Lance Burdett: Former police negotiator says law change on gang assets will serve as a great deterrent

The Government will today announce steps to make it easier for police to stop gangs and criminal groups hiding their assets to avoid seizure laws – and to stop criminals using KiwiSaver to shelter cash obtained through crime.

The NZ Herald understands the changes to the Criminal Proceeds (Recovery) Act outlined today will allow police to target those with links to gang and organised crime figures who may be being used to shelter assets or cash which are the proceeds of crime.

It will extend the law to cases where police believe ownership of assets, such as luxury cars or property, are put under the name of an 'associate' in an attempt to hide them and avoid the forfeiture provisions.

It would require those with a link to a gang or crime figure who did not have the income to afford such assets themselves to prove how they paid for them, or risk losing them.

Police would not have to prove somebody had benefitted directly from a specific crime, but would have to point to a lack of income and an association with an organised criminal group.

It is also aimed at targeting the leaders of criminal groups who may not have directly committed a crime themselves but benefit from its profits of it.

The changes will also allow police to seize New Zealand-based assets in cases where the person has gone overseas, by issuing an order to them overseas giving them two months to prove how they have obtained the asset in question.

Potential sticking points for the law changes could be in the definitions of who is covered by the term 'associate' - such as whether it includes family members, friends and business associates – and in the threshold of proof of a link at which police can invoke the new provisions.

The Government will also move on a loophole exposed by court rulings in the case of convicted fraudster Joanne Harrison which prevented police from seizing her $110,000 KiwiSaver balance to repay her fraud and allowed Harris' bid to withdraw about $23,000 early on the grounds of financial hardship.

In 2021, the Court of Appeal said it required an "urgent legislative fix", and police also flagged concern that the ruling would result in criminals using KiwiSaver to shelter money because it would be exempt from being seized under criminal proceeds legislation.

In 2017, Harrison was convicted of defrauding the Ministry of Transport out of more than $780,000 – she was deported to Britain after being released from prison in January 2019, after serving less than two years of a 3-year and 7-month sentence.

More than $1 billion worth of real estate, luxury cars and cash has been taken from drug dealers, gangs and other criminal groups since the Criminal Proceeds (Recovery) Act was passed in late 2009.

The moves to boost the Criminal Proceeds (Recovery) Act were foreshadowed by the Government earlier this year, after the NZ Herald reported the Government was looking at the changes in January.

Briefings last year revealed the Ministry of Justice expected the changes to result in a further $25 million in assets being seized each year.

The briefings to then-Minister of Justice Kris Faafoi last year said changes were recommended to stop leaders of gangs and organised crime groups structuring their affairs to "insulate" themselves from involvement, or even knowledge of, profit-driven crimes committed by their members.

"These leaders and other members nonetheless provide the structure within which this criminal activity takes place and will derive benefit from this structure," briefings to Justice Minister Kris Faafoi show.

"For example, drug-related organised crime in New Zealand is structured into franchises and pyramid schemes, so that the leaders and senior members who receive a portion of profits are distanced from the criminal activity.

"They also created distance between themselves and their illicit activities by using intermediaries, third-party relatives or friends, associated business people, apparently legitimate businesses and legal entities such as companies and trusts."

The Government has come under fire for its gang policy by the National Party, which has claimed police did not have the powers or resources to tackle a gang environment that had been exacerbated by the Australian deportee's policy.

In July, Justice Minister Kiri Allan and Police Minister Chris Hipkins announced a range of measures, including a new offence of firing a gun with intent to intimidate, new search powers to find and seize weapons from gang members during a gang conflict, and widening police powers to impound motorbikes and vehicles.

It is also expected to announce a youth justice package soon.

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