Canberra lawyer Ben Aulich and accountant Michael Papandrea have lost a bid in the ACT Magistrates Court to cross-examine police witnesses and challenge the undercover operation that led to their money laundering charges.
The pair are accused of conspiring with an undercover police officer to buy a supermarket or other company to help launder money from the sale of illegal cigarettes.
They are both charged with conspiracy to launder money, while Mr Aulich faces another charge of recruiting others to engage in criminal activity.
Today, the court heard an undercover police officer contacted Mr Aulich's legal office several times in May 2020 and organised to meet with him.
At that meeting, the officer posed as a man involved in bringing illegal cigarettes to Sydney from China.
The court heard Mr Aulich advised him to "lay low and be wary of any new customers".
It is the prosecution's case that Mr Aulich and Mr Papandrea discussed the merits of using a business to launder money from the sales, including a cafe, supermarket or panel beater.
Cross-examination of police witnesses unlikely to see case thrown out: magistrate
Defence lawyers questioned the validity of the police operation and the Australian Federal Police's conduct during it, as well as the admissibility of covert recordings conducted without a warrant.
Mr Aulich's lawyer David Campbell had previously told the court the arrangement with the undercover officer was "fictitious" and sought to create an offence.
He also said if the court found entrapment was at play the whole prosecution case would collapse.
Mr Papandrea's lawyer Sam Pararajahsingham had told the court buying a business had only been discussed generally until another undercover police officer became involved, who he said pushed for faster action.
Today, Magistrate Michael Crompton rejected the bid from the pair's legal teams to challenge the undercover operation.
He said it was unlikely any cross-examination of police witnesses would lead to the case being thrown out and that they could be adequately dealt with at trial.
The defence lawyers asked for time to consider their next steps with the matter to be back before the ACT Magistrates Court in February.
