Roach, R. v

In criminal confiscation proceedings, an unqualified prosecution acceptance of a basis of plea ordinarily binds the sentencing judge. An acceptance expressly made without prejudice to confiscation leaves the judge free to determine the relevant facts.

Under Proceeds of Crime Act 2002, property acquired with both tainted and untainted funds represents criminal benefit only to the extent attributable to the tainted funds. Property subject to a mortgage must be valued as the defendant’s net interest, not as the unencumbered freehold, even where the mortgage was fraudulently obtained.

The appellant pleaded guilty at Liverpool Crown Court to offences involving counterfeit discs, false benefit statements and copyright infringement. She was sentenced to 12 months’ imprisonment. On 11 August 2006, the Crown Court made a confiscation order for £242,807.40, with 27 months’ imprisonment in default.

She appealed against that order. The issues were whether her agreed basis of plea bound the confiscation judge, how mortgaged properties should be valued, and how benefit should be assessed where a property had been acquired with mixed tainted and untainted funds.

1. Appeal allowed in part. The confiscation order had to be varied to reflect the appellant’s net interests in the relevant properties and the untainted component of one purchase. The default period was unaffected.
2. An unqualified prosecution agreement to a defendant’s basis of plea ordinarily binds the judge in confiscation proceedings because confiscation forms part of sentencing. That principle, stated in May [2005] 1 WLR 2902, did not govern this case. The prosecution had accepted the basis expressly without prejudice to confiscation. The judge was therefore entitled to hear evidence and reject the appellant’s factual account.
3. The statutory assumptions under Proceeds of Crime Act 2002 applied because the appellant had a criminal lifestyle. The lapse of time since acquisition of 8 Park Lane did not make the assumption unjust. The appellant had not provided sufficient basic evidence that the deposit came from a legitimate source.
4. Under section 79, where another person holds an interest in property, its value is the market value of the defendant’s interest. The appellant’s benefit from 8 Park Lane was therefore her half share of the equity, subject to the building society’s charge, rather than a share of the unencumbered value.
5. For 43 Lusitania Road, half the purchase price was an unsecured loan and half was treated as tainted funds. Applying section 10(6), it was incorrect to assume that the untainted half represented criminal benefit. The benefit was accordingly one half of the property’s value at the valuation date.
6. The same section 79 approach governed the two Parkinson Road properties. A fraudulently obtained mortgage did not permit the court to disregard the building society’s interest. The benefit was the net equity, not the freehold value.

1. Court of Appeal (Criminal Division). Allowed the appeal in part and varied the confiscation order.
2. Liverpool Crown Court. On 11 August 2006, made a confiscation order of £242,807.40, with 27 months’ imprisonment in default, following the appellant’s convictions and sentence.