PROCEEDS OF CRIME - when does the Defendant benefit from "Criminal Conduct"?

March 8, 2011 - PRLog -- CRIMINAL CONDUCT means - Crime. It is conduct which either constitutes an offence in England and Wales or which would constitute an offence if it occurred here (see Section 76(1) of the Act. There is then PARTICULAR  criminal conduct and GENERAL criminal conduct.

The distinction is vitally important. If the Defendant does not qualify as having a criminal lifestyle, then the Court must nevertheless consider whether he has benefited from his PARTICULAR CRIMINAL CONDUCT. See Section 6(4)(a). If, however, the Defendant does qualify as having a criminal lifestyle, then the Court MUST consider whether he has benefited from his GENERAL CRIMINAL CONDUCT. See Section 6(4)(b.)

This is an absolutely fundamental distinction. An enquiry into PARTICULAR CRIMINAL CONDUCT is restricted to the offences which are proven or admitted in the current proceedings, including offences taken into consideration. See Section 76(3). The benefit from the offences in question must be proved by the Prosecution on the "balance of  probabilities."

The question of GENERAL CRIMINAL CONDUCT is very different. Here the Court MUST apply the required assumjptions to all income and expenditure from the previous 6 years. In effect, therefore, GENERAL CRIMINAL CONDUCT is definitely not confined to just six years and is in fact ALL the Defendant's criminal conduct regardless of when it occurred. See Section 76(2) and up to the time the Court makes its ultimate decision.

The next important question is: What is "BENEFIT?"

A Defendant in fact benefits from criminal conduct  - "if he obtains property as a result of or in connection with the conduct." The Defendant's benefit is the value of the property obtained."

Property is "obtained" by a person "if he obtains an interest in it. Where the Defendant has obtained a pecuniary advantage, the benefit is "an amount equal to the value of the advantage." Property held or obtained abroad is nevertheless benefit notwithstanding that that no offence has been committed in that jurisdiction.

This is a very complicated area of law even for lawyers. Take the case of "temporary" obtaining. It is not necessary for the property to pass to the Defendant. As long as he does actually obtain the property, he need only do so momentarily. This is an interesting point. Where in the case of PATEL, the Defendant had taken cash from the till and given half of it to an accomplice, it was held that the fact that he paid over a share was irrelevant and that he had obtained all the property. A courier of cash for example obtains the whole amount that he has carried.

In addition, a pecuniary advantage can be obtained by deferment of a debt or by temporary evasion of payable duty. However, no pecuniary advantage is obtained by a temporary and unrealised increase in the value of shates.

The Prosecution must prove that the Defendant has, in fact, obtained property or a pecuniary advantage himself and not simply that it has been obtained by others, for example, co-conspirators.AN ORDER CANNOT BE MADE JOINTLY AND SEVERALLY AGAINST DEFENDANTS. As a general rule, the Court should attempt to apportion the amount of the proceeds and make separate orders against each individual according to the degree of involvement.

The apportionment of the benefit therefore amond a number of Defendants is a crucial matter. For example, where oine Defendant receives the benefit and then shares it with other members of the enterprise, for example by passing it through a bank account of which he is the sole signatory, that Defendant is treated as having obtained the whole amount of that benefit.

The word "Property" also needs to be deefined. The word has the same meaning throughout nthe Act. It includes anything of value, anywhere in the world, in which the Defendant has or had some interest. Property includes money; all forms of real or personal property; things in action and other intangible or incorporeal property.

Where the Defendant's benefit is a pecuniary advantage, he is taken to have obtained a sum of money equal to the value of an advantage. For example, obtaining state benefits or evading tax on the basis of a false declaration will amount to obtaining a pecuniary advantage.

In the case of NEUBERG, the Defendant had been trading in the name of a liquidated company and therefore unlaawfully. The benefit was held to be the entire income or turnover of the company from that point not merely its profits.

Benefit need not just be "as a result" of criminal conduct, but also obtained "in connection with." the Defendant's Criminal Conduct. For example, where property received by a Defendant through his criminal conducy generates an income without his interest in the property itself being diminished, such a rent is obtainmed in "connection with" the criminal conduct.

THe obtaining of the property need not be exclusively connected with the criminal conduct as long as it has some connection with it. See Section 76(6) of the Act.

There we have it!. For more information on any aspect of bthe Proceeds of Crime Act, Money Laundering, and Civil Recovery, feel free to telephone one of our advisers, Milton Firman, legal Adviser, on 07909 900449 FREE OF CHARGE and at any time day or evening.