Serious Organised Crime Agency v Hymans & Ors

In civil recovery proceedings, the enforcement authority must prove on the balance of probabilities that property was obtained through unlawful conduct. The proceedings are free-standing and are not dependent on a criminal conviction. An acquittal does not conclusively establish that the alleged criminal conduct did not occur, although the court must avoid language that undermines the acquittal. Property representing recoverable property, and profits accruing from it, may be traced. Where recoverable and unrecoverable property are mixed to acquire a further asset, recovery is limited to the portion attributable to the unlawful property. Inferences may be drawn from unexplained wealth, false explanations and the circumstances in which property was handled.

The Serious Organised Crime Agency sought civil recovery orders under Part 5 of the Proceeds of Crime Act 2002 against property held by Trevor Hymans, Stephen Keeble, James Thomas O’Docherty and Manncherty SL. SOCA alleged that O’Docherty had acquired and laundered property through drug trafficking, mortgage fraud and associated money laundering, and that the other respondents held specified properties.

O’Docherty had previously faced criminal proceedings which were stayed as an abuse of process. The central issues were whether SOCA had proved unlawful conduct and the recoverable character of the identified property, whether the previous criminal proceedings affected the civil claim, and whether the property should be treated as wholly or partly recoverable.

1. Statutory framework. Proceedings under Part 5 of the Proceeds of Crime Act 2002 may be brought against a person whom the enforcement authority thinks holds recoverable property. If the court is satisfied that property is recoverable, it must make a recovery order, subject to the statutory exceptions and Convention-rights limitation in section 266.

2. Standard and relationship with criminal proceedings. Section 241(3)(a) requires proof of unlawful conduct on the balance of probabilities. Civil recovery proceedings are free-standing and may proceed whether or not criminal proceedings have been brought. An acquittal does not conclusively establish that the respondent did not commit the alleged act. The court may consider evidence underlying the criminal charge and may reach a different finding on the civil standard, provided its language and reasoning do not undermine the acquittal or make an imputation of criminal liability beyond what is necessary.

3. Inference of unlawful conduct and money laundering. It is unnecessary to identify unlawful conduct with precision, provided the particular kind or kinds of unlawful conduct are set out. A lack of lawful income alone is insufficient, but failure to account for a lifestyle or a false explanation may support an inference that property is recoverable. To establish money laundering, SOCA had to identify the anterior criminal conduct and show that the circumstances in which the property was handled gave rise to the irresistible inference that it could only be derived from crime.

4. Tracing and mixed property. Recoverable property includes property representing property obtained through unlawful conduct and profits accruing from it. Where recoverable and unrecoverable property are mixed to acquire a further asset, the recovery order may bite only on the portion attributable to the unlawful property.

5. Application and outcome. The surveillance evidence, financial records, property transactions, use of aliases and offshore accounts, and the absence of any substantial rebuttal established on the balance of probabilities that O’Docherty was a professional, large-scale and sophisticated drug dealer and had used the proceeds of unlawful conduct to acquire and launder the identified assets. The Revenue settlement did not affect the amount of recoverable property because it was based on incomplete information and unsupported estimates. SOCA proved its claim. The judge invited the parties to agree the form of order, with written submissions to follow if necessary.