$1 billion of assets from alleged criminals frozen over decade
Real estate, luxury cars and cash seized from drug dealers, gangs since law change
More than $1 billion in alleged criminal wealth has been frozen in New Zealand since a powerful law targeting organised crime came into effect just over a decade ago, the Herald can reveal.
Expensive real estate, luxury cars and cash are among the assets restrained from drug dealers, gangs and other criminal groups since the Criminal Proceeds (Recovery) Act was passed in late 2009.
The data revealing the restrained proceeds was obtained under the Official Information Act.
The figures illustrate the force of the powers handed to the police amid concerns that prominent criminals were enjoying lavish lifestyles because law enforcers couldn’t pin specific criminal charges on them.
Before the law change, police had to secure a conviction to strip illgotten gains from underworld figures. To their frustration, this often failed to catch crime bosses, who limited their prosecution risk by staying distant from day-to-day operations.
Under the new law, detectives only had to show that someone profited from offending to the lower standard of proof applied in civil cases — “on the balance of probabilities” — rather than surpassing the more difficult “beyond reasonable doubt” threshold for criminal cases.
Asset seizure cases often run parallel to criminal prosecutions. Police apply to a High Court judge, usually without warning so suspected criminals and their allies haven’t time to hide or sell the assets.
Frozen assets are held by the Official Assignee, a government body that administers bankruptcies, until the High Court rules on whether they should be permanently forfeited to the Crown. The process takes two years, on average, but the most complex cases last much longer.
Because of that time lag, hundreds of millions of dollars restrained from alleged criminals is sitting in limbo. According to the data obtained by the Herald, assets frozen since 2009 amount to $1,038,765,090.36, but just under $330 million has been permanently forfeited so far.
By taking their money, we’re stopping them from expanding their criminal enterprise. Detective Inspector Craig Hamilton
Detective Inspector
Craig Hamilton, the national supervisor for criminal proceeds cases, told the Herald asset seizure has proven to be a powerful tool. “Organised crime is all about money,” Hamilton said.
“But money is also the biggest vulnerability for organised crime.
“By taking their money, we’re trying to take their power and influence. This is about crime prevention. By taking their money, we’re stopping them from expanding their criminal enterprise.”
According to the police’s risk analysis, about $1.3b a year is generated from criminal activity, mostly from supplying and distributing methamphetamine and cocaine. To combat this, police have got tougher powers and more manpower, with staff numbers increasing from a dozen investigators to 80 in the two decades Hamilton has worked in asset recovery.
The vast majority of the proceedsof-crime cases the police have pursued related to drugs, gangs and organised crime. Recently, they have increasingly been going after the proceeds of other alleged crimes including fraud, tax evasion, exploitation of slave labour, movie piracy and even a workplace fatality.
In several notable cases, police
Yong Ming Yan (alias William Yan) have worked with overseas law enforcement agencies to restrain assets in New Zealand allegedly derived from criminal activity abroad.
The highest-profile case involved William Yan, better known as Bill Liu, an “economic fugitive” wanted for an alleged large-scale fraud in China.
He agreed to pay $43m without admitting criminal or civil liability, the biggest settlement under the legislation so far.
But that could be dwarfed by other recent cases. In one case, the authorities froze around $70m in New Zealand bank accounts linked to Edward Gong, a businessman accused of fraud and money laundering in Canada. In another, they restrained $140m connected to Alexander Vinnik, a Russian computer expert accused of running a Bitcoin exchange that laundered money for criminal networks.
“We don’t want New Zealand to be seen as a soft touch,” Hamilton said. “If you want to bring proceeds of crime to New Zealand, you’re more likely to lose them here than any other country in the world. These results reflect that.”