Question
An ED officer, while investigating a money laundering
case, discovers that proceeds of crime have been transferred to a third party who had no knowledge of the illicit origin. The third party claims to be a bona fide purchaser for value. Under PMLA, which statements are correct? Statement 1: The property cannot be attached because the third party is innocent. Statement 2: The property remains liable for attachment as proceeds of crime, but the third party may claim equitable relief. Statement 3: The third party can claim immunity if they were unaware of the illicit source. Statement 4: Only the original offender can be prosecuted; the third party cannot be prosecuted unless they actively participated in money laundering. Which statements are correct?Solution
Section 5 permits attachment regardless of subsequent transferees' knowledge—Statement 2 is correct. Innocent third parties can seek relief but property remains liable—Statement 2 is correct (partial innocence may reduce penalties). Statement 4 is correct—Section 3 and 4 liability attaches based on knowing possession. Statements 1 and 3 are incorrect—ignorance does not provide immunity. Statements 2 and 4 are correct.
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