Money laundering charges must fall as CBT charges has not been proven, says defence

KUALA LUMPUR (Oct 23): The defence team in Datuk Seri Najib Razak's SRC International Sdn Bhd graft trial involving RM42 million of the company's funds has argued that the prosecution must first prove that the former prime minister indeed committed the predicate offences — criminal breach of trust (CBT) — in order for the money laundering charges to stand, as the two offences are related.

Lead defence counsel Tan Sri Muhammad Shafee Abdullah argued that while a person can be charged under Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFA) without being charged for the predicate offence, that does not mean the prosecution is excused from proving the predicate offence.

"If you don't charge under predicate offence, you have to be clear under AMLATFA what the predicate offence [is]," he said.

Citing other cases where civil forfeiture suits could not be done because the predicate offence cannot be proven, Shafee said, "Analogously, if the predicate offence cannot be proven, AMLATFA automatically falls."

In fact, Shafee contended that the prosecution has failed to prove that there was an element of misappropriation and dishonesty on Najib's part to begin with, and as such, the CBT charges should also fall.

Drawing reference to the Indian Penal Code under Section 409 — which refers to CBT by a public servant, banker, merchant or agent — Shafee argued that in order to complete the "offence", apart from entrustment — which the defence is contending there is none to begin with — the offender must misappropriate the funds.

By definition, Shafee said misappropriation means that one takes possession of a property and act as if it is one's own.

As such, to complete the last element of the CBT offence, the prosecution must prove that the accused received the money and intentionally retained it.

"My client does not have dominion of SRC because as the adviser, he cannot dispose [of] the assets of the company. He could not do anything about it," he said.

"The prosecution should show that it is planned from the beginning several years in advance, that he (Najib) has his hand in it. Only then it completes the Section 409 (CBT) charge.

"In our case, there is no entrustment," the senior lawyer said.

As such, Shafee further argued that there was no offence committed by Najib within the AMLATFA charges, as the three predicate offences themselves cannot be proven.

"There is no offence of AMLATFA within the current charges. All the three AMLATFA charges should be dropped, it cannot sustain at all. This is over and above the argument that the three predicate offences themselves cannot be proven," he stressed.

In response, appointed public prosecutor Datuk V Sithambaram said the CBT and money laundering charges relate to distinct offences which require different ingredients to prove the charges, and they do not make the charges bad.

"Wrongful loss or gain is not an ingredient to be proved in CBT… receipt is not an ingredient to be proved in CBT," he said.

"To the contrary, receipt is an ingredient of the offence of AMLATFA (money laundering). Whether it is the same RM42 million is not a consideration as they are different ingredients," he added.

Sithambaram argued that the CBT offence is "complete" when there is a dishonest act in relation to the sum. "Receipt is not a necessary ingredient… the question of the receipt of money does not arise. It is immaterial that no one suffers any loss.

"CBT is not an offence which counts loss from consequence of the act. It is the act itself that is the offence. The offence is complete the minute there is misappropriation," he added.

Najib is currently facing one count of abuse of power, three counts of criminal breach of trust and three counts of money-laundering in relation with the alleged embezzlement of RM42 million from Minister of Finance Inc (MoF Inc) company SRC in 2014-2015.

In addition, Shafee claimed that Najib is immune to the abuse of power charge under Section 23(4) of the MACC Act because Najib holds office as PM and finance minister for the Government of Malaysia, which has control of SRC through the shareholding of MoF Inc.

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