R v GUPTA [1999] NSWCCA 384

New South Wales Court of Criminal Appeal CITATION : R v GUPTA [1999] NSWCCA 384 FILE NUMBER(S) : CCA 60178/99 HEARING DATE(S) : 2 December 1999 JUDGMENT DATE : 2 December 1999

PARTIES : REGINA v Yateender Kumar GUPTA JUDGMENT OF : Handley JA at 38; Barr J at 1; Greg James J at 39

LOWER COURT JURISDICTION : District Court LOWER COURT FILE NUMBER(S) : 97/11/0009 LOWER COURT JUDICIAL OFFICER : Solomon DCJ

COUNSEL : Crown: P W Neil SC Applicant: P J D Hamill SOLICITORS : Crown: J Maguire Applicant: T A Murphy CATCHWORDS : ACTS CITED : Commonwealth Crimes Act 1914 s 16A, 16A(2), 16G, 17A, 19AC(2) Financial Transaction Reports Act 1998 (Commonwealth) DECISION : Leave to appeal granted; Appeal dismissed

IN THE COURT OF CRIMINAL APPEAL 60178/99

HANDLEY JA BARR J GREG JAMES J

Thursday, 2 December 1999 REGINA v Yateender Kumar GUPTA JUDGMENT

1 BARR J: The applicant, Yateender Kumar Gupta, seeks leave to appeal against sentences imposed by Judge Solomon in the District Court on 16 April 1999. The applicant pleaded guilty to seven counts under s 15 Financial Transaction Reports Act 1998 (Commonwealth), the substance of each of which was that he knowingly made a report which was false in a material particular. 2 On each of seven occasions between January and October 1995 the applicant received on behalf of his employer an amount of money in Australian currency and later signed an international currency transfer report declaring that a far larger amount of money had been received on that occasion. The smallest discrepancy concerned money received on 22nd September 1995. $10,315 was received but $498,000 was declared as been received, a difference of $487,685. The greatest discrepancy concerned the declaration made on 13 February 1995 when $18,255 was received, whereas $950,000 was declared as having been received, a difference of $931,745. Altogether approximately $4,800,000 was declared as having been received whereas only a little under $80,000 was in fact received, a difference of approximately $4.7 million. 3 On each occasion the method used was the same. The money would be received in a packet and money from another source would be added to it. A complicated series of transactions would be entered into, presumably to try to give the intended declaration an appearance of correctness. 4 On each count his Honour sentenced the applicant to imprisonment for two years and ordered that the sentences be served concurrently. His Honour declined to make a recognisance release order and the result was that, under his Honour's orders, the applicant had to serve the whole of the two years in prison. 5 A number of attacks were made on the sentences. The first was by reference to a sentence his Honour had imposed on 6 November 1998 on the applicant's employer, Narendra Naik. Mr Naik was the manager of a business called Wall Street Exchange and Finance Pty Limited ("Wall Street"), a corporation incorporated in Queensland whose principal activities were finance and exchange. The company's principal business office at the relevant time was in Kings Cross. 6 During 1993 the applicant commenced employment with Wall Street as the accounts manager. He was subject to the oversight and direction of Mr Naik. During 1994 the applicant was appointed company secretary. 7 On 31 August 1998 Mr Naik pleaded guilty to knowingly making a false report under section 15 of the Financial Transaction Reports Act which was false in a material particular. He had declared that $69,860 had been received from overseas whereas no money had been received. That declaration had been made on or about 27 November 1992. 8 For that offence his Honour fined Mr Naik $10,000 and required him to enter into a recognisance to be of good behaviour for three years. 9 The first submission was that imprisonment for a period of two years did not sit well in comparison with the much lighter sentence imposed on Mr Naik, especially in view of the fact that the applicant was a "functionary", as it was stated, of Mr Naik. 10 Mr Naik was described in written submissions filed on behalf of the applicant as a "co-offender". In fact he was not a co-offender in the sense in which that term is used in applying principles of parity between co-offenders. The term was not intended to be used in that way. There were no common offences between the applicant and Mr Naik and the principles of parity did not apply. 11 That would not make the sentence imposed on Mr Naik irrelevant, of course, because a sentence imposed on any offender in circumstances not unlike those which attended this matter might be relevant for comparison. However, as his Honour pointed out during debate, Mr Naik was sentenced upon an entirely different factual basis. 12 As his Honour observed, Mr Naik was sentenced as a person who had been investigated over a period of years by the National Crime Authority and whose records had been scrutinised. Yet the subject offence was the only one that could be found. 13 Apart from those matters, the amount overdeclared by Mr Naik was far less than the total amount overdeclared by the applicant. Mr Naik offended on only one occasion, whereas the applicant's course of conduct extended from January to October 1995. Mr Naik's offence was six years old and his Honour commented on its staleness in imposing sentence. 14 I do not consider that the submission the applicant was a mere functionary of Mr Naik should be accepted at face value. Whilst it may be accepted that the system he used had been devised by Mr Naik and that Mr Naik was his superior in the line of management, the applicant was far from being a clerk without managerial responsibility or capacity. He was engaged in the first place as an accounts manager and later appointed company secretary. Persons occupying those positions have the duty and the power to act responsibly and, if necessary, independently of and even in spite of the wishes of their superiors. 15 I find the sentence imposed on Mr Naik is of no assistance in assessing the appropriateness of the sentences now under consideration. 16 A number of criticisms were made about his Honour's application of the requirements of the Commonwealth Crimes Act. According to counsel for the applicant, his Honour did not indicate the sentence he considered appropriate, having taken into account the principle of totality of criminality, but instead went directly to an assessment of the appropriate period the applicant should serve in prison. It was submitted that the principle of totality applies to non-parole periods as well as to head sentences. His Honour did not expose his reasons for declining to impose a recognisance release order. 17 It was added that this case was not one in which his Honour was entitled to fix a sentence without also making a recognisance release order. Then it was submitted that during the delivery of his remarks on sentence, his Honour overlooked mention of the application of s 16G Commonwealth Crimes Act, which required an adjustment to allow for the fact that the applicant was a federal prisoner who would serve his sentence in a New South Wales prison and would not receive remissions for good conduct. 18 The steps to be followed by a judge imposing sentence for a federal offence were dealt with in Director of Public Prosecutions v El Karhani (1990) 21 NSWLR 370 at 380-386. The judge must first determine the maximum sentence which may be imposed and must then determine the sentence which is of a severity appropriate to the circumstances of the offence. That is a requirement of s16A. 19 The sentencing judge must have regard to s 17A, which provides that a sentence of imprisonment must not be passed until all other available sentences have been considered and the Court is satisfied that none is appropriate in all the circumstances. 20 In reaching a preliminary conclusion about the severity of the sentence, the sentencing judge must take into account the considerations raised by s 16A(2) which include the applicable subjective features. 21 The sentence must then be adjusted as required by s 16G. This is an adjustment of the head sentence, as is made clear in El Karhani at pages 383-384. 22 The Court must then decide whether to fix a non-parole period or, as would have applied in the present case, a recognisance release order. If it decides to fix such a period or make such an order, the period should be fixed having regard to the purposes of parole and the adjusted head sentence: El Karhani at 385G. If it decides not to do so, it must state and record its reasons. 23 It seems to me that his Honour observed the requirements of the Act. His Honour first recorded that the maximum sentence for each offence was imprisonment for five years. His Honour emphasised the objective seriousness of the offences. During the remarks on sentence his Honour said this: I must firstly consider the objective seriousness of the offence and in doing so I refer to the comment made by Mr Justice Dawson in Leask v Commonwealth of Australia (1996) 187 CLR at 579. His Honour in describing the purpose of the Financial Transactions Reports Act held at pp 596-597: 'The mischief with which the Act was designed to deal is identified in the Second Reading Speech to the Cash Transaction Reports Bill as being "the underground cash economy, tax evasion and money laundering". It was intended to "give law enforcement agencies the ability to monitor the movement of large amounts of cash and thus to identify tax evaders and the recipients of proceeds of crime.' I am satisfied insofar as this particular case is concerned that the monies were to benefit tax evaders. In this regard I accept the answers given by the prisoner during the course of an interview held between Superintendent Mark William Standen and the prisoner, conducted on 19 November 1995, in which the prisoner indicated that he dealt with monies involving breaches of the Income Tax Laws. 24 His Honour paid full regard to the subjective features as required by s 16A(2). His Honour then adjusted the sentences required by s 16G to allow for the lack of remissions in New South Wales. His Honour said this: During the course of submissions Mr Boulten referred me to section 16G of the Commonwealth Crimes Act and I indicated to him that I would take that section into consideration in sentencing the prisoner. However, I did not articulate that fact to the prisoner during the course of giving my reasons for sentence. I wish to repeat to the prisoner that the sentence I impose today is a sentence of two years and you shall be released on 15 April 2001 and that this state does not have remissions. I repeat that I took that fact into consideration when I sentenced you and you will be released, as I said before, on 15 April 2001. 25 The transcript of the debate between defence counsel and his Honour preceding their remarks on sentence shows that defence counsel did indeed remind his Honour about the mechanism of s 16G. 26 It seems clear that in deciding on the sentence his Honour made allowance for the lack of remissions in New South Wales and simply forgot to mention that during pronouncement of the sentence. 27 His Honour's processes of reasoning are made clear not only from the remarks on sentence but from the transcript of the debate with counsel preceding it. Having been reminded of the various factors he was obliged to take into account, his Honour expressed the view nothing less than a full-time sentence was required because of the objective seriousness of the offences, that he intended to make the sentences concurrent and that the totality of criminality, being what it was, he was of the view that the applicant should serve no less than two years of full-time detention. 28 The debate went on to the subject of non-parole periods or recognisance release orders and his Honour at one time considered accumulating one or more of the sentences so as to produce the result that full-time custody of two years might be followed by a period of parole or release on recognisance. Then his Honour's attention was drawn to s 19AC(4) which provides that a recognisance release order need not be made if the Court is satisfied that it would not be appropriate to do so. 29 Having been reminded of those things, his Honour stated that that was his intention and that his reason for declining to make a recognisance release order was because his Honour wanted the sentence to reflect the totality of the applicant's criminality and that required him to serve no less than a two year period in full time custody. 30 The view taken by his Honour can come as no surprise. The applicant was not an ordinary offender by any means. He was a mature man having family support. Whilst he had been awaiting sentence he had carried out voluntary humanitarian work. On one view he was already rehabilitated. In due course his Honour said, in the remarks on sentence: I decline to make a recognisance release order because in my view such release order is not appropriate. I am of that view as it is necessary for me in sentencing you, the prisoner, that I apply the totality principle. On applying the totality principle I am of the view that it is appropriate that you, the prisoner, spend two years in prison. 31 In my opinion, his Honour did not err in the application of the several requirements of the Crimes Act 1914. 32 The final submission was that the sentences were manifestly excessive in all the circumstances. There are few instances of sentences imposed under the Financial Transaction Reports Act. I have already referred to the sentence imposed on Mr Naik. 33 Reference was made to R v Leask, a sentence imposed by Judge Keleman on 17 April 1998, but the facts of that case were quite unlike those in this appeal. Transfers of amounts of $10,000 or more must be made the subject of a report to the Treasury by the financial institution transferring them. By a series of individual transfers the appellant transferred a total sum of about $1 million from New South Wales to a bank account in the Northern Territory. Each individual transfer was for an amount of a few dollars less than $10,000. There is a provision of the Act which catches the contrivance there engaged in and makes it an offence. But the purpose for which monies had been so divided and transferred was never clear and there was no question that all the money belonged to the appellant. 34 By way of contrast, the frank admission of this applicant to the police was that he made his false declarations in order to assist customers of the business to avoid paying tax. In my opinion that was a much more serious state of affairs. 35 There appears to be only one other instance of a sentence imposed under the Act, a decision of Demack J in the Supreme Court of Queensland, 22 November 1995, in R v Catania and Spiteri. Fifteen amounts of money were transferred over a period of three days accumulating to just over $100,000. The purpose of the transaction was to hide the identity of the depositors of the money. Fines of $3,000 and $10,000 respectively were imposed. In my view, the criminality revealed in those matters bears no relevance to that of the applicant and I find the case is of no assistance. 36 In my view his Honour was entitled to regard this case as objectively so serious that no less than a period of full time custody was required after taking into account the strong subjective features and allowing for the lack of remissions in this State. 37 I would grant leave to appeal but would dismiss the appeal. 38 HANDLEY JA: I agree. 39 GREG JAMES J: I also agree. 40 HANDLEY JA: The order of the Court will be as announced by Mr Justice Barr. **********