7. Money Laundering and asset recovery Flashcards
What are the three phases of the money laundering cycle?
- placement
- layering
- integration
What is the purpose of the assessment process when preparing an application for a restraining order relating to an instrument of crime?
- 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.
What is the definition of an ‘offence’ in respect of money laundering?
punishable under New Zealand law,
including any act, wherever committed,
that would be an offence in New Zealand if committed in New Zealand.
- What is meant by the term ‘proceeds’ as it relates to s243, Money laundering?
any property that is derived or realised,
directly or indirectly,
by any person
from the commission of the offence.
What is the essence of money laundering?
**What is the essence of money laundering?
concealment
Points to consider when interviewing for money laundering
- suspects legitimate income
- suspects illegitimate income
- expenditure
- assests
- liabilities
- financial records
- documentary evidence to support the above
a restraining order remains in force until?
the making or declining of an assets or profits forfeiture order, whichever is earlier
Who are the only people that may apply for restraining orders?
asset recovery units
To make an application to restrain assets, an affidavit is required. What should be in this?
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
**before preparing such an application an assessment process is required. the assessment process is conducted to determine:
- 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
Who is included in the definition of ‘prosecutor’
- 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
What does instrument of crime mean?
- 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
**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:
- the respondent has unlawfully benefited from significant criminal activity
- the respondent has interests in property
Define significant criminal activity
- 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
**Define qualifying instrument forfeiture offence
- offence punishable by 5+ years
- includes attempts, conspires, accessory if the punishment is 5+ years
Define ‘tainted property’
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
who issues an AFO?
The high court
What is an AFO?
Assets forfeiture order
**The criminal proceeds and instruments forfeiture regime established under this Act proposes to:
- 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
**What is the primary purpose of the act?
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
**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”
Recklessness is the conscious and deliberate taking of an unjustified risk
** 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”
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)
** the elements of “money laundering” are outlined in s243(2) CA 1961.
Explain “ engages in a money laundering transaction”
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
.
.
What are the 3 phases, descriptions and examples of money laundering?
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
What is money laundering?
Dealing with the proceeds of criminal activity in such way as to make the proceeds appear to have been legitimately acquired
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?
No
Define Property
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.
Define ‘conceal’
- Conceal: in relation to property, means to conceal or disguise the property, and includes, without limitation:
- (a) to convert the property from one form to another:
- (b) to conceal or disguise the nature, source, location, disposition, or ownership of
the property or of any interest in the property.
Deal with: in relation to property, means to deal with the property in any manner and by any means, and includes, without limitation:
(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.
Interest: in relation to property, means
(a) a legal or equitable estate or interest in the property; or
(b) a right, power, or privilege in connection with the property.
Offence: means
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.
Proceeds means
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.
