Money Laundering & Criminal Proceeds (Recovery) Act 2009

Question 1

What is Money Laundering?

Answer 1

It is a method by which criminals disguise the illegal origins of their wealth and protect their asset bases, so as to avoid the suspicion of law enforcement agencies and prevent leaving a trail of incriminating evidence.

Question 2

Under the Criminal Proceeds (Recovery) Act 2009 it enables the proceeds of crime to be forfeited in several ways. Name TWO of these ways

Answer 2

1. No criminal charge or conviction the court can issue a Profit or Asset Forfeiture Order.
2. Criminal Conviction entered the court issues a Instrument Forfeiture Order in which forfeiture is mandatory before sentencing.

Question 3

What is the meaning of Money Laundering?

Answer 3

It 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 4

Money Laundering has a cycle of THREE stages. What are these three stages, and what does the first stage mean? Provide an example.

Answer 4

1. Placement
2. Layering
3. Integration

Placement is when cash enters the financial system. An example of this is when an offender makes money from selling cannabis and then deposits these proceeds into an associates account.

Question 5

Money Laundering has a cycle of THREE stages. What are these three stages, and what does the second stage mean? Provide an example.

Answer 5

Placement
Layering
Integration

Layering is involved in a number of transactions. An example of this is the associate transfers the money into an account held by a ‘shell’ company that the offender is the director of (i.e. - barber shop, paintworks shop)

Question 6

Money Laundering has a cycle of THREE stages. What are these three stages, and what does the third stage mean? Provide an example.

Answer 6

Placement
Layering
Integration

Integration is when money is mixed with lawful funds or integrated back into the economy, with the appearance of legitimacy. An example is 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 7

Name the Elements of Money Laundering (Under Section 243(2) C.A. 1961

Answer 7

1.1 In respect of any property that is the proceeds of an offence
1.2 Engages in a money laundering transaction
1.3 Knowing or Believing that all or part of the proceeds of an offence OR
1.3.1 Being reckless as to whether or not the property is the proceeds of an offence.

Question 8

In respect of the first element of money laundering that being (In respect of any property that is the proceeds of an offence) what is the explanation for this?

Answer 8

Def - Property
Property is defined to include both tangible and intangible property and interests in real or personal property whether within or outside NZ.

This includes offences, acts, and omissions committed overseas that would be an offence in NZ if committed in this country.

Question 9

In respect of the second element of money laundering that being (engages in a money laundering transaction) what is the explanation for this?

Answer 9

One must conceal property or enable
another to conceal the property and then
also deal with the property or assist with
such dealing.

This includes disposing or transferring the
property; bringing or removing the
property from NZ; or changing it from one
form to another (eg. Purchasing a vehicle)

Question 10

In respect of the third element of money laundering that being (Knowing or believing that all or part of the property is the proceeds of an offence) what is the explanation for this?

Answer 10

Knowledge is proven via direct evidence
(e.g. admission) and/or circumstantial
evidence.
Knowledge must exist when the property is
dealt with (R v Kennedy)

Question 11

In respect of the third element of money laundering that being (Being reckless as to
whether or not the property
is the proceeds of an
offence ) what is the explanation for this?

Answer 11

Recklessness is the conscious and
deliberate taking of an unjustified risk
(Cameron V R)

Question 12

When it comes to the Prosecution (under the Criminal Proceeds (Recovery) Act 2009 what do the Crown need to prove?

Answer 12

The Crown must prove on the balance of probabilities that wealth and benefits have been accumulated through signficant criminal activity.

Question 13

What is the Primary purpose of the Criminal Proceeds Act 2009?

Answer 13

Establish a regime for the forfeiture of property:
- that has been derived directly or indirectly from significant criminal activity OR
that represents the value of a persons unlawfully derived income.

Question 14

What does the Criminal Proceeds (Recovery) Act 2009 propose to do:

Answer 14

1. Eliminate the chance for persons to profit from undertaking criminal activity
2. Deter criminal activity
3. Reduce the ability for criminal & persons associated with crime or significant criminal activity to continue to expand
4. Deal with matters associated with foreign restraining orders and foreign forfeiture orders that arise in New Zealand

Question 15

What is an Assets Forfeiture Order?

Answer 15

Issued by the High Court on application.
The issuing of this order shows a successful application on the balance of probabilities that specific asests (i.e. a house, a bike) which have been acquired have been TAINTED by significant criminal activity

Question 16

What does it mean by tainted property

Answer 16

Tainted Property is any property been acquired as a result of significant criminal activity. OR directly or indirectly

Question 17

What is the maximum term of imprisonment for Qualifying Instrument Forfeiture Offence?

Answer 17

5 Years

Question 18

What exactly does ‘Significant Criminal Activity’ mean?

Answer 18

An activity engaged in by a person that if proceeded against as a criminal offence would amount to offending that consists of 1 or more offences 5 years + OR from which property proceeds value of $30,000 or more

Question 19

How do you know if someone has ‘Unlawfully benefited from significant criminal activity?

Answer 19

If the person has knowingly (knowledge) directly, or indirectly, derived a benefit from significant criminal activity (regardless of whether they were involved in the offending or not).

Question 20

What is a Profit Forfeiture Order? (Section 55 of Criminal Proceeds (Recovery) Act).

Answer 20

The High Court must make a ‘profit forfeiture order’ if it is satisfied on the balance of probabilities that the person in question has unlawfully benefited from significant criminal activity within the relevant period of criminal activity and the have interest in the property.

Question 21

In regards to a Profit Forfeiture Order what was held in Pulman v Police?

Answer 21

Pulman was involved in selling precursors over the counter (he was a pharmacist) and was convicted as a party to methamphetamine manufacture, and subsequently a profit forfeiture order under s55 Criminal Proceeds (Recovery) Act 2009.

Question 22

Instrument of Crime

Answer 22

Property used to commit or facilitate the commision of a qualifying instrument forfeiture offence.

Question 23

When it comes to notifying the court of relevant property for the forfeiture order who is responsible for that?
And what are their duties around it?

Answer 23

Prosecutor (and O/C)

If the person is convicted of a qualifying forfeiture offence then they must notify the court in writing of the details of the property, and identifying features.

Question 24

Name four things to consider when preparing an application for Restrain of Instrument of Crime?

Answer 24

1. Value of the asset
2. Equity in the asset
3. Any third party interest
4. The cost of auction of the asset

Question 25

An Affidavit is required for a Restraint of Instrumenet Crime application, what does this include?

Answer 25

O/C Details
Offender (details, charges, criminal convictions)
Search Warrant - involving the assest
Any admissions made
Description of the property/show the offender is in control of it

Question 26

What must occur before Criminal Proceeds action can be taken?

Answer 26

1. A restraining order (First Step) in the asset seizure process
2. Tainted property/benefits (made to high court and RGTB that property is tainted)

Question 27

What must you show in an Instrument Forfeiture Order?

Answer 27

RG MUST be provided to show the instrument was used to facilitate significant criminal activity.

Question 28

Who in the Police is allowed to apply for restraining orders, assets forfeiture orders, and profit orders?

Answer 28

The Commissioner only, but he has delegated these functions solely to members in ARU

Question 29

How long is a restraining order valid for once the order is made?
An extension can be made, but when can it be made, and how long is that valid for?

Answer 29

Only one year.

The Cour can issue an extension but it must be before the original order expires, and is only valid for a year.

Question 30

When interviewing a suspect about money laundering what could you consider?

Answer 30

Suspects ‘legitimate income’ and ‘illegitimate income’
Expenditure
Assests
Liabilities
Financial records from banks, family trust documents, loan sharks
Clarification of documentary evidence as outlined above

Question 31

Define ‘Proceeds’

Answer 31

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