Otegbola, R. v

For an offence of converting criminal property under Proceeds of Crime Act 2002, the property must already be criminal property before the alleged conversion. The prosecution may nevertheless prove that pre-existing status without identifying a particular predicate offence where the circumstances of its handling permit the irresistible inference that it could only derive from crime. Unusual and rapid movement of substantial sums through several accounts, coupled with inadequate explanations, may provide a sufficient evidential basis for that inference. Apparent gaps in the prosecution evidence may be matters for the jury, rather than grounds for a no-case submission.

At Maidstone Crown Court, the applicants and a co-accused were convicted by a jury of converting criminal property contrary to section 327(1) of the Proceeds of Crime Act 2002. The prosecution relied on a pattern in which money was rapidly transferred from an account controlled by Mr Otegbola’s wife, through Ms Baje’s accounts, to Mr Otegbola’s account.

The applicants submitted that there was no case to answer because the prosecution had not proved that the funds were criminal property before the transfers began. The trial judge rejected that submission. Their applications for leave to appeal against conviction, refused by the single judge, were renewed before the Court of Appeal. The central issue was whether the evidence could permit an irresistible inference that the funds were derived from crime before the alleged conversion.

1. The renewed applications for leave to appeal against conviction were refused. The trial judge was correct to reject the submissions of no case to answer.

2. Under section 327(1) of the Proceeds of Crime Act 2002, the prosecution had to establish that the funds were already criminal property when the alleged conversion occurred. The court applied R v GH [2015] UKSC 24: the alleged money-laundering transaction cannot itself supply the criminal quality of otherwise clean money.

3. The prosecution was entitled to prove the prior criminal quality of the funds by the alternative evidential route stated in R v Anwoir [2008] 2 Cr App R 36. It need not identify a specific underlying crime if the circumstances in which the property was handled allowed the irresistible inference that it could only have derived from crime.

4. That threshold was capable of being met here. The sums were substantial in comparison with the applicants’ declared income and business turnover. Their rapid, subdivided movement through three accounts was highly unusual. Each account-holder’s interview explanation was inadequate. The absence of enquiries about the persons who originally paid money into the first account was a point for the jury, but did not require the case to be withdrawn. The jury could infer both that the funds were dirty money before the transfers began and that the applicants knew this.

• Court of Appeal (Criminal Division): By [2017] EWCA Crim 1147, refused the renewed applications for leave to appeal against conviction.

• Crown Court at Maidstone: On 19 July 2016, a jury convicted the applicants of converting criminal property. The trial judge had rejected their submissions of no case to answer.

• Single judge: May J refused leave to appeal before the applicants renewed their applications to the full court.