What is Money Laundering? - Criminal Defence Lawyers Australia

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The New South Wales Crime Commission has reported that billions of dollars of ‘dirty’ money is being funnelled through poker machines in pubs and clubs across the state.

Despite the endemic nature of the issue, there is an abundant lack of effective controls or data collection, utilised to identify or prosecute individuals involved.

NSW Crime Commissioner, Michael Barnes noted that poker machines essentially offer criminals with a safe haven to ‘clean’ cash, with virtual impunity.

“At the moment serious offenders can enter NSW pubs and clubs, sit down next to patrons in gaming rooms, and openly feed large sums of cash from their crimes into poker machines with no real fear of detection…

“The lack of traceable data collected by Electronic Gaming Machines means the exact scale of this criminal activity is impossible to determine but it is clear from our investigations it involves many billions of dollars every year.” explained Barnes.

The Commission recommended that mandatory cashless gaming cards and enhanced data collection measures be introduced.

A cashless gaming system would involve the use of ‘player cards’ which would contain customer identification, and the ability to record amounts, times, turnover and losses/wins.

It would also create one to one links between player cards and a bank account, with limits on changing connecting accounts.

Barnes noted that: “these basic reforms will help exclude vast sums of dirty cash that are primarily the proceeds of drug dealing. I’m sure venues won’t argue they should keep receiving that.”

It is estimated that $95 billion in cash flows through poker machines in the state each year.

Pubs and clubs across the state remain rare locations in which cash remains a dominant payment mechanism, essentially creating a: “$95bn-a-year information black hole.”

Notably, residents of NSW lose more money to gambling than any other jurisdiction in the world.

The state has over half of Australia’s poker machines and is second (to Las Vegas) when it comes to machine numbers globally.

There are over 96,000 gaming machines distributed across 4,000 venues in NSW, with 1,500 situated at The Star Casino.

The Commission examined two forms of money laundering in its reports, namely: where users load up machines with ‘dirty’ money and then withdraw the equivalent amount thus ‘cleaning’ the cash, and where criminals utilise the ‘dirty’ cash to gamble.

The report found that loading up machines and cleaning the proceeds of crime is not widespread, as processing large sums of cash is inefficient when compared to other avenues for laundering.

However, it ultimately determined that large sums of ‘dirty’ money are being gambled by criminals across the state, funnelling through poker machines.

It identified that club boards, hoteliers and their staff are largely unaware or ignorant of anti-money laundering responsibilities, with the Commission noting that this needs to be addressed with improved legislation and regulations.

The inquiry was inspired by: “a series of news media articles …that asserted that tens of millions of dollars …were being ‘laundered’ through licensed clubs and pubs and that only a small proportion of (them) were complying with their money laundering prevention obligations.”

Table Of Contents

What is Money Laundering in New South Wales?

What is Money Laundering in New South Wales?

Money laundering can be defined as the process of turning illegal money into the appearance of legitimate money, for personal use.

Illegal or ‘dirty’ money may be referred to as proceeds of crime or money generated due to illegal activity such as fraud related activities or dealing with illegal goods such as prohibited drugs.

Money laundering is criminalised under state and Commonwealth legislation.

In NSW, Part 4AC of the Crimes Act 1900 (NSW) outlines offences related to money laundering.

‘Proceeds of crime’ is defined as any property that is substantially derived or realised, directly or indirectly, by any person from the commission of a serious offence, according to section 193A.

As per section 193B(1), a person who deals with proceeds of crime, knowing that it is proceeds of crime, and intending to conceal this, is guilty of an offence which carries a maximum penalty of 20 years imprisonment.

Furthermore, a person who deals with proceeds of crime, knowing that it is proceeds of crime, faces a maximum penalty of 15 years imprisonment, pursuant to section 193B(2).

Where a person deals with proceeds of crime, being reckless as to whether it is the proceeds of crime, the maximum penalty applicable is 10 years imprisonment, as per section 193B(3).

Applicable across all Australian states and territories, the Criminal Code Act 1995 (Cth) prescribes extensive maximum penalties for money launderers in Part 10.2.

As outlined in sections 400.3 – 400.8, the maximum penalties will depend on the amount of money involved ranging from amounts worth $1,000,000 or more, $100,000, $50,000, $10,000, $1,000 or of any other value that is less.

Penalties range from 6-months to 25-years imprisonment, and/or fines of $330,000 – $13,200.

Published on 02/11/2022