Green, R. v

Under Drug Trafficking Act 1994, proceeds of drug trafficking are gross receipts rather than profit. The statutory assumptions assist the identification of those receipts. They do not permit double counting where accepted evidence shows that sale proceeds were reinvested to buy fresh drug stock.

A confiscation court must respect an agreed basis of plea, but silence about earlier trafficking does not prevent assumptions being made about property proved to have passed through the defendant’s hands. The prosecution must first prove that property was received. Where proceeds are received jointly for conspirators, each joint recipient may be treated as having received the whole sum. The defendant bears the burden of showing that realisable assets are worth less than the assessed proceeds.

The appellant pleaded guilty to conspiracies to supply and import controlled drugs and to launder drug-trafficking proceeds. Following a three-day confiscation hearing, the Crown Court at Manchester made an order for £2.5 million under the Drug Trafficking Act 1994.

The judge assessed proceeds by adding the purchase and resale values of cannabis, an estimated sum for an earlier period of trafficking, and assets caught by the statutory assumptions. He also treated proceeds retained by co-conspirators as attributable to the appellant, and concluded that the appellant had not shown that his realisable assets were below the order.

On appeal, the central questions were whether the purchase and resale figures had been double counted, whether the earlier-period estimate was justified, whether jointly received proceeds were attributable in full, and whether the order should be reduced.

1. Appeal allowed in part. The confiscation order was reduced from £2.5 million to £1,985,725. The six-year term of imprisonment in default remained unchanged.

2. Section 4(1) of the Drug Trafficking Act 1994 requires an assessment of payments or rewards actually received in connection with drug trafficking. As Banks [1997] 2 Cr.App.R.(S.) 110 illustrates, the measure is gross receipts, not profit. However, section 4(3)(b) is a tool for identifying receipts; it cannot create two receipts from the same money. Where accepted evidence showed that cannabis sale proceeds were recycled to purchase fresh stock, aggregating purchase cost and sale proceeds double counted those funds. Dellaway [2001] 1 Cr.App.R.(S.) 77 was different because there was no evidence of the source of funds used to acquire the drugs.

3. The judge should have accepted the agreed quantity and pricing figures. The alternative findings depended on an additional substantial source of income for which there was no credible evidence. The gross proceeds during the admitted conspiracy were therefore £5.6 million.

4. A confiscation court must not make findings or assumptions inconsistent with an agreed basis of plea. But, consistently with Lazarus [2004] EWCA Crim 2297, a basis of plea silent about earlier activities did not amount to an agreement that the appellant had not trafficked before March 2001. The statutory assumptions could apply to proved transfers in that earlier period. They could not support a monthly-average estimate without evidence that equivalent property had passed through the appellant’s hands. The additional-period sum was reduced from £1 million to £135,725.

5. Applying May [2005] EWCA Crim 97, proceeds received by a conspirator on behalf of the conspirators jointly were received by each of them for confiscation purposes. On the evidence, the judge could infer that the appellant’s co-conspirators received sale proceeds on behalf of the joint enterprise before retaining agreed amounts.

6. The appellant had not discharged the burden of showing that his realisable assets were worth less than £2.5 million. Nonetheless, credit was given for proceeds received and amounts recovered from other conspirators to avoid double recovery. The revised proceeds assessment was £6,831,175, producing the reduced order.

• Court of Appeal (Criminal Division) On 25 May 2007, allowed the appeal to the limited extent of reducing the confiscation order from £2.5 million to £1,985,725: [2007] EWCA Crim 1248. The court certified a point of law but refused leave to appeal.
• Crown Court at Manchester On 17 February 2006, His Honour Judge Steiger QC made a confiscation order of £2.5 million following the appellant’s drug-trafficking convictions.