What are Confiscation Proceedings and how do they Work?
In criminal cases, the conclusion of the trial is not always the end of the matter. For many offences Confiscation proceedings will follow and here, Ian Anderson looks at how such proceedings work in practice.
What are Confiscation proceedings?
Confiscation proceedings are heard in the Crown Court after a person has been convicted of a crime which involves either financial gain, an attempt to gain financially or the laundering of criminal assets.
Confiscation proceedings are not automatic, and the prosecution will have to apply for the proceedings to be opened and adjourned at the end of the case.
In quantifying the criminal gain the court is asked to decide if that person has benefited from any relevant criminal conduct.
A Financial Investigation Officer, working for the Police, will produce a statement which sets out the amount of criminal benefit. The court will then make an Order which requires the defendant to pay this amount or the value of their available assets, whichever is lower.
If there is more than one defendant, the court is able to divide the proceeds by the number of defendants in order to work out the benefit figure or come to an agreement about apportionment.
What is ‘Criminal Benefit’?
Criminal benefit has been construed extremely widely. It covers the obvious things like the value of stolen property or the profits from drug dealing, but it also covers slightly more obscure gains such as the rise in the value of a property following a fraudulent mortgage application or the competitive advantage gained by a business which breaches health and safety procedures to make profits.
There are two main types of
Benefit from Particular Criminal Conduct – this is the amount of benefit which is said to derive from the offence for which the person has been convicted. So if Mr A has been overpaid £10,000 in fraudulently obtained state benefits his benefit from particular criminal conduct will be £10,000.
Benefit from General Criminal Conduct – this is used in ‘criminal lifestyle’ cases where the person is assumed to have had criminal benefit from multiple sources for a six-year period, unless they can show otherwise. As you may have guessed, this is where confiscation gets pretty serious. So if Mrs B has been found guilty of a fraud where she obtained £10,000, but has also had £250,000 paid into her accounts in cash over a six year period and obtained a Mercedes worth £50,000 without any evidence of a loan or a trade-in she could be said to have benefitted to the tune of £310,000 and it will be assumed that the money came from crime.
Why are the Prosecution alleging a ‘criminal lifestyle’ on my part?
If you are convicted of an offence specified in Schedule 2 of the Proceeds of Crime Act, including drug dealing, money laundering, people trafficking, terrorism, counterfeiting or blackmail the court is entitled to infer that you have benefited from a ‘criminal lifestyle’ and that any of your unexplained income is from crime. Doing so is known as applying the ‘statutory assumptions’. The assumption being that unless the defendant can explain where the money came from then it is criminal benefit.
The court can also infer a criminal lifestyle if the offending took place over a period of six months or more, or if was part of ‘a course of criminal activity.’
If the income or assets can be satisfactorily explained, then the court will be persuaded that the lifestyle provisions should not apply and the amount payable will reduce drastically. It helps to have good records of income and expenditure to defeat the ‘statutory assumptions’. Failing that it helps to have a good legal team and a forensic accountant.
What happens if I don’t agree with the figure, or I simply can’t pay?
Figures are open to challenge, but you must be in a position to provide evidence to back up your arguments. An expert solicitor can assist you.
If you can persuade the court that you did not benefit from crime in the amount suggested, or that you did not have a criminal lifestyle and can account for the gains then the benefit figure can be reduced. Similarly, if you can persuade the court that you have no money or assets with which to pay an order then the realisable assets figure could also reduce significantly.
It is important to note however that where a person has no money or assets to pay, they will have an order to pay £1, but if they come into money or acquire assets they could be ordered to repay the benefit figure in full. That process is known as a Section 22 Application. Section 22 Applications to increase the available amount can be defended, and legal aid is available in those cases.
It is also possible to request a variation through Section 23. This is the opposite of a Section 22 order and is usually brought by the defence when the available amount can be proven to be less than expected.
How long do I get to pay?
As a starting point the maximum is three months- this can be extended by a further three months in ‘exceptional circumstances,’ and your solicitor will make the necessary application if this is the case.
I’m don’t agree with the Prosecution, so I’m just not going to pay.,..
It is not in any defendant’s interests not to engage with confiscation proceedings. Enforcement Proceedings will be brought in the Magistrates Court to try to get you to pay up or send you to prison. If you have been sentenced to a period of time in custody, this can be extended, or if you haven’t, you may find yourself spending time in one of Her Majesty’s prisons. You’re still expected to pay up- and interest is also added.
If you think you may be subject
to confiscation proceedings, don’t delay in seeking expert advice. Contact Ian on
0113 284 5062 or via firstname.lastname@example.org.
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