Expert Legal Adviser MILTON FIRMAN asks: What is the legal meaning of Money Laundering?
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Money Laundering is the process by which criminal proceeds are sanitised to disguise their illicit origins. Acquisitive criminals will attempt to distance themselves from their crimes by finding safe havens for their profits where they can avoid confiscation orders, and where those proceeds can be made to appear legitimate.
Money laundering schemes can be very simple or highly sophisticated. Most sophisticated money laundering schemes involve three stages:
•Placement - the process of getting criminal money into the financial system;
•Layering - the process of moving money in the financial system through complex webs of transactions, often via offshore companies;
•Integration - the process by which criminal money ultimately becomes absorbed into the economy, such as through investment in real estate.
Prosecutions for money laundering can involve any of these stages in the money laundering process.
Money laundering offences are invariably serious. In summary, money laundering
•Incentivises crime by rendering it profitable;
•Provides domestic and transnational organised crime with a cash flow to perpetrate further crimes; and
•Threatens the financial system and its institutions, both domestic and international.
In deciding whether to prosecute, these following considerations should be taken into account:-
•The importance of making it more difficult for criminals to legitimise their ill-gotten gains;
•The importance of deterring professional launderers;
•The importance of protecting the integrity of financial institutions domestically and internationally.
There are 4 types of money laundering prosecution. There are, firstly, those "mixed" cases in which money laundering can be charged or included on an indictment in which the underlying proceeds -generating predicate offence is included.
The subsets of this are:
•"Own proceeds" or "self laundering", where the defendant in a money laundering case may also be the author of the predicate crime;
•Laundering by a person or persons other than the author of the predicate offence.
Secondly, there are those cases where money laundering is the sole charge capable of proof or the easiest charge to prove.
•"Own proceeds" laundering;
•Laundering by a person other than the author of the predicate offence
Under the pre-POCA law, there were separate offences for drug money laundering under the Criminal Justice Act 1988 and the Drug Trafficking Act 1994.
As the 2002 Act has substantially changed all principal money laundering offences and related definitions it will matter whether the conduct alleged to be the physical element of the offence was committed before or after the commencement of the Act. The provisions of the old legislation (DTA and CJA) will apply to conduct before the Act comes into force.
Part 7 of POCA came into force on 24 February 2003 and acts of money laundering begun on or after that date are offences under the new Act. When the predicate offence that generated the proceeds took place is immaterial in determining whether the Act applies.
S.340 (4) makes it clear that the new offences bite on the proceeds of criminal conduct that took place before commencement.
The new principal money laundering offences are now found in sections 327, 328 and 329 of the Proceeds of Crime Act 2002.
These offences came into force on 24 February 2003.
Money laundering is defined as an act which constitutes an offence under S.327, 328 and 329 or a conspiracy or attempt to commit such an offence. Money laundering includes counselling, aiding or abetting or procuring.
It should be noted that convictions for money laundering under sections 327 and 328 attract the use of the lifestyle assumptions under S.75 and schedule 2 Proceeds of Crime Act 2002.
Under the pre-existing law was that there were separate offences for drug money laundering under the Drug Trafficking Act 1994 and non-drug offences under the Criminal Justice Act 1988. The Crown sometimes had difficulties in pinpointing for the purposes of charging under the appropriate Act the source of the criminal proceeds.
Offences under S.327, 328 and 329 replace the parallel drug and non-drug money laundering offences with single offences that do not distinguish between the proceeds of drug trafficking and other crime.
Under the Proceeds of Crime Act, the Crown has to prove that the laundered proceeds are "criminal property", as defined in S.340 of the Proceeds of Crime Act: that is to say that the property constitutes a person's benefit from criminal conduct.
"Criminal conduct" is all conduct which constitutes an offence in any part of the United Kingdom.
Offences which were committed abroad are relevant predicate crimes if laundering acts are committed within our jurisdiction where the predicate offence committed abroad (from which proceeds were generated) would also constitute an offence in any part of the United Kingdom if it occurred here.
It is immaterial whether the criminal conduct occurred prior to the Act becoming law so long as the laundering act takes place post commencement.
To prove that property is "criminal property" (i.e. the proceeds of crime) the prosecutor must show the property:
•Constitutes benefit from criminal conduct or that it represents such a benefit (in whole or part and whether directly or indirectly) and;
•The alleged offender knows or suspects that it constitutes or represents such a benefit [section 340(3)].
The property which may comprise the benefit from criminal conduct is widely defined (see S.340  and ) to include:
•All forms of property or real estate;
•Things in action and other intangible or incorporeal property.
Property is obtained by a person if he obtains an interest in it.
Because of the definition of criminal property, there is no distinction between the proceeds of the defendant's own crimes and of crimes committed by others (see S.340 ). Thus laundering one's own proceeds is just as much money laundering, as similar activities performed by someone else, notably professional launderers on behalf of the authors of the predicate or underlying offences.
For more information on money laundering and the offences contained within the Proceeds of Crime Act 2002, here is the deal. Call Milton on 0161 485 1100 or 07909 900449 at any time or him at firstname.lastname@example.org
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