Commissioner of Police v Shahidan
[2021] NZHC 1328
•8 June 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-0594
[2021] NZHC 1328
BETWEEN COMMISSIONER OF POLICE
Applicant
AND
SHAHIDRAWADEY BIN SHAHIDAN
Respondent
Hearing: 9 and 10 February 2021 Counsel:
M Harborow and A Masters for applicant Respondent in person
Judgment:
8 June 2021
JUDGMENT OF KATZ J
This judgment was delivered by me on 8 June 2021 at 3:00 pm Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors: Meredith Connell, Auckland Copy to: S B Shahidan (respondent)
COMMISSIONER OF POLICE v SHAHIDAN [2021] NZHC 1328 [8 June 2021]
Introduction
[1] The Commissioner of Police alleges that Shahidrawadey bin Shahidan has unlawfully benefited from significant criminal activity through involvement in money laundering, receiving and the unlawful provision of financial services.
[2] Funds (“Igateway Funds”) held in two Bank of New Zealand (“BNZ”) bank accounts (“Igateway 00” and “Igateway 01” respectively) are alleged by the Commissioner to be the proceeds of this criminal activity. As at 23 April 2020, the balance of the Igateway 00 account was $35,438.51 and the balance of the Igateway 01 account was $1,842,208.15.
[3] Restraining orders under the Criminal Proceeds (Recovery) Act 2009 (“the Act”) have previously been made over the Igateway Funds on a “without notice” basis. The Commissioner now applies on an “on notice” basis for those orders to be continued.
[4] Mr Shahidan opposes the Commissioner’s application. He says he has not been involved in significant criminal activity and, further, that the Igateway Funds are not “tainted” property in terms of the Act.
Relevant legal principles – restraining orders
[5] Restraining orders are interim in nature.1 They have a statutory life of 12 months but may be extended upon application.2 Restraining orders do not in themselves forfeit property rights.3 Their purpose is to maintain the status quo pending determination of an application by the Commissioner for civil forfeiture orders (asset forfeiture orders and/or profit forfeiture orders).4 They may relate to all or part of a respondent’s property, including property over which a person has “effective control”.5
1 Vincent v Commissioner of Police [2013] NZCA 412 at [45].
2 Criminal Proceeds (Recovery) Act 2009, ss 37(1) and 41.
3 Commissioner of Police v Li [2014] NZHC 479 at [5].
4 At [5].
5 At [5].
Section 24 restraining order – tainted property
[6] To make a restraining order under s 24, the court must have reasonable grounds to believe that the property sought to be restrained is “tainted” property. Tainted property is any property that has, wholly or in part, been acquired as a result of significant criminal activity or derived directly or indirectly from significant criminal activity.6 The respondent need not be engaged in the significant criminal activity personally, provided the property was wholly or partially derived from significant criminal activity.7 Significant criminal activity is activity from which property, proceeds or benefits of a value of $30,000 or more have been acquired (directly or indirectly).8
Section 25 restraining order – unlawful benefit from significant criminal activity
[7] In the alternative, a restraining order may be granted under s 25 if there are reasonable grounds to believe that a person has “unlawfully benefited” from significant criminal activity. A person will have unlawfully benefited from such activity if he or she has knowingly derived a benefit from it, either directly or indirectly.9
[8] The making of a restraining order under s 25 does not require that the property sought to be restrained is itself derived from significant criminal activity. What matters is the knowing receipt of financial reward from crime. Knowledge here includes wilful blindness.10
The threshold requirement – “reasonable grounds for belief”
[9] Both s 24 and s 25 require that there be reasonable grounds for belief that the provisions of the relevant section have been met. In Vincent v Commissioner of Police,
6 Criminal Proceeds (Recovery) Act 2009, s 5(1).
7 Doorman v Commissioner of Police [2013] NZCA 476, [2014] 2 NZLR 173 at [32]–[36].
8 Section 6(1)(b).
9 Section 7.
10 Vincent v Commissioner of Police [2013] NZCA 412 at [48]-[53].
the Court of Appeal made the following observations about this threshold requirement:11
It is important to recall what the judge must be satisfied about before issuing a restraining order. He or she must be satisfied that there are “reasonable grounds to believe” that the property is tainted property or that the relevant person unlawfully benefited from significant criminal activity. The judge is not required to make a finding that the relevant property is tainted property or that the particular person did in fact unlawfully benefit from significant criminal activity…
… restraining orders will often need to be obtained in situations of urgency, as is illustrated by the provision for “without notice” applications. They are, as we have said, temporary orders, which give the police time to gather further evidence, and may lead to forfeiture but only on the completion of further processes. Restraining orders are issued on the basis of reasonable grounds to believe, rather than proof, that the target has unlawfully benefited from significant criminal activity…
[10] The threshold required for making restraining orders is therefore relatively low, consistent with their role as a “holding” measure.12
The evidence required
[11] The Commissioner may rely on a range of evidence in seeking to establish that a respondent has unlawfully benefited from significant criminal activity. For example, unlawful benefit may be established as a result of inferences drawn from a number of strands of circumstantial evidence.13 In Commissioner of Police v Hayward, Venning J stated: 14
[22] …The Commissioner can invite the Court to infer… that the respondent was involved in other significant criminal activities that he was not charged with. The Commissioner can also, for instance, rely on the disparity between moneys passing through the respondent's bank account or finding its way into the purchase of assets as compared to his declared legitimate income to prove or establish the benefit the respondent received from his significant criminal activities.
11 At [45] and [47].
12 Commissioner of Police v Li [2014] NZHC 479 at [8]; and Commissioner of Police v Antolik
[2016] NZHC 2649 at [33].
13 Commissioner of Police v de Wys [2016] NZCA 634 at [9].
14 Commissioner of Police v Hayward [2012] NZHC 1097. This statement was made in the context of an application for profit forfeiture orders under s 52, to which the higher standard of proof applies by virtue of s 53.
[12] A particularly important strand of circumstantial evidence will often be the possession of significant funds of unexplained or unidentified source. In Commissioner of Police v de Wys, the Court of Appeal observed that:15
[71] We accept the Commissioner’s submission that the possession of large sums of unidentified income is potentially very significant. If the cash sums cannot be adequately explained then this will tend to support an inference that the relevant cash has been sourced from illegitimate or criminal activity. Referring to the other circumstantial evidence in this case will then assist in determining the likely nature of such activity.
[13] I will first consider whether there are grounds for making a restraining order under s 25. If there are, it will not be necessary to consider the alternative basis for a restraining order, in s 24.
[14] In order to make a restraining order under s 25, I must be satisfied that there are reasonable grounds for belief that:
(a)significant criminal activity has taken place;
(b)proceeds or benefits in excess of $30,000 have been acquired or derived (directly or indirectly) from such criminal activity;
(c)Mr Shahidan has unlawfully benefited from this “significant criminal activity”; and
(d)the property sought to be restrained is property which Mr Shahidan has either an interest in, or effective control of.
Are there reasonable grounds for belief that significant criminal activity has taken place?
[15] The Commissioner alleges that Mr Shahidan has unlawfully benefited from significant criminal activity by:
(a)laundering and receiving the proceeds of the fraudulent VenusFX foreign exchange (“Forex”) trading scheme into the Igateway 00 and Igateway 01 accounts in New Zealand; and
15 Commissioner of Police v de Wys [2016] NZCA 634.
(b)unlawfully providing a financial service in or from New Zealand.
[16] Based on the affidavit evidence filed, and the cross-examination of Mr Shahidan, the relevant background appears to be as follows.
The establishment and activities of VenusFX
[17] VenusFX purported to offer a range of investment services, including Forex trading. The VenusFX trading scheme is alleged to have been established by Mr Shahidan and a number of associates in Malaysia. Mr Shahidan was the Chief Operating Officer of VenusFX.
[18] The Commissioner alleges that Venus Financial Markets Limited (“Venus Financial Markets”) was, in effect, the corporate entity underpinning or associated with the VenusFX scheme. Venus Financial Markets is a New Zealand company. It was registered in New Zealand on 11 December 2015, with Mr Shahidan as its sole director and shareholder.
[19] Under the Financial Service Providers (Registration and Dispute Resolution Act) 2008 (“FSP Act”), financial service providers who fall within the scope of the FSP Act are required to be registered on a public register and be part of an approved dispute resolution scheme.16
[20] VenusFX/Venus Financial Markets held itself out to be in the business of providing financial services, being Forex trading. On the VenusFX website homepage, it stated:
We enable anyone to invest alongside professional investors in foreign markets, crude oil business and growth businesses through equity, debt and investment fund options. Join the over 2,000-strong crowd looking for more interesting investments – it’s big opportunities, quick and has no obligations.
[21] Venus Financial Markets was not, however, registered as a Financial Service Provider in New Zealand. Mr Shahidan states in his affidavit that he applied for registration of Venus Financial Markets but that this application was rejected. Further
16 Section 11.
investigation by the Commissioner, however, indicates that Mr Shahidan’s application to register Venus Financial Markets expired after he failed to respond to verification questions and requests.
[22] VenusFX advertised itself as a legitimate Forex trading service. The Commissioner alleges that investors were invited and encouraged to transfer funds into bank accounts associated with VenusFX (including the Igateway accounts) in the hope that the scheme would rapidly return large profits. The VenusFX website stated it was Asia’s leading investment platform and a Facebook page associated with the scheme regularly posted about the large profits that investors were making.
[23] VenusFX appears to have falsely claimed on its Facebook page that it had a “broker legal registration certificate.” The document it displayed in support of this claim, however, was simply the New Zealand Companies Office “Certificate of Incorporation” for Venus Financial Markets.
[24] Further, on the VenusFX website, the company claimed to be a member of the Financial Services Complaints Limited (“FSCL”). This is an external dispute resolution scheme established under the FSP Act. FSCL has confirmed that Venus Financial Markets was not a FSCL partner.
[25] Although Mr Shahidan claimed in cross-examination that investors did their own Forex trading and VenusFX did not undertake this service on their behalf, this claim lacked credibility and was not supported by the contemporaneous documents provided by the Commissioner. These documents indicated that VenusFX in fact controlled the investment of funds and investors could not (and did not) do their own trading.
Mr Shahidan’s role in VenusFX
[26] Mr Shahidan claimed in his affidavit that he had only a minor role in VenusFX, primarily as a programmer doing technical work on the “back end of the system”. He claimed not to have been involved in financial matters.
[27] It appears, however, from the statement that Mr Shahidan made to the Royal Malaysian Police that his role (on his own admission) was significantly greater than that.17 For example, he admitted being a founder of the venture, along with several friends:
In 2014, I got to know Sukri at an forex investment company, NexusFX, where he was a marketing officer and he suggested that we start an investment known as VenusFX. At this point I invited my friends Firdaus and Syfia to help me expand this VenusFX forex business.
[28] Mr Shahidan created and administered VenusFX’s website and uploaded its marketing plan. He was involved in the process of (unsuccessfully) applying for a financial services licence for VenusFX in Malaysia. He was also the sole shareholder and director of Venus Financial Markets in New Zealand and applied (unsuccessfully) to register that company on the New Zealand Financial Service Providers Register.
[29] Finally, several YouTube videos of VenusFX events were put to Mr Shahidan in cross-examination. The relevant videos strongly support the inference that Mr Shahidan was a much more central figure in VenusFX than he was willing to admit. Amongst other things, he is shown giving speeches promoting the scheme, encouraging investment in the scheme and, later, fronting up to disgruntled investors.
The Igateway accounts
[30] Two days before Mr Shahidan registered Venus Financial Markets on 11 December 2015, he registered another New Zealand company, Igateway Limited (“Igateway”). Mr Shahidan was the sole director and shareholder of Igateway.
[31] The Commissioner alleges that Igateway traded as “IZZIPAY”, which held itself out to be a payment processing website. Mr Shahidan disputed that assertion, but it is supported by contemporaneous documentation provided by the Commissioner. The Commissioner accordingly submitted that a deposit using IZZIPAY was likely a
17 Mr Shahidan challenged the admissibility of that statement in this proceeding. I accept the Commissioner’s submission, however, that the statement is admissible. Malaysian law does not apply to the statement. Its admissibility falls to be determined under the provisions of the Evidence Act 2006. There is no evidence to suggest that the statement is unreliable (s 28), influenced by oppression (s 29), or improperly obtained (s 30).
payment into the Igateway accounts. On the VenusFX website, IZZIPAY was listed as the “Partner” of VenusFX.
[32] Between 24 February and 27 September 2016, funds totalling $2,201,383.65 were deposited into the Igateway accounts. The timing of these deposits coincides with the period in which VenusFX is believed to have operated, with the company’s website being active from around January 2016 to January 2017.
[33] In May 2016, BNZ placed a “stop” on the Igateway accounts. BNZ asked Mr Shahidan for further information and supporting documentation regarding his business, the source of the deposits, and confirming his identity. Mr Shahidan told a representative of BNZ that the funds deposited into the Igateway accounts related to his business of providing system software services. Mr Shahidan failed, however, to provide any of the documentation requested by BNZ.
[34] In his affidavit, Mr Shahidan repeated the claims he had made to BNZ regarding the Igateway accounts. Mr Shahidan stated that when he was instructed to open VenusFX in New Zealand, he took the opportunity to open another company at the same time for his software programming business. Because most of his clients were internationally based, it was “sensible to have an international account”. He claimed that his non-Malaysian software clients were instructed to deposit their payments into this account. Further, the Igateway accounts were his “saving accounts” so no withdrawals were made.
[35] Mr Shahidan was cross-examined at some length on these assertions. Many of his answers lacked credibility. For example, he was asked to explain a 2 July 2016 post on a Facebook page in the name of VenusFX regarding circulation of overseas bank account numbers for investor deposits. That post stated that:
(a)investors living in Singapore, Brunei, Australia, New Zealand, Sri Lanka and the Philippines were to deposit funds into the Igateway 01 account;
(b)for investors in Malaysia, India, Indonesia and China, VenusFX had established bank accounts in each of those countries for deposits to be paid into; and
(c)investors from other countries were instructed, as a default, to pay their deposits into the Igateway 01 bank account.
[36] Mr Shahidan suggested (entirely implausibly) that the relevant Facebook page, despite being headed VenusFX was not in fact VenusFX’s Facebook page and that the instructions to investors to deposit money into the Igateway 01 account (of which Mr Shahidan was the sole signatory and account holder) had been posted by some unrelated person, for unknown reasons. Nor could Mr Shahidan explain why at least one depositor specifically referenced their deposit into the Igateway account “VenusFX”. Further, it seems inherently improbable that Mr Shahidan, apparently working on his own, would have been able to generate revenue of over $2 million for software programming services over a seven month period when he was also working fulltime as the Chief Operating Officer for VenusFX.
[37] Annexed to Mr Shahidan’s affidavit were a number of deposit slips/bank transfer forms which documented payments of foreign currency into the Igateway accounts. Mr Shahidan claimed that these deposit slips showed payments for software services, but there is nothing on the face of the documents to support that claim. I further note that the transfer forms show payments from Kenya and Singapore and are therefore consistent with the instructions given in the 2 July 2016 Facebook post.
[38] The Commissioner’s analysis of the Igateway accounts indicates that other than some payments that appear to relate to bank fees, no funds were returned to depositors (the alleged investors) of the $2,201,383.65 that was transferred into the Igateway accounts between 24 February 2016 and 27 September 2016. Those deposits ranged in value from $58.64 to $84,785.69. There was no bank account activity to indicate that any of the deposited funds were invested. Some of the Igateway Funds were transferred into other New Zealand bank accounts controlled by Mr Shahidan. Otherwise, there were minimal expenses coming out of the Igateway accounts. It appears they were only used to receive deposits.
[39] Almost all of the depositors into the Igateway accounts were individuals, not companies, as one might expect if the payments were from international clients who had engaged Mr Shahidan’s software programming services.
[40] Finally, neither Venus Financial Markets nor Igateway declared any income to the Inland Revenue Department (whether derived from a software programming business, or any other business) for the relevant period. Nor has Mr Shahidan declared any personal income to Inland Revenue.
Investigations in Malaysia
[41] In 2016, a number of complaints were made to the Royal Malaysian Police by persons in Malaysia claiming they had lost money from investing in the scheme. The Royal Malaysian Police commenced an investigation under s 420 of the Malaysian Penal Code, which relates to cheating and dishonestly inducing delivery of property. Mr Harborow, counsel for the Commissioner, submitted (and I accept) that in New Zealand the equivalent offences would be theft by a person in a special relationship18 and obtaining by deception.19
[42] On 6 June 2016, VenusFX was placed on the Malaysian Financial Consumer Alert List. The list is apparently a guide to increase consumer awareness of entities which may be wrongly perceived or represented as being licensed. Venus Financial Markets was placed on the Singaporean investor alert list on 29 July 2016. The Singaporean list names unregulated people or entities who may be wrongly perceived as being licensed or regulated.
[43] The Royal Malaysian Police investigations concluded that Mr Shahidan and Mohammad Sukri Bin Abdul Rahim were responsible for establishing and running the VenusFX investment scheme. Mr Shahidan and Mr Abdul Rahim are said to have directed a third party, Vishnu Moorthy, to find investors. They are also said to have directed other third parties to register a number of companies on their behalf in
18 Crimes Act 1961, s 220.
19 Crimes Act 1961, s 240.
Malaysia, and to open bank accounts in the names of those companies. The bank accounts were used to receive funds deposited by customers of VenusFX.
[44] The Royal Malaysian Police investigation found that the operators of the VenusFX scheme made false claims and engaged in dishonest conduct, including claims of secured profits and segregated accounts for investors’ funds.
[45] Mr Shahidan, however, was never charged with or convicted of any crimes in Malaysia. Rather, the outcome of the Royal Malaysian Police investigation was that Mr Shahidan was subjected to a two-year supervision order under the Malaysian Prevention of Crime Act 1959. The conditions of his supervision included night-time electronic monitoring and regular reporting to a police station.
[46] In March 2017, assets with a total value of approximately $1,096,932.20 were seized (or subject to foreclosure orders) under the Malaysian Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AML/ATF Act”). This included $817,003 of funds that had been deposited by VenusFX investors into a bank account held in the name of an associate of Mr Shahidan. These funds were forfeited on the basis that they had been derived from VenusFX’s fraudulent activities and were the product of money laundering transactions.
[47] Three vehicles registered in the name of third parties but attributed to Mr Shahidan and his associates were subsequently forfeited under the AML/ATF Act. This included a Mercedes Benz which Mr Shahidan acknowledged during cross-examination was a company car that was provided to him for his personal use. The vehicle was in Mr Shahidan’s possession when it was seized.
The New Zealand police investigation
[48] On 18 June 2019, Inspector Navindran Chandra of the Royal Malaysian Police contacted the New Zealand police about their investigation of Mr Shahidan and VenusFX. Inspector Chandra had identified through enquiries with the National Bank of Malaysia that Mr Shahidan had been moving funds into bank accounts in
New Zealand, held in the name of Igateway, being the Igateway Funds. These were believed to be some of the proceeds of fraudulent offending by VenusFX in Malaysia.
[49] Investigations by the New Zealand police identified that between February and September 2016, deposits totalling over $2,201,383.65 were received into the Igateway accounts. At the time the without notice restraining orders were granted, the value of the Igateway Funds was $1,877,646.66.
Discussion
[50] I now turn to consider whether, based on the evidence I have outlined above, there are reasonable grounds for believing the significant criminal activity has taken place.
[51] First, I note that the VenusFX scheme operated internationally, including in Malaysia, Singapore and elsewhere. Money-laundering offences can, however, involve conduct occurring outside New Zealand. As the learned authors of Adams on Criminal Law observe:20
First this may be where the property which is the proceeds of the offence has been brought into or removed from New Zealand, the property itself can be situated in New Zealand or elsewhere, and the offence by which the property was derived can be committed outside New Zealand. For example, the credit standing in a New Zealand bank account may be derived from the sale of drugs overseas and transmitted through an overseas bank.
[52] In Rodriguez v Commissioner of Police, the Court of Appeal addressed the use of domestic restraining orders where money laundering involves “predicate offending” in overseas jurisdictions:21
[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- jurisdictional crime. 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.
…
20 Simon France (ed) Adams on Criminal Law – Offences and Defences (online looseleaf ed, Thomson Reuters) at [CA243.05].
21 Rodriguez v Commissioner of Police [2020] NZCA 589.
[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.
[53] Counsel for the Commissioner also referred to various provisions of the Crimes Act 1961,22 which provide that the predicate offending can occur outside of this jurisdiction, provided the conduct would amount to offending if it had been committed in New Zealand. Here, at least some of the predicate offending occurred overseas. The Commissioner also alleges, however, that significant criminal activity has also taken place in New Zealand including, money laundering, receiving,23 and breaching the FSP Act.24
[54] Money laundering, in essence, is dealing with the proceeds of criminal activity in such a way as to make the proceeds appear to have been legitimately acquired. Section 243 of the Crimes Act creates two different offences: one of money laundering and one of possession of the proceeds of crime with intent to money-launder those proceeds.25
[55] I am satisfied that there are reasonable grounds for believing that Mr Shahidan opened the Igateway bank accounts in New Zealand with the intention of receiving funds from investors who believed they were investing in a legitimate Forex trading scheme and that the subsequent deposit of the funds into the Igateway accounts was intended to distance the funds from the fraudulent activity taking place in Malaysia and elsewhere. It is clearly arguable that the accounts were established in New Zealand in the name of Igateway (not VenusFX of Venus Financial Markets) in an attempt to distance the funds from the overseas investors and to attempt to disguise the unlawful origin of the deposits.
[56] In conclusion, based on the detailed evidence I have set out above, there are clearly reasonable grounds for believing that money laundering has taken place in a sum that very significantly exceeds the $30,000 statutory threshold. There are also
22 Sections 243(1), 246(2) and 246(5).
23 Crimes Act 1961, ss 243 and 246.
24 Sections 11 and 12.
25 Simon France (ed) Adams on Criminal Law – Offences and Defences (online looseleaf ed, Thomson Reuters) at [CA243.05].
reasonable grounds for believing that the offence of receiving (as set out in s 246 of the Crimes Act) had been committed in relation to the same funds.
[57] Finally, I am satisfied that there are also reasonable grounds to believe that Mr Shahidan has breached ss 11 and 12 of the FSP Act. The FSP Act applies to persons who are in the business of providing a financial service in New Zealand.26 Its territorial scope extends to people ordinarily resident in New Zealand, or have a place of business in New Zealand, regardless of where the financial service is provided.27 The definition of “financial service” in the FSP Act includes: trading financial products or foreign exchange on behalf of other persons; providing forward foreign exchange contracts; and investing or managing money, securities or investment portfolios on behalf of other persons.28
[58] Under the FSP Act it is an offence to provide a financial service without being registered,29 as well as an offence to hold out that you are providing a financial service and are registered (even if no financial service is in fact provided).30 Mr Shahidan confirmed that he applied for both VenusFX and Igateway to be registered on the FSP register. The application to register Venus Financial Markets expired in September 2016 when Mr Shahidan did not respond to pre-registration verification questions and requests. The Igateway application expired in June 2016 when Mr Shahidan failed to respond to clarification requests regarding what type of financial service was being provided by the company. Based on the evidence I have outlined above, however, there are reasonable grounds for belief that Venus Financial Markets, despite not being registered, provided financial services.
[59] In conclusion, based on the evidence before the Court, there are reasonable grounds for believing that significant criminal activity has taken place, being money laundering, receiving, and breaches of the FSP Act.
26 Section 7.
27 Section 7A(2)(d).
28 Section 5.
29 Section 11.
30 Section 12.
Are there reasonable grounds for believing that Mr Shahidan has unlawfully benefitted from significant criminal activity?
[60] The next issue is whether there are reasonable grounds for believing that Mr Shahidan has unlawfully benefited from this significant criminal activity.
[61] A total of $2,201,383.65 was deposited into the Igateway accounts during the period when, it is alleged, VenusFX/Venus Financial Markets was fraudulently obtaining money from investors. As I have outlined above, there are clearly reasonable grounds for believing that this money was deposited by those investors, and was not the proceeds of a legitimate software programming business.
[62] Mr Shahidan is the sole account owner and authorised signatory for both of the Igateway accounts. There are therefore reasonable grounds for believing that Mr Shahidan has unlawfully benefited from significant criminal activity.
Does Mr Shahidan have an interest in the Igateway Funds?
[63] It is not disputed that Mr Shahidan has an interest in the Igateway Funds, and I am satisfied that he does. Mr Shahidan is the sole signatory on the Igateway accounts and the sole director and shareholder of both Igateway and Venus Financial Markets.
Conclusion
[64] The Commissioner has established that grounds exist for the making of a restraining order under s 25 of the Act and I am satisfied that it is appropriate to do so. It is therefore not necessary to consider whether there are also grounds to make a restraining order under s 24 of the Act.
Result
[65] I order that, until further order of the Court, the following property (collectively, the “Property”) shall not be disposed of, or dealt with, by any person
other than as provided for in this order, and is to be under the Official Assignee’s custody and control:
(a)the credit balance of the BNZ Igateway 00 account (as more fully described in the Commissioner’s on notice application for restraining orders dated 24 April 2020); and
(b)the credit balance of the BNZ Igateway 01 account (as more fully described in the Commissioner’s on notice application for restraining orders dated 24 April 2020).
[66] If costs cannot be resolved between the parties, then leave is reserved to file memoranda. Any memorandum on behalf of the Commissioner is to be filed by 28 June 2021. Any memorandum in response on behalf of Mr Shahidan is to be filed by 5 July 2021.
Katz J
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