R v Chase

[2018] NZHC 1022

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2012-004-014761

[2018] NZHC 1022

THE QUEEN

v

CHRISTOPHER ARTHUR ROGER CHASE

CRI-2012-004-014896

THE QUEEN

v

CRAIG WILLIAMS

Hearing:

10 May 2018

Appearances:

B Northwood for Crown

R Mansfield and S Lack for Defendants

Judgment:

10 May 2018

SENTENCING NOTES OF VENNING J

Solicitors:           Crown Solicitor, Auckland Counsel:  R M Mansfield, Auckland

R v CHASE [2018] NZHC 1022 [10 May 2018]

[1]                   Mr Chase and Williams you may remain seated. I will tell you when you need to stand. As I indicated I propose to discuss briefly some background common to you both, then to deal with you Mr Chase and then after that to deal with Mr Williams. When I have dealt with you Mr Chase you may stand down when I will tell you to.

[2]                   Christopher Chase and Craig Williams you are both for sentence today in relation to serious drug offending.

[3]                   Mr Chase you are for sentence on nine charges of importing a Class C controlled drug, one charge of possession of a Class C controlled drug analogue for sale, one charge of conspiracy to import, and one charge of selling a Class C controlled drug. In total terms you imported approximately 16.84 kilograms of the Class C controlled drugs. You also conspired to import further consignments of illegal drugs. The maximum penalty for the conspiracy charge is seven years’ imprisonment. The maximum penalty for the other charges is eight years’ imprisonment in each case. You are currently serving an effective sentence of 10 years’ imprisonment for other drug offending.

[4]                   Mr Williams you are for sentence on two charges of money laundering and one charge of conspiring to import a controlled drug. The maximum sentence for each charge is seven years’ imprisonment.

[5]                   The background to the offending and the criminal process you have been involved in is somewhat complicated and involves more than one police investigation. The offending relates to your involvement in the business or activity known as London Underground.

[6]                   Mr Chase you were the instigator or ringleader of London Underground. The business engaged in the distribution of party pills. In addition to legal highs, London Underground distributed pills containing a controlled drug analogue, 4-MEC, which mimicked MDMA (Ecstasy).

[7]                   Mr Chase you in particular were heavily involved in the marketing and distribution of that controlled drug analogue. Following a police operation which terminated in November 2011 both of you, together with a number of others, were ultimately arrested.

[8]                   On 14 August 2014 Mr Chase you were convicted following trial by jury on 14 counts of importing, selling and possessing for sale, 4-MEC powders and pills, imported and distributed for and on behalf of London Underground. You had asserted you believed the powders and pills contained 4-MMC (also known as mephedrone) rather than 4-MEC. However the jury found that both 4-MEC and 4-MMC were controlled drug analogues and a number of other defendants faced trial with you and were also convicted.

[9]                   On 27 February 2015 Woodhouse J sentenced you to an effective term of 10 years’ imprisonment for that offending.1 On 29 June 2017 the Supreme Court dismissed your appeals.2

[10]               Mr Chase, despite your arrest you continued to deal in drugs as we have heard this afternoon. A second police operation established that you had sought to re- establish the after-market section of the business and the present charges relate to the further importation and supplies of other controlled drug analogues. Again you were the principal instigator of the re-establishment of the further offending.

[11]Other parties have already been sentenced in relation to that second operation.

[12]               Mr Williams, prior to the termination of the police operation in November 2011 you had an established role in handling cash for Mr Chase. Your part was to take the cash to a money remittance service in Queen Street and to arrange for it to be sent by electronic transfer to various bank accounts in Asia as directed by Mr Chase. You did so using an assumed name “Timothy Bolton”. On occasion the funds were used to purchase more drug powders from China. Often the funds were re-routed back to New Zealand for Mr Chase’s benefit under the guise of foreign investment earnings.

1      R v Chase & Ors [2015] NZHC 317.

2      Cameron v R [2018] 1 NZLR 161.

[13]               Following the termination of the first operation and until your eventual arrest you continued concealing cash derived from drug sales, and after some months you commenced personally handling the imported powders yourself.

[14]               As I have said I propose to deal with you first Mr Chase, then return to your case Mr Williams.

Mr Chase

[15]               Mr Chase, the business you operated was a sophisticated commercial operation. You were in the business of dealing in illegal drugs to make money. By dealing in the drugs in that way you took a business risk that you might ultimately be caught and would have to pay the price. The sentence the Court imposes on you should denounce your conduct and also provide deterrence so that you and others who are tempted to engage in commercial drug offending and dealing should be aware that there are consequences that make it unattractive. The Court is also required to take into account the gravity of the offending including your culpability, the seriousness of the offence as indicated by the maximum penalties I have referred to, and the general desirability of consistency with similar offenders committing similar offences.

[16]               In terms of your culpability counsel has properly conceded you were the principal instigator of the re-established operation. You maintained control of it and even after the termination of the first police operation you continued to import and supply controlled drugs over a period of six to seven months, while on bail for the earlier offending. Mr Mansfield has sought to argue your culpability is less because you changed the way you operated and you were confident that what you were dealing would not be found to be illegal. You said you simply facilitated others to place orders through you and Mr Vincent. Counsel emphasised you did not participate in pressing the pills. I consider all of those matters, while matters of difference, are not matters of distinction that would lead to a reduction in your culpability.

[17]               In sentencing you in relation to the first operation, which involved approximately 265 kilograms, Woodhouse J took a starting point of seven and a half years for the two importing offences with an uplift for the other offences of sale and

possession. Ultimately the uplifted starting point before any credits was 11½ years’ imprisonment.

[18]               The Crown argue for a starting point of seven years for your offending in relation to the second operation. To that the Crown submits a further nine months should be added for the fact you offended whilst on bail. I agree that an uplift is appropriate as indeed your counsel responsibly conceded. Woodhouse J who sentenced you for your first tranche of offending gave you a discount and a reduction in sentence for your restrictive terms of bail. But as we have heard you abused that grant of bail. While you may have been reckless as to the legality of your actions you deliberately carried on the activities knowing that you faced trial for similar and related offending.

[19]               I do not consider there to be any personal mitigating factors I can properly and responsibly take account of at this stage. The Judge who sentenced you initially gave you credit for your personal circumstances, mainly your family life and business acumen. I consider that when regard is had to totality overall, that credit such as it may have been has been spent. You have a lengthy criminal history not related or restricted to these offences.

[20]               The two factors in your favour today are your guilty plea, and secondly the delay in the disposition of this proceeding. The matter has been hanging over your head for some time. The delay was however caused in part by the processes adopted in dealing with the two substantial drug operations. You and a number of other defendants took your convictions on appeal as of course you are entitled to do but that did add to the delay in the resolution of this particular matter. However I acknowledge that in sentencing other offenders in this second tranche, namely Mr Broxton, Mr Hill and Mr McKinley, van Bohemen J allowed a deduction for delay, as did Woodhouse J in sentencing Mr Cho, Mr Singh, Mr Khan and Mr Nguyen. The Crown accepts some account for delay must be factored into your end sentence on these charges even though you have already had a significant reduction for it on the sentence you are currently serving.

[21]               I also take into account the cases counsel have referred to and the sentences imposed on others involved in the operation, particularly the second stage of it.

[22]               Mr Mansfield submits on your behalf a starting point for your offending of five years with an uplift of five months for the offending while on bail would be appropriate. I regard your culpability as more serious than Mr Mansfield characterised it. Even accepting you are to be sentenced on the basis it was reckless, as I have said you were the instigator of the continued operation.

[23]               I take as a start point for the current offending a sentence of five years, six months. To that I add nine months uplift for the fact you offended whilst you were on bail. An uplift of at least that level is required to reflect the seriousness of such continuation of offending.

[24]               As other Judges have provided a discount for the delay in these proceedings, I also apply a discount, but in your case on this second tranche of offending I assess the appropriate reduction in your case to be nine months. That reduces the nominal sentence back to five years, six months. I apply a discount for your guilty pleas. The guilty pleas were entered, as I have discussed with counsel, later in the piece than they could have been. You changed your plea and entered some guilty pleas and then were going to trial before Judge alone on other counts. Ultimately, when you and the Crown resolved issues the pleas were entered. In the circumstances a discount of at most 20 per cent is appropriate, taking into account the strength of the Crown case. That leads to an adjusted sentence of four years.

[25]               I am then required to take into account totality. If you had been sentenced for all the offending when you were before the Court for sentence previously, an end sentence (after all deductions) in the region of 12½ to 13½ years’ imprisonment would have been appropriate to reflect totality of the offending overall.

[26]               To achieve that end, in light of the current sentence you are serving a sentence of two years, six months’ imprisonment is required.

[27]               Mr Chase please stand. On each charge that you are before the Court on today you are sentenced to two years, six months’ imprisonment. The sentences are concurrent as between each charge before the Court today but are cumulative on the existing sentence of 10 years’ imprisonment that you are serving. The effective sentence taken overall for all your offending is 12½ years’ imprisonment. Stand down.

Mr Williams

[28]               Mr Williams I now deal with you. The first count of money laundering you pleaded guilty to, count 4, involves your actions between 1 August 2011 and 15 November 2011. During that time and using the assumed name of Timothy Bolton as we have heard, you undertook a number of cash transactions, and sent a total of

$1,053,500 overseas. You accept you were at least reckless as to whether the bulk of the funds came from Mr Chase’s serious offending.

[29]               The second count of money laundering, count 12, relates to the period between 5 April 2012 and 9 August 2012. During that period, again using the assumed name of Timothy Bolton, you accept you undertook a further number of cash transactions, and sent a total of $407,600 overseas. Again you were at least reckless as to whether the bulk of the funds came from Mr Chase’s serious offending.

[30]               The payments were remitted to off-shore bank accounts in the name of Lee Vincent, Craig Williams, CEC Limited (Mr Chase’s China-based drug supplier), Christopher Chase and Asia Management Systems.

[31]               The Crown had previously estimated the total across both counts was in excess of $2.4 million. A disputed fact hearing was to have been held in relation to the quantum issues. That issue was, however, resolved without hearing and the Crown accept, and you now accept, that you are to be sentenced on the basis you were involved in laundering $1,461,000. The Crown accepts you are to be sentenced on that basis.

[32]               The final charge you have pleaded guilty to was a charge of conspiring to import a controlled drug, namely alpha-PVP and/or bk-MBDB analogues. Between 1 August 2012 and 28 August 2012 Mr Chase and you agreed between yourselves and

with Mr Chase’s associate, Mr Vincent, to have several further multi-kilogram consignments of controlled drug analogues imported into New Zealand. The orders were lodged with Mr Chase’s Chinese supplier, and paid for but the drugs were ultimately not imported into New Zealand prior to your arrest.

[33]               Counsel agree the money laundering charges are the lead charges. The Crown submit in relation to the money laundering charges a starting point in the vicinity of five years is appropriate. They seek an uplift for the conspiracy to import of 18 months leading to an adjusted start point of six years, six months’ imprisonment. Mr Mansfield submits the appropriate starting point for the money laundering is three to three and a half years with an uplift of no more than six months leading to a totality start point of between three and a half and four years’ imprisonment.

[34]               Mr Williams in fixing your sentence the Court is required to take account of the purposes and principles of sentencing. In relation to money laundering denunciation and deterrence are principle considerations. Drug offending of the nature that Mr Chase and others involved themselves in and that you became involved in, is as I have said driven by commercial return. Those commercial returns require laundering of the proceeds of crime to cover it up. You allowed yourself to become fully involved in the laundering of the money. The sentence the Court imposes should deter you and others from engaging in such activity which facilitates drug offending. Later you went further and became involved in the conspiracy to import further drugs.

[35]               I am however also required to take into account the least restrictive sentence the Court may properly impose and also to consider your rehabilitation.

[36]               In relation to your culpability I accept for present purposes you are to be sentenced on the basis you acted recklessly in becoming involved in this offending. It is also necessary to take into account the general desirability of consistency of sentences for similar offending, and in particular in this case the sentences imposed on others involved in the operation that you were involved in.

[37]               In relation to money laundering, in R v Zhang, the Court of Appeal upheld an end sentence of four and a half years’ imprisonment on four counts of money

laundering involving almost $700,000.3 The Judge in that case took a starting point of five and a half years’ imprisonment. Referring to the previous decision of the Court of R v Wallace the Court observed that:4

those who launder money for drug dealers are nearly as culpable as those who actually participate in the dealing. They help the dealers avoid detection and in this way provide assistance in their activity. … Sentences for money laundering should therefore bear a relationship to sentences for the particular principal offending and should be approached on a similar basis. The more serious the principal offending, the more serious the laundering. …

[38]               The Court also noted that a distinction may be drawn money between laundering which involves personal benefit and situations where the misguided intention of the launderer is to help the drug offender without any particular personal gain.

[39]               Having regard to those comments, and the cases of R v Sorby, R v Karpavicius, McCamish v Police, R v Henry and R v Simanu & Sauer a starting point in the region of four and a half years for the money laundering would be appropriate were it not for a number of factors which I consider to be particularly relevant in your case.5 The first is that as noted you are to be sentenced today on the basis your actions were reckless. That will not always be the case with money laundering. The second is that there is no evidence before the Court of any significant personal gain to you from your involvement in the money laundering. Mr Mansfield submitted that you received no more than a modest fee of $5,000 for the deposits. There is no evidence of anything else received by you.

[40]               There are the further points that Mr Mansfield makes as well, namely that the drug offending was Class C drug offending, whereas money laundering often is involved with more serious drug offending.

3      R v Zhang [2010] NZCA 481.

4      R v Zhang above n 3, citing R v Wallace CA415/98, 16 December 1998 at 5–6 (footnote omitted).

5      R v Sorby HC Auckland T022561, 30 May 2003; R v Karpavicius HC Auckland CRI-2011-004- 16838, 22 November 2013; McCamish v Police HC Auckland CRI-2008-404-389, 18 March 2009; R v Henry HC Auckland CRI-2014-004-5509, 20 July 2015; and R v Simanu & Sauer HC Auckland CRI-2008-004-002053, 16 December 2010.

[41]               Having regard to all of those factors, despite the significant amount involved, I consider a starting point for the money laundering charges of three years, nine months’ imprisonment to be appropriate.

[42]               It is then necessary to apply an uplift for your offending in relation to the conspiracy to import charge. In relation to that offending an uplift of nine months to 15 months’ imprisonment would be appropriate. Taking account of totality in your case I fix an adjusted starting point of four years, six months’ imprisonment.

[43]               I turn to consider your personal circumstances. Mr Williams you are 52 years old with no relevant previous history. You have no previous convictions. You have dual citizenship with the United Kingdom and Australia. You face the possibility of deportation once any sentence this Court imposes has been served. You previously lived in Thailand before relocating to New Zealand. You have the sole custody and care of your daughter and have had that care and custody since she was two. Your mother has recently come to New Zealand to be with you. She is elderly and is dependent on you. You have no other family with you in New Zealand but at the moment regard Auckland as your home and it is apparent from the information provided by counsel on your behalf that you have established a life for yourself, your daughter and your mother in New Zealand.

[44]               You told the report writer your inability to find employment at the time and limited finances were the main reasons you became involved in the offending. More recently you have found work and are working successfully. You are involved at a responsible level in your current business activity. Following these convictions you will not be able to remain as a director, but you will be able to retain employment with the companies, or at least you would like to retain employment with the companies and you have the support of your business partners and employers.

[45]               The report writer considers you show insight into your offending and you are assessed as a low risk of reoffending. The recommendation for sentence by the report writer is home detention, largely because of the delay in prosecution and your compliance with bail conditions during that time.

[46]               The letter you have written to the Court displays insight, although at a level you do seem to seek to minimise your involvement in the offending. You really should reflect on whether you would want your daughter to become addicted to illegal drugs such as the illegal drugs that you were involved in. However the several references in support of you testify to the significant steps you have taken to move on and leave that offending behind you and establish as I say a worthwhile career and life, and you are to be given credit for that.

[47]               The issue is whether the deductions available to you lead to an end sentence of two years or less so that home detention can responsibly be considered.

[48]               There are a number of deductions available to you. A number of your co- offenders were given the benefit of reductions for delay. The Crown accepts that you too are entitled to a deduction for the delay in the ultimate resolution of these proceedings against you. In your case I apply a reduction of one year for that delay consistent with a number of other people who have been dealt with by this Court in relation to this offending. A further reduction of 12 months is available to you for your personal circumstances, your lack of previous convictions and the steps you have taken to rehabilitate yourself whilst on bail and those restrictive bail conditions.

[49]               Finally you are entitled to a reduction for a guilty plea. Again, given the strength of the Crown case against you, a reduction of 20 per cent is appropriate.

[50]               That leads to an end sentence of two years’ imprisonment. At that level the Court is directed to consider whether a sentence of home detention is appropriate. As you have heard the Crown would not oppose a sentence of home detention in your case. Ultimately it is a matter for the Court.

[51]               Given the positive matters I have referred to, and particularly the steps you have taken to rehabilitate yourself since arrest, the fact of your current employment and the support that you have from a number of people within the community, including the people that you work with, I agree that home detention is the appropriate end sentence.

[52]               Mr Williams please stand. On all charges you are sentenced to 12 months’ home detention. The sentence is to be served at the residence of [redacted]. You are to notify a probation officer prior to carrying on with terminating or varying your current employment or voluntary work and you are not to undertake any paid employment or voluntary work without prior approval of a probation officer. Those are the special conditions attaching as recommended. You may stand down.

Venning J