Hidden Assets Defence in P.O.C.A Application

What does the Proceeds of Crime Act 2002 concern?

The Proceeds of Crime Act 2002 concerns the confiscation and recovery of the proceeds of crime. Amongst several other subject areas, the Proceeds of Crime Act extensively covers the treatment and prosecution of money laundering in Britain.

Anti-money laundering legislation aside, the P.O.C.A also covers; confiscation of assets, payment to the state based on profit made from crime, and taxation of profits made from crime.

Several amendments have been made to the Proceeds of Crime Act 2002, including; the Serious Organised Crime and Police Act 2005, Serious Crime Act 2007, and Serious Crime Act 2015.

In essence, P.O.C.A was originally aimed at drug lords, with the goal of stopping these criminals from benefitting from crime, and to put this money back into the British economy. The idea was that the Proceeds of Crime Act would prevent criminals from being able to gain a luxurious lifestyle through the proceeds of crime, in turn disrupting and deterring future criminal activity, and increasing the nation’s safety for all.

Some aspects of P.O.C.A apply to the UK in its entirety. However, other sections maintain jurisdiction in certain areas only (as is outlined explicitly within the act). See the following Gov UK Serious Crime Bill for an overview of the Proceeds of Crime Act 2002.

How is the Proceeds of Crime Act Carried Out?

The P.O.C.A simplified the conviction of money-launderers, as well as others involved in illicit activity who benefitted financially from their involvement. The main money laundering offences are as follows; hiding or disguising criminal property, entering into an arrangement whilst suspecting said arrangement involves the use of criminal property, and acquiring and using known criminal property.

Confiscation of assets usually takes place following conviction through P.O.C.A for money launderers. From 2010-2014, the Home Office declared that upwards of £746 million in criminal assets had been recovered, and £2.5 billion frozen.

Defences for the Accused

Several defences exist which omit the accused of being charged. ‘Authorised disclosure’ is common amongst those in situations where the individual accused only suspects the involvement of criminal property. Other defences include if the crime was not committed in the UK, and the defence of official function.

However, P.O.C.A cases are notoriously hard to defend, for several reasons, which have led the confiscation legislation P.O.C.A contains to repeatedly be referred to as ‘Draconian’. This is largely due to the fact that, what exactly ‘benefit’ entails in terms of criminal activity is incredibly vague, and can be interpreted in a multitude of ways, regarding the accused’s net profit, expenses paid and total value of their allegedly criminal activity. This is only complicated further by the naturally poor bookkeeping kept in these scenarios, leading to further indefinite figures.

Ultimately, according to P.O.C.A, ‘benefit’ is viewed to be the gross amount received by the accused in connection with their criminal activity, even though this may be much more than their actual criminal profit. If the benefit is split between individuals, each party is still held accountable for the total sum. Several other ‘draconian’ features also exist, in total making those accused of P.O.C.A face often extortionate sums in proportion to the activity in which they were actually involved, and providing them with a very tough battle to prove otherwise.

Hidden assets in a P.O.C.A application

It is common in P.O.C.A proceedings for the Crown to assert that the accused has ‘hidden assets’ regarding their activity. If a hidden assets case remains unchallenged, the defendant will be made accountable for the repayment. If the defendant is unable to pay the sum, which is often incredibly inflated and impossible to do so, the defendent will automatically receive an additional prison sentence.

So, what are hidden assets? Hidden assets usually arise where an identified asset cannot be accounted for, for example stolen money from a burglary which is now missing. In cases such as this, the defendant must cover these ‘hidden assets’. Another common case where individuals are accused of hidden assets is when the court determines hidden assets must exist to explain why the defendant is able to support the lifestyle they’re currently living, as they cannot find any other reasonable way to account for this, such as a legitimate income.

The Issue with Hidden Asset Cases

Cases with hidden assets are where things can get convoluted. A financial investigator will create a statement outlining the ‘benefit’ the defendant has accrued through their crime, alongside a ‘recoverable’ figure. However, if the defendant is deemed to meet the ‘criminal lifestyle’ criteria outlined by P.O.C.A, British court may well assume all monies/assets from the previous 6 years are resulting from criminal activity too, making the defendant accountable for turning over these assets also. To prevent such a scenario, the defendant must prove all monies/assets’ legitimacy from the previous 6 years, which in reality is a rather impossible feat, especially as the task may well have to be carried out from prison, without access to an accountant. If the defendant fails to do so, these assets may also be deemed ‘hidden’, and the defendant responsible for turning over these also.

Due to the excessive, unrecoverable bills (which accrue interest each passing day), many convicted are left with life-long, crippling debt. P.O.C.A has been known to break up families, greatly lower mental health, and cause convicted criminals to revert back to criminal activity purely to raise the excessive funds they are being charged for.

Due to the aforementioned ambiguous nature of P.O.C.A legislation, many assets demanded are incredibly unreasonable, and at best, relying on considerably little evidence.

With such high stakes, in hidden assets cases having the right defendant is absolutely crucial, as the defence must do everything possible to prove the contrary.

Challenging Hidden Assets Cases with St. Pauls Chambers

Facing wrongful accusations of P.O.C.A can be extremely distressing due to the intense scrutiny the defendant faces, and the justification of earnings they must give to keep personal items including property.

Our barrister Jon Gregg successfully defended a “hidden assets” application under the Proceeds of Crime Act 2002, at Minshull Street Crown Court.

Instructed by Messrs. Norcross, Lees and Ritches, Jon had previously represented Mohammed Miah during the prosecution of “Operation Rescind”, an undercover police operation aimed at drug dealing in Oldham.

The Crown alleged that Mr. Miah had £17000 in hidden assets, despite his protestations to the contrary. Following a contested hearing, H.H.J. Foster, Q.C. rejected the Crown’s application. Following the case Foster revealed that, even as a full-time criminal judge, he was rarely asked to consider contested P.O.C.A. hearings, and confessed that the last time he had done so was as a Recorder, in 1993, under different legislation!

This case was an object lesson in what can be achieved when one challenges Proceeds of Crime Act applications, despite the draconian burdens placed upon the defence. If you are facing difficulties concerning the Proceeds of Crime Act, and require experienced and reputable hidden assets defence, please don’t hesitate to get in touch with our team of barristers for further assistance.