Money Laundering Charges
Clear advice on penalties, defences and what to expect through the Local and District Courts, for both NSW and Commonwealth money laundering charges.
Money laundering can be charged under two entirely separate legal regimes in NSW, and it matters which one applies to your matter. The state offence is created by section 193B of the Crimes Act 1900 (NSW), which makes it an offence to deal with property that is the proceeds of crime. The Commonwealth offence sits in Part 10.2, Division 400 of the Criminal Code Act 1995 (Cth), and applies where the conduct falls within Commonwealth jurisdiction, such as money or property connected to a Commonwealth offence, or dealings involving a bank or financial institution regulated federally. The two regimes carry different maximum penalties, are prosecuted by different agencies, and, where a non-conviction outcome is sought, are governed by different sentencing law entirely.
The two regimes are structured differently. Under section 193B, NSW law sets three tiers based on the accused’s state of mind and, at the top tier, an additional concealment element: dealing with property knowing it is proceeds of crime and intending to conceal that fact, dealing with it knowing but without that intention, and dealing with it recklessly as to whether it is proceeds of crime. There is no negligence tier under NSW law. The Commonwealth Division 400 regime goes a step further, extending down to a negligence-based offence, and sets its maximum penalty by combining the fault level with the value of the money or property involved, meaning the same state of mind can carry a very different maximum depending on the dollar figure alleged.
"Dealing with" property is defined broadly under both regimes and includes receiving, possessing, concealing, disposing of, importing, or engaging in a banking transaction connected to it. Neither regime requires the accused to have committed, or even known the specific details of, the underlying crime that generated the property, only that they held the requisite state of mind about its criminal origin. Money laundering investigations typically arise from suspicious matter reports made by banks and financial institutions, complex forensic accounting analysis, and often overlap with drug supply, fraud, or organised crime investigations, meaning the surrounding circumstances are usually central to how these matters are defended.
Penalties
What you could be facing
| Penalty | Maximum | Notes |
|---|---|---|
| NSW: Dealing with proceeds of crime, knowing, intending to conceal (s193B(1) Crimes Act 1900) | 20 years imprisonment | The most serious NSW tier. It is the additional element of an intention to conceal that the property is proceeds of crime, not knowledge alone, that elevates this tier above section 193B(2). Strictly indictable and dealt with in the District Court. |
| NSW: Dealing with proceeds of crime, knowing (s193B(2) Crimes Act 1900) | 15 years imprisonment | Applies where the accused knew the property was proceeds of crime but, unlike section 193B(1), did not act with an intention to conceal that fact. |
| NSW: Dealing with proceeds of crime, reckless (s193B(3) Crimes Act 1900) | 10 years imprisonment | The lowest NSW tier, applying where the accused was aware of a substantial risk that the property was proceeds of crime and unjustifiably went ahead with the dealing regardless. There is no negligence tier under section 193B — this is a materially higher fault threshold than the Commonwealth’s negligence-based lowest tier below. |
| Commonwealth: Dealing in proceeds of crime valued at $1,000,000 or more, intentionally (s400.3(1) Criminal Code Cth) | 25 years imprisonment | The most serious tier under the separate Commonwealth regime. Division 400 applies where the matter falls within federal jurisdiction and is prosecuted by the Commonwealth Director of Public Prosecutions, not NSW authorities. |
| Commonwealth: Dealing in proceeds of crime valued at $100,000 or more (Division 400 Criminal Code Cth, exact section and fault level dependent on the facts) | Up to 20 years imprisonment | [VERIFY] The precise maximum depends on both the value threshold and the specific fault level (intention, recklessness or negligence) charged. The lowest Commonwealth tier, negligent dealing under section 400.9, is separately confirmed at 3 years (value $100,000 or more) or 2 years (value under $100,000). |
| Aggravating factors (both regimes) | Sentence increased within the applicable maximum | The amount and value of property involved, the sophistication of any concealment (such as the use of shell structures or third-party accounts), and the connection to organised crime are significant considerations at sentencing under either regime. |
Possible Defences
Ways this charge can be challenged
Absence of the requisite state of mind
Each tier, under either regime, requires a different state of mind, and the defence can focus on demonstrating that the accused’s actual state of mind was lower than that alleged — for example, under NSW law, that they knew the property was proceeds of crime but did not intend to conceal that fact, or were merely reckless rather than knowing; or, under the Commonwealth regime, that they were merely negligent rather than reckless, or had no suspicion at all — particularly where a plausible, innocent explanation for handling the property exists.
Property not shown to be proceeds of crime
The prosecution must establish, to the applicable standard, that the property in question was in fact derived from criminal activity, or that the accused believed or suspected it to be. Where this cannot be established, for example, the funds had a legitimate, traceable source, the charge is not made out.
Genuine, transparent commercial dealing
Ordinary, transparent transactions consistent with legitimate business or personal dealings, properly documented, at market rates, and without any attempt at concealment, can support an argument that the accused neither knew, suspected, nor ought reasonably to have known that property was connected to crime.
Duress
Where a person dealt with property only because they were compelled to by an immediate and genuine threat to their safety or that of another, the defence of duress may be available, though courts apply this narrowly and require evidence of a real, pressing threat with no safe alternative.
What Happens Next
The Local Court process
- 01
Money laundering matters are typically detected through suspicious matter reports from banks and financial institutions, or arise during a broader investigation into drug supply, fraud or organised crime, after which the accused is charged by arrest or Court attendance notice, by either NSW Police or the Australian Federal Police depending on which regime applies.
- 02
At the first mention in the Local Court, a plea of guilty or not guilty is entered, and the matter is assessed to determine whether it can remain in the Local Court or must proceed towards the District Court, depending on the tier and regime charged and the value involved.
- 03
Where the matter stays in the Local Court, a not guilty plea leads to service of the brief, including bank records and any forensic accounting analysis, before a defended hearing.
- 04
Where the more serious tiers are charged under either regime, the matter proceeds through committal in the Local Court before arraignment and either a jury trial or a sentencing hearing in the District Court.
- 05
At any hearing or trial, the prosecution must prove that the property was proceeds of crime and that the accused dealt with it while holding the requisite state of mind for the specific tier charged, beyond reasonable doubt.
- 06
On a finding of guilt or a guilty plea, the Court considers the amount and value of property involved, the sophistication of the conduct, the accused’s role and record, and personal circumstances before sentencing, applying NSW sentencing law to a section 193B charge and Commonwealth sentencing law to a Division 400 charge.
Sentencing
What courts consider at sentencing
The amount and value of the property involved is central to sentence under both regimes, and under the Commonwealth Division 400 tiers, it also determines which specific maximum penalty applies, since the offence structure combines value thresholds with fault levels.
The accused's role, whether a knowing, central participant or a peripheral, lower-level party used to move funds, along with the sophistication of any concealment and any connection to organised crime, are significant aggravating or mitigating considerations under either regime.
For a section 193B charge under NSW law, a non-conviction outcome under the Crimes (Sentencing Procedure) Act 1999 remains a genuine possibility at the reckless tier, the lowest under section 193B, for a first offence with a modest amount involved, whether an outright dismissal under section 10(1)(a) or a Conditional Release Order under section 10(1)(b), though it becomes progressively less realistic at the knowing and knowing-with-concealment tiers.
For a Division 400 charge under Commonwealth law, the NSW section 10 mechanism does not apply at all. The equivalent, and separate, non-conviction mechanism is section 19B of the Crimes Act 1914 (Cth), which allows a federal court to dismiss a charge without recording a conviction, or conditionally discharge the offender without a recorded conviction, having regard to factors including the offender’s character and antecedents, the triviality of the offence, and any extenuating circumstances. As with the NSW equivalent, this becomes progressively harder to obtain as the value involved and the fault level charged increase.
Next Steps
If you've just been charged
Don't discuss the source of the funds or property with anyone other than your lawyer, including any co-accused or business associate, and don't attempt to move, transfer or further deal with the property once you are aware it is under investigation.
Don't agree to a formal interview with police, the AFP, or ASIC before getting legal advice, particularly given how significantly your account of what you knew or suspected can affect which regime, tier and fault level ends up being charged.
Gather documentation of the legitimate source of any funds or property in question as early as possible, since these matters are usually decided on documentary and forensic accounting evidence rather than witness recollection.
Find out early which regime you are actually being investigated or charged under, NSW or Commonwealth, since this affects which Court process, sentencing law, and appeal pathway applies to your matter.
Get legal advice before entering a plea. Whether the prosecution can prove the requisite state of mind, what value is genuinely in issue, and which non-conviction mechanism, if any, might realistically be available are all best assessed early.
Frequently Asked Questions
Common questions
The NSW offence under section 193B of the Crimes Act 1900 is a state offence with three fixed penalty tiers based on state of mind. The Commonwealth offence under Division 400 of the Criminal Code applies where the matter falls within federal jurisdiction, is prosecuted separately by the Commonwealth Director of Public Prosecutions, and sets its maximum penalty by combining the value of the property with the fault level, meaning the two regimes can produce very different outcomes for similar conduct.
The NSW tiers are distinguished by the accused’s state of mind and, at the top tier, an additional element: knowing the property was proceeds of crime and intending to conceal that fact carries the highest maximum penalty of 20 years; knowing, without that intention to conceal, carries up to 15 years; and recklessness as to whether the property was proceeds of crime, the lowest tier, carries up to 10 years. There is no negligence tier under the NSW offence — that only appears in the separate Commonwealth regime.
No, under either regime. Money laundering is a separate offence from whatever crime generated the property in question, and a person can be charged even if they had no involvement in, and limited knowledge of, the specific underlying offence, provided they held the requisite state of mind about the property’s criminal origin.
If you genuinely neither knew nor suspected that property was connected to criminal activity, none of the NSW section 193B tiers should be made out, since even the lowest NSW tier requires recklessness, a conscious disregard of a substantial risk, not mere carelessness. Under the separate Commonwealth regime, however, the lowest tier is negligence-based, meaning a reasonable person’s failure to recognise the risk can be enough, even without actual suspicion.
It depends entirely on which regime applies. A NSW section 193B charge is assessed against section 10 of the Crimes (Sentencing Procedure) Act 1999, while a Commonwealth Division 400 charge is assessed against the separate federal mechanism in section 19B of the Crimes Act 1914. Both become harder to obtain as the value involved and the fault level charged increase, and neither is likely for a high-value, knowing or intentional matter.
It depends on the regime, the tier charged, the value involved, and any connection to organised crime. Very serious, high-value matters under either regime can be treated especially seriously for bail purposes, and each case needs to be assessed on its specific facts against the Bail Act 2013.
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