Holt v Her Majesty’s Attorney General on behalf of the Queen

For money laundering under the Proceeds of Crime Act 2008, section 140(1), the prosecution must prove that the defendant was concerned in an arrangement which she knew or suspected would facilitate another’s use of criminal property, and that she knew or suspected the property represented another’s benefit from criminal conduct. Personal handling of the money is unnecessary. Actual knowledge or suspicion of criminal conduct is required; awareness of an irregular or unauthorised transaction is insufficient. Where a defendant’s account may be rejected, the judge must direct the jury on every remaining element. A conviction is unsafe where the omitted issue could reasonably have affected the verdict.

Holt v Her Majesty’s Attorney General on behalf of the Queen concerned a Manx advocate convicted of money laundering and making false file notes. The prosecution alleged that she helped arrange payment of legal fees from £400,000 taken from a trust by her client. The appeal was from convictions in the High Court of Justice of the Isle of Man, and the judgment also refers to an earlier appeal before the Staff of Government. The central issue was whether the jury should have separately decided whether the appellant knew or suspected that the money was the product of criminal conduct after rejecting her account of its source. The effect on the false-note convictions and judicial comments during the summing-up were also considered.

Disposition and reasoning

The Board advised that the convictions on all counts be quashed.

1. Actus reus. The money-laundering offence concerned being involved in an arrangement which the defendant knew or suspected would facilitate another person’s acquisition, retention, use or control of criminal property. Personal handling of the money was unnecessary. An arrangement could begin before the theft and continue afterwards. The appellant’s efforts to obtain counsel’s fees and arrange their onward payment were capable of constituting such an arrangement.
2. Mens rea. The prosecution had to prove actual knowledge or suspicion that criminal conduct of some kind was involved. It was insufficient that the appellant appreciated that the money might be received irregularly, without the necessary consent, security or formalities, or that she ought to have realised that a crime might be involved. A breach of trust was not automatically equivalent to knowledge or suspicion of criminal conduct.
3. Jury direction. If the jury might reject a defendant’s account, the judge must identify and leave the remaining elements of the offence. Here, if the appellant might have believed that the money came from a source other than the trust, acquittal followed. If the jury was sure that it came from the trust, it still had to decide whether she knew or suspected that it was the product of criminal conduct. The summing-up omitted that second question and wrongly treated rejection of her account as sufficient for conviction.
4. Safety of the conviction. The evidence did not make conviction inevitable. The jury could have concluded that the appellant was naïve about the transaction and had not applied her mind to possible criminal conduct. The Deemster also wrongly referred to the trust deed although the prosecution did not rely on it, and the appellant’s good character remained relevant. The principal conviction was therefore unsafe.
5. False-note counts and judicial comment. The convictions for false file notes were likely to have been influenced by the unsafe money-laundering verdict and had not been left to the jury on an independently assessed basis. They too were quashed. Judicial comments contrasting counsel and risking the impression that conviction was expected were inappropriate. That matter alone would probably not have rendered the convictions unsafe, but it added to the concern.

The Board considered a retrial most unlikely to be required in the public interest, but allowed the prosecution an opportunity to make written submissions on that issue and directed written submissions on costs.

1. Privy Council — In [2014] UKPC 4, the Board advised that the convictions should be quashed. The prosecution was given an opportunity to make written submissions on any retrial.
2. Staff of Government — An earlier appeal is mentioned, but its decision and citation are not stated in the judgment.
3. High Court of Justice of the Isle of Man — The appellant was convicted of money laundering and making false documents. The decision’s citation is not stated in the judgment.