Application by the Commissioner of the Australian Federal Police

1. [1]

   HIS HONOUR: This is an application by the Commissioner of the Australian Federal Police (the “Commissioner”) under s 49 of the Proceeds of Crime Act 2002 (Cth) (“POCA”) for the forfeiture of an amount standing in a particular bank account. In the circumstances that I will describe, the application proceeded without any contradictor.

2. [2]

   Before addressing whether the criteria for the making of an order under s 49 are established, it is necessary to describe the factual background and the history of the proceedings.

Haidar Al Baghdadi

1. [3]

   On 1 November 2013, Mr Haidar Al Baghdadi was arrested and charged with three offences under the Copyright Act 1968 (Cth), namely, making an unauthorised decoder available online contrary to s 135ASG, making a decoder available online for a subscription broadcast contrary to s 135ASH and causing unauthorised access to encoded broadcasts contrary to s 135ASJ.

2. [4]

   Mr Al Baghdadi's trial commenced in the District Court on 25 June 2015, but the jury were discharged on 15 July 2015. There were various other attempts to proceed with the trial. However, for one reason or another, they were unsuccessful.

3. [5]

   Eventually, on 16 February 2017, Haidar Al Baghdadi entered a plea of guilty to an offence contrary to s 135ASJ(1) of the Copyright Act. The other two offences were included on the schedule. Mr Al Baghdadi is due to be sentenced on 4 August 2017.

4. [6]

   The relevant statement of facts that has been prepared for the plea of guilty includes the following:

5. [7]

   As suggested by this summary, in broad terms, s 135ASJ(1) of the Copyright Act and the associated provisions are directed towards criminalising the conduct of those persons who provide unauthorised access to encoded broadcasts, such as that provided by pay television networks including Foxtel. The maximum penalty for such an offence is a fine of not more than 550 penalty units or imprisonment for no more than five years. The offence is an indictable offence, (Crimes Act 1914 (Cth), s 4G).

Westpac Accounts

1. [8]

   Mrs Al Baghdadi is Haidar Al Baghdadi's mother. She passed away on 15 September 2016.

2. [9]

   In April 2009, Mrs Al Baghdadi opened an account with Westpac (the “first Westpac Bank account”). Between 2009 and July 2012, cash deposits totalling in excess of $145,000 were made into the first Westpac Bank account. On 14 December 2011, $140,000 was withdrawn from the first Westpac Bank account and deposited into an account in the name of a company associated with Haidar Al Baghdadi. The name on the deposit slip was “Haidar”. I am satisfied that Haidar Al Baghdadi withdrew those funds.

3. [10]

   In July 2012, Mrs Al Baghdadi opened another account with Westpac (the “second Westpac Bank account”). The balance of the funds left in the first Westpac Bank account, namely $5,031.32, was transferred into this account. Between July 2012 and July 2013, a series of cash deposits were made into the second Westpac Bank account. These total in excess of $268,900. As at 19 August 2014, the balance of the second Westpac Bank account was $200,229.79.

POCA Proceedings

1. [11]

   On 22 August 2014, the Commissioner applied to this Court, ex parte, for, amongst other orders, a restraining order under s 19 of the POCA in respect of the funds standing in the second Westpac Bank account. On that day, Hamill J made an ex parte order under s 19 providing that the property specified in the schedule, namely the funds standing in the second Westpac Bank account, not be disposed of or otherwise dealt with by any person except in certain circumstances. His Honour also made an order under s 38 of the POCA appointing the Official Trustee in Bankruptcy to take custody and control of that account.

2. [12]

   On 23 September 2014, Mrs Al Baghdadi filed a notice of motion seeking, inter alia, an order revoking the restraining order. She also sought a number of other orders all designed to remove the property constituted by the proceeds of the second Westpac Bank account from being under any restraint of an order made under the POCA. In support of her notice of motion, Mrs Al Baghdadi filed an affidavit that was sworn the same day, that is 23 September 2014. As I will explain, in her affidavit she purported to explain the source of the funds that were deposited into the first and second Westpac Bank accounts.

3. [13]

   Thereafter, the course of the proceedings was complicated by difficulties experienced in compulsorily examining various individuals, Mrs Al Baghdadi's ill health and Mr Al Baghdadi's trial.

4. [14]

   Eventually, on 30 November 2016, Bellew J dismissed Mrs Al Baghdadi's notice of motion for want of prosecution in accordance with Uniform Civil Procedure Rule 12.7.

5. [15]

   At some point, the last step in the proceedings, namely the application before the Court today for a forfeiture order, was set down for hearing.

6. [16]

   On 1 May 2017, a solicitor employed by the Commissioner telephoned Haidar Al Baghdadi. The solicitor inquired whether Haidar Al Baghdadi or his father Majed, who was the late Mrs Al Baghdadi's husband, were opposing the application or otherwise intended to appear at the hearing. Haidar Al Baghdadi advised that they would not. When the proceedings were called on today, each of them were called outside the Court but neither appeared.

Forfeiture Order

1. [17]

   Subsections 49(1) and (2) of the POCA provide as follows:

2. [18]

   Thus, the first criteria for making of a forfeiture order is that the "responsible authority" for the earlier restraining order under s 19 in respect of the relevant property be the applicant for the forfeiture order. In this case the relevant "responsible authority" is the Commissioner. This criteria is clearly satisfied.

3. [19]

   The second criteria for the making of a forfeiture order, is that the restraining order has been in force for at least six months. It follows from what I have stated that this criteria is also satisfied.

4. [20]

   The fourth criteria is that the Court be satisfied that the Commissioner has taken reasonable steps to identify and notify the persons with an interest in the property. From what I have outlined, the only three persons who possibly have an interest in the property are Mrs Al Baghdadi, Haidar Al Baghdadi and Majed Al Baghdadi. Haidar Al Baghdadi and Mrs Al Baghdadi were each notified of the making of the restraining order and the Commissioner's intention to seek a forfeiture order by letter dated 20 August 2014. On 6 December 2016, a letter was sent to Majed Al Baghdadi informing him of the Commissioner's intention to apply for a forfeiture order. On 6 April 2017, the Commissioner arranged for personal service on Majed Al Baghdadi of a letter advising of that intention. As noted, this was all followed up with a telephone call to Haidar Al Baghdadi on 1 May 2017.

5. [21]

   In the circumstances, I am satisfied that the Commissioner has, at the very least, taken all reasonable steps to identify and notify the relevant persons.

6. [22]

   The third criteria that must be satisfied before a forfeiture order is made is that the Court is satisfied that the relevant property is "proceeds of one or more indictable offence" (s 49(1)(c)(i)). Although the Commissioner relied on other subparagraphs in 49(1)(c), s 49(1)(c)(i) will suffice in this case.

7. [23]

   In this case, the Commissioner contended that the evidence demonstrated that the amount standing in the second Westpac Bank account is the proceeds of one or more offences against s 135ASJ(1), which, as I have explained, are indictable offences. In particular, the Commissioner contended that that material is the proceeds of Haidar Al Baghdadi’s business of providing unauthorised access to encoded broadcasts over a period of years.

8. [24]

   Section 338 of the POCA provides that:

9. [25]

   In support of his contention that the amount standing in the second Westpac Bank account is the proceeds of an indictable offence, the Commissioner pointed to the fact that the subscription service operated by Haidar Al Baghdadi for reward was conducted during the period the deposits were made.

10. [26]

    The comprehensive submissions filed on behalf of the Commissioner also pointed to the following circumstances as matters which were said to overwhelmingly demonstrate that the amount standing in the second Westpac Bank account was the proceeds of one or more indictable offences, namely:

11. [27]

    I have reviewed all the affidavit evidence which is said to support these contentions. The affidavits prove the matters asserted.

12. [28]

    Considered together, all these circumstances clearly demonstrate that the Commissioner has satisfied s 49(1)(c)(i) in respect of the amount standing in the second Westpac Bank account.

13. [29]

    However, even though these are civil proceedings, the Commissioner took the prudent step of placing before the Court Mrs Al Baghdadi's affidavit of 23 August 2014 which was sworn in support of her application to revoke the restraining order, as well as material obtained from the examination of Haidar Al Baghdadi and a Mr Alex Hadi in 2016.

14. [30]

    In her affidavit, Mrs Al Baghdadi stated that in 2002 her mother passed away in Baghdad and that the amounts deposited into her accounts were "part of the proceeds of the 'sale' of the two houses". No documentary evidence was attached to her affidavit to support any of those assertions.

15. [31]

    An accurate summary of the evidence given by Mr Hadi during his examination is set out in an affidavit sworn in support of the application. The effect of that is that during examination under oath Mr Hadi gave evidence that:

16. [32]

    The same affidavit contains a summary of the evidence given under examination by Haidar Al Baghdadi. The effect of that is that:

17. [33]

    Further, during his examination, Mr Haidar Al Baghdadi produced documents which he said related to the sale of the real property in Iraq, which were contended to be the source of the funds received by his mother. In an affidavit sworn 16 June 2016, a special member of the Australian Federal Police, Domenico Rositano, referred to these documents and stated as follows:

18. [34]

    I have inspected these documents myself. On their face, they support the analysis of Mr Rositano.

19. [35]

    In the end result, the material provided by, and, in some respects extracted from, Mrs Al Baghdadi and Haidar Al Baghdadi does not deter me from drawing the inference sought by the Commissioner. The errors in the documentary material are significant. The discrepancies between the dates and times at which moneys were said to be received are also significant. Even allowing for the fact that the circumstances in Iraq prevailing since the death of Haidar Al Baghdadi’s mother may explain the unusual method of money transfer, there is, in the end result, a complete lack of any cogent material which is capable of supporting the assertion that the source of the funds received into Mrs Al Baghdadi's accounts with Westpac was from the sale of her mother’s houses.

20. [36]

    Accordingly, I am satisfied that the property standing in the second Westpac Bank account is the proceeds of one or more indictable offences, (POCA, s 49(1)(c)(i)). It follows that the Court is obliged to make the forfeiture order sought by the Commissioner.

21. [37]

    A further order is sought by the Commissioner under s 69(2) of the POCA allowing the forfeiture to be effected immediately so as to waive the 28-day stay provided for by s 69(1) that usually operates so as to facilitate appeals. In circumstances where there is no contradictor and no person with any apparent legitimate interest in the funds, I consider that that order is appropriate.

22. [38]

    Accordingly, I will make orders 1, 2 and 3 in the short minutes of order. I will also note that that concludes the proceedings, so it is appropriate to make a fourth order; namely, that the proceedings are otherwise dismissed.