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State v Cutmore [2022] PGNC 454; N10001 (28 October 2022)

N10001

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR FC 119 OF 2022

THE STATE

V

DAVID JOHN CUTMORE

Waigani: Berrigan, J
2022: 21^st September and 28^th October

CRIMINAL LAW – SENTENCE – GUILTY PLEA - Part VIA of the Criminal Code - Money laundering – S. 508B of the Criminal Code – “Criminal property” – 611.1 kg of cocaine received for the purpose of taking to Australia, valued at more than AUD141m (PGK340m) – 18 years of imprisonment.

Cases Cited:
Papua New Guinean Cases

Public Prosecutor v Tom Ake [1978] PNGLR 469
Goli Golu v The State [1979] PNGLR 653
The State v Tardrew [1986] PNGLR 91
Lawrence Simbe v The State [1994] PNGLR 38
Yalibakut v State (2006) SC890
The State v Edward Bae (2019) N8029

Overseas Cases

R v Huang [2007] NSWCCA 259; (2007) 174 A Crim R 370
R v Ansari [2007] NSWCCA 204; (2007) 70 NSWLR 89
R v Li [2010] NSWCCA 125; (2010) 202 A Crim R 195
R v Guo [2010] NSWCCA 170; (2010) 201 A Crim R 403
Thorn v R [2009] NSWCCA 294; (2009) 198 A Crim R 135
Clarke v The Queen [2019] NTCCA 2

Legislation Cited

Sections 19, 508A, 508B, 508F of the Criminal Code
Section 3 Dangerous Drugs Act, 1952

Counsel

Ms H. Roalakona, for the State
Mr F. Kirriwom, for the Offender

DECISION ON SENTENCE

28^th October, 2022

1. BERRIGAN J: The offender was convicted after pleading guilty to one count of money laundering contrary to s. 508B(1) of the Criminal Code (Ch. 262) (the Criminal Code) such that he received criminal property being 28 bags of cocaine weighing 611.1 kilograms, which he knew or ought reasonably to have known was criminal property.
   
2. The maximum penalty for the offence is a fine not exceeding K500,000 or imprisonment for a term not exceeding 25 years, or both: s 508B(1)(a) of the Criminal Code.
   

Background

3. The offender pleaded guilty to the following agreed facts which are supported by the depositions.
   
4. On 26 July 2020 an aircraft, Cessna 402C, flown by the offender travelled from Mareeba Airport, Cairns, Australia, to Papua New Guinea. It landed at an airstrip outside of Port Moresby near Lealea Village, Central Province. The offender was the pilot of the aircraft and travelled alone. He entered Papua New Guinea illegally and for the purpose of collecting the cocaine and transporting it to Australia. Upon landing, the offender received from some locals whom he knew as “Commander” and “Jungle Boy” 611.1 kgs of cocaine, being dangerous drugs contrary to s 1 and s 3 of the Dangerous Drugs Act, 1952, which were loaded onto the aircraft. The offender attempted to take off from the airstrip but his aircraft crashed into the trees at the end of the runway. The drugs were intended for Australia and had an estimated street value of AUD $141,164,100.00.
   
5. The offender declined to make a statement on allocutus but told Probation Services that he was going through some challenges and saw an opportunity to transform his life by transporting the cocaine. He knew what he did was wrong. He apologised to the people of Papua New Guinea, the government of Papua New Guinea, and the people of Australia who reside in Papua New Guinea. He greatly respects Papua New Guinea, its people and laws and regulations but faced a personal situation that forced him to commit the offence and he will not do it again. He asked for the Court’s mercy so that he may return to his home country, having regard to his medical condition and the fact that he will face the full force of the law in Australia.
   

Money laundering, contrary to s 508B of the Criminal Code

6. There have been very few sentences imposed for money laundering in this jurisdiction. This is an unusual case for a number of reasons.
   
7. On the facts described one might have expected the offender to have been charged with a drug related offence. At the relevant time, however, offences under the Controlled Substance Act, 2021, and the severe penalties applying, were yet to come into effect. Offences available under the Dangerous Drugs Act, 1952 were punishable up to a maximum of two years of imprisonment. It appears that in those circumstances the State elected to proceed against the offender for money laundering under Part VIA of the Criminal Code. The charge was open to the State.
   
8. Whilst money laundering is generally understood to concern the processing of monies so as to conceal their criminal origin, the offence prescribed under s.508B(1) is deliberately broad and designed to capture a wide range of offending behaviours: The State v Edward Bae (2019) N8029 at [59].
   
9. Section 508B(1) of the Criminal Code provides that a person who “deals with property that is criminal property and who knows or ought reasonably to know that the property is criminal property is guilty of an offence”.
   
10. “Criminal property” is defined in s. 508A of the Criminal Code to mean: “property that is, in whole or in part and whether directly or indirectly, derived from, obtained or used in connection with criminal conduct and includes any interest, dividends or other income on or value accruing from or generated by such property, regardless of who carried out the criminal conduct or who benefited from it”.
    
11. “Property” is defined in the same section in very wide terms to mean “assets of every kind, tangible or intangible, corporeal or incorporeal, moveable or immovable, however, acquired, including an enforceable right of action, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such assets, including but not limited to currency, bank credits, deposits and other financial resources, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts and letters of credit, whether situated in Papua New Guinea or elsewhere, and includes a legal or equitable interest, whether full or partial, in any such assets.”
    
12. “Deals with property” is defined under s 508B(3) to include one or more of: a) conceals; b) disguises; c) converts; d) transfers; e) removes from Papua New Guinea; f) brings into Papua New Guinea; g) receives; h) acquires; i) uses; j) possesses; k) consents to or enables any of the actions referred to in a) to j); and l) uses an electronic system or device to do any of a) to k): s. 508B (3) of the Criminal Code.
    
13. There is no doubt that the cocaine received by the offender is an asset. It might be a regulated substance but it has value, and significant value at that, particularly to those in organised crime for whom he received it.
    
14. The cocaine was “criminal property”, that is property derived from, obtained or used in connection with past or completed criminal conduct: s. 508A read together with s. 508F(a)(i)(ii) and (b)(i)(ii) of the Criminal Code; Bae at [14].
    
15. “Criminal conduct” includes conduct which “constitutes an offence in Papua New Guinea for which the maximum penalty is death or a term of imprisonment for at least six months”: s 508A.
    
16. The State proceeded on the basis that the cocaine was derived from, obtained or used in connection with the offence of possession contrary to s 3(1)(d) of the Dangerous Drugs Act, for which the maximum penalty is two years of imprisonment.
    
17. On the agreed facts, the cocaine was derived from, obtained or used in connection with the illegal possession of it by one or more persons in Papua New Guinea in contravention of s 3(1)(d) of the Dangerous Drugs Act prior to the offender receiving it. The offender admits and his conduct makes clear that he knew that possession of cocaine in Papua New Guinea was an offence when he received the property, albeit that he may have assumed that it was an offence attracting a much greater penalty.
    

Sentencing Principles

18. Given the breadth of s 508B(1) of the Criminal Code, sentencing requires a careful assessment of the objective seriousness of the offending under consideration: Bae at [59] adopting Thorn v R [2009] NSWCCA 294; (2009) 198 A Crim R 135; Clarke v The Queen [2019] NTCCA 2.
    
19. The following non-exhaustive list of factors may be relevant when considering the objective seriousness of a money laundering offence: a) the amount or value of the criminal property involved; b) the source of the criminal property dealt with or the seriousness of the criminal conduct from which the property derived; c) the period over which the offence was perpetrated and the number of transactions involved; d) the sophisticated nature of the offence and the extent of planning involved; e) the role of the offender, or the authority with which he acted; f) the nature of the dealing or the use to which the money was put, including the extent to which the offender personally benefited; g) the state of mind of the offender, or the extent to which he knew the property was criminal property; h) the extent to which the offender abused a position of power or trust; and i) the impact of the offence on the public and public confidence: Bae at [37]; R v Huang [2007] NSWCCA 259; (2007) 174 A Crim R 370 at [35]; R v Li [2010] NSWCCA 125; (2010) 202 A Crim R 195 at [41]; R v Guo [2010] NSWCCA 170; (2010) 201 A Crim R 403 at [87], [89]; R v Ansari [2007] NSWCCA 204; (2007) 70 NSWLR 89 considered.
    
20. A sentence for money laundering should normally reflect the need for general deterrence to a very significant degree because of the serious nature of the offence and the potential risks posed to the economy and society: Bae at [39].
    
21. Section 19 of the Criminal Code provides the Court with broad discretion on sentence. The sentence in this case will be determined having regard to its own facts and circumstances: Lawrence Simbe v The State [1994] PNGLR 38.
    

State’s Submissions

22. The State submitted in aggravation that the offender was part of a sophisticated scheme of dealing with dangerous drugs. He understood his illegal conduct. The offence was committed with other offences under the Customs Act and the Migrations Act. It involved a significant quantity of dangerous drugs, 611.1 kilograms, at a market value of AUD141,164,100 or about K300m. The source of the criminal property into the country was a yacht. The dealing took place on the same day he received the property. It was a sophisticated and well-planned offence and his role was to receive the property with the intention of transporting it to another country. He knew exactly what his role was. The offender has prior convictions for unlawfully entering the country contrary to the Migration Act, and safety offences under the Civil Aviation Act, for which he is currently serving an effective term of two years.
    
23. The State suggested a starting point of 12 years, and having regard to the aggravating factors, the nature of the criminal property, and the strong need for personal and general deterrence, submitted that a sentence within the range of 15 to 20 years of imprisonment was appropriate.
    

Defence Submissions

24. Defence counsel submitted in mitigation that the offender pleaded guilty. He cooperated with police by firstly surrendering at the Australian High Commission on or about 28 July 2020 and thereafter providing a detailed confessional statement on 30 July 2020. He has no prior convictions. The offences referred to by the State relate to his entry into the country for this offence. The offender is suffering from severe Plaque Psoriasis and Psoriatic Arthropathy, for which conventional treatment in Papua New Guinea has proven unsuccessful. His health in suffering in custody.
    
25. Counsel further submitted that whilst in other countries, like Australia, the 611.1 kgs of cocaine the subject of charge could easily fetch over AUD140m there was no evidence to show that there was a market for cocaine in Papua New Guinea and no evidence to show that it was worth anything in this country.
    
26. Counsel conceded that the conduct of the offender and his accomplices was serious and revealed a well organised, sophisticated drug trafficking operation, otherwise not previously known in Papua New Guinea. The offending demonstrated that Papua New Guinea was not beyond the reach of international drug trafficking syndicates, and moreover revealed that Papua New Guineans were being recruited and were very much involved in sophisticated and illegal operations. There was no dispute that the offender was aware that the criminal property which he had been recruited to transport was cocaine and that this contributed to the seriousness of the offender’s conduct. To that extent the circumstances of the offending placed it in the more serious instance of drug related offences, notwithstanding that the offender had been convicted of money laundering. Having said that, the offender was charged with receiving the cocaine and the offence was complete upon the offender receiving the criminal property at Lealea Village. The sentence need not be the same as that which would otherwise be imposed for the underlying offence or the offence from which the property was derived: Bae at [27]. In conclusion, defence counsel submitted that having regard to the sophistication of the operation and the volume of drugs seized a sentence of six years of imprisonment is appropriate.
    
27. Counsel asked the Court to exercise its discretion to deduct time spent in custody and to suspend the balance of the sentence having regard to the offender’s age, medical condition, and the possibility that he may cooperate as a witness in other prosecutions in Papua New Guinea as well as Australia.
    

Consideration

28. The offender was not an architect of the offence nor a principal beneficiary, and he was not dealing with the property with a view to disguising it in order to make it more difficult to track or identify as the proceeds of a particular crime. There was no breach of trust on the part of the offender and no impact on the public or public confidence in the sense referred to in Bae.
    
29. In the circumstances and having regard to the following matters, the offence is not of the worst kind warranting the maximum penalty: Goli Golu v The State [1979] PNGLR 653 applied. Nevertheless, the objective seriousness of the offence was extremely high for the following reasons, again having regard to the considerations in Bae.
    
30. I am unable to accept that the starting point for the offending in this case is twelve and a half years, or the mid-point of the sentencing range. In my view the value of the property will ordinarily be the principal factor in determining sentence for money laundering. As a general rule, the greater the value of the asset, the more serious the offence: Bae at [37]. It would be premature for me to propose a scale of sentences generally. The value of the criminal property was exceptionally large, AUD141m or more than PGK340m (as at the relevant time). That alone places the offence at the upper end of the scale.
    
31. Whether or not there was a market for the property in Papua New Guinea is irrelevant. Markets for some of the most valuable assets are often limited or remotely located, as may be the assets themselves, as s 508A of the Criminal Code expressly recognises. Moreover, the offender received the property for the specific purpose of taking it to Australia.
    
32. Furthermore, whilst it is not contended that the offender is normally associated with organised crime, he played a critical role. He is a man of mature age who breached international borders to collect well over half a tonne of cocaine. There can be no doubt he knew that the property was extremely valuable whether or not he knew the full extent of its market value.
    
33. Whilst the offence involved a single incident it required significant planning and coordination, involving multiple actors across jurisdictions, and to that extent it may properly be regarded as sophisticated.
    
34. The offender was also well aware of the illegality of his conduct in Papua New Guinea as demonstrated by his illegal entry into the country and his subsequent conduct. Immediately following the plane crash he went into hiding in Port Moresby.
    
35. The State submitted that the offence is aggravated by the fact that the property entered the country on a yacht. That fact was not contained in the agreed facts and the offender may not have been aware of it. To my mind it matters little to the culpability of the offender whether or not he knew that the property was manufactured elsewhere.
    
36. Regardless of that the offending in this case was further aggravated by the fact that, for obvious reasons, the offender knew both the nature of the criminal property and its intended purpose when he received it. He did not receive the property in a vacuum. He knew the property was cocaine and he must have appreciated that it was to be trafficked by those who had recruited him to collect it from Papua New Guinea, who can only have been part of a large criminal organisation.
    
37. Furthermore, whilst he did not ultimately benefit, the offence was motivated by financial gain. There is no dispute or doubt about this although neither party addressed it. The offender admitted in his record of interview that he was promised AUD1m for receiving the cocaine and taking it to Australia: Public Prosecutor v Tom Ake [1978] PNGLR 469; Yalibakut v State (2006) SC890 applied.
    
38. I turn now to consider the personal circumstances of the offender and the matters in mitigation.
    
39. The offender is 57 years of age. He is originally from Townsville, Queensland, Australia but was living in Melbourne, Victoria, at the time of the offence. He is the eldest of three children. His father is 77 years of age and lives in an aged home. His mother lives at home. He is divorced but until recently supported his former wife to care for their daughter, who is now 19 years old, and living independently. Whilst details are limited, it appears that the offender has held a pilot’s licence in Australia since about 1990 and worked as a pilot in that country for a number of companies before operating his own business. At the time of the offence he was unemployed.
    
40. In mitigation this is the offender’s first offence. I agree with defence counsel that the related migration and aviation offences cannot be regarded as prior offences.
    
41. There is no material before me that might be described as going to prior good character. As above, however, I accept that the offender was recruited by others to receive the property and was not normally associated with organised criminals.
    
42. On 28 July 2020 and within two days of his failed attempt to leave the country with the property the offender attended the Australian High Commission for the purpose of surrendering himself to Australian Federal Police, whose officers had left telephone and text messages on his phone.
    
43. Perhaps his options were limited but the fact remains that the offender did not attempt to avoid detection within the country for any extended length of time and nor did he attempt to leave it by other means.
    
44. The offender made admissions to the Royal Papua New Guinea Constabulary on 30 July 2020 as to his role. I do not consider them to be detailed but he does not deny that he entered the country illegally for the purpose of receiving the property, which he knew to be cocaine, and transporting it to Australia. He pleaded guilty at the first opportunity before this Court.
    
45. This early and ongoing cooperation is a significant matter in mitigation and will be reflected in the sentence. It will be taken into account on the utilitarian basis that it saved the State the cost and inconvenience of running a trial. I also take it into account as indicative of remorse, which is reflected in his statements to Probation Services, which I accept as genuine.
    
46. There are no extenuating circumstances. There is no material before me to substantiate the claims that he was in financial difficulty. It would be of little to no weight in the circumstances in any event but on the statements made to Probation Services the offender intended to use the AUD1m promised for receiving the drugs to purchase a house.
    
47. Medical reports from Dr Paul Alexander, Consultant Surgeon, Dr Dinesh KM Consultant Orthopaedics and Sports Medicine, and Dr Monica Kubina, Interventional Cardiologist/Specialist for Internal Medicine, all of the Pacific International Hospital, and Dr Nick Agebigo of the Port Moresby General Hospital, Dermatology Clinic, have treated the offender at different times since his arrest. Their reports indicate that the offender suffers from severe plaque psoriasis and psoriatic arthropathy, which is a chronic and occasionally debilitating disease affecting the skin, joints, scalp and nails. Treatment has proven difficult as the medication normally taken by him to manage the condition is unavailable in Papua New Guinea. The offender also suffers from Type 2 Diabetes and had two stents inserted following a heart attack in 2018. The offender says that he is not receiving heart medication but the report from Dr Kubina would suggest otherwise. He has also been diagnosed with multiple kidney stones which will require urology consultation and possible surgery.
    
48. There is some limited mitigation in his age and medical conditions. He is not of particularly advanced age and his medical problems were largely present at the time of the offence. Neither age nor physical illness excuse his conduct.
    
49. The offence has had and will continue to have a grave impact on the offender. Given his age and the nature of the offence he will struggle to find employment in the future, particularly in aviation. His family expressed concern for his physical and mental welfare in prison in Papua New Guinea. The fact that he faces lengthy incarceration in this country and far from his family is of limited significance, however, given that he deliberately entered the country to commit the offence.
    
50. Before concluding I make it very clear that I am sentencing the offender for the offence of money laundering and not some uncharged drug related offence.
    
51. Regardless of the nature of the property, this was a deliberate, well-planned offence of international scope, conducted for profit and concerning criminal property of enormous value to organised criminals. The fact that the property received was cocaine only makes those matters more stark. The offender played a critical role and well understood the nature of the criminal property and its ultimate purpose. Money laundering is a serious offence and this case warrants personal and strong general deterrence warranting severe punishment.
    
52. In those circumstances of aggravation and having regard to the offender’s personal circumstances and the matters in mitigation, I sentence the offender to 18 years of imprisonment.
    
53. The offender has called for the sentence to be suspended on the basis of his medical condition and the fact that he will face prosecution in Australia.
    
54. In The State v Tardrew [1986] PNGLR 91 the Supreme Court set out three broad, but not exhaustive, categories in which it may be appropriate to suspend a sentence, namely: where it will promote the general deterrence or rehabilitation of the offender; where it will promote the repayment or restitution of stolen money or goods; or where imprisonment would cause an excessive degree of suffering to the particular offender, for example because of bad physical or mental health.
    
55. It is my view that neither partial nor full suspension is appropriate in this case. Restitution is not relevant here. Whilst the offender’s medical conditions will require ongoing review and treatment, I am not satisfied that he will suffer excessively in prison. It appears that his conditions are being managed by Correctional Services through the Port Moresby General Hospital and Pacific International Hospital. Whilst I appreciate that his preferred medication for psoriasis may be unavailable in this jurisdiction, there is nothing to suggest that arrangements might not be made for the medication to be made available to him here, or for alternatives to be found in consultation with his doctor in Australia.
    
56. Suspension is not likely to reform or deter the offender. It would be inappropriate to detain him here to be supervised when he has no means of sustaining himself and any suspended sentence would be of “no effect” in Australia, where it is unlikely to be enforced: Tardrew applied.
    
57. As I made clear prior to the offender’s plea, the decision to have the offender transferred to Australia to serve his custodial sentence in a correctional facility in that jurisdiction is not a matter for this Court.
    
58. Despite my request, no information was provided by either party as to whether or not the offender is likely to be extradited to face charges in Australia or has agreed to cooperate in proceedings against others here or in that country. In the circumstances I will not speculate as to those matters.
    
59. Moreover, the public interest in this case is paramount. The danger of the offence lies in the fact that it sought to use Papua New Guinea as a reception point for criminal property destined for lucrative markets in another jurisdiction.
    
60. Offences like this are difficult to detect. This may be the first of its kind on the facts but it is unlikely to be the last. The threat of organised crime to the peace and security of the nation, its communities and the broader region is well recognised. This sentence must serve as a strong warning to potential offenders both within this country and elsewhere that such offences will not be tolerated.
    
61. In view of the offender’s age and medical conditions the sentence will be served without hard labour. I exercise my discretion to deduct time spent in custody to date.
    

Orders

62. I make the following orders:
    
    • (1) The offender is sentenced to 18 years of imprisonment without hard labour.
    • (2) Time spent in custody to date, 2 years, 3 months, is deducted from time to be served.

_______________________________________________________________
Public Prosecutor: Lawyer for the State
Public Solicitor: Lawyer for the Offender