Money Laundering Flashcards
Money Laundering
Meaning of money laundering
Dealing with the proceeds of criminal activity in such a way as to make the proceeds appear to have been legitimately acquired.
Money Laundering
‘Engages in’ - elements
CA61; S243(2)
- Every one who,
- In respect of any property that is the proceeds of an offence,
- Engages in a money laundering transaction,
- Knowing or believing that all or part of the property is the proceeds of an offence OR being reckless as to whether or not the property is the proceeds of an offence.
The elements of money laundering - explained
-
In respect of any property that is the proceeds of an offence:
Includes both tangible and intangible property and interests in real or personal property whether within or outside NZ. -
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. -
Knowing or believing that all or part of the property is the proceeds of an offence:
Knowledge is proven via direct evidence and/or circumstantial evidence.
Knowledge must exist when the property is dealt with (R v Kennedy - K** = _K_nowledge / **Kennedy)). -
Or being reckless as to whether or not the property is the proceeds of an offence:
(Cameron v R).
Money Laundering
With intent to engage in - elements
CA61; S243(3):
- Every one who
- Obtains or has in his or her possession
- Any property (being property that is the proceeds of an offence committed by another person) —
(a) with intent to engage in a money laundering transaction in respect of that property; and
(b) knowing or believing that all or part of the property is the proceeds of an offence, or being reckless as to whether or not the property is the proceeds of an offence.
Money Laundering
Legislation definitions - 243(4): Conceals / deals with the property
CA 1961; S243(4)
In concealing any property or by enabling any person to conceal any property, that person -
(a) deals with that property, or
(b) assists any other person, whether directly or indirectly, to deal with that property
Money Laundering
Legislation definitions
Conceal
CA61; S243(1)
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.
Money Laundering
Legislation definitions
Deal with
CA61; S243(1)
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.
Money Laundering
Legislation definitions
Interest
CA61; S243(1)
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.
Money Laundering
Legislation definitions
Offence
CA61; S243(1)
An offence punishable under New Zealand law, including any act, wherever committed, that would be an offence in New Zealand if committed in New Zealand.
Money Laundering
Legislation definitions
Proceeds
From an offence
CA61; S243(1)
Proceeds: 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.
Money laundering cycle - placement
Description: Cash enters the financial system.
Example: An offender makes money from selling cannabis and then deposits these proceeds into an associate’s bank account.
Money laundering cycle - 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 the director of.
Money laundering cycle - 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 director fees or a salary out of the company account.
R v Kennedy
(Glad I’m not a Kennedy. He has the necessary guilty knowledge).
R v Kennedy
The guilty knowledge that the thing has been stolen or dishonestly obtained must exist at the time of receiving.
Criminal Proceeds (Recovery) Act 2009
Legislation
Purpose
(Section 3 ss(1))
S3 Criminal Proceeds (Recovery) Act 2009
(1) To establish a regime for the forfeiture of property —
(a) that has been derived, directly or indirectly, from significant criminal activity; or
(b) that represents the value of a person’s unlawfully derived income.
Criminal Proceeds (Recovery) Act 2009
Legislation
Purpose
(Section 3 ss(2))
(a) ELIMINATE the chance for persons to profit from undertaking or being associated with significant criminal activity; and
(b) DETER significant criminal activity; and
(c) REDUCE the ability of criminals and persons associated with crime or significant criminal activity to continue or expand criminal enterprise; and
(d) DEAL with matters associated with foreign restraining orders and foreign forfeiture orders that arise in New Zealand.
Criminal Proceeds (Recovery) Act 2009
Legislation
Tainted Property Definition
S5 Criminal Proceeds (Recovery) Act 2009
(a) means any property that has, wholly or in part, been—
(i) acquired as a result of significant criminal activity; or
(ii) directly or indirectly derived from significant criminal activity; and
(b) includes any property that has been acquired as a result of, or directly or indirectly derived from, more than 1 activity if at least 1 of those activities is a significant criminal activity
Criminal Proceeds (Recovery) Act 2009
Legislation
Qualifying instrument forfeiture offence
S5 Criminal Proceeds (Recovery) Act 2009
(a) Means an offence punishable by a maximum term of imprisonment of 5 years or more; and
(b) Includes an attempt to commit, conspiring to commit, or being an accessory to an offence if the maximum term of imprisonment for that attempt, conspiracy, or activity is 5 years or more.
Criminal Proceeds (Recovery) Act 2009
Legislation
Meaning of significant criminal activity
S6 Criminal Proceeds (Recovery) Act 2009
(1) An activity that would amount to offending–
(a) punishable by a maximum term of imprisonment of 5 years or more; or
(b) from which property, proceeds, or benefits of a value of $30,000 or more have, directly or indirectly, been acquired or derived.
Criminal Proceeds (Recovery) Act 2009
Legislation
Meaning of unlawfully benefited from significant criminal activity
S7 Criminal Proceeds (Recovery) Act 2009
- Knowingly,
- Directly or indirectly,
- Derived a benefit from significant criminal activity
Criminal Proceeds (Recovery) Act 2009
Legislation
(1) The High Court must make a Profit Forfeiture Order if it is satisfied on the balance of probabilities that—
S55 Criminal Proceeds (Recovery) Act 2009
(a) The respondent has unlawfully benefited from significant criminal activity within the relevant period of criminal activity; and
(b) the respondent has interests in property.
Criminal Proceeds (Recovery) Act 2009
Legislation
Instrument of crime definition
Property used (wholly or in part) to commit or facilitate the commission of a qualifying instrument forfeiture offence.
Criminal Proceeds (Recovery) Act 2009
Assessment process before application for restraint of instrument of crime.
Used to determine:
- Asset value
- Asset equity
- Any third party interest in the asset
- The cost of action in respect of the asset.
Criminal Proceeds (Recovery) Act 2009
Affidavit required for application
Needs to outline:
- Officer in Charge
- Offender(s)
- Search warrant
- Admissions made during interview(s)
- Property
Criminal Proceeds (Recovery) Act 2009
What must occur before Criminal Proceeds action can be taken
And what belief is required.
A restraining order is the first step in the asset seizure process.
Reasonable grounds for belief that the property is tainted – that it has been acquired, or directly or indirectly derived, from “significant criminal activity”.
How long is a restraining order valid from the date on which the order is made?
One year.
Investigative Procedure
What points to cover when interviewing a suspect
- Suspect’s legitimate income
- Suspect’s illegitimate income
- Assets
- Liabilities
What is meant by the term ‘proceeds’ as it relates to S243 - Money Laundering?
Proceeds:
Any property that is derived, or realised, directly or indirectly, by any person from the commission of the offence.
What is the definition of an ‘offence’ in respect of money laundering?
Offence:
An offence that is punishable under NZ law, including any act, wherever committed, that would be an offence in NZ if committed in NZ.
What is the purpose of the assessment process when preparing an application for a restraining order relating to an instrument of crime?
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 in respect of the asset.
What is the definition of tainted property in relation to the Criminal Proceeds (Recovery) Act?
- *Tainted Property:**
(a) means any property that has, wholly or in part, been -
(i) acquired as a result of significant criminal activity; or
(ii) directly or indirectly derived from significant criminal activity; and
(b) includes any property that has been acquired as a result of, or directly or indirectly from, more than one activity if at least one of those activities is a significant criminal activity.
What are the three phases of the money laundering cycle?
- Placement
- Layering
- Integration
