When a defendant is convicted of a crime, this may not be the end of the matter. The defendant might be the subject of confiscation proceedings in the Crown Court if the crime involved financial gain, attempted financial gain or laundering of assets linked to criminal activity. Confiscation proceedings fall under the Proceeds of Crime Act 2002 and are used to deprive the defendant of any financial benefit that was obtained from criminal activity. They are used as part of the sentencing options for a defendant and often the burden of proving that the assets are legitimate will fall onto the defendant. In confiscation proceedings, the court determines the criminal benefit that a defendant has acquired and orders them to repay this as a sentence. Here we look at how confiscation proceedings are used in practice and what the implications are for the defendant.
How is criminal benefit defined?
Criminal benefit has quite a broad definition. It obviously covers assets such as stolen property or monies raised from drug dealing, but it can also arise from less obvious situations and generally falls under two categories:
- Where the defendant has benefitted from specific criminal activities.
- Where the defendant has benefitted from a criminal lifestyle - defendants that have committed multiple offences will fall under this category. Where a person has committed certain offences, then it will be assumed that they fall into this category. These offences include money laundering, people trafficking, drug dealing, counterfeiting, terrorism or blackmail. This is known as applying the statutory assumptions, which means that unless the defendant can prove where the assets came from, it is assumed that they were from criminal gain. It is assumed in these cases that the defendant has gained criminal benefit from various sources over a 6-year period, unless they can prove otherwise, and so all assets and expenditure over this period are included in the calculations. If the defendant can prove to the court where the assets came from, then the lifestyle provisions will not be applied to the calculation, and the amount that the defendant will be ordered to pay should be reduced.
What happens with confiscation proceedings?
For confiscation proceedings to be used, they need to be initiated by the prosecution. The court will be asked to determine whether the defendant has benefitted from any relevant criminal conduct for criminal gain. The court will be provided with a statement that details the benefit amount and a Financial Investigations Officer will compile this.
The amount calculated must be assessed from the recoverable amount, which is the amount that the defendant benefitted from the criminal conduct. The available amount is the defendant's total assets (at the time the order is made) after deducting any obligations that have priority and the value of any tainted gifts. If the confiscation proceedings are successful, the court will order the defendant to pay the lower of either the value of the available assets or the recoverable amount. If there are several defendants, then the criminal gain can be apportioned between them at the discretion of the court.
A defendant can challenge the amount that they are ordered to pay if they either don't agree it is correct or they do not have enough funds. However, they will be required to provide evidence to support their arguments. The court may reduce the amount if they are persuaded that the defendant either did not benefit from the crime to the level that was suggested or that they did not have a criminal lifestyle and that the gains highlighted can be accounted for legitimately.
The court can also reduce the payment amount required if the defendant can show that they simply do not have the assets to cover the order. This process does have a safeguard for the court, known as Section 22 Applications. Where the defendant successfully proves that they do not have any money or realisable assets to cover the order, the Court will still order them to pay £1. By doing this, they leave the option open to order the defendant to pay the benefit amount in full if at a later date, should they acquire sufficient assets or money.
Defendants must pay the order within a set period (generally six months). Defendants that do not pay will incur interest at a rate of 8% on the order and can also be sentenced to a period in prison (or any prison sentence can be extended). Even if some of the order is paid, the defendant will still be ordered to pay the totality of the order and any interest until the full order is discharged. In very limited circumstances, the defendant can apply to discharge the order under a certificate of inadequacy.
Contact our Specialist Confiscation Solicitors, London
Confiscation proceedings are very complicated, involving technical areas of the law. Our specialist criminal lawyers have the experience to advise and represent our clients throughout the whole process. We can effectively challenge inappropriate confiscation proceedings and ensure that our clients receive the best advice possible in their circumstances.
We have one of the leading specialist POCA defence teams in the Country; we advise those facing POCA proceedings and those immediately affected by such orders, e.g. third parties, business partners and co-directors.
Our team includes specialist White Collar/Corporate Crime defence teams, highly ranked by the leading Legal ranking directories and are highly experienced when dealing with these proceedings, including AML, taxation, bribery and corruption, market offences, and have an in-depth knowledge of Prosecution agencies policies and behaviour.
Several other law firms have Dispute Resolution Departments comprising of corporate litigators and young barristers that deal with this field and are relative newcomers to this area of law. Not us, we have been dealing with these issues since the enactment of POCA 2002 and believe in early proactive defence, an approach that has proved to be very successful.
If you are facing confiscation proceedings, you need to take immediate expert advice. Please get in touch on 020 3811 3600 or complete our online enquiry form.
