COMMISSIONER OF POLICE AND CAROLINE CHANDRA WILIEANNA AND BENNY TJOKROSAPUTRO AND SUMMITBUILD LIMITED Interested Party
[2023] NZHC 2981
•25 October 2023
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CIV-2022-425-27
[2023] NZHC 2981
BETWEEN COMMISSIONER OF POLICE
Applicant
AND
CAROLINE CHANDRA WILIEANNA
First Respondent
AND
BENNY TJOKROSAPUTRO
Second Respondent
AND
SUMMITBUILD LIMITED
Interested Party
Hearing: 9 October 2023 Appearances:
R W Donnelly and O Taylor for the Applicant No appearance for the Respondent
Judgment:
25 October 2023
JUDGMENT OF HARLAND J
[1] The Commissioner of Police (Commissioner) has applied under the Criminal Proceeds (Recovery) Act 2009 (the Act) for asset and profit forfeiture orders. The respondents have taken no steps, neither has the interested party. Accordingly, the application was dealt with by me on a formal proof basis.
[2] I have decided to grant the asset forfeiture order and dismiss the profit forfeiture order, the latter having been accepted by the Commissioner as appropriate. I have also granted an interim suppression order in favour of Summitbuild Ltd, the interested party, and its director Mr Joseph O’Donnell until 24 November 2023.
COMMISSIONER OF POLICE v WILIEANNA [2023] NZHC 2981 [25 October 2023]
Thereafter, if no further steps are taken to advance the application, the order for suppression will lapse.
[3]My reasons for reaching these decisions are set out below.
The application
[4] The Commissioner’s application for asset and profit forfeiture orders was filed in the Invercargill High Court on 17 April 2023.
[5] The application seeks an asset forfeiture order in relation to real property situated at Unit 1, 3 Kerry Drive, Queenstown (Accessory Unit 1A, 1B, DP528781) (the property). The property concerned is a luxury property purchased by the respondent Ms Wilieanna for the sum of $3,400,000 on 11 September 2017 on behalf of the second respondent Benny Tjokrosaputro.
[6] The Commissioner contends that the property is tainted because it was acquired directly or indirectly from significant criminal activity by the first and/or second respondent, being:
(a) money laundering and/or receiving, pursuant to ss 243, 246 and 247 of the Crimes Act 1961;1 and/or
(b) criminal offending from which property, proceeds or benefits of a value of
$30,000 or more have, directly or indirectly, been acquired or derived.
[7] It is not necessary to outline the details of the application for profit forfeiture orders because the application was filed as a back-up to the asset forfeiture order which, for reasons that will become apparent, is in fact the appropriate order.
1 The maximum penalty for these offences being seven years’ imprisonment.
[8] The application was accompanied by affidavits from Dr Supardi,2 Rochelle Fitzgerald,3 Joseph O’Donnell,4 Tan Siswantoro Tanujaya,5 Awan Wibowo Laksono Poesoro,6 Samuel Jones,7 and Robertha Nimas Ayu R.8
[9] Dr Supardi is a middle senior attorney and the director of investigations attached to the directorate of investigation, which is part of the Attorney-General’s office in Indonesia. His affidavit addresses an Indonesian Authorities investigation into the activities of the second respondent Mr Benny Tjokrosaputro and, through those activities, the first respondent Ms Wilieanna’s involvement.
[10] Ms Fitzgerald is a Police Officer attached to the Southern Asset Recovery Unit which is part of the Financial Crime Group of the New Zealand Police. Her first affidavit was filed in support of the initial without notice application for restraining orders and the second in support of this application.
[11] Mr O’Donnell is the owner of the property which was developed by his company Summitbuild Ltd (the interested party), with the unit that resulted from the development being sold to Ms Wilieanna.
[12] Tan Siswantoro Tanujaya was employed by the Panin Bank in Indonesia as operations manager of the branch where Ms Wilieanna was a client. His affidavit outlines the documents provided by the bank pursuant to a search warrant. Awan Wibowo Laksono Poesoro was the translator responsible for translating Tan Siswantoro Tanujaya’s affidavit. The affidavit of Robertha Nimas Ayu R, an employee of the PT Bank Central Asia Tbk, also outlined the bank statements and banking records for Ms Wilieanna and Mr Tjokrosaputro that were also provided to the Attorney-General’s office under a search warrant.
2 Dated 10 May 2022.
3 Dated 23 May 2022 and 4 April 2023.
4 Dated 20 April 2023.
5 Dated 24 May 2023.
6 Dated 24 May 2023.
7 Dated 15 June 2023.
8 Dated 27 June 2023.
[13] Mr Jones was the real estate agent in Queenstown who facilitated the sale of the property to Ms Wilieanna.
[14] On 27 May 2022, Mander J made a without notice order restraining the property. At a subsequent telephone conference, counsel appeared for the first respondent and agreed to an on notice application for restraining orders being made by consent in relation to the property.
Service
[15] It was not immediately apparent from the file whether the application had been served on the respondents. The second respondent is currently incarcerated in Indonesia and the first respondent is likely to be living in Indonesia or nearby. In any event, neither live in New Zealand.
[16] By minute dated 4 May 2023, counsel for the first respondent sought and was granted leave to withdraw as counsel. Directions were made that counsel’s offices were to remain as the address for service for the first respondent. Any documents served there were required to be forwarded to the first respondent until such time as a notice of a change of address for service was filed on her behalf. No notice of a change of address for service has been filed.
[17] No directions were made about serving the second respondent, largely because of his approach to the application for the restraining order which is outlined in the affidavit of Detective Inspector Borrell, a Police liaison officer in Jakarta, Indonesia. Detective Borrell met with the second respondent on 7 June 2022 at the Central Jakarta District Court and served him with the on notice application for a restraining order over the property. The second respondent said:9
I don’t know what you are talking about, this is not mine. I have been to New Zealand twice in my life and I have no interest whatsoever in investing in New Zealand. As far as I am concerned this is bullshit. I believe this is just the imagination of the Office of the Attorney Generals to relate me to this property. This is not mine, this is not mine, I don’t have anything to do with this and I don’t care.
9 At para 10 of Keith Joseph Borrell’s affidavit, sworn 7 June 2022.
[18] I am satisfied from the above that I can proceed to determine this matter by way of formal proof.
The factual basis for the orders sought
[19] In December 2019, there was an investigation in Indonesia into the activities of the second respondent and his associates and their involvement in a stock manipulation scheme that had triggered losses of more than US$1 billion to an Indonesian state insurer, Asuransi Jiwasraya. Under this scheme, the second respondent, together with Asuransi Jiwasraya executives, invested in stocks and then used the gains to buy properties and foreign currencies. The second respondent and others then became involved in the joint management and investment of stocks and mutual funds. They received “kick-backs” from this in the form of money, shares and other assets and benefits, with the second respondent receiving more than US$400 million for his efforts between 2008 to 2018.
[20] Bad and unlawful management of the scheme, stocks and mutual funds resulted in Asuransi Jiwasraya defaulting on more than 10,000 policies in 2018. The Indonesian Government provided US$1-2 billion to resolve the debt outstanding to policyholders. The Indonesian Government also provided the funds required to restructure Asuransi Jiwasraya.
[21] The second respondent was charged with corruption and money laundering in Indonesia. He was convicted and sentenced to life imprisonment and ordered to pay reparation of US$400 million. This was subject to property being forfeited if the reparation was not forthcoming. The affidavits filed in support of this application describe the trial, which was heard by a special corruption court, as one of Indonesia’s biggest anti-graft trials.
[22] The second respondent controlled the sale and purchase of his company’s stock by using controlled nominees. During the investigation into the second respondent’s activities, his links to the first respondent were identified. It was established that the first respondent was a close friend and one of the controlled nominees used by him.
[23] In his affidavit, Dr Supardi deposed that the second respondent’s stocks team controlled the first respondent’s financial accounts, including several bank accounts and her Indonesian Stock Exchange single identification number. These were used to carry out financial transactions by both sending and receiving money in her name and undertaking stock trading activities to benefit the interests controlled and/or beneficially owned by the second respondent. There were also assets and property in Indonesia in the first respondent’s name, which were beneficially owned by the second respondent.
[24] During a search of one of the second respondent’s subsidiaries and companies, the investigators found documents relating to the property in Queenstown. This included a settlement statement dated 6 November 2019 from the first respondent’s solicitors in Queenstown to her confirming her purchase of the property.
[25] The New Zealand Police obtained a production order against the first respondent’s solicitors. From the documents obtained, it was revealed that the first respondent’s solicitors file was opened on 24 August 2017, following a referral from Mr Jones, the real estate agent handling the sale for the owner of the property.
[26] An agreement for sale and purchase was entered into in respect of the property in September 2017. It was an “off the plans” purchase with some complexity, given that the title was yet to be subdivided and the dwelling built.
[27] The property purchase funds made their way into the solicitors’ trust account from the first respondent’s bank account in Jakarta, Indonesia, which is where she resided. Between August 2017 and September 2019, Ms Fitzgerald deposed that funds totalling NZ$3,450,797.82 were transferred from the first respondent’s Indonesian accounts into her solicitors’ trust account, a bank account for the body corporate for the property and an ASB account in the first respondent’s name.
[28]Documents received from the Indonesian authorities showed a payment of
$101,310 made directly from the first respondent’s Indonesian bank account into the interested party’s bank account in November 2018.
[29] The agreement for sale and purchase became unconditional and was fully settled in September 2019.
[30] Mr Jones did not hear from the first respondent again until early January 2021 when she emailed to say that she wanted to sell the property. As part of this, Mr Jones advised the first respondent he would need to carry out anti-money laundering checks and this would involve him obtaining copies of her passport and proof of residential address. The first respondent said she needed more time to think about things.
[31] Mr Jones did not hear from her again, despite several attempts to follow her up.
[32] On 26 August 2021, the Police spoke to Mr O’Donnell, the director of the interested party who confirmed that he owned the property and that Unit 1 was on the ground floor with a shared lift and garage but on a separate title. The discussions with Mr O’Donnell revealed that, since settlement on 10 September 2019, no one had moved into the property, collected the keys or contacted him about the property. The property remains unfurnished and vacant. No Body Corporate fees have been paid.
[33] The sum of $4,034,128.50 is different from the amount referred to in para [27]. The figure of $4,034,128.50 was calculated by Ms Fitzgerald using the applicable exchange rate at the time of the four known transfers from the second respondent to the first respondent’s Indonesia bank accounts. Given that no evidence has been filed to rebut this presumptive value, the Commissioner submits that figure can properly be specified as the value of the benefit in the profit forfeiture order.
[34] Mr Jones confirmed the discussions he had with the first respondent. He also referred to one occasion when he was introduced to a man known as “Benny” who he now knows to be the second respondent after seeing photographs of him online. Mr Jones said the second respondent talked about how many companies and how much money he had. Mr Jones confirmed that he introduced the first respondent to a local banker to assist with opening a New Zealand bank account which was required to purchase the property.
[35] In November 2022, Ms Fitzgerald, made enquiries with the Panin and BCA Banks in Indonesia in relation to transactions that were completed between the personal accounts of the second respondent and the subsidiaries and companies controlled by the second and first respondents.
[36] These enquiries revealed four deposits to the first respondent’s accounts and transfers from her Indonesian accounts to the New Zealand account of Berry & Co, her solicitors in Queenstown between May and September 2019. The funds transferred into the first respondent’s bank accounts we either made personally by the second respondent or one of his nominees. A table of the transactions was provided and is set out below:
Date Exchange Rate IDR NZD 21.05.2019
9409.4682
12.000.000.000
$1,275,311.18
23.07.2019
9413.8107
1.200.000.000
$127,472.29
20.08.2019
9191.4988
15.000.000.000
$1,631,942.77
03.09.2019
9005.3828
9.000.000.000
$999,402.26
TOTAL
35.200.000.000
$4,034,128.50
[37] The last contact Mr O’Donnell had with anyone to do with the property was in February 2020. The first respondent contacted him via email asking whether he was interested in purchasing the property back. There were negotiations about a price but it was taken no further. Since this time, Mr O’Donnell confirmed that he has not had any further contact from the first respondent.
Discussion
[38]Before orders can be made, the Court must be satisfied that:
(a) the property is tainted, in that it was acquired (in whole or in part, directly or indirectly) from significant criminal activity; and
(b) the first respondent has unlawfully benefitted from significant criminal activity.
[39] In addition, the Court must establish the value of any unlawful benefit and be satisfied that the first respondent has an interest in the property. It is clear that the first respondent has an interest in the property as she is the registered proprietor of it.
Was the property acquired from significant criminal activity?
[40] “Significant criminal activity” is defined by s 6 of the Act. In this case, it comprises money laundering. “Money laundering” is defined in s 243 of the Crimes Act 1961. Section 245 enables that definition to apply to certain acts outside New Zealand. It provides:
245 Application of section 243 to acts outside New Zealand
(1) Section 243 applies to an act that has occurred outside New Zealand and that is alleged to constitute an offence resulting in proceeds only if—
(a)the act was an offence under the law of the place where and when it occurred; or
(b)it is an act to which section 7 or 7A of this Act applies; or
(c)an enactment provides that the act is an offence in New Zealand, and no additional requirement exists for the act to be an offence in the place where and when it occurred.
(2) If a person is charged with an offence under section 243 and subsection (1)(a) applies, it is to be presumed, unless that person puts the matter at issue, that the act was an offence under the law of the place where and when it occurred.
[41] In this case, money laundering has already occurred outside New Zealand. However, the transfer of funds and the purchase of the property brought the offending into New Zealand.
[42] In Rodriguez v Commissioner of Police, the Court of Appeal accepted that money laundering can involve the commission of an offence in multiple jurisdictions.10 Albeit in relation to an application for a restraining order, the Court of Appeal’s discussion, as set out below, is relevant:
[26] Ms Guthrie made the point that money laundering can involve the commission of an offence in multiple jurisdictions and that the courts have regularly recognised the Act must respond in situations involving multi-
10 Rodriguez v Commissioner of Police [2020] NZCA 589.
jurisdictional crime.11 We agree with her submission that the purpose of deterrence must include deterring foreign criminals from using New Zealand as a haven to deposit the proceeds of crime, regardless of whether there has been a request to act by a foreign state.
…
[29] We therefore agree that where money laundering is alleged in respect of funds located in New Zealand the Commissioner is at liberty to apply for a domestic restraining order under s 25 irrespective of where the so-called predicate offending may have occurred. Like the Judge we consider that the appellants’ argument attempts to read in a restriction which the statute does not impose.
[43] I agree with Mr Donnelly that, although Rodriguez dealt with an application for a restraining order, the rationale outlined above is equally applicable to an application for a forfeiture order. This is because a restraining order can only be justified if a substantive application could follow.
[44] However, as well, the purchase of the property in this case could also be viewed as comprising a distinct or additional offence, because the funds used to purchase the property were sourced from offending overseas and therefore the actus reus of the New Zealand offence of money laundering is also complete. Section 245(1)(a) makes it clear that a predicate offence includes offending under the law of a foreign country and, in this case, the second respondent was convicted of corruption and money laundering in Indonesia.
[45] Given the amount of money involved and the modus operandi of the second respondent, I am satisfied that I can infer that the money that was transferred to the first respondent was proceeds from an offence that comes within the definition of s 245(1)(a). By virtue of s 243(1), the money which flowed from this offending was therefore the proceeds of an offence.
Did the first respondent know the funds were the proceeds of offending?
[46] A clear inference is available that the first respondent knew the property was being purchased by funds sourced from criminal offending. There are several unusual aspects of this case that support this conclusion:
11 Commissioner of Police v Vincent [2012] NZHC 2581 at [29]; and Yan v Commissioner of Police
[2015] NZCA 576, ]2016] 2 NZLR 593 at [33].
(a) since settlement, no one has moved into the property, collected the keys or paid the Body Corporate fees;
(b) in February 2020, the first respondent asked whether the interested party would consider purchasing the property back but nothing came to fruition and contact ceased; and
(c) in early 2021, having contacted Mr Jones of Sotheby’s, the first respondent, after saying she wanted to sell the property, did not respond when advised of the anti-money laundering checks that would need to be undertaken.12
[47] I am satisfied the first respondent knew the funds used to purchase the property were the proceeds of offending.
Was the property purchased from tainted funds?
[48] For the reasons I have outlined, I am satisfied that the property was purchased with tainted funds funnelled from the second respondent’s various entities into the first respondent’s accounts in Indonesia and, thereafter, transferred to the trust account of Berry & Co to settle the purchase of the property. This is not a case where there was any third party lending, nor is it a case where illegal funds have been mixed with legitimate income.
Has the first respondent benefitted?
[49] The property is owned by the first respondent. I am satisfied she obtained this benefit from significant criminal activity and that she received this benefit knowingly. As such, she has unlawfully benefitted from significant criminal activity, as defined by s 7 of the Act.
12 When the property was originally purchased, the anti-money laundering requirements were considerably less stringent than at the time the first respondent made these enquiries.
What is the presumed value of the benefit?
[50] The Commissioner’s application seeks for the order to specify that the value of the unlawful benefit is $4, 034,128.50. This figure was calculated by Ms Fitzgerald using the applicable exchange rate at the time of the four known transfers from the second respondent to the first respondent’s Indonesian bank accounts, as outlined in paras [33] and [36] above.
[51] No evidence has been filed to rebut the presumptive value and, accordingly, under s 53 of the Act, I am satisfied that this is the appropriate value of the benefit received.
Conclusion
[52] For the reasons I have outlined above, I am satisfied on the balance of probabilities that the assets forfeiture order as sought should be granted.
[53] I make an asset forfeiture order that the real property at Unit 1, 3 Kerry Drive, Queenstown (accessory Unit 1A, 1BDP528781) is to vest in the Crown absolutely and is to be in the Official Assignee’s custody and control.
Suppression
[54] The Police do not oppose the suppression of the interested party Summitbuild Ltd or its director Mr O’Donnell. I clarified the legal basis for the application for suppression. The concern outlined by Mr Donnelly was that there could be reputational harm to the company and its director given its involvement in the Queenstown market involving the construction of high-end properties. The harm could arise, Mr Donnelly submitted, because the anti-money laundering requirements have changed and members of the public may consider some attribution of blame to these entities with a resulting commercial impact.
[55] It must be said that the interested party and its director are innocent vendors and have done nothing wrong. Furthermore, the actual anti-money laundering requirements would have had to have been completed via the solicitors who prepared
the agreement for sale and purchase but the more stringent requirements that now apply did not apply then.
[56] Mr Ensor from Stuff Ltd was present during the hearing. He indicated that he is not intending to name the company or director and is not opposing the application for suppression. As I outlined however to Mr Donnelly, my concern is more whether the test for continued suppression has been met.
[57] I decided to impose an interim suppression order in relation to the interested party and its director but this order will lapse at 5.00 pm on 24 November 2023 unless the interested party and its director make a further application for it to be continued.
Harland J
Solicitors:
PR Law, Invercargill
Todd & Walker Law, Queenstown.
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