Money laundering and Criminal Proceeds

Question 1

Describe conceal as it relates to Money Laundering

Answer 1

• convert property from one form to another
• conceal or disguise nature, source, location, ownership of property or any interest in it

Question 2

Describe deal with as it relates to Money Laundering

Answer 2

Deal with property in any manner including to dispose of, transfer possession, or bring into or out of New Zealand

Question 3

Define interest as it relates to Money laundering

Answer 3

A legal or equitable estate or interest, right, power or privilege in property.

Question 4

Define proceeds as it relates to money laundering

Answer 4

Any property derived or realised, directly or indirectly, from the commission of an offence

Question 5

Outline the offence of money laundering (Must know)

Answer 5

• in respect of any money that is the proceeds of an offence
• engage in a money laundering transaction,
• knowing or believing that all or part of the property is proceeds of an offence OR being reckless as to whether it was
  OR
• obtain or have in their possession any property, being property that is the proceeds of an offence committed by another person,
• with intent to engage in a money laundering transaction,
• knowing or believing that all or part of the property is proceeds of an offence OR being reckless as to whether it was

Question 6

What is the definition of a money laundering transaction?

Answer 6

In concealing any property or by enabling any person to conceal any property a person deals with that property or assists the any other person, directly or indirectly, to deal with that property

Question 7

For a money laundering charge do you need to prove the defendant had intent to conceal any property or enable another to do so?

Answer 7

No

Question 8

For money laundering does the defendant need to know the particular offence the property was proceeds of?

Answer 8

No

Question 9

Can someone be charged for money laundering even if the property is proceeds for an offence for which the original offender has not been charged or convicted?

Answer 9

Yes

Question 10

When can a Money Laundering charge be applied to proceeds from a offence overseas?

Answer 10

Yes if:
- The act is an offence in the place it occurred
- s 7 or 7A applies
- Any enactment states the act is an offence in New Zealand

Question 11

Discuss the presumption on proceeds from offences overseas as it relates to Money laundering

Answer 11

It is presumed, unless the defendant puts the matter in issue, that the act was an offence under the law of the place when and where is occurred.

Question 12

What are the three stages of the money laundering cycle? (Must know)

Answer 12

• Placement
• Layering
• Integration

Question 13

What happens during the placement stage of money laundering?

Answer 13

Cash enters the financial system.

Question 14

What happens during the layering stage of money laundering?

Answer 14

Money is involved in a number of transactions.

Question 15

What happens during the integration stage of money laundering?

Answer 15

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

Question 16

Compare the Money Laundering cycle with the offence of money laundering in NZ

Answer 16

The offence of Money Laundering has a definition much wider than the internationally recognised Money Laundering Cycle, as such the cycle should only be used to understand the overall process and not as a basis for charging decisions.

Question 17

Is the Criminal Proceed (recovery) Act a criminal or civil process? And thus, what is the associated standard of proof required?

Answer 17

It is a civil process and the standard of proof required is on the balance of probabilities

Question 18

What is the purpose of the criminal proceeds (recovery) Act? (Must know)

Answer 18

To establish a regime for the forfeiture of property:
- Derived from significant criminal activity
- that represents the value of a person’s unlawfully derived income.

It proposes to:
- Eliminate profit from significant criminal activity
- Deter significant criminal activity
- Reduce ability of criminals to continue or expand criminal enterprise
- deal with foreign restraining and forfeiture orders

Question 19

What is a Asset Forfeiture Order?

Answer 19

An order issue by the high court on application that shows on the balance of probabilities, assets have been tainted by significant criminal activity.

Question 20

Define tainted property (Must know)

Answer 20

property that has, wholly or in part, been acquired as a result of significant criminal activity, or directly or indirectly derived from significant criminal activity; and

includes any property acquired as a result of more than 1 activity if at least 1 of those activities is a significant criminal activity

Question 21

What is a qualifying instrument forfeiture offence?

Answer 21

5+ year offences and includes attempts, conspiring and being an accessory if the punishment is 5+ years.

Question 22

Define significant criminal activity

Answer 22

Activity that if proceeded against as a criminal offence would amount to offending:
- including 1 or more offences punishable by 5+ years, or
- from which property, proceeds or benefits of a value of $30,000 or more was directly or indirectly derived

Question 23

When is a person deemed to have unlawfully benefited from significant criminal activity? (Must know)

Answer 23

When they knowingly, directly or indirectly, derived a benefit from significant criminal activity.

Question 24

When must the court make a Profit Forfeiture Order?

Answer 24

When satisfied on the balance of probabilities that:
- the respondent unlawfully benefited from significant criminal activity within the relevant period of criminal activity, and
- the respondent has interest in property

Question 25

What did the court find in R v Pullman as it relates to criminal proceed recovery?

Answer 25

The purpose of the forfeiture regime was not only to prevent the ability of a person to actually profit from undertaking significant criminal activity but also the “chance” that they may be able to do so, and also to deter significant criminal activity.

Question 26

What is an instrument of crime?

Answer 26

• Property used (wholly or in part) to commit or facilitate the commission of a qualifying instrument forfeiture offence.
• Funds allocated for the purposes of committing a qualifying Terrorism Suppression Act offence

It includes proceeds of any disposition of such property or any other property into which that property is converted

Question 27

Whose obligation is it to consider notifying the court of relevant instruments of crime?

Answer 27

The “prosecutor” which includes:
- any employee of the person/agency by whom the prosecutor is employed who has responsibilities connected to the proceedings
- counsel representing the person who commenced the proceedings
- in a private prosecution, the person who commenced the proceedings ortheir cousel

Question 28

What are the duties of a “prosecutor” as it relates instruments of crime forfeiture?

Answer 28

If a person is convicted of a qualifying offence and property is used to commit or facilitate commission of it, the prosecutor must, if in their opinion the court should consider whether to make a instrument forfeiture order, notify them in writing of:
- details of that property
- name and identifying details of any other person who has a interest in the property

Question 29

Practically, who will need to identify instruments of crime? And wht/who should they tell?

Answer 29

The O/C case who will let the prosecutor know that in your opinion they should file a Prosecutor’s Notice with the court

Question 30

Discuss restraint of instruments of crime

Answer 30

You may apply for instruments of crime to be restrained while proceedings take place, to prevent disposal or erosion of its value.

A application is on notice when practicable, but can be made without notice if the court fears CADD if notice was given

Question 31

Before submitting a application for a instrument restraint order, what assessments should you make?

Answer 31

• 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 32

Who must you consult regarding a instrument restraint order, especially the cost of action?

Answer 32

Financial Crime Group

Question 33

What do you outline in your affidavit attached to an application for instrument restraint order?

Answer 33

• O/C details
• Offenders details, charges and criminal convictions
• Search warrant - describe the nature of the offending discover involving the property concerned
• Admissions during interviews
• Description of property and it’s value along with proof the owner has custody and control of it

Question 34

When completing a instrument restraint application who must guidance be sought from?

Answer 34

Prosecutions and/or the Asset Recovery Unit

Question 35

If a defendant is not convicted, what happens to any associated instrument restraint order?

Answer 35

It will lapse

Question 36

What are the requirements and powers of a instrument forfeiture order.

Answer 36

The court must be satisfied the property is an instrument of crime.

The court may the order that the instrument of crime or any part of it be forfeited to the court.

Question 37

What must occur before Criminal Proceeds action can be taken?

Answer 37

A restraining order followed by an application to the high court

Question 38

Can an entire property be forfeited as a instrument of crime even though only part of it was used commit or facilitate the commission of a qualifying instrument forfeiture offence?

Answer 38

Yes

Question 39

What are the orders that only the asset recovery team can apply for?

Answer 39

• Restraining orders (apart from those relating to Instruments of Crime)
• Assets forfeiture orders
• Profit orders.

Question 40

What standard of prove is required to proof property is tainted for a Restraining Order for Criminal Proceeds?

Answer 40

Court has RGTB that the “property“ is “tainted property“

Question 41

Was it a standard of proof for an instrument restraint order?

Answer 41

• Must be charged with a qualifying instrument forfeiture offence, or satisfy the court on RGTB they will be within 48 hrs
• RGTB the property was used to commit, or to facilitate the commission of, the qualifying instrument forfeiture offence

Question 41

When interviewing a suspect in relation to money laundering, what points should be considered? (Must know)

Answer 41

• 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