Wealthy criminals have escaped money-laundering charges through a legal loophole which means they can go unpunished for spending their ill-gotten gains publicly.
The Government is pushing through a significant change to the Crimes Act charge of money laundering as part of wide-ranging legislative amendments to fight organised crime syndicates.
Documents released under the Official Information Act show Justice Ministry officials believe the wording of the money-laundering offence may not meet New Zealand's international obligations and are reviewing the "effectiveness" of the charge.
Money laundering is widely considered to include situations where criminals and their associates are prepared to deal with the profits or assets of criminal activity as apparently legitimate income. But court judgments have interpreted the charge to mean the Crown must not only prove the alleged launderer converted assets from one form to another, but did so with the "very purpose" of "concealing" the property.
A consequence of that ruling is that underworld figures have been acquitted of money laundering despite disposing of millions of dollars of cash or assets derived from serious crime such as drug dealing.
