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Confiscation caution (POCA)

06 February 2019 Written by Wilford Smith Category: Financial Crime

Double digit rises in house values over the last decade has unintended consequences for individuals subject to confiscation orders:

Introduction:

It’s long been the case that the authorities, particularly the police, have pursued individuals by way of confiscation applications in accordance with the Proceeds of Crime Act 2002 (POCA). It’s often said a to be a “draconian” piece of legislation that seeks to take the financial benefit out of crime, and in many respects, achieves its goals. Over the years our experience has shown it’s not uncommon for an accused individual to be more concerned about the confiscation element of their criminality than the sentence itself. However, what we have seen over the last year is the authorities revisiting existing confiscation orders with a view to increasing the amount to be paid by an individual.

Authorities have started to revisit existing confiscation orders for several reasons including:

  1. The fact the liability for the payment of any benefit outstanding remains with an individual for life.
  2. The family homes are likely to have increased in value over the past 10 years this is a readily available source of realisable cash.
  3. Historically "benefit figures" were often very high and, significantly, higher than a defendant's available assets at the time allowing for additional payments to be claimed.
  4. We are in a time of austerity where it is possible for the police to obtain up to a 1/3 of any additional monies generated by confiscation orders.

Proceeds of Crime Act 2002 (POCA):

POCA was put in place so not only would those convicted of a crime be punished in the normal way through the justice system but also any financial benefit gained through illegal activities would be removed. This is achieved by prosecutors attempting to obtain a confiscation order under POCA where the court assesses the value of the financial benefit received from the crime committed. This benefit is generally a calculated estimation based upon assumptions which may include assuming worldwide criminal activities, not just the proportion committed in the jurisdiction where the offence was committed as well as activities up to 6 years before conviction.

When calculating the amount of the confiscation order the court looks at two figures, the “benefit” figure and the “available asset” figure. The benefit figure is the amount of financial benefit the defendant is said to have received from the activity. Once the prosecutors, which can include CPS, HM Revenue and Customs, Financial Service Authority provide their estimations, often based upon assumptions, it is up to the defendant to disprove the figures given, which can be difficult. The available amount is the amount of assets a defendant has which can be sold to make a payment under the order. This figure is also used to set the length of the prison sentence if the amount is not paid.

If granted the confiscation order requires immediate payment of the value of the order with non-payment leading to a default prison sentence, which is in addition to any sentence served for the original offence. So, for instance an unpaid amount of between £20,000 and £50,000 will lead to an 18-month default prison sentence. Irrespective of any default prison sentence served and the unpaid amount remains payable.

The Section 16 Statement put forward by the prosecution should always be the starting point for negotiation of both the benefit amount and the available asset amount, with the prosecuting authorities, trying to maximise the benefit figure by suggesting a higher level of criminality or greater levels of profit generation whilst the defendant argues the opposite. However, the issue which tends to be uppermost in all parties’ minds tends to be the available amount as it determines the short-term repayment and the default prison sentence. In addition, a defendant’s assets are often frozen and subject to restraining order whilst the confiscation process is ongoing, which can make day to day life very difficult and lead to trying to resolve the process quickly rather than with a view to the longer term. Because it is often wrongly believed that their liability is settled once a defendant has satisfied the confiscation order. However, this is only true if the available amount matches the benefit amount.

The position today:

Here at Wilford Smith we are starting to see a marked increase in available amounts being revisited many years after the original confiscation order. Triggers appear to be beyond general life progression, for example smaller amounts of cash in the bank or modest employment. There appears to be deliberate targeting and planned intelligence investigations against those who have an outstanding benefit figure, with one key tactic being a simple review of property value.

How Wilford Smith can help:

Wilford Smith has a strong record of significantly reducing available amounts claimed by the authorities but we believe prevention and planning is a better course of action.

Here at Wilford Smith we look, not only at present circumstances, but also help client’s future proof their lives by actively attacking the benefit figure and giving them more understanding to plan ahead.

CONTACT OUR SPECIALIST FRAUD SOLICITORS IN SHEFFIELD AND LONDON

Please contact us, if you have been subject of a confiscation order where the full benefit figure has not been settled. You should seek legal advice to fully understand the mechanics of the process and how you could be affected by new confiscation proceedings or to obtain more information or advice on this or similar topics.

Our lawyers are based in Sheffield and London and assist clients throughout England and Wales. Contact us today on 01709 828 044 to find out how we can help.

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