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Drive to claw back millions from wealthy criminals is failing, figures reveal

Only a fraction of confiscated monies retrieved from third parties and overseas
  • @oliver_wright

When the former leader of the notorious “Adams Family” gang was told to hand hundreds of thousands of pounds in ill-gotten gains over to the courts, the convicted North London crime boss said he couldn’t afford to pay up, claiming he was so poor that he felt “like a ponce” living off his wife.

Terry and Ruth Adams failed to convince the authorities, who discovered the couple were leading a luxurious life. Yet many other rich criminals are succeeding in avoiding their financial comeuppance, The Independent can disclose.

Less than half of the £501.4m criminals owe in “confiscation orders” is “realistically recoverable”, according to the Crown Prosecution Service – just £159.4m. The Serious Fraud Office also admits it expects to reclaim just £10m of the £106m convicted criminals should currently be paying back.

Emily Thornberry, the Shadow Attorney General, is calling for criminals who fail to pay up to be kept in prison and not be eligible for early release. Labour is also demanding new measures to stop criminals transferring assets to their partners through “sham divorces”, and stronger court powers against criminals who dispose of property overseas.

The scale of the problem facing the CPS and SFO has been revealed in Freedom of Information requests and Parliamentary Questions.

Adams’ request last month to be relieved of his £650,000 confiscation order was rejected by a judge after he heard details of the former gangster and his wife having average “identifiable” spending of £97,000 a year since he was released from prison.

The CPS said Mrs Adams had spent £12,044 on dental treatment and £2,500 on a dietary programme during three months in 2013. The couple also spent nearly £15,000 on flights, hotels, restaurants and entertainment over a three-year period.

Confiscation orders were introduced under the last government in an attempt to recover the ill-gotten gains of criminals following their conviction by the courts.

But flaws in the legislation mean that it is too easy for assets to be moved abroad where they are harder to access, or be transferred to third parties.

In a speech today, Ms Thornberry is expected to set out how further reform of the proceeds of crime system is needed, particularly when it comes to international co-operation. She will also say that law enforcement agencies should be allowed to keep more of the assets they confiscate to replenish their budgets and ensure that asset confiscation is a priority.

“I appreciate how difficult it is to go after money that has been hidden by sophisticated criminals,” she said. “That is why we need to end early release for criminals who don’t pay, tougher measures to stop criminals transferring assets to their partners and stronger court powers against criminals who dispose of property overseas.

“We also need to go much further in enlisting the help of foreign jurisdictions to get back money hidden abroad and to be more reciprocal when other countries ask us for help to do the same.”

Failed recovery: Previous cases

Julian de Vere Whiteway-Wilkinson

  • Ordered to repay: £2.1m
  • Amount recovered: £262,000

Whiteway-Wilkinson boasted of laundering “briefcases of cash” from supplying cocaine to celebrities and City workers. He was jailed for 12 years in 2004 and was later ordered to hand over the £2.1m profit he made from the drugs operation.

Nasir Khan

  • Ordered to repay: £14m
  • Amount recovered: £0

Khan was jailed for nine years in 2011 for a £250m VAT scam. Prosecutors said Khan “enjoyed the lifestyle of an international playboy”, using criminal profits to buy luxury apartments in London, Marbella and Gibraltar.

Charles Scarrott

  • Ordered to repay: £8.4m
  • Amount recovered: £3.6m

The former property developer used his businesses to make false VAT claims of £25m. He bought a £1m penthouse in Teddington, south-west London, as well as flats for his children.