Money Laundering: What Must be Proved in Court?

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Author: Dennis Miralis

Case Study: Money Laundering

Case: Lin v R [2015] NSWCCA 204

Keywords:  Commonwealth Criminal Code, Director of Public Prosecutions, High Court of Australia, Hong Kong, Money Laundering, NSW Court of Criminal Appeal, Proceeds of Crime, Reasonable Suspicion

 

The laws relating to money laundering in Australia are complex. As the case Lin v R [2015] NSWCCA 204 demonstrates, while the prosecution has to prove certain elements in order for you to be found guilty, it doesn’t have to specify the “crime” in proceeds of crime.

If you are charged with an offence under section 400.9 of the Commonwealth Criminal Code (which covers money laundering), the prosecution has to prove that:

  • You have dealt with money / property; and
  • That it is reasonable to suspect that the money/property is the proceeds of crime (“the reasonable suspicion element”).

As part of proving the reasonable suspicion element, you might think the prosecution would have to tell you what “crime” the money or property is said to be derived from. However, as was recently determined by the Court of Criminal Appeal in NSW in Lin v R [2015] NSWCCA 204, the prosecution doesn’t have to particularise or tell you what “crime” they suspect the money or property has come from.

 

Facts of the Case

In Lin v R, the defendant was charged with five offences against section 400.9 for allegedly transferring a total of $2,845,000 (over five separate transactions) from Australia to a Hong Kong bank account. The defendant’s solicitors wrote to the DPP (Director of Public Prosecutions) asking the Director to name the offence that the DPP alleged from which the $2.845 million was derived. The Director declined to do so on the basis that the DPP was under no obligation to particularise the offence.

Ultimately, the NSW Court of Criminal Appeal agreed with the Director by saying that the DPP does not have to point to an offence from which the money or property might be derived. The court further stated that the reasonable suspicion element could be satisfied by proof of any one or more of the circumstances as set out in section 400.9(2) of the Criminal Code, including:

• If the value of the money or property is grossly out of proportion to the defendant’s income and expenditure; or
• If the defendant has stated that the conduct was engaged in on behalf of or at the request of another person and the defendant cannot or will not name that person; or
• If the conduct involves using one or more accounts held with ADIs (authorised deposit taking institutions such as a bank) in false names.

The solicitors for the defendant tried to appeal against the decision of Lin v R to the High Court of Australia, but special leave was refused.

 

It’s important to know that even if the reasonable suspicion element can be proved, there is a defence available under section 400.9(5) of the Criminal Code if you can prove that you had no reasonable grounds to suspect that the money or property was derived from some form of unlawful activity. In our experience, whether or not you can raise this defence depends on what evidence you can gather by way of documentary and oral evidence.

Determining such matters typically involves complex negotiations with the DPP, obtaining information from the DPP pursuant to its disclosure obligations, liaising with foreign bodies, interviewing potential witnesses and issuing subpoenas to various prosecutorial authorities.

This evidence gathering process can sometimes be technical and lengthy, but it is also a critical step in discharging the burden which is placed on an accused when raising a defence.