• Phillip Kelly

Proceeds of Crime and Money Laundering Offences

Updated: May 9


Any person accused of a criminal offence in Western Australia already faces a daunting and alienating experience. Moreover, if the charge relates to a crime from which the accused person has derived an income, you can bet your bottom dollar that the State will not only come after you, but also your assets.


LEGISLATION


In Western Australia, the Criminal Property Confiscation Act 2000 (“CPCA”) allows a Court to order that all assets suspected of being proceeds of crime be confiscated. Proceeds of crime are defined as cash, property, other assets or benefits gained through criminal activity.


No criminal conviction is needed before an order can be made, and property can be confiscated even when a suspect has not been identified.


The main aim of the laws is to remove the financial gain and increase the financial loss associated with crime. The laws also act as a deterrent to crime as well as help police trace property acquired from illegal activity.


ORDERS


Under the Act, police or the Corruption and Crime Commission (“CCC”) can apply to the Supreme Court for various declarations, including:

· Unexplained Wealth Declaration;

· Criminal Benefits Declaration;

· Crime-used Property Substitution Declaration;

· Freezing Order.


UNEXPLAINED WEALTH DECLARATION (“UWD”)


Followers of media reports of criminal matters will often see reports of an accused person who, despite having no discernible occupation, has in his or her possession a veritable cornucopia of luxury items, landholdings, prestige cars and other trappings of wealth. It is therefore commonplace in such situations for Proceeds of Crime investigators to pursue such an individual by seeking an Unexplained Wealth Declaration (“UWD”)


When an UWD is made against a person, there is a presumption at law the person’s wealth has not been lawfully acquired unless they can prove otherwise. The declaration requires the person to pay to the State an amount assessed by the court to be the value of the person’s unexplained wealth; or forfeit those trappings of wealth which are then sold at public auction, with the funds going into a special purpose fund controlled by the Attorney-General.


CRIMINAL BENEFITS DECLARATION (“CBD”)


A court can make a CBD if it is more likely than not that a person’s “property, service, advantage or benefit”, whether or not it was lawfully acquired, is derived from wealth generated by involvement in crime.


Again, there is a presumption the person has acquired a criminal benefit unless they can show otherwise. This type of declaration cannot be made if the property, service, advantage or benefit has been confiscated or taken into account in making a previous UWD. The declaration requires the person to pay to the state an amount assessed by the court to be the value of the person’s criminal benefit acquired.


CRIME-USED PROPERTY SUBSTITUTION DECLARATION (“CPSD”)


This declaration can be made when crime-used property identified by the Police and/or prosecution is no longer available for confiscation.


This could be because the person does not have effective control of it, an order related to the property has been set aside in favour of a family member, or the property has been sold or otherwise disposed of or simply cannot be found.


The CPSD allows an accused person’s property to be available for confiscation instead of crime-used property. The value of the property that can be confiscated is equal to the assessed value of the crime-used property at the time of the offending.


FREEZING ORDER


A Freezing Order is used to prevent a person disposing of, hiding or diminishing assets.


The Court can direct that Police or the Public Trustee manage the assets, or give any other directions to secure and manage the property while the order is in force. A person must not deal with property subject to a Freezing Order.


A Freezing Notice is an interim measure used when police suspect property is used in crime or derived from it. If the person served with the notice does not file an objection within 28 days from the date of the Freezing Notice, the property is automatically confiscated. A person must not deal with property subject to a Freezing Notice.


INVESTIGATIONS


The CPCA confers a range of investigative powers on police and the CCC. These include seeking orders related to financial institutions and examinations.


FINANCIAL INSTITUTIONS


A financial institution can volunteer information to police or the CCC if the institution believes information about a transaction may help investigate a crime or help a Court decide whether to make a declaration. An institution can also be ordered to provide information to police or the CCC about accounts and transactions that may be related to crime.


The Director of Public Prosecutions (“DPP”) or CCC can apply for a monitoring or suspension order to require a financial institution to notify them of any transaction made through a specified account, or to delay completion of a transaction for 48 hours.


EXAMINATIONS


The DPP can apply to the District Court for an order to question a person about the nature, source and location of frozen or property capable of confiscation, and about the wealth, liabilities, income and expenditure of criminals, suspected criminals, declared drug traffickers, or those with unexplained wealth. The order can require the person to, for example, attend court or provide documents or other information.


COMMONWEALTH LAWS


For crimes against commonwealth law, the Proceeds of Crime Act 2002 applies. In some circumstances it can be used to confiscate proceeds of crime against state law, if the proceeds have been used in a way that contravenes commonwealth law.


The commonwealth act grants powers to make orders similar to that which can be made under the Western Australian act. For instance, under the commonwealth act, a freezing order can be made specifically in relation to a bank account. The court can make an order if it is satisfied there are grounds to suspect the account contains proceeds of crime and there is a risk money will be withdrawn from it unless an order is made.


The commonwealth act, however, allows for the making of a literary proceeds order. Literary proceeds are “any benefit a person derives from the commercial exploitation” of their notoriety resulting from them committing an indictable offence in Australia or abroad.


The exploitation may be any means, including publishing material in written or electronic form, use of audio-visual media, or any live entertainment or interview. This is to prevent criminals from profiting from their crimes by indirect means, such as the publications of memoirs, such as those of the late Mark “Chopper” Read or David Everett, the notorious former SAS trooper who committed a series of spectacular armed robberies and drug importations in the 80’s and 90’s. Likewise with convicted criminals selling their stories to current affairs programmes or magazines, or licencing the use of their image in television shows such as Underbelly.


RELEASE OF FROZEN FUNDS TO PAY LEGAL FEES


The issue of an accused seeking release of funds frozen in order to pay for the accused’s legal defence is a long-standing issue of controversy. In the early days of this type of legislation, the prosecution adopted a view that there was no entitlement for the accused to have funds released; or sought to limit the amount to be released to rates equivalent to those provided by the Legal Aid Commission, thereby limiting the scope of the defence and the ability to do such things as retain senior counsel.


This approach has been wound back in recent years, particularly since the case of Mansfield v DPP [2006] 226 CLR 436, where it was held by the High Court that an accused could access funds frozen under the CPCA both for the defence of related criminal charges as well as the legal costs for defending confiscation proceedings. Since that important principle was established, the mechanics of the process have developed over time.


The present position is that funds suspected of being crime-used or crime-derived (to use the parlance of the legislation) can be released from a Freezing Order in order to fund the accused’s defence. In the matter of EF & ors. v State of Western Australia [2017] WADC 159, it was held that there was no reason to treat such property any differently than other property restrained and belonging to a person charged with serious drug offences; conviction upon which would have seen the accused declared to be a Drug Trafficker.


As to exactly how much can be released, the Courts have taken a practical approach, allowing for defence funds that are, in the circumstances, reasonable. However, what is important is that it is the Court, not the prosecution who shall decide what is reasonable.


NEED HELP? CALL US!


If you find yourself in need of an experienced criminal lawyer, Carter Dickens Lawyers can be contacted at any time on 0417550249. Our head of criminal law, Phillip Kelly has over 30 years’ experience and is dedicated to achieving the best possible outcomes for his clients.


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