Money Laundering & Proceeds of Crime

Written by Justin Chua, Principal Solicitor, Chua Tan Associates. Last reviewed 5 October 2026. General information about Victorian law, not legal advice.

Money laundering charges often arise from money moving through your bank account, cash deposits or transfers made for other people. Many people charged did not set out to commit a crime. The central question is usually what you knew, or should have known, about where the money came from.

Victorian offences

Under the Crimes Act 1958 (Vic), “dealing” with proceeds of crime is broad. It includes receiving, possessing, concealing or disposing of money or property. The Commonwealth definition is wider again and includes moving money into or out of Australia.

• Knowing it is proceeds of crime and intending to conceal that (s 194(1)): up to 20 years.
• Knowing it is proceeds of crime (s 194(2)): up to 15 years.
• Reckless as to whether it is proceeds of crime (s 194(3)): up to 10 years.
• Negligent as to whether it is proceeds of crime (s 194(4)): up to 5 years.
• Dealing with property reasonably suspected of being proceeds of crime (s 195): a summary offence, up to 2 years.
• Dealing with property that later becomes an instrument of crime (s 195A): up to 15 years, depending on your state of mind.

Commonwealth offences

Division 400 of the Commonwealth Criminal Code grades money laundering by the value involved and your state of mind. The maximum penalties at the time of writing are:

• $1,000,000 or more: up to 25 years (intention), 12 years (recklessness) or 5 years (negligence).
• $100,000 or more: up to 20, 10 or 4 years.
• $50,000 or more: up to 15, 7 or 3 years.
• $10,000 or more: up to 10, 5 or 2 years.
• $1,000 or more: up to 5 years, 2 years or 12 months.

There is also a separate Commonwealth offence of dealing with money or property that is reasonably suspected of being proceeds of crime (s 400.9). The prosecution does not have to prove which crime produced the money, and you can be guilty even if you believed the amount was lower than it really was. Splitting cash deposits to avoid the bank’s $10,000 reporting threshold is a separate offence of “structuring” under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), even if the money itself is legitimate.

Situations we commonly see

• Letting someone use your bank account after an online job offer or a request from an acquaintance (“money mule” arrangements).
• Informal currency exchange or remittances for friends, family or customers.
• Large or frequent cash deposits from a cash business.
• Buying property, cars or cryptocurrency with funds transferred from other people or from overseas.

What happens, step by step

1. Investigation. Banks report suspicious matters to AUSTRAC, and police or the Australian Federal Police may obtain bank records long before anyone is spoken to. Accounts can be frozen without warning.
2. Interview or arrest. Get advice before you explain where the money came from. Explanations given without documents often hurt more than they help.
3. Restraining orders. Police or the Commonwealth may apply to restrain property under the Confiscation Act 1997 (Vic) or the Proceeds of Crime Act 2002 (Cth). Both Victorian and Commonwealth law allow some forfeiture proceedings to continue without a conviction.
4. Court. Victorian charges start in the Magistrates’ Court. Commonwealth charges are prosecuted by the Commonwealth Director of Public Prosecutions, and can be heard by a magistrate only if both the prosecution and you consent. Serious matters go to the County Court.
5. Evidence of source. Building a clear, documented account of where funds came from is usually the most important work in the case.
6. Plea or contest. Charges can sometimes be negotiated down to a lower fault element (for example, from knowledge to recklessness or negligence), which significantly changes the maximum penalty.

Penalties and realistic outcomes

Sentences depend on the amount, how long the conduct went on, what you knew, whether you profited and your role. Outcomes range from a fine or community correction order for lower-level negligence or reasonable-suspicion offences, to imprisonment for knowing laundering of large sums. A conviction can also affect your visa, employment, banking and any professional licence.

Frequently asked questions

I didn’t know the money was illegal. Can I still be charged?

Yes. Several offences only require recklessness or negligence, or that the money was reasonably suspected of being proceeds of crime. What you knew, and what a reasonable person in your position would have realised, is usually the key issue.

My bank account has been frozen. What should I do?

Get advice before contacting the bank or police with explanations. There are procedures to challenge restraining orders and to seek release of funds for living or legal expenses.

Is depositing cash under $10,000 illegal?

Depositing cash is not illegal. Deliberately splitting deposits to avoid the bank’s reporting requirement is an offence, even if the money is legitimate.

Will this be dealt with by state or federal prosecutors?

It depends on who investigated and which law is used. Victoria Police matters are usually charged under the Crimes Act 1958 (Vic); AFP matters under the Commonwealth Criminal Code.

Penalties and procedures on this page reflect Victorian and Commonwealth law as at the review date shown above. Maximum penalties are rarely imposed; the sentence in any case depends on its own facts.