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The proceeds of crime is a term that is spoken about often, but what does it actually mean? You may be wondering what is as classed as proceeds of crime, and what happens if your assets are suspected of falling within this category. Proceeds of crime is a term given to money or assets obtained by criminals through criminal activity. Where money or other items are suspected of being obtained through illicit means, the court has various different powers in relation to seizing these assets. The Proceeds of Crime Act (POCA) is a complex piece of legislation, which is not written in a ‘user friendly’ manner. This article provides a summary of the key information that you need to know if you find yourself under suspicion for handling proceeds of crime.
POCA makes it a crime to use money or assets that have been obtained through crime. It also enables the authorities to seek permission to investigate a defendant’s assets. POCA sets out offences in relation to the proceeds of crime. These offences are also known as ‘money laundering’ offences.
It also establishes the powers of the state in relation to seizing these assets and the process for doing so. POCA also introduces ‘unexplained wealth orders.’ This is a type of order which can be sought by the authorities which obliges the subject to explain how they came by their assets. If the person named on the unexplained wealth order fails to provide an adequate explanation, the assets will be forfeited.
In short, yes. You may be sent to jail for offences relating to the proceeds of crime or the activities that led to proceeds being obtained or possessed in the first place. Often, these offences are ‘layered’ in a prosecution, meaning you will be prosecuted for several crimes relating to the activities undertaken.
POCA criminalises concealing, disguising, converting, transferring, acquisition, use and possession of criminal property. It also makes it an offence to facilitate the acquisition, retention, use or control of criminal property.
In a practical sense, this could involve accepting cash, cheque or card payments which are the proceeds of crime. Removing criminal property from the UK is also a criminal offence.
For example, say a drug dealer buys a second-hand Ferrari with her illicit earnings. The car would constitute the proceeds of crime. Sometimes a non-criminal entity can unknowingly become involved in money laundering. Here are some examples that could constitute money laundering if the proper due diligence checks have not taken place:
In addition, transferring money into offshore accounts can constitute money laundering where this is done in order to avoid paying tax.
Under POCA, any cash or assets that have been obtained through crime or using cash or other funds which have been acquired unlawfully, constitute the proceeds of crime. Cash, money in a bank account, assets such as land, property, jewellery, or gold could all be proceeds of crime if they are in your possession due to the resources derived from criminal activity.
There are various ways in which the court can remove the proceeds of crime from a person’s possession, and there are ways in which a person can be required to pay back sums owed if the amounts have disappeared. This might be from your house or inheritance money.
Restraint orders: this type of order freezes a person’s assets in order to prevent them from disposing of them before a confiscation order is paid off. It can apply to assets outside of the UK as well as within it. The CPS Proceeds of Crime Unit (CPSPOC) can apply to the Crown Court for the appointment of a Management Receiver, a person who is responsible for managing the assets to make sure that they do not lose value. A restraint order can be obtained at any point following the commencement of a criminal investigation, and at any stage of criminal proceedings. It will only be granted if the prosecutor can show that there is a real risk that the assets may be dissipated if the order is not granted. In some circumstances, property can be seized where it is owned by a company where the defendant is the ‘controlling mind’ of the company. A restraint order does not represent a permanent removal of your assets; the permanent removal of your assets is achieved through a confiscation order.
Confiscation orders: this type of order can only be made once a defendant has been convicted of a crime. It requires a convicted defendant to pay a sum of money within a fixed time, which is always 6 months or less. The figure is calculated with reference to the profit that the defendant is believed to have made from their offending. If they fail to pay the confiscation order, they will face a prison sentence, known as a ‘default sentence’. If you believe that the confiscation order is for a greater sum than the money that came from the offending, you can apply for a reduction. If subsequently, the CPS discover that you have more assets than previously thought, they can apply to the court to increase the order.
POCA payment periods vary, and it is up to the court to decide how long you have to repay any proceeds of crime or an amount equivalent thereto. typically, you have 3 months to pay amounts back, but the court could extend this to 12 months if required.
If your lifestyle changes significantly since the order date, there is a time limit of 6 years from the date of conviction for any re-evaluation of amounts to be done. This means you could have to pay back a different amount from what was originally required.
The outcome of plea bargaining (the process where you negotiate with the prosecution in respect of which offences you will plead guilty to), can have a substantial impact upon the sum that can be demanded pursuant to a confiscation order. This is where the solicitor and barrister representing you can make all the difference. By negotiating in respect of which charges you will accept, you may be able to reduce the amount of money which is payable.
If you wish to oppose confiscation proceedings, you will need to prepare a witness statement identifying the assets that you own and control, highlighting the location and value of these assets. The prosecution will respond by alleging the criminal benefit brought to each of these assets and challenging the value of the assets. The defence will then respond giving their version of how the assets were obtained. It can also be possible to bring litigation challenging the true ownership of the assets. Your solicitor will advise you in respect of what you need in order to demonstrate a legitimate audit trail for your property.
If you do not repay the money due in the Confiscation Order within the stated time frame, you will be subject to enforcement proceedings. A criminal defence solicitor can help you ask for further time to make your repayments.
Civil recovery: as an alternative, where the prosecution does not have enough evidence to pursue the criminal process civil recovery, cash, listed asset and account forfeiture proceedings and taxation can be used by authorities to recover cash or assets which are suspected to be ill gotten gains. In order to secure the return of property which has been forfeited, you must prove on the balance of probabilities that the property is not going to be used for criminal activity and it was not procured through illegal activity. Your criminal defence solicitor can help advise you on the process for securing the return of cash that has been seized by the authorities.
Consequences of not paying are complex, and you should get advice from a solicitor on this matter. Generally, if you can’t pay, you will be subject to further enforcement, which could mean a prison sentence. If you go to prison, you are still liable for the debt, plus interest.
If you cannot pay on time, but might be able to eventually, you can apply for an extension.
If you are in a position where your assets are being treated as proceeds of crime, make sure that you instruct a solicitor with a thorough understanding of the criminal justice system, and your rights within it. At Stuart Miller Solicitors, no case is too big or too small for us. We are ready to tackle the complexities of your case, and help you achieve the best possible outcome. Contact us for a no obligation consultation today.
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