Receivers of stolen information risk money laundering charge
Correspondent | Friday December 4, 2020 15:42
Or stories are published or aired on TV or radio of contractors considering legal action because they were unsuccessful in securing a specific government contract. The source of their information to ground any action, apparently leaked to them by family or friends or corrupt government officials who work for the ministry that issued the contract.
While there are specific corruption offences for officials who release information unlawfully and for those who offer or provide some inducement to do so, what are the other repercussions for any person or entity that receives unsolicited unlawfully acquired and released information? Particularly if they also act upon that information for their own benefit or the benefit of another for example their employer.Widely unknown and understood amongst professionals and the general public is the application of the criminal money laundering laws of Botswana to corruption. Internationally, money laundering laws were initially enacted to combat the proceeds of drug trafficking and later expanded to include other crimes particularly human trafficking, people smuggling and weapons smuggling.
It was never initially envisaged that money laundering legislation would encompass the trade in illegally obtained information. But the broad provisions of many money laundering statutes around the world has changed that. In Botswana, the provision relevant to the use of information that has been illegally obtained and provided to another person, whether they knew of its illegal origin or not, is sub-section 47(1)(b) of the Proceeds and Instruments of Crime Act, 2014 (“PIC Act”) which provides that a person who: “receives, is in possession of, conceals, disguises, transfers, converts, disposes of, removes from or brings into Botswana any property which, in whole or in part directly or indirectly represents, the proceeds of any crime, where he or she knows, suspects or has reasonable grounds for knowing or suspecting that the property is derived or realised, in whole or in part, directly or indirectly from any confiscation offence or foreign serious crime related activity, shall be guilty of the offence of money laundering.”For information to be captured by sub-section 47 it must be property. Section 2 of the PIC Act provides guidance as it defines property to mean money or any other movable, immovable, corporeal, or unincorporeal thing. Movable property is any property a person can take with them, which means it is personal property and therefore does not include a house, apartment, or land. In relation to the unlawful acquisition of information it would include a hard copy of a report, a USB containing information, a file etc. Corporeal property means real estate and personal property which has a tangible form.
It also includes moveable property. While an incorporeal thing refers to something that cannot be seen or touched but it can be owned. Incorporeal property is intangible property and often it is intellectual property, for example a government report or information that has a security or privacy classification or copyrighted works. And to be sure that no intangible property is left out of the meaning of incorporeal property, the definition of property in the PIC Act also includes “any right or interest in property”.
For a person to be involved in money laundering they must undertake one or more of the following physical acts namely either receive, be in possession of, conceal, disguise, transfer, convert, dispose, remove or bring into Botswana any property (in whole or part) that is directly or indirectly the proceeds of any crime.
These acts of money laundering should be given their normal meaning. In a practical sense, if a government official or someone working in the private sector, unlawfully removes or steals information from their employer that would be an offence covered by section 47 of the PIC Act. For example, if that person stole a report, the report would be tangible or movable property while its contents would be incorporeal property or an interest or right owned by the employer or government concerned. Now if that person provided the report to an editor or reporter from a newspaper or other media organisation or to a company that did not obtain a contract from the government which it thought it was entitled to win, then that official would be disposing of the proceeds of crime. And they could be charged with the offence of stealing the information and/or corrupt behaviour in addition to being charged with money laundering. And it does not have to have been communicated or given to them directly by the person who stole the information or who released it unlawfully.
For example, a common method used to convey stolen information is to set up a fake email address and upload an unlawfully acquired file to an email. That email is not sent. The receiver of the information who knows the email address also has the password.
They access the email account and download the file. They then delete the unsent draft email and no record remains in existence of any email being sent or received. Establishment of cloud-based services also makes the theft and transfer of stolen information easier.Any person who received the report or information (e.g. received by email or on a USB) that was stolen or unlawfully obtained, for example an employee of a media organisation, would commit a money laundering offence. Similarly, if that person passed on an illegally obtained report or information to another person, they would be in possession of that item and potentially could be charged with money laundering. It is a matter for a court to decide if the provision has been satisfied by a course of action. However, the handling of an envelope or storage device containing classified documents or receipt of an email etc might constitute receiving. Uploading of the material to another device, computer or the cloud would amount to possessing the items and if the information was later encrypted or password protected or both by a journalist, then those actions might amount to an act of concealment.
It has often been said that the legal relationship between the predicate offence and money laundering is similar to the roles of a thief and a receiver of stolen goods. Except in relation to the criminal money laundering law of Botswana, a person who commits a predicate offence can also be charged and convicted of money laundering, whereas a thief cannot be convicted of being a thief and a receiver of the goods he/she stole. They are usually charged with one offence.
Establishing that a person has possession or has received etc property namely information that has been acquired illegally is usually not difficult. Finding a stolen report or a USB containing the information during a search of premises occupied or used by a suspect is the most common occurrence. The most difficult aspect to prove is the knowledge the person possessed at the time they received the unlawfully acquired information. Here too, section 47 aids the prosecution. The section is slightly unwieldy and a full analysis of the mental elements of that provision is beyond this article. But in simple terms, where a person knows of the illegal origin of the information, then the element is established.
This could be brought about by evidence given by the other party, namely the person who unlawfully acquired the information and passed it on, could state that they told the person receiving it where it originated from and how. The severe penalty for money laundering in Botswana is another enticement the prosecution can use to secure the cooperation of other offenders. And from experience, when a co-offender is facing a substantial penalty, they are more likely to cooperate with the prosecution in exchange for a reduced sentence. An offence against Section 47 upon conviction carries a sentence of up to 20 years imprisonment or a fine not exceeding P20 million or both.
The penalty is one of the severest in the world for money laundering. Adding to that penalty is the potential forfeiture of any assets or benefit derived from the crime or used to commit the crime. Potentially in relation to a media organisation, if it were convicted of a money laundering offence or civil forfeiture action was initiated against it, it could involve forfeiture of the business to the government. Where full knowledge cannot be established, a person can be convicted if they suspect the information is proceeds of crime or has reasonable grounds for knowing or suspecting that the property is derived from any offence. This section has subjective and objective elements. The latter would be based on what a reasonable independent person placed in similar circumstances, as the offender would conclude about the origin of the information. It would be easy to prove that a suspect had reasonable grounds for knowing or suspecting that information in his/her possession was the proceeds of crime if the information is not publicly available or contained government security or privacy classifications. The presence of a security or privacy classification would alert any prudent journalist or other person that the person releasing the information to them, is not be entitled to do so. The unlawful release of information particularly from government ministries is a major problem in Botswana. Use of money laundering laws to combat it would have a significant impact on the issue and be a major deterrent, particularly to the receivers of the illegal information. All parties involved in this abhorrent practice are on notice about the power and application of section 47 and its potential use by authorities to quash the illegal trade in information in Botswana.
MICHAELA POWELL-REES & CHRIS DOUGLAS*
*Michaela Powell-Rees & Chris Douglas, on behalf of Merero Partners, a boutique advisory firm based in Botswana offering Corporate Finance, Management Consulting and Risk Advisory Services. Contact Merero via email enquiries@merero.co.bw for more information on its AML/CFT training and consultancy services in Botswana