Supreme Court New South Wales Medium Neutral Citation: Arora v Commonwealth Director of Public Prosecutions [2011] NSWSC 552 Hearing dates: 3 June 2011 Decision date: 10 June 2011 Before: Simpson J Decision: Summons dismissed. Catchwords: CRIMINAL LAW - procedure - application for stay - particulars alleged - charge of money laundering - dealing with money intending that money will become an instrument of the crime - "structuring" - same activity alleged to constitute the "dealing" and the crime for which money intended to be used as an instrument - dealing also includes "possession" - particulars may be revised - order for stay refused - summons dismissed CRIMINAL LAW - procedure - application for permanent stay - abuse of process - prosecution of money laundering offence when substantive charge of "structuring" available - higher maximum penalty - exercise of prosecutorial discretion - no abuse of process established - summons dismissed Legislation Cited: Criminal Code (Cth) Financial Transaction Reports Act 1988 Cases Cited: Nahlous v R [2010] NSWCCA 58; 201 A Crim R 150 R v Huang; R v Siu [2007] NSWCCA 259; 174 A Crim R 370 Thorn v R [2009] NSWCCA 294; 198 A Crim R 135 Category: Interlocutory applications Parties: Gaurav Arora (Plaintiff) Commonwealth Director of Public Prosecutions (Defendant) Jagdish Arora (Plaintiff) Commonwealth Director of Public Prosecutions (Defendant) Representation: Counsel: P Hastings QC/W P Lowe (Plaintiffs) G J Bellew SC (Defendants) Solicitors: Hardinlaw (Gaurav Arora) William O'Brien & Ross Hudson Solicitors (Jagdish Arora) Commonwealth Director of Public Prosecutions (Defendants) File Number(s): 2011/32429; 2011/121324 Judgment 1Each of the plaintiffs (Jagdish Arora and Gaurav Arora) seeks an order permanently staying the prosecution of a charge against him brought by the Director of Public Prosecutions (Cth) ("the CDPP") under the Criminal Code (Cth) ("the Code"). Jagdish Arora is charged under s 400.4 of the Code; Gaurav Arora is charged under s 400.3(1) of the Code. Section 400 creates the offence commonly known as "money laundering". No challenge was made to the jurisdiction of this Court to deal with the application. 2Section 400.3(1) is, relevantly, in the following terms: " (1) A person is guilty of an offence if: (a) the person deals with money ... and (b) either: (i) the money ... is, and the person believes it to be, proceeds of crime; or (ii) the person intends that the money ... will become an instrument of crime; and (c) at the time of the dealing, the value of the money ... is $1,000,000 or more. Penalty: Imprisonment for 25 years..." 3Section 400.4(1) differs from s 400.3(1) only in that the value of the money the subject of the offence is $100,000 or more. 4"Deals with money" is defined in s 400.2, in the following way: "400.2(1) For the purposes of this Division, a person deals with money ... if: (a) the person does any of the following: (i) receives, possesses, conceals or disposes of money ... (ii) imports money ... into, or exports money ... from Australia; (iii) engages in a banking transaction relating to money ...; and (b) the money ... is proceeds of crime, or could become an instrument of crime, in relation to an offence that is: (i) a Commonwealth indictable offence; ..." 5An "instrument of crime" is defined in s 400.1 in the following way: "money ... is an instrument of crime if it is used in the commission of, or used to facilitate the commission of, an offence that may be dealt with as an indictable offence ..." 6The charge against Gaurav Arora is formulated in the following terms: "[Gaurav Arora] did deal with money intending that the money will become an instrument of crime and at the time of the dealing the value of the money was $1,000,000.00 or more." The charge against Jagdish Arora is identically framed, except that the value of the money the subject of the "dealing" was asserted to be $100,000 or more. 7On 1 October 2010 solicitors acting for both plaintiffs sought, from the CDPP, further particulars of the charges. Relevantly for present purposes they asked: "2. In what manner is it alleged that the [plaintiffs] did 'deal' with the money? ... 4. Of what crime did the [plaintiffs] intend the money to become an 'instrument'?" By letter dated 5 October 2010, the CDPP: * answered the request numbered 2 by identifying the manner in which he alleged that the plaintiffs "dealt" with the money as purchasing multiple bank drafts or international money transfers by the exchange of cash at various bank branches (he attached a schedule of the transactions in which each plaintiff was alleged to have engaged); * answered the request numbered 4 with a lengthy explanation, which included: "It is alleged that the [plaintiffs] conducted each transactions (sic) ... in a manner and form for the sole or dominant purpose of ensuring or attempting to ensure that the cash involved would not give rise to a significant cash transaction and accordingly not be reported by the banks to Austrac. ... It is alleged that the [plaintiffs] dealt with the cash ... intending to structure the transactions so as to avoid the banks filing a significant cast transaction with Austrac." 8It was common ground that the crime so identified was the crime of "structuring" created by s 31(1) of the Financial Transaction Reports Act 1988 which is, relevantly, in the following terms: "(1) A person commits an offence against this section if: (a) the person is a party to 2 or more non-reportable cash transactions; and (b) having regard to: (i) the manner and form in which the transactions were conducted, including, without limiting the generality of this, all or any of the following: (A) the value of the currency involved in each transaction; (B) the aggregated value of the transactions; (C) the period of time over which the transactions took place; (D) the interval of time between any of the transactions; (E) the locations at which the transactions took place; and (ii) any explanation made by the person as to the manner or form in which the transactions were conducted; it would be reasonable to conclude that the person conducted the transactions in that manner or form for the sole or dominant purpose of ensuring, or attempting to ensure, that the currency involved in the transactions was transferred in a manner and form that: (iii) would not give rise to a significant cash transaction; or (iv) ..." 9For present purposes, a "non-reportable cash transaction" is, essentially, a transaction involving less than $10,000. By s 7 of the Financial Transaction Reports Act , a transaction greater than that amount is "a significant cash transaction", and attracts mandatory reporting provisions to the "AUSTRAC CEO". Put simply, therefore, but adequately for present purposes, the offence of structuring is committed where two or more cash transactions, each involving less than $10,000, are made in circumstances that warranted the conclusion that the transactions were so structured in order to avoid mandatory reporting under s 7. 10Structuring is an indictable offence. The maximum penalty prescribed is imprisonment for 5 years. The facts upon which the prosecutions are based 11The CDPP alleges that, over a period between 13 May 2004 and 4 February 2010, Jagdish Arora purchased 62 bank drafts to the value, in total, of $350,700. Each individual bank draft was in a sum less than $10,000. Accordingly, any two of the transactions could, if they otherwise came within s 31(1) of the Financial Transaction Reports Act , have constituted an offence of structuring. 12The CDPP alleges that, over a period between 1 March 2006 and 4 September 2008 Gaurav Arora purchased 198 bank drafts, and international money transfers, to a value, in total, of $1,565,440, each individual transaction being of a value under $10,000. As in Jagdish Arora's case, any two of the transactions could, if they otherwise met the requirements of s 31(1), have constituted an offence of structuring. 13Each plaintiff seeks a stay of the prosecution on two independent bases. (i) "the charge is bad in law" or "duplicitous" 14The first basis concerns the manner in which the CDPP has particularised the charges. In my opinion, neither "bad in law" nor "duplicitous" accurately captures what the plaintiffs claim is the vice in the manner of charging: see the discussion of duplicity in R v Agius; R v Abibadra; R v Jandagi; R v Zerafa [2011] NSWSC 367. The point sought to be made is that, when properly analysed, the charges are tautologous. That can be explained by expanding the formulation of the charges as follows (bearing in mind the CDPP's particularisation of the "dealing" alleged): "... the plaintiffs did deal (by purchasing bank drafts, in successive transactions, each to a value of less than $10,000) with money, intending that the money will become an instrument of crime (in that it will be used to purchase bank drafts in successive transactions, each to a value of less than $10,000)." 15Put that way, that plaintiffs argue, it can be seen that the same activity - purchasing the bank drafts in successive transactions of under $10,000 in value - is alleged to constitute the "dealing in money" as well as the crime - structuring - for which the money is intended to be used as an instrument. 16It is not an element of the money laundering offence that the dealing be in an amount under $10,000. Indeed the offences created by s 400.3 and s 400.4 require, respectively, dealings of $1,000,000 and $100,000 or more, although these may be made up of a series of lesser transactions, as is here alleged. It is an essential element of an offence of structuring that the cash transactions be in an amount less than $10,000. However, the money laundering pleaded (as particularised) could not be proved by the CDPP unless the amounts involved in the purchases of bank drafts were under $10,000. That is because he could not prove that the plaintiffs intended that the money in which they dealt would become the instrument of the crime of structuring, unless the transactions were in those amounts. And it is true that the purchase of the bank drafts is alleged to constitute the "dealing", and also to constitute the crime of structuring that the prosecution alleges for which the plaintiffs intended the (same) money to be used. 17The plaintiffs' submission ignores an essential element of the offence of structuring. That offence is not committed until there have been at least two non-reportable cash transactions: the purchase of any of the bank drafts individually could not constitute the offence of structuring. It is therefore not quite correct to say that the "dealing" alleged is entirely co-extensive with the crime of which it is alleged the money was intended to be the instrument. 18It is not, however, necessary to resolve this conceptually challenging question. That is because, notwithstanding the manner in which the CDPP has particularised the "dealing" alleged, "dealing in money" (for the purpose of the money laundering offences) is broadly defined, and includes possession of money. It is integral to the CDPP's case that the plaintiffs were, up to the time of purchase of the bank drafts, in possession of the various sums of money. Should the CDPP reconsider its position on the particularisation of the "dealing" alleged, to encompass possession, the plaintiffs' first argument evaporates. 19A second argument, which, perhaps, rests on a firmer foundation, is that sub-para (1)(b)(ii) of s 400.3 and s 400.4 both require an intention that the money the subject of the dealing will (that is, in the future) become an instrument of crime. But, the argument goes, when the dealing is completed, the offence of structuring is also completed. There is no scope for a crime to be committed in the future. The dealing and the structuring, being, in effect, identical transactions, are necessarily simultaneous. 20Senior counsel for the CDPP indicated an intention to revise the particularisation. That essentially concludes both arguments. "Possession" is not the same as "purchasing". And "possession" predates the purchasing said to constitute structuring. 21Senior counsel for the plaintiffs nevertheless pressed for an order for stay of the prosecutions on the basis of the present particularisation. It seems to me that, to grant a stay on the basis of the present particularisation, in circumstances where an alternative is readily and simply (and obviously) available, would be a futility. If the CDPP revises his particulars - as far as I can see, that does not require any leave of any court - the stay would have to be discharged. (ii) abuse of process 22The second basis upon which the plaintiffs sought a stay concerned what is said to be an abuse of process, or oppression. That was, so it was said, because the proper analysis of the conduct of the plaintiffs would dictate that they should be charged with the substantive offence of structuring, which carries a maximum penalty of imprisonment for 5 years, as distinct from the 25 year maximum applicable to the s 400.3 offence, and 20 years applicable to the s 400.4 offence. 23Reliance was placed upon a series of decisions of the Court of Criminal Appeal in which criticism was made of the CDPP for prosecuting money laundering offences in conjunction with other offences. In Thorn v R [2009] NSWCCA 294; 198 A Crim R 135 the applicant had been charged with 11 counts of dishonestly obtaining a financial advantage and one of attempting to do so by making false claims for refunds under the GST legislation. He was also charged with one count of money laundering under s 400.4(1) of the Code. The money the subject of the money laundering charge was the proceeds of the fraud offences (that is, where the present charges rely on sub-para (b)(ii) of the sub-section creating the offence - that is, an intention that the money will become the instrument of crime - in Thorn , the CDPP relied upon sub-para (b)(i) - that the money was the proceeds of crime). Howie J, with whom Campbell JA and Rothman J agreed, considered this to be "an unusual use" of a money laundering offence, with an overlap between that and the fraud offences (at [27]). He said that the criminality "was very much in the obtaining of the funds not in their use". He drew an analogy with "a robber being sentenced for both the robbery and being in possession of the stolen goods". 24It is apparent that the extent of overlap was not raised by that applicant's legal representatives, and it appears from the judgment that that applicant had pleaded guilty to all charges. 25The Court reduced the sentences, but nevertheless retained, in respect of the money laundering offence, a sentence of imprisonment for 2 years and 8 months, which was partially accumulated upon the other sentences. In other words, the Court did not regard the additional criminality involved in the money laundering as negligible. 26Similarly, in Nahlous v R [2010] NSWCCA 58; 201 A Crim R 150 the applicant pleaded guilty to six charges under the Copyright Act 1968 (Cth) concerning the sale, or offering for sale, of unauthorised property, and to one offence of money laundering (dealing with the proceeds of crime) under s 400.6(1) of the Code. The items the subject of the money laundering offence were the very items that the applicant had sold or offered for sale. The Court referred to Thorn , and said that, in that case, as in Nahlous : "[14] ... the offence to a certain extent concerned the profits of the applicant's own criminality ..." 27The Court (of which Howie J was a member) quoted from [27] of Thorn and went on to say that it could see no justification whatever for the prosecution of the money laundering offence. The Court said: "[17] We appreciate that a person can by the one act commit two offences and, where the two offences address different aspects of the criminal conduct, there is nothing wrong with prosecuting the two offences or, subject to the principle of totality, with imposing separate sentences for the two offences. But in our view the receipt of the money as a result of the sale did not result in a separate act of criminality that warranted a separate charge and a separate penalty." The Court dismissed that charge under s 19B(1)(c) of the Crimes Act 1914, stating its opinion that it was inexpedient to inflict any punishment in respect of that offence. 28However, in R v Huang; R v Siu [2007] NSWCCA 259; 174 A Crim R 370 this Court dealt with Crown appeals against sentence in respect of two offenders who had, like the present plaintiffs, been charged with (and pleaded guilty to) both structuring offences and money laundering offences. It was not suggested in that case that that involved an abuse of process, and, indeed, the Court (of which, again, Howie J was a member) said the following: "[34] The amount of money involved is clearly a highly significant matter [in relation to the money laundering offences] because the legislation uses it as the principal means of dividing the offences into categories and it is the primary identifier of what is the maximum penalty for an offence ... 37 Sentences that have been imposed for offences in breach of s 31(1) of the [ Financial Transaction Reports ] Act are not a helpful guide to the sentence to be imposed for an offence contrary to s 400. This is not simply because of the difference in the maximum penalties prescribed for the different offences. Depositing sums of money in breach of the provisions of that Act to the extent that was embarked upon by the respondents and taking into account their knowledge of the purpose of the transactions imbues their criminal activity with a completely different complexion." 29The principal argument advanced on behalf of the plaintiffs was dependent upon the significant difference in the maximum penalties applicable, on the one hand, to structuring offences, and, on the other hand, to money laundering offences. It was accepted that the CDPP retains a significant degree of independence in respect of prosecutorial decisions. Nevertheless, it was submitted that the Court retains an overall supervisory role in order to prevent an abuse of the decision making process. 30I accept that, to a limited extent, there is role for the Court to intervene in order to prevent abuse of its processes by the wrongful exercise of prosecutorial discretion. I was referred to no decision in which the Court had exercised that limited power in such a way as to determine the nature of the charges to be preferred against an accused person. I do not see the decision to prosecute the plaintiffs in respect of money laundering, as distinct from structuring, offences, as involving any such abuse. 31I observe that the options available to the CDPP in respect of each plaintiff were not, simply, a charge of money laundering, or a single charge of structuring. Every two purchases of bank drafts exposed the plaintiffs to charges of structuring; there are numerous ways in which, if only structuring were charged, it would have been open to the CDPP to divide the transactions in order to prosecute multiple offences of structuring with potentially cumulative penalties. 32In any event, when the amount of money involved, particularly in the case of Guarav Arora, is considered, it can be seen that it would be inappropriate to prosecute on a single charge of structuring, carrying a maximum penalty of imprisonment for 5 years. The same applies, although with less force, to the case of Jagdish Arora. 33I am satisfied that no abuse such as to warrant the intervention of this Court has been demonstrated. 34In each case the summons is dismissed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 June 2011