Ensuring crime does not pay...

IN 2000 the Government commissioned a report to consider how the then existing legislation that allowed the proceeds of crime to be taken from criminals could be improved.

At this time the methods available for confiscation were embedded in specific legislation, such as the Misuse of Drugs Act, but it was recognised that clever individuals were able to “invest” their ill-gotten gains so that they were available to them when they were released from prison or, in some cases, available to them while they were in prison so that they could continue their activities.

At this time it was estimated that illegal drug activities were worth around £8.5 billion per year and fraud between £5 billion and £16 billion per year.

On the basis of this report the Proceeds of Crime Act (POCA) emerged and became law in 2002. An integral part of this was the creation of the Assets Recovery Agency (ARA) subsequently merged with the Serious Organised Crime Agency (SOCA) in 2007.

Under POCA anyone convicted of an offence in the Crown Court (more serious offences where the maximum sentence exceeds six months imprisonment or a fine of £5,000) could be the subject of a POCA inquiry which could then result in the imposition of a confiscation order and the loss of their criminally derived “income”.

These are proceedings under criminal law which require to be proven “beyond reasonable doubt” but with the previous conviction of the individual for specific offences could be said to be a logical extension of the legal process.

What many people do not realise is that there is an alternative mechanism that can be invoked to confiscate assets from individuals, the “recovery order”.

There are two main differences between this and the confiscation order. Firstly, a recovery order can be issued against individuals whether or not they have been found guilty of, or even charged with, a criminal offence.

It is therefore unnecessary to prove that the individual has been involved in criminal conduct, it is sufficient for the prosecution to show that, on the balance of probabilities, the property involved, cash or articles that have been bought, has been derived from an illegal activity or is to be used for an illegal activity.

Secondly, these proceedings are brought under civil law where the burden of proof is less, i.e. on the balance of probabilities, rather than that required for the confiscation order.

In many circumstances this raises no concerns. An individual is found with a large amount of cash which is shown to be highly contaminated with illegal drugs.

This, together with other supporting evidence, such as their lifestyle, the finding of other drugs-related paraphernalia, would be sufficient to satisfy not only the “balance of probabilities” requirement but also the more stringent “beyond reasonable doubt” requisites.

There are, however, circumstances in which an individual may be in possession of a large amount of cash, POCA allows an investigation if more than £1,000 is involved, quite legitimately, e.g. they run a retail business.

The provision of proof of the transactions from which the cash was derived should therefore guarantee that proceedings are taken no further.

What, however, if the person who has bought goods is involved in illegal activities and has paid for these with drug-contaminated cash?

POCA does allow that if the property has been obtained in “good faith”, and certain other criteria are fulfilled, a recovery order will not be made but how is it possible for the court to differentiate between these circumstances and those described in the previous paragraph?

I have been involved in one such case in which the only evidence against the defendant was the finding of some drug- contaminated banknotes in the seized cash and a recovery order was granted.

It has been argued that the recovery order procedure is incompatible with the Human Rights Act but this argument has been defeated in the courts on the grounds that civil proceedings are involved which carry no penalty or punishment

I am not sure the person from whom in excess of £30,000 was “recovered” would agree that no penalty was involved!



Dr Audrey is Senior Research Fellow in the School of Applied Sciences, University of Huddersfield