Fears over laundering blocked gang raffle

Money laundering by gangs has emerged as one of the main reasons why the Internal Affairs Department refused to allow Tauranga motorcycle club The Filthy Few to run its annual raffle.

The gang had applied to the department last year for a gambling licence to allow it to raffle a motorcycle as part of its Metal Mania custom motorcycle and car show.

Details of why Internal Affairs declined the application were revealed in submissions to the Gambling Commission in June.

The commission was hearing an application for costs of $10,000 from The Filthy Few after the club successfully challenged the department's decision.

The department told the commission that it was concerned at "the potential for the [gambling] licence to be used to allow the group to launder money under the auspices of running a raffle".

The Filthy Few's lawyer, Paul Mabey QC, argued that the department's decision on November 18, 2011 to decline the application had breached natural justice.

He said the department had failed to assess the merits of The Filthy Few's application and rubber-stamped a police objection without reference back to the club.

Mr Mabey said police had sought to introduce untrue and speculative allegations against the club and that the department did not make any proper inquiry into these allegations, quoting police objections verbatim as justification for refusing the application.

He said it was not enough that the secretary for Internal Affairs recognised the merits of the club's case by withdrawing from the proceedings. "This does nothing to recompense the appellant for its costs, nor bring home to the secretary the need to act responsibly and in accordance with natural justice," Mr Mabey said.

The department said that before the application from The Filthy Few, it had been looking into concerns that organised criminal groups may be using class 3 gambling licences, including major raffles, to legitimise the holding of large amounts of cash.

"Following the review, he [the secretary] decided that closer consideration should be given to applications for class 3 operator's licences made by groups with strong criminal associations," the department said.

The police report had raised concerns about the suitability of The Filthy Few to run the raffle. It had been concerned about the criminal activities and associations of the club.

In outlining why the department had reversed its decision, the commission said the secretary had reflected on the club's relatively unblemished history in running raffles and balanced that against concerns about the club's alleged criminal activities.

"Considering all the available material, including the new material filed as part of the appeal, he [the secretary] decided to reverse his earlier decision," the commission said.

The commission said there was no breach of natural justice. The secretary had followed the statutory path for considering applications and made his decision on the basis of information presented to him at the time.