UK: Proceeds Of Crime: The Benefit Of Paying For Criminal Property

Last Updated: 29 November 2011
Article by Will Hays

1. A defendant's 'benefit' from criminal conduct is the proceeds of his crime, not his net profit. This, we thought, was settled law, so that it is irrelevant to the calculation of benefit that the thief or handler paid for the stolen property he acquires. But this latter proposition may have been put in doubt by the decision of the Court of Appeal in R v Grant Williams [2011] EWCA Crim 275. In that case the Court decided that where drugs possessed by a defendant were purchased using legitimate funds, the value of those drugs should not be included in the calculation of benefit.

2. This article will suggest that defence practitioners may be able to argue that the principle established in R v Grant Williams applies to all cases, regardless of the type of criminal property involved. The principle arguably applies to thieves, handlers and all those guilty of possessing criminal property, where they have paid for the property acquired.

Possessors of Stolen Property

3. Thieves and handlers, and persons convicted of possessing criminal property (section 329 of the 2002 Act) benefit from their criminal conduct, provided they 'obtain' the stolen property as a result of or in connection with their offence (section 76(4) of the 2002 Act). 'Obtain' was defined in R v May [2008] 1 AC 1028. In essence, if the person comes to own the property, he has 'obtained' it.

4. For the purpose of deciding whether the thief, handler or possessor of stolen property has benefited and, if he did, the value of his benefit, the following matters are irrelevant:

  1. That D did not intend to sell the property.

  2. That D no longer holds the property, whether he has destroyed it, or consumed it, or sold it and spent the proceeds.

  3. That D paid for the item of property. The court is concerned with the proceeds of crime, not the net profits of crime. So, for example, the handler who pays £500 for a stolen car worth £1,000 benefits from his criminal conduct. The value of his benefit is £1,000 (rather than nil, or £500).

5. So that is the position in relation to one type of criminal property (stolen property). What is the position in relation to another type of criminal property, namely controlled drugs? One would expect the position to be the same. But is it?

Mere Possession of Drugs

6. The value of controlled drugs may now be included in the calculation of the benefit figure: R v Islam [2009] 1 AC 1076. This means, for example, that the value of controlled drugs imported by a drug trafficker is included in the benefit figure.

7. But does the person who merely possesses drugs thereby 'benefit'? Applying the legal principles which apply to stolen property, one would expect the answer to be 'yes'. This is because the person has obtained property (the drugs) as a result of his offence (the possession of the drugs).

8. Moreover, whether D paid for the drugs should be irrelevant to the calculation of D's benefit. However, recent authority suggests otherwise.

R v Grant Williams

9. The question of whether a person who possesses and consumes drugs thereby benefits was considered in R v Grant Williams, supra. In that case the defendant pleaded guilty to possessing cocaine with an intention to supply it to another. He had been acting as a custodian of the cocaine, looking after it for the dealers. He had fulfilled this role for many years. Over that time he had received payment in the form of quantities of drugs and money. Applying the statutory assumptions, the Crown Court accepted that the drugs he had consumed had been transferred to the defendant as a result of or in connection with his general criminal conduct. The drugs consumed by the defendant were valued at £65,000 and this figure was declared to be the defendant's benefit.

10. The Court of Appeal (Aikens L.J., Irwin and Saunders J.J.) considered that the assumption made by the Crown Court had been justified on the facts of the case. One of the reasons given was that the defendant had obtained the drugs as a result of or in connection with criminal conduct, namely the possession of the drugs themselves. Aikens L.J. said (at paragraph 13):

'In so far as the appellant used quantities of the cocaine he kept with him, those quantities must have been transferred to him. He became the owner and then he used those quantities. The possession of controlled drugs is in itself criminal conduct within section 76(1) of the Proceeds of Crime Act because it is an offence to possess controlled drugs. "General criminal conduct" constitutes all the criminal conduct of a defendant. The appellant had "benefited" from his general criminal conduct for the purpose of section 76(4) of the Act because he had obtained controlled drugs either as a result of or in connection with his offences of obtaining and having possession of controlled drugs.'

11. So far, this is consistent with the position as it relates to stolen property. But the Court of Appeal next observed that the defendant had paid for some of his drugs using legitimate money. The Court decided that the value of any drugs purchased with legitimate funds should not be included in the benefit figure. Aikens L.J. said (at paragraph 19):

'In principle we would say that it is legitimate to reduce the amount of benefit if it is demonstrated that a part of the source for the purchase of drugs is shown to be legitimate income.'

Opportunities for the Future

12. The Court of Appeal's conclusion was that where D pays for drugs using legitimate funds, the value of such drugs should not be included in the calculation of the benefit figure. This principle may be relied upon, and extended by defence practitioners, in a number of scenarios, including those in the following examples.

13. First, where the possessor / importer / dealer of drugs can show he paid for the drugs using legitimate funds, the value of those drugs should not be included in the calculation of benefit.

14. Secondly, the principle established in R v Grant Williams concerning controlled drugs may be extended to cases involving the possession of stolen property, since there is no principled reason to distinguish between different types of property (see R v Islam, per Lord Mance at paragraph 48).

15. Thirdly, if the principle applies to those guilty of possessing stolen property it is reasonable to extend the principle further to handlers and thieves. Thus, where the handler pays a sum of legitimate money to receive stolen goods, the price paid should be deducted from the benefit figure. Similarly, where D, an art collector, commissions a thief to steal a painting worth £1 million, and pays the thief £1 million to do so, his benefit is nil.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions