The K 65M QUESTION: A FRANCIS MILAMBO PERSPECTIVE

Note: All characters fictious and hypothetical!!

About a week ago about K65m was alleged to have been recovered from a named house in Lusaka. In this short article, I briefly give my two cents as a Certified Fraud Examiner and Financial Crimes Investigator.

Madam K65 will definitely have a lot of explaining to do. From my perspective the Zambian law in this regard was well drafted as it provides a good platform on which the burden of proof is not so high for the prosecution. The best charge that madam K65 can be given in the absence of a clear cut predicate offense is “Possession of Property SUSPECTED to be proceeds of Crime (contrary to section 71(1) of the forfeiture of proceeds of crime Act No. 19 of 2010 of the Laws of Zambia (FPC ACT).” The key word is SUSPECTED. The law doesn’t say “possession of property which is proceeds of crime” but rather “possession of property SUSPECTED to be proceeds of crime.” This in itself has three important implications;

1.???To secure a conviction under section 71(1) of the FPC no predicate offense needs to be proved.

2.???‘Reasonable suspicion’ under section 71(1) of the FPC means a state of conjecture or surmise, where proof is lacking.

3.???Proof beyond reasonable doubt or reasonable suspicion was not intended when section 71(1) of the FPC was formulated. The standard of proof is on a balance of probability.

The three positions above, go as far as they do but suffice to say the big picture to be adduced is that by the foregoing, the prosecution does NOT need to prove wrong doing or a clear cut offense. All the prosecution needs to do is to prove that there is REASONABLE SUSPICION that the property (in this instance money) could be proceeds of crime. This was the case in The People v Liato (2015 ZMSC 26) Supreme court of Zambia. In that case it was held that, “the quantum of the cash found in the possession of the respondent (Mr. Liato), the method of concealment which he employed together with the facts investigated by PW 6 as to the possible source of the appellant’s money were specific and articulable facts sufficiently established by the prosecution, which in our view, grounded reasonable suspicion. To prove reasonable suspicion under section 71(1) of the Act, therefore the prosecution DOES NOT have to show the link between the source of the money or the accused to possible criminal conduct. It is SUFFICIENT that possession and reasonable suspicion are proved….” It is important to note that what amounts to ‘reasonable suspicion’ depends on the circumstances. How the money was kept, transported or concealed can amount to reasonable suspicion. The Judge will normally ask themselves, in the circumstances, can a reasonable person have a reasonable suspicion that the said property could be proceeds of crime? If the answer is yes, then the Judge is highly likely to convict. The question is then, what amounts to reasonable suspicion? Well reasonable suspicion has been a subject of great debate, however Lord Devlin said, “suspicion in its ordinary meaning is a state of conjecture or surmise, where proof is lacking: I suspect but I cannot prove.’ The facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground belief, yet some factual basis for the suspicion must be shown.”

WHAT IS THE BEST WAY FOR THE PROSECUTION TO PROCEED?

In my perspective the best way for the prosecution to proceed is to bring a charge of “Possession of Property SUSPECTED to be proceeds of Crime (contrary to section 71(1) of the forfeiture of proceeds of crime Act No. 19 of 2010 of the Laws of Zambia (FPC ACT).”

It is my view that to firmly support this charge, the starting point should be the prosecution doing what in financial crimes investigations we call Financial Profile of madam K65. This basically involves listing all the income that madam K65 could have earned from proven legitimate sources and summing it up then comparing the total (of income from legitimate sources) to the value of the K65m, USD$ 57 thousand and all other assets madam K65 owns. Any huge difference can be inferred to have been from illegitimate sources (proceeds of crime) since all legitimate sources have been taken into consideration. Such financial profiling would involve listing down madam K65’s income from business, employment, loans, inheritance if any…etc. If say all madam K65’s income from LEGITIMATE sources totals K30m and this is proved, then it can be inferred that the difference between K65m, USD$57 thousand and all other assets madam K65 owns can be SUSPECTED to be proceeds of crime. Income can only be legitimate or illegitimate and if all legitimate sources are exhausted then what remains is most likely illegitimate (proceeds of crime)!! The prosecution and investigative wings however, need to do a thorough job to ensure that all income from legitimate sources is taken into consideration and that no single material amount from legitimate sources is missed. If a number of material legitimate income is missed, it could ruin their case.

Secondly there is no law that necessarily bans keeping money in one’s house but one question that the Judge will most likely ask themselves is, would a reasonable person keep K65m in their house? Wouldn’t that be a risk to their security/safety? Given that one can keep money in the bank safely without risking their lives, what could be the explanation or motivation of madam K65 deciding to keep such an amount in their house and risk their security and life? ??

Pertinent questions to be asked are;

1.???Which bank was the money withdrawn?

2.???If the money came from outside the country through the banking system, then where are the proof of Bank transfers?

3.???If the money was flown into the country, was it declared at entry as per anti-money laundering guidelines?

4.???If it was income from business, what was the business? where taxes paid? Any discrepancy between taxes paid and the amount recovered should be investigated. It could be that someone is exaggerating business income to launder money or justify proceeds from crime. ?

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In conclusion, this case really is premised on the prosecution proving that madam K65’s properties and monies far out-amount her income from legitimate sources and that the way she kept the money is suspicious.

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For the Passion of Audit and Fraud Investigations!!

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FRANCIS MILAMBO SPEAKS!!

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Disclaimer:

This article does not suggest wrongful or criminal conduct by anyone. It is the basic opinion of the author based on media coverage hence some assertions may not be factual.?