Money laundering

Question 1

Money laundering

Answer 1

The process of dealing with the proceeds of criminal activity in such a way as to make the proceeds appear to have been legitimately acquired

Question 2

Section 243(2), Crimes Act 1961

Answer 2

7 years imprisonment

(1) In respect of any property that is the proceeds of an offence
(2) Engages in a money laundering transaction
(3) 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

Question 3

Section 243(3), Crimes Act 1961

Answer 3

(1) Obtains or has in his or her possession
(2) Any property (being property that is the proceeds of an offence committed by another person) -
(i) with intent to engage in a money laundering transaction in respect of that property, and
(ii) 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

Question 4

Conceal

Answer 4

To disguise the property

(a) convert property from on form to another
(b) conceal or disguise the nature, source, location, disposition or ownership of the property

Question 5

Deal with

Answer 5

To deal with the property in any manner and by any means

(a) disposing of property (sale, purchase, gift etc)
(b) transfer possession of property
(c) bring property into NZ
(d) remove property from NZ

Question 6

Proceeds

Answer 6

Any property that is derived or realised, directly or indirectly, by any person from the commission of the offence

Question 7

Section 243(4), Crimes Act 1961

Answer 7

A person engages in a money laundering transaction if, in concealing any property or by enabling any person to conceal any property, that person -

(a) deals with that property
(b) assists any other person, whether directly or indirectly, to deal with that property

Question 8

Section 243(4A), Crimes Act 1961
Prosecution not required to prove

Answer 8

The prosecution is not required to prove that the defendant had an intent to -

(a) conceal any property
(b) enable any person to conceal any property

Question 9

Section 243(5)(a) and 243(5)(b), Crimes Act 1961 (particular offences)

Answer 9

243(5)(a) -
Not necessary to prove that the defendant knew or believed that the property was the proceeds of a particular offence

243(5)(b) -
No defence that the defendant believed any property to be the proceeds of a particular offence when in fact it was the proceeds of another offence

Question 10

Section 243A, Crimes Act 1961
Person may still be charged under s243(2) or 243(3)

Answer 10

A person may be charged under s243(2) or 243(3) in respect of property that is proceeds of an offence, even though the person who committed the offence -
(a) has not been charged with that offence
(b) has not been convicted of that offence

Question 11

Section 245 - defence to money laundering

Answer 11

An act that occurred outside NZ and that is alleged to constitute an offence resulting in proceeds only if -

(a) the act was an offence under the law of the place where and when it occurred
(b) it is an act to which section 7 or 7A of this act applies
(c) an enactment provides that the act is an offence in NZ and no additional requirement exists for the act to be an offence in the place where and when it occurred

Question 12

What are the three stages of the money laundering cycle?

Answer 12

(1) Placement - cash enters the financial system
(2) Layering - Money is involved in a number of transactions
(3) Integration - Money is mixed with lawful funds or integrated back into the economy with the appearance of legitimacy

Question 13

What is the purpose of the Criminal Proceeds (Recovery) Act 2009?

Answer 13

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

Question 14

What does the criminal proceeds and instruments forfeiture regime propose to do?

Answer 14

(a) Eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity

(b) Deter significant criminal activity

(c) Reduce the ability of criminals and persons associated with crime to continue or expand criminal enterprise

(d) Deals with matters associated with foreign restraining orders and forfeiture orders that arise in NZ

Question 15

Assets Forfeiture Order (AFO)

Answer 15

• Issued by the High Court
• Shows on the balance of probability that specific assets which have been acquired have been tainted by significant criminal activity

Question 16

Tainted property

Answer 16

Any property that has been (wholly or in part) -
(a) Acquired as a result of significant criminal activity, or
(b) Directly or indirectly derived from significant criminal activity

Question 17

Qualifying instrument forfeiture offence

Answer 17

(a) An offence punishable by 5years imprisonment or more
(b) Includes attempts, conspiracy or being an accessory to an offence if the maximum term of imprisonment for that attempts, conspiracy or activity is 5 years or more

Question 18

Significant criminal activity

Answer 18

Activity engaged in by a person that would amount to offending -
(a) Consists of, or includes, one or more offences punishable by 5 or more years imprisonment
(b) From which property, proceeds or benefits of a value of $30,000 or more have directly or indirectly been acquired or derived

Question 19

Unlawfully benefited from significant criminal activity

Answer 19

If the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity

Question 20

Profit forfeiture order (section 55, Criminal Proceeds (Recovery) Act 2009)

Answer 20

High Court must make a profit forfeiture order if it is satisfied on the balance of probabilities that -
(a) Respondent has unlawfully benefited from significant criminal activity within the relevant period of criminal activity, and
(b) The respondent has interests in property

Question 21

Instrument of crime

Answer 21

(a) Property used to commit or facilitate the commission of a qualifying instrument forfeiture offence
(b) Includes funds allocated for the purposes of committing an offence in respect of an offence against the Terrorism Suppression Act 2002

Question 22

Section 142B, Sentencing Act 2002
(Obligations of the Prosecutor)

Answer 22

If a person is convicted of a qualifying instrument forfeiture offence and any property was used to commit or facilitate the commission of that offence, the prosecutor must notify the court in writing of -
(a) Details of that property
(b) Name and identifying details of any person (other than offender) who has an interest in the property

Question 23

Restraint of instrument of crime

Answer 23

Restraining property while the criminal proceedings take their course to prevent the disposal of the asset or erosion of its value.

Application made under section 26 Criminal Proceeds (Recovery) Act 2002. This is the first step in the asset seizure process

Question 24

Assessment process prior to restraint of instrument of crime application

Answer 24

Assessment process is required first. It is conducted to determine:
- Value of the asset
- Equity in the asset
- Any third party interest in the asset
- Cost of action in respect of the asset

Accompanying affidavit must include:
(1) OC details
(2) Offender details, charges, convictions
(3) Search warrant - nature of offending discovered
(4) Admissions made
(5) Property sought, value and ownership/control by the offender

Question 25

Instrument Forfeiture Order

Answer 25

An order made under section 142N of the Sentencing Act 2002.

Question 26

Who can apply for restraining orders, assets forfeiture orders and profit orders?

Answer 26

The Commissioner of Police and members of the Asset Recovery Unit

(does not include orders relating to Instrument of Crime)

Question 27

How long is a restraining order valid?

Answer 27

One year from the date on which the order is made. The court may issue an extension before the expiry of the order, which is also valid for one year

Question 28

Suspect interview

Answer 28

• Suspect’s legitimate income
• Suspect’s illegitimate income
• Expenditure
• Assets
• Liabilities
• Acquisition of financial records
• Clarification of documentary evidence