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Are Confiscation Proceedings Really Fair?

I recall giving a talk at the North East Fraud Forum’s conference introducing the Proceeds of Crime Act 2002. Since then I have been instructed in 100s of cases involving asset forfeiture under this legislation. It continues to form a large proportion of my work.

If you are faced with confiscation proceedings you require a robust criminal defence. You may have been found guilty of some qualifying crime, but have not enjoyed a long and profitable criminal lifestyle. You may have made your money legitimately abroad, but have not retained the historical records explaining this.

In short, you may be facing the loss of hard earned income as a result of a modest crime or lack of accounting records. The authorities have a hard job to do, and will not accept explanations without supporting evidence.

The Main Tool In Defending Confiscation Proceedings

We typically deal with a dozen or more confiscation or asset seizure cases every year. Also, the predicate matters involving fraud that we deal with may potentially lead to Proceeds of Crime applications. In so many of these cases we see the defendants vehemently denying the level of benefit they have received that is shown in the S16 Statement of Information or the application for asset forfeiture, but are unable to convince the investigating authorities.

This is why the forensic accounting response of an expert accounting witness is often needed. Sometimes to simply present the position in an independent, credible and succinct way.

Start With The Particular Criminal Benefit

We may hear counsel say “…we must accept the figure for benefit mentioned by the judge in the predicate case…”

This is not necessarily so. Common sense must prevail and very often the levels of obvious benefit gained by a defendant are inflated. A more reasonable figure should be proposed. The definition of “criminal benefit” within the Proceeds of Crime Act (POCA) 2002 do not equate to “profitable gains”.

When an expert values the quantity of drugs seized, this does not consider the cost of acquisition and distribution. It is not the value of money illegally obtained by the defendant that is available to spend.

The logic behind the quanta of claims being made by the Crown in the predicate case are often flawed. However, the defendant is guilty and pleads accordingly. The level of criminal activity is never properly established but assumptions are inappropriately applied to Particular Criminal Benefit.

Challenge The Lifestyle Assumptions

The assumptions that the Crown can make according to POCA 2002 have been hailed as “draconian”. They allow all the finances of a defendant to be assumed to be criminal activity. It is for the defendant to prove otherwise.

There is scope for the innocent (or relatively innocent) to lose much more than they benefited from their crimes. In making assumptions mistakes are also made. The Crown’s financial investigators commonly double count transactions. They include gross values of property without considering mortgages. They fail to trace obvious legitimate income to supporting documentation.

We accept that preparation of S16 Statements of Information can be difficult. We know because we are sometimes called upon to assist with their preparation. Making challenges may be somewhat easier. However, this very confrontational arena of criminal dispute needs to be independently scrutinised to ensure a fair result.

An impossible situation – how to prove a negative?

The Crown wants the S16 benefit to be satisfied by the amount available to the defendant. This could be all their realisable assets. Sometimes a modest benefit set at a fair level can be settled. The defendant could sell a property or obtain a loan from family and friends. In this case, the family home is retained and family jewellery does not need to be sold. The defendant can begin to rebuild his or her life.

Other times a massive benefit results from long running illegal activity. This overshadows the defendant’s assets and there is no hope of settling it. This can happen where it is more than just “profits” of crime that have been assessed. In this case the realisable amount will be set to wipe out all the defendant’s possessions, including pension and savings. This makes it all the harder to start rebuilding any sort of normal life.

But matters can be worse! It is open to the Crown to suggest that a defendant has gifted wealth to the safe keeping of friends. This may have happened, but very often any disappearing wealth may well have…just disappeared! Regular withdrawals of cash may have been squandered gambling and not secreted away in a secret bank account. This is the challenge for the criminal defence of confiscation proceedings. How do you prove a negative…that you don’t possess something you don’t have?

Chasing Hidden Assets And Tainted Gifts In Confiscation Proceedings

Mark Jenner & Co Limited are often asked to respond to Proceeds of Crime Confiscation Proceedings. We normally consider every aspect of the S16 Statement of Information.

Sometimes it is not possible to present a definitive value for a person’s wealth. Often records have not been kept. This makes it is impossible to prove that you don’t have something. In these cases it is essential that all reasonable explanations are considered and presented. This allows as much sensible criticism of the assumptions as possible. Common sense can prevail during the legal arguments between prosecution and defence counsel. They can then thrash out a fair deal leading to an appropriate order being made by the court.

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