Scragg, R v

Where property is obtained through criminal conduct and is later sold, the benefit must not be counted twice. Under section 80 of the Proceeds of Crime Act 2002, the value is the greater of the value when obtained, adjusted for changes in the value of money, and the value at the time of the confiscation decision of property still held or representing it.

Accordingly, where a vehicle was dishonestly obtained and sold as part of the same fraudulent trading, its acquisition and resale formed one process producing one benefit. The benefit for that vehicle was its value when obtained or its sale proceeds, whichever was greater.

The appellant pleaded guilty to fraudulent trading arising from the operation of a car-trading company. The Crown Court made a confiscation order of £557,089.83 under the Proceeds of Crime Act 2002, based on agreed realisable assets. The benefit figure had been assessed at £645,400.67.

He appealed, with leave, against the confiscation order. The issue was whether, for each vehicle dishonestly obtained and then sold, the benefit included both its value on acquisition and the proceeds of sale, or only the greater of those sums.

1. Appeal allowed. The benefit figure was reduced to £453,587.62. That sum was payable within six months, with four years’ imprisonment in default, consecutive to the sentence already being served.

2. The statutory scheme required the court first to identify benefit from the particular criminal conduct under section 6 of the Proceeds of Crime Act 2002. Under section 7, the recoverable amount equalled that benefit. Section 76(4) treated a person as benefiting where property was obtained as a result of or in connection with criminal conduct, and section 76(7) made the benefit the value of that property.

3. Section 80 governed the valuation of property obtained through criminal conduct. The court had to take the greater of: the value when the property was obtained, adjusted for later changes in money value; and the value at the time of decision of the property still held or property representing it in the defendant’s hands.

4. The judge should therefore have valued each vehicle by comparing its value when obtained with the proceeds then representing it. A vehicle worth £10,000 when obtained and sold for £8,000 produced a benefit of £10,000; if sold for £12,000, it produced a benefit of £12,000.

5. Obtaining and selling a vehicle in the fraudulent-trading business were not separate criminal enterprises. They were one process and gave rise to one benefit. Counting both the vehicle’s acquisition value and its sale proceeds would impose confiscation twice for the same criminal conduct. This approach was consistent with Glatt [2006] EWCA Crim 605.

• Court of Appeal (Criminal Division): allowed the appeal against the terms of the confiscation order and reduced the benefit figure to £453,587.62.

• Wolverhampton Crown Court: following convictions including fraudulent trading, made a confiscation order of £557,089.83 under the Proceeds of Crime Act 2002.