Afolabi, R. v

Property acquired with criminal funds ceases to be criminal property when it is sold to a bona fide purchaser. The consideration received on that sale may nevertheless represent the original criminal benefit and remain criminal property. Under Proceeds of Crime Act 2002, a person may become concerned in a money-laundering arrangement by agreeing to receive its criminal proceeds, even if not involved at its outset.

Suspicion requires a personal belief in a possibility, more than fanciful, of criminal provenance. It need not be firmly grounded, targeted on particular facts, or objectively reasonable.

The appellant, a solicitor, was convicted at the Inner London Crown Court of three money-laundering arrangement offences under section 328 of the Proceeds of Crime Act 2002 and one offence of acquiring criminal property under section 329. She received concurrent sentences of 18 months’ imprisonment.

The transactions concerned a property originally bought with funds obtained by her husband’s frauds, its subsequent sales, another property bought with sale proceeds, and transfers into the appellant’s bank account. She denied knowing or suspecting that the funds were criminal property.

On appeal, the central issues were the adequacy of the summing-up, the directions on knowledge and suspicion, and whether property remained criminal property after sale to an allegedly bona fide purchaser.

1. The appeal was allowed in part. The convictions on counts 3 and 4 were quashed. The convictions on counts 2 and 5 were upheld.

2. The judge had misstated the effect of the definition of criminal property in the Proceeds of Crime Act 2002. A house bought with criminal funds does not remain criminal property after a sale to a bona fide purchaser. Otherwise the original benefit would multiply on every resale. The word “represents” concerns property which replaces the original benefit. The purchase money received on the bona fide sale may therefore be criminal property, but the house is not.

3. That error made the convictions on counts 3 and 4 unsafe. The case had been left to the jury on the incorrect basis that the house, and then later sale proceeds, remained criminal property regardless of the purchaser. There was evidence from which a jury might have found that an intermediary acted with the fraudster, but that was not the basis on which the case had been put. The court could not uphold the convictions on an untried basis.

4. Count 2 was nevertheless safe. Section 328 catches a person who becomes concerned in an arrangement. If the appellant agreed with her husband to receive part of the proceeds from the sale of the original property, she became concerned in the arrangement. Distribution of the proceeds was inseparable from the transaction, and those proceeds represented the original criminal benefit.

5. The summing-up was not unsafe merely because it did not follow a particular structure. It adequately identified the issues, the evidence and the prosecution burden. There was sufficient evidence for the jury to find that the appellant suspected the criminal provenance of the funds. Applying Da Silva [2006] 2 Cr App R 517, suspicion required belief in a real, rather than fanciful, possibility. No special direction on “knowing” was required, since suspicion was sufficient for liability and the conspiracy context of R v Saik [2006] 2 Cr App R 368 was different.

• Court of Appeal (Criminal Division) Allowed the appeal in part, quashing the convictions on counts 3 and 4 while upholding those on counts 2 and 5.
• Inner London Crown Court On 14 July 2009, His Honour Judge Wakefield convicted the appellant of three offences under section 328 and one offence under section 329 of the Proceeds of Crime Act 2002, and imposed concurrent sentences of 18 months’ imprisonment.