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Association Offences - 2020 > Money Laundering > Flashcards

Flashcards in Money Laundering Deck (19)
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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

Elements

S243(2) CA61
Penalty: 7 years

- 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

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.

4

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.

5

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.

6

Legislation definitions

Proceeds

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.

7

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.

8

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.

9

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.

10

Criminal Proceeds (Recovery) Act 2009

Legislation

Purpose of Act

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.

11

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.

12

Criminal Proceeds (Recovery) Act 2009

Legislation

Tainted Property Definition

Tainted property
(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

13

Criminal Proceeds (Recovery) Act 2009

Legislation

Qualifying instrument forfeiture offence

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.

14

Criminal Proceeds (Recovery) Act 2009

Legislation

Meaning of significant criminal activity

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.

15

Instrument of crime definition

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

16

Criminal Proceeds (Recovery) Act 2009

Assessment process before application for restraint of instrument of crime.

Used to determine:

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.

17

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”.

18

Investigative Procedure

What points to cover when interviewing a suspect

When interviewing a suspect about money laundering or where proceeds recovery action is to be considered, consider the following points:
• 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

19

Restraining Orders

The Criminal Proceeds (Recovery) Act 2009 empowers the Commissioner of Police to apply for restraining orders, assets forfeiture orders and profit orders. The Commissioner has delegated these functions solely to members in Asset Recovery Units.
Only members of Asset Recovery Units may apply for restraining orders (apart from those relating to Instruments of Crime), assets forfeiture orders and profit orders.