Commissioner of Police v Shahidan

[2022] NZHC 2848

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-000594

[2022] NZHC 2848

UNDER

The Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

SHAHIDRAWADEY BIN SHAHIDAN

Respondent

Hearing:

24 August 2022

Appearances:

R E Budd for the Applicant

No appearance by or on behalf of Respondent

Judgment:

2 November 2022

JUDGMENT OF POWELL J

This judgment was delivered by me on 2 November 2022 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors/Counsel:

Meredith Connell, Auckland

COMMISSIONER OF POLICE v SHAHIDAN [2022] NZHC 2848 [2 November 2022]

[1]                 By way of formal proof, the Commissioner of Police seeks profit forfeiture orders against the respondent, Shahidrawadey Bin Shahidan (“Mr Shahidan”), in the sum of $2,201,383.65 being the total sum formerly held in two Bank of New Zealand bank accounts (“Igateway 00” and “Igateway 01” respectively) in the name of Igateway Limited (“Igateway”) which have been subject to restraining orders since 21 April 2020.

[2]                 The application has proceeded by way of formal proof at the direction of Moore 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 High Court must make a profit forfeiture order if it is satisfied, on the balance of probabilities, that:

(a)The respondent has unlawfully benefited from significant criminal activity 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 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

[5]                 Considerable evidence has been placed before the Court with regard to what has been alleged by way of criminal activity and how that activity relates to the monies at issue. That evidence has in fact previously been considered by Katz J in determining whether to continue the restraining orders, an application opposed by Mr Shahidan in February 2021.3 Having heard the evidence her Honour concluded that the source of the funds at issue was a fraudulent investment scheme based in Malaysia and carried out between 2015 and 2016, known as the VenusFX scheme. The corporate entity underpinning or associated with the VenusFX Scheme was a company called Venus

1      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 period of criminal activity”.

3      Commissioner of Police v Shahidan [2021] NZHC 1328.

Financial Markets Limited, a New Zealand company registered on 11 December 2015 with Mr Shahidan as its sole director and shareholder. At around the same time Igateway was also incorporated in New Zealand, and again Mr Shahidan was the sole director and shareholder. Katz J found that between 24 February and 27 September 2016, funds totalling $2,201,383.65 were deposited into the Igateway accounts, with the timing of the deposits coinciding with the period in which VenusFX was believed to have operated, between January 2016 and January 2017.4 After noting that there was no evidence to suggest that the monies deposited in the Igateway account in New Zealand were ever invested, and that indeed there were only minimal outgoings, Katz J analysed the evidence, including evidence given by Mr Shahidan, and concluded that there were clearly reasonable grounds for believing that money laundering has taken place in a sum that very significantly exceeds the $30,000 statutory threshold.5  Katz J was also satisfied that Mr Shahidan had breached ss 11 and 12 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 by purporting to provide a financial service without being registered, as well as by holding out that a financial service was being provided by a registered provider.6

[6]                 Finally, Katz J also concluded that there were reasonable grounds for believing Mr Shahidan had benefited from the significant criminal activity identified, noting that Mr Shahidan was the sole account owner and authorised signatory for both of the Igateway 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 various Malaysian documents setting out the detail of the VenusFX scheme, and an affidavit from Navindran A/L Chandra, a Police inspector of Kuala Lumpur, who has provided details of the Malaysian investigation. Having considered the additional material filed and the submissions made by Ms Budd, I am satisfied it simply further strengthens the relevant 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 in the 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 00 account (as more fully described in the Commissioner’s application for civil forfeiture orders dated 15 June 2022),8 and all interest earned on them; and

(b)the funds formerly held in the Bank of New Zealand Igateway 01 account (as more fully described in the Commissioner’s application for civil forfeiture orders dated 15 June 2022),9 and all interest earned on them.

Powell J

8      As at 23 April 2020, this account contained $35,438.51.

9      As at 23 April 2020, this account contained $1,842,208.15.