Money Laundering

Question 1

Definition of Money Laundering

Money laundering is the process…

Answer 1

Money laundering is 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
S243(2) CA61

Offence

Answer 2

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
S243(3) CA61

Offence

Answer 3

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
S243(1) CA61

Meaning of INTEREST

Answer 4

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.

Question 5

Money Laundering
S243(1) CA61

Meaning of OFFENCE

Answer 5

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 6

Money Laundering
S243(1) CA61

Meaning of PROCEEDS

Answer 6

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.

Question 7

Money Laundering Cycle

1. Definition and Example

Answer 7

1. Placement

- Cash enters the financial system

Question 8

Money Laundering Cycle

2. Definition and Example

Answer 8

2. Layering

- Money is involved in a number of transactions.

Question 9

Money Laundering Cycle

3. Definition and Example

Answer 9

3. Integration

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

Question 10

R v Harney

Recklessness

Answer 10

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 11

R v Kennedy

Answer 11

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

Question 12

S3 Criminal Proceeds (Recovery) Act 2009

(1) The primary purpose of this Act

Answer 12

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 13

S5 Criminal Proceeds (Recovery) Act 2009

Tainted Property Definition

Answer 13

(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.

Question 14

S6 Criminal Proceeds (Recovery) Act 2009

(1) significant criminal activity

Answer 14

means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending–

(a) that consists of, or includes, 1 or more offences 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.

Question 15

S7 Criminal Proceeds (Recovery) Act 2009

Meaning of unlawfully benefited from significant criminal activity.

Answer 15

A person has unlawfully benefited from significant criminal activity if the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook or was involved in the significant criminal activity).

Question 16

S55 Criminal Proceeds (Recovery) Act 2009

(1) The High Court must make a Profit Forfeiture Order if it is satisfied on the balance of probabilities that—

Answer 16

(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.

Question 17

Criminal Proceeds (Recovery) Act 2009

Assessment process before application for restraint of instrument of crime.

Answer 17

Used 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.

Question 18

Criminal Proceeds (Recovery) Act 2009

Affidavit required for application

Needs to outline:

Answer 18

• Officer in Charge:
− details.

• Offender(s):
− details
− charges
− criminal convictions.

• Search warrant - describe the nature of the offending discovered at or involving the property (asset) concerned.
• Admissions made during interview(s).

• Property:
− describe property sought to be restrained and its value.
− show that offender owns, has custody or control.

Question 19

Criminal Proceeds (Recovery) Act 2009

What must occur before Criminal Proceeds action can be taken

And what belief is required.

Answer 19

A restraining order is the first step in the asset seizure process.

In the case of tainted property and benefits from crime an application made to the High Court must show reasonable grounds for belief that the property is tainted – that it has been acquired, or directly or indirectly derived, from “significant criminal activity”.

Question 20

Investigative Procedure

What points to cover when interviewing a suspect

Answer 20

• 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.

Question 21

Money Laundering
S243(4) CA 1961

A person engages in a money laundering transaction if…

Answer 21

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 22

Money Laundering
S243(1) CA61

Define conceal

Answer 22

In relation to any 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, ownership, location, or disposition (SOLD) of the property or any of interest in the property

Question 23

Money Laundering
S243(1) CA61

Define deals with

Answer 23

In relation to any property, means to deal with the property in any manner and by any means, 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 NZ
(d) to remove the property from NZ

Question 24

Money Laundering
S243(1) CA61

Define property

Answer 24

Any real or personal property of any description, whether situated in NZ or elsewhere and whether tangible or intangible, and includes an interest in any such real or personal property.