Confiscation Proceedings (POCA)
Confiscation Orders are made following conviction where the Prosecution seek to prove that the defendant has benefitted financially. Confiscation orders only bite on a defendant’s realisable assets. Kings Solicitors have experience of defeating or limiting the extent of confiscation proceedings.
The Prosecution will seek to ask the court to make the assumption that all assets, including money and property, held by the defendant since conviction and all income and expenditure over a period commencing six years prior to the date when the defendant was charged with the offences of which he has been convicted. If the court chooses to make any of these assumptions, the defendant has to show to the civil standard that the assumption is incorrectly made.
The prosecutor’s s16 Proceeds of Crime Act 2002 statement is a key document in confiscation proceedings. In preparing the s16 statement the prosecution will have considered the offence of which the defendant has been convicted; the evidence at trial (or readied for trial where there has been a guilty plea) and other information collected during investigation of the offence; information provided by the defendant in any statement under s18 or in response to any requirement in a restraint order under s41(7); information obtained from banks and others (perhaps by way of a production order under s345); and the results of the prosecution’s own investigations – probably undertaken by an accredited financial investigator.
Prosecution s16 statements in confiscation proceedings are prepared in a wide variety of circumstances. No two s16 statements will be the same – though they all have some similarities. In any event the s16 statement will need careful study. Typically, the body of the s16 statement will run to between 10 and 30 pages with supporting appendices which could run to several hundred pages and may include spreadsheets.
The s16 statement is likely to include some background narrative which sets the confiscation proceedings into context, including a description of the court proceedings resulting in the conviction and any restraint order which has been obtained. There may also be information about the defendant (date of birth, previous convictions, etc) and information about his known legitimate income.
Kings Solicitors will challenge any incorrect factual assertions in that narrative – but this narrative background is not at the heart of the s16 statement.
Financial investigations and ‘benefit’
The s16 statement will provide details about the financial investigations undertaken by the prosecution and their findings about the defendant’s financial affairs. That leads to the prosecution assertions about the defendant’s ‘benefit’ for confiscation purposes.
In this context ‘benefit’ has a special meaning based on the statutory provisions – it does not refer to what might be the defendant’s benefit in the everyday sense of the word.
‘Benefit’ of the offences
The s16 statement will deal with is the ‘benefit’ of the offences of which the defendant has been convicted, referred to as the ‘direct benefit’ or the ‘benefit of particular criminal conduct’.
But in many cases the ‘benefit’ of the offence will be less clear cut. For example, there may be theft of cash where there are inadequate records to quantity the amount of cash stolen, or supply of controlled drugs where there are no records of the monies received for the drugs, or the defendant may have been a member of a conspiracy (meaning it will be necessary to ascertain the amount ‘obtained’ by this particular defendant in his role in that conspiracy).
In rare cases the ‘benefit’ may be based on the profit deriving from fundamentally legitimate business operations which have been tainted by criminality. The ‘benefit’ asserted by the prosecution for confiscation purposes may also include assets which need to be valued, such as controlled drugs seized at the time of the defendant’s arrest.
In other cases, the ‘benefit’ may be based on a ‘pecuniary advantage’ arising from the evasion of a liability – for example evasion of income tax, VAT or duties on goods.
If the prosecution assert that the defendant has a ‘criminal lifestyle’ then the s16 statement will also deal with additional assumed ‘benefit’ which arises for confiscation purposes under the statutory assumptions of s10 POCA 2002. The statutory assumptions apply to the defendant’s receipts and expenditures since the ‘relevant day’ (which is usually 6 years prior to the date on which the defendant was charged with the offences of which he has been convicted) and to any assets held by the defendant since the date of his conviction.
Typically, the prosecution will have obtained bank and credit card statements for all known bank and credit card accounts held by the defendant and will have reviewed all deposits to those accounts since the ‘relevant day’. They may also have information about the defendant’s expenditures since the ‘relevant day’ – for example as a result of examining documents seized from searches of the defendant’s premises or considering information provided by the defendant in recorded interviews or in his s18 statement. In addition, the prosecution may have obtained Land Registry records or solicitors’ conveyancing files regarding property purchases, and mortgage account statements.
These same sources of information may be the basis for assertions of assumed ‘benefit’ in respect of any assets held by the defendant after the date of his conviction.
Finally, the prosecutor’s s16 statement will deal with the defendant’s ‘available amount’. Again, this is a term defined by confiscation law which does not mean simply the amount which the defendant has available to meet the confiscation order. It refers to the current market value of the defendant’s assets, less any mortgage or other liability which is secured on those assets, plus the current value of any ‘tainted gift’ which the defendant has made.
However, many of the defendant’s liabilities, such as unsecured borrowings and unpaid bills, will be ignored when computing the defendant’s ‘available amount’ in confiscation proceedings.
The s16 statement may conclude with an indication of the range of default sentences applicable where a confiscation order remains unpaid.
Challenging the s16 statement
Kings Solicitors will scrutinise in detail the prosecution assertions in relation to both the defendant’s ‘benefit’ and their ‘available amount’ for confiscation purposes. The focus of the defence challenge to the prosecutor’s figures will depend very much on the details within the s16 statement.
In relation to the ‘benefit’ of the offences of which the defendant has been convicted the defence will wish to consider the existence of the asserted ‘benefit’; whether it has been ‘obtained’ by the defendant himself, solely or jointly; and whether it is correctly valued.
Regarding the assumed ‘benefit’ the defence will wish to consider whether the criteria for a ‘criminal lifestyle’ set out in confiscation law have been met; whether the ‘relevant day’ has been correctly identified; the existence of the asserted receipts, expenditures and assets of the defendant himself (which may involve careful consideration of bank accounts and assets held in joint names and consideration of ‘lifting the corporate veil’); any evidence of the legitimate nature of those receipts and legitimate funds used to finance those expenditures and the purchase of those assets; any overlap or double counting between the various heads of asserted ‘benefit’ including, for example, where monies have been withdrawn from one of the defendant’s bank accounts and paid in to another; and the valuation of the various items reflected in the assumed ‘benefit’.
In relation to the asserted ‘available amount’ the defence will again consider the existence of those assets; the ownership of them by the defendant himself so as to exclude any interest of third parties; the current market value of those assets; and the amount of any liabilities secured on those assets.
Particular difficulties may arise where the ‘available amount’ is said to include any ‘tainted gifts’ or ‘hidden assets’.
Ultimately Kings Solicitors will consider whether the use of the statutory assumptions involves a ‘serious risk of injustice’ or the confiscation order sought by the prosecution would be disproportionate and so infringe the defendant’s human rights.
All of these matters will feed into the drafting of a s17 statement to be signed by the defendant and filed in response to the prosecution’s s16 statement, and the defence preparation for the confiscation hearing in the Crown Court.
Use of a forensic accountant
A forensic accountant may be able to assist the defence in challenging the s16 statement. This is likely to be particularly important in confiscation cases involving ‘assumed benefit’ under the ‘criminal lifestyle’ assumptions. A forensic accountant may be better placed to undertake detailed examination of the figures and financial documents underlying the prosecution’s s16 assertions.
The cost of a forensic accountant’s report will normally be met by criminal legal aid under prior authority arrangements.
We at Kings Solicitors are experienced and have extensive experience of challenging Restraint Orders and Confiscation proceedings. We are committed to minimising or reducing to nil (it does happen!) the potential value of a confiscation order. This requires meticulous preparation, attention to detail and use of experts to challenge the prosecution case.