R v Khan

[2018] NZHC 3065

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2017-004-10847

[2018] NZHC 3065

THE QUEEN

v

MOHAMMED NASEEM KHAN

Hearing:	23 November 2018
Appearances:	B R Northwood for the Crown D S Niven for the Defendant
Sentence:	23 November 2018

SENTENCING REMARKS OF PETERS J

Solicitors:           Meredith Connell, Crown Solicitor, Auckland Counsel: D S Niven, Auckland

R v KHAN [2018] NZHC 3065 [23 November 2018]

[1]        Mr Khan, you are for sentence having pleaded guilty to seventeen charges of money laundering.1 The maximum penalty for the offending is seven years’ imprisonment.

[2]        The offending took place between 22 December 2016 and 18 April 2017. The sum involved was approximately $330,000 and all of it derived from the supply of cocaine by two foreign nationals, Mr Ryszard Wilk and his son, Mr Ralph Wilk, between 6 September 2016 to 16 April 2017. I am familiar with the events giving rise to your offending. I recently sentenced Ralph Wilk and another defendant involved in the money laundering aspect of this enterprise, Mr Bryan Williams, and I also presided at the trial – or as much of a trial as there was – of Ms Tang, to whom I shall refer shortly.

[3]        Mr Wilk and Mr Williams pleaded guilty to representative charges in respect of their offending whereas you have entered a plea to 17 individual charges. That makes no difference to the sentencing process today.

[4]        You pleaded guilty to the offending on 11 October 2018 on the basis of an agreed summary of facts, and the day before you were to go to trial with Ms Tang.

[5]        The gist of the agreed summary is that you became involved in this offending at the behest of a Mr Andy He, whom you met in 2016. You rented an apartment from Mr He, as I understand it you subsequently became flatmates and you then became what is described as the “marketing manager” for two of Mr He’s companies.

[6]        The Crown acknowledges that at least up until April 2017 you acted under the direction of Mr He and you say even beyond that. That is not agreed by the Crown but the important point is that Mr He got you involved and, for the most part if not all of it, you were acting on his instructions.

[7]        In his submissions to me for today Mr Niven, your counsel, has emphasised that you were not charged on the basis that you knew the funds you were arranging to transfer were the proceeds of crime but rather were reckless as to whether that was the

1      Crimes Act 1961, s 243

case. Mr Niven has also submitted that there is a clear distinction to be drawn between those who act recklessly and those who offend in the full knowledge of where the funds have come from, in this case the sale of cocaine. Mr Niven submits that needs to be reflected in sentencing and that such is reflected in other cases.

[8]        The Crown says that your primary role was to collect large quantities of cash, that Ryszard Wilk would give you the details of the overseas bank accounts to which the funds were to be sent, and then you would deliver the cash and the bank account details to the foreign exchange companies. The Crown also accepts that you were reckless as to whether the cash was sourced unlawfully and says you did not benefit significantly from the offending. However, it also says that you continued to work for the Wilks after, on the Crown’s view of it, Mr He ceased to be involved. The Crown says this shows you appreciated the potential for financial gain, and used this to further your own interests.

[9]        Mr Khan, I am bound by the summary of facts that has been agreed, but I have found it difficult to accept much of what has been said about your lack of knowledge and that is because of my recent involvement in Ms Tang’s trial. Ms Tang worked for MCM, one of the three foreign exchange companies that you used to remit the funds overseas. Although Ms Tang’s trial was not completed (for reasons I need not address), in the course of her trial I heard and read hundreds of text messages between you and Ms Tang, between you and Mr He, and between you and one or other of the Wilks or their associate, Mr Patryk Lukasik. Having done so, I have some difficulty accepting that you ever thought your actions part of a legitimate business. A principal reason for this is the coded language in the texts which leads me to infer that you at least suspected, if not knew, that the money you were arranging to transfer derived from criminal offending.

[10]      As I say, I shall sentence you on the basis of the agreed summary of facts but parts of it are certainly inconsistent with the evidence to which I have referred and, of course, the sheer fact of 17 charges.

Personal circumstances

[11]      Mr Khan, you are aged 29, have no prior convictions, and live in Auckland. You moved to New Zealand from India in 2009 and obtained qualifications in IT engineering. I have read the Provision of Advice to Courts report dated 2 November 2018. Corrections consider you are at low risk of reoffending, and that the events of this case have been a very sobering experience for you.

Approach to sentence

[12]      In sentencing you I am required to undertake a three-step process. First, I am required to identify what is referred to as the starting point, which requires me to assess the gravity of your offending. The second step requires me to adjust that starting point to make allowance for matters that relate to you personally. The third step is to reduce your sentence because you have pleaded guilty.

Starting point

[13]      Money laundering is a serious offence. I note the often-cited comments of the Court of Appeal in R v Wallace:2

… 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. Depending upon the circumstances, they may not technically be parties to the principal crimes, and hence the need for a separate offence on the statute book, but they come very close to it. 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.

[14]The important facts in your case are:

(a)The amount of money you laundered – approximately $330,000.

(b)You offended regularly, and over four months.

2      R v Wallace CA415/98, 16 December 1998 at 8-9.

(c)The principal offending – that is the Wilks – was serious and sophisticated and entailed the supply of a substantial quantity of cocaine.

(d)The extent of your financial gain. You advised the pre-sentence report- writer that you received sporadic payments of $150 to $200 in return for your work. As Mr Niven says, that is trivial. There is no evidence, however, of what Mr He was paying you when he employed you as the “marketing manager” for his companies.

[15]      Mr Niven submits that a starting point of two to two-and-a-half years’ imprisonment is appropriate and I have considered the cases to which he referred me in support this submission.3 As I have said, I have taken into account Mr Niven’s submission that you are charged with acting recklessly rather than deliberately and Mr Niven submits that the starting point should fall towards the lower end of that proposed range due to the lack of proximity of your offending to the drug-related offending.

[16]      The Crown proposes a starting point of two-and-a-half years.4 It says that your primary role was to collect large quantities of cash, obtain the details of the overseas bank accounts from Mr Wilk, and then to transfer the cash and make sure the transfer went through.

[17]      In setting your starting point, I have regard to the sentence I recently imposed on Mr Williams.5 Mr Williams pleaded guilty to one representative charge of money- laundering, arising out of the same enterprise. On the information before me, I take the view your offending was more serious than Mr Williams’. Although Mr Williams handled $481,000, and he knew the funds were from drug-dealing and he offended over nine months, the sum he actually laundered was about NZ$30,000. In large part Mr Williams was simply a courier from point A to point B.

3      R v Sorby T022561, 30 May 2003; R v Beckham HC Auckland CRI-2008-404-29112, 12 August 2011; and R v Paroa [2016] NZHC 1105.

4      R v Simanu HC Auckland CRI-2008-004-20453, 16 December 2010; R v Le [2018] NZHC 2199; and R v Chase [2018] NZHC 1022.

5      R v Williams [2018] NZHC 2731.

[18]      Having regard to comparable cases, I adopted a sentence starting point of two years and three months for Mr Williams.6 I am going to adopt a starting point of two years, six months in your case, because of the sheer number of charges and your very direct involvement in getting the money out of New Zealand and into overseas accounts.

Personal factors

[19]      I turn now to whether I am required to adjust the starting point upwards or downwards for factors personal to you.

[20]There are no grounds on which to increase the sentence.

[21]      Mr Niven submits, and the Crown agrees, that I should allow you a discount for previous good character based on your lack of previous convictions.7 I have also had delivered to me today a letter attesting to your good character, particularly from the Al Hikmah Trust. That speaks highly of you and your efforts for the trust and I have also taken that into account.

[22]      Given the agreement that exists, I shall allow a modest discount of two months. In settling on that, I take into account that the discount is largely for a lack of prior convictions only and that any discount must be proportionate to the starting point.

Guilty plea

[23]      As I have said, you entered pleas of guilty the day before your jury trial was to commence. Mr Wilk’s and Mr Williams’ were similarly close to trial. I gave them a discount of 15 per cent for their pleas and I shall do likewise for you.

End sentence

[24]      Applying these discounts to the starting point, I arrive at an end sentence of just under two years’ imprisonment, say one year, 11 months.

6      R v Beckham HC Auckland CRI-2008-404-29112, 12 August 2011; R v Henry [2015] NZHC 1684.

7      Sentencing Act 2002, s 9(2)(g).

[25]      That sentence is such that I must consider whether to commute it to a sentence of home detention.8 It is a fundamental principle of sentencing that the Court must always impose the least restrictive outcome appropriate in the circumstances.9

[26]      It is not always appropriate to impose a sentence of home detention in place of a short period of imprisonment. A Judge is required to make a considered and principled choice between the two.10

[27]      In your case, you have a suitable home detention address, you are a first offender, there is no suggestion that you will not comply with a sentence of home detention and it will also have the advantage, I hope, of continuing to allow you to work in a business that I understand you either own or have an interest in. The Crown has no objection to a sentence of home detention and, in those circumstances, I think that sentence the better course to adopt.

[28]      Accordingly, in lieu if imprisonment, I shall impose a sentence of 11 months’ home detention.

Sentence

[29]Mr Khan, please stand:

(a)on charge 3, I sentence you to 11 months’ home detention;

(b)on the remaining charges (4, 5, 7, 9, 10, 11, 12, 13, 15, 16, 17, 18, 19,  20 and 21), I sentence you to 11 months’ home detention, to be served concurrently – that means at the same time – with the sentence I have imposed on charge 3; and

(c)I discharge you on all remaining charges, being charges 1, 2, 6, 8 and   14, as set out in the Crown Charge Notice dated 25 September 2018.

8      Sentencing Act 2002, s 15A.

9      Section 8(g).

10     Fairbrother v R [2013] NZCA 340 at [30].

[30]      The sentence is to be served at the address in respect of which the report has been conducted and on all standard conditions.

[31]Please stand down. Thank you.

Peters J