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Goodbye to ill-gotten gains

A criminal's assets, tainted or not, are fair game for confiscation, writes Grania Langdon-Down
Lottery winnings, a house inherited from a relative, rent paid by tenants - all good clean money. But if you are a criminal, it's fair game for the Crown Prosecution Service's Central Confiscation Branch (CCB).

From today the screw can be turned even tighter as new powers come into force. Criminals involved in fraud, organised crime, pornography and other serious offences can now be subjected to the same wide-ranging powers of confiscation as drug traffickers. The Proceeds of Crime Act 1995 extends both police powers to investigate a criminal's financial background and court powers to strip them of his ill-gotten gains.

The idea that the CCB does not just go after "tainted" assets often comes as a surprise to crooks, says the unit's head, Sue Taylor. "We get amazed letters from solicitors when we go after clean assets saying 'you can't touch that'. But we can, and do."

If a criminal was said to have made pounds 100,000 from crime but had squandered all the money, then the order must be paid from the sale of other assets, legitimately owned or not, even if that means, for example, making his family homeless.

Miss Taylor says: "I call it the 'but for' rule - but for the proceeds of the crime, the person wouldn't have the house or the business or affluent lifestyle."

The wives of convicted criminals in a TV comedy might enjoy the good life while their husbands are inside. But in the real world, the Chigwell house in Birds of a Feather would have gone into the pot along with any other realisable asset.

Confiscation orders can make even bankruptcy seem generous as a receiver acting under the Drug Trafficking Act or Proceeds of Crime Act can take every single asset, down to the clothes the person is wearing. However, the new provisions are complex and are likely to prove fertile ground for litigation. While criminals may roll over quietly and accept a prison sentence, they will fight tooth and nail to keep their lifestyle sweet for their release.

The key elements of the new Act are:

Courts can make assumptions about how much a defendant, convicted of two or more offences (one of which may be a previous conviction) committed after 1 November, has funded his lifestyle through crime. It can then make a confiscation order to the value of any unexplained assets passing through his hands during the previous six years. It is up to the defendant to prove they were legitimately obtained.

A criminal defaulting on payment will no longer be able to wipe out his debt by serving a longer prison sentence.

The CPS can ask for a review of a confiscation order to increase the amount if investigators discover previously hidden assets up to six years after conviction.

There is no right to silence. The courts will have the power to order a defendant to give information even if it is self-incriminatory, and can draw an inference from a refusal to respond; and

The pounds 10,000 minimum limit on confiscation orders no longer applies.

The Act amends the 1988 Criminal Justice Act, which required the prosecution to prove beyond reasonable doubt that the benefit had been derived from the offence for which the defendant had been convicted.

In February the 1993 Criminal Justice Act lowered the level of proof to the civil standard of balance of probabilities and allowed confiscation hearings to be postponed until after the defendant had been sentenced.

Miss Taylor, a barrister who joined the CPS at its inception in 1986, has headed the CCB since 1990. Her team includes eight lawyers, although there are only six now in post, two examiners trained in accountancy and six administrative staff. She feels the UK is the "world leader" in legislation tackling proceeds of crime. However, there are now three versions of the 1988 Criminal Justice Act, under which confiscation orders can be made in non-drug cases. The crucial factor in deciding which powers can be used will be the date the offence was committed.

The CPS is not alone in processing confiscation cases. Customs and Excise and the Serious Fraud Office have their own units.

Between 1987-94, the courts issued 6,653 confiscation orders in drugs cases totalling nearly pounds 77m. Between 1989-94, 61 orders were made in cases involving other serious crimes, adding up to more than pounds 5.1m. The highest confiscation order made so far in a non-drugs case is the pounds 1.5m order against the retired Ministry of Defence official Gordon Foxley, jailed for four years for taking bribes from three foreign arms companies.

Figures for the total amount actually recovered and paid to the Treasury are harder to find, as many cases take years to resolve. Assets may also be worth less than expected, particularly if tracking work has had to be suspended during lengthy appeals. The property crash left the CCB with suburban semis in negative equity on which no mortgage payments had been made for two years. A drug dealer's Range Rover, valued at more than pounds 5,000, was worth only a tenth of that after the drugs squad and sniffer dogs had been through it and the car had been left in the open in the police pound during the case. If there proves a considerable shortfall, it is possible to go back to the court to obtain a certificate of inadequacy.

But there are success stories. In the case of Rene Black, Britain's first identified drug millionaire and supergrass, the team recovered pounds 900,000 from his UK assets.

In response to the new powers, Miss Taylor has issued prosecutors across England and Wales with guidance, asking them to contact the CCB as soon as they think they have a likely confiscation case. While the branch will not take over the prosecution, it will make the decision whether or not to trigger confiscation proceedings once it has studied details of the defendant's assets provided by the police.

The CCB is now dealing with about 600 cases, two-thirds of them drug- related, involving millions of pounds. How much its workload increases with the new provisions will depend on the extent to which the police and prosecutors identify suitable cases. Andrew Mitchell, a barrister and head of the asset forfeiture team at Furnival Chambers, says: "The impact of the new legislation will depend on police resources and determination to investigate criminal backgrounds and on the part of the courts in getting to grips with it, given their marked reluctance in the past. Judges have always loathed the assumptions element of the Drug Trafficking Act.

"However, the CCB and other confiscation units are ill equipped to handle the necessary increase in work if the new provisions are used properly. There have been some good orders but if there is a weakness, it is in enforcement - they try hard but there are a number of files just gathering dust." Added to that is a perception that the smart crook who knows how to invest shrewdly and refuses to co-operate keeps his money.

But Miss Taylor is sanguine about such claims: "If these criminals get caught, they can't be all that astute. They have usually left an audit trail somewhere. And many countries, even Switzerland, are much more open now, as long as the crime involved is considered an offence under their own jurisdiction." Britain has agreements with other countries to execute each other's court rulings, with the country carrying out the order keeping the money as a "reward".

Still, it is hard work parting the crook and his money. "People who live on the edge of the law are not going to co-operate. They are always playing for time, trying to negotiate a smaller amount," says Miss Taylor.