Director of the Assets Recovery Agency v Taher & Ors

Assets may be recovered in civil recovery proceedings where the claimant establishes, on the balance of probabilities, that they are proceeds of crime. A failed prosecution, an absence of prosecution, or evidence insufficient to prove criminality beyond reasonable doubt does not prevent civil recovery. The court may find that funds are proceeds of crime even where the precise underlying criminal source cannot be identified, including where the evidence supports money laundering. Victims may recover from restrained assets only if they can trace their contributions into the assets available for recovery.

The Director of the Assets Recovery Agency sought payment to a civil-recovery trustee of balances held in six bank accounts. The accounts were held in the names of three respondents. The first two respondents had acted for the third, who was said to be the real perpetrator of advance fee frauds.

The first two respondents did not contest the claim. The third respondent did not appear despite substituted service. The first two had previously faced criminal proceedings, but the first trial ended without a verdict and the prosecution offered no evidence at the retrial. The issue was whether the balances were recoverable proceeds of crime and whether the recovery order should be made.

1. Recovery order. The court was satisfied on the balance of probabilities that the funds in the six accounts were recoverable assets and appointed a trustee for the civil recovery. The freezing order made on 10 April 2006 was discharged.
2. Standard of proof. Civil recovery did not require proof of criminality beyond reasonable doubt. Assets could be recovered where the Director established on the balance of probabilities that they were proceeds of crime. This remained so whether a prosecution had failed or had not been brought because the evidence was insufficient to establish criminality to the criminal standard.
3. Nature of the proceeds. The evidence showed that some funds came from identified victims of advance fee frauds. Transfers between the accounts and unidentified sources supported the conclusion that the remaining assets were also proceeds of crime, including proceeds of money laundering, even though the precise criminal source could not always be identified.
4. Victims’ claims. Victims might recover some of their losses from the assets, but only if they could establish that the relevant sums were properly allocated to money they had provided and could be traced into the assets seized. The practical difficulty of tracing did not prevent the recovery order.
5. Orders. A recovery order was made for the amounts standing to the credit of the six accounts. No separate costs order was sought.