Convicted of VAT fraud without trial? | AccountingWEB

Convicted of VAT fraud without trial?

I was interested to read the judgment in the Court of Appeal on 18 April in the case of Bagnall & Sharma v R [2012] EWCA Crim 677.

Darren Bagnall was a successful businessman, but he was caught with a bag containing £99,200 in cash and convicted of being concerned in an arrangement concerning criminal property (a money laundering offence) contrary to s328 PoCA 2002.

Subsequently he was subject to confiscation proceedings.  The s328 offence is a 'criminal lifestyle' offence for the purposes of confiscation, see s75 and Sch 2 PoCA 2002.

In the confiscation proceedings the prosecution said, in effect, that they believed Mr Bagnall to have been involved in Missing Trader Intra Community (MTIC) VAT fraud (or 'carousel' fraud) in connection with wholesale trading in mobile phones.  That fraud explained, they said, the large amounts of money passing through bank accounts held jointly by himself and his wife in previous years.

The Crown said that Mr Bagnall was not going to be charged with the MTIC fraud - partly because they knew that he was already subject to 'criminal lifestyle' confiscation proceedings and, if you like, there was no need to prosecute him for the VAT fraud as they 'had' him anyway by way of the confiscation.

In the Crown Court the judge made a confiscation order against Mr Bagnall for £1,818,619 - vastly more than the amount involved in the money laundering offence of which he had been convicted.

Mr Bagnall appealed saying that his human rights had been breached as he had effectively been convicted without trial in relation to the VAT fraud.

The Court of Appeal did not accept that view.  They held that the Crown Court had acted correctly.  Mr Bagnall had suffered the consequences of his conviction under s328 and confiscation proceedings, including the operation of the statutory assumptions of s10, flowing from that.  He had not suffered as a result of any 'conviction' of VAT fraud without trial.

The confiscation order would be reduced by £200,000 in relation to a separate point raised on appeal, but would otherwise stand good.

But is this how confiscation was intended to operate?



The intention of the legislation

The Black Knight | | Permalink

always remains hidden until it strikes perhaps ?

Bearing in mind there have been other moves to administer summary justice by removing trial by jury and imposing large civil fines (COP9) etc...I would say that is where we are headed.

If it had not been intended so perhaps it would not have been written as such.

Judge Dredd here we come ?

b.clarke's picture

But is this how confiscation was intended to operate?    1 thanks

b.clarke | | Permalink

Without going back to the record of the original discussions surrounding the legislation, I can't be sure, but it seems me that the answer is Yes. The legislation is drafted in very wide terms, and that has always been acknowledged.

Does he have a criminal lifestyle, as defined? Yes.

So he needs to explain or lose this money which has passed through his accounts.

Maybe it's just that this particular wrinkle hasn't come up before.


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