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Proceeds of Crime Act (POCA) and confiscation proceedings

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What are confiscation proceedings?

Confiscation proceedings are brought following a conviction for an offence where there has been a financial gain. This could be a fraud, drugs or indeed any regulatory offence where it is perceived that the criminal behaviour has benefited someone financially.

Will I lose everything I own?

This is a difficult question to answer and each case is different. Sometimes yes it can mean losing everything you own which is why access to specialised legal advice is so important. In general terms the Court can seek to confiscate all or some of your assets and these are called your ‘available assets’. These assets are used to pay back the benefit of crime. The benefit of crime is calculated in different ways and is known as the benefit figure. It does not matter if your available assets are nothing to do with any benefit of crime and that you acquired them through honest and legitimate means. The test is ‘what do you own that can pay back the benefit figure?’ As such it is extremely important that the benefit figure is correct in the first place.

What are hidden assets?

If there is a difference between what the Prosecution says your benefit of crime is and the available assets you have to pay this off then the Prosecution may allege that you have hidden away some of the proceeds of your crime. This happens if you are unable to explain where money has gone to or if there is any hint of money being transferred to other people or abroad. It will be for the Court to decide then if you have hidden anything away.

This is a very difficult situation as it means the Court does not believe that you no longer have the money. It is extremely important to show in as much detail as possible that you do not have that money and that may mean many hours work with your Solicitor compiling documents to prove where the money has gone. Anything less than this could mean you are said to have hundreds of thousands of pounds that you simply don’t have. It is important that you instruct an expert solicitor who has the appropriate experience in dealing with these issues. You could be made liable to pay what you have in available assets and a sum in hidden assets over and above that if you haven’t been able to prove there are no hidden assets.

What is a tainted gift?

It can sometimes be alleged that a transaction that has occurred is a tainted gift. This can be if property or assets are transferred to a spouse or other family member or friend. If there is a transaction of this nature then you could be treated as still having that money or amount even though you hold no legal right to the property anymore. In situations such as these it is important to show that there was a legitimate reason for the transfer and it wasn’t simply a way of hiding more assets.

If I go to prison for non payment of my confiscation order will the debt be wiped out?

If you are ordered to pay a sum of money in confiscation proceedings that sum remains owing until it is either paid or the order is varied to remove it. If during the enforcement of the order you are sent to prison for a period of time in default of payment then the debt, together with the interest accruing, is still payable on your release from prison.

What do I do if I can’t pay?

In the first instance the Court can be asked to extend the period of time in which you were given to pay to maximum of six months. This is not an automatic right and you will have to show good reason for the extension and that you have made every effort to raise the funds in the required time.

What is a certificate of inadequacy?

A certificate of inadequacy relates to older confiscation orders before the Proceeds of Crime Act came in. This is where you could apply to have the confiscation order varied if you could show that there was no longer any prospect of raising the sum of money originally ordered. This may be where a property has dropped in value or other such circumstances. This can still be done under the Proceeds of Crime Act under S23.

Can I get legal aid for confiscation proceedings?

If you had the benefit of legal aid (a representation order) for the main Crown Court hearing then that same order will be valid for the confiscation proceedings. If you did not have legal aid then an application can be made. This will be granted if the Court believes it to be in the public interest. This test would usually be passed as your liberty will be at stake if you do not pay a confiscation order.

This will be means tested and you may have to pay a contribution to your representation. If the order is being enforced against you then you can apply to the Magistrates Court for a representation order again under the same tests but if you are over the financial threshold then you will not receive representation. We would be happy to discuss all aspects of paying for your legal costs with you whether you want to have legal aid or pay privately.

Can the prosecution bring confiscation proceedings for regulatory offences?

Yes. Often people believe that offences such as trading standards offences, environment offences and other such regulatory matters will not be subject to the Proceeds of Crime Act confiscation regime.

They do attract confiscation and in these matters it is even more important to have a specialist POCA solicitor dealing with your case as there could be complex issues to deal with in order to protect either your assets or the assets of your company.

It is important that the solicitor dealing has good commercial knowledge in order to argue against what is known as ‘piercing the corporate veil’. Issues will arise as to what the benefit of crime actually was and as to whether this is turnover figures or profit. There is considerable case law in this area all of which would need to be argued to ensure you are fully protected.

Can the Prosecution still come after legitimately gained assets that I may get long after the confiscation order has been paid?

Yes. As long as the benefit figure is higher than the sum paid the Prosecution can apply to the Court to re-determine the original available assets and ask for more. This can be from any source of money even an inheritance or even lottery winnings. As long as the benefit figure is higher than the available assets figure then the Prosecution can pursue any money which you come by even legitimately earned income.

By Rachel Adamson, Partner, serious fraud and business crime  

If you are facing confiscation proceedings or need any advice on POCA please call our expert POCA lawyers on 01616 966 229.