Chapter 9 while collar crime

1. Discuss all the 5 elements that prove fraud in relation to the Tai Lee Finance Co Sdn Bhd
case .

Answer:
In Tai Lee Finance Co Sdn Bhd v Official Assignee (1983) the court held that “the
question of existence or otherwise of fraud is one of fact to be determined in the light of
the facts and circumstances surrounding each particular case. The onus is upon the
person alleging fraud to prove fraud not on a balance of probabilities but beyond
reasonable doubt.”

There are 5 elements that prove fraud.

First, the victim must prove that the defendant intentionally made a misrepresentation of
material fact to the victim. A misrepresentation is a false statement, in other words, a lie.
The misrepresentation must be material. This means that the misrepresentation must
affect something important to the transaction, not a minor point.

Second, the victim must prove that the defendant possesses the knowledge that the
statement is untrue. If the person making the statement honestly believes it to be true,
he is not guilty of fraud, he is considered to have made a mistake.

Third, the victim must prove that the defendant intended that the victim would rely upon
the false statement of material fact or omission.

Then, the victim must show that he or she reasonably relied on the misrepresentation.
The victim’s reliance must be reasonable. A victim cannot may not rely on a false
statement if he or she knew the statement was false or if its falsity was obvious to the
victim.

Finally, the victim must show that, as a result of his or her reliance on the
misrepresentation or omission, the victim was actually damaged and suffered harm. As
a general rule, fraud that does not result in damage is not actionable.

2. Mr A, a foreigner, approached a legal firm to buy 2 houses, one in Penang and one in
KL. The purchase price was paid in cash for a total of RM 15,000,000.00 each and the
funds were sent through a bank in an off-shore jurisdiction. Before the contract was
signed, Mr. A requested to change his name to ABC Investment Berhad, with Mr. X and
Mr. Y , both Malaysian as director. You, as an accountant, found out that every year this
pattern of transaction occurs. As an accountant, what should you do ?

Answer:
 I am an accountant and one of the reporting institutions that is a person who carries on
designated non-financial businesses and professions (DNFBPs) in First Schedule under
AMLA. I should report and submit a Suspicious Transaction Report (STR) and Cash
Threshold Report (CTR) for cash transaction exceeding 50,000 per day to the Financial
Intelligence and Enforcement Department. Therefore, I need to provide the information
required into STR.

First is the information on the person conducting the transaction which is the information
Mr. A that purchased two houses in Malaysia.

Secondly, the information on the account holder or beneficiary which is the information
director of ABC Investment Berhad, Mr. X and Mr. Y.

Thirdly, details of the transaction, such as the type of products or services and the
amount involved which is Mr. A transfer ownership of the two houses purchased for
value RM 15 million each to ABC Investment Berhad with Mr. X and Mr. Y.

Next, a description of the suspicious transaction or its circumstances, in which is Mr. A

Besides, any other relevant information that may assist the Financial Intelligence and
Enforcement Department in identifying potential offences and individuals or entities
involved.

3. Mr. Ben is a branch manager who is working in ABZ Casino Berhad. On 1.2.2019, he
met Mr. Ranaj, his childhood friend who is now working in Iraq. Mr. Ranaj informed him
he has USD $ 500,000.00 and intends to transfer the money from Iraq to Malaysia. Mr.
Ranaj requested Mr. Ben to allow him to transfer all the money into Mr. Ben’s personal
account. Mr. Ben agreed without asking Mr. Ranaj the source and proposed money to be
brought into Malaysia. Mr. Ben later transferred some of the money into his other
personal bank account. On 1.6.2019 Mr. Ben found out that Mr. Ranaj was arrested in
Kuala Lumpur and charged for trafficking dangerous drugs under S 39B of the
Dangerous Drug Act 1952.

Advise Mr. Ben whether he will be charged under Anti-Money Laundering, Anti-
Terrorism Financier and Proceeds of Unlawful Activities Act 2001 (“AMLA 2001”)and
what are the punishment under AMLA 2001 if he is found guilty.

Answer:
 Issue
Whether Mr. Ben will be charged under Anti-Money Laundering, Anti- Terrorism
Financier and Proceeds of Unlawful Activities Act 2001 (AMLA 2001) for money
laundring and what are the punishment under AMLA 2001 if he commit an offence.

Law
According to Section 4(1) which stated that a person is committed an offences of money
laundering if he or she involves himself or herself in the following circumstances
(a) Any person engaged directly or indirectly into the transaction which the proceeds
is from an unlawful activity or instrumentalities of offence
(b) Any person who are acquires receives possesses disguises transfer converts
exchanges carries disposes of or uses proceed of an unlawful activity or
instrumentalities of offence
(c) Any person who transferred out or bring into the proceeds of unlawful activity into
Malaysia.
(d) Any person conceals disguises or impedes the establishment of the true nature
origin location movement disposition title of rights with respect to or ownership of
proceeds of an unlawful activity or instrumentalities of offence

According to Section 4(2) which stated that the objective of factual circumstances may
be inferred when
(a) A person is reasonable believe or reasonable suspicion that the property is from
a proceed of unlawful activity or instrumentalities of an offence
(b) A person without reasonable excuse fails to take reasonable steps to determine
whether the property is the proceeds of an unlawful activity or instrumentalities of
an offence
Commits a money laundering offence on conviction liable to imprisonment for a
terms not exceeding 15 years and shall also be liable to a fine not less than 5 time
the sum of value of the proceeds of an unlawful activity or instrumentalities of an
offence at the time the offence was committed or RM 5,000,000.00 whichever is
higher

Application
On 1 February 2019, Mr. Ben met his friend, Mr. Ranaj. In the scenario, Mr. Ranaj told
Mr. Ben that he was intent to transfer a sum of USD $ 500,000 from Iraq to Malaysia. Mr.
Ranaj requested Mr. Ben to allow him to transfer all the money into the personal
account of Mr. Ben. This may constitute an offence under Section 4(1)(c) of AMLA 2001
as the large sum USD $ 500,000 of unlawful activity proceeds or instrumentalities of
offence was transferred from Iraq and bring into Malaysia which is under Mr. Ben’s
personal bank account.
 Mr. Ben agreed Mr. Ranaj’s motion without asking the origin of the large amount to be
brought into Malaysia. Mr. Ben then only found that Mr. Ranaj was arrested in Kuala
Lumpur and committed an offence under S39B of the Dangerous Drug Act 1952 for
trafficking dangerous drugs. This was an indication that the large amount of the money
highly came from illegal activities. In this situation, Mr. Ben cannot claim that he is
innocent for committing an offence of money laundering since he does not know whether
the money is the proceeds of unlawful activity or instrumentalities of offence. It had
clearly stated in Section 4(2) of AMLA 2001 as Mr. Ben must has reasonable belief and
suspicion that the large amount of USD $ 500,000 maybe is the proceeds of unlawful
activity or instrumentalities of an offence. Besides, he cannot make an excuse that he
failed to take reasonable steps to determine the source of USD $ 500,000.

If Mr. Ben is found guilty, Mr. Ben will be liable to imprisonment for a term not exceeding
fifteen years and the higher of fine which is not less than five times the sum or value of
the proceeds of an unlawful activity or instrumentalities of an offence at the time the
offence was committed or five million ringgit.

Conclusion
As result, Mr. Ben will be charged under AMLA 2001 for commit an offence of Money
laundering which transferred the proceeds of unlawful activity or instrumentalities of an
offence into Malaysia and be liable to imprisonment not exceeding fifteen years and the
higher of the fine of not less than five times the sum or value of the proceeds of an
unlawful activity or instrumentalities of an offence or five million ringgit.

4. Mr Liew, a manager working in Genting Berhad. On 31.12.2018 he met his friend Mr.
Raman who from Cambodia came to visit him. Mr Raman informed Mr Liew, he wanted
to have a holiday in Genting . Mr Liew arranged all the accommodation with him and Mr.
Liew found out Mr. Raman had with him a cash of RM 10,000,000.00.

Mr. Raman invited Mr. Liew to open a café business in Cheras, Mr. Liew agreed. On
1.2.2019 Mr. Liew found out from the new paper Mr. Raman was arrested for money
laundering and the police came after Mr. Liew and charged him for money laundering,
Advise Mr. Liew and the consequences if he was found guilty.
Answer:
Issue
Whether Mr. Liew will be charged under Anti-Money Laundering, Anti- Terrorism
Financier and Proceeds of Unlawful Activities Act 2001 (AMLA 2001) for money
laundring and what are the consequences under AMLA 2001 if he was found guilty.

Law
According to Section 4(1) of (AMLA 2001) which stated that a person is committed an
offences of money laundering if he or she involves himself or herself in the following
circumstances
(a) Any person entered directly or indirectly into the transaction which the proceeds
is from an unlawful activity or instrumentalities of offence
(b) Any person who are acquires receives possesses disguises transfer converts
exchanges carries disposes of or uses proceed of an unlawful activity or
instrumentalities of offence
(c) Any person who transferred out or bring into the proceeds of unlawful activity into
Malaysia.
(d) Any person conceals disguises or impedes the establishment of the true nature
origin location movement disposition title of rights with respect to or ownership of
proceeds of an unlawful activity or instrumentalities of offence

According to Section 4(2) of (AMLA 2001) which stated that the objective of factual
circumstances may be inferred when
(a) A person is reasonable believe or reasonable suspicion that the property is from
a proceed of unlawful activity or instrumentalities of an offence
(b) A person without reasonable excuse fails to take reasonable steps to determine
whether the property is the proceeds of an unlawful activity or instrumentalities of
an offence
Application
On 31.12.2018, Mr. Liew met his friend Mr. Raman, who is from Cambodia to visit him. In
this scenario, Mr. Raman has informed Mr. Liew that he wanted to have a holiday in
Genting. Hence, Mr. Liew as a manager and arranged all the accommodations with Mr.
Raman. After that, Mr. Liew found out Mr. Raman had a cash of RM10,000,000.00 with
him. Under Section 4(1)(c) of AMLA 2001, Mr. Liew provides the accommodation for Mr.
Raman who is from Cambodia and brings in the cash of RM10,000,000.00 proceeds of
an unlawful activity of instrumentalities of offence into Malaysia. This is because if Mr.
Liew does not provide the accommodation to Mr. Raman, Mr. Raman is not able to bring
in the cash of RM10,000,000.00 into Malaysia.

Mr. Liew accepted the invitation from Mr. Raman to open a cafe business in Cheras and
he found out Mr. Raman was arrested for money laundering on 1.2.2019. After that, the
police came after Mr. Liew and charged him for money laundering. In this situation, Mr.
Liew cannot claim that he is innocent for committing an offence of money laundering
since he does not know whether the money is the proceeds of unlawful activity or
instrumentalities of offence. Under Section 4(2)(b) of AMLA 2001 as Mr. Liew must have
reasonable belief and suspicion that the large amount of RM10,000,000.00 may be the
proceeds of unlawful activity or instrumentalities of an offence. Besides, he cannot make
an excuse that he failed to take reasonable steps to determine the source of
RM10,000,000.00.

If Mr. Liew is found guilty, Mr. Liew will be liable to imprisonment for a term not exceeding
fifteen years and the higher of fine which is not less than five times the sum or value of
the proceeds of an unlawful activity or instrumentalities of an offence at the time the
offence was committed or five million ringgit.

Conclusion
As result, Mr. Liew will be charged under AMLA 2001 for commit an offence of Money
laundering which transferred the proceeds of unlawful activity or instrumentalities of an
offence into Malaysia and be liable to imprisonment not exceeding fifteen years and the
higher of the fine of not less than five times the sum or value of the proceeds of an
unlawful activity or instrumentalities of an offence or five million ringgit.