G & Anor, R. v

An offence under section 328(1) of the Proceeds of Crime Act 2002 requires an arrangement which facilitates dealings with property that was already criminal property when the arrangement first engaged with it. The arrangement cannot itself be what gives the property its criminal character.

However, criminal property need not exist when a defendant enters into the arrangement. The statutory offence is complete only when the arrangement actually facilitates the specified acquisition, retention, use or control of criminal property. The present tense in “facilitates” excludes an arrangement which merely will, or is intended to, facilitate such dealings.

The Crown appealed, under section 58 of the Criminal Justice Act 2003, against rulings that G and H had no case to answer on charges under section 328(1) of the Proceeds of Crime Act 2002.

The Crown alleged that each respondent had opened bank accounts for Buckharee, who used fraudulent motor-insurance websites. G’s account received money transferred from an associate’s accounts after the fraud. H’s accounts received payments directly from defrauded customers after they had been opened.

The central issues were whether the money was criminal property before the relevant arrangement operated on it, and whether criminal property had to exist when each respondent entered into the arrangement.

1. The Crown’s appeal was allowed as to G and dismissed as to H. Section 328(1) creates a money-laundering offence. It requires an arrangement which facilitates the acquisition, retention, use or control of property that has independently acquired the character of criminal property before the arrangement operates on it. An arrangement cannot satisfy the section where its own operation first makes the property criminal property.

2. H’s alleged arrangement was a single integral arrangement. It included opening the accounts, giving Buckharee control of them, and receiving the fraud proceeds directly into them. The money identified in count 2 became criminal property only upon receipt into those accounts. It was artificial and illegitimate to sever the facilitation of acquisition from the subsequent retention, use and control, in order to treat the latter as an arrangement concerning pre-existing criminal property. The appeal concerning H therefore failed.

3. By contrast, the money transferred into G’s account had already become criminal property when it was received by Buckharee’s associate. The statutory requirement concerning pre-existing criminal property was therefore met in G’s case.

4. The court rejected the respondents’ further submission that criminal property must already exist when a defendant enters into or becomes concerned in an arrangement. Section 328(1) uses the present tense, “facilitates”. Entering an arrangement alone does not complete the offence. Where the arrangement subsequently engages with property that is then criminal property, the offence is committed at that later point, provided the defendant has the required knowledge or suspicion. A person who withdraws before the arrangement engages with criminal property commits no offence under the subsection.

5. The counts were defective because they alleged an arrangement which the defendants knew or suspected would facilitate dealings with criminal property. A count should instead allege an arrangement which the defendant knew or suspected facilitated the specified dealings.

• Court of Appeal (Criminal Division). In [2013] EWCA Crim 2237, the Crown’s appeal was allowed as to G and dismissed as to H.
• Central Criminal Court. Miss Recorder Greenberg QC ruled on 20 September 2013 that G and H had no case to answer on the section 328(1) charges, and refused the Crown leave to appeal.