Friday, February 21, 2020

Money laundering, structuring, implications of Lordianto v The Queen [2019] HCA 39

Money laundering can be committed recklessly. When you add that fact to what you have learnt from Lordianto v The Queen [2019] HCA 39 (13 November 2019), the implications are startling.

Suppose you are expecting a large deposit in your bank account, say $100,000. As far as you can see, there is no reason why that would not appear in your bank account as a single transaction.

Surprisingly, you find that there has been a series of deposits, each under $10,000, to make up the expected $100,000. For example, 11 deposits: 10 of $9,990 and one of $100.

Knowing what you do know, after reading Lordianto and learning about cuckoo smurfing, you must be alert to the risk that what has gone on is called structuring, and it is an offence against the anti-money laundering legislation.

Structuring is arranging transactions to avoid detection by agencies who have due diligence obligations under that legislation. In New Zealand, it is an offence against the Anti-money Laundering and Countering Financing of Terrorism Act 2009s 101.

This is not your offence, but the question is whether you know that there is a risk that structuring has been committed, and whether objectively it is unreasonable for you to take that risk. This recklessness comes into play because it is a way that money laundering can occur. And you are presumed to know the law, for example the prescribed threshold for the bank having to report the relevant transaction, as set out in the AML/CFT (Definitions) Regulations 2011.

Money laundering is an offence defined in s 243 of the Crimes Act 1961. If you “deal with” the deposits, by transferring them (or strictly in legal terms, exercising your rights pursuant to the chose in action referable to the credit in your account) to anyone, and that dealing involves concealment (which it necessarily does, because concealment is defined to include converting it from one form to another), with the necessary state of mind, the offence of money laundering is committed.

Recklessness as to whether the deposits are proceeds of the offence of structuring is the catch that could easily criminalise a person who in all other respects expects to be the recipient of lawful funds.

Furthermore, the structured funds could be restrained under the Criminal Proceeds (Recovery) Act 2009, preventing you from accessing them.