Elsayed vThe Crown

For confiscation under the Proceeds of Crime Act 2002, the value of drugs obtained is their market value in the hands of the defendant at the time of acquisition. That value may reflect the illicit market in which the defendant was found to intend to dispose of them.

Drugs obtained at wholesale purity may therefore be valued at their intended retail street value where findings establish that the defendant was a street dealer who would cut, divide and sell them at that level. The assessment is fact-driven and requires a fair and purposive application of sections 79 and 80, directed to depriving the defendant of the benefit of criminal conduct.

The appellant pleaded guilty in the Crown Court at Isleworth to possessing class A drugs with intent to supply and possessing criminal property. Police recovered cash and cocaine, including 169 grams of cocaine at 80 per cent purity, from his work locker.

At the confiscation hearing, the appellant claimed that he was merely storing drugs and money for another dealer. The judge rejected that account and found that he would cut the cocaine to 5 per cent purity, divide it into wraps and sell it at street level. Applying the criminal-lifestyle provisions, the judge assessed benefit from the cocaine at its retail street value and made a confiscation order for the lower available amount of £245,984.

The appeal challenged whether benefit had to be assessed at the wholesale value when the appellant obtained the cocaine, rather than its intended retail street value.

1. Appeal dismissed. The judge was entitled to value the 169 grams of cocaine at £108,160, its retail street value on the facts found, rather than at the asserted wholesale value.

2. Under sections 79 and 80 of the Proceeds of Crime Act 2002, the question is the market value of the property obtained by this defendant when he obtained it. Market value is not fixed solely by the wholesale source from which goods came. It may depend on the time of acquisition and the defendant’s capacity and role in the relevant market.

3. The intended treatment and disposal of the drugs were not speculative. The judge had permissibly found that the appellant was neither a custodian nor a wholesaler, but a street dealer who would cut the cocaine, divide it into wraps and sell it at 5 per cent purity. Those findings established the relevant illicit retail market and therefore the actual market value of the drugs in his hands at acquisition.

4. A contrary approach would make valuation turn arbitrarily on when the police seized the drugs. It would also fail to give the statutory language a fair and purposive construction. The statutory purpose is to deprive criminals of the benefit of their criminal conduct, and the resulting order was not disproportionate or a fine.

5. The court regarded the authorities as consistent with that conclusion: in a drugs case the appropriate market can be the market in which the defendant intended to dispose of the drugs, and the United Kingdom market value is not the cost at source.

• Court of Appeal (Criminal Division): dismissed the appeal against the confiscation order.

• Crown Court at Isleworth: made a confiscation order on 17 December 2012 for £245,984. The judge assessed the benefit from 169 grams of cocaine by reference to its intended retail street value.