Asset Forfeiture

30 July 2023 in Criminal Law

Asset forfeiture is a legal process by which the government seizes property that is believed to be connected with criminal activity. This can include cash, vehicles, real estate, and other types of property. The goal of asset forfeiture is to disrupt criminal conduct and organisations by depriving them of the proceeds of their illegal activities. In some cases, the property seized through asset forfeiture is sold, and the proceeds are used to fund law enforcement activities or other public programs.

Asset Forfeiture in NSW

There are three legislative regimes that allow property obtained through criminal activities to be forfeited. The primary goal of these Acts is to prevent offenders from benefiting from criminal offences and to preserve evidence. However, many of the provisions within these Acts place a significant financial burden on any defendant or offender.

These three legislative regimes are:

Proceeds of Crime Act 2002 (Cth)

The Australian Federal Police (AFP) and Commonwealth Director of Public Prosecutions (CDPP) can apply to court for an order to withhold proceeds of crime related to Commonwealth offences. These types of orders include Freezing, Restraining, Forfeiture and Pecuniary Penalty Orders.

Confiscation of Proceeds of Crime Act 1989 (NSW)

The NSW DPP, the Commissioner of the Independent Commission Against Corruption (ICAC), or the NSW Police Commissioner can apply to court for an order to withhold “tainted property” related to NSW offences. The types of orders available include Forfeiture, Pecuniary Penalty, Drug Proceeds, Freezing Notice and Restraining Orders.

Criminal Assets Recovery Act 1990 (NSW)

The NSW Crime Commission can withhold proceeds of crime by seeking and obtaining from the court, a Restraining, Forfeiture, Proceeds Assessment or Unexplained Wealth Order.

Types of Orders

Restraining orders

Restraining orders are legal measures that prevent an individual from managing or disbursing their assets. These orders are preventative measures to ensure that the person does not conceal any illegal assets before a conviction or forfeiture order can be obtained.

If someone intentionally violates a restraining order by disposing of the property that is subject to the order, they may be charged with a separate offence under Section 58L of the Victims Support and Rehabilitation Act 1996. This offence carries a penalty of a fine equal to the value of the property and/or imprisonment for up to 2 years. If the case is heard in the Local Court, the maximum penalty is $10,000.

Pecuniary penalty

If an offender has gained any financial benefits from a criminal activity, they may be subject to a pecuniary penalty order that obligates them to repay the amount. This type of order is designed to impose a financial penalty on the offender.

Drug proceeds orders

Drug proceeds orders function in a similar way to pecuniary penalties, but they only apply to cases where the crime involves drug trafficking. Pursuant to Section 29 of the Confiscation of Proceeds of Crime Act 1989, this court order mandates that the defendant, who has been convicted of a drug trafficking offence, must pay a penalty equivalent to the profits the defendant made from drug trafficking.

Forfeiture order

A forfeiture order is a court order that enables the DPP to seize a person’s assets under Section 18.1 of the Confiscation of Proceeds Crimes Act 1989, which is imposed by the District Court or the Supreme Court. The DPP may apply to the court for a forfeiture order after a person has been convicted of a serious offence.  Where the court finds, on the balance of probabilities, that the property is “tainted” property, the court may order that the property is forfeited to the State.

Proceeds assessment and unexplained wealth orders

Proceeds assessment orders are made when an individual obtains financial gain from the unlawful activities of someone else.

On the other hand, unexplained wealth orders are utilised when the origin of a person’s wealth cannot be established or tracked, but the NSW Crime Commission has grounds to believe that it was acquired through illegal means.

In both situations, a court may impose an order that mandates the individual to pay the NSW Treasurer the amount equal to the value of the proceeds gained through the illegal activity or the value of unexplained wealth.

Challenging Orders

It’s important to consult with an experienced criminal lawyer if you wish to challenge a proceeds of crime order. In court, law enforcement agency applications can be challenged by showing that the orders requested are unnecessary and do not meet the legal requirements to make such an order.

After an order has been granted, there are two legal causes of action that can be taken. The first is to apply under Section 94 of the Proceeds of Crime Act to exclude property from forfeiture if it can be proven that it was obtained from a legitimate source. However, this must be initiated as soon as possible after conviction, as there is a 15-month limit from the date of conviction or sentencing after which the property will automatically be forfeited.

The second option is to negotiate a settlement, which may involve giving up part of the property. Such negotiations can take place with the CDPP or the NSW Crime Commission.