R v Chen[2007] QSC 380

SUPREME COURT OF QUEENSLAND

1. MARTIN J: On 6 December 2007 Ivan Chen pleaded guilty to:

• one count of trafficking in dangerous drugs;

• two counts of possession of a dangerous drug (heroin);

• two counts of possession of a dangerous drug (cocaine);

• two counts of possession of a dangerous drug (3,4-methylenedioxymethamphetamine);

• one count of possession of a dangerous drug (methylamphetamine);

• two counts of possession of a dangerous drug (cannabis sativa);

• one count of attempting to pervert the course of justice; and

• one count of possession of property obtained from trafficking, namely $123,025.

2. The charges against Chen arose out of a joint operation of the Australian Crime Commission and the Queensland Police Service which commenced in June 2003. Codenamed “Operation Catacomb” it targeted three distinct but overlapping drug syndicates based in south-east Queensland. Chen headed one of those syndicates. The Chen syndicate dealt primarily in heroin, although it also did business in large quantities of cocaine and Ecstasy and, to a lesser extent, in methylamphetamine.

3. The defendant was born on 5 December 1976 in Taiwan. He came to Australia at the age of 14 and has lived here since then. At the time of the commission of these offences he was 26 to 27 years of age and, at the moment, is 31 years old.

The trafficking charge

Heroin

4. Chen would purchase bulk quantities – up to several kilograms in weight – of heroin and then sell it at a wholesale level. To do so he would use a heroin press enabling him to sell in 350 gram blocks called “cakes”. At a high level of purity the “cakes” would sell for about $120,000. At a lower level of purity, they would sell for about $70,000. The adjustment in purity came about through Chen and his associates “cutting” the heroin and using the heroin press referred to above.

Cocaine

5. Chen also obtained cocaine in large quantities including quantities of over a kilogram. The evidence discloses that he purchased quantities in that amount for approximately $130,000 a kilogram.

Methylamphetamine

6. The trade in this drug was of a lesser nature than the previous two. Only small quantities were exchanged but it was clear that he was proposing to enlarge his business with respect to that dangerous drug. Purchases of that nature did not, though, take place.

MDMA

7. This drug, also known as Ecstasy, was purchased in bulk quantities and likewise sold in bulk.

Business organisation

8. The prisoner had a primary distributor (Dan Vi Kan) who had a number of runners working for him. Kan would sell the product at wholesale levels, usually in amounts of an ounce or two. There were also direct employees of Chen who sold to customers both regular and irregular. Chen kept records of the amounts owed to him by runners and purchasers. Transcripts of telephone intercepts of Chen’s conversations disclosed that he spoke to these people in a type of code in an effort to disguise what was going on. He maintained discipline within the syndicate – on one occasion he dismissed an employee because the employee did not pay him what was owed.

Scale of business

9. A financial analysis was undertaken of the accounts known to be used by Chen. That analysis discloses:

1. over the 19 months of trafficking charged he deposited $1,854,700 into the accounts of interstate suppliers;

2. over that period he made deposits into his accounts of $2,180,469 and the source or sources of that money was unexplained;

3. when arrested he had approximately $150,000 of unexplained income in an account and approximately $123,000 in his possession.

Telephone intercepts

10. Over a 10 month period extensive interception of telephone calls took place. On an almost daily basis he was engaged in conversations with people concerned with buying or selling dangerous drugs. The extent of the conversations and the amounts being dealt with disclosed that he was engaged in large scale sales and purchases during that time.

Possession Charges

11. In June 2004, while Chen was overseas, the police executed a search warrant at his townhouse. They located the following:

12. During that search the police found a heroin press which they confiscated.

13. Notwithstanding that the prisoner knew that the police had searched his townhouse and had removed the items referred to above (and others), he, upon his return, continued to engage in drug trading even to the extent of obtaining a new heroin press.

14. In September 2004 the unit in which he was living was searched by police and on this occasion they found:

15. They also found and confiscated the newly obtained heroin press.

Perverting the course of justice

16. Upon his return from overseas in June 2004, Chen became aware that his residence had been searched and that large amounts of dangerous drugs had been located. He got in touch with Kan and asked him to find someone who would be willing to take responsibility for the drugs located, plead guilty to the relevant charges and endure the necessary punishment. Kan approached a man called Francisco Latorena. Through another person Latorena was told that if he was prepared to go to jail for Chen then it would be worth $50,000 to $100,000. Latorena was initially interested as he was of the view he would only be in prison for some two to three years. Kan told Chen that Latorena wanted time to think about it but that he was “75%” convinced and was aware that there was $100,000 to be made. Kan made an arrangement to see Latorena at a fast food restaurant at Sunnybank. Prior to that meeting, Kan had conversations with Chen regarding the need to discuss details of the plan and to coach Latorena on what to say, including that he would have to say that he had used gloves in order to explain the lack of his fingerprints. Kan then later told Latorena he would be given $50,000 cash at the end of the court case and a further $50,000 to his girlfriend afterwards.

17. On 17 June 2004 Latorena met with Chen, Kan and another person and they talked about the best way for him to claim that he was guilty. Chen told him that he should move into Chen’s former townhouse and pretend that he had been there for a while. He was to clean the place of fingerprints and place his own around the residence. He was then to call the police and give himself up for the heroin found there. It was at that point that Latorena became aware of the amount of heroin which had been discovered by the police and he became very concerned that the sentence would be much longer than he had anticipated.

18. Kan continued to act as an intermediary between Chen and Latorena relaying information on what to say and do and providing Latorena with an initial amount of $4,000.

19. Eventually Latorena agreed to go to Chen’s former residence and he stayed there until 30 June 2004 when he surrendered himself to police. He was charged with trafficking based on a separate set of circumstances and was granted bail. Latorena then told Kan and Chen a number of stories as to why he had taken so long to turn himself in and why he had bail. By about 22 July Chen had given Kan approximately $44,000 to give to Latorena but it appears that Kan had kept most of this money for himself.

20. Chen refused to provide any more money until he saw the charge sheets, solicitors’ papers, interviews and so on to prove that Latorena had been charged. Phone intercept transcripts show numerous calls from Chen to Kan asking him to obtain this information. Kan then attempted to deceive Chen by telling him that the court case was finalised and that Latorena had been sentenced to eight years imprisonment. Chen refused to pay until he saw the paperwork concerning Latorena’s imprisonment and, at the time of his arrest, it appears that Chen was still of the belief that Latorena had confessed to the possession of the drugs, had been charged and was awaiting sentence.

Criminal history

21. Chen has a limited criminal history, with no previous drug offences. His most recent conviction was for assault occasioning bodily harm in 2000 when he was sentenced to six months imprisonment which was wholly suspended for a period of 18 months.

Submissions for the Defendant

22. Mr Macgroarty, in his submissions, concentrated on the fact that the defendant was not just a drug user during the relevant period but was significantly addicted to heroin and, to a lesser extent, other drugs.

23. Reports from Dr Ian Curtis (April 2005) and Dr Peter Fama (November 2007) were tendered. Each refers to the defendant suffering a severe injury to his head during childhood. It appears that that injury has caused him to suffer from serious headaches since that time and it was submitted on his behalf that those headaches led to his drug use.

24. Both doctors agree that at the time of the commission of the offences the defendant was drug dependent. Dr Curtis referred to him as a severe polydrug addict. Dr Fama’s diagnosis was of multiple drug dependence (opioids, stimulants and cocaine).

25. Affidavits were received from members of the defendant’s family in which they described his symptoms of addiction and how he was unable to function at certain times due, they say, to his addiction. It was said that he should receive a discount beyond that ordinarily available for an early plea of guilty because of the addiction from which he suffered and the fact that it led to his wife leaving him with the result that he had to care for their young child.

26. It was also submitted that on the occasion when he went overseas (to Taiwan) he was unable to obtain any heroin and commenced to suffer from serious withdrawal symptoms. Mr Macgroarty submitted that it was in those circumstances that he asked associates to try to get someone to take the blame for him so that he could keep trading purely to get more heroin and thus obtain some heroin for his own use.

27. The defendant’s instructions to his counsel with respect to the cash found in his possession were the amount of approximately $123,000 was not his but was to be sent to suppliers in Melbourne from whom he had obtained drugs. It was also pointed out that, in contrast with other persons convicted of similar offences, he did not have a large number of assets and, it was submitted that supported the contention that he was significantly addicted throughout the whole period.

Suggested range of penalty

28. Mr Lehane, for the Crown, submitted that, after taking into account all mitigating factors, the appropriate sentence would be in the range of 16 to 18 years imprisonment for all offences and that that would include a sentence on the offence of attempting to pervert the course of justice being made cumulative upon the other sentences.

29. Mr Macgroarty, for the defendant, said that the appropriate range was, for all offences, 13 to 15 years.

30. Both counsel agreed that the range for the offence of perverting the course of justice was 18 months to two years.

Early plea?

31. It was submitted on behalf of the Crown that notwithstanding that the defendant did plead guilty to these charges the plea should not be regarded as being particularly early. That was disputed by Mr Macgroarty. He drew my attention to the problems which had occurred during the committal due to the ill health of the magistrate hearing the matter, with the transfer of his client to Woodford (which led to substantial limitations on obtaining instructions), and the difficulties caused by having to translate many of the intercepts as a number of them were in the Taiwanese language. At the conclusion of the committal, the defendant’s lawyers sought a sentencing range from the Crown and there was a dispute between the two sides as to certain facts which related to the plea being heard in this Court. Eventually, the disputes were resolved and the resolution of all of those disputes was in the defendant’s favour. I accept that in the circumstances leading to the plea of guilty in this case it should be regarded as an early plea. I regard it as having been the subject of discussion between the Crown and the defendant’s solicitors since at least the end of the committal hearing and while, obviously, it was not as early as it could possibly be, it is sufficient for me to properly allow a discount on the sentence that might otherwise be imposed.

Sentencing considerations

32. Mr Macgroarty accepted, quite properly, that this “is a very serious case of trafficking in drugs” and that his client was “clearly significantly culpable in that regard”.

33. The amount of schedule 1 drugs involved in the trafficking was clearly substantial. It is impossible to place a useful estimate on the amount of drugs which were obtained and distributed in south-east Queensland by the syndicate controlled by Chen. The amount of nearly $2.2 million which was deposited into his accounts over a 19 month period gives a sufficient indication of the size of the enterprise which he was conducting. Further, I have considered the sample of transcripts of intercepted telephone calls and regard them as providing a very clear indication of the size and scope of the operation. Notwithstanding that it appears that Chen has not accumulated any significant assets, it is clear that the well organised, broadly based enterprise which he conducted, had a significant turnover which allowed him, at the time of his arrest, to be in possession of approximately $273,000. Further, he had sufficient cash to pay $40,000 to associates in an attempt to pervert the course of justice.

34. The case put forward on behalf of Chen was that his activity could be ascribed, in a large part, to the fact that he was an addict and that he was able to obtain heroin to feed his addiction through this enterprise. While I accept that he was, at the relevant time, an addict, this is not the sort of case, though, where a person trades in dangerous drugs simply for the purpose of obtaining drugs for himself. This was much larger than that. The remarks of Byrne J (as he then was) in R v O'Grady (unreported, CA No 185 of 1996, 11 July 1996, Court of Appeal, Williams, Ambrose and Bryne JJ) are apposite:

“It was contended on his behalf that he resorted to heroin for pain relief. It was said that he distributed heroin to get heroin for personal consumption for pain relief.

Although his use of heroin may have been a response to pain, it was plainly the exercise of a deliberate choice, conduct of an addict.”

35. The length of period of the trafficking, the size of the operation, the number of people obviously involved, the amount of money which passed to and from Chen and the sophisticated manner of the wholesale operation lead me to the view that his addiction did not prevent him in any relevant way from conducting this criminal purpose and that while he may have used his sources to obtain heroin for himself, it was also a substantial purpose for him to make money.

36. I was referred to a number of decisions which relate to trafficking at high levels. They include R v Dent [2002] QCA 247, R v Truong [2001] QCA 98, R v George [2001] QCA 135, R v Bradforth [2003] QCA 183, R v Raciti [2004] QCA 359, R v Tran [2006] QCA 174 and R v Matasaru [2000] QCA 246.

37. Clearly, the trafficking charge is the most serious of the drug related charges. The maximum penalty for that charge is 25 years. A sentence of 18 to 20 years would be available to me with respect to that charge without any mitigating factors. I think that in this case, taking into account the limited criminal history of Chen, his background including his addiction, the rehabilitation to some extent which he has demonstrated through doing work during his recent incarceration, and his early plea, a sentence of 14 years imprisonment is appropriate.

38. With respect to the other drug offences, I impose the following sentences:

• Counts 2 and 8 (possession of a dangerous drug – heroin) – 4 years;

• Counts 3 and 9 (possession of a dangerous drug – cocaine) – 4 years;

• Counts 4 and 10 (possession of a dangerous drug – (3, 4 - methylenedioxymethamphetamine) – 2 years;

• Count 5 (possession of a dangerous drug – methyl amphetamine) – 2 years;

• Counts 6 and 11 (possession of a dangerous drug – cannabis sativa) – 6 months;

• Count 12 (possession of property obtained from trafficking – 4 years.

39. With respect to each of those sentences, they are to be served concurrently with the sentence for trafficking.

40. With respect to the conviction for attempting to pervert the course of justice, I have taken into account what has been said on behalf of Chen and applied similar considerations to this sentence. The scheme which was constructed and driven by Chen was designed to strike at the heart of the justice system.

41. The circumstances of the offence of perverting the course of justice as apparent in this case are such that the sentence imposed should be made cumulative upon the other sentences. See R v Waterreus [1998] QCA 90. The nature of the organisation undertaken by Chen in an attempt to avoid responsibility for the offences the subject of the earlier sentences is sufficient to justify a term of imprisonment of two years. I have, in doing that, taken into account the requirement to observe the totality principle.

42. A pre-sentence custody certificate was tendered which disclosed that up until 6 December 2007 the defendant had been in custody for 1,164 days for the charges to which he has now pleaded guilty. He has been in custody a further eight days since then. Pursuant to s 159A of the Penalties and Sentences Act 1992 (Qld), the dates between which Chen has been held in pre-sentence custody are from 28 September 2004 to 14 December 2007, the time he has been held in pre-sentence custody amounts to 1,172 days, and I declare that all of that time is to be taken to be imprisonment already served under the sentence imposed with respect to the trafficking charge. In other words, I have taken into account the remarks of the Court of Appeal in R v Harris-Davies [2007] QCA 164 and intend that the declaration of time served relate only to the term of imprisonment imposed on the defendant with respect to the trafficking charge.

43. I declare that the prisoner is a serious violent offender.