Superior Number Sentencing – reasons regarding sentencing.
[2016]JRC165
Royal Court
(Samedi)
15 September 2016
|
Before :
|
W. J. Bailhache, Esq.,
Bailiff and Jurats Nicolle, Crill, Blampied,
Ramsden, Thomas and Pitman.
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The Attorney General
-v-
Stephen Richard Goodwin
D. J. Hopwood, Esq.,
Crown Advocate for H.M. Attorney General.
Advocate J. C. Gollop for the Defendant.
JUDGMENT
THE BAILIFF:
1.
On 25th
August, 2016, the defendant was sentenced to a total of 6 years’
imprisonment and fined £2,000 with default sentences. Reasons were to be given later and this
judgment contains those reasons.
The detail in relation to the four counts on the indictment in respect
of which guilty pleas were entered is set out below.
Count 2 – money laundering
2.
The
defendant pleaded guilty to making deposits and transfer of funds between
various bank accounts in his own name or that of his business or his wife or in
their joint names, both in Jersey and in the United Kingdom, knowing or having
reasonable grounds to suspect that these deposits represented another
person’s proceeds of drug trafficking. The amount in question was
£596,893, and the money laundering took place between March 2006 and 31st
December, 2011. On this count, the
defendant was sentenced to 6 years’ imprisonment, the Court having
previously determined that the defendant had benefitted in the sum of
£325,970.78, and made a confiscation order in the sum of
£214,237.82, that amount to be paid within 18 months, with a 2 year
imprisonment sentence in default.
The charge therefore represents a considerable sum of money which was
laundered, and the amount of benefit shows the extent to which the defendant
would have made a profit over that period in respect of that money laundering.
3.
Although
the money laundering took place over a period of some five years, it became
increasingly aggressive in the sense that approximately one half of the total
sum laundered was deposited during 2011, the final year of the relevant period. During that year there were on average
seven deposits every week, most being in the sum of being £950. Some of the laundered money was spent on
luxuries – a Rolex wrist watch for the defendant and two Chanel watches
for his wife, costing £7,459 and £2,805 respectively. In 2011, the defendant spent nearly
£62,000 on home improvements.
4.
Money
laundering is a serious offence which, by virtue of the Drug Trafficking
Offences (Jersey) Law 1988 (“the Law”), carries a potential
sentence of 14 years’ imprisonment or an unlimited fine. This Court has previously had regard to
the English authority of R v Monfries [2004] 2
Cr. App. R.(S) 3, in which the English Court of Appeal set out a number of
principles:-
(i)
There is
not necessarily a direct relationship between the sentence for the laundering
offence and the original antecedent offence. Where, however, the particular
antecedent offence can be identified, some regard will be had
to the appropriate sentence for that offence when considering the appropriate
sentence for the laundering offence.
(ii) The criminality in laundering is the
assistance, support and encouragement it provides to criminal conduct.
(iii) Regard should be had to the extent of the
launderer’s knowledge of the antecedent offence.
(iv) The amount of money laundered is a relevant
factor.
5.
In AG v
Gomes and others [2007] JRC 129, the Court indicated that in addition to
these principles, regard should be had to the period of time during which the
money laundering occurs.
6.
In Bhojwani
v AG [2011] JCA 034, the following principles were added:-
(i)
No
distinction is to be drawn as a matter of law between the laundering of
one’s own proceeds of crime and the proceeds of crime committed by third
parties.
(ii) A professional money laundering service is not
necessarily more serious than laundering the proceeds of a one off fraud
– it may be so, but each case will depend on its own facts.
(iii) The interests of Jersey as a finance centre
justified an element of deterrence in the sentence.
7.
In AG v
Bhojwani [2010] JRC 116, the Royal Court had held that the duration,
sophistication and scale of money laundering are also relevant
considerations.
8.
In our
view the factors which make this present case particularly serious are the
following:-
(i)
The money
laundering involved a considerable amount of money laundered over a long period
of time.
(ii) The substance of the antecedent offence was
drug trafficking. The defendant
therefore made his money out of the hardship and suffering which the Court
recognises is caused by drug trafficking in our community.
(iii) The offence was based on greed and the
defendant’s desire to acquire luxury products of one kind or
another.
(iv) This was a relatively sophisticated money
laundering offence in the sense that it involved the use of many bank accounts,
not only in Jersey but in the United Kingdom as well. Inevitably that made the investigation
of the offence more difficult and the piecing together of a money trail more
challenging. Furthermore, as was
said in Bhojwani:
“The Island relies to a
considerable extent for its GDP on the finance industry. Jersey now ranks among the world’s
leaders for good anti-money laundering compliance and regulation, and has
worked hard to establish its reputation as a jurisdiction which eschews
criminal wealth and will bring offenders to book.”
9.
In this
case, the fact that the defendant used joint accounts, which led to his wife
and daughter falling under suspicion is an aggravating factor. The acknowledgement of guilt in relation
to the charge of attempting to pervert the course of justice, the detail of
which appears below, also aggravates the money laundering offence.
10. Advocate Gollop submitted in mitigation that
the defendant did not appreciate at the outset that he was helping launder the
proceeds of drug trafficking. He
said that the defendant originally made the deposits in order to help a friend,
but later on appreciated that these represented the proceeds of drug
trafficking. He went on to say that
the defendant was faced with threats to himself and his family when he tried to
pull out of the arrangement, and as a result he continued. The suggestion that the defendant did
not appreciate at the outset that he was laundering the proceeds of crime is
not consistent with the guilty plea which has been entered, but, even on the
defendant’s story, there is no doubt that from a relatively early stage
he was aware of the criminality in which he was engaged and he knew that drug
trafficking underlay his course of conduct.
11. We do not treat as mitigation the alleged
threats which have been made against the defendant and his family. In cases of sentencing for drug
trafficking, the Court’s policy is clear – no mitigation is allowed
where the drug trafficker has been subjected to threats, for two clear policy
reasons – the first is that the drug trafficker puts himself in this
position. If the trafficker is a
user himself, he knows perfectly well that he is moving into an illicit world
where threats are an everyday occurrence and they are regularly used. It follows that by choosing to put
himself in that position, the drug trafficker cannot later claim he should be
allowed mitigation for another offence he commits because of the threats made
against him. We think the same
rationale applies in money laundering cases. Where a person knows or has reasonable
grounds to suspect that he is laundering the proceeds of drug trafficking, he
chooses himself to enter the illicit world where threats are an everyday
occurrence. The second reason, as a
matter of policy, for not treating the threats as mitigation is that it is in
most cases impossible to ascertain whether the suggestion is true. Save in the rare case of physical
evidence, it is impossible for the Crown or the Court to know whether a simple
submission by counsel on behalf of a person that that person has been
threatened by his dealer further up the line is true or not. Once again the same logic applies in
money laundering cases.
12. It is clear that the proceeds of drug
trafficking in the instant case included the proceeds of trafficking in Class A
drugs, because there were traces of MDMA or ecstasy found on some of the cash
which was seized on a search of the defendant’s home both in 2012 and
again in 2015. The maximum sentence
for trafficking in Class A drugs is life imprisonment; and the maximum for
trafficking in Class B drugs is 14 years’ imprisonment. Advocate Gollop did not dissent from the
proposition that just as there would not for the most part be thieves without
receivers, there would not be drug traffickers without money launderers. There would be a very much reduced
purpose in drug trafficking if the proceeds could not provide a benefit to the
drug trafficker. Given that the
maximum sentence for trafficking in Class A drugs is life imprisonment, we
think the legislature might wish to give consideration to increasing the
maximum sentences under Part 3 of the Proceeds of Crime (Jersey) Law 1999.
13. Nonetheless Advocate Gollop submitted that any
analogy with drug trafficking is difficult because one could not assess the
involvement in drug trafficking.
Here he said that the defendant had no knowledge of the details of the
underlying drug trafficking, and never handled or never saw the drugs in
question.
14. Although one Jurat did not accept the analogy
by way of comparison with the predicate offence, the Court considered that it
was appropriate to look at what sentence might have been imposed in relation to
the antecedent offence. In the case
of Attorney General v Warren and others [2009] JRC 234 the charge was
conspiracy to evade the prohibition on the importation of cannabis. The amount in that case involved180
kilograms of cannabis with a wholesale price of £720,000 and a street
value of £1 million. The
Court took a starting point of 13 years’ imprisonment for Warren, who was
considered to be the mastermind of the operation. Other conspirators in that case were
sentenced on the basis of starting points of 9 to 11 years’
imprisonment.
15. It is true that we do not know in the present
case whether these proceeds represented solely the laundering of Class A drugs
or a mixture of classes of drugs.
What we do know is that the defendant agreed to be paid a commission of
some 20% plus expenses, and in the event, took an even higher commission; and
for the purposes of laundering, he made trips to the Netherlands and elsewhere
to deliver cash. We therefore can
proceed on the basis that he was heavily involved in the drug trafficking
operation albeit his participation was as a money launderer and not as a
handler or supplier of the drugs.
Although the Crown has not identified a starting point, we would
identify a starting point of between 11 and 12 years for the money laundering
in this case. We have done so on a
comparison of starting points in Class A and Class B drugs having regard in
particular to the value of MDMA and cannabis and recognising that there is no direct
relationship with the antecedent offence, but very much taking it into account.
16. Advocate Gollop contended that it was wrong to
look at so high a starting point particularly when one compared the cases of AG-v-Michel
[2007] JRC 120 and Bhojwani.
In Michel, the defendant was sentenced on a total of 10 counts of
assisting another to retain the benefit of criminal conduct under the Proceeds
of Crime Law, where the antecedent offence was tax evasion. The Court took a starting point of 8
years and imposed a sentence of 6 years’ imprisonment. In Bhojwani, the defendant was
sentenced to 6 years’ imprisonment having laundered approximately US$34
million, this sum representing the proceeds of corruption in Nigeria. The Court adopted a starting point of 8
years’ imprisonment.
17. In our judgment not only are the cases not
comparable, but also it is right that sentencing policy should move on from the
Michel and Bhojwani cases, decided as they were 9 and 5 years
ago. As to comparability, the
present case involves the laundering of drug trafficking. It would seem that at least some of the
drug trafficking, and possibly all of it, occurred on the streets of Jersey and
the antecedent offence therefore directly involves damage done to the people of
this Island. For the avoidance of
doubt, we are not saying that the laundering of drug trafficking proceeds where
the trafficking involved damage to other communities would be less serious
offence – for drug trafficking is a heinous crime wherever it takes
place. What we do say, however, is
that when comparing the cases of Michel and Bhojwani, we can take
into account, and we do, that there has been direct damage caused to the people
of this Island by the antecedent offence.
18. As to the second point, we consider that the
evil of money laundering generally receives an increasing focus in the
international community and that it is right that this Court should reflect
that in the sentences which it passes.
We note that in the Michel case the Court considered that it was
appropriate to exercise some mercy within the overall duty to impose the proper
sentence and, although it does not appear that that language was used in terms
in the Bhojwani case, it may well be that some of the features
highlighted by the sentencing court were really based on that principle. At all events, we accept that it is
necessary for the Court to send a clear signal that the Island’s
financial institutions are not to be abused for business of this kind, and we
think that if the Michel and Bhojwani cases were to come to Court
today, it is very possible that higher starting points would have been taken
and longer sentences might have been imposed.
19. We have noted the points which have been raised
by Advocate Gollop in mitigation and say something about those now. First of all we take into account the
guilty pleas which the defendant has entered to the counts on which he now
falls to be sentenced. Particularly
in relation to Count 2, this guilty plea is of real value because there would
undoubtedly have been a long and complex trial had a not guilty plea been
entered. We therefore give him full
credit for that. We also note that
he co-operated in relation to the confiscation order, and that he is a man of
previous good character who has indicated his remorse for the offending which
he has committed and for the damage which it has caused his family. He has shown good conduct on remand in
the prison which also stands to his credit. We have taken into account all that is
set out in the social enquiry report.
Advocate Gollop suggested that some mitigation ought to be available for
the fact that there has been a very lengthy investigation and that these
proceedings have therefore been hanging over the defendant for some time, the
first arrest and search taking place in December 2011. We do not think this is a point
significantly in the defendant’s favour. Where offences of this kind are
committed, it is invariably difficult to investigate quickly, because the Crown
does not have all the information, does not have a complainant and cannot start
from the identified premise that particular transactions are unlawful. Such investigations inevitably take time
and what is more they are frequently made more complex by the conduct of the defendant
himself – as here where he falsified documents and used numbers of bank
accounts in both Jersey and in the United Kingdom. We therefore do not think this point is
available to the defendant as mitigation.
20. Having regard to those considerations the Court
imposed a sentence of 6 years’ imprisonment in relation to Count 2.
Counts 3 and 4 – Tax evasion
21. Counts 3 and 4 relate to charges of
fraudulently omitting income from income tax returns submitted in respect of
the years 2006 and 2007. During
this time, the defendant was allegedly unemployed, according to him suffering
from severe clinical depression. He
did not include in his tax returns income earned as an IT consultant, namely
the sum of £15,400 during 2006 and £15,100 during 2007. It is right to note that if he had
included that sum within his income tax return, no additional tax would have
been payable and therefore there has been no loss to the Comptroller.
22. By Article 137(1) of the Income Tax (Jersey)
Law 1961, the maximum penalty for delivering a fraudulent return at the
time these offences were committed was a fine not exceeding the aggregate of a
fine at Level 3 on the standard scale and a further sum based on the income tax
that would have been payable had the right declaration been made. As no additional tax would have been payable,
it means that the maximum fine is at Level 3 on the standard scale, which is
the sum of £2,000.
23. The filing of accurate income tax returns is an
essential obligation which the citizen owes to the State. If it is not conducted accurately, then
an incorrect amount of tax is charged, and that does damage to the Island
community as a whole. The fact that
no additional tax would have been payable on this occasion means of course that
the maximum fine which can be imposed is much reduced, because the actual
damage caused to the Island is negligible.
Nonetheless the fraudulent return is a serious matter because the
efficient administration of our tax system depends to a large extent upon the
honesty of Islanders in making their tax returns. A dishonest breach of the citizen’s
obligation to the State, if committed by many, would undoubtedly lead to a
requirement for more resources to be allocated to the problem of gathering in
the taxes which are due to be paid.
For these reasons we treat the offences as serious, and impose a fine of
£1,000, to be paid within 18 months, and in default a sentence of 6 weeks’
imprisonment concurrent, these fines, default provisions and periods for
payment to apply to each of Counts 3 and 4.
Count 14 – attempting to pervert the course of
justice
24. In December 2011 10 Royal Mail packages
addressed to the defendant were opened and found to contain a total of
€24,015. The cash was seized
and the defendant invited to attend for interview. He acknowledged that he was the intended
recipient of the postal packages but he claimed that he had purchased the Euros
using his savings and funds inherited from his late father. He handed over copies of his bank
statements and email messages apparently showing that some of the Euros had been
purchased during the previous few days.
He offered various explanations for obtaining the Euros in this
way.
25. Three days later, a further package containing
€2,885 addressed to the defendant was seized, making the total amount
€26,900.
26. Customs officers carried out enquiries in
relation to the identified bank accounts.
They established that the purported copies of the bank statements
provided by the defendant during interview had been falsified and did not match
the original documents issued by the bank.
The falsified documents were presented by the defendant to Customs
officers in order to conceal the wider money laundering which is the subject of
Count 2 on the indictment.
27. Attempting to pervert the course of justice is
a serious offence. It is often
treated as meriting a consecutive sentence because it is distinct and because
the Court frequently wishes to emphasise the seriousness of the crime. In this case the attempt to pervert the
course of justice was an attempt to conceal the defendant’s own guilt in
respect of the more serious charge.
For that reason, the Court agrees with the Crown that the charge should
receive a concurrent sentence, but that nonetheless the offending aggravates
the wider offence under Count 2. We
consider that the matter is appropriately dealt with by a sentence of 12
months’ imprisonment, concurrent.
Authorities
Drug Trafficking Offences (Jersey)
Law 1988.
R v Monfries
[2004] 2 Cr. App. R.(S) 3.
AG
v Gomes and others [2007] JRC 129.
Bhojwani
v AG [2011] JCA 034.
AG
v Bhojwani [2010] JRC 116.
Proceeds of Crime (Jersey) Law 1999.
Attorney
General v Warren and others [2009] JRC 234.
AG-v-Michel
[2007] JRC 120.
Income Tax (Jersey) Law 1961.