COMMISSIONER OF POLICE v SHAHIDAN [2022] NZHC 2848

COMMISSIONER OF POLICE v SHAHIDAN [2022] NZHC 2848 [2 November 2022]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2020-404-000594[2022] NZHC 2848UNDER The Criminal Proceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF POLICEApplicantAND SHAHIDRAWADEY BIN SHAHIDANRespondentHearing: 24 August 2022Appearances: R E Budd for the ApplicantNo appearance by or on behalf of RespondentJudgment: 2 November 2022JUDGMENT OF POWELL JThis judgment was delivered by me on 2 November 2022 at 3.30 pm pursuant toR 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors/Counsel:Meredith Connell, Auckland[1] By way of formal proof, the Commissioner of Police seeks profit forfeitureorders against the respondent, Shahidrawadey Bin Shahidan ("Mr Shahidan"), in thesum of $2,201,383.65 being the total sum formerly held in two Bank of New Zealandbank accounts ("Igateway 00" and "Igateway 01" respectively) in the name ofIgateway Limited ("Igateway") which have been subject to restraining orders since 21April 2020.[2] The application has proceeded by way of formal proof at the direction ofMoore J,1 Mr Shahidan having taken no steps on the present application.[3] Under s 55 of the Criminal Proceeds (Recovery) Act 2009 ("the Act"), the HighCourt must make a profit forfeiture order if it is satisfied, on the balance ofprobabilities, that:(a) The respondent has unlawfully benefited from significant criminalactivity within the relevant period of criminal activity;2(b) The respondent has interests in property.[4] In this case the Commissioner asserted the criminal activity at issue was:(a) money laundering and receiving (offences under ss 243 and 246,respectively, of the Crimes Act 1961); and(b) the unlawful provision of financial services (an offence under s 11 ofthe Financial Service Providers (Registration and Dispute Resolution)Act 2008.[5] Considerable evidence has been placed before the Court with regard to whathas been alleged by way of criminal activity and how that activity relates to the moniesat issue. That evidence has in fact previously been considered by Katz J in determiningwhether to continue the restraining orders, an application opposed by Mr Shahidan inFebruary 2021.3 Having heard the evidence her Honour concluded that the source ofthe funds at issue was a fraudulent investment scheme based in Malaysia and carriedout between 2015 and 2016, known as the VenusFX scheme. The corporate entityunderpinning or associated with the VenusFX Scheme was a company called Venus1 Commissioner of Police v Shahidan HC Auckland CIV-2020-404-594, 19 July 2022.2 Seven years prior to the date of the application; see s 5 of the Act, definition of "relevant periodof criminal activity".3 Commissioner of Police v Shahidan [2021] NZHC 1328.Financial Markets Limited, a New Zealand company registered on 11 December 2015with Mr Shahidan as its sole director and shareholder. At around the same timeIgateway was also incorporated in New Zealand, and again Mr Shahidan was the soledirector and shareholder. Katz J found that between 24 February and 27 September2016, funds totalling $2,201,383.65 were deposited into the Igateway accounts, withthe timing of the deposits coinciding with the period in which VenusFX was believedto have operated, between January 2016 and January 2017.4 After noting that therewas no evidence to suggest that the monies deposited in the Igateway account in NewZealand were ever invested, and that indeed there were only minimal outgoings, KatzJ analysed the evidence, including evidence given by Mr Shahidan, and concluded thatthere were clearly reasonable grounds for believing that money laundering has takenplace in a sum that very significantly exceeds the $30,000 statutory threshold.5 KatzJ was also satisfied that Mr Shahidan had breached ss 11 and 12 of the FinancialService Providers (Registration and Dispute Resolution) Act 2008 by purporting toprovide a financial service without being registered, as well as by holding out that afinancial service was being provided by a registered provider.6[6] Finally, Katz J also concluded that there were reasonable grounds for believingMr Shahidan had benefited from the significant criminal activity identified, noting thatMr Shahidan was the sole account owner and authorised signatory for both of theIgateway accounts.7[7] The position has not materially changed since Katz J's judgment was issued.In addition to the material before Katz J there are now translations of variousMalaysian documents setting out the detail of the VenusFX scheme, and an affidavitfrom Navindran A/L Chandra, a Police inspector of Kuala Lumpur, who has provideddetails of the Malaysian investigation. Having considered the additional material filedand the submissions made by Ms Budd, I am satisfied it simply further strengthens therelevant conclusions set out in the earlier judgment.4 At [32].5 At [56].6 At [57].7 At [60]–[62].[8] I therefore conclude that it is appropriate to make the profit forfeiture order inthe sum of $2,201,383.65, to be disposed of in accordance with s 83(1) of the Act,being the following restrained property:(a) the funds formerly held in the Bank of New Zealand Igateway 00account (as more fully described in the Commissioner's application forcivil forfeiture orders dated 15 June 2022),8 and all interest earned onthem; and(b) the funds formerly held in the Bank of New Zealand Igateway 01account (as more fully described in the Commissioner's application forcivil forfeiture orders dated 15 June 2022),9 and all interest earned onthem._______________________________Powell J8 As at 23 April 2020, this account contained $35,438.51.9 As at 23 April 2020, this account contained $1,842,208.15.