Citation: R v Jiao [2014] NSWDC 352
Court: District Court of New South Wales
Date: 3 December 2014
Judge: Cogswell SC DCJ
Background
The accused faced prosecution for an offence under s 400.9(1) of the Criminal Code Act 1995 (Cth), which concerns dealing in money reasonably suspected of being proceeds of crime. The charge arose from her receipt of over $600,000 in cash at a Sydney casino and her subsequent attempt to remit some or all of those funds to another account.
In a record of interview, the accused gave extensive answers to police questions and offered an explanation for the funds that was, on its face, consistent with innocent conduct. Defence counsel relied on that explanation as the basis for an evidentiary objection.
Before trial, the prosecution sought a ruling on whether it could lead evidence from a Federal Agent of the Australian Federal Police concerning the methods used by money laundering syndicates, specifically the practice of depositing cash into casino gaming accounts and then moving those funds to create the appearance of legitimate winnings.
Legal Issues
- Whether expert evidence about money laundering methods employed at casinos was relevant to an element of the charged offence
- Whether such evidence was admissible given the accused's exculpatory explanation in her record of interview
- Whether the use of unexplained technical terminology ("layering") affected the admissibility of the proposed evidence
Decision
The central element requiring proof under s 400.9(1) is that "it is reasonable to suspect that the money is proceeds of crime." Cogswell SC DCJ held that evidence explaining how money laundering syndicates use casinos to move and legitimise cash was directly relevant to that element. The proposed Federal Agent evidence tended to establish that the circumstances surrounding the accused's transactions were consistent with a known criminal methodology, which bore directly on whether reasonable suspicion of criminal proceeds was made out.
The court rejected the defence argument that the accused's exculpatory record of interview neutralised the suspicious character of the funds. His Honour characterised that argument as a statement of the defence case rather than a reason to exclude the prosecution's evidence. The prosecution retained both the right and the obligation to prove the reasonable suspicion element through its own witnesses.
On the objection to the term "layering," the court noted that it was the prosecution's responsibility to establish the expertise of its witnesses and to define technical terms relied upon. However, the Crown Prosecutor indicated that the evidence would not in fact be led by reference to that expression, which resolved the specific objection without requiring a ruling on it.
Orders Made
• The evidence from the Federal Agent regarding money laundering processes is admissible
• The witness is allowed to give evidence regarding whether it is reasonable to suspect that the money is proceeds of crime
• The Crown Prosecutor is not to lead evidence by reference to the term "layering"
Key Takeaways
- Under s 400.9(1) of the Criminal Code Act 1995 (Cth), the prosecution must prove that it is reasonable to suspect that money constitutes proceeds of crime, and expert evidence capable of establishing that suspicion is relevant and admissible.
- The District Court confirmed that a defendant's exculpatory explanation in a record of interview does not, of itself, render prosecution evidence about the suspicious character of a transaction irrelevant or inadmissible.
- Expert or opinion evidence about the modus operandi of criminal syndicates can go to proving a statutory element of an offence, not merely to background context.
- Where technical terminology is used in proposed expert evidence, the responsibility to define those terms and to establish a witness's expertise rests with the party calling that witness.
- The court's ruling was narrowly confined to a pre-trial admissibility question; no broader findings were made about guilt or the ultimate weight of the evidence.
Legislation and Cases Referenced
Legislation:
- Criminal Code Act 1995 (Cth), s 400.9(1)
Cases cited:
No cases were cited in this decision.