The Growth in Confiscation Proceedings
When the Proceeds of Crime Act was introduced there was a general feeling that it was a consolidation of existing legislation and would be directed against organized crime and terrorist outfits. The reality has been quite different. One only has to have a cursory glance at high profile cases that have reached the Court of Appeal such as Shabir EWCA/Crim/2008/1809, Perkes EWCA/Crim/2010/101 and Del Basso EWCA/Crim/2010/1119 to see that PoCA has been used against what many would consider to be just ordinary businesses rather than and the Mr Bigs of the criminal underworld.
I have previously written about a recent case in which I was instructed by defence lawyers who were representing a company and one of its directors who faced confiscation proceedings after pleading guilty to offences under waste management legislation. Readers should be aware that such cases are not uncommon and should take note of a case this month in which the Gambling Commission secured its first confiscation order under the Proceeds of Crime Act 2002 following one of its investigations.
Marc Darren Bird, 38 and from Coventry was ordered to pay £30,000 at a hearing at Leamington Crown Court. The confiscation order is in addition to fines and costs of nearly £27,000 awarded against Bird in September 2010 under the Gambling Act 2005. The defendant had been found guilty at Birmingham Magistrates Court in January 2009 of eight counts of making ‘Joker Poker’ gaming machines available for use and eight counts of supplying and maintaining gaming machines without an operating licence. Bird abandoned an appeal against the conviction August 2010 following a test case in the Divisional Court in March of that year. This case confirmed the Commission’s view that a machine offering players the chance to win credits that can be exchanged for a cash prize is classified as a gaming machine.
The list of regulators now vigorously using the confiscation legislation makes interesting reading. In 2009 a new tranche of regulators were given powers to confiscate the assets of convicted defendants. The list now includes:
- Counter Fraud and Security Management Service of the NHS;
- Department for Business, Innovation and Skills (BIS);
- Department for Work and Pensions (the DWP);
- Environment Agency;
- Financial Services Authority (FSA);
- Gambling Commission;
- Gangmasters Licensing Authority;
- Local authorities in England and Wales;
- Medicines and Healthcare products Regulatory Agency;
- Office of Fair Trading (OFT);
- Revenue and Customs Prosecutions Office;
- Royal Mail;
- Rural Payments Agency;
- Serious Fraud Office (SFO);
- Transport for London; and
- Vehicle and Operator Services Agency.
Accountants in practice should be aware that the very Draconian legislation of the Proceeds of Crime Act 2002 may be applied to their clients. From experience when I have raised this with fellow accounting practitioners or even solicitors the reaction is one of stunned disbelief.