Proceeds of Crime Proceedings in the Crown Court - A guide from Specialist POCA Lawyers

Proceeds of crime is a very unpleasant concept. It can be a painful experience to be accused of a criminal offence; but to then have to justify all earnings after conviction just to hang on to your property can be a real shock, and seem an injustice. The Labour Government promised at the beginning of their reign that this area of law would be specifically targeted at local and national drug lords in order both to prevent them from benefiting from the proceeds of crime and to bring that money back into the legitimate economy.

So called ‘POCA' lawyers are sadly now in demand as there are now accusations that the Proceeds of Crime Act is being abused by the CPS and the Police, and almost everyone convicted of certain types of offence is being unfairly targeted in a way that parliament and the public did not intend.

It is no secret that a proportion of all confiscated funds go straight back to the Police and prosecuting bodies. This can raise serious questions about what the police motivation is. Are the police and CPS prioritising investigations into criminals who are a real risk to society, or are they starting to prosecute people on the basis that there is money to be had?

At Mary Monson Solicitors, we have a specialist POCA department which focuses on defending in confiscation proceedings. We have considerable experience and have advised clients whose assets are in seven figures. We have a track record of success in saving the assets of our clients. This is not an easy area. It requires expertise, an aggressive approach, and sensitivity to the fact that for the client, everything that he or she has earned in a lifetime is under threat.

We have included a free guide to the basics of how confiscation works in the Crown Court below. It only covers the basics. This is a complex area and we strongly recommend seeking properly qualified professional advice from specialist POCA lawyers.

Confiscation after a Criminal Case the Law Explained

If you are convicted or plead guilty to an offence, the court must consider confiscation proceedings if it is asked to do so by the prosecution. This does not mean that the court will allow the confiscation. It just allows the process of the prosecution attempt at confiscation of assets.

The confiscation proceedings are not a forum for contesting the conviction. The proceedings go ahead on the basis that the defendant is guilty, since he or she has been convicted.  The judge does have the power to stop confiscation proceedings if he or she considers that it would be unfair to proceed. One factor that the judge may consider is what role the convicted person played in the original criminal case.

It might not seem unreasonable to assume that the court will then decide how much the defendant benefited from the crime, and seize the defendant's assets up to that value. Unfortunately it is much more severe than that.

These proceedings are acknowledged by most POCA lawyers, and sometimes even by the courts to be draconian in their nature. The intention is to strip the offender of the proceeds of his or her criminality whether proven as a criminal offence or not.

The ‘Assumptions'

If a defendant is considered to have a ‘criminal lifestyle', then any assets, expenditure, and any property given or received in the last 6 years is assumed to have been met or obtained with the proceeds of criminal conduct, unless you can prove the opposite. For this reason, this requirement to show that all assets passing through a defendant's hands are legitimate is called ‘the assumptions'. Again, the assumptions only kick in if the defendant has a ‘criminal lifestyle'.

If a ‘criminal lifestyle' cannot be shown, then the confiscation is limited to the amount the defendant actually gained in this criminal case. This means that if the court finds that the defendant has a ‘criminal lifestyle' the doors are opened to a full financial attack by the prosecution. This absolutely means the defendant must be satisfied that he or she has specialist POCA lawyers for this stage of the proceedings.

What is a ‘Criminal Lifestyle'?

A ‘criminal lifestyle' for the purposes of confiscation proceedings is not a phrase used to describe a defendant's material wealth, or general criminal behaviour. It is a legal term which describes a defendant who falls into one of the following three categories:

  1. Where the offence falls into one of the following categories: Drug trafficking offences, money laundering, terrorism directing offences, people and arms trafficking, counterfeiting and copyright offences, prostitution industry offences, and blackmail

  2. If the offence constitutes conduct forming part of a course of criminal activity. This means that in the recently finished case or in the last 6 years the defendant has been convicted of 3 or more offences from which he has benefited in the sum of £5000 or more.

  3. Where the offence lasted for 6 months or more, according to the evidence in the case

If you have a criminal lifestyle the court will next consider whether you have benefited from your general criminal conduct ie whether you have obtained property by or in connection with it. This can be made relatively easy if the assumptions (that all assets that you have had contact with in the last 6 years are the proceeds of crime) apply.

If it is not already obvious, it is possible to have a benefit sum greater than the amount that a defendant obtained from committing the offence. For example, if a defendant is convicted of a fraud from which he or she made £100,000, but he or she has also received a further £100,000 in the previous 6 years, the court will assume that the entire £200,000 is criminal property. The benefit figure will therefore be £200,000 unless the defendant can show that the figure is wrong or that there is a serious risk of injustice.

The next step is for the court to find is the recoverable amount. Experienced POCA lawyers will not make the mistake of confusing this with what assets the prosecution say the defendant has. The recoverable amount is usually the benefit figure.

Hidden Assets

If the judge does not believe the defendant's position that the recoverable amount is less than the benefit figure, he may decide even if there are no identifiable assets that the defendant has somehow concealed them and therefore order make an order for the full benefit.

The Benefit Figure -POCA lawyers' End Game

A team of experienced POCA lawyers will be well aware that the aim of a confiscation case is to get to the benefit figure, whether it be low (suiting the defendant), or high (suiting the prosecution). This is the amount that will probably be forfeited.

Here are some points to be aware of:

  • It is proceeds not profits.

    Overheads of running the criminal business are irrelevant to the calculation. So is money shared between defendants. Two defendants who have each handled the same £100,000 without explanation

    may be liable to forfeit £100,000 each,

    as unfair as that sounds.

  • A defendant does not have to have formally owned property to be considered to have been the holder of it. Property held officially by another can be proceeds of crime, if it was under the control of the defendant.

    But the role of the defendant in the offence is important.

    An employee earning a small criminal wage to transfer funds on behalf of the ring leader may not be considered to have benefited to the whole value of funds, but his or her

    wages for the task may be included.

  • In some cases, the court will

    split the benefit figure between the defendants.

    The court may decide that the property was jointly owned or if not to divide the value of the goods between the accused. That will depend on the court's assessment of the facts. This can be very important. If the court agrees to apportion the benefit, this can

    drastically reduce the benefit figure.

    A close analysis of the facts is required. Where it is decided to apportion the benefit between conspirators, the starting point is an equal split.

The recoverable amount is then decided. The recoverable amount is the same as the benefit figure unless you show that the available amount is less than the benefit. The available amount is the total amount of the free property in which the defendant has an interest together with the value of any detainted gifts.

If you do not give evidence on the point that can be powerful evidence against you. The recoverable amount may not necessarily be the same as the amount you have available. Much of the work the POCA lawyers for the defence will do will focus on valuations and assessments of the available amount, which almost always will have been wildly exaggerated by the prosecution.

Tainted Gifts

As stated above, ‘tainted' gifts are added to the amount that is actually forfeited the available amount'.

A gift is tainted if it is made by the defendant to any person in the period beginning 6 years prior to the beginning of the case, or if it is made by the defendant with money obtained through crime. A gift also includes a transfer of an asset, for example to a friend or relative in exchange for less money than it is worth.

Third parties including family members

There is no special protection given by the Proceeds of Crime Act to spouses or family members. Despite the technical nature of proceedings, confiscation orders do not just affect the defendant. They have an impact on all those who may hold joint property interests with the defendant for example, partners, spouses, extended family. For some communities, the cultural practice of joint ownership of property can lead to undeserved problems.

The partner or spouse can remain in the property pending the conclusion of proceedings. Once again the outcome at the enforcement stage depends on the facts; there are examples of spouses losing their homes and examples going the other way. Courts have said that it is not proportionate to throw an innocent wife out on to the street. Other relevant factors are did the spouse make a contribution in monetary or childcare terms to the mortgage?

Proceeds of Crime How the Court Procedure Works

The process leading up to the final confiscation hearing works in this way:

  • The first step is usually that the defendant makes a declaration of his assets

    (a ‘section 18 declaration')

  • Then the prosecution make a ‘

    section 16 statement of information

    ' in which they set out their case for confiscation of assets

  • The defence then make a ‘

    section 17 response

    '. If the defence accepts to any extent an allegation in the statement of information, that acceptance may be treated as final.

    This means that the section 17 response is incredibly important to get right

A failure to answer the points in the prosecution's Statement of Information may be taken as an admission of everything the prosecution have put forward about the defendant's assets. This would usually depend on whether the defendant had been given a proper opportunity to inform his POCA lawyers about his response, and whether there was any other good reason for the failure to respond to those points.

It is important to note that what a defendant says in his or her response cannot be used as evidence against him or her in a new criminal case.

Default

If a defendant fails to pay the amount the court decides he or she has available to meet the order, he or she will receive a prison sentence of up to 10 years in default. It has been known that the prison term in default exceeds the prison sentence imposed for the offence itself.

The imposition of a prison sentence in default does not free the defendant of the debt: it hangs over the head of the defendant until paid. This lasting effect of the proceedings is one reason why the POCA lawyers will have been able to warn the original defence team and client early in the proceedings about the consequence of conviction and the basis upon which the defendant was sentenced.

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