$150,000 CASH FOUND IN A WARDROBE NOT TO BE CONFISCATED

When police found $150,000 cash in a wardrobe at the home of a man convicted of cultivating cannabis, an application was made to automatically forfeit the money as proceeds of the crime, until his wife claimed that it was actually from her own gambling and convinced the Court to give it to her.

The Direction of Public Prosecution appealed the Magistrate’s decision to the Supreme Court, arguing that the woman’s claims were ‘inherently unlikely’ and that her evidence was ‘manifestly absurd,’ but the Supreme Court concluded that the Magistrate had not made any legal error, even though the Supreme Court Justice had ‘some doubt’ as to whether they would be persuaded by the woman’s evidence.

Restraining Orders and Forfeiture of Property as Criminal Assets

The Director of Public Prosecution can apply to a Court for an order preventing a person from disposing or dealing with property when that person has been convicted of or charged with a serious offence, or even if it is proposed that they be charged or are suspected on reasonable grounds of having committed a serious offence.  Also where property is suspected on reasonable ground of being the proceeds of a serious offence such an application can be made and in each case the law says that the Court must make the order.

Further, when the DPP makes an application for forfeiture of property, the Court must order that the property is forfeited to the Crown if a person has been convicted of a serious offence and the property is a proceed of that offence, or when a restraining order has been in force for 6 months and the Court is satisfied that it is the proceeds of a serious offence committed by the person whose conduct (or suspected conduct) formed the basis for the restraining order.  Even if the person has been found not guilty of the charges, the Court still has power to make a forfeiture order.

A person can apply to the Court to have property excluded from a Restraining Order or a Forfeiture Order if they can prove that the property is not the proceeds of unlawful activity and their interest in the property was lawfully acquired (along with some further requirements).

The Facts

In January 2021 the police went to a property in Fullarton where they came across the husband.  When both he and his van were searched they found $720 cash in his pockets and $7,450 in $50 notes in cash under the driver’s seat.  Inside the house they found 14 cannabis plants and equipment for cultivating the drug.  The police then went to the marital home of the couple at Beulah Park and found the $150,000 cash in $50 notes in a box in a wardrobe, along with $1,050 in $50 notes in the woman’s handbag.  The husband was charged with cultivating cannabis and possessing equipment for drug cultivation along with diverting electricity from a power system without authority.  Both he and the wife were charged with engaging in a transaction involving tainted property, namely money in excess of $30,000 in circumstances that they ought reasonably to have known the property was tainted.  (“Tainted property” effectively means that it is stolen or obtained from any unlawful act or activity or that it is the proceeds of such property.)

The DPP then obtained a restraining order over the four sums of money.

The woman’s husband pleaded guilty to the charges of cultivating cannabis, possessing equipment and diverting electricity but the charge of dealing with tainted property wasn’t proceeded with.  On that basis, the woman who herself had previously been convicted of using a false name to rent premises which were used to cultivate cannabis was no longer facing any charges over the cash the police had seized.  The woman then applied to exclude the $1,050 located in her handbag and the $150,000 found in the wardrobe from the forfeiture order.

Where Did the Money Come From?

Her case was that she started gambling in 2014 and that while she banked some of the money that she won, she kept the rest in the box in the wardrobe, which she would use from time to time and later replace in order to maintain a ‘set amount’ at all times.  In support of her evidence she produced some winning TAB tickets amounting to $109,000.  She said that she visited various betting outlets far from her home to avoid seeing people she knew and to increase her chances.

The DPP relied on evidence asserting that at least $80,000 of the money was made up of $50 notes that were not in circulation prior to October 2018.  At that time a new $50 note was released and the police claimed that a video recording of the process of sorting the 3,000 $50 notes showed that this number was made up of the new currency.  Nevertheless, they could not give an exact number of those notes and the money had since been banked.

According to the law, the onus was on the woman to establish that she owned the money, that she acquired it lawfully, that it was not the proceeds of an illegal activity and that it would not be contrary to public interest to return it to her.  The Magistrate who heard the case was of the view that the woman gave her evidence with consistency and without hesitation and concluded that while her behaviour might be considered ‘unusual’, her explanation was not ‘not inherently unlikely or unbelievable’.  On that basis the cash was excluded from forfeiture.

The DPP then appealed that decision to the Supreme Court arguing that the woman’s account was ‘inherently implausible’ for a variety of reasons including the fact that all of the money being in $50 notes was inconsistent with her account, the money found on her husband was made up of $50 notes, they shared the bedroom, the money was hidden in an unusual location, the betting tickets didn’t account for all of the money and her evidence of going to different TABs was ‘manifestly absurd’.

Large Sums of Money Doesn’t Necessarily Mean Criminal Activity

The Court in this case made the observation that while having large amounts of cash at a residential property is unusual, it is not necessarily evidence of criminal activity.  Although the DPP argued that the woman’s account was inherently unlikely or unbelievable, the Supreme Court commented that the concept of ‘inherent implausibility’ – referring to the decision-maker’s understanding from experience of the world and the people in it of the likelihood that a particularly account is true – is prone to be inapt when considering human behaviour and in particular gambling behaviour.  It concluded that the DPP had not established any error in the Magistrate’s decision and dismissed the appeal.  As a consequence, the woman was entitled to the $151,050 that had been seized.

As this case demonstrates, even when a person is not convicted of a charge they can still be at risk of losing their property as the result of a restraining order or forfeiture order relating to alleged criminal assets confiscation proceedings.  A restraining order can be applied for simply when a person is suspected on reasonable grounds of having committed a serious offence and the Court must make the order, and then six months later there can be a risk that the property is forfeited.  In all cases involving seizure of assets or alleged ‘confiscation of profits’ it is important to get legal advice as soon as possible.  Websters Lawyers have experienced criminal law specialists who are able to advise and assist you with all Criminal Assets Confiscation cases.  Call 8231 1363 to arrange to speak with a criminal lawyer.

Director of Public Prosecutions (SA) v Scalzi & Anor [2024] SASC 2