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CIB 006 - Association Offences > Money Laundering > Flashcards

Flashcards in Money Laundering Deck (26)
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1

Money Laundering

Meaning of money laundering

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.

2

Money Laundering

Engages in...

Elements

S243(2) CA61

Every one is liable to imprisonment for a term not exceeding 7 years who, 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]].

3

Money Laundering

With intent to engage in...

Elements

S243(3) CA61

Every one is liable to imprisonment for a term not exceeding 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 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]].

4

Money Laundering

Legislation definitions

Money Laundering Transaction

S243(4) CA 1961

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

5

Money Laundering

Legislation definitions

Conceal

S243(1) CA61

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.

6

Money Laundering

Legislation definitions

Deal with

S243(1) CA61

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.

7

Money Laundering

Legislation definitions

Interest

S243(1) CA61

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.

8

Money Laundering

Legislation definitions

Offence

S243(1) CA61

Offence: 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.

9

Money Laundering

Legislation definitions

Proceeds

From an offence

S243(1) CA61

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.

10

Money Laundering Cycle

Definition and Example

1. Placement

Cash enters the financial system.

An offender makes money from selling cannabis and then deposits these proceeds into an associate’s bank account.

11

Money Laundering Cycle

Definition and Example

2. 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 the director of.

12

Money Laundering Cycle

Definition and Example

3. Integration

Money is mixed 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.

13

R v Harney

Recklessness

R v Harney

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

14

R v Kennedy

Guilty Knowledge

R v Kennedy

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

15

Criminal Proceeds (Recovery) Act 2009

Legislation

Purpose

S3 Criminal Proceeds (Recovery) Act 2009

(1) The primary purpose of this Act is 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.

16

Criminal Proceeds (Recovery) Act 2009

Legislation

Proposes to

S3 Criminal Proceeds (Recovery) Act 2009

(2) The criminal proceeds and instruments forfeiture regime established under this Act proposes to—

(a) ELIMINATE the chance for persons to profit from undertaking or being associated with significant criminal activity; and

(b) DETER significant criminal activity; and

(c) REDUCE the ability of criminals and persons associated with crime or significant criminal activity to continue or expand criminal enterprise; and

(d) DEAL with matters associated with foreign restraining orders and foreign forfeiture orders that arise in New Zealand.

17

Criminal Proceeds (Recovery) Act 2009

Legislation

Tainted Property Definition

S5 Criminal Proceeds (Recovery) Act 2009

(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

18

Criminal Proceeds (Recovery) Act 2009

Legislation

Qualifying instrument forfeiture offence

S5 Criminal Proceeds (Recovery) Act 2009

(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.

19

Criminal Proceeds (Recovery) Act 2009

Legislation

Meaning of significant criminal activity

S6 Criminal Proceeds (Recovery) Act 2009

(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–

(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.

20

Criminal Proceeds (Recovery) Act 2009

Legislation

Meaning of unlawfully benefited from significant criminal activity

S7 Criminal Proceeds (Recovery) Act 2009

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).

21

Criminal Proceeds (Recovery) Act 2009

Legislation

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

S55 Criminal Proceeds (Recovery) Act 2009

(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.

22

Criminal Proceeds (Recovery) Act 2009

Legislation

Instrument of crime definition

S5 Criminal Proceeds (Recovery) Act 2009

Instrument of crime means–

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


Of note

(b) in relation to a qualifying instrument forfeiture offence that is an offence against section 8(1) or (2A) of the Terrorism Suppression Act 2002, includes funds (as defined in section 4(1) of that Act) allocated for the purposes of committing that offence; and

(c) in relation to any property referred to in paragraphs (a) and (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.

23

Criminal Proceeds (Recovery) Act 2009

Assessment process before application for restraint of instrument of crime.

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.

24

Criminal Proceeds (Recovery) Act 2009

Affidavit required for application

Needs to outline:

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

25

Criminal Proceeds (Recovery) Act 2009

What must occur before Criminal Proceeds action can be taken

And what belief is required.

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”.

26

Investigative Procedure

What points to cover when interviewing a suspect

• 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.