We have penned a number of blogs over the years about proceeds of crime laws and the applicable penalties.
Under section 193C of the Crimes Act 1900 (NSW), it is a criminal offence to possess or deal with property that is suspected to be the proceeds of crime.
This essentially refers to money or other forms of property that the police suspect “on reasonable grounds” have been obtained through illegal activities.
Obvious examples are money, cars and jewellery that are obtained through drug dealing.
Section 193C imposes a maximum penalty of two years imprisonment and/or a fine of $5,500.
Any such property will be forfeited if the prosecution is ultimately able to prove the charge.
Earlier this year, South Australian police released the results of their yearly crackdown on criminal proceeds.
The last year has seen SA police seize a large number of luxury goods alleged to be connected with criminal dealings, including cars, jet skis, boats, cash and even luxury homes.
A percentage of profits obtained from the sale of proceeds of crime assets are directed towards victims of crime funds.
And last year, $1.69 million was deposited into South Australia’s Victims of Crime Fund.
How do police investigate proceeds of crime allegations?
Proceeds of crime laws differ from state to state.
In some cases, police are not able to seize property without securing a conviction first.
This is known as ‘conviction-based recovery.’
In other cases, police can seize assets without securing a conviction.
This is sometimes called ‘civil-based recovery.’
Though the prospect of relinquishing your assets without a conviction may seem unfair, police contend that it prevents people from selling or hiding their assets or moving them offshore before the end of criminal proceedings.
If you are charged with an offence under section 193C, you may be able to beat the charge by proving that you had no reasonable grounds to believe that the property was obtained through illegal activity.
If you raise this defence, you must be found guilty if the court is persuaded “on the balance of probabilities” (ie more than 50%) – that you had no reasonable grounds for suspecting that the money or goods were substantially derived from crime.
Are proceeds of crime laws unfair?
The reasoning behind proceeds of crime laws is simple enough: they send a clear message that people will not be allowed to profit from criminal activity.
However, one criminal defence lawyer has spoken out against the laws, arguing that proceeds of crime legislation unfairly targets many people.
He gave the example of a man who cultivated a small amount of cannabis on his own property, and subsequently lost his home, despite no evidence being presented to show that the home was purchased using money obtained through drug cultivation.
That lawyer has cautioned against the over-policing of suspects, stating that simply because someone has a criminal record does not mean that “everything they have is from the proceeds of crime”.
His comments have been backed by interstate advocates, including WA barrister Hylton Quail.
Mr Quail contends that outdated proceeds of crime legislation may unfairly impact innocent third parties, such as the spouses and children of those convicted of drug offences – who had no idea that their relatives were involved in criminal activity.
In several cases, entire families have lost their homes and have had their assets frozen – effectively leaving them financially destitute.
What about overseas?
In the United Kingdom, proceeds of crime offences are dealt with under the Proceeds of Crime Act, which was enacted in 2002.
Until recently, the prosecution had to prove that the property in question was obtained through criminal activity, and were required to identify the crime.
However, changes to the Act mean that the prosecution is no longer required to specify the type of crime that allegedly gave rise to the proceeds.
Critics have labelled the UK legislation as unfair and draconian, and have raised concerns that removing the requirement to specify the alleged criminal conduct may effectively lump small-time drug users together with commercial drug suppliers and manufacturers.
Opponents of the laws argue that this will result in disproportionate penalties and confiscations.
Recent cases appear to legitimise those concerns.
In 2011, Kevin Whitelaw had assets valued at almost £13,000 confiscated after he was alleged to have cultivated cannabis for personal use.
In another case, an elderly man was forced to give up assets valued at almost £100,000 after he grew cannabis to treat his bowel cancer.
Meanwhile in Australia, there are concerns that our laws will lead to similarly unfair outcomes.
A number of people have expressed concerns at the ease with which police can confiscate assets, sparking a parliamentary review to be held later this year.
A committee will seek to reconsider existing laws in order to determine whether they are fair and effective.
It remains to be seen whether the review will be a catalyst for legislative change