Criminal assets confiscation

EU leaders call for tougher rules on criminal assets confiscation.

EU leaders have proposed new legislation to tackle the issue of lack of effectiveness in proceeds of crime recovery. Cecilia Malmström, the current European Commissioner for Home Affairs, stated that serious organised crime members freely invest profits from their criminal enterprises into luxury goods, properties and precious metals. The illicit assets can be easily transferred within the EU due to major differences between the Member States’ local anti-money laundering laws.

The UK anti-money laundering and illicit assets recovery legal framework is based on the Proceeds of Crime Act 2002. The Act not only allows for cash seizures by the police forces, but also operates a Suspicious Activity Reports System. Under the SARs system, all transaction that can reasonably be deemed suspicious have to be logged and referred to the UK Financial Intelligence Unit, for further intelligence and analysis. Cecilia Malmström claimed that she had seen figures showing UK recovery levels of £150-£200 million per year. In fact, according to SOCA’s 2008 report, only in the investigations started under the SARs system, the confiscation orders had a value of £110 million and further cash seizures of £26 million.

She states that it is important to ensure that organised crime is not profitable. The official figures for 2006, estimated that organised crime generated £15 billion. In view of the official data it is difficult to argue that the current confiscation procedures are effective. The EU Commission believes that this is due to the fact that national laws are not fully harmonised and significant difference hinder the processes.

Proposed Changes

The newly proposed changes to the current confiscation regime include:

  • Simplification of confiscation processes for assets that can be clearly traced to convicted criminals;
  • Improvement of recovery processes for assets transferred to third parties who ought to have been aware of the criminal origin of the assets;
  • Implementation of procedures for asset recovery from criminals who are on the run, terminally ill or dead;
  • Introduction of less bureaucratic and more time-efficient procedures allowing for temporary asset freezes even before formal conviction or court order;
  • Effective management and utilisation of recovered funds.

The abovementioned changes are of particular importance to innocent tax payers who have to face effects of economic downturn including raising taxes and unemployment. The confiscated money could be used to improve public services and lower the current tax bands for individuals and businesses, stimulating the economy.

At the same time, the Crown Prosecution Service has just published a list of 191 convicted criminals who were ordered to return £1 million or more in criminal profits. 49 of the above-mentioned are classified as millionaires. Unfortunately, according to another source criminals reportedly ignore the legal system and refuse to repay the money. Illicit funds are often transferred overseas to trusted third parties or locally to family members or friends. With the introduction of the proposed changes, it will not only be easier to reverse any transactions and confiscated the property from families, friends and third parties but also place temporary freezes, before a judicial order is made, on assets that can easily be identified.

The proposed changes along with the newly created National Crime Agency bring hope to aid the system and ensure effectiveness of the confiscation processes. The National Crime Agency will replace the Serious Organised Crime Agency and become fully operational in 2013.

Criminal legal aid – being exploited ?

Criminals Receiving Legal Aid

The purpose of legal aid is to provide financial assistance to members of society who cannot afford to pay for certain types of legal advice. Most people will agree that millionaire criminals, where their wealth is believed to have come from criminal activities and may have been hidden away should not be entitled to legal aid where they have sufficient illegal funds to cover the cost of their criminal defence. Others would argue that the “innocent until proven guilty” presumption means that these individuals should still be entitled to criminal legal aid.

However, shocking figures under the Freedom of Information Act has revealed that in the last three years almost 50 wealthy criminals received an average of nearly £300,000 each in legal aid despite them having over £1million of suspected illegal money.

The final figure is expected to be even higher as all the defence bills have not been paid as yet. The figures are controversial and come at a time when Justice Secretary Ken Clark is trying to reform legal aid by cutting £350 million from the legal aid budget by reducing the service to poorer people in cases of clinical negligence, welfare, personal injury and divorce.

Most of the criminals applied for legal aid to fight the Crown’s attempts to have their wealth seized. This wealth cannot be used to pay for their legal defence fees under the Proceeds of Crime Act 2002 (POCA). Under POCA the Crown can apply for a Restraint Order prohibiting anyone from dealing with their assets in order to prevent the accused from dissipating with the same. The rules used to allow for reasonable living expenses and reasonable legal costs to be paid from the restrained funds but the rules were later changed so that legal expenses cannot now be paid. Therefore, a person subject to a Restraint Order may be able to get legal aid and many so-called sophisticated criminals have also moved any assets abroad or otherwise hidden them, thereby pleading poverty.

Ministers argue that the law is justified as these criminals may ultimately be ordered by the courts to pay back their legal fees and those that fail to do so will get extra time. Whether this is true in practice is perhaps a different matter However, Lord Macdonald, The Bar Council and the Criminal Bar Association amongst others would like the law changed so that the tax payer is not subsidising wealthy criminals anymore. Accordingly, there are proposals before the House of Lords to amend the Legal Aid Sentencing and Punishment Bill.

It is worth noting that the rules as they stand do not only have financial implications on the public purse but they could also be a breach under the Human Rights Act as it restricts an individual from choosing their own lawyers.

What do you think about this issue ?

Tech savvy and choosy burglars

Burglars now tech savvy

It seems that burglars are becoming choosy and many are only interest in tech gadgets, spurning more everyday objects. this of course reflects society’s near obsession with the tech craze.

With the advances in technology, items such as music dvd’s are simply no longer profitable for burglars, so the emphasis is on the gadgets such as laptops, phones and such like. Apparently, the Met Police have analysed data on burglaries and found that items such as dvd’s are now taken in only 7% of burglaries.

Fraud – is it acceptable for private companies to fund police ?

Public/private partnership on fraud – a dangerous precedent or practical necessity ?

Fraud of all kinds is becoming an increasing issue in our society and comes with the double whammy of cuts in police resources. Is it better in these circumstances for cash rich companies to resource the police to achieve a faster more effective solution to serious fraud ? A recent disclosure shows this has already happened but the practice is clearly highly controversial.

It appears that Virgin media paid cash to the police to help resolve a major fraud issue affecting Virgin and the deal, agreed in a formal contract with the Met Police, also had a success element, almost akin to a no win no fee personal injury type arrangement. The facts of this unusual arrangement, in summary, are :-

  • It is possible for police to charge private organisation’s fees under the 1996 Police Act, but this usually relates to the costs of policing events such as concerts or football matches
  • The problem Virgin had was  major international fraud issue which was estimated as losing the company nearly £150 million annually
  • Under the commercial arrangement reached, some 30 officers were utilized to work in conjunction with a similar number of internal investigators working for Virgin Media.
  • It is understood that police were only brought in when there was sufficient evidence to move to an action phase of investigation
  • Controversially the contract provided that Virgin would pay the police 25% of any monies recovered from the fraudsters.
  • The arrangement has been heavily criticized. Senior members of the Metropolitan Police Authority state they were completely unaware of the deal agreed.

Clearly, there are compelling reasons why the type of arrangement reached in this case makes a lot of sense, but do the dangers of private companies funding the police outweigh the potential benefits ? What do you think ?

Soundbites or substance ?

Soundbites or substance ?

Every month of every year, with almost every Government we can remember, there is a new plan about how to deal with criminal justice, penalizing criminal behavior and so … “tough  on crime, tough on the causes of crime” is the ever present mantra. What a load of nonsense.

We all know that keeping someone in prison costs an extraordinary amount of money, about £20k a year for each in inmate. This is a lot of money and it of course makes sense on a number of levels to get prisoners to work, to pay at least a modicum of the expense of keeping them in prison, to get some kind of payback for crime, and to provide skills which may reduce the possibility of  reoffending. All good, but saying it is one thing, implementing it is another. Call us cynical, but we’ve heard it all before.

So, does this sound familiar ? …..

  • inmates to working up to 40 hours a week
  • 50% of prisoners reoffend within a year of release

The above are the new proposals from the Justice Secretary – let’s see what the position is in the next year or two.

Double jeopardy

In the wake of the Stephen Lawrence case convictions, this article explores ‘double jeopardy’.

Double jeopardy means that you can not be tried twice for the same offence. There are good reasons for this, some of which are listed below:

It may be considered manifestly unfair to the alleged victim who is presumed innocent until proven guilty, the test usually being beyond all reasonable doubt;

It may be considered an abuse of process to re-consider or introduce new evidence, when Authoritative or Regulatory bodies should, frankly, have got their act together, and their evidence in place with one proverbial bite at the cherry being the Trial;

It may be considered an abuse of administration of justice where high costs are spent, and Court time has been taken up. Moreover the victim and the victim’s family should expect the Prosecution to have all evidence in place;

Natural Laws of Justice ought to apply. Justice must be seen to be done. Certainty and clarity should be what in Law we strive for. Without it, we have potential despair, and possible chaos looming;

A fair trial may be impossible given previous publicity, and length of time since the first offence;

The Criminal Justice Act 2003 (‘the 2003 Act’), changed the double jeopardy rule.

Section 75 of the 2003 Act allowed for a retrial following the Defendant’s acquittal, which includes the following offences:

  • Murder and Attempted Murder;
  • Manslaughter;
  • Kidnapping;
  • Arson, endangering life or property

The Prosecution must in the first instance apply to the Court of Appeal seeking an Order quashing acquittal of the Defendant, and providing for the Defendant to be retried for that particular offence.

The Director of Public Prosecutions must consent to such an application.

There are 2 tests to be met in order to prosecute a defendant for a second time:

There must be ‘new and compelling’ evidence: The evidential test, Section 78 of the 2003 Act. That new evidence should not have been adduced when the Defendant was acquitted, and that evidence must be reliable, substantial, and highly probative against the Defendant.

The second test relates to the interests of justice, which is set out at Section 79 of the 2003 Act. The Court of Appeal has to consider a number of matters including, but not limited to:

  • The nature and seriousness of the offence;
  • The heinousness of the alleged crime committed;
  • Whether a fair trial is likely;
  • The length of time passed since the offence was allegedly committed;
  • Whether new evidence could have been adduced at the initial Trial;
  • Whether the Police or the Prosecution failed to act with due diligence or expedition;

As we well know, the quality, methods, and procedure of obtaining evidence, and investigating objects and articles forensically, has significantly evolved and developed particularly since the Lawrence case.

The writer believes that exceptions to the rule of double-jeopardy is necessary, but it has to be weighed carefully against the rights of an acquitted Defendant as against the seriousness of the crime and impact to the victim and their family.

The fact that in the Stephen Lawrence case those who have since been convicted, gloated and boasted generally about committing racist crimes, eased the consciousness of right-thinking society to vilify them. I wonder if such evidence had not been adduced, whether polite society would have been so amenable to convictions based on forensic evidence found, which had not been previously discovered because forensics had yet to evolve, or alternatively they were simply missed, rather than evidence over the years may have become contaminated.

No doubt there will be an Appeal which will hopefully further clarify the exceptions to double-jeopardy.

David Rosen is a Solicitor-Advocate, Partner and head of Litigation at Darlingtons Solicitors, and a visiting associate Professor of Law at Brunel University.

More than 900 serving police officers and community-support officers have a criminal record, official figures show.

Forces across England and Wales employ police officers with convictions including burglary, causing death by careless driving, robbery, supplying drugs, domestic violence, forgery and perverting the course of justice. Those with criminal records include senior officers, among them two Detective Chief Inspectors and one Chief Inspector working for the Metropolitan Police.

At least 944 officers and police community-support officers (PCSOs) have a conviction, according to figures released by 33 of the 43 forces in England and Wales in response to requests under the Freedom of Information Act.

Many forces could not provide details of criminal records dating from before their staff joined, meaning the true figure will be significantly higher.

The Metropolitan Police, Britain’s largest force, came out on top with 356 officers and 41 PCSOs with convictions. It was followed by Kent Police (49) and Devon and Cornwall Police (44). The criminal records include: a PC convicted of burglary as a teenager who is now with Devon and Cornwall Police; an inspector convicted of dangerous driving and another inspector convicted of possessing and supplying cannabis at Essex Police; five officers convicted of assault and one convicted of causing death by careless driving at Merseyside Police.

Most of the convictions are for traffic offences such as speeding and drink-driving, but the records also include an officer in South Yorkshire was convicted of fishing without a licence. Home Office guidelines issued in 2003 say police officers should have “proven integrity” because they are vulnerable to pressure from criminals to reveal information. The guidance says forces should reject potential recruits with convictions for serious offences – including causing bodily harm, burglary, dangerous driving and supplying drugs – unless there are “exceptionally compelling circumstances”.

Ethnic differences in sentencing – are you surprised ?

Institutional racism in sentencing of offenders ?

A recent study by the Guardian newspaper (not the first such analysis over the years) shows that there are definite sentencing disparities based on ethnicity and when it comes to certain offences.

The Guardian conducted it’s own analysis based on an extensive trawl through data released by the Ministry of justice. The most interesting aspects of this analysis are as follows :-

  • black offenders compared to white offenders for driving offences are over 40% more likely than to go to prison
  • in relation to possessing a weapon the figure is just under 40% more for black people
  • for drug related offences the figure is just under 30%.

These are clearly large discrepancies and certainly do nothing to dispel the ongoing belief, with apparent justification, that the law is not applied fairly, which many would say was a significant contributing factor to the recent London riots.

The analysis does also show that this is not only a black and white issue, since there are also quite large differences between sentencing for white and Asian offenders, as follows :-

  • Asian offenders are over 40% more likely to go to prison for drugs offences
  • Nearly 20% more Asians go to prison for the offence of shoplifting.

The Judicial Office when asked about the above figures simply said that there are a whole range of factors which could account for the differences. One such factor, pleading guilty early is potentially significant, but otherwise, is this explanation satisfactory especially given that a similar study in 1992 found similar overall discrepancies ?

Prison numbers still increasing

Prison numbers still on the increase

The Daily telegraph has reported in the last 24 hours that prison numbers have reached a record of over 88,000. This leaves only just over 1,200 free places in prisons. There is  plan to build several new prisons over the next few years, but can we afford to go on like this as a country. Each prisoner costs the country tens of thousands per year to keep in jail.

Whilst the swelling prison numbers have been put down to the summer riots in London and whilst there is undoubtedly truth in this, is there a wider issue here ? Is society becoming less moral ? We believe there is certainly evidence for this, and particularly when it comes to financial crime, in a society where prospects for the young are deteriorating fast. Combined with a culture of rampant consumerism.

If you look at figures for things such as insurance fraud, mortgage fraud, theft, corruption and such like, it looks like there is a problem.

Never has “tough on crime, tough on the causes of crime” seemed a more difficult yet pressing issue.

Repeat offenders

Repeat Offenders

The issue of rehabilitation of offenders and hardcore repeat offending is o0ne of the most difficult of all relating to prison and criminal justice reform. Is the issue still that offenders continue to repeat because they are institutionalized and unable to get a foothold back in society or is that the penalties for serious repeat offenders are too lenient, giving them a reason to continue their past conduct ?

Here is some intere4sting research from the Daily telegraph :-

  • Over 4,000 offenders with more than 15 previous offences only received a caution or reprimand in the last year.
  • In the last 10 years nearly 40,000  repeat offenders were not imprisoned for repeat offences and last year alone, nearly 30,000 offenders who have for committed at least 3 offences were only cautioned or reprimanded on reoffending
  • For clarity, the repeat offences in question fall into the category where they could have been dealt with by a Crown Court, so they are not minor offences