Dirty Money: Defending Money Laundering Charges in New Zealand
Money Laundering Cases Are on the Rise in New Zealand
New Zealand has seen a sharp increase in the prosecution of money laundering offences in recent years. Authorities estimate that approximately $1.3 billion is laundered through New Zealand’s financial system annually, primarily from drug offending, fraud, and organised crime.
With agencies like the New Zealand Police Financial Crime Group, National Organised Crime Group and the Serious Fraud Office (SFO) increasing their focus on financial crime, money laundering prosecutions have become more frequent and sophisticated.
For individuals facing these allegations, a clear understanding of the law — and a strong defence — is critical.
What is Money Laundering in New Zealand?
Money laundering is governed primarily by section 243 of the Crimes Act 1961.
To prove money laundering, the prosecution must establish beyond reasonable doubt that:
The defendant dealt with property
("Dealing" includes concealing, transferring, using, disposing of, or receiving property.)The defendant concealed the property or enabled any person to do so
(Concealing property in the context of money laundering means hiding or disguising the nature, source, location, ownership, or control of property known or believed to be the proceeds of crime. However, the prosecution need not prove that the defendant intended to conceal the property, just that it was in fact concealed)The property was the proceeds of an offence
(The Crown must prove that the property derived from criminal offending, even if no one has been convicted of the underlying crime. However, the Crown doesnt need to prove the discrete offence that the property came from, nor that the defendant was involved in it)The defendant either knew, believed, or was reckless
as to the fact that the property was the proceeds of an offence.
The law distinguishes carefully between knowledge/belief, and recklessness, both requiring different levels of proof.
What is Required to Prove “Knowledge” or “Belief”?
To prove a money laundering charge under section 243 of the Crimes Act 1961, the prosecution must show that the defendant knew or believed that the property was the proceeds of an offence.
Knowledge and belief are legally distinct but closely related:
Knowledge
A person has knowledge when they are sure or certain of a fact.
In this context, the prosecution must prove that the defendant was sure that the property was derived from criminal offending.
Belief
A person believes a fact if they accept it as being true, even if they are not completely certain.
Belief requires more than just suspicion or speculation.
It is not enough for the defendant to merely suspect that the property might be criminal proceeds — they must have accepted in their own mind that it was the proceeds of crime.
Thus, belief sits between mere suspicion and full knowledge: it is a positive acceptance of a fact’s existence, though it falls short of certainty.
Important points to note:
The prosecution does not need to prove the defendant knew the specific nature of the underlying offence — only that they knew or believed the property was derived from some criminal activity.
Belief can be inferred from circumstances, such as the way the transaction was structured, but it must be the only reasonable inference based on the evidence.
What is Required to Prove “Recklessness”?
The Crown may alternatively prove that the defendant was reckless in dealing with criminal proceeds.
Recklessness requires proof that:
The defendant recognised there was a real possibility that the property was the proceeds of an offence; and
Despite recognising that risk, they unreasonably went ahead and dealt with the property.
In simple terms:
The defendant must have consciously appreciated the risk that the property was tainted.
Their conduct must have been unreasonable by the standards of a reasonable and prudent person.
It is not enough that the defendant was merely careless or failed to ask questions. Recklessness involves a conscious disregard of a recognised risk.
Common Scenarios Leading to Charges
Money laundering allegations frequently arise in the context of:
Large cash deposits inconsistent with known income (within either business or personal accounts)
Complex movement of funds between domestic and offshore accounts
Purchases of high-value assets (e.g., property, vehicles) with unclear funding sources
Use of third parties ("money mules") to obscure ownership or control of property
Because these cases often involve sophisticated financial transactions, prosecutions typically rely on forensic accounting evidence and inferences drawn from patterns of conduct.
Defence Strategies for Money Laundering Allegations
A successful defence must directly address the elements the Crown must prove — particularly whether the funds were derived from criminal activity and the defendant’s knowledge, belief, or recklessness of that fact, if proven.
1. Challenging Knowledge, Belief, or Recklessness
The prosecution must prove beyond reasonable doubt that the defendant either knew, believed, or was reckless about the criminal origins of the property.
Key defence tactics include:
Arguing that the defendant had no knowledge or belief about the property's origin
Demonstrating that the defendant genuinely believed the property was legitimate
Arguing that there was no conscious appreciation of risk (for recklessness)
Where belief or recklessness is inferred from circumstantial evidence, the defence can argue that such inferences are not the only reasonable explanation.
2. Tracing and Explaining the Source of Funds
Establishing a legitimate origin for the property is crucial. This may involve:
Producing evidence of lawful income (business profits, inheritances, legitimate loans)
Demonstrating legitimate business transactions
Engaging expert forensic accountants
A credible, documented source of funds can significantly undermine or be fatal to the Crown case.
3. Challenging Proof that Property is Proceeds of Crime
The prosecution must prove the property’s criminal origin. Defences may challenge:
Whether the property can be reliably linked to an offence
The sufficiency and credibility of the evidence tracing the property's source
Whether the value of the alleged proceeds matches the property at issue
Any reasonable doubt about the criminal source of the property should result in an acquittal.
4. Scrutinising Investigative Procedures
Money laundering investigations often involve search warrants, surveillance, and financial record subpoenas.
Defence lawyers must carefully examine:
Legality of search warrants, production orders and other investigative measures
The nature of any forensic examinations conducted on electronic items (e.g. cell phones or computers)
Admissibility of expert financial evidence
If crucial evidence was improperly obtained, it may be excluded under the Evidence Act 2006.
5. Dealing with Asset Forfeiture Proceedings
Parallel to criminal charges, authorities may pursue the restraint and forfeiture of assets under the Criminal Proceeds (Recovery) Act 2009. Defence strategies include:
Tracing assets to legitimate, untainted sources
Challenging assumptions that assets are derived from criminal offending
Raising arguments of proportionality and undue hardship
Successfully resisting forfeiture actions can help protect the client’s financial future, even if a criminal case proceeds.
Why Early Legal Advice Matters
Money laundering prosecutions are complex, often involving:
Voluminous financial records
Expert accounting evidence
Fine distinctions between knowledge, belief, and recklessness
Parallel civil forfeiture proceedings
Securing early, specialised legal advice is crucial. An experienced criminal barrister can manage investigations strategically, preserve evidence, and build a proactive defence from the outset.
Facing Money Laundering Allegations? Get Legal Advice Now
If you are under investigation or facing charges for money laundering, taking early, informed steps is vital.
Contact Steven Lack — an experienced Auckland criminal defence barrister — for strategic, discreet representation in serious financial crime matters. Click here to get an understanding of Steven Lack’s extensive experience in defending complex allegations of money laundering.