Money Laundering & Criminal Proceeds (Recovery) Act 2009

Question 1

Section 243(1) - Definitions -
Crimes Act 1961
Money Laundering

Answer 1

CONCEAL means to conceal or disguise the property including to convert the property from one form to another
to conceal or disguise the nature, source, location, disposition or ownership of the property or any interest in the property

DEAL WITH means to deal with the property in any manner and by any means and includes without limitations to :

• dispose of the property whether by sale, purchase gift or otherwise
• transfer possession of the property
• bring the property into NZ
• remove the property from NZ

INTEREST

• a legal or equitable estate or interest in or
• a right, power, or privilege in connection with the property

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

Question 2

Section 243(2) - Liability -
Crimes Act 1961
Money Laundering

Answer 2

Subject to 244 & 245, everyone is liable to 7years who,
in respect to 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

Section 243(3) - Possession with intent -
Crimes Act 1961
Money Laundering

Answer 3

Subject to 244 & 245, Everyone is liable to 5 years
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 to 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

Section 243(4) -Transaction defined-
Crimes Act 1961
Money Laundering

Answer 4

For the purposes of this section, A person engages in a money laundering transaction if, in concealing any property or 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

(4A) prosecution does not need to prove intent.

Question 5

Section 243A - charging -

Crimes Act 1961

Answer 5

A person can be charged under section 243(2) or 243(3) in respect to any property that is the proceeds of an offence to which section 243(2) & 243(3) applies even though the person who committed the offence -

a) has not been charged with that offence; or
b) has not been convicted of that offence

Question 6

The meaning of Money Laundering

Answer 6

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 7

Money Laundering Cycle - 3 Stages

Answer 7

PLACEMENT - Cash enters the financial system.
(an offender deposits money made from selling cannabis into an associates bank account)

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 a director of)

INTEGRATION - Money is mixed up 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 8

Profit Forfeiture Order

Answer 8

Section 55, 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 -
(a) The respondent has unlawfully benefited from significant criminal activity within the relevant period of criminal activity; and
(b) the respondent has interests in the property

Question 9

Section 5, Criminal Proceeds (Recovery) Act 2009

Instrument of crime

Answer 9

Instrument of Crime means -

a) Property used (wholly or in part) to commit or facilitate the commission of a qualifying instrument forfeiture offence
b) in relation to a qualifying instrument forfeiture offence that is an offence against section 8(1) or 2(A) of the terrorism Suppression Act 2002, includes funds (as defined in section 4(1) of the Act) allocated for the purposes of committing that offence; and
c) in relation to any property referred to in paragraph (a) & (b), the proceeds of any disposition of that property or any other property into which that property is converted , after the commission of the qualifying instrument forfeiture offence, except to the extent provided otherwise by any order of a court under this Act or the Sentencing Act 2002, excluding any severable interest or granting relief

Question 10

Obligations to notify Court

Answer 10

Section 142B of the sentencing Act 2002 places the obligation on the prosecutor to consider notifying the court of any relevant property that is an instrument of crime so that forfeiture maybe considered as part of sentencing.

Question 11

Section 142B,

Sentencing Act 2002

Answer 11

If person is convicted of a qualifying instrument forfeiture offence the prosecutor, (if their opinion is that the court should consider the property) must notify the court in writing of

a) the details of that property
b) The name and identifying details of any person (other that the offender) who, to the knowledge of the prosecutor, has an interest in the property

Question 12

Restraint of instrument of crime

Answer 12

Property may need to be restrained while the criminal proceedings take their course, to prevent disposal of the asset or erosion of its value by being further encumbered (eg mortgage on a house)
Will require an Application for restraining order relating to instrument of crime, under section 26, Criminal Proceeds (Recovery) Act 2009

Question 13

Assessment Process

Answer 13

before preparing application assessment process is required 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 14

Affidavit required for application

Answer 14

• Officer in charge details
• Offender, details, charges an criminal convictions
• search warrant - describe the nature of the offending discovered at or involving the property concerned. Note where the value of the asset is high you need to demonstrate that the offending was at more of a commercial level
• admissions made during interview(s)
• Property, description of property sought to be restrained and its value, Show that the offender own, has custody or control

Question 15

Tainted Property

Answer 15

Section 5, Criminal Proceeds (Recovery) Act 2009
tainted Property
a) means any 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
b) includes any property that has been acquired as a result of, or directly or indirectly derived from, more than 1 activity is at least 1 of those activities is a significant criminal activity

Question 16

Qualifying Instrument Forfeiture Offence

Answer 16

Section 5, Criminal Proceeds (recovery) Act 2009

Qualifying Instrument Forfeiture Offence
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

Question 17

Significant Criminal Activity

Answer 17

Section 6, Criminal Proceeds (recovery) Act 2009
Meaning of significant criminal activity

(1) In this Act, unless the context otherwise requires, significant criminal activity means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending
- that consisted of or includes 1 or more offences punishable by a max term imprisonment of 5 years or more
or
- from which property, proceeds or benefits of a value of $30,000 or more have, directly or indirectly been acquired or derived

Question 18

Unlawfully benefited from criminal activity

Answer 18

Section 7, Criminal Proceeds (Recovery) Act 2009

In this Act unless the context otherwise requires, 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 19

Property Forfeiture

Answer 19

Reasonable grounds must be provided to show the instrument was used to facilitate significant criminal activity
Even if the property has only been partly used for the purposes of crime, the entire property is an instrument of crime and may be subject to forfeiture.

Question 20

Restraining orders

Answer 20

Only Asset recovery Units may apply for restraining orders, (apart from those relating to instruments of crime), assets forfeiture orders and profit orders.

Question 21

In relation to specific property

For an order made under section 24(1) Criminal Proceeds (recovery) Act 2009

Answer 21

The court must be satisfied it has reasonable grounds to believe that the property is tainted property.
- that it has been either acquired as a result of, or directly or indirectly derived from significant criminal activity

Question 22

In relation to all or part of respondents property

For an order made under section 25(1) Criminal Proceeds (recovery) Act 2009

Answer 22

The Court has to be satisfied that it has reasonable grounds to believe that the respondent has unlawfully benefited from significant criminal activity, and that the respondent has an interest in the property to be restrained

Question 23

In relation to an instrument of crime

For an order made under section 26(1) Criminal Proceeds (recovery) Act 2009

Answer 23

Two criteria must be met
1. either the respondent must have been charged with a ‘qualifying instrument forfeiture offence’ (or the court must be satisfied on reasonable grounds that the respondent will be so charged within 48 hours) and the court must be satisfied that it has reasonable grounds to believe that the property which will be the subject of the order was used to commit, or to facilitate the commission of, the qualifying instrument forfeiture offence

Question 24

Valid (expiring)

Answer 24

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

Question 25

Suspect Interview

Answer 25

Consider the following points

• suspects legitimate income
• suspects illegitimate income
• expenditure
• assets
• liabilities
• acquisition of financial records, from banks, financing companies, loan sharks, family trust documents
• clarification of documentary evidence located, ad per above