Millions will stay frozen

An international fraudster jailed over a medical money laundering scheme has failed to get the Court of Appeal to agree to allow him to produce further evidence against a restraining order over accounts in New Zealand.

David Charles Rae had been jailed for 10 months in the US state of New Jersey on a charge of conspiracy to commit international money laundering in 2020.

He was said to have transferred to New Zealand the proceeds of fraudulent schemes committed in America in relation to that country’s Medicare scheme.

The commissioner of police applied to the High Court for a restraining order over more than $6.5 million in two bank accounts. It was granted.

Rae, however, said the commissioner did not tell the whole story to the High Court and the restraining order should have been rescinded when that became apparent.

At a later hearing, Justice Francis Cooke discharged the restraining order over one of the accounts but said the grounds for an order over the second account were established as they appeared to be tainted property and Rae appeared to have unlawfully benefited from significant criminal activity

Justice Cooke had said there was no dispute that certain key information was not put before the Court.

However, he said the commissioner had not acted in bad faith.

The Court of Appeal agreed and said the missing information would not have changed the outcome if it had been known for the one account that was now restrained.

It also said: ‘‘The public interest favoured ongoing restraint. Money laundering is a serious crime and one, we consider, that can be difficult to detect.

‘‘Mr Rae allegedly derived significant benefit from that crime in New Zealand and through similar offending abroad.’’

The court dismissed Rae’s application to bring further evidence and declined his appeal.

Rae – and three others from the US – were caught in an FBI sting. Rae had pleaded guilty and was sentenced and ordered to pay a money judgment of US$1.775 million.