Money Laundering (NSW)

Money laundering is an act or acts that conceal the fact that money is the proceeds of crime. The Crimes Act 1900 states a person commits an offence if they deal with proceeds of crime knowing that is proceeds of crime. The maximum penalty is 15 years imprisonment. If a person intends to conceal that it is proceeds of crime, that penalty increases to 20 years imprisonment. If a person is reckless as to whether it is proceeds of crime, the maximum penalty is 10 years imprisonment.

“Deal with” includes to receive, possess, conceal, dispose of, bring or cause to be brought into NSW, or engage directly or indirectly in a transaction.

If a person deals with property, and there are reasonable grounds to suspect the property is proceeds of crime, and the value of the property is $100,000 or more, the maximum penalty is imprisonment for 5 years. If the value of the property is less than $100,000, the maximum prison term is 3 years.

Reasonable grounds

The Act states reasonable grounds includes when the dealing involves:

• transactions structured or arranged to avoid required financial reporting;
• the use of one or more bank accounts in false names;
• property that is grossly out of proportion to the person’s income and expenses;
• a significant cash transaction, and that transaction has not been reported as required or false or misleading information has been given about it;
• a claim the dealing was done on behalf of a person and no information is given that allows that person to be identified and found.

If a person deals with property intending that it will be used to commit a serious offence and it then is used for that purpose, they face a maximum penalty of 15 years. If the person is reckless about whether the property will be used to commit a serious offence, and it is then used for that purpose, the maximum prison term is 10 years.

A single charge can be about one act or several acts committed at the same time or different times. If the single charge is about 2 or more acts, and the value of the property is an element of the offence, the value is the sum of the values of the property from each act.

A jury has the power to deliver an “alternative verdict” when dealing with money laundering offences. For instance, if a person is charged with dealing with proceeds of crime knowing it is proceeds of crime, and the jury is not satisfied the person knew it was proceeds of crime, the jury can find the person not guilty of that offence but guilty of dealing with proceeds of crime being reckless as to whether it is proceeds of crime.

Examples of money laundering

Money laundering is a diverse activity that involves hiding, disguising or legitimising the origin of money used in or derived from criminal activity. It commonly takes place in 3 stages:

1. the placement of funds generated by crime into the financial system;
2. the separation of the funds from the source to avoid detection;
3. the laundering of the funds back into the community to make the funds appear legitimate.

Examples include

• splitting cash between bank accounts or making multiple deposits;
• shifting money via multiple transactions over a short period of time;
• shifting cash through a casino;
• channelling money through illegitimate businesses or “shell” companies (inactive businesses created to hide genuine business ownership);
• swapping shares in a company for shares in another company without a change in legal ownership.

Defences

A person can contest a money laundering charge by arguing, for instance, that:

• they were unaware that the money was the proceeds of crime;
• they did not receive, possess, conceal or dispose of the property;
• the property did not originate from a crime;
• they were acting under duress;
• by dealing with the proceeds of crime, they were helping to enforce a law of the Commonwealth or a state or territory.

Commonwealth legislation

The Criminal Code Act 1995 and the Anti-Money Laundering And Counter-Terrorism Financing Act 2006 both contain money-laundering offences.

Criminal Code Act 1995

This Act states a person commits an offence if the person deals with money or other property, and either:

• the money or property is, and the person believes it to be, proceeds of crime; or
• the person intends that the money or property will be used to commit a crime.

The penalties range from imprisonment for 25 years or a fine of 1500 penalty units ($333,000), or both, for the most serious offences, to a fine of 10 penalty units ($2200) for the least serious.

Anti-Money Laundering And Counter-Terrorism Financing Act 2006

This Act contains offences used to prosecute money laundering, in particular:

• sections 53 and 55: movement of physical currency in and out of Australia;
• sections 136-141: providing false information, using false documents or using a false customer name;
• sections 142-143: conducting transactions to avoid reporting requirements.

For these offences the penalties range from imprisonment for 10 years or a fine of 10,000 penalty units ($2,220,000), or both, for the most serious offences, to imprisonment for 2 years, or 120 penalty units ($26,540), or both, for the least serious.

For advice or representation in any legal matter, please contact Armstrong Legal.