The NSW Government has introduced new money laundering offences, aimed at addressing the rising influence of organised crime in the state.
The member who introduced the bill, Deputy Premier and Minister for Police, Paul Toole noted how it: “targets an essential enabler of organised crime by introducing some of the most comprehensive anti-money laundering laws in the country.”
The Australian Institute of Criminology reported that organised crime has cost the country between $24.8 billion and $60.1 billion in 2020-21 alone, with efforts to prevent and address such groups estimated as totalling up to $16.4 billion over the same period.
The Government noted that the new offences were necessary due to the increasing tendency for organised criminal groups to employ professional money launderers.
In explaining the bill, Toole noted how offenders often seek to “remain at arm’s length from the direct criminal activity that generates the criminal proceeds being laundered,” allowing them to “practise what can be referred to as ‘strategic ignorance’ about the criminal source of the funds.”
This can evidently present difficulties in prosecuting offenders under primary money laundering offences.
This has been further complicated by the court decisions in Chen v Director of Public Prosecutions (Cth)  NSWCCA 205 and R v McKellar (No 3)  NSWSC 106, which have guided the manner in which primary money laundering offences under the existing section 193B of the Crimes Act 1900 (NSW) are interpreted.
These decisions have held that in order to prove an accused knowingly, or recklessly, dealt with proceeds of crime, the prosecution must prove that the accused had knowledge of the type of offence that generated the alleged proceeds of crime.
Despite section 193F of the Act stating that it is not necessary for the prosecution to establish that a particular offence was committed in relation to the property, or that a particular person committed the offence, the court held that this only relieves the prosecution of providing the proceeds were derived from a particular event.
The reform has thus also been prompted by this interpretation, and difficulties encountered in prosecution.
While money laundering is a type of white collar crime, there are various types of white collar crimes in our criminal justice system.
The New Money Laundering Offences
The Crimes Amendment (Money Laundering) Act 2022 (NSW) amends the Crimes Act 1900 (NSW) to create new offences relating to money laundering, new circumstances of aggravation, and to expand the circumstances giving rise to reasonable grounds to suspect that property is proceeds.
The two main amendments include introducing the offence of money laundering of proceeds of ‘general crime’ and expanding penalties for the offence of dealing with suspected proceeds of crime.
As per section 193BA(1) of the Act, it is an offence to deals with proceeds of general crime, with a value of $100,000 or more, where the offender is reckless as to whether it is proceeds of general crime, and whilst intending to conceal or disguise features of the property.
A maximum penalty of 15 years imprisonment is applicable.
The Act prescribes that in determining whether a person intended to conceal or disguise features of money or other property, the Court may consider its nature, value, source, and location.
It may also consider any movement of the money or other property, or the identity of a person who has rights in relation to it, or effective control of it.
Where a person merely deals with proceeds of general crime with a value of $100,000 or more, being reckless as to whether it is proceeds of general crime, a maximum penalty of 10 years imprisonment is applicable, as outlined in section 193BA(3).
Proceeds of general crime is defined as money or other property that is wholly or partly derived or realised, directly or indirectly, by a person from the commission of an offence against a law of the state, the Commonwealth, another State or a Territory, or another country.
This is opposed to the existing terminology and offences related to ‘proceeds of crime’.
‘Proceeds of crime’ is defined as any property that is substantially derived or realised, directly or indirectly, by any person from the commission of a ‘serious offence’, which is essentially an offence that can be prosecuted ‘on indictment’ or proceed to the District Court, as per section 193A.
Section 193F has been amended, to include subsection (3) which states that where the offence concerns proceeds of general crime, it is not necessary to establish the offence, or a type of offence which may have been committed in relation to the property, or that a particular person committed an offence or a type of offence.
Whilst offences have previously existed criminalising dealing with property where there is reasonable grounds to suspect it is proceeds of crime, the reform has introduced a new tier of the offence where the property involved is valued at $5 million or more.
A maximum penalty of 8 years imprisonment is applicable, as per section 193C(1AA).
However, where this offence is committed in circumstances of aggravation, the maximum penalty rises to 10 years imprisonment.
The Act defines circumstances of aggravation as where:
- the person used a position of professional trust or fiduciary duty to commit the offence,
- the offence was committed in the context of a criminal group, serious crime organisation or serious criminal activity,
- the offence was committed to fund or support terrorism,
- the person provided finance to enable part or all of the dealings in property, or
- the offence was committed for the purposes of transferring the value of the property out of New South Wales.
Section 193CA, which prescribes what constitutes reasonable grounds to suspect property is proceeds of crime, has been expanded under the recent reform.
It provides that there are reasonable grounds to suspect that property is proceeds of crime in each of the following circumstances, in which the dealing:
- involves a number of transactions structured or arranged to avoid the reporting requirements under Commonwealth and other anti-money laundering laws,
- involves using one or more accounts held with authorised deposit-taking institutions in false names,
- involved the use of a token or other unique identifier that preserves the anonymity of one or more of the parties to the dealing,
- involved the use or possession of falsely subscribed telecommunication services, or a dedicated encrypted communication device,
- involved a clandestine meeting or the use of a concealed compartment,
- was engaged in on behalf of or at the request of another person and has not provided information enabling the other person to be identified and located.
It also prescribes that reasonable grounds may be made out where the value of the property involved in the dealing is, in the opinion of the Court, grossly out of proportion to the defendant’s income and expenditure over a reasonable period within which the dealing occurs.
The defendant possessing or having accessed instructions that are consistent with money laundering or having more than $100,000 in cash without lawful excuse, will also be relevant.