Mouldon, R. v

Where drug-trafficking cash is used to acquire property, the required assumptions under Drug Trafficking Act 1994 may treat the acquired property, rather than merely the cash deposit, as a payment or reward connected with drug trafficking. The relevant value is the defendant’s equity at the date of the confiscation order, after outstanding mortgages and charges.

Appreciation in the property’s value does not itself make that assumption inaccurate or create a serious risk of injustice. The same conclusion follows where the property directly or indirectly represents the original drug proceeds. A confiscation order remains limited by the defendant’s realisable property.

The applicant was convicted at Newcastle Crown Court of conspiracy to supply MDMA and sentenced to 16 years’ imprisonment. He also became subject to a confiscation order of £667,000 under the Drug Trafficking Act 1994, following a benefit finding of at least £750,000.

He renewed applications for leave to appeal against conviction and sentence, alleging that the summing-up was biased and that the sentence was excessive. He also sought leave to appeal the confiscation order. The central confiscation issue was whether properties acquired partly with drug cash and partly with borrowing should be valued only by reference to the drug-funded deposits, or by reference to the defendant’s equity in them.

1. The court refused leave to appeal against conviction, sentence and the confiscation order. It extended the time for payment of the confiscation order by three months.

2. The judge’s summing-up contained no impermissibly derogatory comment and did not render the conviction unsafe. The 16-year sentence was justified by the applicant’s role as a large-scale supplier of class A drugs, his proximity to the source of supply, and his previous serious drug convictions.

3. On confiscation, the applicant’s argument rested on a false premise. Under Drug Trafficking Act 1994, where drug-trafficking cash is used to acquire a property, the relevant asset is the acquired property—being the defendant’s equity where it is mortgaged—not the initial deposit alone. The statutory words connecting a payment or reward with drug trafficking have a wide meaning.

4. The required assumption that property transferred during the statutory six-year period was received as a payment or reward was not rebutted. The applicant showed neither that the properties were legitimately acquired nor that making the assumption created a serious risk of injustice. A rise in the value of property bought with a relatively small drug-funded deposit did not create injustice; it was the consequence of acquiring the equity while the mortgage debt remained fixed.

5. The same result followed under section 7(3): property purchased with cash representing drug proceeds directly or indirectly represented that cash. Its value was assessed at the material time, taking account of outstanding mortgages and charges. The calculation concerning the Old School Lane development was therefore correct. The order could not exceed the applicant’s realisable property and did not create the suggested risk of bankruptcy.

• Court of Appeal (Criminal Division) Refused renewed leave to appeal against conviction and sentence, and refused leave to appeal against the confiscation order.
• Newcastle Crown Court The applicant was convicted on 6 December 2002, sentenced on 24 January 2003, and made subject to a confiscation order under the Drug Trafficking Act 1994 on 30 January 2004.