Ward, R v

Where a defendant has a criminal lifestyle, the assumptions in section 10 of the Proceeds of Crime Act 2002 place the burden on the defendant to displace them. Showing that money came from a legitimate lender is insufficient. The defendant must show that it was obtained lawfully and without relevant support from the criminal lifestyle.

Mortgage advances obtained at the defendant’s direction confer a benefit even if paid directly to discharge a debt or meet a purchase price. A mortgage debt will ordinarily be reflected when assessing the available amount, but only if the defendant proves that the available amount is below the assessed benefit.

The appellant pleaded guilty to offences of possessing, concealing and converting criminal property, and to obtaining a passport by a false statement. Leeds Crown Court made a confiscation order for £287,398.42 after finding that he had a criminal lifestyle for the purposes of the Proceeds of Crime Act 2002.

He appealed against the inclusion in his benefit of remortgage and mortgage advances, the valuation of a property acquired with those advances, and the finding that his available amount was not less than his benefit. The central issues were whether statutory assumptions had been rebutted and whether the judge gave adequate reasons for the available-amount finding.

1. Appeal dismissed. The Crown Court was entitled to include the remortgage proceeds in the appellant’s benefit. The first assumption in section 10 applied to the money transferred to him. The fact that Manchester Building Society was a legitimate lender did not itself establish that the money had been lawfully obtained or that the appellant’s criminal lifestyle was irrelevant.

2. The judge was entitled to reject the appellant’s account. False accounts showing earnings while he was imprisoned supported the inference that they were submitted by him or on his behalf to induce the advance. The absence of direct evidence that the lender relied on them did not matter. Common sense permitted the conclusion that accounts supplied to a lender were intended to influence its decision.

3. The appellant obtained a benefit from mortgage money paid at his direction to redeem an existing mortgage or to the vendor of a property. Physical receipt of the money was unnecessary. Further, under section 76 of the Proceeds of Crime Act 2002, general criminal conduct includes specific criminal offences. A fraudulent obtaining of an advance could therefore fall within the statutory assumption concerning general criminal conduct.

4. The judge correctly assessed the benefit from Pullman Court at its full market value. The appellant had not displaced the assumption that the mortgage advance was obtained through criminal conduct. The comparison with cases involving lawfully secured mortgage finance did not assist him. The deduction made to avoid double counting was justified.

5. Although the judge’s brief statement on the available amount would have been inadequate in isolation, the judgment read as a whole gave cogent reasons. The comprehensive rejection of the appellant’s credibility and finding of pervasive criminality justified the conclusion that he had not shown his identified assets to be the entirety of his available assets. There was no resulting injustice, since a mortgage debt would ordinarily be reflected in the available-amount calculation where the statutory burden had been met.

• Court of Appeal (Criminal Division): In [2008] EWCA Crim 2955, dismissed the appeal against the confiscation order.
• Leeds Crown Court: On 16 October 2007, His Honour Judge Ibbotson made a confiscation order of £287,398.42 following the appellant’s convictions.