At Chidiac & Associates, we provide experienced criminal defence representation to clients facing proceeds of crime and money laundering allegations throughout Sydney and New South Wales. We carefully examine the circumstances of the alleged dealings, the financial evidence and the legislation relied upon by the Prosecution.

What Is Dealing with Property Suspected of Being Proceeds of Crime?

Dealing with property suspected of being proceeds of crime is an offence under section 193C of the Crimes Act 1900 (NSW).

The offence concerns circumstances where a person deals with money or other property and there are reasonable grounds to suspect that the property represents proceeds derived from criminal activity.

Importantly, section 193C does not necessarily require the Prosecution to establish that the accused knew the property was derived from crime. Instead, the offence focuses on whether reasonable grounds existed to suspect that the property was proceeds of crime.

Depending on the value of the property and the circumstances of the alleged offending, different maximum penalties apply.

What Does It Mean to Deal with Property?

The expression "deal with" is broadly defined under the legislation.

It includes:

• receiving property;
• possessing property;
• concealing property;
• disposing of property;
• bringing property into New South Wales;
• transferring property electronically into New South Wales;
• participating directly or indirectly in a transaction;
• receiving property as a gift; or
• giving property to another person as a gift.

The definition extends beyond physically handling cash or goods.

For example, a person may be alleged to have dealt with property by allowing money to be deposited into their bank account and subsequently transferring those funds to another person.

Whether the conduct constitutes an offence will depend on the surrounding circumstances and whether the remaining elements of section 193C can be established.

What Are Proceeds of Crime?

For the purposes of the legislation, proceeds of crime generally refers to property substantially derived or realised, directly or indirectly, from the commission of a serious offence.

Property may include money, financial assets, goods or other items of value.

A serious offence may include:

• an offence capable of being prosecuted on indictment;
• certain offences involving the supply of restricted substances; or
• conduct occurring outside New South Wales that would constitute a relevant serious offence if committed within the State.

The property does not necessarily need to have been obtained directly from the original criminal activity.

For example, money derived from criminal conduct may subsequently be transferred between bank accounts, used to purchase goods or exchanged for other property.

Examples of Conduct That May Give Rise to Charges

Depending on the circumstances, allegations of dealing with suspected proceeds of crime may arise where a person:

• possesses a substantial amount of unexplained cash in circumstances suggesting a connection with criminal activity;
• receives money into their bank account and transfers it to another person without a credible explanation for the transactions;
• agrees to hold valuable goods for another person despite circumstances suggesting the goods may have been unlawfully obtained;
• participates in repeated financial transactions that appear designed to avoid reporting requirements;
• receives or transfers money through accounts held in false names; or
• facilitates the movement of money or property on behalf of another person where suspicious circumstances exist.

These examples do not automatically establish criminal liability.

The Prosecution must still prove the relevant elements of the offence, and the circumstances surrounding the property and transactions must be carefully examined.

Elements of Dealing with Property Suspected of Being Proceeds of Crime

To establish an offence under section 193C, the Prosecution must prove the relevant elements beyond reasonable doubt.

1. The Accused Dealt with Property

The Prosecution must establish that the accused dealt with the property in a manner recognised by the legislation.

This may involve evidence of possession, receipt, concealment, disposal or participation in a financial transaction.

Relevant evidence may include:

• bank statements;
• electronic transfers;
• cash deposits or withdrawals;
• transaction records;
• communications between parties;
• ownership documents; and
• evidence concerning possession or control of property.

The precise nature of the accused's involvement may be important.

2. There Were Reasonable Grounds to Suspect the Property Was Proceeds of Crime

The Prosecution must establish that there were reasonable grounds to suspect that the property was derived from criminal activity.

This requires consideration of the circumstances surrounding the dealing.

Relevant matters may include:

• the source of the money or property;
• the nature and purpose of the transaction;
• whether the transaction had a legitimate explanation;
• the relationship between the parties;
• the use of false identities or account details;
• the structure and frequency of financial transactions; and
• any surrounding circumstances suggesting criminal activity.

A person being unable to immediately explain a transaction does not, by itself, necessarily establish the offence.

The evidence must be considered as a whole.

3. The Value of the Property at the Time of the Dealing

The value of the property is an important element of the offence and determines which subsection and maximum penalty may apply.

Under section 193C, different penalties apply depending on whether the property is valued:

• below $100,000;
• at least $100,000 but below $5 million; or
• at $5 million or more.

The Prosecution must establish the relevant value at the time of the alleged dealing.

Where the value is disputed, financial records, valuations and other evidence may become important.

What Are Reasonable Grounds for Suspecting Property Is Proceeds of Crime?

Section 193CA of the Crimes Act 1900 (NSW) identifies circumstances that may establish reasonable grounds for suspecting that property is proceeds of crime.

These include situations where:

• transactions are structured or arranged to avoid financial reporting requirements;
• dealings involve accounts operated under false names;
• a person claims to be acting on behalf of someone else but fails to provide that person's details; or
• financial transactions display characteristics specifically identified by the legislation as grounds for suspicion.

These circumstances are not necessarily exhaustive.

Whether reasonable grounds existed will depend on the applicable statutory provisions and the evidence in the particular case.

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What Are the Penalties for Dealing with Suspected Proceeds of Crime?

The maximum penalty depends on the value of the property and the subsection under which the person is charged.

Property Valued Below $100,000

Under section 193C(2), the maximum penalty is:

3 years' imprisonment.

Property Valued at $100,000 or More but Below $5 Million

Under section 193C(1), the maximum penalty is:

5 years' imprisonment.

Property Valued at $5 Million or More

Under section 193C(1AA), the maximum penalty is:

8 years' imprisonment.

Where specified aggravating circumstances apply under section 193C(1AB), the maximum penalty increases to:

10 years' imprisonment.

The maximum penalties above relate to the statutory offences and do not mean that every person convicted will receive a sentence of imprisonment.

Where the matter is dealt with summarily in the Local Court, different sentencing limits may apply.

The sentence imposed will depend on the circumstances of the offence and the individual offender.

Relevant considerations may include:

• the value of the property;
• the number and nature of transactions;
• the accused's role in the alleged dealings;
• whether the conduct was planned or repeated;
• the circumstances giving rise to suspicion;
• the accused's criminal history;
• whether a guilty plea was entered;
• the accused's personal circumstances; and
• prospects of rehabilitation.

Which Court Will Hear a Section 193C Charge?

Proceedings for dealing with property suspected of being proceeds of crime may be heard in either the Local Court or the District Court, depending on the charge and applicable procedural rules.

Under Schedule 1 of the Criminal Procedure Act 1986 (NSW), the classification of an offence as Table 1 or Table 2 affects who may elect to have the matter dealt with on indictment.

Generally:

• Table 1 offences: Either the accused or the Prosecution may be entitled to elect for the matter to proceed on indictment.
• Table 2 offences: The Prosecution may elect for the matter to proceed on indictment.

The applicable classification must be considered by reference to the particular offence and relevant statutory provisions.

If no election is made, the matter will ordinarily proceed in the Local Court.

The court in which the charge is heard can affect the sentencing powers available.

Possible Defences to Dealing with Suspected Proceeds of Crime

Being charged under section 193C does not mean that a person is guilty.

The Prosecution must prove the elements of the offence beyond reasonable doubt.

Depending on the circumstances, possible defences and issues may include the following.

1. No Reasonable Grounds for Suspicion

Under section 193C(4), a statutory defence is available where the accused establishes that they had no reasonable grounds for suspecting the property was derived from relevant criminal activity.

This defence must be established on the balance of probabilities.

Relevant matters may include:

• the accused's knowledge of the transaction;
• the explanation provided for receiving or transferring the property;
• the information available to the accused;
• the nature of the relationship between the parties;
• whether the transaction was consistent with legitimate activity; and
• whether the surrounding circumstances reasonably gave rise to suspicion.

2. The Accused Did Not Deal with the Property

A defence may arise where the Prosecution cannot establish that the accused received, possessed, transferred, concealed or otherwise dealt with the property.

The mere existence of a connection between the accused and another person involved in a transaction does not necessarily establish that the accused dealt with the property.

3. The Value of the Property Is Disputed

The value of the property is relevant to the subsection charged and the maximum penalty.

A dispute may arise concerning:

• the amount of money allegedly involved;
• whether multiple transactions have been correctly identified;
• the ownership or value of particular assets;
• the date on which the property was valued; or
• whether the Prosecution can establish the relevant statutory threshold.

4. Duress

In appropriate circumstances, a person may raise a defence of duress where they engaged in the conduct because of sufficiently serious threats or coercion.

Whether this defence is available depends on the particular facts and applicable legal requirements.

5. Insufficient Prosecution Evidence

A charge may be defended where the Prosecution cannot establish every element of the offence beyond reasonable doubt.

This may involve challenging the reliability, accuracy or interpretation of financial records, witness statements and other evidence.

Evidence in Proceeds of Crime Cases

Investigations involving suspected proceeds of crime often rely heavily on financial, documentary and electronic evidence.

Depending on the allegations, the Prosecution may rely on:

• bank statements and transaction histories;
• cash deposit and withdrawal records;
• electronic funds transfer records;
• financial intelligence material;
• mobile phone messages;
• emails and other communications;
• records of cryptocurrency transactions;
• business and accounting records;
• documents concerning ownership of property;
• surveillance material;
• police interviews;
• witness statements; and
• evidence concerning the alleged source of funds.

The interpretation of this evidence can be critical.

For example, a series of transactions may appear suspicious when considered in isolation but may have a legitimate explanation when examined alongside the accused's financial circumstances and communications.

At Chidiac & Associates, we carefully examine the evidence relied upon by the Prosecution and identify any weaknesses, inconsistencies or alternative explanations.

Police Investigations into Suspected Proceeds of Crime

Investigations may arise following suspicious financial transactions, police searches, the discovery of unexplained cash or information obtained during investigations into other alleged criminal activity.

Police may seek to:

• examine bank accounts and financial records;
• obtain electronic communications;
• interview people involved in financial transactions;
• investigate the source and movement of funds;
• seize cash or other property; and
• obtain evidence concerning the accused's knowledge and involvement.

A person may become the subject of an investigation even where they have not been charged with the underlying criminal activity allegedly responsible for generating the property.

If you become aware that you are under investigation, obtaining legal advice before participating in a police interview can be important.

Early legal advice can assist you in understanding the allegations, your rights and the potential consequences of providing information to investigators.

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What Happens to Money or Property Seized by Police?

Where police suspect that money or property is connected to criminal activity, the property may be seized during an investigation.

Depending on the circumstances, further proceedings may arise concerning the continued detention, forfeiture or recovery of the property.

The seizure of property does not, by itself, establish that the owner has committed a criminal offence.

The legal process for recovering property will depend on the circumstances of the seizure and the legislation relied upon.

A criminal defence lawyer can advise on the available options for challenging the seizure or seeking the return of property.