Gor v R

In criminal-lifestyle confiscation proceedings, the statutory assumption concerning property transferred to a defendant does not arise unless the Crown first proves the transfer. Payment into a spouse’s account in a family business is insufficient without proof that the spouse received the money as the defendant’s nominee.

Property held after conviction remains subject to the assumption concerning general criminal conduct unless the defendant rebuts it. Identifying a particular mortgage fraud does not displace that assumption. A sham disposal may leave the defendant’s equitable interest intact. Market value under the Proceeds of Crime Act 2002 is ordinary open-market value between a willing seller and buyer, unaffected by the ordinary period allowed for payment of a confiscation order.

The appellant pleaded guilty at Isleworth Crown Court to providing unauthorised immigration services and assisting unlawful immigration. His offending gave him a criminal lifestyle for the purposes of the Proceeds of Crime Act 2002.

On 4 December 2015, HHJ Denniss found that he had benefited from criminal conduct by £927,356.35 and made a confiscation order for that sum. The appellant appealed against that order. He challenged, among other matters, tuition fees paid into his wife’s account, benefit attributed to properties acquired through mortgage fraud, the value assigned to properties, and rental income.

The central issue was the proper application of the statutory assumptions in calculating benefit in a criminal-lifestyle confiscation case.

1. The appeal was allowed to a limited extent. The benefit figure and confiscation order were reduced from £927,356.35 to £767,233.59.

2. The court rejected the challenge to the finding that the college was a sham used to exploit students. The judge had heard the appellant’s evidence, made detailed adverse credibility findings, and had material entitling him to conclude that the appellant had not rebutted the relevant statutory assumption.

3. The court allowed the challenge to £124,317 paid into the wife’s sole accounts. Before the assumption in section 10(2) could apply, the Crown had to establish that the money had been transferred to the appellant, including by proving that the wife acted only as his nominee. The judge’s brief finding, based on the existence of a family business, did not adequately establish that premise.

4. The court rejected the argument based on Waya [2013] 1 AC 294. Waya concerned particular criminal conduct, where the Crown had to identify property obtained from that conduct. This was a criminal-lifestyle case. Under section 10(3), the properties held after conviction were assumed to derive from general criminal conduct. Showing that a fraudulent mortgage advance assisted their acquisition did not rebut that assumption, and the tracing provisions did not require a different result.

5. The judge’s findings that purported transfers of the Berry Way and Olive Road properties were shams supported the conclusion that the appellant retained equitable interests in them. Those interests could therefore be treated as property held after conviction.

6. For section 79 purposes, open-market value meant the ordinary price between a willing buyer and willing seller. The three-month payment period under section 11 did not require a forced-sale valuation. Islam [2009] 1 AC 1076 concerned the valuation of illegal drugs and did not alter that conclusion.

7. The Crown did not maintain that all rent from 26A Olive Road was tainted. Since only 10.74% of its purchase price was tainted, the court reduced the attributed rental benefit by £35,805.76.

• Court of Appeal (Criminal Division) — In [2017] EWCA Crim 3, allowed the appeal only to reduce the benefit figure and confiscation order by £160,122.76.
• Isleworth Crown Court — On 4 December 2015, HHJ Denniss found benefit of £927,356.35 under the Proceeds of Crime Act 2002 and made a confiscation order in that sum.
• Isleworth Crown Court — On 14 February 2012, before HHJ Molyneux, the appellant pleaded guilty to the substantive immigration offences and was later sentenced to 16 months’ imprisonment.