02 September 2024

Asset Forfeiture: Commissioner of Police v. Heron

 

Canterbury properties owned by Michael Heron and Hayley Lewis collectively valued at $1.77 million were confiscated under proceeds of crime legislation following Heron’s conviction for cannabis cultivation and supply.

Their home on a rural property at Johns Road, Fernside, was the site of a substantial growing operation; an investment property on Main North Road in Waikuku tainted by reason of dealing profits used to pay down the mortgage.

At a High Court assets forfeiture hearing under the Criminal Proceeds (Recovery) Act, Heron argued unsuccessfully that substantial household income over a seven year period was derived from cash deals mowing lawns, selling firewood and prospecting for gold.  He was unable to provide any evidence of clients for whom he was mowing lawns, or the source of firewood supposedly sold or names of his firewood customers.

Tax returns declaring some income from these sources were dismissed by Justice Preston as not representing the true source of cash receipts.

More damning was evidence of a police raid in September 2020 which found extensive cannabis cultivation in a five bay garage next to Heron’s Johns Road home.

Police intercepts had identified buyers purchasing cannabis from Heron.  In one intercept Heron was recorded discussing an upcoming referendum on legalisation of cannabis in which he stated that he would be voting against; legalisation would result in ‘the corporates’ driving small growers like him out of business, he stated.

A police forensic accountant gave evidence that Heron banked $1.27 million over a seven year period from identified cannabis sales and otherwise unknown sources; some used to pay down mortgages on the two properties.  There was evidence of cash being paid into their credit card accounts plus multiple cash deposits being made into bank accounts on the same day to keep each deposit below an amount likely to raise bank suspicions about the source.

Heron admitted $153,000 cash found by police in the Johns Road search was proceeds of cannabis sales.  Justice Preston ordered the cash forfeit.

She also ordered forfeiture of their Johns Road home and their investment property.  Proceeds of cannabis sales were used to pay down mortgages on each property.

Hayley Lewis is joint owner of these properties.  She has not been charged with any criminal offence.

Justice Preston dismissed her claims to have no knowledge of her partner’s cultivation and sale of cannabis.  She benefitted from the cash generated, Justice Preston said.

Her half share of the two properties was also forfeit.

Justice Preston allowed a $147,000 hardship allowance be paid Ms Lewis after sale of the two properties and repayment of loans secured over them.

This $147,000 was calculated as repayment of her cash contribution to purchase their investment property plus half the capital gain on this property for the following two years.  After this two year period, the property was tainted by reason of mortgage payments being sourced from cannabis dealing.

This investment property had initially been their family home, before purchase of Johns Road.

Commissioner of Police v. Heron – High Court (2.09.24)

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