7. Money Laundering and asset recovery

Question 1

What are the three phases of the money laundering cycle?

Answer 1

• placement
• layering
• integration

Question 2

What is the purpose of the assessment process when preparing an application for a restraining order relating to an instrument of crime?

Answer 2

• the value of the asset
• equity in the asset
• any third party interest in the asset
• the cost of action in respect of the asset.

Question 3

What is the definition of an ‘offence’ in respect of money laundering?

Answer 3

punishable under New Zealand law,

including any act, wherever committed,

that would be an offence in New Zealand if committed in New Zealand.

Question 4

1. What is meant by the term ‘proceeds’ as it relates to s243, Money laundering?

Answer 4

any property that is derived or realised,

directly or indirectly,

by any person

from the commission of the offence.

Question 5

What is the essence of money laundering?

Answer 5

**What is the essence of money laundering?

concealment

Question 6

Points to consider when interviewing for money laundering

Answer 6

• suspects legitimate income
• suspects illegitimate income
• expenditure
• assests
• liabilities
• financial records
• documentary evidence to support the above

Question 7

a restraining order remains in force until?

Answer 7

the making or declining of an assets or profits forfeiture order, whichever is earlier

Question 8

Who are the only people that may apply for restraining orders?

Answer 8

asset recovery units

Question 9

To make an application to restrain assets, an affidavit is required. What should be in this?

Answer 9

OC details
Offender: details, charges, prior convictions
if there was a SW: nature of offending discovered at the property (the asset)
admissions made during interviews
property: value , who owns it

Question 10

**before preparing such an application an assessment process is required. the assessment process is conducted to determine:

Answer 10

• the value of the asset
• equity in the asset
• any third party interest in the asset
• the cost of action is respect of the asset

Question 11

Who is included in the definition of ‘prosecutor’

Answer 11

• anyone in the prosecuting agency
• counsel representing the person who commenced the proceedings
• in the case of a private prosecution person who commenced the proceedings or counsel representing that person

Question 12

What does instrument of crime mean?

Answer 12

• property used (wholly or in part) to commit or facilitate the commission of a qualifying instrument forfeiture offence
• includes funds allocated for committing that offence
• Any disposition of that property or any other property into which that property is converted

Question 13

**Section 55, criminal proceeds act 2009

The high court must make a profit forfeiture order if it is satisfied on the balance of probabilities that:

Answer 13

• the respondent has unlawfully benefited from significant criminal activity
• the respondent has interests in property

Question 14

Define significant criminal activity

Answer 14

• one or more offences punishable for 5+ years , or
• from which property, proceeds or benefits of a value of $30,000 or more have directly or indirectly been acquired or derived

Question 15

**Define qualifying instrument forfeiture offence

Answer 15

• offence punishable by 5+ years

- includes attempts, conspires, accessory if the punishment is 5+ years

Question 16

Define ‘tainted property’

Answer 16

s5 Criminal proceeds act 2009
any property that has, wholly or in part, been:
- acquired s result of significant criminal activity or
- directly or indirectly derived from significant criminal activity and

Includes any property that has been acquired as a result of, or directly or indirectly derived from, more than 1 activity or at least one of those activities is a significant criminal activity

Question 17

who issues an AFO?

Answer 17

The high court

Question 18

What is an AFO?

Answer 18

Assets forfeiture order

Question 19

**The criminal proceeds and instruments forfeiture regime established under this Act proposes to:

Answer 19

• eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity and
• deter significant criminal activity and
• reduce the ability of criminals and persons associated with crime or significant criminal activity to continue to expand criminal enterprise; and
• deal with matters associated with foreign restraining orders and foreign forfeiture orders that arise in NZ

Question 20

**What is the primary purpose of the act?

Answer 20

establish a regime for the forfeiture of property:

• that has been derived directly or indirectly from significant criminal activity or
• that represents the value of a persons unlawfully derived income

Question 21

**The elements of money laundering are outlined in s243(2) of the CA 1961.
Explain “being reckless as to whether or not the property is the proceeds of an offence”

Answer 21

Recklessness is the conscious and deliberate taking of an unjustified risk

Question 22

** the elements of “money laundering” are outlined in s243(2) CA 1961. Explain “knowing or believing that all or part of the property is the proceeds of an offence”

Answer 22

Knowledge is proven via direct evidence (e.g. admission) and/or circumstantial evidence.
Knowledge must exist when the property is dealt with (R v Kennedy53)

Question 23

** the elements of “money laundering” are outlined in s243(2) CA 1961.
Explain “ engages in a money laundering transaction”

Answer 23

one must conceal property or enable another to conceal the property and then also deal with the property or assist with such dealing. This includes disposing or transferring the property; bringing or removing the property from NZ; or changing it from one form to another

Question 24

.

Answer 24

.

Question 25

What are the 3 phases, descriptions and examples of money laundering?

Answer 25

Phase 1: Placement
Description: cash enters financial system
Example: offender sells drugs, deposits money into an associate’s bank account

Phase 2: Layering
Description: Money is involved in a number of transactions
Example: The associate transfers the money into an account held by a ‘shell’ company that the offender is a director of

Phase 3: Integration
Description: Money is mixed with lawful funds or integrated back into the economy, with the appearance of legitimacy
Example: The money is declared as revenue for the company, tax is paid, and then the offender pays himself directors fees or a salary out of the company account

Question 26

What is money laundering?

Answer 26

Dealing with the proceeds of criminal activity in such way as to make the proceeds appear to have been legitimately acquired

Question 27

Is it necessary for the prosecution to prove that the defendant knew or believed that the property was the proceeds of a particular offence or particular class of offence?

Answer 27

No

Question 28

Define Property

Answer 28

Property: means real or personal property of any description, whether situated in New Zealand or elsewhere and whether tangible or intangible; and includes an interest in any such real or personal property.

Question 29

Define ‘conceal’

Answer 29

1. Conceal: in relation to property, means to conceal or disguise the property, and includes, without limitation:
2. (a) to convert the property from one form to another:
3. (b) to conceal or disguise the nature, source, location, disposition, or ownership of
   the property or of any interest in the property.

Question 30

Deal with: in relation to property, means to deal with the property in any manner and by any means, and includes, without limitation:

Answer 30

(a) to dispose of the property, whether by sale, purchase, gift or otherwise
(b) to transfer possession of the property
(c) to bring the property into New Zealand
(d) to remove the property from New Zealand.

Question 31

Interest: in relation to property, means

Answer 31

(a) a legal or equitable estate or interest in the property; or
(b) a right, power, or privilege in connection with the property.

Question 32

Offence: means

Answer 32

means an offence (or any offence described as a crime) that is punishable under New Zealand law, including any act, wherever committed, that would be an offence in New Zealand if committed in New Zealand.

Question 33

Proceeds means

Answer 33

In relation to an offence, means any property that is derived or realised, directly or indirectly, by any person, from the commission of the offence.