money laundering and criminal proceeds

Question 1

money laundering s243 crimes act 1961

“conceal”

Answer 1

1) for the purpose of this section and sections 243A, 244 and 245, - Act includes any omission
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 2

money laundering s243 crimes act 1961

“deal with”

Answer 2

deal with: in relation to property means 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 3

money laundering s243 crimes act 1961

“interest”

Answer 3

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 4

money laundering s243 crimes act 1961

“offence”

Answer 4

offence: means any 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 NZ if committed in NZ

Question 5

money laundering s243 crimes act 1961

“proceeds”

Answer 5

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 6

money laundering s243 crimes act 1961

“property”

Answer 6

property: means 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

Question 7

defence to a charge of money laundering

Answer 7

s245 of crimes act 1961

1) s243 applies to an act that has occurred outside of NZ and that is alleged to constitute an offence resulting in proceeds only if:

a) the act was an offence under the law of the place where and when it occurred; or
b) it is an act to which s7 or 7A of this act applies; or
c) an enactment provides that the act is an offence in NZ and no additional requirement exists for the act to be an offence in the place where and when it occurred.

Question 8

what is the meaning of money laundering

Answer 8

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 9

what are the three stages of the money laundering cycle

Answer 9

1. PLACEMENT
   cash enters the financial system eg. offender makes money from selling cannabis and deposits into an associates bank account
2. LAYERING
   money is involved in a number of transactions eg. the associate transfers the money into an account held by a shell company that offender is a director of
3. INTEGRATION
   money is mixed with lawful funds or integrated back into the economy, with the appearance of legitimacy eg. 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 10

what are the elements of money laundering

Answer 10

s243(2) of crimes act 1961

• 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 11

what is a money laundering transaction

Answer 11

concealing the property or enabling another to conceal the property and to deal with the property or assist with such dealing

eg. 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 12

how do you prove knowledge that the property is proceeds of an offence

Answer 12

knowledge is proven via direct evidence (eg admission) and/or circumstantial evidence

knowledge must exist when the property is dealt with

Question 13

pullman v police

Answer 13

pullman was a pharmacist who knowingly sold precursor substances to be used in the manufacture or methamphetamine. he argued he did not benefit from the sales as the money was used by his employer to pay wages

the court held that 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 deter significant criminal activity

pullmans appeal was dismissed.

Question 14

what is the prosecutors obligation under s142B of the sentencing act 2002

Answer 14

the prosecutor is to consider notifying the court of any relevant property that is an instrument of crime so that forfeiture of that property may be considered as part of the sentencing process. this could include vehicles and property used to facilitate commission of an offence

eg a house used in the manufacture of methamphetamine or motor vehicle used in the delivery of illegal drugs

Question 15

what and how must the prosecutor advise the court of an instrument forfeiture

Answer 15

s142B of sentencing act 2002

the prosecutor must notify the court in writing of:

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

Question 16

what is the purpose of the assessment process for an application for a restraining order on an instrument of crime

Answer 16

before preparing such an application process is required, the assessment process is conducted 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 17

what is outlined in the affidavit for the application to restrain an instrument of crime

Answer 17

1. O/C:
   - details
2. Offender:
   - details
   - charges
   - criminal convictions
3. search warrant:
   - describe the nature of offending discovered involving the property/asset concerned, if value of asset is high demonstrate that offending was more at commercial level
4. admissions made during interview
5. property:
   - describe property sought to be restrained
   - show that offender owns/has custody or control

Question 18

s5 instrument of crime

Answer 18

means:

a) property used (wholly or in part) to commit or facilitate the commission of a qualifying instrument forfeiture offence

Question 19

what needs to be satisfied before criminal proceeds action can be taken

Answer 19

an application made to the high court must show reasonable grounds for belief that the property is tainted, that is has been acquired or directly or indirectly derived from significant criminal activity

Question 20

what is significant criminal activity

Answer 20

s6 of criminal proceeds act 2009

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 21

elliot v r

Answer 21

elliot grew cannabis from his house and garage. following conviction he was subject to a forfeiture order and nature of property meant it was indivisible

court of appeal held:

s142N(1) of sentencing act 2002 authorises a partial forfeiture of property which was an instrument of crime and enables the court to give practical effect to an order forfeiting the crown only part of a property which is an instrument of crime

Question 22

what two criteria must be met for an order to be made under s26(1) of criminal proceeds (recovery) act 2009

Answer 22

1. either respondent must have been charged with a qualifying instrument forfeiture offence or court is satisfied they will be charged within 48 hours
2. and the court must be satisfied that it has reasonable grounds to believe that the property was used to commit, or to facilitate the commission of the qualifying instrument forfeiture offence

Question 23

what points should you consider when interviewing a suspect about money laundering or on proceeds recovery action

Answer 23

• 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 as per above

Question 24

what is the definition of tainted property in the criminal proceeds (recovery) act 2009

Answer 24

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