Ali & Anor v Revenue & Customs Prosecutions Office

A ruling on the admissibility of defence hearsay evidence cannot be based on undisclosed material or submissions which the defence cannot meet. That procedure is contrary to Article 6, although a resulting error will not make a conviction unsafe where the evidence lacked probative value and could properly have been excluded under Criminal Justice Act 2003, section 114.

An ill-founded prosecution point does not undermine a conviction where the trial judge clearly directs the jury to disregard it. Large, unverified cash deposits, coupled with a failure to identify their sources, may support an inference of knowledge that the funds were criminal proceeds. Substantial delay through no fault of an offender may justify a reduction in sentence.

The appellants operated a Hawala money-transmission business through Watan Travel. On a retrial at Leeds Crown Court they were convicted of two conspiracies to launder money. The prosecution accepted that some of the cash involved was criminal proceeds. The live issue was whether either appellant knew that fact.

The appellants challenged the fairness of the prosecution and the admission ruling that excluded a report concerning the later destination of funds. They also contended that the prosecution’s reliance on the conversion of sterling to dollars could have misled the jury. Both appealed their sentences because the retrial followed their successful earlier appeal against conviction, [2005] EWCA Crim 87.

The central questions were whether the identified trial irregularities rendered the convictions unsafe and whether delay justified a reduced sentence.

1. The conviction appeals were dismissed. The Crown was not obliged to concede that cash transactions outside the indictment were lawful. The appellants had kept no adequate source records and could not positively identify the origin of that cash. The judge correctly confined the jury’s task to the two charged conspiracies.

2. The prosecution should not have relied on the route by which sterling was converted into dollars after receipt. That route did not bear on the appellants’ knowledge of the source of the cash. However, the judge made clear that the prosecution no longer relied on the routing as evidence of guilty knowledge. The point therefore did not render the verdicts unsafe.

3. The judge’s exclusion of the Dubai Report resulted from a serious procedural error. In deciding an application under section 114 of the Criminal Justice Act 2003, neither party may rely on material or arguments withheld from the other. It was contrary to Article 6 for the prosecution to rely on undisclosed material in resisting the defence application. The court followed the fairness principle illustrated by Edwards & Lewis v The United Kingdom and R v H & C.

   Nevertheless, the error did not affect safety. Even if true, the report concerned the destination of sterling after conversion into dollars, not the appellants’ state of mind when they received the cash. It had no probative value on the live issue, and the defence could not establish the circumstances or reliability required by section 114(2).

4. The jury was entitled to infer guilty knowledge from the exceptionally large cash deposits, the appellants’ complete failure to investigate their sources, and the absence of any credible innocent explanation. The existence of some legitimate business did not assist them: a legitimate business may provide the medium for money laundering.

5. The sentence appeals were allowed. The court reduced each concurrent sentence from twelve years to ten years. The substantial delay caused by the successful first appeal and retrial was not the appellants’ fault, apart from their entitlement to contest the charges.

• Court of Appeal (Criminal Division): The court dismissed the conviction appeals but allowed the sentence appeals, reducing each sentence from twelve to ten years: [2008] EWCA Crim 146.
• Crown Court sitting at Leeds: On retrial, the appellants were convicted on 10 January 2007 of two money-laundering conspiracies and received concurrent sentences of twelve years’ imprisonment.
• Court of Appeal (Criminal Division): The appellants’ earlier appeals against conviction succeeded because the jury had been misdirected as to the required state of mind: [2005] EWCA Crim 87; [2006] 1 Cr App R 8.