Organised Crime in New Zealand
2010
Commissioner's Foreword
Organised crime is a global threat, but local in its impact and damage to New Zealand
society. It affects every community in New Zealand. It is widely recognised that the most
effective way in which to combat this threat is through cooperation and collaboration.
Organised Crime in New Zealand 2010 brings together information and intelligence
provided by a wide range of agencies from the New Zealand Government and the private
sector. I am particularly grateful to these agencies for their ongoing assistance and for
working together to better understand the threat and develop solutions.
The report reveals that today's organised crime networks are involved in a range of illegal markets. They are agile,
innovative and operate across international borders. The world-wide profits run to billions of dollars annually and
organised crime presents a current and growing threat across the globe. The responses required to address these
threats need to be equally sophisticated and New Zealand Police, together with our partners, are engaged in a range
of initiatives. Some of these are highly visible - for example running traditional criminal investigations - while others
involve supporting legislation reviews, tightening regulations or cooperating with international partners to make the
New Zealand environment increasingly hostile for organised criminals.
But it is not just the police and our partners that are responsible for combating organised crime. We are all responsible
for helping to reduce organised crime; it requires us as all to be vigilant; to recognise, report and respond to these
threats so that we stay ahead of the criminals that do so much harm to our society. The aim of this report is to put into
the public domain a clear picture of the problems and challenges we face, and to help engage our community in the
joint efforts needed to disrupt and dismantle organised crime in New Zealand.
Howard Broad
Commissioner of Police
2010
2
CONTENTS
INTRODUCTION.................................................................................................................4
DEFINING AND IDENTIFYING ORGANISED CRIME....................................................................4
ORGANISED CRIME GROUPS AND MEMBERS IN NEW ZEALAND................................................5
New Zealand Adult and Youth Gangs
Family syndicates
Transnational organised crime groups
Facilitators and specialists
ILLEGAL MARKETS.............................................................................................................7
Illicit drugs
Burglary, theft and links to organised crime
Violence
Kidnapping
Illegal trade, possession and use of firearms
Illegal migration
Identity crime
Financial crime
Electronic crime (e-crime)
Environmental crime
Intellectual Property (IP) crime
Bribery and corruption
EFFORTS TO DISRUPT AND DISMANTLE ORGANISED CRIME...................................................21
Collaboration - international, government and private sector
Legislation
3
INTRODUCTION
According to the United Nations (UN), transnational organised crime is a major threat to human security, impeding the
social, economic, political and cultural development of societies worldwide. Organised crime groups throughout the
world are involved in a range of criminal activities including drug trafficking, human trafficking, firearms trafficking,
environmental crime, cyber crime and money laundering. As part of the global community, New Zealand is not immune
to the organised crime threat. A number of organised crime groups, both domestic and international, are involved in a
range of illegal markets impacting on New Zealand.
Organised Crime in New Zealand 2010 aims to provide insight into the nature and extent of the threat in New Zealand.
The analysis in this report draws from information provided by a range of agencies from the New Zealand Government
and the private sector. Open source research on national, regional and global trends relating to organised crime is also
included. Further, the report highlights efforts that aim to disrupt and dismantle organised crime in New Zealand.
DEFINING AND IDENTIFYING ORGANISED CRIME
New Zealand has signed and ratified the UN Convention Against Transnational Organised Crime that defines an
organised criminal group as ‘a structured group of three or more persons, existing for a period of time and acting in
concert with the aim of committing one or more serious crimes1 in order to obtain, directly or indirectly, a financial or
other material benefit’. Under New Zealand domestic law, membership of an organised criminal group is punishable
pursuant to Section 98A of the Crimes Act 1961, and could result in up to 10 years imprisonment. Section 98A draws
from the UN definition but also includes penalties for group violence, or committing crimes overseas, that if committed
in New Zealand, would be an offence.
“Today’s organised crime networks are more agile and inventive, quick to embrace new technologies
and seek out new markets and supply routes. They run like sophisticated and modern multi-national
businesses”.
United Kingdom, Home Office 2009
A number of groups engaged in organised crime in New Zealand are traditional, in the sense that they operate as
a structured group with a rigid hierarchy. However, consistent with international trends, some organised groups
impacting on New Zealand are fluid, flexible and dynamic criminal networks, where structure is less obvious.
Increasingly, these organised crime groups expand and contract depending on criminal opportunities. In this way, the
networks are entrepreneurial and often use facilitators and specialists, as well as legitimate businesses, to facilitate their
illicit activities. While organised crime definitions provide a useful starting point, defining and identifying organised
crime groups is problematic due to their continuing evolution and the complexity of emerging networks. Despite the
challenges in defining and identifying organised crime groups, those involved are linked by two common characteristics;
they all pose a risk to New Zealand and they are largely motivated by financial gain.
1 The UN Convention against Transnational Organised Crime defines serious crime as conduct constituting an offence punishable by a maximum deprivation of liberty at least
four years or a more serious penalty.
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ORGANISED CRIME GROUPS AND MEMBERS IN NEW ZEALAND
Organised crime in New Zealand is perpetrated by a range of groups. Importantly, not all organised crime groups
pose the same level of risk. The diagram below highlights that organised crime group involvement in criminal activity
varies from street level offending to transnational organised crime. Consequently, the impact these groups have on the
community, and the law enforcement response, varies greatly.
New Zealand Adult and Youth Gangs
A New Zealand Adult or Youth Gang is an organisation, association or group with the following
characteristics: a common name; one or more common identifiers; and whose members or associates
either individually or collectively promote, encourage or engage in criminal activity that is driven by a
desire for profit and/or to create an atmosphere of fear and intimidation, all of which are enabled by
virtue of membership in the gang.
New Zealand Police
Currently, it is noted that there are 30 adult gangs in New Zealand. These adult gangs are present in towns and cities
throughout New Zealand and are involved in a wide range of criminal offending. While tension often exists between
these groups, an observable trend in the last few years is their willingness to work together where there is profit to be
made from criminal activity. New Zealand Adult Gangs have also evolved and are now less likely to be collectively linked
to a single criminal venture. Rather, individuals use their gang membership to enable and facilitate criminal activity.
New Zealand Youth Gang presence is also noted widely throughout the country. However, their fluid nature makes
determining membership particularly problematic. New and emerging youth gangs continue to be identified but
groupings are often observed to disband or merge with other gangs. New Zealand Youth Gangs are commonly noted
for their involvement in drug offending, burglary, vehicle crime, disorder, intimidation, wilful damage and graffiti.
While not always considered ‘organised’, offending is often facilitated and driven by membership in a youth gang and
sometimes the gangs’ affiliation to an adult gang.
5
Family syndicates
Organised crime groups in New Zealand can also be linked by family relationships. Family syndicates are noted
throughout New Zealand and are involved in a range of offending including burglary, violence, threats, possession of
weapons, drugs and vehicle crime.
Transnational organised crime groups
Law enforcement continues to identify transnational organised crime groups impacting on New Zealand. These groups
often have links to international criminals or networks, increasing the risk that they pose. Commonly linked by
either ethnicity, or their involvement in a specific illegal market, these groups are often flexible and entrepreneurial.
West African, Vietnamese, Chinese, Iranian, Italian, Romanian, Pakistani and Malaysian organised crime groups have all
been noted for their involvement in a range of organised offending including fraud, Intellectual Property (IP) crime and
illicit drug activity. Asian organised crime groups in particular continue to pose a serious threat to New Zealand, due to
their ongoing involvement and central role in the illicit drug market.
Facilitators and specialists
Outsiders are commonly recruited or exploited where specialised skills are required to facilitate organised criminal
activity in New Zealand. They may be outside contractors or part of a criminal network and include complicit lawyers,
accountants, chemists and computer hackers, or even those with access to particular goods including firearms, false
documents or precursor chemicals.
6
ILLEGAL MARKETS
Illicit drugs
Methamphetamine, precursor chemicals and clandestine laboratories
• Oceania is recognised internationally as having one of the highest amphetamine-type substance user rates
per capita in the world.
• The New Zealand methamphetamine market is estimated to be worth approximately NZ$1.2 billion per
year at street level prices.
• The recently published Tackling Methamphetamine: Action Plan aims to reduce methamphetamine use in
New Zealand and the subsequent harm it causes.
• Asian organised crime groups are a key threat due to their involvement in the importation of
methamphetamine and pseudoephedrine, as well as domestic manufacture of the drug.
• Reporting indicates domestically sourced pseudoephedrine is commonly used in clandestine laboratories.
• Organised crime group involvement is noted at every stage of the methamphetamine supply chain in
New Zealand.
Oceania is recognised internationally as having one of the highest amphetamine type substance2 user rates in the world
‘per capita’. Methamphetamine, commonly referred to as ‘P’, is supplied to the New Zealand market via importations
and domestic manufacture. It is estimated that the methamphetamine market is worth NZ$1.2 billion per year at street
level prices and is the most significant driver of profit for organised crime in New Zealand.
The recent publication Tackling Methamphetamine:
An Action Plan3 released by the New Zealand
Government demonstrates a commitment to
reducing methamphetamine use in New Zealand
and the subsequent harm it causes. The Action Plan
outlines the aim to implement stronger controls over
methamphetamine precursors, provide better routes
into treatment for problematic users, increase community
support, and ensure that agencies are working together to
reduce the use of, and harm associated with, the drug in
New Zealand.
The global demand for methamphetamine that
ContacNT granules concealed within a bicycle frame.
emerged in the 1990s, has driven the demand for
4
precursor substances, namely pseudoephedrine and
ephedrine, typically used as the primary ingredients in the manufacturing process. Manufacturing methods that use
pseudoephedrine are often preferred, because it is (relatively) easily converted to make methamphetamine. China is
currently the primary source country for both pseudoephedrine and ephedrine predominantly in the form of ContacNT5.
New Zealand continues to be targeted by Asian organised crime groups who dominate the supply of overseas sourced
pseudoephedrine, however, these groups are also linked to importations of methamphetamine, and more recently its
domestic manufacture. It is likely their involvement in the methamphetamine market in New Zealand will continue.
2
3
4
5
For the purposes of this report, ATS includes amphetamine, methamphetamine and MDMA.
Refer link: http://www.beehive.govt.nz/sites/all/files/ActionPlan.pdf
Precursor substances are those used in the manufacture of illicit drugs.
ContacNT is a medicine widely available in China.
7
Operation Jacaranda in 2009 targeted one of the largest
methamphetamine clan labs ever detected in New Zealand.
The investigation revealed that pseudoephedrine
was being extracted in a motel in Auckland and then
transported to a rural property for conversion into
methamphetamine. A hollow, cracked marble table and
statues at the rural site indicated imported precursors
had been used. Four full truckloads of chemicals were
removed from one of the sites. Chemicals present at the
scene also indicated experimentation with alternate
manufacturing methods not requiring pseudoephedrine.
The manufacturing operation was run by an Asian offender.
Another source of pseudoephedrine is the diversion
of pseudoephedrine-based medicines brought over
Some of the chemicals located during Operation Jacaranda.
the counter from pharmacies; a practice known as ‘pill
shopping’. Pill shoppers are often either contracted by domestic organised crime groups and paid in cash, or they may
be users obtaining the medicine in exchange for drugs. Domestically sourced pseudoephedrine is commonly identified
at clandestine laboratories. Forthcoming legislative changes that intend to make pseudoephedrine a prescription-only
medicine aim to significantly reduce domestic diversion.
New Zealand methamphetamine manufacturing methods also use chemicals that are not controlled by legislation, for
example, phosphorous and iodine. These chemicals are typically obtained domestically and diverted for illicit purposes.
New Zealand Adult Gangs continue to be involved in the manufacture and distribution of methamphetamine, with
104 of the 133 clan labs dismantled (78 percent) in 2008 linked to Adult Gangs.
Cannabis
• New Zealand is self sufficient in the cultivation of cannabis, which is the most commonly used illicit drug in
New Zealand.
• Organised crime groups and members can be linked to every stage of the cannabis supply chain.
• There has been an increase in indoor cannabis operations linked to Vietnamese organised crime groups.
• While ‘drug dealing houses’ once sold only cannabis, a range of illicit drugs are now sold at these locations.
Since the early 1990s New Zealand has been self
sufficient in the cultivation of cannabis, which is
the most widely used illicit drug in New Zealand.
According to international research, New Zealand is
acknowledged as having one of the highest rates of
use per capita in the world.
Both indoor and outdoor cannabis cultivation is
noted in New Zealand. Whilst outdoor cultivation of
cannabis remains the preferred means, indoor soil
and hydroponics operations producing higher potency
cannabis are becoming more prevalent. Vietnamese
organised crime groups have been linked to several
recent indoor growing operations.
8
Operation Kristy
The 2008/2009 New Zealand Police National
Cannabis and Crime Operation resulted in the
destruction of approximately 141,000 cannabis
plants. Police arrested 1,175 individuals and
seized approximately NZ$400,000 worth of
stolen property and 191 firearms.
In addition, four methamphetamine clan labs
were detected. It is believed that Operation
Kristy cannabis plant seizures alone prevented
an estimated NZ$377 million in harm to the
New Zealand community.
Organised crime continues to be linked to every step of the
cannabis supply chain. A ‘typical’ cannabis supply chain
consists of a cultivator using a trusted buyer, or a small
select group of trusted buyers, who then on-sell to a wider
range of buyers. In 2009 a number of New Zealand Adult
Gangs were linked to seizures of cannabis.
Locations selling cannabis are colloquially referred to as
‘tinnie houses’, due to cannabis often being sold in small
quantities wrapped in tinfoil. However, a range of illicit
drugs are increasingly being sold at these locations,
prompting a change of name by the New Zealand Police
from ‘tinnie houses’ to ‘drug dealing houses’.
Cannabis seized during a police investigation.
MDMA and MDMA mimics
• Tablets that users believe to be MDMA are increasingly found to actually contain a range of synthetic
substances (MDMA mimics).This also means it is more difficult to determine the true nature of the MDMA
market in New Zealand.
• MDMA in New Zealand is sourced from illegal importations.
• Both domestic and transnational organised crime groups are involved in the MDMA market in New Zealand.
MDMA is commonly referred to as ‘ecstasy’. Importations of MDMA into New Zealand
first emerged in the mid-1990s and originated from Europe (specifically the
Netherlands and Belgium). However, in recent years a wider range of regions and
source countries, including Eastern Europe and Asia, have been noted. From the
late 1990s, domestic organised crime groups became increasingly involved in the
importation and distribution of MDMA. Only a small number of clandestine MDMA
laboratories have been dismantled in New Zealand in the last 20 years, indicating
MDMA in New Zealand is primarily sourced from illegal importations.
Both domestic and transnational organised crime groups have been identified
importing and distributing MDMA in New Zealand. Approximately 14,500 MDMA
tablets6 were seized in 2009 in 112 seizures.7 However, since 2007, it has become
difficult to identify MDMA tablets because they increasingly include a range of
alternative synthetic substances (MDMA mimics).8 This includes BZP9, which has
been classified as a Class C Controlled Drug under the Misuse of Drugs Act 1975.
These developments have essentially altered the MDMA market, making it difficult
to determine trends. It is likely MDMA tablets will continue to contain other synthetic
substances, which presents a greater risk for users who believe that they are taking
MDMA.
6
7
8
9
Seized MDMA tablets and granules.
Tablets refer to tablet equivalents as MDMA is imported in both tablet and powder form.
Tablets have been recorded as MDMA but may have included other synthetic substances.
Alternate synthetic substances can include but is not limited to piperazines, mephedrone and methylone.
Benzylpiperazine (BZP) is a recreational drug with stimulant properties. The effects produced by BZP are believed to mimic those produced by amphetamine, although at
reduced potency.
9
Cocaine
• By international standards the current cocaine market in New Zealand is believed to be small.
• It is possible that organised crime groups will seek to expand the cocaine market in New Zealand.
• New Zealand and the Pacific region are used as transit points for shipments of cocaine.
Cocaine is derived from the coca plant, which is grown in South America, specifically Colombia, Peru and Bolivia, and
there is no evidence that cocaine is currently produced in New Zealand. It is believed that New Zealand’s cocaine market
is relatively small, however, during the latter part of 2009 and early 2010, reporting indicated increased availability of
cocaine.
It is possible that transnational organised crime groups, as well as New Zealand Adult Gangs, might seek to expand the
cocaine market in New Zealand. Intercepted shipments of cocaine indicate New Zealand and the Pacific region are used
as transit points for illicit drug consignments destined for other international markets.
Opiates and opioids
• Hospital admissions indicate an increasing number of younger individuals are using opioids.
• The New Zealand market is currently dominated by the diversion of opiate-based pharmaceuticals.
• It is possible that organised crime groups will seek to exploit any expansion in the opiates and opioids
market in New Zealand.
There are no current indicators to suggest there is a market for imported heroin
in New Zealand and there have been no significant seizures of imported heroin
since 2001.
While New Zealand has had a long period of relatively low opiate10 abuse since it was
targeted by the Mr Asia syndicate in the 1970s, there are early indications that this
market is expanding. Hospital admissions highlight an increasing number of younger
individuals who are using potentially addictive opioids11.
The New Zealand opiate market is currently dominated by the diversion of opiatebased pharmaceuticals, including those that can be obtained via doctor’s prescription.
It is difficult to determine the most widely abused opiates in New Zealand. Codeine
is most widely available but morphine features more regularly in seizure incidents.
The abuse of methadone is also commonly noted. It is possible that any increased use
of opiates and other opioids in New Zealand could lead to the recommencement of
imported heroin and the expansion of this market by organised crime groups.
10 An opiate includes, but is not limited to, heroin, opium and methadone.
11 Opioid includes, but is not limited to, morphine, codeine and oxycodone.
10
Scored Opium Pod.
Burglary, theft and links to organised crime
• Organised crime groups and family syndicates continue to be noted for their involvement in volume crime
offending.
There are ongoing examples of New Zealand Adult and
Youth Gang, as well as family syndicate, involvement in
burglary, theft and a range of other ‘volume’12 crimes.
Investigations reveal theft and burglary are often
undertaken to support a drug habit.
Organised crime groups in New Zealand are also involved
in the movement of illicit and stolen commodities to
satisfy national supply and demand. Both the road and air
transport networks are utilised to move goods including,
for example, stolen property, firearms, counterfeit items
and illicit drugs.
Stolen vehicle and parts ready for export.
Operation Beryl
An operation was launched in 2009 following the identification of organised offending relating to the
theft of over 500 Toyota Hiace Vans in the Auckland Region. A small percentage of these stolen vehicles
were subsequently recovered. The police targeted ‘chop shops’ as well as the offenders who were
stealing the vehicles. To date there have been 12 arrests and 444 criminal charges laid.
In addition, the operation has resulted in the recovery of 127 or NZ$690,000 worth of stolen vehicles
or parts, four firearms, stolen property, methamphetamine and cash. Parts were being shipped to the
Middle East via the United Arab Emirates, sometimes at a rate of one container per week. This highly
organised criminal syndicate had a significant impact on vehicle theft across Auckland.
Violence
• The majority of organised crime groups engage in violent offending.
• New Zealand Adult Gangs engage in overt displays of violent offending commonly perpetrated within and
against other organised crime groups. Many of these incidents remain unreported.
Organised crime groups provide a structure as well as a set of values and behaviours that actively encourage and
normalise antisocial behaviour, including violence. In New Zealand, the majority of organised crime groups engage in
violence and intimidation as a way of life, in random acts of aggression or in self defence.
New Zealand Adult Gangs often engage in overt displays of violent offending commonly linked to incidents of both
inter and intra gang tension. Gang members in New Zealand are noted for their ongoing involvement in ‘standovers’13
and ‘taxing’,14 which are often linked to the illicit drug trade. This is consistent with international reporting that notes
violence is used to enforce criminal business dealings and recover debts.
12 Volume crime generally includes burglary, unlawful taking of motor vehicles and general theft (including theft from motor vehicles and shoplifting).
13 A standover involves the use of intimidation to create fear of consequences if a certain demand is not complied with.
14 Taxing is the removal or theft of property, drugs or money by a gang member in payment of a debt, whether real or imagined. Taxing often involves the use of intimidation or
violence to overcome resistance.
11
While some gang members have legitimised their involvement in debt collection in New Zealand, it is likely that their
status as a gang member is used to intimidate victims. Further, organised crime groups and members are often found
in possession of a range of weapons, including firearms. New Zealand Youth Gangs are commonly involved in violent
offending including fighting, assault and intimidation. Organised crime group involvement in violent offending is often
unreported out of fear, or due to the victims being criminals themselves.
Operation Billy
Operation Billy related to a violent clash between two rival youth gangs in 2005. Thirty members
of one gang, armed with weapons, confronted members of another gang at an Auckland address.
The ensuing violence resulted in gang members being knocked unconscious, and beaten about
the head and body with baseball bats, hammers, glass bottles and pieces of wood. Victims were
hospitalised with life threatening injuries. Eleven individuals were charged with attempted murder,
wounding with intent and serious assault. This violence highlights that tensions between rival gangs
can often lead to violent offending.
Kidnapping
• Organised crime groups in New Zealand are involved in criminal vendetta kidnappings as well as
kidnappings for gain.
• Organised crime group involvement in kidnapping in New Zealand is under reported.
There are a number of examples of organised crime group
involvement in kidnapping in New Zealand. It is believed that
kidnapping incidents are under reported, commonly due to
the victims being criminals themselves. These incidents are
sometimes referred to as ‘criminal vendetta’ kidnappings.
For example, an indoor cannabis growing operation shut down
by police in 2008 led to a standover in relation to lost drug
money. A violent incident ensued and kidnapping charges
were subsequently laid against four individuals. In another
example, a well-known criminal involved in illicit drug activity
was charged with kidnapping following an incident in 2008.
Along with two others, and armed with a cattle prod, a knife
and a pistol, they entered the victim’s address and demanded
the return of cannabis that had allegedly been stolen.
Organised crime groups in New Zealand have also been noted
for their involvement in kidnapping for gain. In a recent
example, a brothel client was kidnapped, threatened with
violence and had a large amount of money withdrawn from
their account. The brothel is believed to be one of several in
the wider Auckland region run by an Asian organised crime
syndicate. In an incident in early 2010 a New Zealand Adult
Gang member who, while armed with a weapon, kidnapped
an individual from their apartment complex. The victim was
transported in the offender’s vehicle, robbed of possessions
and made to withdraw money from their bank account.
12
Operation Convoy
Operation Convoy related to the
kidnapping of a female from her home.
One of the four offenders had undertaken
contracting work at the victim’s residence
prior to the kidnapping. Armed with
a knife and a fake gun, three of the
offenders entered the victim’s home in the
early morning and tied her and her elderly
parents up.
They told the victim’s parents they
wanted NZ$500,000 by noon and another
NZ$500,000 by noon the next day.
They said if the kidnapping was reported
to the police all three of them would be
murdered. The victim was blindfolded and
driven away in her own vehicle. Realising
their demands would not be met, the
offenders left the victim in an industrial
area. The offenders were subsequently
arrested.
Illegal trade, possession and use of firearms
• Organised crime groups and members are involved in the illegal trade, possession and use of firearms.
• Firearm use is noted in inter and intra gang violence. Incidents involving members of the public are rare.
• Organised crime groups undertake burglaries and continue to target legitimate firearm owners and
collectors in order to gain access to firearms.
The dynamics of organised crime lends itself to conflict
and consequently, the possession and use of firearms.
Organised crime groups use firearms for their protection,
the enhancement of their status and the commission
of crime including intimidation, robbery, assault and
homicide. International reporting highlights that the
possession of firearms by organised crime groups is often
linked to the illicit drug trade.
Organised crime groups in New Zealand continue to
illegally possess and use firearms. Inter and intra group
Weapons and ammunition seized from an address by police in 2008.
conflict, often involving weapons,15 has existed in
New Zealand for decades and firearms have featured in a
number of high profile cases in recent years. For example, in 2007 a New Zealand Adult Gang member killed the two
year old daughter of a rival gang member in a drive-by shooting. Fortunately, organised crime group use of firearms
in incidents involving members of the public are rare. However, any use of firearms by the criminal fraternity poses an
unacceptable risk to the public.
Consistent with international reporting, organised crime groups undertake burglaries and continue to target legitimate
firearm owners and collectors in order to gain access to firearms. For example, 22 firearms were stolen in six targeted
burglaries in rural Northland in 2009.
Illegal migration
• International migration is set to increase in the future, driven by a range of factors.
• Human trafficking has not yet gained a foothold in New Zealand.
• There is a risk of future seaborne people smuggling attempts targeting New Zealand.
• Illegal migration is facilitated by application fraud, the use of irregular travel documentation or the
contravention of permits once an individual arrives in New Zealand.
• Organised crime groups are involved in the production and use of false, fraudulent or stolen documents to
facilitate entry into New Zealand.
The UN estimate there are approximately 200 million migrants worldwide, a figure that has more than doubled in the
last 25 years. Increased migration has been driven largely by globalisation and the dramatic improvements in transport
and communications. While economic incentives will continue to drive migration in the future, environmental pressures
and climate change will almost certainly become more relevant. Conflict and war also result in the displacement of
people to other countries. Consequently, illegal migration as a subset of all migration looks set to increase.
Human trafficking is distinct from people smuggling in that it involves coercion and exploitation of the migrant. It is
believed human trafficking has not yet gained a foothold in New Zealand.
15 Firearms most commonly used are ‘long arms’ such as rifles and shotguns.
13
People smuggling has emerged as a major organised crime
problem in Australia. There is a risk of future seaborne people
smuggling attempts targeting New Zealand. The success of
any venture is dependant on a number of factors including
the determination of the smugglers, the seaworthiness of
the vessel, the weather, as well as required food and fuel
provisions. Proactive law enforcement intervention will also
hinder the success of any venture.
Illegal migration continues to be facilitated by application
fraud, the use of irregular travel documentation or
the contravention of permits once an individual is in
New Zealand. The presence of foreign nationals working
illegally in New Zealand’s sex industry has also been
identified.
The abuse of legitimate entry to New Zealand by organised
crime groups is likely to continue as border controls tighten
in regard to illegal migration. Such groups are often involved
in the production and use of false, fraudulent or stolen
documents to support legitimate applications to gain entry
and remain in New Zealand. It is likely organised crime groups
will produce increasingly sophisticated documentation in
support of elaborate scams to deceive immigration authorities.
CASE STUDY
In 2004, a male Malaysian national
was one of the first individuals to
be convicted of people smuggling in
New Zealand. The investigation related
to the smuggling of Malaysian and Thai
nationals into New Zealand to work
illegally in the horticulture industry.
Upon arranging entry into New Zealand
through Auckland International Airport
and transiting the workers to Blenheim,
the offender retained his employees’
passports and provided sub-standard
accommodation. The offender was
subsequently convicted and sentenced
on 12 immigration charges relating to
people smuggling and sentenced to two
years imprisonment.
Identity crime
• Identity crime is often essential to facilitate successful, and sometimes large-scale, offending.
• Information and Communications Technology, including the Internet, are used as a means to facilitate, as
well as commit, identity crime.
• Organised crime groups and specialists continue to use fraudulent identity documents to commit a range of
offending.
The misuse of personal identity information, commonly referred to as identity crime16, describes illicit activity that
forms part of an offence. It is important to examine identity crime as a separate illegal market because it remains poorly
understood and facilitates a range of criminal activity. The misuse of personal identity information can directly expedite
an offence by allowing a deception to occur. This is evidenced in many financial and immigration frauds. While identity
crime is described as an ‘enabler’, it is often essential to facilitate successful, and sometimes large-scale, offending.
Cash and gold bars retrieved from an identity crime offender’s property.
16 Internationally, terms relating to the misuse of identity vary widely and can include identity theft, identity fraud and identity crime.
14
Information and Communications Technology, including the Internet, provides avenues that assist identity crime
offending. For example, technology provides the means to produce high quality manufactured identity documents,
while the increasing online storage of personal information and online transaction systems are also being exploited.
Online identity crime activity, currently based around phishing17, account compromise and credit card fraud, is often
committed against New Zealanders by offenders based elsewhere in the world. The scope and reach of this offending
can be vast with minimal financial outlay. Many items used in the production of false identity documents are widely
available on the Internet, including card readers, card encoders, card printers and over-laminates used to produce cloned
credit cards.
Organised crime groups and their specialists continue to use fraudulent identity documents to facilitate a range of
offending, commonly linked to fraud and illegal migration. An example in 2009 related to the fraudulent reporting
of ‘lost’ passports that were then used to gain illegal entry into Australia. Of note is the fact that identity documents,
including passports and driver licences, continue to be targeted in thefts and burglaries in New Zealand.
Financial crime
Money laundering
• Organised crime groups are involved in money laundering in New Zealand.
• The complexity of money laundering methods depends largely on the sophistication of the offenders
involved.
• New legislation will result in increased scrutiny of financial institutions and transactions, and it well enable
law enforcement to more easily seize proceeds of crime.
Money laundering is the process by which income and assets used in, and derived from, illegal activity are converted
into, or disguised, as apparently legitimate income. Organised crime groups launder proceeds of crime to avoid
detection, preserve profit, further their criminal enterprise and support their lifestyle. The primary aim of organised
criminal activity is the pursuit of profit. Therefore, combating money laundering is fundamental to effectively
addressing serious and organised crime.
Money laundering is a criminal offence and separate to the original (or predicate) offence18 that generated the proceeds
of crime. In essence, money laundering occurs whenever a criminal deals with the proceeds of a serious crime19 with
the purpose of concealing the origins, and with the knowledge that the proceeds have been derived from serious crime.
There is no reliable estimate as to the extent of proceeds of crime. However, organised crime is financially motivated and
therefore it is likely that the criminal proceeds laundered are of substantial value.
Most money laundering occurs through the regulated financial system. The complexity of the money laundering
depends on the sophistication of the offenders involved. For example, the laundering of proceeds of crime can range
from the sale of a stolen item20 and the deposit of the money into a retail bank account, through to multiple transfers
of illicit drug money through shelf companies’21 trust accounts. Organised crime groups in New Zealand have been
observed using a range of money laundering methods including:
• Use of the retail banking sector, credit cards, cheques, stored value cards, promissory notes etc.
• Cash conversion.
• Currency exchange.
17 Phishing commonly involves sending fake emails to a victim purporting to come from a legitimate source and requesting information (such as bank account details and/or
passwords), or directing a victim to a fake Internet website where this information can be captured.
18 Predicate offence refers to a serious offence (or specified drug offence) from which the proceeds can be laundered.
19 In this context, serious crime is defined as an offence punishable by five years imprisonment or more or an offence committed overseas that, if committed in New Zealand,
would be punishable by five years imprisonment or more - Section 243 (1) Crimes Act 1961.
20 Under New Zealand legislation, stolen property must have a value of NZ$1,000 or more before it can be laundered.
21 A shelf company is a legal company that exists in name only and does not perform or operate in anyway.
15
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Purchase of portable valuable commodities (gems, precious metals etc).
Purchase of valuable assets (real estate, vehicles etc).
Alternative remittance services/underground banking.
Casino, pub and bar gambling, horse racing.
Co-mingling (business investment).
Use of nominees, trusts, family members or third parties.
Use of professional services (lawyers, accountants, brokers etc).
The Anti Money Laundering and Countering Financing of Terrorism Act 2009 will be implemented over two years.
The Act will result in increased scrutiny by financial institutions of financial transaction activity. Since the Criminal
Proceeds (Recovery) Act 2009 came into force, NZ$36 million worth of assets have been identified that are believed to
have been obtained through criminal activity. Of the NZ$36 million under investigation, a large proportion is believed to
be linked to the illicit drug trade. Targets in these investigations have included organised crime groups and members.
Fraud
• International and domestic organised crime groups continue to be noted for their involvement in a range of
fraud offences impacting on New Zealand.
It is sometimes difficult to identify an organised element to fraud offending as offences are often viewed in isolation.
Despite this, the use of similar modus operandi by offenders is often noted, highlighting knowledge sharing within the
criminal fraternity.
Consistent with international reporting, New Zealanders continue to be targeted in advance fee frauds, commonly
perpetrated by West African nationals and organised crime groups. The principal strategy of these scams is to target
vulnerable individuals with promises of personal gain. A recent scam in New Zealand involved online vacancy
advertisements for ‘receipts payment clerks’. The receipts payment clerks were required to bank stolen or fraudulent
funds in varying forms, predominantly counterfeit traveller cheques, before forwarding funds offshore.
These scams are commonly referred to as mule recruitment22. The clerk essentially acts as a mule, laundering funds
on behalf of the offender and subsequently receives a commission for conducting the transactions. Advance fee fraud
and other online fraud offences are challenging to investigate, as the Internet enables offenders to conceal their
whereabouts and maintain anonymity. The Ministry of Consumer Affairs in New Zealand provides the public with
information to help them recognise and protect themselves from such scams.23
Organised crime group involvement in credit card fraud is ongoing and often involves international gangs. An example
of this is a recent investigation identifying increased theft of credit cards by courier drivers. It is believed the cards were
being passed to ‘distributors’ who arranged for ‘shoppers’ to make the first purchase for the distributor. Shoppers were
then able to continue using the cards for their own benefit.
In March 2008, two Malaysian nationals were arrested in Whangārei using professionally cloned credit cards to purchase
high-end electrical goods for on-sale. In addition, 18 cloned Visa and MasterCard credit cards were seized from two
Singaporean nationals at Auckland International Airport. It is believed that these two incidents are linked and the
offenders were connected to an organised crime group in Australia.
22 ‘Mule Recruitment’ is an attempt to get a person to receive stolen funds using his or her bank account, and then transfer those funds to criminals overseas.
23 http://www.consumeraffairs.govt.nz/scamwatch/index.html
16
Electronic crime (e-crime)
• Cyber crime and online theft is believed to be costing the global economy US$1 trillion annually.
• Computer users in New Zealand continue to be targeted, mostly by cyber attacks originating from overseas.
• The Internet provides an opportunity for offenders in New Zealand to communicate and extend their
criminal networks.
Electronic crime (e-crime) refers to offences where information and
communications technology (ICT)24 is used as a tool in the commission
of a crime, is the target of an offence, or is used as a storage device in the
commission of a crime. Online theft is estimated to cost the global economy
US$1 trillion annually. Some international reporting states that cyber crime
is currently in a transition period and that, left unabated, there will be a
significant increase in offending in the coming years.
Society has become increasingly dependant on the Internet and ICT in general.
Public, private, social, economic and military institutions all now rely heavily
on computer networks, and throughout the world the Internet is used for
communication, information gathering and sharing, as well the purchase of
goods and services. Despite the progress facilitated by the Internet, it has been
likened to a new frontier where users can exist anonymously and physical
identity and location are irrelevant. Criminals are increasingly exploiting this
space to engage in criminal activity that threatens individuals, organisations
and governments.
Forensic examination of a computer hard drive.
International organised crime groups are noted for their ongoing involvement in using ICT to facilitate traditional
offending, as well as launching cyber attacks. The Internet is being used to exploit vulnerabilities in computer systems
to launch cyber attacks against both individuals and organisations. Attacks against individuals often involve malicious
software (malware25) or codes that are used to harvest personal information or data while the individual is online.
Criminals are also launching cyber attacks using malware to gain access to large amounts of personal information held
by organisations. Computer users in New Zealand are targeted, predominantly by attacks originating from overseas.
The Internet provides an opportunity for offenders in New Zealand to communicate and extend their criminal networks.
For example, organised crime groups and members are using social networking websites26 to advertise their gang
connections, communicate and share information with each other.
CASE STUDY
In April 2010, a joint investigation conducted by the FBI, United States Secret Service and Romanian
law enforcement agencies resulted in the arrest of 70 individuals from three separate organised cyber
crime syndicates. The individuals were charged for their involvement in online auction scams that
targeted eBay users. It is believed the groups launched phishing attacks to obtain login credentials
and set up fake auctions selling high value commodities. The offenders fraudulently obtained in excess
of £1million and targeted more than 800 victims in 11 countries, including New Zealand.
24 ICT describes a range of technologies used for gathering, storing, retrieving, processing, analysing and transmitting information. ICT technologies can include computer
systems and mobile phones.
25 Malware is malicious software that covers any unwanted program that makes its way onto a computer system
26 A social networking website is an online community which allows users to send messages, write blogs and post images. Popular social networking websites include MySpace,
Facebook and Bebo.
17
Environmental crime
• The illegal trade in environmentally sensitive items is lucrative.
• New Zealand Adult Gangs as well as Asian organised crime groups are involved in poaching and black
market activity relating to environmentally sensitive items.
• Environmentally sensitive items are being traded online.
• There is an ongoing risk relating to the illegal importation of biosecurity risk materials into New Zealand.
The illegal trade in environmentally sensitive items,
including endangered species, marine resources, timber,
ozone depleting substances, toxic chemicals and hazardous
waste is a serious problem with global impact. The
involvement of organised crime entities in the exploitation
of marine resources, the illegal trade in wildlife and illegal
logging is well documented.
Environmental crime is one of the most lucrative and
fastest growing areas of international criminal activity.
For example, the international illegal trade in wildlife is
estimated to be worth at least US$5 billion and potentially
in excess of US$20 billion annually.
New Zealand Adult Gangs as well as Asian organised crime
groups are involved in poaching, and black market activity
linked to environmentally sensitive items. New Zealand
fisheries, including paua and rock lobster, are commonly
targeted.
In March 2007, an investigation resulted in the
apprehension of a black market paua buyer who had
links to Asian organised crime entities. The offender was
identified over a two-month period as having received
and on-sold 1.6 tonnes of illegal product. He was paying
NZ$17kg to purchase the illegal paua and on-selling it on
the Auckland black market for NZ$46kg. It is believed the
offender, who was active over a 12-month period, made in
excess of NZ$270,000 in profit.
A jewelled gecko, the target of a smuggling attempt.
CASE STUDY
In February 2010, three individuals were
involved in trafficking of 16 jewelled geckos,
nine of which were pregnant. The geckos
would likely have fetched approximately
NZ$200,000 on the international black
market. WEG had previously noted one of
these individuals for his involvement in
wildlife trafficking internationally.
New Zealand is considered both a source and destination for Convention on International Trade in Endangered Species
of Wild Fauna and Flora (CITES) items. The Wildlife Enforcement Group27 (WEG) confirms that environmentally sensitive
items from New Zealand are being traded online.
There is an ongoing risk relating to the illegal importation of biosecurity risk materials that have the potential to
adversely impact New Zealand, both from an economic and biosecurity perspective. For example, any deliberate
importation of foot and mouth virus would severely impact the New Zealand economy, and grape phlox could destroy
the wine industry. In the past, there have been attempts to smuggle the calicivirus into New Zealand. The honey
industry has also been severely affected by the introduction of the varroa mite, believed to have been brought in on a
smuggled queen bee.
27 The New Zealand Customs Service hosts the Wildlife Enforcement Group, which is resourced and staffed by the New Zealand Customs Service, the Department of Conservation
and the Ministry of Agriculture and Forestry.
18
Intellectual Property (IP) crime (counterfeiting and piracy)
• Globalisation and technological advances have facilitated the growth in IP crime.
• While domestic and transnational organised groups have been noted for their involvement in IP crime in
New Zealand, much of the current offending is opportunistic.
It is estimated IP crime, namely counterfeiting and piracy,
constitutes five to seven percent of global trade. The World
Health Organization (WHO) predicts that 10 percent of
medicines available worldwide are counterfeit. Globalisation and
technological advances have facilitated the growth in IP crime
by enabling widespread distribution of high quality counterfeit
goods, some of which are hard to differentiate from the genuine
articles. The global increase in the use of the Internet has further
facilitated the advertising, sale and distribution of counterfeit and
pirated goods.
International reporting has established a link between organised
crime and the manufacture, distribution and sale of Intellectual
Property Rights (IPR) infringing goods. While transnational and
domestic organised groups have been noted for their involvement
in IP crime in New Zealand, much of the current offending is
opportunistic, exploiting market demand for particular goods.
Film piracy continues to threaten New Zealand’s film industry.
CASE STUDY
In March 2008, the New Zealand Police and the New Zealand Federation against Copyright Theft
(NZFACT) seized over 6,300 pirated DVD movies. The burning set-up, located at an apartment in the
Auckland CBD, had a capacity to burn 430,000 discs annually, potentially generating NZ$2.6 million
for the offenders involved. Two individuals were arrested in relation to these seizures.
The piracy operation was identified by NZFACT investigators who discovered advertisements for
pirated discs being offered for sale on the Skykiwi trading site. The offenders had moved three times
in four months and on one occasion left a substantial amount of equipment behind purchasing new
equipment at the new address. While not organised in the traditional sense, this operation involved a
degree of sophistication, significant profit, as well as tax evasion.
19
Bribery and corruption
• New Zealand is internationally recognised as one of the least corrupt societies in the world.
• There are isolated incidents whereby bribery and corruption have facilitated organised crime group
offending in New Zealand.
International experience has shown that despite increased scrutiny and surveillance at the border, as well as enhanced
law enforcement effort, organised crime groups continue to carry out criminal activity such as illicit drug trafficking,
illegal migration and identity crime. This activity is facilitated in part by the corruption of public officials through the
payment of bribes and extortion. Although there are few incidents of corruption in New Zealand, organised crime groups
continue to look for ways to exploit weaknesses.
New Zealand has implemented international standards28 that criminalise corruption and promote transparency in
decision-making as a way of combating corruption by organised crime groups. To date, New Zealand has been able to
prevent and detect wide-spread corruption through a combination of public antipathy to corrupt practices, effective
legal frameworks and strong integrity systems29.
28 New Zealand has ratified the UN Convention on Transnational Organised Crime, which is concerned with the corruption of domestic public officials, and the OECD Convention
on Bribery of Foreign Public Officials in International Business Transactions, which is concerned with bribery of overseas public officials.
29 ‘Integrity systems’ refers to those democratic institutional and constitutional arrangements that provide for transparency and public accountability. These include appropriate
checks and balances between the executive, legislature and judiciary, respect for the rule of law, and an active civil society (including an independent free media, free and fair
elections and participation in public affairs).
20
EFFORTS TO DISRUPT AND DISMANTLE ORGANISED CRIME
Collaboration - international, government and private sector
A number of law enforcement agencies in New Zealand work with international partners, sharing information and
resources, to target transnational organised crime groups.
To disrupt and dismantle organised crime in New Zealand, government and private sector partners continue to
collaborate. Drawing on collective knowledge, expertise and resources ensures effective targeting of organised crime
groups and members.
Organised and Financial Crime Agency New Zealand
Formed in July 2008, the Organised & Financial Crime Agency New Zealand (OFCANZ) aims to attack national and
transnational organised crime threats, and increase cooperation between New Zealand Government agencies. OFCANZ
has commenced a number of multi-agency taskforce operations targeting organised crime networks in New Zealand.
Combined Law Agency Group (CLAG)
The Combined Law Agency Group (CLAG) is a group of intelligence, enforcement and compliance professionals who
collaborate on a whole of government approach to leverage combined resources. CLAG partnerships are utilised to
tackle the threats of cross-agency crime.
Legislation
Criminal Proceeds (Recovery) Act 2009
This Act enhances the criminal forfeiture regime and introduces a new civil regime to recover proceeds of crime. Under
this legislation, a conviction is not required to trigger forfeiture proceedings for criminal proceeds. It will simply be
sufficient to prove on the balance of probabilities that a person has unlawfully benefited from significant criminal
offending.
Anti-Money Laundering (AML)/Countering the Financing of Terrorism (CFT) Act 2009
This Act will result in increased scrutiny of a wider range of financial institutions and transactions.
Crimes Amendment Act 2009 and Sentencing Act 2009
The Crimes Amendment Act 2009, and Sentencing Amendment Act 2009 increase the penalty for participating in
an organised criminal group, clarify the evidential requirements to prove that offence, and make participation in an
organised criminal group an aggravating factor at sentencing. The Local Government Amendment Act 2009 enables a
District Court to issue a removal order if a property is regularly used by an offender or suspected offender and its fence,
structure or vegetation is regarded as intimidating.
Criminal Investigations (Bodily Samples) Amendment Act 2009
This Act amends the Criminal Investigations (Bodily Samples) Act 1995 and allows the police to collect, without prior
judicial approval, a bodily sample from any person that they intend to charge with certain specified offences.
Search and Surveillance Bill
This Bill aims to balance the values of law enforcement and human rights by providing consistent thresholds for the
exercise of police search and surveillance powers. It also seeks to consolidate and rationalise these powers.
21
Sentencing and Parole Reform Act 2010
This Act came into force on 1 June 2010 and provides for parole to be denied for repeat serious violent offenders and
those convicted of the worst murders. It also requires the maximum term of imprisonment to be imposed on offenders
who commit a third serious violent offence after having received a first and a final warning by the court at the time of
the previous convictions.
Arms Amendment Bill (No 3)
This Bill aims to improve controls on the sale, supply and ownership of firearms by individuals, and to better regulate
their importation.
Trade Marks (International Treaties and Enforcement) Amendment Bill 2008
This Bill is an omnibus Bill to amend the Copyright Act 1994 and the Trade Marks Act 2002 to provide the Police, the
New Zealand Customs Service and the Ministry of Economic Development with search and seizure powers to enforce the
criminal offences for dealing in counterfeit goods and pirated works.
22
Crimestoppers is an independent charity dedicated to providing a way for people to pass on information about crime to
the authorities and remain anonymous. If you have information that could help the New Zealand Police or any other law
enforcement agency in their efforts to disrupt and dismantle organised crime and you would prefer to remain anonymous,
please call 0800 555111 or use the encrypted web form at:
www.crimestoppers-nz.org