Confiscation - until the grave | AccountingWEB

Confiscation - until the grave

I was quite interested to read a law report in The Times a few weeks back, but brought up an issue of which I was unaware, probably should have have been, and with which you all will be well familiar.  Sorry, I forget the case name.

But it dealt with someone who had been convicted of an offense, had a confiscation order levied at the time being his "available amount" which was considerably less than his benefit from criminal activity.  Anyway, he coughed up the available amount, did his time and, having returned to society, went on to lead a blameless life under the mistaken impression that he had a clean slate.  Not so fast.

Somewhat to his chagrin, the authorities could then strip him of his legitimate earnings obtained subsequent to his release, until the total amount confiscated reaches the original benefit obtained from crime.


It may be hard to have much sympathy for this offender.  Certainly I have more sympathy for some other cases that I have come across.  But I wonder whether this rule is in the public interest.

Say you reckon that an honest wage would bring you in £30K per year.  You avail yourself of an opportunity to rake in £2m by way of some fraud or drug deal, and you fritter away £1m of it on fast living before they catch up with you.  You go down, do your stir, pay over the remaining £1m, and then what have you got to look forward to?  You could work honestly for half a century and pay every penny over in compensation until you die or ... I know, go back to a life of crime.  You may get away with it.  You may not.  But you will be no worse off.

davidwinch's picture

Yes indeed

davidwinch | | Permalink

It is the case under PoCA 2002 confiscation provisions that where a defendant's 'benefit' exceeded his 'available amount' at the time the (initial) confiscation order was made then - at any time subsequently - the prosecutor can return to court, under s22, and ask for a further order (technically perhaps better described as an amendment to the initial confiscation order).

This means that the value of assets legitimately acquired in later life can be taken into account by the court in re-assessing the defendant's (current) 'available amount' and he can be ordered to pay a further sum.

It should also be borne in mind that a defendant's 'benefit' is not the amount which, as accountants, we would regard as the amount by which he has benefited from his crime.  It is the gross amount 'obtained' as a result of or in connection with his criminal conduct.

Very recently I was in court in a confiscation case involving a businessman who had operated a plant hire business.  Some of the plant proved to have been stolen before the defendant bought it and he was convicted of 'handling' stolen property (knowing or believing it to be stolen).

In consequence he 'obtained' a benefit, the court held, of the value of the stolen plant (which was seized by police and returned to its true owners) plus the gross hire charges (inclusive of VAT) arising from that plant.  The court rejected legal arguments to the effect that the value of the returned plant and the output VAT (which had been accounted for to HMRC) should be excluded from the 'benefit' figure.

Ultimately of course the defendant will be obliged to pay (to the Crown) the amount of his 'benefit'.

In the case of a drug dealer postulated by the OP, his benefit is the gross amount 'obtained' by him - in effect the 'turnover' of his illegal 'business', not the profit arising.

The case reported in the press was Re Peacock [2012] UKSC 5.


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