‘Mind altering’ drugs key to Ibrahim case

Fadi Ibrahim has appeared in court. Picture: NewsWire / John Appleyard

Sydney identity Fadi Ibrahim was taking “mind altering” painkillers for a gunshot wound at the time he received a $600,000 payment comprising suspected proceeds of a crime, a court has heard.

The 50-year-old was arrested in Dubai alongside his brother, Michael Ibrahim, in August 2017 amid a multi-agency drug sting.

His brother Michael was jailed for more than two decades in 2020 over his role in importing illegal drugs and tobacco into Australia.

Fadi has pleaded guilty to dealing with money reasonably suspected to be proceeds of a crime, but his lawyer and the crown prosecutor were in court on Tuesday to argue over the facts before the matter proceeds to sentencing.

Fadi and Michael are the younger brothers of Kings Cross nightclub personality John Ibrahim, who has not been accused of any wrongdoing.

On Tuesday, the NSW District Court heard Fadi loaned Michael $800,000 in early 2017, which was used to purchase tobacco for illegal importation.

Fadi Ibrahim has pleaded guilty to dealing with money reasonably suspected of being the proceeds of a crime. Picture: NewsWire / John Appleyard

There is no suggestion Fadi knew what his brother intended to do with the loan, or that he was involved in his tobacco or drug dealings.

The court heard his brother repaid nearly $600,000 of the loan via intermediaries, who made two large deposits in Fadi’s account. Prosecutors allege this repayment was made from money obtained in the tobacco deal.

Fadi’s lawyer Simon Buchen SC revealed the 50-year-old was under the influence of “mind altering substances” at the time of the first $300,000 bank deposit in July 2017.

The court heard he has struggled with chronic pain since 2009, when he was shot five times while sitting in a Lamborghini outside his North Sydney home.

Mr Buchen revealed Fadi “lost his entire stomach” and has been reliant on heavy pain medication to treat the pain, followed by a hospital-administered infusion of ketamine to wean him off the medication.

At the time of the first payment, the court heard he was “agitated (and) couldn’t focus” on the multiple phone calls from his brother, and a friend described him as “not in his right frame of mind.”

“That reduces the offender’s culpability because he was in an altered state,” Mr Buchen said.

“He was certainly not in an optimal state.”

He argued Fadi had provided the loan to help his younger brother Michael “get back on his feet” after he had been released from prison and couldn’t secure a loan.

The court heard there was a “long history” of Fadi helping members of his family, who sometimes bullied him for his “small stature”.

Brothers Fadi Ibrahim, Michael Ibrahim, Sam Ibrahim and John Ibrahim. Neither Sam or John are accused of any wrongdoing.
Brothers Fadi Ibrahim, Michael Ibrahim, Sam Ibrahim and John Ibrahim. Neither Sam or John are accused of any wrongdoing.

In a phone call covertly recorded by police, Fadi was heard telling his brother: “I do everything you ask, I never say no.”

Mr Buchen said there was “nothing criminal about the loan” and there was no suggestion Fadi had been involved in the underlying criminal conduct of the tobacco or drug importation.

However, crown prosecutor David Jordan argued in the NSW District Court that Fadi would reasonably have suspected the $600,000 repayment was the proceeds of a crime. Fadi’s lawyer denied this claim.

The crown prosecutor asserted the 50-year-old had played a role in “directing” a number of intermediaries to deposit the loan repayment into his bank account on 24 July 2017.

“That was done through cash deposits and bank cheques … in an undocumented way,” he told the court.

Yet Mr Buchen said the “inherent traceability” of the massive $300,000 payments revealed there was “no offence of concealment”.

“This is not sophisticated money laundering conduct,” he said.

“It’s a far cry from your usual money laundering case.”

He said the evidence showed the intermediaries had been directed by Michael, and had reported to him that “Fadi’s all done” after the second repayment was completed.

“Yes, there are moments where (Fadi) provides payment instructions … but that is different from directing the intermediaries,” Mr Buchen said.

He emphasised that his client had not financially benefited from receiving the suspected proceeds of a crime, which made up only three quarters of his original loan to Michael.

“Not only was there not a gain, but there was a loss. Quite a significant loss,” Mr Buchen said.

Fadi is not accused of being involved in his brother’s illegal activities. Picture: NewsWire / John Appleyard
The court heard he has been bullied for his ‘short stature’. Picture: NewsWire / John Appleyard

The court heard Fadi was arrested in 2017 and released on $2 million bail with “significant” restrictions, which Mr Jordan argued had gradually become much more lenient.

“In the intervening years he has been able to travel overseas for holidays and such while on bail,” he said.

Yet Mr Buchen said his client had been under “major stress” since being charged with the offence seven years ago.

He noted the crown had initially charged Fadi with offences of a “vastly greater seriousness which they then abandoned”.

The court heard 50-year-old had offered to plead guilty in 2019, but the prosecution rejected his offer and the matter dragged on for another five years.

While the crown is pushing for Fadi to serve jail time over the offence, his lawyer argued he should be sentenced to a recognisance release order or a suspended sentence.

The case will continue before Judge Christopher O’Brien later this week.