ML CASE STUDIES - Money laundering conviction does not require proof of a specific predicate offence

Well-established case law across multiple COMMON LAW jurisdictions—including Mauritius, the UK, and other Commonwealth countries—affirms that a money laundering conviction can be sustained without the prosecution having to prove a specific predicate (underlying) offence, as long as it's shown that the property in question is criminal in origin and the accused knew or suspected this.

Here are some key cases that support this principle:

1. DPP v Bholah [2011] UKPC 44 (Mauritius / Privy Council)

• Held: The prosecution does not need to prove a specific predicate offence under Mauritian anti-money laundering laws (ECAMLA).
• The Privy Council emphasised that requiring proof of a specific offence would defeat the objective of anti-money laundering regimes, which are designed to target handling of proceeds of crime, even when the exact crime is unknown.
• SEE BELOW FOR AN OUTLINE OF THIS CASE

2. R v Anwoir [2008] EWCA Crim 1354 (UK) - https://crimeline.co.uk/wp-content/uploads/2014/02/anwoir2008ewcacrim1354.pdf

• Held: The Court of Appeal confirmed that it is sufficient to prove that the property was criminal in origin without proving the specific crime.
  • The prosecution can either:

a) Show that a specific crime occurred, or

b) Use circumstantial evidence to show that the property was derived from criminal conduct.

3. R v Montila [2004] UKHL 50 https://publications.parliament.uk/pa/ld200405/ldjudgmt/jd041125/mont-1.htm

• Held: Knowledge or suspicion that property represents the proceeds of *some* criminal conduct is sufficient; proof of a specific criminal act is not required under the Proceeds of Crime Act 2002.
• This case clarified the “MENS REA” (mental element) required for money laundering, emphasising the role of suspicion.

4. R v NW [2008] EWCA Crim 2 https://vlex.co.uk/vid/r-v-w-n-793165589

• Held: It is not necessary to identify or prove the exact predicate offence, as long as the defendant knew or suspected the property was criminal property.
• This case affirmed the reasoning in “ANWOIR” and emphasised flexibility in proving criminal origin.

5. FSA v Mabey & Johnson Ltd [2009] (UK) https://www.spotlightcorruption.org/wp-content/uploads/2024/07/Mabey-Johnson-transcript-25-Sept-2009.pdf

• Held: The court accepted evidence of widespread corruption in foreign jurisdictions without needing to identify particular bribes.

• This case confirmed the courts' realistic approach in complex financial crimes where direct links to a predicate offence may be obscured.

Principal Extracted:

• Across these cases, courts recognise that:

• • Money laundering statutes are intended to target financial handling of criminal property, not necessarily to re-prove the original crime.
  • Requiring proof of a specific predicate offence would undermine the effectiveness of anti-money laundering legislation.
  • Knowledge or suspicion that property is derived from some kind of criminal activity is typically enough.

THE CASE OF DIRECTOR OF PUBLIC PROSECUTIONS V A.A. BHOLAH [2011] UKPC 44

The case of Director of Public Prosecutions v A.A. Bholah [2011] UKPC 44 is a significant decision by the Judicial Committee of the Privy Council concerning money laundering laws in Mauritius and the constitutional right to a fair trial.

 Significance

1. This decision clarifies that, under Mauritian law,
• A money laundering conviction does not require proof of a specific predicate offence,
• Provided the accused is sufficiently informed of the nature of the alleged criminal activity.
2. It underscores the balance between effectively enforcing anti-money laundering laws and the accused's constitutional rights.

Background

• Mr. A.A. Bholah, a director of Apparel Exports Ltd, was charged with money laundering under the Economic Crime and Anti-Money Laundering Act 2000 (ECAMLA).
• In 2001, substantial sums were transferred into his company's bank account from Mr. Jose Maria Martin Nunez's account at ABN Amro Bank in Miami.
• These funds were subsequently moved to various accounts outside Mauritius.
• Evidence indicated that Mr. Nunez had not authorised these transfers, suggesting the funds were proceeds of a crime.  

In 2004, Mr. Bholah was convicted by a magistrate.

• In 2004, Mr. Bholah was convicted by a magistrate, who determined that he had transferred money he had reasonable grounds to suspect was proceeds of crime.
• The magistrate held that, under section 17(7) of ECAMLA, the prosecution was not required to specify or prove a crime from which the money originated.  

• (ECAMLA had been replaced by the Financial Intelligence and Anti[1]Money Laundering Act 2002, section 6(3) of which re-enacts section 17(7) in the same terms).
• The magistrate held that she could infer from the evidence that the monies were the proceeds of criminal activity.

2009 Supreme Court Appeal

1. Mr. Bholah appealed to the Supreme Court of Mauritius, which quashed his conviction in 2009 on two grounds:
   1. Constitutional Conflict:
      1. The court found that section 17(7) of ECAMLA conflicted with section 10(2)(b) of the Mauritian Constitution, which guarantees the right to be informed in detail of the nature of the offence.
      2. The court held that the prosecution must specify and prove the precise offense that generated the proceeds of crime
   2. Fair Trial Concerns:
      1. The court concluded that, due to the lack of detailed information about the predicate offence, Mr. Bholah was unable to prepare an adequate defence, rendering the trial unfair.

2011 Privy Council Decision

1. The Director of Public Prosecutions appealed to the Privy Council, which delivered its judgment on 20 December 2011.
2. The Privy Council allowed the appeal, reinstating Mr. Bholah's conviction.
3. Key findings included:
   1. No Need to Prove Specific Predicate Offence:
      1. The Privy Council held that, under section 17(1)(b) of ECAMLA, proving a specific predicate offence was unnecessary.
      2. The court emphasised that money laundering laws are designed to address situations where the exact origin of illicit funds may be obscured.
   2. Fair Trial Requirements:
      1. While the prosecution is not required to specify the exact predicate offence, the accused must be adequately informed of the nature of the criminal activity alleged.
      2. In this case, Mr. Bholah was made aware that the funds were suspected to be proceeds of a fraud involving forged bank transfers, satisfying the requirements for a fair trial.

 Significance

1. This decision clarifies that, under Mauritian law, a money laundering conviction does not require proof of a specific predicate offence, provided the accused is sufficiently informed of the nature of the alleged criminal activity.
2. It underscores the balance between effectively enforcing anti-money laundering laws and the accused's constitutional rights.

For the full judgment, refer to

• The [Judicial Committee of the Privy Council's official website]( https://jcpc.uk/cases/jcpc-2010-0059 ).

• https://jcpc.uk/cases/jcpc-2010-0059
• https://jcpc.uk/uploads/jcpc_2010_0059_judgment_3f1c122e5f.pdf
• https://vlex.co.uk/vid/dpp-v-bholah-807398593?utm_source=chatgpt.com

SOURCES

1. https://www.lawgazette.co.uk/law/proceeds-of-crime/63939.article?utm_source=chatgpt.com
2. https://www.casemine.com/judgement/uk/5b2897ff2c94e06b9e19ec87?utm_source=chatgpt.com

FCC v Patel Supreme Court

DPP v Bholah [2011] UKPC 44.36 and UK case of R v Anwoir [2009] 1 WLR 980