Follow the money
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He was described as “a modest, gangly, bespectacled man”, who said he had been duped into helping the Comancheros motorcycle gang hide money.
Lawyer Andrew Simpson might have continued to be the dupe of a notorious gang of drug dealers, and line his own pocket at the same time, but instead he is in prison after admitting to 13 charges of helping the Comancheros launder drug money.
He set up a trust account for the purpose and, in the words of the judge who sentenced him, this unassuming family man “lent credibility” to a fiercely venal criminal organisation and brought his own profession into disrepute.
Standing in the dock in a plain and slightly ill-fitting suit, Simpson appeared the polar opposite of his co-accused, Comancheros vice-president Tyson Daniels, whose buff physique was accentuated with a tight-fitting, long-sleeved Versace top featuring the gang’s gold and black colours.
It seems these flamboyant outlaws never miss an opportunity for self-promotion (last year it was Instagram photos of their gold-plated Harleys – motorbikes that were later seized by police).
This odd couple laundered nearly $1.4 million in cash – part of the untaxed profits regularly being reaped around the world from selling illegal drugs (estimated at $750m a year in New Zealand).
The lawyer, painted by his defence team as gullible and unaware he was involved in money laundering, nonetheless knew how to hide money from the authorities.
It was deposited into bank accounts in amounts of less than $10,000 to avoid triggering the threshold for checking large transactions. It was then deposited into Simpson’s trust account and used to buy, among other items, a truckload of ostentatious vehicles, including a Lamborghini, two Rolls-Royces and four Range Rovers (because you can never have too many of those) and property assets.
The scale of offending and its damaging effect on vulnerable communities in New Zealand might have continued but for the collective work of the three specialist crime units that make up Police’s Financial Crime Group (FCG).
The FCG provides a suite of tools to enable the country’s law enforcement agencies to combat organised crime.
They track money laundering and target assets, hitting criminals in the pocket where it really hurts – and it’s working.
In the past couple of years, Police has made a series of impressive high-value drug busts, including those involving Andrew Simpson and the Comancheros.
The assets recovered in that operation will be added to the FCG’s tally as it heads towards a target of restraining $500 million worth of assets by July 2021. This target was set on July 1, 2017. As of August 21, 2020, Police has restrained an estimated $388 million worth of assets and is on track to meeting, and probably exceeding, the $500 million target.
But it’s not easy work: catching these kinds of thieves requires a lot more than just a hunch.
Complex forensic accountancy and financial analysis are part of a whole-of-government approach that includes Customs, the Serious Fraud Office, Inland Revenue, several other government ministries, Interpol and other overseas agencies.
The FCG is made up of: the Financial Intelligence Unit (FIU), which receives, analyses and disseminates financial intelligence in support of organised crime and counter terrorism investigations; the Asset Recovery Unit (ARU) – which undertakes the restraint and forfeiture of criminally acquired or derived assets for all government law enforcement agencies; and the Money Laundering Team (MLT) – the newest member of the team, set up three years ago. The MLT are responsible for investigating money laundering syndicates and professional money laundering facilitators.
There are over 150 staff across the wider FCG with varying backgrounds including constabulary staff, authorised officers, former bankers, police analysts and accountants.
The FIU is based at PNHQ, the MLT in Auckland and the ARUs in four regional centres (Auckland, Hamilton, Wellington and Christchurch).
The buzz word is “disruption”, which deals a blow to criminal groups and their “professional facilitators” (the lawyers, accountants, real estate agents and bankers who work for them) when their financial networks are exposed and their assets seized.
The press releases and media reports that follow each successful raid inevitably feature an array of firearms, drugs and way more cash than you could ever hide under a mattress, carefully laid out for the photographers.
Expensive “toys” – boats, cars, motorcycles – forfeited as the proceeds of crime are paraded for media before the assets are towed away to be handed over to the official assignee. Drug money also finds its way into luxury real estate and high-value goods, such as jewellery, and Bitcoin is gaining in popularity.
As FIU manager Detective Inspector Christiaan Barnard points out, most gang members are prepared to wear a spell in prison if they believe they can resume their activities when they are released,
“but if you take away their money and assets, it’s a powerful disincentive because it’s so much harder to rebuild”.
“We’re targeting their motivation and we know we are having an effect.”
Any financial or property transactions with the merest whiff of suspicion about them (sometimes literally when bank notes smell of cannabis) are raised with the FCG.
Since 2009, under anti-money laundering rules, various sectors are legally obliged to report suspicious activity. With a low threshold for what constitutes suspicious activity, and 4000 reporting entities, including banks, insurers, casinos, mortgage brokers, financial markets and the Department of Internal Affairs, the result is up to 12,000 reports a year.
Every report is triaged by the FCG, which then trawls financial records, cross-references bank accounts and looks for any patterns that might signal criminal activity.
As a result, the FIU continues to amass a substantial archive of financial intelligence on organised crime targets.
It’s this rich resource that the FCG makes available to all Police districts. “We love it when investigators come to us early on in their investigations. We are eager to share our intelligence, and for investigators early engagement is key,” Christiaan says.
“We can provide them with a range of intelligence that supports their investigative outcomes such as the identification of assets and financial network analysis.”
As Detective Senior Sergeant Keith Kay, the OC of the Waikato/BOP ARU, noted last month after yet another significant seizure of drugs and assets in his area: “Organised crime is all about money.”
The FCG teams may lack the grunt and swagger of high-profile frontline policing, but they make up for that with cutting-edge gang-busting techniques, matching the sophisticated strategies of modern drug-dealing cartels with their own smart intelligence and diligent back-room attention to financial detail.
The FCG also protects New Zealand by casting its net over potential terrorist financing, working with partner agencies to develop leads, monitoring payments to individuals and high-risk jurisdictions; the investigation of the use of New Zealand legal structures in “proliferation” – the financing of weapons of mass destruction; and following up alleged breaches of UN sanctions.
An FIU report last year, saying that domestic criminal activity was generating $1.35 billion for money laundering each year, led to a breathless assertion from a New Zealand Herald reporter that the country was “awash with dirty money”.
Certainly, the FIU has identified several sectors that remain a high risk for abuse by criminal organisations, including the emerging risk of cryptocurrencies along with international remittance and investment in local assets (such as the aforementioned property and luxury goods).
Meanwhile, an increasing number of ill-gotten gains acquired with that dirty money continue to fill the well-hidden warehouses of the official assignee.