of the range.
As to the tobacco offending, Mr Rattray submitted that it should also be characterised as mid-range offending. It was acknowledged that your role was significant, and, it was suggested, on par with Bi.
I have already made findings generally as to your role, which as I have indicated was as the principal offender. As to the submission that the nature and gravity of the offending should be seen as ‘mid-range’, I do not think it helpful to describe what you did by reference to a range. Suffice to say that it seems to me that both sets of offending represent very serious examples of the type of offences committed.
You have, for the first time in your life, been unemployed since you were charged with these offences. You have felt acutely, I accept, the hardship your offending has caused to your wife and children. Mr Rattray submitted you felt particularly badly about involving your wife in the money laundering activity. These matters were canvassed in your letter of apology of 19 September 2020 which I have taken into account.
As for other matters in mitigation, your counsel relied upon:
·your plea of guilty;
·the utilitarian value associated with that plea of guilty;
·your previous good character;
·what he submitted were your good prospects for rehabilitation; and,
·the matters which he submitted in combination would make custody significantly more onerous for you, which included your very limited English, the limited social support you have in Australia and the ongoing impact of COVID-19 restrictions on persons in custody.
I accept that all of these matters should attract significant weight in the sentencing calculus.
Two further matters were the subject of discussion on the plea. The first related to whether you should receive any allowance for cooperation in the confiscation proceedings. The second related to how the prospect of your deportation should be taken into account.
As to the issue of confiscation, I’m satisfied that you cooperated with the authorities by withdrawing your application for exclusion from the forfeiture orders sought. Yesterday you consented to the making of the forfeiture order on the Lonsdale St property. The value of you and your wife’s interest in that property was approximately $340,000.
Section 320(a) of the Proceeds of Crimes Act 2002 enables this Court to take that cooperation into account in your favour, and I do so.
As to the issue of deportation, you indicated through your counsel that you wish to try to remain in Australia upon completion of your sentence. Ordinarily, having committed the offences you have and receiving the sentence that will be imposed, it would be expected that you would be deported. The situation is complicated, however, by the fact that your two children are now Australian citizens and you may therefore have an argument to remain in Australia.
It follows that there is a good deal of uncertainty as to whether you will be deported or ultimately permitted to remain in Australia. Mr Rattray submitted that the safest course in these circumstances was to take that uncertainty into account in the sense that it is likely to make your time in custody more onerous. I accept that submission and I have taken the uncertainty associated with your future immigration status into account in mitigation.
The prosecution submitted that the objective seriousness of both sets of offending, taking into account the emphasis required to be given to general deterrence, warranted the imposition of a term of imprisonment with a fixed non-parole period. Some measure of cumulation between the offending was also required.

Ruxin

Ruxin Zheng, you were born in Dongguan in southern China on 9 August 1970 and are now 50 years of age. You were 47 and 48 when you committed these offences. You have no previous criminal convictions in either China or Australia.
You describe yourself as having had a difficult upbringing essentially because your family was very poor. Your grandfather had been a successful businessman but lost his wealth after the revolution in China. I was told that you grew up with a very strong ambition to achieve financial success and provide a much better life for your family. In some respects, you achieved that ambition only to find yourself in custody in respect of this offending.
You were the youngest of five children. All of your siblings reside in China and, until your incarceration, you financially supported three of them who were impoverished. In total, the financial support you provided to them amounted to a commitment of approximately $50,000 AUD per year.
You were charged with these offences in August 2018 and remained on bail until 7 July 2020 when you chose to go into custody. In the time since you were charged with these offences, both of your parents have passed away – your father in December 2018 and your mother in July 2019. The conditions of your bail prevented you from attending their funerals. I appreciate that must have been very difficult for you. Your counsel submitted that I should take that matter into account as part of the punishment you have already suffered as a result of committing these offences, and I do so.
You completed your primary and secondary schooling in Dongguan leaving school at the age of 17. You immediately went into business retailing fruit and vegetables. Two years later, when you were 19 years of age, you started a second business as a seafood distributor exporting dried marine products from Hong Kong. Although the business involved a great deal of work, it thrived and enabled you to achieve your ambition of financial success and provide for your extended family.
In 1993, you married Yanqun Pan. As I mentioned earlier in these remarks, I sentenced your wife in respect of her involvement with respect to the third cash collection in June of this year. I was informed that after her release on a recognizance release order, she has returned to China.
You have three children, Xiaoling Zheng, who is married to the co-offender Haochu Bi and was the subject of Dr Carroll’s evidence, Shuliang Zheng (also a co-offender) and Jiajun Zheng (referred to as ‘Kevin’) who is 13 years of age.
Kevin wrote a letter, which was tendered on your plea, which describes how he travelled alone to Hong Kong and ultimately to Dongguan during July and early August this year. He went through an arduous process of travel and quarantine but is now safe with his relatives. The fallout from your offending, together with his mother’s, his brother’s and his brother-in-law’s offending, has had a significant impact on him. Having listened carefully to Mr Alexander, who appeared with Mr Kirimof on your behalf, I have no doubt that you feel acutely the problems you have caused to your young son.
Returning to the narrative of your personal history, in 1999 you started another business in China which continues to operate profitably to this day. The business is known as Dongguan Xie Yi Plastic Manufacturing Pty Ltd and is generally concerned with plastic manufacturing. You continued to expand the business until 2014 when you came to Australia for the first time. It has a gross yearly turnover in the order of $6.5 million AUD and employs about 30 staff. You retain a 60 percent share in the business which has been operated by your business partner whilst you have been on bail and remand. I was told that you receive a director’s fee of $2000 per month and an annual dividend as a shareholder of $200,000. Those amounts comprise your income.
You came to Australia as a tourist in 2014 and determined that you should settle here and provide what you thought would be a better life for your children. In May 2015, you migrated to Australia under the auspices of a business innovation and investment visa.
Almost immediately after you arrived, you met Mingche Weng at his café in Box Hill. You became friends and he assisted you and your family with practical advice as to such things as renting a property, purchasing a car, arranging schooling for the children and the like. It was suggested that you were particularly impressed with Weng and saw him as something of a role model.
During the period between May 2015 and August 2018, you travelled quite frequently to Dongguan, China to attend to your plastics business and visit your elderly parents. You found it difficult, however, to establish a successful business here in Australia. According to your counsel, you became increasingly frustrated with your lack of success, and it was in that context you made the ill-fated decision to become involved in the illegal tobacco importation business with Weng.
Mr Alexander submitted that you came to this country with the admirable intention of building a new life for you and your family in Australia. Instead, you have, as he put it, completely destroyed that opportunity and in the process entangled your wife, your eldest son and your son-in-law in your criminal offending. Mr Alexander made it plain that you accept responsibility for doing so. You say as much in your letter of apology.
It was suggested that although you knew that you were engaging in illegal conduct, you didn’t appreciate how very serious that conduct should be regarded. Two years on, having seen your wife imprisoned and now yourself remanded in custody with your son, you can be in no doubt as to its seriousness.
Mr Alexander submitted that with respect to the dealings in cash, you acted at the direction of Weng and had no direct contact with the source of the funds. It was put that you relied on Weng’s assertions that the cash was legitimately derived.
I should make it plain now that I treat your counsel’s assertions about your state of mind as to the provenance of the cash in the same way as I have in respect of Weng. In the absence of credible evidence supporting those assertions, your state of mind will be treated as neither mitigating nor aggravating sentence.
With respect to the tobacco importations, Mr Alexander submitted that your role was to assist Weng with the ‘on-the-ground’ aspects of the importations.
It was asserted that you were to receive $3,500 per month for assisting Weng, although you instructed that you had not actually received any money from the venture. Again, in the absence of any credible evidence, I am unable to accept that assertion. It seems to me that your involvement in this business was intense, sustained and carried with it considerable risks. You would not have undertaken this venture but for what must have been some sizable financial gain. The evidence does not permit that gain to be quantified.
Counsel particularly relied on your early plea of guilty in the tobacco matter and the significant utilitarian benefit of that plea and the plea in respect of the cash dealing offence. He also submitted that you are remorseful and that as you say in your letter of apology, you ‘repent and reflect each day in the past two years’.
The prosecution urged that I should be somewhat sceptical of your claimed remorse, particularly as your letter of apology asserts ignorance of the law. Having carefully considered that matter, I take the view that you are remorseful. You have seen your whole family dragged through the criminal justice system and you shoulder a good deal responsibility for that state of affairs. I accept that you feel that acutely and that in turn you are very sorry for having offended in this way.
In addition, counsel relied on your good character. As I indicated, you do not have any previous convictions. You have not subsequently offended and have complied with all of your bail conditions. Your business partner and the general manager of your company, Xingyi Wang, in a translated written reference, lauds your honesty and trustworthiness in dealings with suppliers and clients and your devotion to your family.
A former business partner and close friend, Chongqing Zheng, also provided a written reference. He writes that he has witnessed acts of charity on your part on a number of occasions, indeed there was evidence that you had donated surgical masks to elderly members of the Chinese community here in Australia. Mr Zheng believes that your offending is very much inconsistent with the character of the man he has known for the last 20 years.
It was submitted that in light of that material, you had good prospects for rehabilitation. I accept that is so.
As to the issue of deportation, I accept that you have lost your opportunity to permanently settle in this country which had been your ambition for you and your family. I will take that matter into account, however your wife and youngest son have returned to China and you intend to follow once you have completed your sentence. In those circumstances, imprisonment will not be as onerous as it would be if you had no life to return to in China.
On the question of confiscation, like Weng, you have cooperated with the authorities by withdrawing your application for exclusion from the forfeiture orders sought. I will take that cooperation into account in your favour.
Mr Alexander further submitted that whilst this was, in both instances, a ‘moderately serious example’ of the offence, the sentencing considerations relevant to COVID-19, the lack of family support whilst you are in custody because your wife has returned to China and the lack of English rendering imprisonment difficult, should, together with the other matters he relied on, operate to significantly moderate the term of imprisonment to be imposed. I have already made plain that I regard both sets of offending as very serious examples of these offences.
As in the case of Weng, the prosecution submitted that the objective seriousness of both sets of offending justified the imposition of a term of imprisonment with a fixed non-parole period.

Haochu Bi, you were born in Guangzhou China on 12 June 1997 and are now 23 years of age. During the time of the offending you were 20 and 21 years of age. You have no previous convictions in this country or elsewhere.
Your parents separated when you were just three years old and thereafter your mother became your primary carer. Your father worked as a businessman in communications technology whilst your mother worked for a French company that sold ophthalmological equipment.
You moved with your mother to Shanghai where you attended primary school. Because of your mother’s work commitments, you were largely raised by your grandparents. You also managed to maintain a positive relationship with your father, although that deteriorated somewhat after he re-partnered.
You told your assessing psychiatrist, Dr Danny Sullivan, that your time during your primary schooling years was unhappy. There was apparently a lot of discrimination against students that came from southern China, you were routinely beaten by other students and often felt fearful and distressed.
In 2009, you returned to Guangzhou to live with your father and attend secondary school. It seems you finished year 10 before travelling to Australia in late 2012. You attended an English language school for six months and then during 2013 you enrolled at Mount Waverley Secondary College. Because of the difficulties you experienced in getting along with your step-mother, you were sent to the United States to continue your education. You lived in Utah and attended the Meridian School for about 18 months, leaving after completing year 12. You showed aptitude in maths and chemistry but struggled with subjects such as American history and English.
You returned to Australia in the latter half of 2017 and commenced, but did not complete, a radio and television course at Holmesglen TAFE. Whilst you were at TAFE, you met your future wife, Xiaoling Zheng. She is the daughter of Ruxin Zheng and Yun Quan Pan and the sister of Shuliang Zheng. Ms Zheng fell pregnant and you married in December 2017. Your daughter, Janice, was born in April 2018, not long after your offending commenced.
You initially lived as a couple with your father and step-mother in late 2017 and early 2018, but due to ongoing personality problems with your step-mother, you went to live with your wife’s parents at their home in Doncaster. At that time, you were working in food delivery on a very modest income. In that setting you were offered, it was said, the opportunity to assist Ruxin Zheng in the business of importing cigarettes. You had the advantage, unlike the others, of speaking fluent English and so you were able to provide valuable practical assistance to the business.
In his assessment of you, Dr Sullivan found no evidence of any serious mental illness, personality difficulties or antisocial traits. He diagnosed your current reported mood as at April 2020 as being consistent with ‘an adjustment disorder with mixed anxiety and depressive reaction, mild in severity’. He also opined that you appeared somewhat immature and likely to be vulnerable in prison due to your appearance and cultural background. There was no indication, however, that mental disorder would render you more vulnerable whilst in custody.

Also for the purposes of your plea hearing, Dr Andrew Carroll, a consultant forensic psychiatrist, assessed your wife, Ms Zheng. The purpose of that assessment was to determine what medical or psychiatric conditions your wife may have and how she and your daughter might be affected by your incarceration. Dr Carroll gave oral evidence at the plea hearing and was cross-examined.
In Dr Carroll's view, your wife has suffered from significant depressive symptoms since your daughter was born. It appears that she has never been able to cope with the role of soothing her daughter when she becomes upset. Her symptoms were strongly indicative of pathologically diminished maternal bonding due to a post-natal depressive illness that has persisted.
In this context, you had taken over as the daughter’s primary carer and she looked to you to fulfil her daily needs. It was suggested that you were your daughter Janice’s primary attachment figure and that essentially her mother, your wife, was emotionally absent.
Dr Carroll was particularly concerned that your wife had reported having thoughts of murder-suicide involving herself and her young daughter. She met the diagnostic criteria for a ‘major depressive episode of at least moderate severity with onset in the postnatal period’. Dr Carroll had very real concerns about your daughter's welfare if she were to be left entirely reliant on your wife's care in the event that you were incarcerated.
After his assessment, Dr Carroll referred your wife to a mental health service and to a crisis assessment team. He felt that your daughter was not currently at risk but that situation might change if your wife does not have appropriate support. The risk of harm to your daughter will escalate if you are incarcerated.
In his submissions on your behalf, Mr Crisp emphasised that you were only 20 and 21 years of age the time of this offending, you had no prior convictions and, as Dr Sullivan observed, you present as being particularly immature. He submitted that the authorities relevant to youthful offenders require that rehabilitation be emphasised to a much greater extent than the more punitive sentencing purposes.
You were married at a very young age and found yourself in the difficult position of having to provide for your family in circumstances where your wife became incapable of caring for your young child. You responded to those problems by embracing the opportunities that appeared to present themselves through your father-in-law and his associates.
You pleaded guilty at an early stage to the offences involving the importation of tobacco, and whilst you pleaded guilty to the money laundering matter at a later stage, you had done so before all other offenders, which was of some significance. It was submitted that your pleas were indicative of remorse, facilitated the course of justice and merited a substantial discount in the sentence that otherwise would be imposed.
It was also submitted that your prospects for rehabilitation must be regarded as being very good having regard to your youthfulness, your lack of prior convictions, your lack of antisocial tendencies, your personal responsibilities to your family and your work history generally. It was further submitted that exceptional circumstances had been established such that the sentence imposed on you should be mitigated because of the hardship your imprisonment would create for your wife, and particularly for your daughter.
Your mother, Grace Li, who remains in Shanghai, provided a helpful written personal reference for the purposes of your plea hearing. She confirms that you were provided with a loving environment in which you spent your early years. She speaks to you and your daughter almost every day on a video call and stresses how very dependent she and your wife are upon you. I will take that reference into account.
For reasons which will become clear, I do not believe that the prospect of deportation is a realistic matter to take into account in your case. Recently, you consented to orders resulting in the forfeiture of your apartment in Doncaster and agreed not to pursue an exclusion order. In those circumstances, s 320(a) of the Proceeds of Crime Act 2002 operates to mitigate sentence by reason of what I accept is your genuine cooperation.
Mr Crisp submitted that the term of imprisonment imposed on you for all of this offending should allow for your immediate release on a recognizance release order.
Ms Champion acknowledged that despite the role you played in this offending which was, to say the least, enthusiastic, you were young, immature and subject to the direction or influence of older offenders including your father-in-law, therefore less punitive sentencing considerations came into play.
Moreover, you were responsible for a young family where there was, according to the expert evidence, an imminent risk of a catastrophic reaction in your wife endangering your young child, were you to be incarcerated. In those circumstances, which are quite out of the ordinary, the Crown accepted that exceptional circumstances had been made out and s 16A(2)(p) of the Crimes Act1914 was engaged.
The Crown submission in relation to your sentence was that a term of imprisonment was warranted, but that it would be within range to release you immediately on a recognizance release order.
I should indicate at this point that I accept the matters put in mitigation by your counsel. I also accept that the Crown concession was appropriately made and well founded on the expert evidence given by Dr Carroll.

Shuliang

Shuliang Zheng, you were born in Dongguan, China on 16 September 1996 and are now 24 years of age. You were 21 when you committed these offences. You also have no prior convictions either in this country or in China.
Your parents, of course, are both co-offenders in these proceedings. Your mother was to be released on 24 September 2020, and I am told she has now returned to China. Your father remains in custody with you. Your younger brother has already returned to China. It remains unclear as to whether your older sister, your niece and brother-in-law (Bi) will remain in this country or return to China.
You describe yourself as having a normal upbringing and you appear to have done sufficiently well at school. As I described when recounting your father’s personal history, you came to Australia with your family in 2015 and commenced studying automotive mechanics at Box Hill TAFE. You have also had some casual work in plastering, however, your employment opportunities were somewhat limited because you still only have a limited facility with English.
I was told that you see your career as being in the automotive industry and when this matter is finalised you hope to return to China to pursue that career.
Up until 7 July of this year, you were on bail in respect of this offending and had not committed any further offences. It was not suggested that you have any sort of a substance abuse or mental health problems.
You wrote a letter of apology which, as the prosecutor pointed out, had some similarities with your father’s letter of apology. Whilst it refers to ignorance of the law, I do not take this as an attempt to blame ignorance for your offending. Coupled with your plea, I am prepared to accept that you are remorseful for what you have done.
Mr Antos, who appeared on your behalf, relied on your previous good character, your pleas of guilty, and what he submitted was your relatively limited role in both sets of offending.
In that last respect, he emphasised that you were to be sentenced for one cash collection only, and with respect to the tobacco importation, it was clear that you did not expect the same financial reward as the principals.
For example, a discussion between Ruxin and Weng on 4 June 2018 suggests you were to be paid somewhere between $20 and $50 an hour to work for the business, and on 26 June 2018, that you were to receive a couple of hundred dollars for attending at the warehouse.[26] Those matters, it was suggested, put your role in the tobacco importations in perspective.
[26] Ibid n 24, paras [53] – [60].
Counsel emphasised that you were not to be sentenced for involvement in the first illegal importation and that your role was properly placed at the bottom of the hierarchy of offenders.
Beyond that, there were two matters in particular on which Mr Antos focused.
The first matter related to the influence of your father. It was submitted the objective evidence clearly established that your family was close and that you were very much influenced by your father. You are loyal to him, and but for his request for you to assist, it was put that it would be very unlikely that you would have offended at all.
The second matter related to your young age. As I have indicated, you were only 21 when you committed these offences and Mr Antos submitted that I should accept that you were an impressionable young man when your father recruited you for this offending.
Given your lack of previous convictions, your education and work history, the lack of any psychological or substance abuse problems, and the lessons likely to have been learned from this experience, your counsel submitted that your prospects for rehabilitation should be regarded as being excellent. Indeed, your status as a young offender, like that of Bi, requires greater emphasis on rehabilitation and less emphasis on the more punitive sentencing purposes.
Given your desire to return to China upon release, it is unlikely that the prospect of deportation should weigh on you whilst you are in prison.
The prosecution accepted that you played a lesser role and that your young age and vulnerability to the influence of your family weighed very much in your favour. Even so, it was submitted that general deterrence was of significant importance and both sets of offending warranted the imposition of a term of imprisonment coupled with the fixing of a recognizance release order after the service of some component of immediate imprisonment.

Yang

Liangliang Yang, you were born in Fujian in southern China on 12 July 1982 and are now 38 years of age. You were 36 years of age when you committed this offence. You have no prior convictions in either this country or China.
Your family was not well off materially and you had a limited education. You left school after year 10 and commenced work as a cashier and later as a clothing retail assistant. It was expected that you would contribute to your family financially and you did so.
Your parents remain in China, although they are both in poor health. They are financially dependent on your brother and your younger sister. You were married to the co-offender Mingche Weng when you were 22 years of age as a result of what your counsel described as an arranged marriage.
On your account, it does not appear that the marriage has been a happy one. You described to your assessing psychologist, Mr Bernard Healy, experiencing stress, feelings of abandonment and isolation. You were required to manage the care of the children and domestic responsibilities on your own. Your husband would frequently leave the family without informing you as to where he was going or what he was doing. There was, you said, little affection between the two of you.
There are two children of the marriage, a son aged 14 and a daughter aged 12. You stopped working at the time of the birth of your first child and worked in the family home until you and the family came to Australia in 2013.
Once you and Mr Weng purchased the café in Box Hill, you managed that café successfully until the lease expired in 2016. For much of the time that you have been on bail, you have performed similar work. Indeed, a reference was provided by your current employer, Bo Cong, for whom you have worked over the last year. She described you as an honest, dependable and trustworthy person who takes pride in their work and has become a key employee for the business.
Your children are now both Australian citizens and are settled in secondary schools in the local area. You and Mr Weng are permanent residents.
According to testing conducted by Mr Healy, you have an intellectual functioning in the below average range with a full-scale IQ of 81, meaning that some 90 percent of people around your age would perform better. His testing also revealed quite a raised level of depression which he thought was longstanding and was ‘of considerable seriousness with marked downturn in mood, having little hope for a positive future and with some suicidal ideations, with an accompanying elevated level of anxiety’.[27] Mr Healy confirmed in oral evidence that your symptoms reflected long standing chronic depression.[28]
[27] Report of Bernard Healy, psychologist, of 29 August 2020, p 9.
[28] Transcript of 8 October 2020, p 14.
Your counsel, Ms Yuan, submitted that it was inevitable that your husband would be imprisoned. If you were imprisoned, it was submitted that would cause exceptional hardship to your two children. You were both first generation migrants to Australia and have no other family or friends here capable of looking after them. Nor could they return to China where the extended family was not in a position to care for the children. The situation was complicated by the fact that they are Australian, rather than Chinese, citizens.
It followed that there were no alternative arrangements open other than the children having to go into the care of the Department of Health and Human Services. You gave oral evidence at the plea hearing on 8 October 2020 in support of this submission.
Being placed in care, it was submitted, was likely to have a severe impact on both children, particularly your son who was the subject of a psychological report and further oral evidence from Mr Healy. He formed the view that your son had developed a sense of hopelessness and a significant loss of drive and motivation. He noted that there had been thoughts of self-harm and that your son regards himself of little worth and possibly in some way blames himself for what has happened. Mr Healy's report underlines your son's psychological fragility and vulnerability.
In his oral evidence, Mr Healy expanded on his opinion concerning your son. He was assessed as being on the threshold of adolescence and in need of particular care and guidance. He had developed a separation anxiety disorder, and had become depressed and socially withdrawn at the prospect of his mother being imprisoned. There was an escalating risk of self-harm and the development of a generalised anxiety disorder in the longer term.
Mr Healy was cross-examined extensively, and I took him to firmly maintain the view that your son was at risk of serious psychological harm should you be separated from him. That was so even if the separation was for 3 months or so.
In cross-examination, Mr Healy was asked:
Ms Champion: …but would you describe the potential or possible effects on [the child] as being exceptional for a child whose parents would go into gaol?
Mr Healy: Well, they are in an exceptional category, yes, indubitably.[29]
[29] Plea Transcript of 8 October 2020 at p 28, lines 18 – 22.
Although the focus of the family hardship argument revolved around the plight of your son, there was also evidence that your daughter had suffered quite an extreme adverse reaction to her father’s imprisonment and the prospect that you also would be imprisoned.[30]
[30] Ibid, at p 49.
Ms Champion submitted that exceptional hardship had not been demonstrated. The likely hardship did not extend beyond that which might be expected when children of their age are separated from their parents. Reference was made to Markovic v The Queen[31], Cross v The Queen[32], and Borg v The Queen[33] as to the application of the relevant principles.
[31] (2010) 30 VR 589.
[32] [2019] VSCA 310.
[33] [2020] VSCA 191.
To my mind, the placement of the children in the care of the State, in these circumstances, particularly as they relate to your son, does indeed amount to exceptional family hardship. It is clear on the strength of Mr Healy’s evidence that your son suffers from a significant psychological disorder which renders him extremely vulnerable were he to be separated from you. In my view, there is a real risk, indeed I am satisfied that it is more likely than not, that your son would suffer long lasting psychological damage if he was to be placed in care whilst you were imprisoned.
Accordingly, I find that s 16A(2)(p) of the Crimes Act 1914 is engaged and that I will take into account the probable effect your imprisonment would have on your children in mitigation.
For reasons that will become evident, the prospect of deportation is not a matter which should affect sentence. As to confiscation, there is some complexity attaching to that issue in your case however it is sufficient for these purposes to recognise that you made genuine offers to resolve the confiscation proceedings and that those proceedings have now been resolved. You ultimately consented to the forfeiture of the Lonsdale Street apartment and did not pursue an exclusion order which obviated the need for what could potentially have been protracted litigation. It is accepted that your cooperation in finalising the confiscation proceedings engages s 320(a) of the Proceeds of Crime Act 2002. I have therefore taken that cooperation into account in mitigation.
Earlier in these remarks, I briefly summarised your role in the offending. There are a number of further specific matters I now need to set out with respect to the role that you played in the third cash collection.
Between August 2017 and July 2018, you were in China with your children. You were not in Australia at the time of the first and second cash collections in April and May 2018 and it was submitted that there was no evidence to suggest that you had knowledge of the illicit activities your husband had been engaging in during that period.
Your counsel also pointed to an incident that occurred at the time the police executed the search warrant on 13 August 2018, where you were asked by police whether you wanted to speak to a relative or a legal practitioner. You initially asked to do so but then declined and appeared to defer to your husband. This was indicative, it was suggested, of the dominant position your husband occupied within the relationship and your deference towards him.
Reference was then made to a telephone discussion between your husband and Ruxin on 8 August 2018 in the lead up to the third cash collection. Ruxin suggested to your husband that you and Ms Pan should collect the cash to which your husband responded, ‘Just organise for it’.
It was submitted there was no evidence that you were consulted about your participation. Nor was there any evidence that you were part of the arrangements in the lead up to the collection, or part of the discussions and communications that occurred in carrying out the collection.
The organising of the flights, the hiring of the car and the liaison with Bi were arrangements that were all handled by Ms Pan. Moreover, there was no evidence that you played any part in the arrangements that were made to distribute the money which had been collected. Your phone, together with the others, was confiscated at the time of the arrests. An interrogation of that phone did not reveal any greater involvement.
Relying on those matters, Ms Yuan submitted that a material distinction could be drawn between the role played by you and Ms Pan. In particular, the Crown had relied upon Ms Pan’s involvement in earlier uncharged offending and her awareness of the nature of the business operation her husband had been involved in to elevate her moral culpability. You, it was said, were in a different position.
Having regard to your limited education, your relatively low intellectual functioning, your financial and social dependence on your husband, your absence from Australia at the time of the earlier offending and the hardship likely to be experienced by your children should you be incarcerated, it was submitted that you should be sentenced to a term of imprisonment but immediately released on a recognizance release order.

In my sentencing remarks concerning Ms Pan, I referred to the possibility that your action in attempting to conceal the bag containing $490,415 in cash might suggest you had a greater interest in that cash than Ms Pan. Having heard your counsel on your plea, I have determined that I could not be satisfied to the requisite standard that was so.
As I understood the Crown position, it was submitted that you should be regarded as on par with Ms Pan as to your role in the third collection. Ms Champion contended that the objective seriousness of your offending and the need to give sufficient weight to the sentencing purpose of general deterrence required the imposition of the term of imprisonment to be served immediately after which you should be released on a recognizance release order.
I should indicate at this point that I accept Ms Yuan’s submission that a material distinction should be drawn between your role in the third cash collection and that of Ms Pan. Aside from the fact that Ms Pan was active in liaising with Bi in making the necessary arrangements, there is no evidential foundation for the allegation that you were participating in, or even aware of, the nature of your husband’s illicit cash dealing business. You will be sentenced on the basis, unlike Ms Pan, that your involvement was isolated and limited to the one occasion.

Utilitarian benefit of pleas of guilty

Before proceeding to sentence I wish to emphasise one matter that you should all understand has attracted significant weight in the sentencing calculus. That is the utilitarian benefit of your pleas of guilty. In dealing with your individual circumstances I canvassed other aspects of those pleas, however the economic advantage to the community your guilty pleas have achieved should be expressly acknowledged.
It became plain during the plea hearings that the scope and complexity of this matter was considerable. Eight sitting days was required to complete oral submissions. If this matter had proceeded to trial, I have no doubt it would have occupied many weeks of court time and substantial legal resources. The sentences imposed will reflect the fact that your pleas of guilty have saved that cost.

Comparative authorities

Lastly, Ms Champion referred me to an array of cases both from this court and intermediate appellate courts across the country in respect of s 400.9(1) of the Criminal Code (Cth)[34] and tobacco importation[35]. I have taken those authorities into account bearing in mind they are to be used as yardsticks which might serve to illustrate, but not define, the possible range of sentences available.
[34] Nguyen v The Queen [2019] NSWCCA44; R v Tang [2019] VCC 1857; DPP(Cth) v Taiba [2018] VCC 1560; DPP(Cth) v Lebdeh [2018] VCC 1913; R v Le & Nguyen [2018] VCC 895; R v Choi [2017] SASCFC 54; Linggo v The Queen [2017] NSWCCA 67; R v Yangton Pan [2017] VCC 1842; Islam v The Queen [2016] NSWCCA 233; Almada v The Queen [2015] NSWCCA 19; Shi v The Queen (2014) NSWCCA 276; R v Nguyen, Pham, Truong & Nguyen [2014] VCC 455; Wong v The Queen [2013] VSCA 52.
[35] Barakat op. cit; R v Sim [2019] VCC 168; R v Medalian [2019] 133 SASR 50; R v To [2018] VCC 2043; Hussein v The Queen [2016] VSCA 211; R v Keefer [2016] VCC 1805; R v Saleh [2015] NSWCCA 229.
The maximum term of imprisonment that may be imposed in respect of an offence against s 400.9(1) of the Criminal Code is three years. In respect of an offence against s 233BABAD(1) of the Customs Act the maximum term of imprisonment that may be imposed is ten years.

Sentence

I will now turn to sentence. Taking all relevant matters into account you will be sentenced as follows.

Weng

Mingche Weng, on the charge of importing tobacco products with the intention of defrauding the revenue, you will be convicted and sentenced to a term of imprisonment of 3 years. That sentence will commence this day 17 December 2020.
On the charge of dealing with money reasonably suspected to be the proceeds of crime, you will be convicted and sentenced to a term of imprisonment of 2 years. That sentence is to commence on 17 December 2022.
My intention in sentencing you is that 12 months of the sentence imposed in respect of the dealing in money reasonably suspected of being the proceeds of crime be served cumulatively upon the sentence imposed for importing tobacco products with intention to defraud the revenue.
The total effective sentence imposed will therefore be 4 years. I will fix a non-parole period of 2 years and 6 months.
I will declare that pursuant to s 18 of the Sentencing Act 1991 (‘the Act’), you have already served 91 days by way of pre-sentence detention and I will cause that declaration to be noted in the records of the Court.
Pursuant to s 6AAA of the Act, I will declare that but for your plea of guilty, you would have been sentenced to a total effective sentence of 5 years and 6 months imprisonment with a non-parole period of 3 years and 6 months.

Ruxin

Ruxin Zheng, on the charge of importing tobacco products with the intention of defrauding the revenue, you will be convicted and sentenced to a term of imprisonment of 2 years and 9 months. That sentence is to commence this day on 17 December 2020.
On the charge of dealing with money reasonably suspected to be proceeds of crime, you will be convicted and sentenced to term of imprisonment of 21 months imprisonment. That sentence is to commence on 17 September 2022.
My intention in sentencing you is that 9 months of the sentence imposed in respect of the dealing in money reasonably suspected of being the proceeds of crime be served cumulatively upon the sentence imposed for importing tobacco products with intention to defraud the revenue.
The total effective sentence imposed will therefore be 3 years and 6 months. I will fix a non-parole period of 2 years.
I will declare that pursuant to s 18 of the Act, you have already served 163 days by way of pre-sentence detention and I will cause that declaration to be noted in the records of the Court.
Pursuant to s 6AAA of the Act, I will declare that but for your plea of guilty, you would have been sentenced to a total effective sentence of 5 years imprisonment with a non-parole period of 3 years.

Haochu Bi, on the charge of importing tobacco products with the intention of defrauding the revenue, you will be convicted and sentenced to a term of imprisonment of 2 years and 3 months. That sentence is to commence this day on 17 December 2020.
On the charge of dealing with money reasonably suspected to be proceeds of crime, you will be convicted and sentenced to term of imprisonment of 18 months. That sentence is to commence 17 June 2022.
My intention in sentencing you is that 9 months of the sentence imposed in respect of the dealing in money reasonably suspected of being the proceeds of crime be served cumulatively upon the sentence imposed for importing tobacco products with intention to defraud the revenue.
The total effective sentence imposed will therefore be 3 years.
I will further order that you be released immediately upon entering into a recognizance to be of good behaviour for a period of 3 years with yourself as surety in the sum of $3000 without such security being required to be deposited.
Pursuant to s 6AAA of the Act, I will declare that but for your plea of guilty, you would have been sentenced to a total effective sentence of 3 years and 9 months imprisonment with a non-parole period of 2 years.

Shuliang

Shuliang Zheng, on the charge of importing tobacco products with the intention of defrauding the revenue, you will be convicted and sentenced to a term of imprisonment of 15 months. That sentence is to commence this day on 17 December 2020.
On the charge of dealing with money reasonably suspected to be proceeds of crime, you will be convicted and sentenced to term of imprisonment of 12 months. That sentence is to commence on 17 June 2021.
My intention in sentencing you is that 3 months of the sentence imposed in respect of the dealing in money reasonably suspected of being the proceeds of crime be served cumulatively upon the sentence imposed for importing tobacco products with intention to defraud the revenue.
The total effective sentence imposed will therefore be 18 months.
I will further order that you be released after the service of 6 months upon entering into a recognizance to be of good behaviour for the balance of the sentence with yourself as surety in the sum of $1500 without such security being required to be deposited.
I will declare that pursuant to s 18 of the Act, you have already served 163 days by way of pre-sentence detention and I will cause that declaration to be noted in the records of the Court.
Pursuant to s 6AAA of the Act, I will declare that but your plea of guilty you would have been sentenced to 2 years 3 months imprisonment and I would have directed your release on a recognizance release order after 14 months.

Yang

Liangliang Yang, on the charge of dealing with money reasonably suspected to be proceeds of crime, you will be convicted and sentenced to term of imprisonment of 9 months. That sentence is to commence this day on 17 December 2020.
I will further order that you be released immediately upon entering into a recognizance to be of good behaviour for a period of 9 months with yourself as surety in the sum of $1000 without such security being required to be deposited.
Pursuant to s 6AAA of the Act, I will declare that but for your plea of guilty, you would have been sentenced to 14 months imprisonment and I would have directed your release on a recognizance release order after 9 months.

[2020] VCC 2103

17 December 2020