R – v – May

The judgements made by the House of Lords in 2008 in the three cases of R – v – May, R – v – Jennings and R – v – Green are considered to be landmarks for the process of confiscations under the Proceeds of Crime Act 2002.  The cases clarify a number of important issues, but also begin to establish a firmer set of principals governing the way in which Courts approach their decisions.

For example Lord Bingham’s speech in R – v – May advises the courts to focus on the language of the statutory provision rather than the proliferating case law. This means that each different case must be considered on its unique facts but that clear questions such as “Does the appellant have a criminal lifestyle?”, “What property has been obtained or is controlled by the appellant” or “Has the property been obtained from the criminal activities for which this appellant has been convicted?” must be answered properly and in a sensible sequence.

R – v – May

This case confirmed that actual profits made are immaterial when assessing benefit. Just because a criminal incurred costs or if some or all of the benefit of the crime was shared with other criminals does not reduce the amount of benefit that can be established. If a crime is committed resulting in money flowing through several hands, all convicted parties are jointly and severally obtaining the benefit of the total flow of value without deduction for costs incurred.

This situation often arises where for example a husband and wife are convicted of supplying drugs. If drugs receipts total £1 million for their joint business, each person will be deemed to have the £1 million benefit. However, in such cases the defence must establish the limits that each party then possess in terms of realisable assets to ensure that they are not penalised for being unable to settle any benefit order.

R – v – Jennings

Mr Jennings was deemed to be a party in an advance fee fraud. The leading perpetrator was Mr Phillips who was sole director and controlling shareholder of UK Finance (Europe) Limited which was the company used to get individuals to part with their money.  Mr Jennings was an employee of the company and received a salary.

The benefit for each fraudster was calculated by the Crown to be £584,637 – being £460,809 that had passed through the company bank account and accounting records and £123,828 that had been cashed separately at a local post office. Mr Jennings argued that he had only received his salary and a few of the cashed payments at the post office (made when Mr Phillips was away), totalling £50,000.

In this case it was upheld that Mr Jennings did not jointly share in the whole benefit. The all inclusive (joint liability) approach had been too broad in this case.

R – v – Green

This case confirmed the underlying principle that proceeds of any crime were to be dealt with as equivalent benefit for each of the conspirators convicted of the crime.  It also enforced the needs for the sequential approach by the Court in its approach to determining benefit:

1. Has the defendant benefited from the relevant criminal conduct?

2. Is so – what is the value of the benefit he has obtained?

3. What sum is recoverable from the Defendant?

Courier or Custodian

These cases provide a background for an important aspect of benefit calculations – more normally within money laundering situations.  If a defendant was a mere courier or custodian of criminal property – he obtains no direct benefit from that property. Thus if a person is recruited to carry a bag of criminal proceeds abroad, for the purpose of money laundering say, or to pay a drug dealer, and is paid a modest sum for the work, then the benefit cannot be the money contained in the suitcase being transported.  However, if the money is deposited into his bank account, and then he transfers it to other gang members retaining a modest sum for his troubles, it is more likely that his role in the criminal activity will be seen as substantial and controlling. In this case his criminal benefit will likely be assessed on the total amount flowing through his bank account, and not the profit earned for his efforts.

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About Mark Jenner

Mark Jenner is an experienced forensic accountant specialising in fraud and white collar criminal matters. He provides independent financial investigation and expert accounting witness services to police forces, fraud regulators and criminal defence lawyers, also providing assistance and solutions to organisations embroiled in financial disputes.

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