Hiding criminal profits in a family trust did not prevent forfeiture. Trust assets were confiscated as proceeds of crime because trustee and convicted drug dealer Brett Wallace James had absolute control and treated trust property as his own. Used as his home, the trust property at Sunset Road on Unsworth Heights in Auckland was purchased with cash generated by drug dealing, the High Court ruled.
In 2018, James was sentenced to three years seven months’ imprisonment on conviction for drugs and firearm offences. He came under suspicion when police investigated chemicals leaking from a storage unit. Precursor chemicals for methamphetamine manufacture were found, along with $400,000 cash. Subsequent searches of Sunset Road and another storage unit uncovered equipment for methamphetamine production.
Police applied for a profit forfeiture order totalling $776,900 under the Criminal Proceeds (Recovery) Act. Sunset Road was ordered sold. It was ‘tainted’ property, Justice Gordon ruled. Cash generated from methamphetamine manufacture was used to pay interest on a Sunset Road mortgage and to complete renovations. The court was told Sunset Road had a market value of some $600,000 as at July 2019, with equity of $387,000 after allowance for balance owed on the mortgage.
Trustees of a family trust were registered owners of Sunset Road: James together with corporate trustee GDP Trustee Ltd. James had unfettered control of Sunset Road, Justice Gordon ruled. The trust deed named James as settlor, trustee and beneficiary with power to alter or amend the trust deed at any time.
The $400,000 cash was ordered confiscated. James said the money was not his; it was cash advanced from Hong Kong-based Wilson Chee for a planned joint property project. At James’ criminal trial, Mr Chee gave evidence by visual link from Hong Kong stating the cash was gambling winnings. Mr Chee in fact made substantial losses when gambling according to evidence extracted from Sky City casino records. An IOU purporting to record a loan of $400,000 from Mr Chee to James was dismissed by Justice Gordon as a fabrication.
Commissioner of Police v. James – High Court (20.11.20)
20.183