Money Laundering -Criminal Justice (Money Laundering and Terrorist Financing) Act 2010

YOUR BANK ACCOUNT SHOULD BE FOR YOUR EYES ONLY!

The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 creates a number of offences in relation to money laundering. In this article Rafter Solicitors  examine

 (i) the legislative presumptions which come to the aid of the prosecuting authorities in cases of this type, and (ii) the sentence guidelines that can be extracted from the caselaw to date.

OFFENCES & MAXIMUM PENALTIES

The principal offences created by the 2010 Act are:

  • Money laundering occurring in State (Section 7)
  • Money laundering outside State in certain circumstances (Section 8)
  • Attempts, outside State, to commit offence in State (Section 9)

The maximum penalty, on indictment, is the same for each offence – a fine and/or a term of up to 14 years imprisonment.

Each of the offences is defined by reference to Section 7, which sets out the conduct that constitutes ‘money laundering’.

OFFENCE DEFINITION

A person commits an offence if he/she does any of the following with property that is the proceeds of criminal conduct:

  1. concealing or disguising the true nature, source, location, disposition, movement or ownership of the property, or any rights relating to the property;
  2. converting, transferring, handling, acquiring, possessing or using the property;
  3. removing the property from, or bringing the property into, the State,

and he/she knows or believes (or is reckless as to whether or not) the property is the proceeds of criminal conduct.

PROOFS

Although every case will turn on its own facts, in most cases the prosecution will have to prove the following ingredients:

  • That the property is, in fact, the proceeds of criminal conduct;
  • That the accused knew or believed or was reckless as to whether the property is the proceeds of criminal conduct;
  • That the accused ‘dealt with’ the property in one of the ways enumerated at 1, 2, and 3 above.

PRESUMPTIONS

1. PROCEEDS OF CRIMINAL CONDUCT

Section 6 defines ‘proceeds of criminal conduct’ as:

‘any property that is derived from or obtained through criminal conduct, whether directly or indirectly, or in whole or in part, and whether that criminal conduct occurs before, on or after the commencement of this Part‘

Given the potential difficulty of proving beyond reasonable doubt that certain property was obtained through criminal conduct, the legislation provides (Section 11(4)) examples of circumstances in which it could be reasonable to conclude that property is the proceeds of criminal conduct (the list is not exhaustive):

  • The value of the property is out of proportion to the income of the accused (or another person if the accused was acting on behalf of another person);
  • There is a purchase or sale of goods or services for an amount that is out of proportion to their market value;
  • False names are used in one or more transactions;
  • The accused claims that he/she is acting on behalf of another person but does not identify that other person;
  • Where the accused has concealed or disguised in relation to the property but has no reasonable explanation for that concealment or disguise.

This list is non-exhaustive and is by way of example only. The key question is whether the circumstances are such that it is reasonable to conclude that the property is the proceeds of criminal conduct.

Even where the circumstances suggest that the property is the proceeds of criminal conduct, it is still a matter for the fact-finder (judge or jury) to decide whether the evidence is strong enough to prove that contention beyond a reasonable doubt.

DPP V BAXTER [2021] IEHC 256

One of the issues raised by Baxter in this case was whether the Director of Public Prosecutions had proved that the cash represented the proceeds of crime. Although decided under slightly different legislation (s.38(1A) of the Criminal Justice Act 1994 (the 1994 Act), as inserted by s.20(a) of the Proceeds of Crime (Amendment) Act 2005) the reasoning is instructive.

The affidavits of Edel Kilbride and Amanda Lovett set out the events which led to the seizure. They are customs officers at Dublin Airport. The affidavit of Edel Kilbride discloses that on the morning of the seizure she was on duty at the Airport along with Amanda Lovett. She avers that “At approximately 6.00 am, as a result of routine profiling, pursuant to the provisions of Section 31(1) of the Customs Act 2015, I stopped and questioned …. James Baxter (hereafter referred to as ‘the Respondent’).” She noted down the questions and answers.

She got his name and address and confirmed his identity from his passport. “I put a number of questions to the Respondent.” “When asked where he was travelling to, the Respondent replied ‘Barcelona’. When asked about the purpose of his trip, the Respondent replied ‘I am going to visit my girlfriend for a few days’. When asked if he had booked a return ticket the Respondent answered ‘No’. When asked if he was carrying any cash, the Respondent replied: ‘a bit of money, about €300.’ …On being asked to empty the contents of his pockets, the Respondent removed approximately €300 from his pocket and showed it to me…The Respondent was in possession of a carry-on bag. On being requested to do so, the respondent handed his bag to Officer Lovett for inspection. On searching the bag, Officer Lovett located a large brown envelope. Within the large brown envelope Officer Lovett discovered a large quantity of cash.”

Edel Kilbride then proceeded to ask more questions. These questions were answered by James Baxter. The questions were directed to the provenance of the large amount of cash. He told her that the total was “€80,000. I accumulated it, my own money, my life savings.” He was asked where he had saved the money and he replied : “In my house”. When asked if he was working, he said that he was not and that he had his own company and had €20,000 to €30,000 a year in pensions. She was not satisfied with the answers and formed the suspicion that the cash represented proceeds of crime or was intended for use by some person in connection with criminal conduct at 6.10 am. She told James Baxter that she was seizing and detaining the cash pursuant to the provisions of s.38 of the 1994 Act, as amended, on suspicion that it represented proceeds of crime or was intended for use in connection with criminal conduct.

In dealing with the arguments made by Baxter, Mr. Justice Alex Owens said:

“The evidence establishes to the requisite standard of proof that the cash found by the customs officers in James Baxter’s bag was proceeds of crime or intended by any person for use in criminal conduct. It consisted of used €50 notes and the explanation that it represented cash proceeds of the sale of a house some years previously or proceeds of policies is unbelievable. James Baxter’s assertion that he had lost faith in banks and was in the habit of carrying this large sum of cash on his holiday travels is unbelievable.

The documents produced by James Baxter did not support these explanations. He continued to have a bank account and more recent extracts from his bank statements showed expenditure in Barcelona on 8 November 2017. When asked about his travel prior to the date the cash was seized, he claimed he could not remember where he had travelled. He had the option of producing more details from his bank account to show the source of the cash which he claimed to be derived from proceeds of the house sale and policies. He chose not to do so. He was travelling to Barcelona, supposedly to visit a female friend who he would not identify, without any change of clothes or travel accoutrements.

He claimed that bank drafts bought by him using proceeds of sale in 2014 of his wife’s house which he inherited were used to get cash. He failed to produce any evidence of this. He claimed he travelled abroad frequently and took this large amount of cash with him. In response to an allegation in a custom’s officer’s affidavit that €148,100 was seized from James Baxter as suspected proceeds of crime at Fuengirola in Spain while he was the company of a well-known Limerick criminal on 26 September 2016, his affidavit accepts that the incident occurred. He asserts that this is inadmissible as it is only relevant to character.

This is relevant evidence. No explanation is provided by James Baxter of why he was in possession of €148,100 in cash in Fuengirola. The fact that cash was taken from him in this incident made it highly unlikely that he would then carry around his life savings in cash and subject himself to the risk that this cash would go the same way as the Fuengirola money. The obvious inference which must be drawn is that the two seizures of cash are not capable of being explained away as unfortunate coincidence and that James Baxter was carrying the cash seized from him by customs in Dublin Airport as a bagman for criminals.”

2. KNOWLEDGE, BELIEF AND RECKLESSNESS

There are a number of presumptions that come to the prosecution’s aid in relation to knowledge, belief and recklessness.

The presumptions can arise where the circumstances are such that it is reasonable to conclude that the accused knew or believed or was reckless (as to the property being the proceeds of criminal conduct). Where these kinds of circumstances arise, it is presumed that the accused knew or believed or was reckless unless the judge or jury is satisfied that there is a reasonable doubt that the accused so knew or believed or was reckless.

Unlike in relation to the proceeds of criminal conduct (see Section 1 above) the legislation does not give examples of circumstances in which it would be reasonable to conclude that an accused knew or believed or was reckless.

Section 7(4) provides that ‘knowing or believing that property is the proceeds of criminal conduct’ includes knowing or believing that it is probably the proceeds of criminal conduct.

The concept of recklessness is given its usual legal definition at Section 7(5) – a person is reckless if he/she disregards a risk of such nature and degree that the disregard of that risk involves culpability of a high degree.

SENTENCE GUIDELINES

What follows in this section is a selection of sentencing decisions, setting out some pertinent facts and the sentence imposed. The reader is referred to the full judgment (citations below, some hyperlinked) if further information is required.

PEOPLE (DPP) V MCHUGH [2002] 1 I.R. 352

Single count (under s.31(3) Criminal Justice Act 1994). IR£95, 785 and STG£7,240.00 found in McHugh’s home. Went to trial. Sentenced to 12 months imprisonment (unclear if there was an additional period of suspension). Ultimately, on appeal, the entire conviction was quashed without discussion of the factors influencing sentence.

DPP V CUNNINGHAM [2013] IECCA 62

Ten counts of money laundering. In excess of STG£2,400,000. Went to trial (‘exceptionally long’ – 44 days). Sentenced to 10 years imprisonment. Ultimately had conviction overturned following appeal, having spent three years in prison, and apparently later pleaded guilty to lesser charges (smaller amounts; based on recklessness rather than knowledge) for which he received a 5 year suspended sentence (see this article in the Currency).

DPP V TRIMBLE [2016] IECA 309

Four counts of money laundering. €292,850 and GBP£12,000. Guilty plea.

Circuit Court sentence: 4 years 6 months. No previous, true remorse, unlikely to come before courts again. Sentenced to 4 years 6 months in Circuit Court. Severity appeal.

Court of Appeal: sentenced to 5 years with final 2 years suspended.

DPP V CAREW [2019] IECA 77

Severity appeal. Two counts of s.7 money laundering (committed while on a 3 year suspended sentence for a prior similar offence).

Prior offence was money laundering – found in possession of €67,900 – no previous convictions, good employment history, one child with a significant medical condition. Sentence of three years imprisonment suspended for three years.

Four months after that sentence was imposed, accused found in possession of €191,160 in cash.

Ten months later, accused found in possession of €351,000 during an operation targeting a large trans-national organised crime group. Accused was a target of the operation. Uncontested evidence was that he was a trusted person in the organisation and highly involved in the organisation.

The sentencing judge dealt with all three matters (activation of suspended sentence, sentence on €191,160 incident, sentence on €351,000 incident) together, and imposed a sentence of imprisonment of 8 years.

Mr. Carew’s appeal against severity of sentence was dismissed.

DPP V AJIBOLA [2019] IECA 253

One count of s.7 money laundering. €32,000. Guilty plea.

Circuit Court sentence: 4 years with 2 suspended on conditions. Appeal against severity.

Court of Appeal reviewed Trimble, McHugh, Cunningham, and Carew and said:

They are not indicative of any clearly discernible trend in respect of how money laundering offences should be ordinally ranked, nor do they flag a particular approach being consistently applied. We therefore approach the matter from first principles.Appeal dismissed.

PEOPLE (DPP) V CLIVE KAVANAGH [2020] IECA 13

One count of s.7 money laundering. €829,265. Guilty plea.

Circuit Court sentence: 3 years imprisonment with final 18 months suspended on conditions. Undue leniency appeal.

Court of Appeal: Very lenient but not ‘unduly’ lenient. Dismiss appeal.

PEOPLE (DPP) V SINNOTT [2021] IECA 42

Undue leniency appeals. Three accused:

  • Sinnott: One count of s.7 money laundering. €109,000. Guilty plea. Circuit Court sentence: 12 months, fully suspended. Court of Appeal: Exceptional case, one extremely foolish and rash error of judgment. Not unduly lenient. Appeal dismissed.
  • Long: One count of s.7 money laundering. €201,000. Guilty plea. Circuit Court sentence: 2 years 6 months, fully suspended. Court of Appeal: Not a once-off act, caught up in criminal gang, making easy money. Unduly lenient. Sentence of 2 years 6 months imprisonment.
  • Joyce: One count of s.7 money laundering. €911,600. Guilty plea. Circuit Court sentence: 5 years with 2 years suspended. Court of Appeal: Error by sentencing court in identifying 7 years as headline, reducing that to 5 years, and then also suspending 2 years. Unduly lenient. Sentence of 7 years imprisonment with 3 years suspended.
DPP V TANYA BREEN [2021] IECA 331

Two counts of s.7 money laundering. €123,000. Guilty pleas.

Circuit Court sentence: 3 years 6 months imprisonment with final 6 months suspended. Severity appeal.

Court of Appeal: 3 years 6 months imprisonment with final 15 months suspended.

DPP V GIUSEPPE DIVICARRO [2022] IECA 205

Five counts of s.7 money laundering. €200,019.65. Guilty pleas.

Invoice redirect fraud. Accused described by judge as a “vital facility which he was providing to organised criminals” and further that “he was certainly playing a vital role in relation to realising the proceeds of the criminal conduct of other persons further up the chain”.

Circuit Court sentence: 5 years imprisonment with final 18 months suspended. Undue leniency appeal.

Court of Appeal: ‘We might have imposed a longer custodial period’ but sentence is not unduly lenient. Appeal dismissed.

DPP V JAMES CURTIS [2022] IECA 184

One count of s.7 money laundering. €376,550. Guilty plea. [Note: Also charged in relation to drugs valued at €646,093].

Circuit Court sentence: 4 years 6 months imprisonment.

Prosecution appealed on grounds of undue leniency – focus of appeal was on drugs sentence – no real discussion of money laundering sentence.

 

If you have been charged with a Money Laundering Offence it is important that you obtain legal representation.

Please contact Rafter Solicitors if you  are seeking advice.

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