MONEY LAUNDERING

Question 1

Money Laundering Meaning of 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

Money Laundering (2) Elements

Answer 2

S243(2) CA61 7 years
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.

Question 3

Money Laundering (3) Elements

Answer 3

S243(3) CA61. 5 years
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.

Question 4

Money Laundering Legislation definitions Money Laundering Transaction

Answer 4

S243(4) CA 1961
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

Question 5

Money Laundering Legislation definitions Conceal

Answer 5

S243(1) CA61 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.

Question 6

Money Laundering Legislation definitions Deal with

Answer 6

S243(1) CA61 Deal with:
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.

Question 7

Money Laundering Legislation definitions Interest

Answer 7

S243(1) CA61 Interest:

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

Question 8

Money Laundering Legislation definitions Offence

Answer 8

S243(1) CA61 Offence:
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 9

Money Laundering Legislation definitions Proceeds From an offence

Answer 9

S243(1) CA61 Proceeds:

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

Question 10

Money Laundering Cycle Step 1

Answer 10

1. Placement
   Cash enters the financial system.

An offender makes money from selling cannabis and then deposits these proceeds into an associate’s bank account.

Question 11

Money Laundering Cycle Step 2

Answer 11

2. Layering
   Money is involved in a number of transactions.

The associate transfers the money into an account held by a ‘shell’ company that the offender is the director of.

Question 12

Money Laundering Cycle Step 3

Answer 12

3. Integration
   Money is mixed with lawful funds or integrated back into the economy, with the appearance of legitimacy.

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.

Question 13

R v Harney

Answer 13

R v Harney - Recklessness
Recklessness means the conscious and deliberate taking of an unjustified risk. In New Zealand it involves proof that the consequence complained of could well happen, together with an intention to continue the course of conduct regardless of risk

Question 14

R v Kennedy

Answer 14

R v Kennedy - Guilty Knowledge

The guilty knowledge that the thing has been stolen or dishonestly obtained must exist at the time of receiving.

Question 15

Investigative Procedure What points to cover when interviewing a suspect

Answer 15

• suspect’s legitimate income
• suspect’s illegitimate income
• expenditure
• assets
• liabilities
• acquisition of financial records, from banks, financing companies, loan sharks, family trust documents
• clarification of documentary evidence located, as per above.