Geary, R v

An arrangement under section 328(1) of the Proceeds of Crime Act 2002 must concern property which is already criminal property when the arrangement begins to operate. It does not cover an arrangement which first gives lawfully acquired property its criminal character. A single arrangement cannot artificially be divided so that its performance both criminalises the property and constitutes dealing with it as criminal property.

The offence also requires knowledge or suspicion that the arrangement concerns criminal property. A defendant who believes the money was lawfully acquired lacks that mental element, even if the intended use of the money is itself unlawful.

The appellant pleaded guilty in the Crown Court at Leeds to an offence under section 328(1) of the Proceeds of Crime Act 2002 and was sentenced to 22 months’ imprisonment.

The money he received was in fact stolen bank money. His basis of plea, however, was that he believed a friend had lawfully obtained it and wished to conceal it from his wife in anticipated divorce proceedings. The trial judge indicated that those facts afforded no defence, after which the appellant pleaded guilty.

On appeal, the issue was whether the facts in the basis of plea disclosed the necessary mental element of the charged section 328(1) offence.

1. Appeal allowed. The facts stated in the basis of plea did not disclose an offence under section 328(1) of the Proceeds of Crime Act 2002. The conviction was therefore unsafe.

2. Section 340 establishes that property becomes criminal property when a person obtains an interest in it as a result of, or in connection with, criminal conduct. On the natural and ordinary meaning of section 328(1), the arrangement must operate on property which already has that character. It does not extend to an arrangement which makes originally legitimate property criminal only through its implementation.

3. The arrangement could not be split artificially into the receipt, holding and return of money. There was one arrangement, and its later stages could not be treated as separate arrangements concerning property newly made criminal by the first stage.

4. The mental element required both intentional or reckless participation in an arrangement facilitating dealings with criminal property and knowledge or suspicion that it would have that effect. On the accepted basis of plea, the appellant believed that the money had been lawfully acquired. Although its intended concealment might have been unlawful, that did not give him the required knowledge or suspicion for section 328(1).

5. The court considered that, if the assumed purpose of the transfer involved perverting the course of justice, the later handling of the money might have supported a differently framed charge under section 327(1)(c) or (d). That possibility did not justify an artificially broad construction of section 328(1). The Crown could instead have sought an amendment to the indictment to reflect the appellant’s stated state of mind.

• Court of Appeal (Criminal Division): Allowed the appeal against conviction, holding that the accepted basis of plea did not establish an offence under section 328(1) of the Proceeds of Crime Act 2002.
• Crown Court at Leeds: The appellant pleaded guilty on re-arraignment and was sentenced to 22 months’ imprisonment.