Dr Who, Inter-galactic Law and the Crown Court

Part of a very enjoyable Easter break has been spent watching the new Dr Who, which I thought was terrific.

I was a bit non-plussed however when the good Doctor berated the predatory aliens by pointing out that incinerating a harmless planet would be contrary to inter-galactic law.  As a mere Earthling I know nothing about the inter-galactic law to which he referred, and I felt confused and out of my depth.  Would it really be a clear breach of the law?  How would it be enforced? And by whom? What evidence was necessary to show that the unlucky planet really had posed no threat?  Hmmm.

It took me straight back to the moment, earlier in the week, when I had been listening in Crown Court to the defendant's evidence.  "How could I be guilty of money laundering?" he asked.  "I don't even know what it is!"

It sounded like a heart-felt plea.  But guilty he was - and he received a suspended sentence for the money laundering and for benefit fraud.

He had claimed State Benefits without declaring his full income as a self-employed builder or his possession of over £60,000 in neat bundles of £20 notes in a safe at his home.  That was the benefit fraud.

As for the money laundering, he had received some of the State Benefits some years ago in the form of girocheques, which he had signed on the back so that his wife could cash them at the local Post Office.  That amounted to converting criminal property (money laundering) contrary to s327 Proceeds of Crime Act 2002.

So whilst he was genuinely confused and out of his depth, he had indeed committed the crime he so little understood.

The total benefit fraudulently obtained was just short of £6,000, over a period of rather more than 6 months.  The offences, as some readers will already have spotted, are sufficient for him to be deemed to have a 'criminal lifestyle' for confiscation purposes.  He is now at risk of being wiped out.

Rather like the inhabitants of planet Earth in the Dr Who episode.  They were saved by the intrepid Doctor and his sonic screwdriver.  But who will save the benefit fraudster?

David

Comments

The serious point I suppose

Anonymous | | Permalink

is what is the deterrent effect of laws the offender stands no chance of understanding? He presumably got the basic point but the bit with his wife was not surprisingly beyond him.

Confiscation will presumably be limited to the benefit gained of

Anonymous | | Permalink
davidwinch's picture

Criminal lifestyle confiscation

davidwinch | | Permalink

In 'criminal lifestyle' confiscation cases everything the defendant has (and more) is at risk.

See for example the case judgment at www.bailii.org/ew/cases/EWCA/Crim/2006/3062.html in which a defendant had been convicted of theft of a car valued at £18,650 and making off without paying for petrol on four occasions, total petrol value of £219.

A confiscation order was made in the sum of £1,566,911.

The defendant appealed and the Court of Appeal held that the order should have been made for £1,862,189.

It's a bit complicated to explain here, but you can read more about it on my website at www.accountingevidence.com

David

P.S. It is now further discussed below in this thread.

was the original intention of money laundering to catch benefit

Anonymous | | Permalink

or was it really to do with large scale crime - can we now do away with all other offences - can benefit enhancers now expect to be charged under the terrorism act aka the icelanders

i think i will become a conchie

and yes you are right Matt is an inspired cjoice for the Doctor

Seems Draconian

Anonymous | | Permalink

Seems draconian and inequitable in that a theft of say £19,000 can lead confiscation for everything the 'thief' has including presumably previoulsy taxed earnings including presumably principal private residence.   On this case benefit of £19k leads to government legally obtaining title to £1.9M.

Are we living in a democracy or what?  One reads in the press that people convicted of serious violent crimes get away with a derisory custodial sentence or even suspended custodial sentence.

Thank you have cases like Equitable Life, where people get retired with a heavy pay-off for loss of office and even a heavier pension. What about RBS?

Let me open a bottle of Brandy.

nogammonsinanundoubledgame's picture

Same old same old

nogammonsinanun... | | Permalink

Yes, anonymous, we live in a democracy.  And as a democracy we voted in a government who then voted in this legislation.

It's all above board.

With kind regards

Clint Westwood.

stepurhan's picture

Contrast of crimes and severity.

stepurhan | | Permalink

The main difference is the people of Earth were actually innocent. They could hardly be accused of harbouring Prisoner Zero when said entity was of a type that they would be unable to readily detect. There could therefore not have been any collusion between them and it was up to the Atraxians to prove otherwise before incinerating us. I've always presumed that the Shadow Proclamation is some sort of intergalactic police force (though it could simply be the basis of intergalactic law, it being quoted like an act) so investigation would be down to them. Can't see the Judoon handling this one though.

By contrast, the benefit fraudster must have known that not declaring his income and "savings" he was doing something wrong. To a certain extent it is irrelevant whether this offence is defined as money laundering or not. The key thing is that an offence has happened and the benefit fraudster was aware he was committing an offence.

The problem in the case is the excessive nature of the "criminal lifestyle" provisions in this context. He should be forced to pay back the amount he fraudelently took and a penalty should be imposed on top of that. If a convicted fraudster is not left worse off by being caught then it is worth anyone trying it to get away with it. That penalty should be proportional to the crime though. It should be up to the prosecution to provide more robust evidence beyond "he's committed one crime so he's probably committed others" before they can invoke this provision.

What mitigation is available under the criminnal lifestyle provisions? If he can prove income from building work for example, does that get taken into account?

carnmores's picture

Hi Clint

carnmores | | Permalink

Democracy , not really !   everyone has the right to a vote (well almost) but each vote is not worth the same due to national gerrymandering   - not that i have come up with a better system than the status quo

no party has had a 50% vote (ever even blair?) so no law passed has true 'democratic legitimacy'

besides one look at the national socialists in Germany in the 30s just about says it all re legitimacy

i believe that we are slipping inexoriably down the slppery slope to total state control and i am not keen to participate in such a process 

tysonn's picture

terrorist asset freezing

tysonn | | Permalink

Those interested may like to contribute to this latest Treasury consultation. The Treasury has launched a public consultation on the Terrorist Asset-Freezing Bill, which was published in draft on 5 February 2010. The consultation document sets out the Government's approach to terrorist asset freezing and its proposals for more permanent terrorist asset freezing legislation.  
 

You can find the consultation document at.

http://www.hm-treasury.gov.uk/d/consult_terrorist_assetfreezing_bill.pdf
 

Cheers

Neil

davidwinch's picture

Shadow Proclamation

davidwinch | | Permalink

Wow! I'm impressed, Stephen!

If I ever find myself facing the Judoon over an alleged breach of inter-galactic law can I give you an urgent call please?

On a more serious point, in another case http://www.bailii.org/ew/cases/EWCA/Crim/2006/933.html involving a business run by a used car dealer who was subject to confiscation, the Court of Appeal said "if persons such as this appellant in this particular business choose to operate their business dealings in such a way as to deal only in cash and to keep no records of any kind whatsoever they have to take the consequences that may arise: not least for the purposes of the potential application of the Proceeds of Crime Act 2002".  The consequence in question was that the entirety of his receipts (i.e. his gross takings) over a period of 6 years were assumed to be benefits of unspecified criminal conduct - and so subject to confiscation.

So the trader who keeps no records (in that case not even the most basic and fundamental items - copy sales and purchase invoices and a cash book recording receipts and payments) faces not only HMRC chasing him for tax, interest and a civil penalty, but (if he gets into trouble with the law) the possibility of being financially wiped out under PoCA 2002.

Perhaps it is helpful to note that confiscation law was originally introduced for drug trafficking offences only in 1986 (Drug Trafficking Offences Act 1986) and extended to other criminal conduct by the Criminal Justice Act 1988, which was made more Draconian by the Proceeds of Crime Act 1995. The separate strands of confiscation legislation for drug and non-drug offences were merged and re-codified in the Proceeds of Crime Act 2002.

Somewhere along the way severe procedures intended originally to deal with drug dealers have become applicable to defendants convicted of very much less serious crimes.

As Stephen suggests, maybe things have got a little out of balance.

David

P.S. To deal with Stephen's specific query, confiscation law has something in common with tax law.  If the defendant has received some money (or has spent some money the source of which cannot be identified, or has an asset the acquisition of which cannot be shown to be legitimately funded) then the amount concerned is assumed to be proceeds of unspecified criminal conduct.  The burden is on the defendant to show a legitimate source of the monies in question, on the balance of probabilities, by "clear and cogent" evidence (so if no evidence is produced the prosecution win).  The Court looks at the period beginning exactly 6 years prior to the date on which the defendant was charged with the offence of which he has been convicted, so it is reviewing a period of 6+ years.

I do not understand

Anonymous | | Permalink

I have to post as an anon as it is beyound my intellectual capacity to understand how can total takings be benefit obtained from crime?

The trader presumably has to pay for stock (COS), repairs and bringing cars upto a saleable state and overheads. surely the trader can only spend for this benefit what is left over?  If did not pay tax on his profits than his benefit is the tax dodged?

On the other hand we will continue to provide housing benefit and other benefits to peopleopenly preaching hate against the host nation.

Democracy gone mad or what?

davidwinch's picture

"Obtained" is the key word

davidwinch | | Permalink

Law, especially criminal law, is about words rather than numbers.  It is written and interpreted and used by wordsmiths rather than numbersmiths.

If I buy a stolen BMW for, say, £6,000 and sell it for £10,000 (knowing it to be a stolen vehicle) then by my crime I have "obtained" the £10,000 which I received on the sale.

Therefore the 'benefit' (which is defined as the value of the property which I obtain from criminal conduct) is £10,000.

If instead 'benefit' had been defined as the profit derived from my criminal conduct then some rather more complex calculations would be required.  And I would obtain no benefit - or a negative benefit - if I sold on the stolen car for less than I had paid for it.

Bear this in mind when you next read a news report about a person being asked to 'pay back' what they have 'obtained' from their crime.

As a matter of law it is also the case that when two (or more) people obtain something jointly they each obtain the whole of it.

So if Jane and John fraudulently obtain a mortgage advance of £100,000 then Jane obtains a 'benefit' of £100,000 from that crime, and John also obtains a 'benefit' of £100,000 from it.

Such is the Draconian nature of some of our criminal law!

David

nogammonsinanundoubledgame's picture

If these laws had a deterrent effect ...

nogammonsinanun... | | Permalink

... then they might generate more support.

And if they were better publicised, then these laws might have more of a deterrent effect.

Trouble is, if they were better publicised, then perhaps there would also be more of a backlash by those who, although themselves honest, perceive them as unjust.

Possibly a bit of a Catch 22, but I suspect it more likely that no-one has thought to publicise them more widely.

With kind regards

Clint Westwood

 

Thank You, Mr Whinch

Anonymous | | Permalink

Thank you, Mr Winch for explaining the benefit concept so lucidly.

How does the law justify benefit of £19,000 leading to confiscation of £1,900,000 (Everything the person had)?

sorry, i misspelt your name.

Anonymous | | Permalink
davidwinch's picture

Publicity

davidwinch | | Permalink

Clint

To be fair the authorities make no secret of confiscation.  There is even a government publication, "Payback Times" devoted to publicising success stories.  The latest issue is at http://nds.coi.gov.uk/ImageLibrary/DownloadMedia.ashx?MediaDetailsID=1432

If you scour your local press you may see mention of confiscation either as a footnote to a report of a conviction or as a separate story of a convicted person being required to 'pay back' some of their benefit from crime or face an additional period of imprisonment.  There is usually a comment from a police or trading standards officer along the lines of, "This sends a clear message . . .".

But local reporters are neither lawyers nor accountants and, frankly, do not understand the severity of confiscation.

As to the separate point about the justification for the larger figure, imagine my (hypothetical) dodgy re-seller of the stolen BMW (in an earlier posting on this thread) had been charged with 'converting criminal property' (s327 PoCA 2002) by the sale of the stolen car (rather than 'handling stolen goods' s22 Theft Act 1968, which would be an alternative charge), then on conviction of the s327 offence he would be deemed to have a 'criminal lifestyle' (see s75 and Sch 2 PoCA 2002).

As a consequence, in confiscation the statutory assumptions of s10 PoCA 2002 would apply and EVERYTHING passing through his hands in a period of 6+ years (everything received plus everything spent in that period plus everything he currently owns) would be assumed to be proceeds of crime until shown otherwise.  On that basis it is quite easy to get up to a figure in excess of £1 million.

The burden of proof is at that stage laid upon the defendant to show that what he received / spent / has is legitimate.  Doing that over a period of 6+ years can be rather difficult! But whatever can be shown to be legitimate will be excluded from the 'benefit' figure.

There is a common perception that the police and courts are 'soft' on criminals.  So if Joe Public reads in his paper that someone has to pay back, say, a six-figure sum the perception will be that he probably 'had that and more'. Also there is a misconception about the default prison sentence.  For example if Pete is ordered to pay £110,000 in confiscation with a two year prison sentence in default, Joe Public will say to himself something along the lines of, "It's worth him doing the time - he's effectively getting £55,000 a year for it - which is a lot more than I earn in legitimate work".

In fact the prison sentence is an ADDITIONAL penalty for failure to pay the confiscation on time - not an alternative to paying it!  The confiscation amount remains payable after the default term has been served.

David

P.S. Clint, I don't see much likelihood of any government being thrown out of office for being too hard on convicted criminals, do you?

new anon poster

Anonymous | | Permalink

David ? just when I thought I had got it !

When considering a money laundering report I previously understood that I had to take into account whether the suspect knew this was a crime and and whether it was deliberate.

Unfortunately the builder example is just group norm behaviour, he was the unlucky one in a million to get caught.

There is a large part of the population that do not see this behaviour as wrong, it is however good to see one case prosecuted, albeit for benefit fraud, presumably the £60K under the bed was from undeclared profits and tax evasion but HMRC are not as good at prosecuting.

We see similar things on a daily basis, and our clients complain that others are getting away with these sorts of acts. and they are !

Do I have to reappraise how stupid the man on the clapham omnibus is ? perhaps upgrade him to dim. Otherwise I am going to spend the rest of my days reporting, and die in poverty.

 

davidwinch's picture

Re: new anon

davidwinch | | Permalink

You are correct.  The issue in money laundering reporting is whether you know or suspect (or have reasonable grounds to suspect) that the person in question meets the criteria.

The criteria are that either (i) he has himself committed a criminal offence from which he has benefited or (ii) he has become involved with an asset which he knows or suspects is, or represents, the benefit of a crime committed by someone else.

In assessing whether a crime has been committed you (normally) have to consider whether the alleged criminal has been dishonest.

A person cannot be dishonest merely by accident.  Dishonesty requires that the person do something which they realise is wrong (or deliberately omit to do something - such as register for VAT - which they realise they are wrong to fail to do).

When I say "wrong" I really mean "dishonest by the standards of ordinary and decent people".  So that, for example, what Robin Hood did was "wrong" because he stole from the authorities (he stole from the taxes collected by the Sheriff of Nottingham).  As you say, Robin Hood may well have been warmly applauded by the people on the Clapham Omnibus (bit of a Dr Who style time shift there, but never mind!) but that is not the point.  He was still a thief in legal terms.

But confiscation - which I have been dealing with in the comments on this thread - is a whole different ball game!  In confiscation we are dealing with a person who has been convicted of an offence (or more than one offence).  So now we ditch concepts of 'innocent until proven guilty' and 'beyond reasonable doubt'.  Now we are in the realms of 'it's proceeds of crime unless you have persuasive evidence to the contrary'.  (That's not the case in the money laundering reporting arena.  OK?)

David

Dr Who

Anonymous | | Permalink

This stuff could become a religion ! Stranger things have happened !

May be the point was that to punish one criminal (crime unknown) many innocent beings must suffer.(colateral damage)

This is just how our law works.

examples include : Hiroshima, Sadam and the children of Iraq, etc etc . State control and freedom from something ?

Money laundering ? Mp's expenses (much more than £6000 criminal property ?)

In fact it pervades our very being as it is a mistake we make daily.

Only when we are on the receiving end do we think it wrong.

level five planet ?

Anonymous | | Permalink

Am I right that if the planet had only been populated by, Tigers, Orangutangs and other less important species it would have been ok to incinerate the planet (or just the rain forest) ?

What comes around goes around, if only in make believe.

cymraeg_draig's picture

The world (or at least our political masters) has gone mad.

cymraeg_draig | | Permalink

Confiscation orders merely serve to underline one fact.

Take a few pounds from the state and it's reaction will be vicious and disproportionate.

Rape or murder a fellow citizen and the state will slap you on the wrist.

It seems that money is more valued than people.

cheer me up why don't you !

Anonymous | | Permalink

I was hoping it was me that was mad; not the world !

Cheer up! The good news is . . .

Anonymous | | Permalink

 . . . that we only have 30 more days of party political bickering before the politicians leave us alone again for a few years!

cymraeg_draig's picture

30 days ?

cymraeg_draig | | Permalink

. . . that we only have 30 more days of party political bickering before the politicians leave us alone again for a few years!

 

Posted by Anonymous on Tue, 06/04/2010 - 13:48

 

No - they will simply sneak up behind you and pick your pocket instead of asking you to donate.

criminal life style confiscation order is most appropriate for p

Anonymous | | Permalink

Re configuration

Anonymous | | Permalink

A Judoon I was introduced to once pointed out that if it were not  for some interefence by a certain former Gallifreyan party,the whole of this ramshackle crazy planet would have been reset to start point and sterilised of "criminal elements" several times.

He said that when it finally happened the Earth would be a much better place ! Lovely wallows and good running space.

It is believed that the Judoon only dealing with simple matters - more complexproblems including cancellation of DNA and RNA for crimes against  evolution.are dealt with by more capable entities under the Shadow proclamation.

Fantasy reality

Anonymous | | Permalink

Will we know where fantasy ends and reality begins ?

I should have stuck with nature and science rather than dealing with man made nonsense.

Beam me up scotty !

davidwinch's picture

Post-script

davidwinch | | Permalink

Returning to the story of the self-employed builder in my post at the start of this thread, the Crown Court judge ultimately made an order requiring him to pay a little over £250,000 within 6 months and, in default, he faces 5 years imprisonment. 

The judge based the figure upon the estimated value of the matrimonial home (there is no mortgage) plus the builder's savings and the estimated sale value of the two vehicles he owns.  In other words the amount to pay off the order represents everything that the builder and his wife have standing to their names.

I understand the builder intends to appeal against the confiscation order.

David

Confused as well..

Rishi13 | | Permalink

I assume that siging the back of Giro Cheques was a monely laundering offence as he was not entitiled to claim the benefit.

£60,000 cash found in the house -presumably he could not account for this money. Was this a money alundering offence as well?

nogammonsinanundoubledgame's picture

David

nogammonsinanun... | | Permalink

Just out of interest - if he elects for the 5 years (and presumably it would be the full 5), is his house then safe when he gets out?

With kind regards

Clint Westwood

davidwinch's picture

The cash / The default sentence

davidwinch | | Permalink

The cash in the house was not demonstrated to be proceeds of crime (but the defendant could not produce evidence to rebut that assumption).  Therefore there was no money laundering offence proved in relation to that cash.  The burden of proof would rest on the Crown, and to the criminal standard (i.e. so that a jury could be "sure" - judges no longer talk about "beyond reasonable doubt", that wording has gone out of favour in England & Wales), to show a that money laundering offence had been committed in that connection - but the burden is on the defendant to show, to the civil standard (on the balance of probabilities) that the cash was not a 'benefit' of crime in a confiscation.

So since the source of the cash could not be proved either way, the outcome in court is that the criminal offence is not proved (so no money laundering of that cash) but the cash is assumed to be proceeds of crime for confiscation purposes.  I realise that sounds like something of a paradox!

The default sentence may be imposed if the defendant fails to pay on time.  It is exactly that - a sentence for failing to pay on time.

It is not an alternative to payment.  When he has served the sentence the amount due under the confiscation order remains outstanding.  He cannot then be sent to prison (again) for failing to pay it.  Instead the Crown could pursue the debt in the civil courts - for example by attaching a legal charge to his house and appointing a receiver to sell his interest in it.  Whether the court would enforce a sale of the property on the basis of that legal charge is open to question.

If the defendant were imprisoned for failing to pay the fine (i) he would be immediately released at any time if he paid off the amount in full, (ii) the sentence would be reduced pro-rata in respect of any amount that was / had been paid, and (iii) the usual provisions relating to release of a prisoner on licence part way through his sentence would apply (so typically he would be realsed at the half-way stage of the sentence).

Incidentally interest is added to the amount outstanding in the event that it is not paid on time.  The interest rate was fixed years ago and I think has not been updated, so the rate is 8% per annum.

David

That's not just a slap on the wrist!

rworboys | | Permalink

David, it's interesting that there are two issues going on here, the presumably underdeclared takings (£60,000 cash) and the benefits fraud.

Do you know how the matter was discovered?

davidwinch's picture

Discovery

davidwinch | | Permalink

The matter came to light when the builder decided it was no longer safe to keep the £60,000 in cash at home.  His wife took the cash to the bank to deposit it in her (existing) current account.  The bank refused to accept the cash and (presumably) made a Suspicious Activity Report to SOCA who, in turn, passed the information to the police who, in turn, obtained a search warrant and searched his house and seized the cash.

The police then made further enquiries and discovered he was in receipt of DWP benefits.  The police then charged him with benefit fraud and money laundering.

(It is unusual for the police to charge anyone with benefit fraud - usually the DWP or local authorities prosecute benefit fraud.)

David

Thanks David

rworboys | | Permalink

So SARs do get acted upon. I'm pleased I'm not his accountant. I wonder if there were any telltale signs that should have made the accountant suspicious................

davidwinch's picture

Accountant

davidwinch | | Permalink

For most years the builder submitted his returns without the aid of an accountant.

He used an accountant one year but then never went back because the accountant suggested things which were manifestly nonsense.  For example, the accountant said the builder should make his wife a partner in the business when "she has never lifted a brick in her life".

Draw your own conclusions!

David

Better off laundering it in the washing machine

alistair_king | | Permalink

Too dim to go for proper smurfing.

Sounds like he would have been better off sticking the cash in the washing machine. Or maybe having a nice bonfire...

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