Money Laundering Charges
Clear advice on penalties, defences and what to expect through the Local and District Courts.
Money laundering in NSW is principally created by section 193B of the Crimes Act 1900 (NSW), which makes it an offence to deal with property that is the proceeds of crime. Unlike many offences, section 193B is structured around three distinct tiers based on the accused’s state of mind: dealing with property knowing it is proceeds of crime, dealing with it recklessly as to whether it is proceeds of crime, and dealing with it negligently — meaning a reasonable person in the accused’s position would have known. Each tier carries its own, significantly different maximum penalty, reflecting how much more seriously deliberate laundering is treated compared to careless or reckless involvement.
"Dealing with" property is defined broadly and includes receiving, possessing, concealing, disposing of, importing, or bringing property into NSW, or engaging in a banking transaction connected to it. It does not require the accused to have committed, or even known the specific details of, the underlying crime that generated the property — only that they held the requisite state of mind about its criminal origin. A related provision, section 193C, applies in a similar tiered structure to property that will become the proceeds of crime in the future, such as an advance payment for planned criminal conduct.
Money laundering investigations typically arise from suspicious matter reports made by banks and financial institutions, complex forensic accounting analysis, and often overlap with drug supply, fraud, or organised crime investigations. Because the offence depends heavily on what the accused actually knew, suspected, or ought reasonably to have known about the source of funds or property, the surrounding circumstances — including the accused’s relationship to any co-offender, the plausibility of any innocent explanation given, and the sophistication of any concealment — are usually central to how these matters are defended.
Penalties
What you could be facing
| Penalty | Maximum | Notes |
|---|---|---|
| Dealing with proceeds of crime — knowing (s193B(1) Crimes Act 1900) | 20 years imprisonment | The most serious tier, requiring proof that the accused actually knew the property was the proceeds of crime. Strictly indictable and dealt with in the District Court. |
| Dealing with proceeds of crime — reckless (s193B(2)) | 15 years imprisonment | Applies where the accused was aware of a substantial risk that the property was proceeds of crime and unjustifiably went ahead with the dealing regardless. Also dealt with on indictment given the maximum penalty available. |
| Dealing with proceeds of crime — negligent (s193B(3)) | 5 years imprisonment | The lowest tier, applying where a reasonable person in the accused’s position would have known the property was proceeds of crime, even though the accused did not actually turn their mind to it. Lower-value matters at this tier can often be dealt with summarily in the Local Court. |
| Aggravating factors | Sentence increased within the applicable maximum | The amount and value of property involved, the sophistication of any concealment (such as the use of shell structures or third-party accounts), and the connection to organised crime are all significant considerations at sentencing. |
Possible Defences
Ways this charge can be challenged
Absence of the requisite state of mind
Each tier of section 193B requires a different state of mind, and the defence can focus on demonstrating that the accused’s actual state of mind was lower than that alleged — for example, that they were merely negligent rather than reckless, or had no suspicion at all, particularly where a plausible, innocent explanation for handling the property exists.
Property not shown to be proceeds of crime
The prosecution must establish, to the applicable standard, that the property in question was in fact derived from criminal activity, or that the accused believed it to be. Where this cannot be established — for example, the funds had a legitimate, traceable source — the charge is not made out.
Genuine, transparent commercial dealing
Ordinary, transparent transactions consistent with legitimate business or personal dealings — properly documented, at market rates, and without any attempt at concealment — can support an argument that the accused neither knew, suspected, nor ought reasonably to have known that property was connected to crime.
Duress
Where a person dealt with property only because they were compelled to by an immediate and genuine threat to their safety or that of another, the defence of duress may be available, though courts apply this narrowly and require evidence of a real, pressing threat with no safe alternative.
What Happens Next
The Local Court process
- 01
Money laundering matters are typically detected through suspicious matter reports from banks and financial institutions, or arise during a broader investigation into drug supply, fraud or organised crime, after which the accused is charged by arrest or court attendance notice.
- 02
At the first mention in the Local Court, a plea of guilty or not guilty is entered, and the matter is assessed to determine whether it can remain in the Local Court or must proceed towards the District Court, depending on the tier charged and the value involved.
- 03
Where the matter stays in the Local Court, a not guilty plea leads to service of the brief, including bank records and any forensic accounting analysis, before a defended hearing.
- 04
Where the knowing or reckless tiers are charged, the matter proceeds through committal in the Local Court before arraignment and either a jury trial or a sentencing hearing in the District Court.
- 05
At any hearing or trial, the prosecution must prove that the property was proceeds of crime and that the accused dealt with it while holding the requisite state of mind for the specific tier charged, beyond reasonable doubt.
- 06
On a finding of guilt or a guilty plea, the court considers the amount and value of property involved, the sophistication of the conduct, the accused’s role and record, and personal circumstances before sentencing.
Frequently Asked Questions
Common questions
The tiers are distinguished by what the accused knew or should have known about the property: actual knowledge that it was proceeds of crime carries the highest maximum penalty of 20 years, recklessness as to that fact carries up to 15 years, and mere negligence — where a reasonable person would have known — carries up to 5 years.
No. Money laundering is a separate offence from whatever crime generated the property in question, and a person can be charged even if they had no involvement in, and limited knowledge of, the specific underlying offence, provided they held the requisite state of mind about the property’s criminal origin.
If you genuinely neither knew, suspected, nor ought reasonably to have known that property was connected to criminal activity, none of the three tiers of the offence should be made out, as each tier requires at least a negligent failure to recognise the risk.
The prosecution does not necessarily need to prove the precise underlying offence that generated the property, only that it was, in fact, proceeds of crime generally, or that the accused believed or suspected this to be the case, depending on the tier charged.
Yes. A similar tiered money laundering regime exists federally under the Criminal Code (Cth), and depending on the facts — particularly where the matter involves interstate or international dealings — a person may be charged under Commonwealth law instead of, or in addition to, the NSW provision.
It depends on the tier charged, the value involved, and any connection to organised crime. Very serious, high-value matters can be treated especially seriously for bail purposes, and each case needs to be assessed on its specific facts against the Bail Act 2013.
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