The NSW Court of Criminal Appeal has dismissed a taxpayer’s appeal against his conviction and sentencing for money laundering and tax fraud offences.
The Court said that, in November 2010, the appellant was found guilty by a jury in the NSW Supreme Court on one count of “money laundering”, contrary to s 400.3(1) of the Criminal Code Act 1995 (Cth), and one count of doing an act with the intention of dishonestly obtaining a gain from the Commonwealth, contrary to s 135.1(1) of the Code. On 17 December 2010, Johnson J (the trial judge) imposed the following sentences on the appellant:
- Re money laundering, imprisonment for a period of 7 years, to date from 17 December 2010 and to expire on 16 December 2017.
- Re the other count, imprisonment for a period of 3 years and 6 months, to date from 17 December 2015 and to expire on 16 June 2019.
In relation to both sentences, his Honour fixed a non-parole period of 4 years and 9 months to date from 17 December 2010 and to expire on 16 September 2015.
The appellant appealed against both convictions and sought leave to appeal against the sentence.
The Court said that, essentially, the Crown case was that the appellant had acquired through his private company, Barat Advisory Pty Ltd, a significant parcel of shares in a company, Admerex Limited, at negligible cost. After taking advice, he established tax-deferral arrangements involving overseas entities through which, ultimately, the shares were disposed of. The Court said the short-term feature of the arrangements was the necessity to pass the legal and beneficial ownership to the overseas entities. A critical dealing in the shares was the later “swap” of some 48m Admerex shares for 1m Temenos shares.
The Crown alleged that the appellant, prior to the swap, had in a number of respects deliberately and significantly departed from the terms of the tax advice he had been given and the structure, which had been established by his lawyers. He did so with the ultimate intention of avoiding the payment of CGT liabilities that might later arise, the Court said. In particular, it was the Crown case that Barat Advisory Pty Ltd retained the beneficial ownership of the shares. When the opportunity ultimately arose to dispose of the Admerex shares, once again, the appellant did so, contrary to the terms of the tax advice and with the same intention of avoiding CGT. The structure of, and the dealings involved in, these transactions were complex. Relevant transactions occurred both in Australia and overseas, between January 2003 and September 2005. It was the Crown case that the CGT liability arose in the 2005 financial year. It was also alleged the appellant had deceived and misled his accountants in a number of respects. These were the circumstances relating to the second charge in the indictment.
After extensive review of the evidence and consideration of many relevant cases, the Court of Criminal Appeal concluded that the sentences imposed by the trial judge were open to him and they were not manifestly excessive. It dismissed the taxpayer’s appeal against conviction, granted him leave to appeal against sentence, but then dismissed that appeal as well.
(Milne v R [2012] NSWCCA 24, NSW Court of Criminal Appeal, Whealy JA, Latham and Harrison JJ, 2 March 2012.)
[LTN 43, 5/3]