Confiscation and Asset Recovery Specialists
Confiscation and the Proceeds of Crime Act (POCA)
Olliers have specialist solicitors dealing with all aspects of confiscation, most of which these days are dealt with under the Proceeds of Crime Act 2002 or ‘POCA’ as it is commonly referred to.
If you are convicted of a crime with any financial element, such as fraud, theft, drug trafficking, or money laundering (this is not an exhaustive list) you may well face confiscation under POCA.
The prosecution will seek to recover the proceeds of your crime which often means very strict and seemingly unfair provisions. If you find yourself in this position you should seek expert legal advice.
At Olliers we regularly deal with confiscation proceedings under POCA, the DTA 1994 and CJA 1988 and can advise and represent you at various stages of the confiscation process.
Initial Stage – ‘POCA timetable’
If your conviction was for an offence which can lead to POCA proceedings, the prosecution (at the sentence hearing but before sentence is passed), will inevitably ask for a POCA timetable to be ordered signalling the start of the confiscation process.
- Firstly the defendant is required to submit a financial statement of means under Section 18 of POCA where he or she should disclose details of all bank accounts, property held, vehicles, expenditure over the relevant period, and any other assets held. It is very important to make full and frank disclosure. If any information is deemed to be false, or information deliberately missing then this could be seen as contempt of court.
- Secondly, the prosecution will respond with a statement (section 16) from an accredited Financial Investigator who will set out what he or she believes to be the criminal ‘benefit’ arising from a defendant’s criminality following conviction and will go on to state what the known available amount of assets is. The prosecution will usually invite the court to make a confiscation order in the amount they have assessed as benefit, unless they accept that the defendant’s assets are insufficient to meet the benefit figure, in which case they will seek a confiscation order in the available amount. If they conclude you have no assets at all, they will sometimes ask the court to make a nominal order of £1.
- The defence may respond to the prosecution under section 17. It is very important to challenge everything which is not accepted but it should be noted that the burden is on the defendant to disprove any aspect of the prosecutor’s statement he or she challenges. It is therefore vitally important to seek expert advice in relation to these proceedings.
What is meant by ‘the benefit figure’?
The benefit figure is the figure that the Prosecution allege the defendant made from the crime he was prosecuted for, and may (in cases where it is said that the defendant had a ‘criminal lifestyle’) include property held, transferred or acquired within the in the past 6 years on examination of his or her accounts (called criminal lifestyle). The prosecution will look carefully at all identified and unidentified credits and debits to the defendant’s account and seek to apply the assumption that the expenditure, property acquired, transferred or held comes from the proceeds of criminal conduct unless the defendant can prove otherwise and rebut those assumptions. Often the benefit figure is much higher than people expect and it is therefore very important to have effective representation to argue this figure down where it is possible to do so.
What is the ‘available amount’?
This is the sum of money that the Prosecution state the defendant has in order to satisfy the benefit figure. Sometimes this is based on amounts of cash seized from the defendant, other times it is based on amounts identified in bank accounts, real property, vehicles, jewellery and other assets held. Even if these items have been acquired legitimately they are deemed as available assets to meet the benefit figure and therefore will be liable to confiscation under POCA where those assets are less than or equal to the benefit figure. For example where the benefit figure is said to be £100,000 but the defendant’s available amount of assets is £20,000 the confiscation order should be made in the sum of £20,000.
In very rare circumstances, a person’s assets may in fact be greater than the benefit figure. In such a case the defendant has the luxury of being able to decide which of his assets to realise towards the order.
In most cases the available amount will be less than the benefit figure and once the assets have been realised, the confiscation order will have been paid (subject to applications under s22 below).
What if the prosecution allege that I have ‘Hidden’ assets?
In some unfortunate cases, even where the defendant asserts that he or she does not have sufficient assets to meet the benefit figure, the Prosecution occasionally allege that a defendant has ‘hidden assets’ that should be included in the available amount. The prosecution should provide some evidential basis to back this up but they often suggest that there must be money left over in the particular circumstances of the case, as there is no audit trail and no other explanation for where the money has gone – for example where there has been no evidence that it could possibly have been spent. The burden rests with the defendant to prove on the balance of probabilities that he does not have any more assets with which to pay the benefit figure. It is very difficult to prove that you do not have hidden assets. In a contested POCA hearing it will inevitably be necessary for the defendant to give evidence and seek to persuade the Judge that he or she does not have any hidden assets. It is very important to be properly represented in this regard.
The Court makes a confiscation order
Some POCA cases never reach the stage of a contested hearing. If benefit is not challenged and the assets are agreed by the parties the Judge will simply make a confiscation order in the agreed sum. There will then be an order for time to pay and a sentence of imprisonment in default of payment.
Other cases when either benefit or assets are challenged there will be a contested hearing where evidence from both sides will be called and the Judge will make findings of fact and law before making a confiscation order declaring the benefit and the realisable amount before moving on to the time to pay and the period of time in imprisonment in the event of non-payment. The maximum time to pay is 3 months initially which can be extended to a further 3 months making 6 months in total.
If a confiscation order is not paid, the case will eventually be listed for enforcement in the magistrates court who will enforce the default period of imprisonment ordered by the Crown Court Judge. An order for imprisonment in default will be based on the amount paid towards the order. If you find yourself before the enforcement court it is important that you seek legal advice.
Applications to vary a confiscation order
These can be made by both the defence under s23 or the prosecution under s22.
Section 22 application by the prosecution:
In cases where the benefit figure is significantly in excess of the available amount at the time of the making of the order, the prosecution reserve the right to apply to uplift the confiscation order at any time in the future if they come to understand that the defendant’s financial circumstances has changed significantly. If for example a defendant has come into large sums of money, or has accrued large amounts of equity in a property or savings, or purchased an expensive car the prosecution reserve the right to apply for a restraint order and to seek to recover the additional funds towards the benefit figure under s22. If the court allows them to do so the effect is that the confiscation order is varied upwards and a further period of time to pay is ordered with a new period of imprisonment in default. This is one of the most draconian measures of POCA. If you are unfortunate enough to be the recipient of an application under s22 you should seek expert legal advice. The applications can be objected to on the basis that they are unjust or unfair, especially if the prosecution try to make repeated applications.
Section 23 Applications by the defence:
Where, in the process of trying to pay a confiscation order it becomes clear that the item being sold to raise money towards the confiscation order is not going to raise the amount it was expected to, there is a procedure whereby the confiscation order can be varied downwards by the defence. . A good example is the sale of a house. If the defendant’s house was valued at the making of the POCA order at £200,000 yet upon sale it only made £175,000 an application can be made. Evidence would need to be provided in the application to show that there was a valid reason for the shortfall. If accepted by the court, the confiscation order figures could be amended (reduced) to match the shortfall. Usually such applications are made with the agreement of the prosecution but on occasions we need to go and argue them before the Judge.
Can I appeal against a POCA order?
Sometimes mistakes are made when a confiscation order is made. Figures might have been based on incorrect information. There could have been error in law by the court. Where the mistakes cannot be rectified with an application to vary under a s23 application the only possible remedy is an appeal. In order to appeal an order there needs to be arguable grounds to do so. You would need to seek advice from a specialist solicitor and / or barrister to see if such grounds exist.
What happens if I have been served with a restraint order?
The prosecution apply for a restraint order against a person when they believe that they have been involved in criminal proceedings in some way and they have assets, in the form of cash, equity or some other form that are relevant to the proceedings that they wish to preserve. These are usually served before criminal proceedings are instigated at all, let alone POCA proceedings but sometimes they follow after a POCA order is made when they accompany an application to vary under s22.
The order sets out a list of prohibitions and or conditions that restrict the person it applies to. Such prohibitions include conditions not to sell property, not diminish or reduce assets held in any way. Inevitably bank accounts are frozen. These orders can have a huge immediate impact on someone’s life and / or business.
If someone is convicted of breaching the order then this would amount to a contempt of court and that person could well be sent to prison as a consequence. Please seek advice should you receive a restraint order. There are provisions allowing you to apply to vary or even discharge a restraint order which Olliers can assist you with.
Need help? Olliers are specialist Asset Recovery & Confiscation Lawyers (London & Manchester)
For advice in relation to POCA or indeed confiscation under older provisions such as the drug trafficking act 1994 or the Criminal Justice act 1988 please contact us.