R V A - Money Laundering Convictions Quashed

Our Expert Money Laundering Solicitors appealed against the conviction of a client for Money Laundering Offences, namely Possessing Criminal Property and Disguising or Converting Criminal Property, contrary to the Proceeds of Crime Act 2002.

The prosecution case had been based on the fact that despite our client's very limited income, a relatively large sum of cash had been found at his home and he had bought two cars using very large amounts of cash. The prosecution did not allege any particular kind of Criminal Conduct; its case simply being that the circumstances were such that it was an irresistible inference that the cash represented the proceeds of unspecified crime.

Our client's defence was that he had acquired some of the money by selling gold jewellery originating from Pakistan. During his evidence, the jury sent a note asking the Judge whether the gold had been declared when it was imported and whether VAT or duty had been paid on it. The Judge replied that such matters were not part of the prosecution case.

After the jury retired, it sent a second note asking the Judge whether Tax Evasion could constitute criminal conduct for the purposes of the case. She reminded them that the prosecution did not need to prove the source of our client's funds, just that the only inference was that those funds were criminal and our knew or suspected as much. She then went on to answer that Tax Evasion was a criminal offence.

APPEAL SUCCESSFUL & ALLOWED

The Court of Appeal confirmed that there were two ways in which the prosecution could prove that property derived from crime: either that it derived from specific unlawful conduct or the evidence of the circumstances in which the property was handled gave rise to the irresistible inference that it could only be derived from crime, R. v Anwoir (Ilham) [2008] applied. In the instant case, the prosecution had sought to establish the latter proposition and had thus not set out to prove any kind of revenue Fraud. But the second jury note then raised that as a specific aspect which the jury might be considering. The difficulties with the Judge's direction were that the jury was given no instruction as to the circumstances in which Tax Evasion could constitute Criminal Activity and that the whole subject matter of Tax Evasion had been no part of anybody's case or evidence at trial.

Furthermore, the first jury note had indicated the jury's possible interest as to whether the importation of gold from Pakistan attracted VAT or duty, and it was not clear from the second jury note whether the jury still had some thoughts in that regard or indeed were contemplating the position about Benefit Fraud.

Thus it was not clear what the jury had in mind when asking about Tax Evasion. The jury was left with an answer enabling it to convict not only on a basis that was not legally explained to it but on a basis which had never featured at trial, R. v Gabriel (Janis) [2006] and R. v Yip (Albert) [2010] considered. The Judge had two choices: the first, which was the correct one in the circumstances, was to instruct the jury that Tax Evasion had never been part of the prosecution, had never been subject to any evidence and the jury should simply not speculate on that matter any further; the second was to give the jury some legal instruction as to the elements of Tax Evasion, but that would very quickly have led to the difficulties of identifying that there had been no evidence directed to that point at all. However, the Judge adopted neither course in answering the note and there had been a material misdirection to the jury.