By Professor Jeremy Gans
Some trace the term ‘money laundering’ to the coin-operated Chinese laundromats that Al Capone pretended were the source of millions he earned from Prohibition-era alcohol sales and vice. This dubious origin-story rests on some hard facts: that crime can pay, that it may pay a lot, but that not all money is equal. If criminals want to spend their profits without attracting attention to their crimes, they have to find a way to make it look like their riches were legitimately earned. That is, illicit money is of little value until it is ‘cleaned’.
The criminal law now adds to the wealthy criminal’s burden by deeming the act of money laundering to be an especially heinous offence in and of itself. In Australia, after police and prosecutors baulked at the dirty work of sorting out criminals’ financial shenanigans, legislatures and courts have recently stretched the offence’s definition to include simply handling any money or property en route to or from any crime. The result is that many very ordinary criminal acts can now also be charged as money laundering. Shoplifting. Bank robbery. Social security fraud. Commercial offences. Just about any crime that involves anything of value. That includes tax evasion, the only crime the Americans were able to pin on Al Capone. Or it did, until the High Court put a stop to the bloat of money laundering last month.
Airing some dirty laundry
On Valentine’s Day 2004, officers of the Australian Crime Commission entered a presidential suite in Melbourne’s Sheraton Towers (now The Langham), armed with a warrant to search for evidence that celebrity lawyer Michael Brereton had schemed to evade tax. Brereton himself was never charged with tax fraud, but the Toshiba notebook computer they seized (belonging to the room’s occupant, Philip Egglishaw) yielded a list of the clients of Egglishaw’s Geneva firm Strachan and prompted seven federal agencies to join forces to investigate offshore tax havens.
Project Wickenby has resulted in dozens of prosecutions and convictions and has featured at least yearly in the High Court’s caseload this decade. In 2010, the Court rejected attempts by one of Wickenby’s most famous (but also never charged) targets, Paul Hogan, to keep a document detailing his tax affairs secret. The next year, the Court ruled that the common law did not prevent the Commission from compulsorily examining one target’s wife. In 2010, 2011 and 2013, the Court dismissed three criminal appeals by convicted Wickenby targets. This run of successes in the High Court ended with this year’s Milne v The Queen  HCA 4. Continue reading