Canberra lawyer Ben Aulich and Accountant Michael Papandrea will continue to resist being put on trial on conspiracy to launder money after losing a bid to have their case heard in the ACT Magistrates Court.
Both have been charged with conspiracy to launder money. Mr Aulich faces an alternative charge of recruiting others to engage in criminal activity.
Efforts to keep the case in the lower court failed after prosecutor Mark Tedeschi told the court it didn't have jurisdiction to hear the case, and the charges should be sent to the ACT Supreme Court for trial.
"It would be hard to imagine a more serious case … than an officer of the court engaging with a client to set up a system to engage in laundering money," Mr Tedeschi said.
He told the court the maximum penalties in the Magistrates Court were inadequate for the crime and it was abundantly clear there were serious legal issues that needed to be considered by the Supreme Court.
Transcripts reveal conversation about money laundering
Mr Tedeschi revealed new details of how Mr Aulich and Mr Papandrea had allegedly hatched a plan with an undercover police officer to buy a supermarket to launder money obtained through the sale of illegal cigarettes.
The undercover officer had been wearing a wire, and police had listened in on conversations with Mr Aulich.
Some transcripts were read to the court on Friday.
At one point, the officer told Mr Aulich "people still gotta smoke", suggesting the market was better than drugs or alcohol.
The officer said the returns would be about $100,000 a month, or up to $1.2 million a year.
"It's worth it … it's not chump change," one of them said.
The transcript also noted Mr Aulich discussed how so much cash could not go to the bank.
"You've got a wardrobe full of f***ing cash — what are you going to do with it?" Mr Aulich allegedly said.
Mr Tedeschi told the court the conversation backed up the prosecution's case.
"That's a conversation between them about how they are going to launder their money," Mr Tedeschi said.
"The discussion is about purchasing a business for the specific and sole purpose of laundering $1.2 million per year."
He said the amounts discussed were far above the $30,000 limit on the Magistrates Court's jurisdiction.
But Mr Aulich's lawyer Steven Whybrow told the court the allegation was only about a conspiracy, and no amount of money changed hands.
He pointed out it was the "agent provocateur" — the undercover officer — who mentioned the amounts.
"Here it is a future, hypothetical assertion," Mr Whybrow said.
Concerns were also raised about how long the case was taking, and that if the Magistrates Court wouldn't hear it, the trial might not be held until three years after the original charges were laid.
But Magistrate Michael Crompton told the court the charges were too serious and the amount too high, ruling the lower court did not have jurisdiction.
Lawyers for Mr Aulich and Mr Papandrea told the court they were not done yet with the Magistrates Court, and planned to contest any committal proceedings before a Supreme Court trial.
The case will return to court in November.
