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Following a conviction, an individual may face a confiscation order under the Proceeds of Crime Act (POCA) 2002. The court will pursue a payment equal to the defendant’s benefit from their crime – but how much is the right amount? PKF can help to ensure that defendants do not suffer unfairly from these orders.
About confiscation orders
The Proceeds of Crime Act 2002 substantially changed the court’s ability to deal with those who benefit from criminal activity. Following a conviction, an individual may now face an additional hearing in relation to their assets known as a 'confiscation hearing'. The Act dictates that the court must instigate confiscation proceedings if the prosecution makes an application for the court to do so or if the court thinks it is appropriate to do so.
The Prosecution will assess the benefit an individual has made from his or her criminal activity and pursue a payment equal to their available assets. The Act is often described as draconian and unforgiving, as indeed it was designed to be.
The assumptions of a ‘criminal lifestyle’
At the confiscation hearing, the court has to decide whether the individual has a ‘criminal lifestyle’. Serious acquisitive crimes such as drugs trafficking, blackmail, people trafficking and money laundering are all defined in the Act as lifestyle offences (See Schedule 2 POCA for the full list). However, a course of criminal activity committed over a set period of time may also give an individual 'criminal lifestyle' status. If the court is satisfied that an individual has a criminal lifestyle, it must make a number of pre-determined statutory assumptions (S10 POCA). It must assume that all the subject's income and all his or her expenditure throughout the period, commencing 6 years prior to the date on which the individual was charged and continuing through to the present date, is 'benefit' from their criminal activity. It must also assume that all the assets held by an individual at the date of their conviction are derived from crime and therefore constitute 'benefit'. There is no obligation upon the court to specify the type of criminal activity it believes the individual has been engaged in.
Can the defendant rebut the assumptions?
The defendant may rebut the assumptions, but the onus is on individual and not the prosecution to persuade the court that the benefit is not from criminality on the balance of probabilities. Courts have generally held that unsupported assertions are not sufficient to rebut the assumptions.
The order
Following the hearing, the court will be invited to make a confiscation order. The Judge should record two figures on the order. The first figure is the benefit which the court believes has been derived from criminality. The second figure is the recoverable amount. The recoverable amount is deemed to be the lower of the defendant's benefit from criminal conduct and the available amount. The available amount is the value of the defendant's free property, minus certain prior obligations such as secured borrowings, and includes the total of the values of all tainted gifts. A nominal amount should be recorded if the available amount is nil.
Non-payment
When a confiscation order is issued, the Judge will record when the payment should be made. A term of imprisonment is added to be served by the defendant if he or she does not make payment on time. The length of sentence is set by the Judge and is known as the default sentence.
Serving the sentence does not expunge the debt. The sentence is proportional to the amount of the debt and runs consecutively to the substantive sentence. The defendant is committed for the default sentence at an enforcement hearing in front of the enforcing magistrates. The sentence is classed as 'criminal' and must be served unless or until the order is satisfied.
How can PKF help?
PKF's forensic team has considerable experience of helping defendants with these punitive orders. We provide an independent investigation, uninhibited by previous or existing relationships. Our forensic specialists can challenge the value of the benefit assessment, distinguish legitimate earnings from criminal proceeds and help to substantially reduce the amount that an individual has to pay.
Confiscation orders are for life and can put homes and other assets at serious risk. The court will seek the maximum payment, which could be well in excess the actual financial or economic benefit from the crime. With our advice, you can ensure that your client does not loose more than is appropriate.
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