Money Laundering Offences in 2008 Act A. Introduction 1. There are three offences: s 139, s 140 and s141. B. Criminal Property (s 158) 2. The offences criminalise dealings with property which constitutes or represents, in whole or in part and whether directly or indirectly, a benefit from criminal conduct; 3. The alleged offender knows or suspects that it constitutes or represents such benefit. Criminal conduct 4. Criminal conduct means: (a) An offence in the island (b) Something which would have been an offence if done in the island (c) By whoever committed (d) Whether happening before or after the 2008 Act Benefit 5. Benefit means: (a) to obtain (includes obtaining a right to possession) property (defined in the widest terms) as a result of or in connection with the conduct; (b) Obtain a pecuniary advantage as a result of or in connection with the conduct; (c) Includes property or pecuniary advantage obtained in that connection and some other Knowledge or suspicion
6. Suspicion means: a possibility, which is more than fanciful, that the relevant facts exist. A vague feeling of unease would not suffice. But the statute does not require the suspicion to be clear or firmly grounded and targeted on specific facts or based upon reasonable grounds : R v. Da Silva [2007] 1 WLR 303 (Court of Appeal) C. General exceptions 7. The following appear in each of the three sections: (a) Disclosure (see earlier presentation); (b) Person performing statutory functions; (c) Overseas conduct in some circumstances; (d) Threshold amount for deposit taking bodies 8. Overseas conduct exception (a) The person knows or believes on reasonable grounds that the money laundering is occurring in a particular place outside the island; AND (b) The money laundering is not unlawful in that place; AND (c) Not prescribed by Department of Home Affairs [In England the overseas conduct exception does NOT apply if the overseas conduct would be punishable with over 12 months in prison if it had occurred in the UK, with minor exceptions] 9. Deposit Taking Bodies s 158 (13) (a) Business which engages in the activity of accepting deposits; or (b) The National Savings Bank; (c) Does the act in operating an account maintained by it; (d) Value of property is less than the threshold amount: D. Individual Offences 250 or An amount specified by the FCU or An order by the Department of Home Affairs
S 139 Concealing, disguising, converting, transferring or removing from the island Concealing or disguising includes concealing or disguising nature, source, location, disposition, movement or ownership or any rights with respect to it S 140 Entering into or becoming concerned in an arrangement which the person knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another S 141 Acquisition, use or possession Unless: acquired, used or had possession of the property for adequate consideration Inadequate consideration if value of the consideration is significantly less than the value of the property or of the use or possession The provision of goods or services which the person knows or suspects may help another to carry out criminal conduct is not consideration Hogan v. DPP [2007] 1 WLR 2944 Defendant found in possession of 6,000 worth of scaffolding, which he acquired for 1, 100 Held (a) If adequate consideration, no offence even if knows that goods stolen; (b) Adequacy of consideration is a question of fact, it is an objective question and the court must look at all relevant circumstances; (c) This is not strictly a defence but a limitation on the scope of the offence once the issue of adequate consideration has been raised, this matter should be regarded as an element of the offence to be proved by the prosecution to the normal criminal standard
E. Offence of Failing to Comply with Code (s 157) 10. S 157 provides that the Department of Home Affairs must make such codes as it considers appropriate for the purposes of preventing and detecting money laundering. The Code will be concerned with guidance and internal systems.there is a provision that some breaches of any such code will be punishable with up to two years in prison or a fine F. Some cases Proof of Predicate Conduct 11. R v. NW, SW, RC [2008] EWCA Crim 2, R v. Anwoir [2008] EWCA Crim 1354; and R v. F, B [2008] EWCA Crim 1868 R v. NW, SW, RC [2008] EWCA Crim 2 12. Around 105, 000 was transferred out of the UK to Jamaica through Western Union or Jamaica National Overseas Limited. The first defendant had no visible means of support there was no record of him receiving benefits or paying tax, other defendants were on benefits, there was 5, 000 found in cash in their home and evidence of frequent telephone calls. Crown could not prove any particular criminal activity. Judge acceded to a submission of no case to answer. 13. Court of Appeal held: trial judge was correct, the prosecution must identify the class of crime in question. R v. Anwoir [2008] EWCA Crim 1354 14. Undercover tape recordings of one defendant made clear that he had access to people who were prepared to launder money from drug dealing. Conversations also referring to carousel fraud through the same people. In separate proceedings the defendants were convicted of relatively minor drugs offences. Charged with money laundering in relation to 740, 000 in cash paid into a bank account and transactions through a bureau de change which bureau had a turnover of 50 million in 2 ½ years, much of it changed into Euros in denominations of 500 notes 15. Held (a) Considered R v. N W and conflicting decision in R v. Craig [2007] EWCA Crim 2913; (b) The cases which spoke of the need to allege a kind or kinds of conduct were referring to a very general requirement such as
importing and supplying controlled drugs or money laundering BUT there are two ways in which the Crown can prove the property derives from crime, (a) by showing that it derives from conduct of a specific kind or kinds and that conduct of that kind or those kinds is unlawful; or (b) by evidence of the circumstances in which the property is handled which are such as to give rise to the irresistible inference that it can only be derived from crime (paragraph 21) (c) In the present case, the jury could conclude that the proceeds came from drugs and/or VAT fraud R v. F, B [2008] EWCA Crim 1868 16. Two defendants checked in at Heathrow for flight to Tehran. Police asked whether money in suitcase, one said no, the other said yes. In fact 1, 184, 670 in suitcase. In interview said asked to do it for friend, had done it 2 or 3 times before, did not know source of money but knew what was doing was wrong. Trial Judge: no case to answer on basis of R v. NW. 17. Court of Appeal, held: (a) (b) Appeal allowed; Prosecution entitled to rely on second limb of test in Anwoir (paragraph 8): Tax Evasion we can see no procedural unfairness arising out of the fact that the prosecution at this stage is unable to point to any particular criminality. The fact is that, certainly as far as the first respondent is concerned, the answers he gave to the customs officers suggest that he knew full well that criminality of some sort was involved in the production of that money 18. Despite Court of Appeal in R v. Gabriel (Note) [2007] 1 WLR 2272, the proceeds of tax evasion can be criminal property for the purposes of the money laundering provisions: R v. K (I) [2007] 1 WLR 2262. 19. In K (I) the prosecution case was that, over a period of 4 years, MR had systematically cheated the revenue of income tax and VAT by under-declaring the takings of his business and transferring the undeclared amount to a money services business for transmission to Pakistan. 20. Held: a person who cheats the revenue obtains a pecuniary advantage as a result of criminal conduct within the meaning of section 340 (6)
Conspiracy POCA. However, the dicta and reasoning in this case should be looked at closely where such cases arise. 21. R v. Saik [2006] 2 WLR 993 (followed in a number of cases under the new Act), the mental element required for a conspiracy to commit any of the money laundering offences is, either: (a) intention that the property will be criminal property (if property not identified at time of agreement); or (b) knowledge that the property is criminal property if the property has been identified at the time of the agreement This case may or may not be followed in the isle of man.