Director of the Assets Recovery Agency, R (on the application of) v Shen

Criminal proceeds acquired through fraudulent evasion of Value Added Tax and subsequent money laundering may be recovered through the civil procedure route. The court may make a civil recovery order for the amount established on the evidence, allowing appropriate adjustments for bank charges and accrued interest. An alternative allegation, such as breach of immigration law, need not be determined where the order is sufficiently supported by the established criminal conduct.

The Director of the Assets Recovery Agency sought a civil recovery order against Shen. The defendant did not attend and was not represented. On the material before the court, the central issue was whether the defendant had acquired recoverable property through fraudulent evasion of Value Added Tax and money laundering. The claim also relied in the alternative on business activity conducted in breach of immigration law.

1. The court was satisfied on the written material and evidence that the defendant had fraudulently evaded Value Added Tax and had laundered the resulting criminal proceeds.
2. Those findings provided a sufficient basis for recovery through the civil procedure route. The court therefore made a civil recovery order for £25,862.03, representing the sums specified in the claim form after allowing for bank charges and interest accrued since February 2007.
3. The order excluded any sum exceeding £37.46 in the Nationwide Building Society account identified in the order.
4. The court made no ruling on the alternative allegation that the defendant’s business activity breached immigration law. That issue was left for determination on a future date in another case. The order rested solely on fraudulent evasion of Value Added Tax and laundering of the proceeds.