New South Wales Crime Commission v Elskaf [2017] NSWSC 681

Supreme Court New South Wales

Medium Neutral Citation: New South Wales Crime Commission v Elskaf [2017] NSWSC 681 Hearing dates: 4 April 2017 Date of orders: 30 May 2017 Decision date: 30 May 2017 Jurisdiction: Common Law Before: Harrison J Decision: Direct the parties within seven days to bring in short minutes of order giving effect to my conclusions. Catchwords: PROCEEDS OF CRIME – application for unexplained wealth order – application for assets forfeiture order – reasonable suspicion of serious crime related activity – no evidence served by defendant to explain wealth – no public interest grounds to refuse order Legislation Cited: Crimes Act 1900 Criminal Assets Recovery Act 1990 Cases Cited: New South Wales Crime Commission v Ayik [2016] NSWSC 1183 Category: Principal judgment Parties: New South Wales Crime Commission (Plaintiff) Ali Elskaf (Defendant) Representation: Counsel: I D Temby AO QC (Plaintiff) Solicitors: New South Wales Crime Commission (Plaintiff) V L Macri Lawyers (Defendant) File Number(s): 2011/202183 Publication restriction: Nil

Judgment 1. HIS HONOUR: By its second amended summons filed on 2 December 2016 the New South Wales Crime Commission seeks the following relief pursuant to the provisions of the Criminal Assets Recovery Act 1990. First, an unexplained wealth order in accordance with s 28A of the Act. Secondly, an assets forfeiture order in accordance with s 22(1A)(a) of the Act. Those provisions are respectively in the following terms: "28A Making of unexplained wealth order (1) The Commission may apply to the Supreme Court for an unexplained wealth order requiring a person to pay to the Treasurer an amount assessed by the Court as the value of the unexplained wealth of the person. (2) The Supreme Court must make an unexplained wealth order if the Court finds that there is a reasonable suspicion that the person against whom the order is sought has, at any time before the making of the application for the order: (a) engaged in a serious crime related activity or serious crime related activities, or (b) acquired serious crime derived property from any serious crime related activity of another person (whether or not the person against whom the order is made knew or suspected that the property was derived from illegal activities). (3) A finding under this section need not be based on a reasonable suspicion as to the commission of a particular offence and can be based on a reasonable suspicion that some offence or other constituting a serious crime related activity was committed. (4) The Supreme Court may refuse to make an unexplained wealth order, or may reduce the amount that would otherwise be payable as assessed under section 28B, if it thinks it is in the public interest to do so. (5) Engagement in a serious crime related activity or the acquisition of serious crime derived property referred to in subsection (2) extends to engagement in an activity or the acquisition of property before the commencement of this section. 22 Making of assets forfeiture order (1) The Commission may apply to the Supreme Court for an order forfeiting to, and vesting in, the Crown specified interests, a specified class of interests or all the interests, in property of a person (an 'assets forfeiture order'). (1A) The application must specify that the interest in property is an interest in property of any one or more of the following kinds: (a) an interest in property of a person suspected by an authorised officer, at the time of the application, of having engaged in a serious crime related activity or serious crime related activities…" 1. The orders sought are to be found at paragraphs 9A and 9B of the second amended summons and are in these terms: "9A. An order pursuant to s 28A of the Criminal Assets Recovery Act 1990 that Ali Elskaf pay to the Treasurer an amount assessed by the Court as the value of the unexplained wealth of Ali Elskaf. 9B. An order pursuant to s 22 of the Criminal Assets Recovery Act 1990 that the interest in property of Ali Elskaf in the property specified in the Schedule hereto (being an interest in property of a person, namely Ali Elskaf, suspected by an authorised officer, namely Jonathan Lee Spark, of having engaged in serious crime related activity) be forfeited to, and vest in, the Crown." 1. Unexplained wealth order 2. On 21 June 2011, this Court made a restraining order pursuant to s 10A of the Act in relation to all interests in property of Mr Elskaf. That order was made upon the basis of evidence that included the affidavit of Mr Spark sworn 17 June 2011. 3. In a subsequent affidavit sworn on 15 June 2015, Mr Spark deposed to a suspicion that Mr Elskaf had engaged in a serious crime related activity of dishonestly obtaining a financial advantage by deception contrary to s 192E(1)(b) of the Crimes Act 1900. An offence under that section is an offence involving fraud and is punishable by imprisonment for 5 years. Mr Spark's evidence concerning that offence was as follows: "8(3) Based on the investigations and financial analysis conducted by the Commission I suspect that in or around September 2007 Elskaf engaged in a serious crime related activity or serious crime related activities…namely dishonestly obtaining a financial advantage by deception contrary to section 192E(1)(b) of the Crimes Act 1900 – to wit – dishonestly obtaining a loan from ING Direct on the basis of having provided dishonest information in support of a loan application, being an offence involving fraud and punishable by imprisonment for 5 years, and thus falling within the definition of 'serious criminal offence' pursuant to section 6(2) of the Act;" 1. In his affidavit sworn on 6 May 2016, Mr Spark referred to s 178BB of the Crimes Act, which was in force at the material time, in order to correct an erroneous reference in his earlier affidavit to s 192E(1)(b), which had not then been in force. Nothing turns on that for present purposes. 2. Mr Elskaf was examined before the Registrar on 22 October 2012 concerning his affairs. He was shown an ING Bank loan application form signed by him on 18 September 2009 that indicated at least the following matters: 1. His (then) current employer was JFK Developers Pty Ltd and his occupation was a bricklayer. 2. His gross monthly income was $4,583.33. 3. He had assets to the value of $83,000. 1. Mr Elskaf gave the following evidence: "Q. The witness/examinee is being shown a copy of a document which is headed LIXI loan application form and ING Bank. Now do you see the applicant 1 details, that's your name, isn't it, on the front page? A. Yes. Q. And the address 4 Church Street that's where you're living now, well it should be 4A but that's where you're living now, correct? A. Yes. Q. Do you see there at employment details it says that your current employer as of the date of this loan application which is September 2007, your current employer is JFK Developers Pty Limited and it says your occupation is a bricklayer? That was not correct, was it, based on the evidence you've given today? A. I never worked. Q. You never worked as a bricklayer at JFK Developments? A. No. Q. Do you see just over halfway down the page there's a heading 'Assets' and it says that your total assets are $83,000 as of September 2007? Do you see where it says that? A. Yeah, down here? Q. Yes. A. Yeah. Q. Did you have $83,000 worth of assets? A. No. Q. And then— A. Turn the page or? Q. No, no. Then the bottom is the total loan being requested and that's $229,200? A. Yeah. Q. And that's about right, isn't it, that's the loan that you eventually got more or less? A. I don't remember but yeah. Q. Then when you turn the page the total income or sorry it says there that your gross monthly income, this is the top of the page, is $4,583.33? A. Yes. Q. Was that correct? A. Yeah. Q. It was? A. I never – what do you mean like, that's what I was getting. Q. Were you earning monthly— A. I told you I wasn't working so how was I earning? Like I wasn't working for JFK. … Q. In September 2007 is when this application form appears to have been completed, at that time— A. I was at work. Q. With Ace Action Motors? A. Yeah, I was on wholesaling. Q. Yes. Were you earning at that time four and a half thousand dollars a month? A. No. Q. Is that your signature at about two-thirds of the way down the page? A. About that. Q. Sorry? A. It looks like it. Q. It looks like it. Well do you remember signing it? A. To be honest, like, I remember signing I think paperwork but I don't remember what I was signing." 1. In order to establish that ING Direct advanced $229,000 to Mr Elskaf upon the basis of the information provided to it in the loan application, the Commission relied upon affidavits from Stephen Baker, Truong Sanh Ly and David Chi Tran. 2. Mr Baker was employed by ING Direct as a Financial Crimes Investigator. His affidavit was sworn on 31 March 2016. He confirmed that the loan application form was signed by Mr Elskaf on 18 September 2007 and that the loan was approved on 25 September 2007. The loan was settled on 5 October 2007. Apart from periodical debits to the loan account and monthly credits for repayments of principal and interest, a payment of $288,800 was made to the credit of the loan account on 28 February 2008. Mr Baker said that if ING Direct had established that declarations made in Mr Elskaf's loan application were false, or that any documentation supplied with the application was fraudulent, the loan would not have been approved but it would have been rejected. 3. Mr Ly worked as a financial planner. His affidavit was affirmed on 15 April 2016. He provided a statement to the Commission, which was annexed to his affidavit. His statement was to the effect that he falsified pay slips and a 2007 PAYG payment summary for Mr Elskaf that were submitted to ING Direct in support of his loan application. 4. It is not suggested that ING Direct suffered or sustained any loss as the result of anything done or not done by Mr Elskaf in the circumstances relating to the application for the loan or the grant of the loan itself. 5. The Commission submitted that in these circumstances there was at the very least a reasonable suspicion that Mr Elskaf engaged in the serious crime related activity referred to and identified by Mr Spark. The Commission contended that it was therefore entitled to the unexplained wealth order sought in the second amended summons.