Gricevicius, R v

Under the Proceeds of Crime Act 2002, a defendant’s benefit is the total value obtained from criminal conduct, not the net profit after expenses or payments to associates. The recoverable amount ordinarily equals that benefit unless the defendant proves that the available amount is lower. Available assets need not be the direct proceeds of crime.

Proportionality requires a fact-sensitive assessment of the statutory aim and the means used to achieve it. It does not generally require an accounting exercise to estimate net profits from criminal activity. Where there is evidence of hidden assets and the defendant gives no adequate explanation of them, an order equal to the assessed benefit may be proportionate.

The appellant pleaded guilty to a conspiracy to supply cocaine. Following a Newton hearing, the Crown Court found that he had played a leading role in a large-scale drugs enterprise and that £2.34 million had passed through his hands.

At a confiscation hearing in Birmingham Crown Court, the judge made an order for £2.34 million. The judge found substantial hidden assets and held that the appellant had not proved that his available amount was less than his benefit. The appellant appealed on the sole ground that the order was disproportionate because it failed to allow for the costs of drug dealing and his likely retained profit.

1. Appeal dismissed. The Crown Court was entitled to make a confiscation order for the full benefit figure of £2.34 million.

2. The appellant’s benefit was correctly assessed as the value of the property or advantage obtained through the criminal conduct. It was not limited to his net profit after deducting the purchase price of drugs, other expenses, or sums payable to co-conspirators. The court applied the principles in R v May [2008] UKHL 28 and R v Waya [2012] UKSC 51.

3. Under section 7 of the Proceeds of Crime Act 2002, the recoverable amount equalled the benefit unless the appellant proved that his available amount was lower. Available assets did not have to be traceable to the particular drug dealing. The evidence supported the finding that the appellant had substantial hidden assets. His failure to give evidence or explain those assets meant that he had not discharged the statutory burden.

4. R v McIntosh [2012] 1 Cr App R (S) 60 did not require an automatic full-benefit order following non-disclosure. The court had to consider all the evidence. Here, unlike R v Brooks [2016] EWCA Crim 44, there was no other evidence capable of showing that the available amount was less than the benefit.

5. Proportionality required examination of the relationship between the statutory aim of depriving criminals of criminal proceeds and the means used. The inquiry was fact-sensitive. It could permit a full-benefit order despite the absence of a deduction for criminal expenses. The appellant’s leading role, the cash passing through his hands, his unexplained cash-rich lifestyle, and the evidence of hidden assets justified the conclusion that the order was proportionate. The judge’s reference to his persistent lies was of lesser relevance but did not invalidate the decision.

• Court of Appeal (Criminal Division)—dismissed the appeal against the confiscation order: [2018] EWCA Crim 1061.
• Birmingham Crown Court—on 11 January 2017 made a confiscation order for £2.34 million, with three months for payment and ten years’ imprisonment in default.