Harmer v R

For a conspiracy to commit a statutory money-laundering offence, the agreed conduct must amount to an actual offence if carried out. Under Criminal Justice Act 1988, section 93C(2), and Drug Trafficking Act 1994, section 49(2), it is insufficient that the accused had reasonable grounds to suspect criminal provenance. The prosecution must also prove that the property was in fact the proceeds of the relevant crime.

An inability to prove that fact is not an impossibility which engages section 1(1)(b) of the Criminal Law Act 1977. Section 1(2) also requires conspirators to intend or know that the necessary factual circumstance will exist where the substantive offence can be committed without that knowledge.

Harmer v R was an appeal against a jury conviction at the Crown Court sitting at Middlesex Guildhall for conspiracy to convert or transfer currency. The prosecution alleged that the appellant and a co-defendant had laundered more than £1.2 million through corporate accounts and bogus Spanish accounts.

The count was confined to an allegation that they had reasonable grounds to suspect that the money represented another person’s proceeds of criminal conduct or drug trafficking. The Crown accepted that it could not prove the money’s criminal provenance, and the trial judge did not direct the jury that proof of provenance was required. Following R v Montila [2004] UKHL 50, the central issue was whether that omission made a conviction for conspiracy unsafe.

1. Appeal allowed. The conviction was unsafe because the Crown had not proved, and the jury had not been directed to decide, that the particular money was in fact the proceeds of criminal conduct or drug trafficking.
2. R v Montila [2004] UKHL 50 established that actual criminal provenance is a necessary element of each substantive offence under section 93C(2) of the Criminal Justice Act 1988 and section 49(2) of the Drug Trafficking Act 1994. Reasonable grounds to suspect that provenance do not by themselves complete the offence.
3. Under section 1(1)(a) of the Criminal Law Act 1977, a conspiracy requires an agreement to pursue conduct which, if carried out as intended, will amount to an offence. The alleged agreement concerned the particular money relied upon by the Crown. Since its criminal provenance was not proved, the Crown had not established an agreement to commit the substantive money-laundering offence.
4. Section 1(1)(b) did not assist the Crown. This was not a case in which an offence was impossible because of an external fact. The substantive offence might have been committed, but the Crown could not prove that it had been committed. Further, section 1(2) required the appellant and at least one other party to intend or know that the money would be criminal proceeds when the agreed conduct occurred. The Crown had expressly abandoned any allegation of such knowledge.
5. The court declined to substitute an attempt verdict. The case had not been tried or directed as one of attempt, and it could not safely be said that the jury had found the facts needed for such an offence. The court also observed that an alternative conspiracy charge may assist where money is proved illicit but its precise criminal source cannot be identified; it cannot assist where the money is not proved to be the proceeds of any crime.

• Court of Appeal (Criminal Division): Allowed the appeal against conviction and held the jury’s verdict unsafe: [2005] EWCA Crim 1.
• Crown Court at Middlesex Guildhall: HH Judge Simon Smith and a jury convicted the appellant on 15 March 2004 of conspiracy to convert or transfer property. He was sentenced to three years’ imprisonment.