Godley, R v

In confiscation proceedings under the Criminal Justice Act 1988, the prosecution must prove the fact and value of benefit to the civil standard. The defendant must prove that the realisable amount is less than the benefit. Gifts made after the offence may be treated as realisable property even where they were made for innocent purposes, derived from legitimately acquired assets, or are difficult to recover. Their value is not necessarily limited to the property presently held by the recipient. The court must nevertheless avoid a serious risk of injustice. Where the defendant provides inadequate evidence of assets or gifts, the court may take the gifts into account. Compensation already paid to victims should be deducted where requiring payment again would be unjust.

William Godley pleaded guilty to conspiracy to defraud investors in the Imperial Consolidated Group. He was sentenced in 2010 after the court found that his criminal involvement began no earlier than November or December 1999. Earlier applications concerning an alleged assurance that his Portuguese home would be excluded from confiscation proceedings were rejected, and the Court of Appeal refused permission to appeal against conviction.

The confiscation hearing concerned the value of Mr Godley’s benefit, the realisable amount, gifts allegedly made to his wife and children, and compensation for investors. The central issues were whether the gifts were caught by the Criminal Justice Act 1988 and whether it was appropriate to take them into account.

1. The court found that Mr Godley benefited from the relevant criminal conduct between 1 November 1999 and 30 June 2002. The prosecution proved a benefit of £1,330,156, increased by indexation to £1,567,974. Payments made during the relevant period, including Bahamian housing costs, were properly included because they were connected with his role in the fraud. Section 74(5) permitted the increase in the value of money to be taken into account.

2. Under sections 71(6) and 74(3) of the Criminal Justice Act 1988, the amount payable was the lesser of the benefit and the amount that might be realised. Mr Godley did not establish on the balance of probabilities that the realisable amount was less than the benefit.

3. Gifts made after the commission of the offence were capable of being caught under section 74(10). Their purpose, including tax planning or support for children’s university and living expenses, did not exclude them. Nor was it necessary that the assets forming the realisable property were themselves the proceeds of crime. The court could consider the value of gifts when made, where that value exceeded the value of property currently held.

4. The court was satisfied that £1,691,179 transferred to Mrs Godley and £132,744.54 transferred to the children were gifts directly or indirectly made by Mr Godley. The absence of adequate evidence from Mr Godley and the recipients supported taking those gifts into account. The court found no serious risk of injustice in doing so.

5. A confiscation order was made for £1,567,974, reduced by the present-day value of £93,025 paid to the liquidators as compensation. The order was payable within six months, with three years’ imprisonment in default. A compensation order was also made in the confiscation sum, payable pro rata for the benefit of investors, subject to any contrary submissions from the liquidators.

The judgment records that Mr Godley was convicted and sentenced in the Blackfriars Crown Court. The Court of Appeal refused permission to appeal against conviction and refused an extension of time. The present confiscation proceedings were then determined at first instance.