Proceeds of Crime - 2 sides of the coin
Posted: Wednesday 8 February 2012
Two news reports recently came out on the same day and highlighted the different aspects of Proceeds of Crime.
The first report relates to a lengthy opinion which was issued last week in the civil recovery case of Scottish Ministers v Stirton & Anderson.
This opinion followed a long running proof in which the Scottish Ministers alleged that assets of nearly £1 million owned by the respondents represented the proceeds of crime and were therefore recoverable under the Proceeds of Crime Act 2002. In her opinion Lady Stacey held that the Scottish Ministers had succeeded in proving that the assets had been obtained through unlawful conduct. In this case the respondents held no criminal convictions in respect of the unlawful conduct alleged.
However, the Scottish Ministers were able to pursue the case in the civil courts under Part V of the Proceeds of Crime Act, which allows them to pursue the recovery of assets thought to have been obtained through unlawful conduct.
During the proof, which ran over a two year period, the Scottish Ministers led evidence to show that the respondents held property which had been obtained through their involvement in the illegal drug trade, extortion of money from a taxi firm and mortgage fraud.
As a result of this Lady Stacey held that the Scottish Ministers had established, on the civil standard of proof, that the assets constituted the proceeds of crime and were therefore recoverable. This was one of the longest running cases of its kind in Scottish legal history.
It brings up an interesting comparison with the second case, which was markedly different. It concerned fishermen in Scotland who were guilty of an offence of landing more fish than they declared, in breach of the relevant legislation. On one view, these were otherwise legitimate businessmen who were caught up in a widespread industry practice.
In this situation, confiscation proceedings were commenced by the Crown to recover the monetary benefit obtained from overfishing, after the fishermen accepted they were in breach of the regulations, and pled guilty to the offences.
It is set down by statute in s.97(2) of the Proceeds of Crime Act 2002 that a final punitive sentence in the criminal prosecution cannot be imposed until the confiscation proceedings are resolved. In this case, having agreed to pay back an amount in respect of the benefit they obtained, or their "proceeds of crime", the background circumstance were outlined to the court last week for consideration before sentence is passed - which is likely to be a fine.
To what extent the amount paid under any confiscation order is taken into account in passing sentence, remains to be seen.
These two very different cases, in both of which the Fraud and Financial Crime Unit of Morton Fraser were instructed for the Scottish Ministers and Defenders respectively, demonstrate both types of recovery - by civil means and by prosecution. They also highlight Morton Fraser's experience in both pursuing and defending cases under the Proceeds of Crime Act.
If you would like to discuss proceeds of crime further please contact our experts Douglas Milne or Mike Wells.
