Money laundering and proceeds of crime in Australia.

The sentence in summary.

The man was charged after an investigation by the Victorian Joint Organised Crime Taskforce, which brings together the Australian Federal Police, Victoria Police, the Australian Border Force and others. He pleaded guilty to four counts. The first was attempting to import a commercial quantity of a border controlled drug, 63 kilograms of methamphetamine, contrary to section 307.1(1) of the Criminal Code (Cth) by way of section 11.1. The second was dealing with money believed to be proceeds of crime of more than $100,000, contrary to section 400.4(1). The remaining two were state trafficking counts under the Drugs, Poisons and Controlled Substances Act 1981 (Vic). The court imposed 17 years with a non-parole period of 11 years and six months. The AFP release is here.

Money laundering rarely stands alone. It usually sits next to the crime that produced the money, most often drug trafficking, fraud or tax evasion. This note sets out what money laundering is under Australian law, how much money it takes, how the prosecution proves it, and how the courts sentence it. The person sentenced this week has been dealt with. Nothing here comments on any matter still before a court.

What is considered money laundering in Australia?

Money laundering is the handling of dirty money. The main offences are Commonwealth offences. They sit in Chapter 10, Part 10.2, Division 400 of the Criminal Code (Cth), sections 400.3 to 400.9. Each offence is about dealing with money or property that is the proceeds of crime, or that is at risk of becoming an instrument of crime. Proceeds of crime is money or property derived, directly or indirectly, from an indictable offence. An instrument of crime is money or property that is to be used in committing an offence.

Dealing is defined broadly. It covers receiving, possessing, concealing, disposing of, importing, exporting, and engaging in a banking transaction with the money or property. The New South Wales Court of Criminal Appeal has described these offences as a 21st century response to serious crime that often has an international element: R v Ansari (2007) 70 NSWLR 89. The conduct caught runs from cash carried across a border to funds pushed through shell companies. The Judicial Commission of NSW collects the sentencing authorities.

What qualifies as money laundering?

A single act can qualify. A person does not need to run an elaborate scheme. Taking cash from a drug sale and buying a car with it is a dealing with proceeds of crime. So is moving money between accounts to hide its source, or receiving money for someone else and passing it on. The offence does not require the person to conceal anything. If the money is proceeds of crime and the person deals with it with the required state of mind, the offence is made out.

A person can also launder their own money. This is called self-laundering. Someone who commits a fraud and then spends or hides the proceeds can be charged both with the fraud and with money laundering. That is why a drug importer, like the man sentenced this week, can face a separate money laundering count on top of the import charge. The two offences target different conduct. One is bringing the drug in. The other is handling the money the trade produces.

How much money is considered to be money laundering?

Any amount can be money laundering. Division 400 is a graduated scheme. The value of the money or property, and the offender's state of mind, are the two dials that set the maximum penalty. The greater the sum, the higher the maximum. As the courts have put it, the amount of money is the primary marker of how serious the offence is: R v Li (2010) 202 A Crim R 195.

The thresholds step up through $1,000, $10,000, $50,000, $100,000 and $1,000,000, with a top tier for $10,000,000 or more. Dealing with $100,000 or more intending it to be proceeds of crime, the offence in section 400.4(1), carries a maximum of 20 years. Dealing with $1,000,000 or more carries 25 years under section 400.3. For the very largest sums, $10,000,000 or more, the maximum reaches life imprisonment. The lowest tier, section 400.9, covers dealing with money that it is reasonable to suspect is proceeds of crime, and carries up to three years where the value is $100,000 or more.

How do they prove money laundering?

The Crown must prove three things. First, that the accused dealt with the money or property. Second, that the money or property was proceeds of crime, or that there was a risk it would become an instrument of crime. Third, the fault element that matches the charge. The fault element is where the offences divide. The most serious require intention or belief that the money is proceeds of crime. Others require recklessness. Others again require only negligence. The least serious, section 400.9, requires no fault at all beyond the objective fact that it is reasonable to suspect the money is dirty.

The Crown does not have to prove which crime produced the money. It does not have to name the fraud, the drug deal or the theft. It only has to prove that the money was proceeds of some indictable offence, and that the accused dealt with it with the required state of mind. The distinction between the fault elements matters at sentence. Under the principle in The Queen v De Simoni (1981) 147 CLR 383, a judge sentencing for a recklessness offence cannot punish the offender as if a more serious belief offence had been charged. The courts guard that line carefully: see R v Ansari on JADE.

What triggers a money laundering investigation?

Most investigations start with a report. Banks, casinos, remitters and other reporting entities must report suspicious matters and large cash transactions to AUSTRAC under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). A pattern of cash deposits just under $10,000, a sudden flow of money that does not match a person's income, or transfers to high risk destinations can all generate a report. The AFP and partner agencies then follow the money.

Breaking cash into amounts below the reporting threshold is a crime in its own right. It is called structuring, or sometimes smurfing. Structuring offences sit in sections 142 and 143 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). They carry lower maximum penalties than the Division 400 offences, and the courts have warned against treating a structuring sentence as a guide to a full money laundering sentence: R v Huang (2007) 174 A Crim R 370. The Commonwealth Director of Public Prosecutions sets out its approach in its money laundering guidance.

What are the 5 main indicators of money laundering?

Investigators and reporting entities watch for a handful of patterns. The common ones are transactions that do not match a person's known income or business; cash deposits or transfers kept just under the $10,000 reporting threshold; the fast movement of funds through many accounts or overseas; the use of third parties, shell companies or false identities to hold or move the money; and a refusal or inability to explain where the money came from.

None of these is proof of an offence. They are the flags that prompt a closer look. A person may have a good answer for an unusual transaction. That is why source of funds becomes the battleground in many of these cases. The defence often turns on whether the money can be traced to a lawful source, and on whether the accused knew or suspected anything about where it came from.

How is money laundering sentenced?

These are Commonwealth offences, so the offender is sentenced under Part IB of the Crimes Act 1914 (Cth). Section 16A lists the matters the court must weigh. General deterrence carries real weight, because money laundering is hard to detect and feeds serious organised crime: R v Guo (2010) 201 A Crim R 403. There is no settled sentencing range. The offences cover such a wide span of conduct that past cases give only a broad guide.

The court looks hard at what the offender actually did. Money laundering has a hierarchy, like drug importation. A person at the bottom who moves money for a fee, and who runs a high risk of being caught for a small reward, stands in a different position from the organiser who takes the profit and stays hidden. The number of transactions and the period they ran over matter, because they show the depth of the offending. At the top end, the New South Wales Court of Criminal Appeal upheld 12 years for laundering more than $63 million from a tax fraud in Dickson v R [2016] NSWCCA 105, available on JADE.

Is money laundering a state or a Commonwealth offence?

Both levels have offences. The Commonwealth Division 400 offences are the ones the AFP and the CDPP use, and they cover money connected with a Commonwealth, state, territory or foreign indictable offence. The states and territories also have their own money laundering offences. In New South Wales the offences are in sections 193B and 193C of the Crimes Act 1900, which is the framework behind a charge of dealing with proceeds of crime in a state matter. In the Australian Capital Territory the offence is section 114B of the Crimes Act 1900 (ACT).

Which set of offences is charged depends on who investigates and what the money is tied to. Money from a Commonwealth drug importation is a natural fit for a Division 400 charge. Money from a state offence, such as a break and enter or a local fraud, is often charged under the state provisions. The elements are similar in shape, but the penalties and the fault elements differ, so the choice of charge matters.

What defence work looks like in a money laundering case.

The defence starts with the elements. Was the money proceeds of crime at all? Can the Crown trace it to an indictable offence, or is there a lawful explanation for it? What did the accused know or suspect? A person who handled money without any reason to think it was dirty may lack the fault element for the more serious offences. The gap between belief and recklessness is often the whole case, because it decides which offence, and which maximum, is in play.

Where the evidence is strong, the work shifts to the plea. An early plea of guilty attracts a discount and is taken into account under section 16A. Role is the next fight. Placing the accused at the bottom of the chain, rather than the top, can change the sentence a great deal. Value is tested too, because a lower proven value can move the charge to a lower tier with a lower maximum. Each of these is a real lever, and each turns on the detail of the financial evidence.

Frequently asked.

What constitutes money laundering in Australia?

Money laundering is dealing with money or property that is the proceeds of crime, or that is at risk of becoming an instrument of crime, with the state of mind the charge requires. The main offences are in Division 400 of the Criminal Code (Cth), sections 400.3 to 400.9. Dealing includes receiving, holding, moving, converting or spending the money.

How much money is considered money laundering?

Any amount can be money laundering. Division 400 is graduated by value, with thresholds at $1,000, $10,000, $50,000, $100,000, $1,000,000 and $10,000,000. The value sets the maximum penalty; it does not decide whether an offence has occurred.

What is the maximum penalty for money laundering in Australia?

It depends on the value and the fault element. Dealing with $1,000,000 or more intending it to be proceeds of crime carries 25 years under section 400.3. Dealing with $100,000 or more carries 20 years under section 400.4. For $10,000,000 or more the maximum reaches life imprisonment. Lower amounts and lesser fault elements carry lower maximums.

How do they prove money laundering?

The Crown proves that the accused dealt with the money, that it was proceeds of crime or at risk of becoming an instrument of crime, and the fault element for the charge, which may be intention, belief, recklessness or negligence. It does not have to prove which underlying crime produced the money. For the least serious offence in section 400.9 it need only show it is reasonable to suspect the money is proceeds of crime.

Is self-laundering an offence in Australia?

Yes. A person can be charged for dealing with their own proceeds of crime. The Division 400 offences do not require the money to belong to someone else, so a person who hides, moves or spends money from their own offending can face a money laundering charge on top of the underlying crime.

What are the 5 main indicators of money laundering?

Transactions that do not match known income, cash kept just under the $10,000 reporting threshold, fast movement of funds through many accounts or overseas, the use of third parties, shell companies or false identities, and a refusal to explain the source of funds. Indicators are not proof; they are the patterns that prompt a report to AUSTRAC or a police inquiry.

To speak to a criminal defence lawyer, call Aaron Kernaghan on 0421 717 019.

This article is written by Aaron Kernaghan, criminal defence lawyer at Good Legal Lawyers, as at 3 July 2026. It is commentary and reflects the personal opinion of the author only. It is not legal advice, it is not a substitute for advice on your own matter, and it does not purport to be accurate or complete. Any matter referred to may be before the court and any person charged is presumed innocent. For advice on a specific matter, contact Aaron Kernaghan on 0421 717 019 or contact the firm.

More criminal-law commentary by Aaron Kernaghan.

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