Money Laundering in NSW

Money laundering in NSW has become a prevalent topic in the media in recent months. The NSW Government has been criticised for being slow to bring in reforms to combat money laundering and organised crime as well as to enact measures to confiscate unexplained wealth. The money laundering laws which are currently in place in NSW include offences of dealing with the proceeds of crime, financial or otherwise, as a serious offence with significant maximum penalties of imprisonment. This article examines the laws around money laundering in NSW and why the media and certain politicians are campaigning for reform.

What is Money Laundering?

Money Laundering offences are broadly applicable to a large range of activities relating to money and other property used in connection with or arising from, serious crime. Money laundering offences cover money obtained illegally, to be used for illegal purposes, or dealt with in a manner that is illegal. Money laundering offences are often detected and charged by the Police in connection with monies and other items illegally obtained in connection with other offences such as drug supply and fraud.

The State Legislation

In NSW, money laundering offences are outlined in Part 4C of the Crimes Act 1900 (NSW). Specifically, the state offence of money laundering is outlined in section 193 of the Crimes Act 1900 (NSW). Section 193B deals with money laundering, section 193C deals with property suspected of being proceeds of crime and section 193D deals with property that subsequently becomes an instrument of crime.

In respect of money laundering offences, there are three different forms of offending outlined in section 193B of the Crimes Act 1900 (NSW) which vary in their elements, seriousness and maximum penalties. Section 193B is framed as follows:

  1. A person who deals with proceeds of crime:
    1. Knowing it is proceeds of crime, and
    2. Intending to conceal that it is proceeds of crime

Is guilty of an offence. The maximum penalty of an offence under this subsection is 20 years imprisonment.

  1. A person who deals with proceeds of crime knowing that it is proceeds of crime is guilty of an offence. The maximum penalty for an offence under this subsection is 15 years imprisonment.
  2. A person who deals with proceeds of crime being reckless as to whether it is proceeds of crime is guilty of an offence. The maximum penalty for an offence under this subsection is 10 years imprisonment.

Further, situations where there is a suspicion that the property in question is proceeds of crime are dealt with in Section 193C, which states:

  1. A person is guilty of an offence if:
    1. A person deals with property, and
    2. There are reasonable grounds to suspect the property is proceeds of crime, and
    3. At the time of the dealing, the value of property is $100,000 or more.

The maximum penalty for this offence is 5 years imprisonment.

  1. A person is guilty of an offence if:
    1. The person deals with property, and
    2. There are reasonable grounds to suspect the property is proceeds of crime, and
    3. At the time of the dealing, the value of the property is less than $100,000

The maximum penalty for this offence is 3 years imprisonment.

Situations where dealing with property that subsequently becomes an instrument of crime are outlined in Section 193D, which states:

  1. If-
    1. A person deals with property intending that the property will become an instrument of crime, and
    2. The property subsequently becomes an instrument of crime,

That person is guilty of an offence. This offence has a maximum penalty of 15 years imprisonment.

  1. If-
    1. A person deals with property being reckless as to whether the property will become an instrument of crime, and
    2. That property subsequently becomes an instrument of crime,

That person is guilty of an offence. This offence has a maximum penalty of 10 years imprisonment.

When are there Reasonable Grounds to Suspect that Property is Proceeds of Crime?

Outlined in Section 193C subsection (3), there are reasonable grounds to suspect that property is proceeds of crime in each of the following circumstances–

  1. the dealing involves a number of transactions that are structured or arranged to avoid the reporting requirements of the Financial Transaction Reports Act 1988 (Cth) would otherwise apply to the transactions,
  2. the dealing involves a number of transactions that are structured or arranged to avoid the reporting requirements of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) that would otherwise apply to the transactions,
  3. the dealing involves using one or more accounts held with authorised deposit-taking institutions in false names,
  4. the dealing amounts to an offence against section 139, 140 or 141 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth),
  5. the value of the property involved in the dealing is, in the opinion of the trier of fact, grossly out of proportion to the defendant’s income and expenditure over a reasonable period within which the dealing occurs,
  6. the dealing involves a significant cash transaction (within the meaning of the Financial Transaction Reports Act 1988 (Cth)) and the defendant—
  7. has contravened the defendant’s obligations under that Act relating to reporting the transaction, or
    1. has given false or misleading information in purported compliance with those obligations,
  8. the dealing involves a threshold transaction (within the meaning of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth)) and the defendant—
  9. has contravened the defendant’s obligations under that Act relating to reporting the transaction, or
    1. has given false or misleading information in purported compliance with those obligations,
  10. the defendant—
    1. has stated that the dealing was engaged in on behalf of or at the request of another person, and
    2. has not provided information enabling the other person to be identified and located.

What if the ‘Crime’, to which the Proceeds Relate, Cannot be Proven?

Under Section 193F, proof of other offences is not required when looking at money laundering offences. Section 193F notes:

  1. To avoid doubt, it is not necessary, in order to prove for the purposes of an offence under this Part that property is proceeds of crime, to establish that—
    1. a particular offence was committed in relation to the property, or
    2. a particular person committed an offence in relation to the property.
  2. To avoid doubt, it is not necessary, in order to prove for the purposes of an offence under this Part that property will be an instrument of crime, to establish—
  3. an intention or risk that a particular offence will be committed in relation to the property, or
    1. an intention or risk that a particular person will commit an offence in relation to the property.

Practical Response to Money Laundering Offences

Money laundering offences often involve using money that is proceeds of crime and attempting to legitimise that money as coming from a legal source. The media has, in recent times, highlighted attempts by organised crime syndicates to launder money at licensed premises in NSW, particularly through pubs and clubs. The state government in late 2021 announced a Crime Commission Inquiry into Money Laundering at pubs and clubs, in particular the relationship between electronic gaming machines and money laundering.

It is likely that regulation around the tracking of money put in and taken out of electronic gaming machines at pubs and clubs will be tightened as a result of this inquiry which may mean that the detection of money laundering offences becomes more prevalent in NSW Courts.

Why Choose Australian Lawyers and Advocates?

Being arrested for a money laundering offence is a serious situation. Money laundering offences carry lengthy periods of imprisonment as potential sentences. It is therefore important that you consult with an experienced criminal defence lawyer as soon as possible after you have been arrested or contacted by the Police in respect of an offence. Many law firms claim to be ‘the best’ or ‘leading’ firms. At Australian Lawyers and Advocates, we let our results, reputation and high level of client service and satisfaction speak for themselves. Our team of lawyers are highly experienced, highly skilled and respected advocates.

The content contained within this guide is expressed as a general guide as to this area of law and is not intended to contain legal advice specific to an individual’s case. If you, or someone you know has been arrested or charged with a criminal offence and requires legal advice, do not hesitate to contact Australian Lawyers and Advocates to discuss any criminal law or traffic law matters further.

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