Tag Archives: confiscation

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Unexplained Wealth Orders in force from January 2018

On 31st January 2018, regulations bring into force sections of The Criminal Finances Act 2017.  These deal with unexplained wealth orders as well as various other related provisions.  They are intended to be used with existing civil recovery powers.

The purpose of the unexplained wealth orders is to allow for certain people who obtain property, which would ordinarily be beyond their obvious means, to be required to prove how they lawfully acquired it. This is, in effect, a reverse of the usual burden of proof where the prosecution must make a court sure of wrong doing.

Law enforcement agencies often have reasonable grounds to suspect that identified assets of such persons are the proceeds of serious crime. However, they are often unable to freeze or recover the assets under provisions in the Proceeds of Crime Act due to an inability to obtain evidence (often due to the inability to rely on full cooperation from other jurisdictions to obtain evidence).

Who can apply for unexplained wealth orders?

The authorities which may apply for such an order are:

  • The National Crime Agency
  • HM Revenue and Customs
  • The Financial Conduct Authority
  • The Director of the Serious Fraud Office
  • The Director of Public Prosecutions

What happens if you are subject to an order?

If you are subjected to an order of this kind, you must provide a statement which does the following:

  • Sets out the nature and extent of your interest in the property
  • Explains how you obtained the property, particularly how any costs involved were met
  • Provides details of any settlement if the property is held by trustees
  • Sets out any other information about the property specified in the order

In addition to a statement, it may be necessary to supply documents connected to the property as required by the order.

What does the High Court need to be satisfied of?

Before it can make an order, the High Court must be satisfied that the following criteria are met:

  • There is reasonable cause to believe that the person in question holds the property and that it is worth over £50 000;
  • There are reasonable grounds for suspecting that this person’s known income (from lawful sources) would not be enough to obtain the property; and,
  • The person in question is a politically exposed person (see definition below) or there are reasonable grounds for suspecting that they are or have been involved in a serious crime or someone connected to this person is or has been so involved.

A politically exposed person (PEP) is someone who is or has been entrusted with prominent public functions by an international organisation, a State other than the UK or another EEA State, a family member of such a person, a close associate or someone connected to them in another way.

Are any criminal offences created?

It is a criminal offence to knowingly or recklessly make a statement that is false or misleading in response to an unexplained wealth order. Doing so can result in two years’ imprisonment and/or a fine. This offence can be tried in either the Magistrates’ Court or the Crown Court.

What if I fail to provide the information?

Failing to provide the information, in full or part, may prejudice any civil forfeiture proceedings.

In some cases, an unexplained wealth order will be accompanied by an interim freezing order. This prohibits the respondent to the order and any other person with an interest in the property from in any way dealing with the property.

Property held outside this country

Where the property is thought to be in a country outside the UK, the Secretary of State may forward a request for assistance to the government of the receiving county. This can be a request to prevent anyone in that country from dealing with the relevant property and provide assistance in managing it as required.

Contact VHS Fletchers for specialist legal advice

To discuss unexplained wealth orders, or any other matter, please contact confiscation law solicitor Julia Haywood on 0115 9599550 at our  Nottingham office.  Alternatively use the contact form below for prompt expert advice.

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News

£700K reduction in the benefit figure for confiscation client

Confiscation law specialist Julia Haywood recently took over a client’s case post conviction.  Our client was involved in confiscation proceedings involving a benefit figure of over a million pounds.  He was not happy with the advice and representation he was receiving once the main part of the case was over.

It is often our experience that client’s may feel that their interests are not being properly protected after sentence, despite the fact that it may be that the outcome of any confiscation proceedings could be a more substantial punishment than the sentence for the offence.

In this case, our client had been referred on to this firm on recommendation from an existing client, the client citing out ‘Good reputation on Class A cases’ as one of the reasons why he wished to transfer to this firm.

The preparation of such cases are often complicated where our client is serving a sentence of imprisonment.  For example, here. he was initially at HMP Wandsworth but later transferred to HMP Highpoint North.

The application to transfer legal aid to us was not resisted, and the first task Julia undertook was to seek to amend the timetable to permit proper preparation of our client’s case.

Background to the confiscation proceedings

The background to the case was a conviction for conspiracy to supply drugs of both Class A and Class B.   There had been covert surveillance at agricultural premises, and following a raid cocaine was found that was initially valued at £1.5 million.  The cocaine had a total weight of 22 kg, packaged in individual blocks.  Our client was one of four co-accused.  At the point that we took over conduct of the case, one of the co-accused had been subject to a confiscation order with a benefit figure specified of £1 060 280.

Unfortunately, our client was very unclear as to what he had pleaded guilty to and on what basis.  It appears that he had followed advice that inevitably resulted in a significant loss of credit for his plea.  He received advice in writing that he had pleaded guilty to possession with intent to supply a smaller amount of Class A drug when he had in fact pleaded to the conspiracy on a full facts basis.  His case had been listed for a Newton Hearing, although this was later abandoned for reasons that were not immediately apparent.  Our client was serving a sentence of 11 years.

In order to ensure that the case was fully  prepared Julia visited her client six times prior to the final confiscation hearing.  Although some work had been undertaken on his behalf, in effect she had to start the preparation of his case from the very beginning.  Assertions had been made in documents submitted on our client’s behalf that had no legal basis.

Significant reduction of the benefit figure

The prosecution were claiming that our client’s benefit from his offending was £1.1m.   Once Julia had taken the opportunity to review all of the evidence in the case she was able to engage in negotiation.  Agreement was reached over a much reduced figure of £396K.

This reduction of £700K was likely to be extremely significant for our client over the longer term.  He did not have assets sufficient to pay the benefit figure in full.  As a result it would be open to the prosecution to bring the matter back to court each time it was discovered he had assets to direct that more money be directed to paying off the benefit figure.  As a result it was in his interests for the benefit figure to be as small as possible.

Extensive realisable assets

The position in relation to our clients realisable assets was also complex.  He had been self-employed.  Preparation of such a case where a person is in prison is always difficult.  This was particularly true as our client had been remanded from the time of charge.

He had significant assets that would be counted in the calculation of the ‘available amount’.  He owned his own home and three vehicles as well as a large amount of specialist camera equipment.  His partner, however, had left him following his arrest and taken all of his assets not seized by the police.

The prosecution was contending that these were tainted gifts  although our client would argue otherwise.  Julia was able to locate the ex-partner who attended court at the final hearing to confess what she had done!

There were further complicating issues involving substantial loans of many thousands of pounds to our client by his father.  Julia was able to put together a comprehensive history of where her client’s  money had come from.  Understandably this was not an easy task.

The value of the Realisable assets as an ‘available amount’ was finally agreed at £136K.  Julia identified a large sum of cash that had been seized by the police.  This had not been counted in the initial prosecution calculation.

Although in this case, our client lost what he had, there was a reasonable opportunity to rebuild his fortunes upon his release from prison.

Instruct an expert on confiscation proceedings

The outcome of any case is important.  In cases involving confiscation proceedings there will not only be a sentence to serve, but the potential for the additional punishment of loss of assets.

If you wish to discuss any aspect of your case then please contact Nottingham confiscation solicitor Julia Haywood on 0115 9599550.  Alternatively, use the contact form below.

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News

Confiscation proceedings – a hidden sentence?

In many cases involving confiscation proceedings, the conversation in conference between solicitor and client may go as follows:

Client: ‘What am I looking at?’

Solicitor: ‘Around 12-15 months, suspended if you are very lucky.’

Client: ‘Oh, I can live with that!’

Solicitor: ‘But there is something else?’

Client: ‘What?’

Solicitor: ‘You are likely to lose your money and your car and have to sell your house.’

What are  confiscation proceedings?

At its most simple it is the process by which those convicted of particular crimes are deprived of their benefit from those crimes.

So, for example, a particular client might steal £20,000 from her employer and spends it on a luxury holiday and new electrical items.

The proceeds of that crime is £20,000.  This is her ‘benefit’ from the crime.  She can expect a confiscation order to be made in that sum.

Are confiscation proceedings fair?

Although the process seems straightforward and fair in confiscation proceedings such as the one above the situation is more complicated than that.  For example, the the £20,000 from the confiscation order above  will not go to the employer.  Instead it will go to the state.

The court may also, however, make a compensation order in the sum of £20,000 to repay the employer for their loss.

So, Jill will have to pay two lots of £20 000, a total of £40 000.

Quite possibly if she has the assets.

The potential for unfairness in confiscation proceedings

The situation can be a whole lot worse for some defendants.

For example, a client might steal a Porsche worth £130,000.  He is caught a few hours later by the police.  The the car is recovered undamaged and it is returned to its owner.

The ‘benefit’ in his case is £130,000 (the value of the car).  This is the case even though the car has been returned to its owner within hours.

Examples from real confiscation cases

The examples above are all from real confiscation proceedings.  While the results outlined do not always follow, the problem for defendants is that confiscation proceedings are  ‘draconian and intended to be draconian’.

Certain convictions trigger what are known as the ‘lifestyle provisions’.  This means that the finances going back many years will be subject to investigation for those convicted of a relevant offence.  Unless a defendant can establish that the income was lawfully obtained, any unexplained monies will be at risk of being added to the ‘benefit’ figure.

Should you care if you don’t have any assets?

The benefit figure will still be determined even for defendant’s who don’t have any money or other property.  If, for example, they come into some money at a later date the prosecution can ask the court for that money.  This might include an inheritance, a pension lump sum or equity in a property that did not exist when the original order was made.

Any property of value can be seized in order to satisfy a confiscation order, and if the court believes that you can pay the order, and you fail to do so, you can be sent to prison in default.

The process can be very complicated

It is in very many cases.  This , and we haven’t even mentioned gifts, hidden assets, corporate veils or Article 1 of the First Protocol of the European Convention of Human Rights.

The real punishment felt by an offender may not be the headline sentence but instead the financial penalty that flows from a confiscation order.

The rules are incredibly complicated.  We will often find fundamental errors and assumptions being made by financial investigators. Basic errors can lead to incorrect calculations amounting to many tens of thousands of pounds.

In some cases, we can argue that the making of a confiscation order is so disproportionate that to do so would be unlawful.

As a result, before entrusting your case to any other solicitor you will want to ensure that they are up to speed not only on the basics of the offence with which you have been charged, but also in relation to the confiscation proceedings that are likely to flow following conviction.

Contact a specialist in confiscation proceedings

If you wish expert advice in relation to confiscation proceedings then please contact criminal solicitor Julia Haywood based at our Nottingham office.  She provides nationwide advice and representation in relation to such cases.

Please call her on 0115 9599550 or use the contact form below.

Alternatively she can be contacted by letter at our Nottingham office.

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News

Confiscation Proceedings (POCA)

The Proceeds of Crime Act 2003 (POCA) was introduced to ensure that convicted criminals were unable to have the benefit of their criminal activity after the conclusion of their cases through confiscation proceedings.

At the conclusion of certain types of proceedings, particularly drug trafficking offences and significant dishonesty offences, the prosecution are able to seek to recover what it alleges is the benefit from the criminal conduct.

Dependant upon the offence, the Crown are able to seek an explanation from the convicted person for all income, expenditure and assets acquired during a 6 year period prior to the commission of the offence.  Absent a reasonable explanation the court is able to treat such items as the fruits of criminal conduct.  The situation can be made even more complicated where the Crown allege that a person has hidden assets or has made inappropriate gifts to others.

Once a figure for this ‘benefit’ has been decided upon the court will then decide whether a person has sufficient assets to use to discharge this benefit figure.  This can involve the sale of property, cars or other assets by a person who may be serving a lengthy prison sentence.

A period of imprisonment is fixed if the money is not paid.  If the assets are not realised and the debt paid within 3 months then there is a risk that the period in default will be activated and the debt remain thereafter.

Understandably these are significant worries for our clients who face confiscation proceedings under POCA.  We take great care in assisting our clients to make sure they comply with all of their obligations under this extremely complicated and potentially draconian legislation  in an attempt to limit their liability and give them an opportunity to discharge any debt and rebuild their circumstances post-conviction.

Serena Simpson, from our Chesterfield office, has recently assisted as litigator in the case of a first time offender who pleaded guilty to supplying drugs.  The supply was only to a close circle of friends in order to subsidise his own drug use.

The Prosecution decided to proceed under the  Proceeds of Crime Act despite the fact he lived a lifestyle far removed from any drug dealing stereotype.

Serena set out with the client to undertake the potentially mammoth task of demonstrating how 6 years of income, assets and expenditure had been legally funded.

The client was helped to:

  • Demonstrate  lawful income he received as an employee
  • Confirming what bank accounts he had and explain the payments in and out
  • Catalogue assets that would be relevant to the proceedings

Serena drafted a Statement of Assets and Means  which was served on the Crown Prosecution Service.  The through preparation on behalf of the client led the Crown to decide that it was not worth pursuing the client under confiscation and the proceedings were discontinued.

Not only did the client have nothing to pay under confiscation proceedings, he also had the benefit of legal aid which means that our advice and representation was free of charge to him.

If you need advice in relation to confiscation of other proceedings please contact your nearest office or email us.