When will assets be forfeited following a criminal conviction?

Money made from Serious Crime in the UK

Currently there are huge amounts of income made from criminal enterprises in the UK ranging from organised crime to different types of fraud such as bank fraud or mortgage fraud. If individuals are found guilty of these crimes and are found to have made huge sums of money from these crimes then it follows that they should not only be sentenced but they should not be enabled to hold onto the money made – this would not be in the public interest if criminals were able to keep the money made from illegal enterprises and have the use of it following their sentence or for their families to have the use of it.

Which body is responsible for claiming back assets made from crime?

The Proceeds of Crime Act 2002 established the Assets Recovery Agency (ARA) which was launched in January 2003 with the following three distinct functions:

  1. Criminal confiscation

  2. Civil recovery

  3. The taxation if income related to crime

However the Assets Recovery Agency was abolished by the Serious Crime Act 2007 instead transferring the powers of the Assets Recovery Agency to the following four bodies:

  • The Serious Organised Crime Agency

  • The Director of Public Prosecutions

  • The Director of the Serious Fraud Office

  • The Director of Revenue and Customs Prosecutions

These bodies have been charged with maintaining the principle that criminals should not benefit from their crimes.

Criminal confiscation

Is there any legislation in place in deal with criminal confiscations?

Part 2 of the Proceeds of Crime Act deals with the situation where a confiscation order for certain assets will be made.

When will a criminal confiscation order take place?

A criminal confiscation order will be made by a Crown Court if the two following conditions are satisfied:

  1. The first condition being that the defendant falls within any of the following:

  • The defendant is convicted of an offence or offences before the Crown Court

  • The defendant is committed to the Crown Court for sentence in respect of an offence of offences under Section 3, 4, or 6 of the Sentencing Act

  • The defendant is committed to the Crown Court in respect of an offence or offences under Section 70 of the Proceeds of Crime Act – committal with a view to a confiscation order being considered

      2.    The second condition being that:

  • That the prosecutor or the Director requests the court to proceed under the Proceeds of Crime Act

  • That the court believes it is appropriate for it to do so

Does the Defendant have a criminal lifestyle or not?

The next question which the Court must define is whether the defendant had a criminal lifestyle or not.

What is meant by a criminal lifestyle?

A defendant will be viewed to have a criminal lifestyle if they fall within one of the following three categories:

  1. They have committed an offence specified in Schedule 2 of the Proceeds of Crime Act

  2. They have committed an offence which constitutes conduct that forms part of a course of criminal activity

  3. The offence was committed over a period of at least 6 months

For the second two categories the defendant’s benefit must have been at least £5,000.

What are the offences specified under Schedule 2 of the Proceeds of Crime Act?

The following offences are considered to be offences that are part of a criminal lifestyle for the purpose of the Proceeds of Crime Act:

For a full description of these offences contained with Schedule 2 of the Proceeds of Crime Act please see the Act.

What happens if the defendant is viewed to have a criminal lifestyle?

It the court decides that the defendant has a criminal lifestyle then the court will have to consider whether they have benefitted from their general criminal conduct.

What happens if the defendant is viewed not to have a criminal lifestyle?

If the defendant is viewed as not having a criminal lifestyle the court must decide that the defendant has benefited from their particular criminal conduct on the balance of probabilities.

When will the defendant be viewed to have benefitted from their criminal conduct?

Under Section 76(4) of the Proceeds of Crime Act an individual will be deemed to have benefitted from their criminal conduct, whether this is from their general or particular criminal conduct, if he obtains property as a result of or in connection with the conduct.

Section 84(2) of the Proceeds of Crime Act fully describes what is meant by obtaining property for the purpose of the Act.

The recoverable amount

The third stage of the recovery of criminal assets is for the court to decide the recoverable amount.

How will the court decide on what is the recoverable amount?

When the court is deciding on the recoverable amount the following things will be taken into account:

  • The conduct up to the time of making the decision

  • The property obtained up to that time

When the court is considering these issues the following rules will apply, the first being that the defendants benefit will be the value of the property obtained and the second being that the value of the property is the market value of the property at the time.

Market Value

It has been argued that when deciding on the market value of property that the market must be a legitimate or a legal market and so that when an individual has profited from the sale of heroin there can be no market value attached to this as it is not a legal market. This submission was rejected by the Court of Appeal.

The available amount

The final stage of making a confiscation order is for the court to decide what the available amount is.

How does the court make a decision on what is the available amount?

When deciding on what is the available amount the court will undertake the following tasks:

  • Identifying any free property

  • Calculating the total market value of that property

  • Deducting priority obligations such as fines

  • Adding the value of tainted gifts

The burden will then be placed on the defendant to prove that the available amount is less than the recoverable amount – if this is the case the available amount will then become the recoverable amount.

When the confiscation order is made how long does the defendant have to pay the amount?

Section 11 of the Proceeds of Crime Act states that the amount should be paid upon the making of the order however, if the defendant needs time to pay this can be extended to 6 months and sometimes 12 in exceptional circumstances.