Fulton v R.

For confiscation under Proceeds of Crime Act 2002, benefit depends on whether the defendant obtained property through the particular criminal conduct. A person’s importance to a conspiracy does not itself establish benefit. The decisive factual question is the capacity in which that person dealt with the property.

An employee who merely performs employment duties may not obtain the employer’s criminal proceeds. However, a conspirator who exercises autonomous operational control over money transfers in a laundering scheme may obtain the funds jointly, despite having no legal interest in the bank account. A money launderer’s benefit is the value of property obtained through laundering, not necessarily the tax evaded by the underlying fraud. A confiscation order remains subject to proportionality.

The appellant, an experienced foreign-exchange dealer employed by Omnis FX Capital, was convicted of conspiring to disguise, convert or transfer criminal property. He handled about 60 per cent of transactions through Omnis during a large-scale money-laundering conspiracy connected with MTIC fraud.

On 25 August 2017, Manchester Crown Court made a confiscation order under section 6 of the Proceeds of Crime Act 2002. It assessed his benefit at £17.85 million, representing the funds he had handled, but ordered payment of his agreed available amount, £104,228. A separate appeal against sentence had previously been dismissed in R v Fulton and Wood [2017] EWCA Crim 308.

The appeal challenged whether he had obtained the transferred funds, whether benefit should instead be limited to tax evaded, and whether the benefit figure and order were disproportionate. It also raised the risk of multiple recovery from co-defendants.

1. The appeal was dismissed, subject to qualification of the confiscation order to prevent multiple recovery. The order was to be enforced only to the extent that co-defendants had not satisfied it.

2. Under section 76(4) of the Proceeds of Crime Act 2002, the question is whether the particular defendant obtained property. Central involvement in a conspiracy does not automatically establish that fact. R v Sivaraman [2008] EWCA Crim 1736 did not create an employee exemption. It required an assessment of the capacity in which the employee acted.

3. The judge was entitled to find that the appellant was not merely an employee, custodian or bailee. He knowingly carried out money laundering, had sole operational control over the transfers for which he was responsible, and exercised considerable autonomy through the banking platform. His lack of legal ownership, account-signatory status or a large personal profit did not prevent him from obtaining the funds jointly for himself and the other conspirators. The first ground therefore failed.

4. The definitions in Part 7 of the Act, including section 340, govern the money-laundering offences and did not directly determine benefit in Part 2 confiscation proceedings. The appellant did not obtain a pecuniary advantage equal to tax evaded, because he was not liable for that tax. His benefit was instead the value of the property he obtained through the laundering conspiracy under section 76. The second ground failed.

5. The benefit figure was not disproportionate merely because it exceeded the appellant’s personal gain or the tax evaded. The court left open whether proportionality must separately be addressed when fixing a benefit figure, but held that the final order for the agreed available amount was proportionate. The judge had considered the appellant’s personal circumstances and made no error of principle.

• Court of Appeal (Criminal Division): The appeal against the confiscation order was dismissed, subject to a qualification preventing enforcement to the extent that co-defendants had satisfied the order.
• Manchester Crown Court: On 25 August 2017, following the appellant’s conviction for conspiracy to disguise, convert or transfer criminal property, the court assessed benefit at £17.85 million and made a confiscation order for the available amount of £104,228.