National Crime Agency v Azam & Ors

In civil recovery proceedings under Part 5 of the Proceeds of Crime Act 2002, the claimant must prove, on the balance of probabilities, that identified property was obtained through unlawful conduct. It need not prove that a particular defendant committed a particular criminal offence, but it must establish criminal conduct of an identifiable kind or an irresistible inference that the property could only have derived from crime.

Where money laundering is alleged, the predicate offence need not be specified if the evidence establishes that the property represents the proceeds of criminal activity. Property may remain recoverable when held by an innocent person. A subsequent use of criminal proceeds to acquire further property may constitute a fresh laundering act for limitation purposes. Recovery of property acquired through a business involving VAT fraud is not disproportionate where the fraud was essential to the business.

The National Crime Agency brought a civil recovery claim under Part 5 of the Proceeds of Crime Act 2002 against Amir Azam and members of his family. The claim concerned eight properties, rental income and balances in English and Luxembourg bank accounts. The NCA alleged that the assets represented the proceeds of drug dealing, money laundering, VAT fraud or other unlawful conduct.

Mr Azam denied the allegations and attributed the assets to legitimate car trading, property dealings, family funds and loans. The central issues were whether the assets were recoverable property, whether the claim concerning 2 Watery Lane was time-barred, and whether recovery would be disproportionate in relation to 291 Great West Road.

1. The court found that the NCA had proved on the balance of probabilities that 2 Watery Lane, 1 Offley Place, the three ABC properties, 291 Great West Road, 5 Thurza Court, the Luxembourg account balances and Wheatash Road were recoverable property. The Spanish Property was not recoverable because the NCA had not established that it was acquired with unlawful funds.

2. Under Proceeds of Crime Act 2002, the relevant question was whether the property itself, or property it represented, had been obtained through unlawful conduct. The NCA did not have to prove a specified offence committed by a specified person. It had to identify criminal conduct of an identifiable kind or establish that the circumstances gave rise to the irresistible inference that the property could only have derived from crime. The court applied Director of the Assets Recovery Agency v Szepietowski [2007] EWCA (Civ) 766 and R v Anwoir [2008] EWCA Crim 1354.

3. The standard was the balance of probabilities. Evidence relied upon in earlier criminal proceedings could be considered in civil recovery proceedings, although the court had to avoid undermining any acquittal. The court applied the principles in SOCA v Gale [2011] 1 WLR 2760 and SOCA v Hymans and others [2011] EWHC 3332.

4. The purchase of Offley Place with the proceeds of Watery Lane was a fresh act of money laundering within the limitation period. The claim was therefore not time-barred. The court also concluded that the VAT fraud in the car-import business was integral to that business, rather than incidental. Recovery of Great West Road was consequently not disproportionate under section 266(3)(b), applying R v Waya [2012] UKSC 51 and distinguishing Ahmed v HMRC [2013] EWHC 2241 (Admin).

First-instance civil recovery proceedings in the High Court. No appellate history is stated in the judgment.