We might assume that NZ Police has no direct involvement in the illicit drug trade, but its speculative assessment of cash generated by dealers must be accepted by judges when making Criminal Proceeds (Recovery) Act profit forfeiture orders.
The Act presumes the level of profits generated by convicted or suspected dealers as assessed by police is correct, unless offenders prove to the contrary.
Legislative use of the term ‘profit forfeiture’ is misleading.
The Criminal Proceeds (Recovery) Act seeks to recover revenue generated by dealing, with no allowance for expenses incurred; cultivating, manufacturing, or buying finished product prior to sale. This confiscation of revenue is described in the Act as ‘profit forfeiture.’
One High Court judge got a rap over the knuckles for questioning police calculations.
King Cobra gang member Tereva David Akavi pleaded guilty in 2021 to dealing in methamphetamine; caught in Wellington as part of Police investigation Operation Bonito.
At a subsequent criminal-proceeds hearing, Police sought a profit forfeiture order of $468,000. This figure was calculated on the assumption Akavi was involved in selling at least one ounce of meth per week for one year at a price of $9000 per ounce.
This unit sale price per ounce was derived from street purchases by undercover police.
The trial judge questioned why an arbitrary assumption had been made that Akavi was dealing regularly in these volumes and for exactly one year. He slashed the profit forfeiture order to $98,850; the value of meth purchased by undercover police from King Cobra associates over a ten day period in 1991.
The Court of Appeal increased the profit forfeiture order to $468,000 as calculated by Police. In the absence of evidence to the contrary from Akavi, Police assessment of revenue generated had to be accepted.
The Criminal Proceeds (Recovery) Act has its parallels in tax law.
Taxpayers failing to file tax returns have a default assessment calculated by Inland Revenue. This assessment stands, unless the defaulting taxpayer provides evidence to the contrary.
Inland Revenue has decades of data across every trade and occupation as a basis for estimating what should be likely taxable income for a particular taxpayer.
Police has no such historical record to support its proceeds-of-crime profit forfeiture assessments.
Commissioner of Police v. Akavi – Court of Appeal (5.08.24)
24.183