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"Tainted Gifts" - Revisited

19-Apr-2018

You may remember, in June 2017, we published a short article titled "Tainted Gifts" - Is Recoverability an Issue? in which we explored the importance, or not, of the recoverability of “tainted gifts” in confiscation proceedings.

Click here to read more - www.forthsonline.co.uk/announcements/tainted-gifts-in-confiscation-proceedings

We concluded by stating that the recoverability of “tainted gifts” does not appear to be a factor when calculating the recoverable amount, on the basis that it would defeat the point of POCA to say that “tainted gifts” have no value and, as such, should not be included as part of confiscation proceedings, simply because the Defendant cannot get them back.

In support of our opinion, a recent Court of Appeal case, involving a solicitor who was jailed for stealing millions from her clients and the Church of England, found that the judge who issued the original confiscation order had been wrong to discount the value of various “tainted gifts” which she had given to her family from the stolen money.

To summarise, in November 2017, the Defendant was ordered to pay back more than £1.9m, made up of £1.5m (free property) and £470k of “tainted gifts”, which the prosecution appealed on the basis that the “tainted gifts” figure should have been higher by approximately £500k.

The judge held that it would be disproportionate to include sums in the recoverable amount unless there was some legal or moral basis on which to consider that they would be recoverable by the Defendant from the recipients.

The Court of Appeal disagreed, stating that it is hard to conceive of a case where it would be proper to reduce the amount in a confiscation order in the “tainted gifts” regime without hearing oral evidence from the Defendant and those called on her behalf, and without full disclosure of documents concerning the financial circumstances of all relevant persons.

Further, that it is wrong to embark on a process almost akin to tracing the stolen money into the hands of third parties, and to find that if no assets could be found which represented the gift, then that gift should not be included in the recoverable amount.

The “tainted gifts” regime operates by the imposition of an order on the convicted person as an incentive for them to recover the proceeds of their crime from persons to whom they have passed them, by whatever means are available.

What those persons have done with them, or whether they received them knowing of their criminal origin, are likely to be largely irrelevant factors. What matters is whether the Court is satisfied that the resulting order is disproportionate. If not, then the order must be made in the full value of the tainted gifts.

As a result, the Court allowed the appeal and substituted the sum of £2.45m in the confiscation order.

For more information or to discuss a potential case with our criminal defence forensic accountants, call us on 0113 387 5670, email us at enquiries@forthsonline.co.uk or fill out an Enquiry Form and we will contact you directly.