Jersey Unreported Judgments

Inferior Number Sentencing - drugs - assisting another to retain the benefit of trafficking.

[2013]JRC137

Royal Court

(Samedi)

5 July 2013

Before     :

Sir Michael Birt, Kt., and Jurats Morgan and Blampied.

The Attorney General

-v-

Phillip James Brian McFeat

Kevin Dermott Smyth

Carol Susan Howard

Sentencing by the Inferior Number of the Royal Court, following guilty pleas to the following charges:

Phillip James Brian McFeat

1 count of:

Assisting another to retain the benefit of drug trafficking, contrary to Article 37 of the Drugs Trafficking Offences (Jersey) Law 1988 (Count 10).

Age:  33.

Plea: Guilty.

Details of Offence:

Between 2010 and 2012, the Crown case is that a conspiracy existed between several parties to import commercial quantities of cannabis resin into Jersey from the UK.  When several of the alleged conspirators were arrested in March 2012, approximately £2.7 million worth of cannabis resin, destined for Jersey, was also seized at premises controlled by them in Staffordshire.  Large amounts of cash, both in Sterling and Euros, were also seized.  As part of the said conspiracy, the Crown alleges that Liam Norris ("Norris"), who was based in Jersey, engaged McFeat, Smyth and Howard to assist him in laundering the proceeds of drug trafficking in the Island. 

McFeat, Smyth and Howard all entered guilty pleas to the counts against them on the basis that they suspected that the money that they were transacting for Norris was the proceeds of drug trafficking.  Whilst Norris and his father had both entered guilty pleas to substantive offences concerning conspiracy to import cannabis into Jersey, an outstanding Newton hearing in relation to Norris was due to take place in October 2013.  However, in light of the guilty pleas entered by the three defendants and the delay that had already been encountered, it was determined that they should be sentenced in advance of the conspirators, rather than delay proceedings until later in the year. 

The money laundering effected by McFeat, Smyth and Howard was done in two ways.  The first method was the exchange of Sterling and Euros at various post offices throughout the Island.  On each occasion the three defendants ensured that the amount of cash that they were changing was below the threshold which might have prompted a suspicious transaction report.  This sometimes necessitated many visits to different post offices over the course of a day in order to exchange all of the money that they had been given. 

The second method involved the loading of money onto pre-paid travel cards (currency cards).  These cards enable the movement of cash between countries.  They are issued in an individual's name and the applicant must provide identification when the card is set up.  However, as long as a person has the appropriate multi-digit number, cash can be "loaded" onto a card that is in the hands of a third party in another jurisdiction, who in turn can "withdraw" the money from the card.  Smyth and Howard set up two such cards each, whereas McFeat set up one card in his name.  The cards issued in Smyth and Howard's names were later seized in Staffordshire at the time of the conspirators' arrests in March 2012.  McFeat's card was never recovered. 

Over a 34-month period McFeat exchanged over £74,000 into Euros and loaded over £5,500 onto a pre-paid card in his name.  Over a 27-month period Smyth and Howard exchanged in excess of £20,000 and £27,000 respectively into Euros, and loaded over £13,000 and £17,000 respectively onto pre-paid cards in their names.  The money loaded onto the cards in Smyth and Howard's names is shown to have subsequently been withdrawn in Staffordshire, while the money loaded by McFeat was withdrawn in Spain. 

Full details of the amounts laundered are as follows:-

	Currency Exchange	Card Transactions	Total
McFeat	£74,298.72	£5,555.00	£79,853.72
Smyth	£20,091.70	£13,520.00	£33,611.70
Howard	£27,147.82	£17,020.00	£44,167.82

During an interview with McFeat after his initial arrest in March 2012, he admitted purchasing foreign currency but attributed this to holidays in Europe, saying he regularly visited Amsterdam.  He also admitted that he smoked cannabis, but denied dealing drugs.  McFeat admitted that he had known Norris since 1995 and regularly visited Norris' place of business.  He gave "no comment" when asked whether he had been making money transactions at the Co-op and when told that records showed him changing almost £75,000 into Euros.  He later acknowledged that on some occasions he had made several money transactions on the same day, but was adamant that the money was nothing to do with drugs.  At the end of the interview he said "Well I'm not exactly innocent I've changed loads of money and it's illegal to do 80 grand obviously when you ain't got it..."

Smyth and Howard were arrested in November 2012 at which time McFeat was also re-arrested. 

Howard initially denied being involved in money laundering or any drugs-related activity.  However, she told interviewing officers that she knew Smyth, with whom she lived, was a cannabis user. When asked about the pre-paid cards she said that she had obtained two and given them to a friend, who she initially named as "Danny".  She said that she could not remember his surname.  Howard alleged that "Danny" regularly gave her money to load onto the cards.  She maintained that she did not think it was strange and that she received nothing in return.  She explained that he would just ring up or pop around with the cash, and that she only ever paid money in and never withdrew any.  When asked whether she had ever enquired where the money came from, Howard replied "I'm just banking so I didn't take any notice.  It was meaningless to me.  I didn't want to know it wasn't my, my, it wasn't my business although it was my card."

Howard also admitted changing money into Euros, but initially declined to name who had asked he to do this.  However, she later said that it was someone called "Liam" who had asked her, and that she had assumed it was for people's holidays.  She admitted making 40-50 currency exchange transactions for "Liam", but continued to attribute the pre-paid travel card money to "Danny".  Only at the end of the interview did Howard admit that she had been lying, and that the source of all the money was in fact Norris.  When asked why she had lied, she replied that she had not wanted to get Norris into more trouble than he was already facing.  She conceded that Norris had asked her to obtain the pre-paid cards and that she got a small payment each time she carried out a transaction.  She continued to deny knowing either where the money had come from or where it was going. 

Smyth also initially denied being involved in money laundering.  He said that he had known the Norris family for over 25 years.  When asked about the pre-paid cards, Smyth said that he had been lent almost £3,000 in 2011, and initially explained that the pre-paid cards were set up to repay money to Norris' father. He then admitted that he had made payments onto the two cards in his name every month, and then conceded that the cards had been loaded with £500 on fourteen different occasions in 2011 alone. 

Smyth initially refused to name the person who gave him the money to put onto the travel cards, but admitted that he was suspicious about the origin of the cash.  He said that he sometimes received a £50 reward for loading the cards with £500.  He also admitted receiving £50 payment to exchange cash into Euros.  He admitted transacting small amounts at a time so as not attract too much attention.  Smyth ultimately disclosed that he thought that the money may have come from stolen bike parts or drugs, but that he did not know and did not want to know.  He gave "no comment" when asked whether Norris was involved in stolen goods or drugs, and denied that he himself was involved in the distribution of drugs.  He admitted however that he knew people who smoked cannabis and who supplied the same.  At the end of the interview Smyth told the officers that Howard had only become involved in the card transactions through him, and admitted that he suspected that the money was derived from either criminal activity or drug trafficking.  He said that he had not ever reported those suspicions.  He ultimately conceded that it was Norris who had given him the money to load onto the travel cards and to exchange into Euros. 

When McFeat was re-interviewed he again denied being involved in money laundering.  He admitted travelling to Amsterdam six times over the last 15 months, and claimed to have spent £9,000 on holidays over the last 3 years.  He admitted obtaining a pre-paid travel card in his name but said that he had lost it.  He claimed that he had used it when travelling and thought that he had loaded several thousand pounds onto it.  When it was put to him that £5,555 had been loaded onto the card, McFeat made "no comment" to further questions. 

Details of Mitigation:

Guilty plea; remorse; did not receive cash payment for laundering the money. 

Previous Convictions:

27 previous convictions including dishonesty offences.

Conclusions:

Count 10:

2 years' imprisonment.

Sentence and Observations of Court:

In relation to McFeat, due to the level of involvement, the money laundered and the period of time over which the offending took place, the Court considered there was no alternative to imprisonment.  The Court did however feel able to reduce the Crown's conclusions.

Count 10:

18 months' imprisonment.

Kevin Dermott Smyth

1 count of:

Assisting another to retain the benefit of drug trafficking, contrary to Article 37 of the Drug Trafficking Offences (Jersey) Law 1988 (Count 12).

Age:  58.

Plea: Guilty.

Details of Offence:

See McFeat above.

Details of Mitigation:

Early guilty plea; co-operated with the investigation; remorse; became involved to repay a debt; took responsibility for involving Howard.

Previous Convictions:

11 previous convictions, including possession of cannabis in 2005.

Conclusions:

Count 12:

18 month's imprisonment.

Confiscation Order in the amount of £3,050 sought.

Discharge of the saisie judiciare sought.

Sentence and Observations of Court:

Although Howard had laundered more money than Smyth the Court determined that they would no distinction between them as they both agreed to launder the money that had been received by Norris at the home they shared.  The Court accepted that Howard had been persuaded by Smyth to become involved with the arrangement.  It was also noted that Smyth asserted that he had agreed to effect the money transactions in order to reduce an outstanding loan to Norris' father. 

Count 12:

12 months' imprisonment.

Confiscation Order made in the sum of £3,050.

Discharge of the saisie judiciare ordered.

Carol Susan Howard

1 count of:

Assisting another to retain the benefit of drug trafficking, contrary to Article 37 of the Drug Trafficking Offences (Jersey) Law 1988 (Count 11).

Age:  58.

Plea: Guilty.

Details of Offence:

See McFeat above.

Details of Mitigation:

Guilty plea; remorse; induced by Smyth to participate; carer for 84-year old mother.

Previous Convictions:

None.

Conclusions:

Count 11:

18 month's imprisonment.

Confiscation Order in the nominal sum of £1 sought.

Sentence and Observations of Court:

See Smyth above.

Count 11:

180 hours' Community Service Order, equivalent to 12 months' imprisonment.

Confiscation Order made in the nominal sum of £1.

C. M. M. Yates, Esq., Crown Advocate.

Advocate A. M. Harrison for McFeat.

Advocate E. L. Burns for Smyth.

Advocate J. M. Orchard for Howard.

JUDGMENT

THE BAILIFF:

1.        We begin by saying this.  Normally all those charged in relation to a connected matter are sentenced together.  This might have suggested therefore that sentence in this case should await the outcome of the prosecution against the Norris's and others.  The reason for this practice is that a sentencing court wishes to be aware of everyone's respective involvement in order to try and ensure that the sentences are consistent with the parts played.  However, we are satisfied in this case that the involvement of these three defendants is of such a different level to that of the conspirators in the drug importation that any sentence we pass will be quite irrelevant to any sentence which may be passed in due course on them, and therefore we are content to proceed today. 

2.        All three of these defendants have pleaded guilty to a money laundering offence in relation to the proceeds of drug trafficking belonging to Liam Norris and/or his father, Richard Norris.  It is clear that those two persons were engaged in a conspiracy to import substantial quantities of cannabis into Jersey between 2010 and 2012.  Each of you assisted in the laundering of some of the proceeds of that drug trafficking conspiracy by converting sterling into euros and by using prepaid travel cards, which enabled cash to be moved out of Jersey. 

3.        However the Court accepts in each case that, although you were suspicious that these monies came from illicit activities, you were not involved in the importations, you did not know that these importations were taking place, and you did not know that you were dealing with proceeds of drug trafficking; but you suspected it.  And the gravity of money laundering is that it enables drug traffickers to hide and dispose of the proceeds of their dealing and the assistance given is just as useful where the money launderer is not involved in the drug trafficking itself and does not know the details of the main offending.  A person who assists, not caring whether the money is legitimate or not, is giving the same assistance and is still guilty of a serious offence, albeit we accept that, in those circumstances, the offending is not quite as serious as where the launderer either is involved in the conspiracy or knows exactly the source of the monies. 

4.        As the English Court of Appeal said in the case of R-v-Hanna (1994) 15 Cr. App. R. (S) 44:-

"...friends of drug dealers and their wives must also understand that if they suspect that money which is coming into their hands is coming from the drug dealing then the thing to do is to have nothing to do with it because if you anything to do with it, imprisonment will almost automatically follow."

That sentiment has been endorsed in this jurisdiction in the case of AG-v-Fowler [2007] JRC 044 where the Superior Number said this:-

"We would wish to emphasise that drug traffickers are in the business for profit and it follows that disposal of the cash proceeds from the sale of drugs forms an extremely important part of the business of drug trafficking.  Therefore it also follows that the Court will regard the laundering of the proceeds of drug trafficking as a very serious offence, which will almost invariably require a prison sentence."

We repeat those sentiments today.  The part played in laundering the proceeds of drug trafficking is a vital part of the overall drug trafficking enterprise and even where offenders do not know the full details of what is involved, where they deal with the proceeds having suspicion that it is the proceeds of trafficking, they must expect serious punishment. 

5.        With those introductory remarks we turn to each defendant in turn and we first of all turn to McFeat.  You changed money into euros and loaded cash cards to a total of £79,853.  You did this over a 2½ year period.  There were regular payments and you have admitted that you realised that it was all very suspicious. 

6.        We have taken into account the mitigation which your advocate has put forward; you pleaded guilty; you do have previous convictions but most of them were when you were a teenager and the offences since then are of a different nature.  We accept that you did it for a friend, Liam Norris, we have read the references and your letter of remorse and we have read the contents of the background report.  But in our judgment, particularly given the level of involvement and the amount involved and the period involved, there can be no alternative to imprisonment. 

7.        We do think we can reduce the conclusions slightly, having regard to the general level of sentencing which appears from the various cases which have been cited to us.  The sentence in your case is 18 months' imprisonment. 

8.        We come next to Mr Smyth.  You too carried out a substantial number of transactions by exchanging currency and the use of travel cards.  The total involved in your case was £33,611 and you were paid £50 for each transaction.  This was to reduce the debt which you owed to Richard Norris.  We consider that although your amount is less than Mrs Howard, as both counsel accepted, it was a matter of chance as to who happened to be available when Liam Norris came round and therefore we should regard you as having laundered broadly similar amounts and no distinction is to be drawn in that regard. 

9.        In your mitigation we take into account your guilty plea and, in particular in your case, it was early and you were cooperative at interview.  You too have some previous convictions, but they were a long time ago and are comparatively minor for the most part.  We accept that you became involved because you owed money to Richard Norris and that this was a way of endeavouring to reduce the debt.  We have read the references and we have read the background report.  Nevertheless, the amounts involved and the period involved were such as to require a prison sentence unless there really was some very exceptional mitigation.  We accept that there is mitigation but it is not sufficient to lead us to depart from the general policy of a prison sentence for money laundering of this gravity. 

10.      The sentence in your case is one of 12 months' imprisonment and we do, as requested, discharge the saisie judiciaire after payment of the Confiscation Order. 

11.      We come finally to Mrs Howard.  You too carried out a substantial number of transactions.  In your case the total involved was £44,167, but as we have said, we think that no distinction is to be drawn in the amount between you and Mr Smyth.  We do accept that in your case you were induced to do this as a favour to Mr Smyth, in that he was the one with the loan and you were invited to join in order to help him reduce his loan. 

12.      In mitigation we take into account your guilty plea.  In your case, at the age of 58, you have no previous convictions and are of previous good character and that is an important aspect.  As we say, we accept you were involved by Smyth with whom you lived and he has, very fairly, taken responsibility for involving you.  As we say the financial benefit accrued to him, not to you.  In your case you look after your mother, who is 84, and she will suffer considerable hardship if you are sent to prison.  We have read carefully in your case the psychological report.  This makes it clear that you are vulnerable to suggestion; you have a high level of suggestibility, which would have made it very difficult to resist the suggestions both of Mr Smyth and of Liam Norris that you should become involved.  We have also read the letter from your mother.  In all the circumstances we have just been persuaded that the additional powerful mitigation in your case enables us to pass a non-custodial sentence. 

13.      The level of your involvement is the same as Mr Smyth but we think in your case we can impose a Community Service Order in place of a prison sentence.  You are therefore sentenced to 180 hours of community service which is the equivalent of 12 months' imprisonment. 

Authorities

R-v-Hanna (1994) 15 Cr. App. R. (S) 44.

AG-v-Fowler [2006] JRC 175.

AG-v-Culkin 2001/242.

R-v-Greenwood [1995] 16 Cr. App. R. (S) 614.

R-v-Monfries [2004] 2 Cr. App. R. (S) 3.

AG-v-Fagan [2005] JRC 031.

AG-v-De Freitas [2004] JRC 128.

AG-v-Morgan [2006] JRC 031.

AG-v-Soares [2008] JRC 015.

R-v-Allpress [2009] 2 Cr App R (S) 58.

Fowler-v-AG [2007] JRC 044.