The confiscation proceedings balancing act

I recall speaking at the 2003 North East Fraud Forum conference that heralded the introduction of the 2002 Proceeds of Crime Act. Since then confiscations under this legislation have become commonplace and there is usually a money laundering aspect to every criminal defence case that I take on.

Dealing with Proceeds of Crime

You would think that so many years later that confiscation proceedings would have become more streamlined, providing an essential and substantial source of self financing work for the authorities. It is true that there appears to be an increasing number of well presented S16 Statements of Information compared to the early days, but in a lot of cases I see the same old mistakes being made, the same application of inappropriate investigator experience and lack of evidence. I wonder if it is the case that the accredited investigator always has his or her fingers crossed in the hope that the defence does not appoint a competent forensic accountant to the team.

Over the years I have seen the profile of my work portfolio change, taking on more high value and complex frauds, many of which are HMRC prosecutions for tax evasion. This is entirely within the business planning model for my firm, not least because, as is the case for my legal colleagues, private paying work is generally more lucrative than the ridiculously low rates paid for publicly funded confiscations. However, I still actively seek confiscation assignments for a number of reasons.

The challenge is to present a balanced picture of criminal benefit

Firstly, with experience the work can be approached very efficiently, little time is wasted on spurious avenues and resources can be focused on the areas that matter. Secondly, and most importantly in my view, it is the challenge. I see the role of a defence forensic accountant as that of a moderator within the system. We are impartial and so we must apportion the wealth obtained by a person who has been convicted fairly, between that which has been legitimately obtained and his proceeds of crime. This challenge can be difficult and exciting, and is markedly different to the Crown’s financial investigation that comes up with a starting point that often designates most wealth to illegitimate sources.

When presented with the S16 Statement, you can be almost certain that the allegations of the amount of wealth obtained by the defendant are inflated beyond what is reasonable. This is because POCA 2002 legislation allows the prosecutor to make assumptions. Although the assumptions should be based on reasonable premises, sometimes they are not, and it is up to the defence accountant to challenge them. However, the challenge must be supported.

I believe that the Crown’s approach is to start as high as possible because they know the defence will try to bring the alleged sums of benefit down.

Confiscation proceedings – a negotiated settlement

I actually disagree with this approach, which is akin to bartering a person’s worldly possessions in the market. Both parties start miles apart and meet in the middle! This is wrong because the whole point of the POCA legislation was to remove the wealth that had been earned from criminal activity. The provisions have sometimes been called “Draconian” because they were intended to make it easier to confiscate the wealth accrued by drug barons and  career criminals, not as an extra punishment for petty thieves who had lost their way at some point.

I try to get to the correct position, and if the Crown started at this point I would be more than happy to simply endorse their work. This does happen, and it is why I am often instructed to clarify a situation so that a defendant can understand why he has to pay back the amount he is being asked to – or why in predicate cases it would be in his best interest to plead guilty.

So while the prosecution and the defence team spend the time trying to strike a bargain, the forensic accountant strives to unpick the problem and present a balanced case. There is no doubt that in the vast majority of cases this can lead to a preferable outcome for a defendant.

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