Application of the Commissioner of the Australian Federal Police (No 2) [2016] NSWSC 277

Supreme Court New South Wales

Medium Neutral Citation: Application of the Commissioner of the Australian Federal Police (No 2) [2016] NSWSC 277 Hearing dates: 16 March 2016 Date of orders: 16 March 2016 Decision date: 17 March 2016 Jurisdiction: Common Law Before: Schmidt J Decision: Order sought made. Catchwords: CRIMINAL LAW – proceeds of crime – forfeiture orders – orders made – reasons Legislation Cited: Corporations Act 2001 (Cth) Cybercrime Act 2001 (Cth) Criminal Code Act 1995 (Cth) Proceeds of Crime Act 2002 (Cth) Cases Cited: Application of the Commissioner of the Australian Federal Police [2015] NSWSC 1137 Category: Procedural and other rulings Parties: The Commissioner of the Australian Federal Police (Plaintiff) Representation: Solicitors: Mr W Chan Proceeds of Crime Litigation Australian Federal Police File Number(s): 2015/198278 Publication restriction: None

Judgment 1. On the application of the Commissioner of the Australian Federal Police I yesterday made orders under s 49 of the Proceeds of Crime Act 2002 (Cth) in terms sought, for forfeiture to the Commonwealth of a sum of money, of approximately $77,000. Those funds were in the custody of the Official Trustee in Bankruptcy, having become the subject of restraining orders made by Button J in August 2015 (see Application of the Commissioner of the Australian Federal Police [2015] NSWSC 1137), it being suspected that they were proceeds of offences under the Cybercrime Act 2001 (Cth), the Corporations Act 2001 (Cth) and s 400.9 of the Schedule to the Criminal Code Act 1995 (Cth). The offences involved the hacking of certain share trading accounts, market manipulation and money laundering. 2. These are the reasons why the orders sought were made. 3. Section 49 provides that the Court must make an order that restrained property be forfeited to the Commonwealth, if the conditions specified there are met. 4. Button J's orders were made on affidavit evidence of Ms McLean, an officer of the Federal Police. By motion filed in March 2015, Saxo Bank A/S sought orders under s 29 and s 31 of the Act, excluding what it claimed to be its interest in the restrained money from the August order. That application was later withdrawn. In those circumstances under s 49(3), the requirements of s 49(1)(c) did not apply to this application. 5. On the affidavit evidence of Ms Cooper, also a member of the Federal Police, and of Ms Horan, a litigation assistant employed by the Federal Police, I was satisfied that the other requirements of s 49 had been met. 6. The evidence established that the application, supporting materials relied on, orders and further affidavits and other relevant materials had been served by the Commissioner on those interested in the application Saxo Bank A/S of Denmark; Morgan Stanley Australia Securities Limited and Mr Dmitri Stahrukhin, who had been identified by the market regulator in Denmark, the Danish Financial Supervisory Authority, as the person operating the suspect account involved in the offending discussed by Button J in the August 2015 judgment, but who was not identified as having any interest in the money the subject of the application. 7. ASIC had also contacted Mr Starukihn to advise him of the suspected involvement of his account in market misconduct. There was also no response to the request that he contact ASIC. 8. Steps have been taken to put victims of these unauthorised trades into the position they were in before their accounts were hacked. Accordingly, they were not identified as having any interest in the restrained property. Nor have any other individuals been identified as having any potential interest in the restrained property. 9. There was no appearance by any of those served, to oppose the forfeiture order sought by the Commissioner. 10. The Commissioner is a "responsible authority" for a restraining order as that term is defined in the Dictionary to the Act. The restraining order has been in force for longer than 6 months. Ms Cooper's evidence addressed the circumstances in which the application for the restraining order made by Button J came to be made; following ASIC investigation of suspicious trading in 13 securities listed on the Australian Securities Exchange, through identified online accounts. The advice of affected clients was that they had not authorised that trading. 11. The result was steps being taken to withhold profits which totalled some $AUD113,036.50 from these trades. Only some of those profits were then held by Morgan Stanley, some trades having already earlier been settled, before ASIC's notification was given to Morgan Stanley. It was the remaining profits which became the subject of Button J's restraining order. 12. This evidence, I was satisfied, also established that the restrained moneys was the proceeds of relevant offending and that it was in the public interest to make the orders sought. There was, accordingly, no basis on which the order sought by the Commissioner could be refused and accordingly, orders in the terms sought were made.