England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		9th June 2009

1. LORD JUSTICE RIX: On 14th August 2008 in the Crown Court at Reading before Mr Recorder Cooper, the appellant, Mohammed Fazal, was convicted by a majority of 10 to 2 of seven counts of converting criminal property, contrary to section 327(1)(c) of the Proceeds of Crime Act 2002. On 19th September 2008, before the same judge, he was sentenced to a community order for a period of 12 months with a requirement to perform 180 hours unpaid work. He now appeals against conviction by leave of the single judge.
2. The facts were essentially as follows. The appellant held an account at the Slough branch of Barclays Bank. During the period indicted, that is say between 1st June and 1st August 2006, seven deposits were made into that account which were not disputed to have been the proceeds of fraud. Three of those deposits came from identifiable victims who had paid for electrical goods advertised on the Internet which were never delivered and indeed never intended to be delivered. Three further of the deposits were made by unidentified individuals for similar amounts and in similar circumstances. A seventh deposit in the account was a stolen forged cheque fraudulently processed through that account. That was for the largest sum of all those involved, the sum of £2,800.
3. The prosecution case was that each of the seven deposits were the proceeds of fraudulent transactions, that the money had been converted with the assistance of the appellant who had made his account available for that purpose and that he knew or suspected that the deposits constituted the benefit for criminal conduct and thus constituted or represented criminal property.
4. The defence case was that the appellant had given his account details to an old friend, a Mr Butt, who claimed to have a problem with his own account and needed to use the appellant's account in order to have his wages paid. The appellant's case was that he neither knew nor suspected that the account was being used to recycle the proceeds of fraud. He had no idea throughout June or July 2006 that his account was being misused in any way.
5. Evidence was given by the various losers as to the circumstances which concerned them, but that evidence need not be detailed for the purposes of this appeal.
6. Detective Constable Jarvis gave evidence of arresting the appellant and thereafter interviewing him. In that interview the appellant confirmed that the account concerned was his and that he had the sole use of it. He said that he had had that account for approximately 2 years. When he had been working, he had had his salary paid into that account and he withdrew money from it using a debit card. He was not working in 2006 and had no salary to pay in and was not using the account. He was living on £20 per week cash that he received from his parents. He continued to say in this interview that he did not know where the deposits in his account had come from and thought they were mistakes. Indeed, he thought that he had queried some of the deposits with the bank. He did not have his card at that time to withdraw any of the money that had been withdrawn.
7. Ultimately he thought that the deposits were mistakes that the bank had made and he did nothing about it. He had never put his bank details on the internet and the number of his mobile telephone seized by the police did not match that which had been used in the fraud. He denied that he had given his bank details or PIN number to anyone.
8. At trial, however, the appellant gave evidence of a different kind. He said that he had given his bank details to Baba Butt who had been a friend since they had been at nursery and their families had been friends. Butt had asked him for his help and he allowed Butt to use his account in June or July 2006. He had been told by Butt that this was necessary because of an unspecified problem on Butt's account.
9. When he was interviewed by the police, he went on to say in his evidence at trial, he had not been represented by a solicitor and he had, as he then admitted, lied. That was because he was afraid of Butt. The first time that he saw a solicitor was at court and he told the solicitor about Butt.
10. In cross-examination, he said that he had not immediately given the bank details to Butt. It was not until the third time that he had been asked that he was finally persuaded and agreed and that was mainly because their fathers were friends. At the time he had virtually no money in the account and he had not been using it. He gave Butt the account details, his ATM card, that is his debit card and its PIN number. He confirmed that he had lied in police interview, in particular when he had said that he had lost his debit card. Also that he had lied when he claimed to have contacted the bank about the cheque, that is the cheque for £2800, when it had in fact been the other way round. The bank had contacted him and he had then claimed that he thought the deposits were bank mistakes and denied that he allowed someone else to use his account or that he had given anyone else his details. He stated that he had only briefly looked at his bank statements. He had no idea how much Butt would earn and he could not answer why Butt would need his bank account if he was being paid in cash.
11. That being the nature of the case, we need say something further about the statutory provisions under which the appellant was charged. Section 327 of the 2002 Act reads as follows:

"(1) A person commits an offence if he—

(a) conceals criminal property;

(b) disguises criminal property;

(c) converts criminal property;

(d) transfers criminal property;

(e) removes criminal property from England and Wales or from Scotland or from Northern Ireland."

Subsection (2) then goes on to make an exception if any of those events had occurred after an authorised disclosure under section 338 of the Act and after that person had received the appropriate consent.

12. Section 338 contains details of how a disclosure is to be made, that is to say to a constable or an officer of the Revenue & Customs, and how a consent is to be acquired (see section 335). Section 327 contains further provisions (see subsection (2C) in favour of a deposit-taking body, which excuse or take out of the statute what would otherwise be an offence of converting or transferring criminal property under section 327(1)(c) or (d), where that deposit- taking body does the act merely in operating an account maintained with it and the value of the criminal property concerned is less than the threshold amount under section 339A of the Act, which is currently £250.
13. It is, of course, an essential part of this offence that here what is charged as the converting of criminal property is concerned with criminal property. Criminal property is defined in section 340 of the Act. Section 340, which is an interpretation section, reads as follows:

"(2) Criminal conduct is conduct which—

(a) constitutes an offence in any part of the United Kingdom...

(3) Property is criminal property if—

(a) it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and.

(b) the alleged offender knows or suspects that it constitutes or represents such a benefit."

Thus for the purposes of section 327 and indeed other sections of the Act, the mens rea of the offence charged is to be found set out in section 340 and consists in knowing or suspecting that the property concerned constitutes or represents criminal property, that is to say, a person's benefit from criminal conduct.

14. It was common ground in this case that the property concerned was a benefit derived from criminal conduct (section 340(3(b)) and the issue, in effect the dominant issue, for the jury was whether the appellant had the required mens rea of knowing or suspecting that the money constituted a represented, a person's benefit from criminal conduct (section 340(3)(c)).
15. A separate issue was nevertheless raised before the judge requiring his ruling as to whether there was any evidence before the jury of converting criminal property (section 327(1)(c)). It was submitted that the facts may have, indeed, it was accepted did constitute an offence under section 328 of the same Act, but that they there was no offence under section 327, where the actual lodging of the monies was done either by the disappointed buyers, who had been invited on the internet to put their money into the nominated bank account, that is the appellant's bank account, or in the case of the stolen and forged cheque had been done by Mr Butt. It was submitted that when the appellant had so to speak opened the keys to his account by allowing its use, both for the purposes of payments in and by giving Mr Butt the debit card and the PIN number for the purposes of permitting withdrawals, there was, in the use of those keys no act of converting criminal property committed by the appellant himself, only by others in a way which did not concern him.
16. Section 328 of the 2002 Act reads as follows:

"(1) A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person."

We are not concerned in this case with any attempt to define the width of section 328. We note in passing that it is primarily concerned with acquisition, retention, use or control of criminal property by or on behalf of another person, that is to say a person other than a person charged. It is concerned with the whole range of matters which might be described as being concerned in an arrangement which the defendant knows or suspects facilitates such acquisition and so forth. It might be noted that under that section a mens rea aspect enters twice, both in terms of criminal property, for the purposes of the definition of that property under section 340, but also because it has to be known or suspected for the purposes of section 328 that the arrangement will facilitate the acquisition and so forth of criminal property.

17. It is, of course, possible that that an offence under section 327 is also an offence under section 328 and vice versa. Whether that is so or not, what we are concerned with in this case is section 327.
18. The judge directed the jury in the following terms. He said that they would have to ask themselves three questions before they could convict. First of all, they had to be satisfied that the money deposited in the appellant's bank account was criminal property, which he defined for the purposes of that first issue in terms of a person's benefit from criminal conduct (the section 340(3)(a) question). As we have said, there was no issue before the jury in respect of that question. Secondly (although the judge referred to it in error as the third thing they had to consider):

"...was the money converted with the assistance of the defendant? That is to say, was the money legitimised by appearing to come from a source unassociated with the fraud by being deposited in the defendant's bank account and then withdrawn, that being a facility the defendant had made available to the fraudsters, he not being one of their number, nor aware of their fraud, and that he thereby played a part in the conversion by permitting his account to be used."

19. As to that question, there was no issue on the facts. The appellant had made clear in his own evidence, as we have described it earlier in this judgment, that he had played a full role in the use to which the monies in question had been put by being cycled into and then out of his account. But the issue had been raised with the judge, in the absence of the jury, as to whether, assuming mens rea, that could amount to converting criminal property within the meaning of section 327. The judge had ruled that it could. He ruled that the drafting of the counts was a fair and proper description of the behaviour alleged, which the appellant could understand and meet in presenting his case and that it amounted to converting.
20. The third issue, which was the real issue at trial, certainly so far as the jury was concerned, was put by the judge as follows:

"Finally, and most importantly (because this is the main issue of the case) ask yourselves whether the defendant knew or suspected at the time the deposits were made into his account in June and July 2006 whether they constituted the benefit arising from criminal conduct."

That was the issue of mens rea, with which we are no longer concerned (the section 340(3)(b) issue).

21. On this appeal Mr Crinion has raised again before this court the matters which he raised before the judge and which the judge had ruled on, on the second question. The essence of his submission is that because the lodging of the various deposits and their withdrawals were done by someone else, that is to say either by the would-be buyers or by Mr Butt, and because all that the appellant had done was to allow his account to be used in the way which he described in his own evidence, therefore he was not himself guilty of converting criminal property, even assuming the necessary mens rea. We do not agree with that submission. A person may lodge, receive, retain and withdraw monies from his account, each of which would amount to a converting of the monies concerned, and Mr Crinion does not suggest otherwise, by asking or allowing some other agent to do so. That other agent may have mens rea himself or may be an entirely innocent agent, but that does not prevent the owner of the account, who uses and operates his account, albeit with the help of an agent, innocent or otherwise, to be himself converting money which goes through that account by means of its operation in that way.
22. There are probably several instances of converting down the line as the money is paid in, received, retained and withdrawn, and at various stages transfers or changes its features from a chose of action owned by one person into a chose of action owned by another person. When money goes through an account it changes its nature from money likely to be owned by one bank but representing a debt owed to one creditor into money owned by another bank and representing a debt owed to another creditor. Finally, when that money is withdrawn in cash, if it is withdrawn in cash, it becomes transferred into cash into the hands of the withdrawer. So at each stage, in our judgment, as the property concerned passed through the appellant's account, it was being converted and the appellant, in allowing. The reference to converting criminal property in this statute is not necessarily a reference to the civil tort of conversion, but it cannot be far removed from its nature and, of course, conversion in the civil law is a broad tort which is essentially concerned with the taking or receiving or retaining or parting with someone else's property. When that is wrongfully done, it is a strict offence and requires no mens rea at all in the civil law, but only requires a dealing with someone else's property so as to question, deny or interfere with the owner's title to it. So it is seems to us that not only when these monies were lodged but also when they were credited to the appellant's account, when they were retained in it, and when they were withdrawn from it, all of which occurred with the full co-operation, knowledge, approval and authority of the appellant, there were successive acts of converting criminal property.
23. In this connection Mr Crinion had a fallback position, which was that since the lodging and/or withdrawal of the moneys were done by other people, such as Mr Butt, therefore, this amounted to a joint enterprise of converting and that this somehow was unfair, if that is not putting the submission too high, to the appellant, in circumstances where there was no reference in the indictment about this being done by the appellant "together with other persons unknown" or to joint enterprise. That, however, was not formally necessary, and even if it were formally necessary, it could, if there is no unfairness to be involved in it, be rectified by an amendment, even in this court, which we do not consider necessary. The appellant knew exactly what the case against him was and subject to his defence that he lacked the mens rea, and to the legal point raised on his behalf before the judge at trial, his case on the facts was clear in his own evidence and his real defence was that he lacked the necessary knowledge or suspicion, the point on which the jury's verdict went against him. In these circumstances we reject the submissions of law put before us and dismiss this appeal.