William & Ors v R.

For money-laundering offences, undeclared business turnover may be criminal property even though the benefit obtained by cheating the Revenue is the unpaid tax. The turnover represents that benefit in part within Proceeds of Crime Act 2002, so the whole sum is criminal property, subject to proof that the alleged offender knew or suspected its character.

A disclosure breach renders a conviction unsafe only where there is a real possibility that disclosure would have produced a different verdict. Multiple transactions may properly appear in one count where they form a course of conduct by time, place or purpose. A count does not become duplicitous merely because tax and VAT fraud are both alleged, absent a live issue requiring separate verdicts.

Venus, Sylvia and Sophia William were convicted in the Crown Court at Kingston-upon-Thames of converting and transferring criminal property contrary to section 327 of the Proceeds of Crime Act 2002. The prosecution alleged that they helped Isaac William, who had pleaded guilty to cheating the public revenue, to move money from his security-guarding business through family-controlled accounts.

They appealed against conviction. Their principal grounds were that the jury had been misdirected on criminal property and knowledge or suspicion; that two undisclosed HMRC investigator statements made the convictions unsafe; and that the single counts were duplicitous. The latter ground was linked to the admission of hearsay evidence about the way the business operated.

1. Appeals dismissed. The judge correctly directed the jury on criminal property. Under sections 340(3) and 340(6) of the Proceeds of Crime Act 2002, a person who cheats the Revenue obtains a pecuniary advantage equal to the tax unpaid. The undeclared turnover represents that benefit in part. It is therefore criminal property in its entirety, rather than only to the extent of the unpaid tax. The court followed R v K (I) [2007] EWCA Crim 491. Since Isaac William had admitted the relevant income-tax and VAT frauds, and no separate legitimate income source was identified, the real issue was whether each appellant knew or suspected the character of the money.

2. The prosecution should have disclosed the two Moorcroft statements. Applying McInnes v HM Advocate [2010] HRLR 17 SC, the question was whether there was a real possibility of a different verdict had disclosure occurred. The statement quantifying unpaid tax did not affect the issue because the jury had the underlying financial information and the precise tax figure was immaterial once the criminal-property ground failed. The statement expressing an opinion on Venus William’s role was inadmissible and unnecessary. Whether she was involved and what she knew were factual questions for the jury, consistently with Turner [1975] QB 834. In any event, it could not realistically have supported exclusion of the evidence or a successful submission of no case.

3. The judge was entitled to admit the hearsay evidence under section 78 of the Police and Criminal Evidence Act. The court followed R v Quinn [1995] 1 Cr App Rep. 480 on appellate restraint concerning that discretion. The judge then confined the evidence to its possible bearing on knowledge or suspicion, warned the jury to treat it cautiously, and did not permit it to establish a separate source of criminal property.

4. The counts were not duplicitous. Rule 14(2)(2) of the Criminal Procedure Rules permitted multiple incidents in one count where they formed a course of conduct. The repeated transfers and conversions satisfied that criterion. Although distinct knowledge of tax and VAT fraud could in principle require amendment or separate counts, no such factual distinction was advanced at trial.

• Court of Appeal (Criminal Division): Dismissed the appellants’ appeals against conviction: [2013] EWCA Crim 1262.
• Crown Court at Kingston-upon-Thames: On 13 October 2011, the appellants were convicted of converting and transferring criminal property contrary to section 327 of the Proceeds of Crime Act 2002.