The Benefits Of Confiscation Proceedings

Crime causes much grief to many within society, and is very hard to prevent. How can you stop someone committing murder, which is often a crime carried out in the heat of the moment? In the case of crimes that involve money it is possible to make life hard for the criminals by taking that money away.

The confiscation regime was seen to be a way of ensuring that crime no longer paid. If a person could not explain how he obtained any of his wealth he would lose it by default. This was targeted at crime lords and organised criminals who were often thought to be beyond the law. They amassed enough criminal wealth so that if caught committing fraud or fencing stolen goods they could employ the services of expensive criminal defence lawyers and criminal defence forensic accountants to minimise the sanctions imposed upon them.

Now the prosecution authorities look less at the specifics of the crime on its own, and often simply ask how the accused obtained his money. If it was obtained illegally, it will be impossible for him to explain its source and it is not enough to provide vague explanations. Detailed accounts are necessary. If the money was obtained legally but no records kept, this can pose just as much a problem as when criminal proceeds are the issue. Any wealth is still assumed to be the proceeds of criminal activity - or it might be revenue that is avoiding being taxed. The tax on it plus interest and penalties will add up to the same result. The authorities still take away the money.

The confiscation system was strengthened considerably in 2003 with the enforcement of the Proceeds of Crime Act 2002. The Act introduced and strengthened a lot of measures which many say are too heavy handed and sometimes even "unfair". The intention was to create a system that allowed wealth to be taken away from the organised criminals, by being able to make assumptions that any wealth was from crime. It was up to the accused to explain where any wealth came from and if he couldn't it would be taken away. The trouble is that the assumptions can be made on any person deemed to have a criminal lifestyle and the criteria for this are fairly light.

If a person has committed several crimes, or committed a crime over a period of six months, or if the crimes are for amounts adding up to at least £5,000 - then the person is deemed to have a criminal lifestyle and all assets held and every transaction for the previous six years are deemed to be criminal.

This could mean that a person who fails to pay for his petrol repeatedly, say three times in a row, could have his house and life savings taken away. In addition, he would need to account for every credit shown on his bank statements and every outgoing debit for six years prior to the date of the commencement of proceedings. If an order made within a confiscation is not paid on time, a substantial additional prison sentance can result.

Therefore, although the confiscation procedures do hit the criminals where it hurts, in their pockets, they can cause disproportionate sanctions against those committing only modest crimes.


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Mark Jenner is a Fellow of the Institute of Chartered Accountants in England and Wales, a Certified Fraud Examiner and has a Masters Degree in Fraud Management. He runs his own business as a forensic accounting expert specialising in mtic fraud and criminal defence matters.