Proceeds of Crime Flashcards
Proceeds of Crime Act 2002
The offences and powers under the Proceeds of Crime Act 2002 are connected with day-to-day criminality and are relevant to all police officers. This chapter provides an overview of the three principal offences relating to ‘money laundering’ created by s. 327 (concealing criminal property), s. 328 (arrangements in relation to criminal property) and s. 329 (acquisition, use and possession of criminal property) of the Act. To begin with, we examine the concepts of ‘criminal conduct’ and ‘criminal property’.
The Proceeds of Crime Act 2002, s. 340 states:
(2)
Criminal conduct is conduct which—
(a)
constitutes an offence in any part of the United Kingdom, or
(b)
would constitute an offence in any part of the United Kingdom if it occurred there.
Section 340(4) states that it is immaterial:
- who carried out the criminal conduct;
- who benefited from it;
whether the conduct occurred before or after the passing of the Act.
- who benefited from it;
Criminal Conduct
So criminal conduct not only includes the behaviour of the defendant but also of any other person. Effectively, this states that any offence, committed by any person, anywhere at all and at any time is ‘criminal conduct’. As a consequence of s. 340, a conviction can be obtained under the Proceeds of Crime Act even if the prosecution cannot specify the offence or offences that gave rise to the proceeds or identify the person(s) responsible for the offence(s).
The Proceeds of Crime Act 2002, s. 340 states:
(3)
Property is criminal property if—
(a)
it constitutes a person’s benefit from criminal conduct or it represents such a benefit (in whole or in part and whether directly or indirectly) and,
(b)
the alleged offender knows or suspects that it constitutes or represents such a benefit.
Criminal Property
The offences under ss. 327, 328 and 329 are often referred to as ‘money laundering’. Note that the definition of ‘property’ does not just relate to money. Section 340(9) of the Act defines property as all property wherever situated and includes:
- money;
- all forms of property, real or personal, heritable or movable; and
- things in action and other intangible or incorporeal property.
(Incorporeal property relates to property or an asset that does not have value in material form, such as a right or a patent.)
The mens rea relating to criminal property and therefore to all three offences is knowing or suspecting. Dishonesty is not required. In R v Da Silva [2006] EWCA Crim 1654, the Court of Appeal upheld the conviction, concluding that the word ‘suspect’ meant that the defendant had to think that there was a possibility, which was more than fanciful, that the relevant facts existed. A vague feeling of unease would not suffice. The fact that suspicion alone will suffice means that proving such offences is remarkably less burdensome for the prosecution than the potential alternative to such offences, a charge of handling stolen goods where the defendant must be proved to know or believe that goods are stolen goods.
Concealing Criminal Property—Proceeds of Crime Act 2002, s. 327
- Triable either way
- 14 years’ imprisonment on indictment and/or a fine
- Six months’ imprisonment and/or a fine summarily
The Proceeds of Crime Act 2002, s. 327 states:
(1)
A person commits an offence if he—
(a)
conceals criminal property;
(b)
disguises criminal property;
(c)
converts criminal property;
(d)
transfers criminal property;
(e)
removes criminal property from England and Wales and Scotland or from Northern Ireland.
(2)
But a person does not commit such an offence if—
(a)
he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;
(b)
he intended to make such a disclosure but had a reasonable excuse for not doing so;
(c)
the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.
(3)
Concealing or disguising criminal property includes concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it.
Concealing Criminal Property
There is an overlap between offences of concealing criminal property and handling stolen goods. However, whereas handling only occurs ‘otherwise than in the course of stealing’ and ‘by or for the benefit of another’, the offence under s. 327 can potentially be committed during the commission of an offence and for the benefit of the thief. On a literal reading of s. 327, a thief who conceals, disguises or sells property that he/she has just stolen may thereby commit offences under that section because the definition of criminal property applies to the laundering of an offender’s own proceeds of crime as well as those of someone else.
The offence can be committed in a variety of ways. In R v Fazal [2010] 1 WLR 694, D allowed his bank account to be used by a friend to launder money, and it was held that he was guilty of converting criminal property (contrary to s. 327(1)(c)) whenever such monies were deposited in, retained in or withdrawn from the account.
In R v Pace [2014] EWCA Crim 186, the Court of Appeal rejected the argument that, on a charge of attempting to commit the offence under s. 327(1)(c), it would be sufficient for the prosecution to prove that D merely suspected the property in question to be criminal property. Suspicion of this kind suffices for the substantive offence (as it does for all such offences under ss. 327 to 329) but it cannot, said the court, suffice for an attempt.
Section 327(2) creates several defences to charges under s. 327.
Arrangements in relation to Criminal Property—Proceeds of Crime Act 2002, s. 328
- Triable either way
- 14 years’ imprisonment on indictment and/or a fine
- Six months’ imprisonment and/or a fine summarily
The Proceeds of Crime Act 2002, s. 328 states:
(1)
A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.
Arrangements in Relation to Criminal Property
This offence will often be apt for the prosecution of those who launder on behalf of others. This could catch persons who work in financial or credit institutions, accountants etc., who in the course of their work facilitate money laundering by or on behalf of other persons and also family members (husband/wife, partner etc.). The natural and ordinary meaning of s. 328(1) was that the arrangement to which it referred must be one which related to property which was criminal property at the time when the arrangement began to operate on it. To say that it extended to property which was originally legitimate but became criminal only as a result of carrying out the arrangement was to stretch the language of the section beyond its proper limits (R v Geary (Michael) [2010] EWCA Crim 1925).
Section 328 includes the same defences against committing the offence as those included in s. 327(2).
Acquisition, Use and Possession of Criminal Property—Proceeds of Crime Act 2002, s. 329
- Triable either way
- 14 years’ imprisonment on indictment and/or a fine
- Six months’ imprisonment and/or a fine summarily
The Proceeds of Crime Act 2002, s. 329 states:
(1)
A person commits an offence if he—
(a)
acquires criminal property;
(b)
uses criminal property;
(c)
has possession of criminal property.
Acquisition, Use and Possession of Criminal Property
A thief who uses or retains possession of property that he/she has just stolen (this being criminal property as defined in s. 340) must therefore be guilty of an offence under s. 329(1)(b) or (c), the maximum penalty for which is twice that for basic theft. It does not follow that such a charge would be appropriate.
This offence is committed where a person knows or suspects that the property which is acquired etc., constitutes or represents his/her own or another’s benefit from criminal conduct; the same defences against committing the offence apply as in s. 327.
An additional defence exists under s. 329(2)(c) which states that a person will not commit the offence if he/she acquired or used or had possession of the property for adequate consideration (e.g. being paid a proper market price of £3,000 to fix a roof). The effect of the defence in s. 329(2)(c) is that persons, such as trades people, who are paid for ordinary consumable goods and services in money that comes from crime are not under any obligation to question the source of the money. However, the defence is not available to a defendant who provides goods or services knowing or suspecting that those goods or services will help a person to actually carry out criminal conduct.
The coincidence between an offence of handling stolen goods and those described from the Proceeds of Crime Act 2002 might provide a dilemma as to which offence to charge. In such a situation, CPS guidance states that if it is possible to charge money laundering or handling stolen goods, then money laundering may be more appropriate if ‘either a defendant has possessed criminal proceeds in large amounts or in lesser amounts, but repeatedly and where assets are laundered for profit’. However, a money laundering charge should only be considered where proceeds are more than de minimis (about minimal things) in any circumstances where the defendant who is charged with the underlying offence has done more than simply consume the proceeds of crime.
