England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE CROWN COURT AT SOUTHWARK
HIS HONOUR JUDGE ROBBINS
T20090295

		Royal Courts of Justice Strand, London, WC2A 2LL
		31 January 2013

Mr Justice Eady :

1. On 28 April 2009 in the Crown Court at Southwark, before His Honour Judge Gledhill QC, this Appellant, who is now aged 73, pleaded guilty to entering into or being concerned in a money laundering arrangement contrary to s.328(1) of the Proceeds of Crime Act 2002 (Count 1 on the indictment) and to possessing criminal property contrary to s.329(1)(a) of the same statute (Count 2).
2. On 2 June 2009 he was sentenced by His Honour Judge Goymer to 18 months' imprisonment on each count concurrent. After considerable delay, on 25 October 2010, a confiscation order was made in the sum of £326,906.74 by His Honour Judge Robbins. A period of three years' imprisonment was to be served consecutively in default. The Appellant was given six months to pay, although that period was subsequently extended to 25 August 2011. He now appeals in respect of the confiscation order by leave of Nicola Davies J, who also granted the necessary extension of time.
3. The background may briefly be summarised on the basis of the prosecution "note for sentence" prepared for the hearing before Judge Goymer. The Appellant had been involved in laundering part of the proceeds of an international "boiler room" fraud. The value of his services in this context was in large measure attributable to his lack of any previous convictions.
4. The scheme worked on the basis that shares were purportedly sold to gullible investors which were said to have a restriction attached preventing them being traded on the market for a specified period. Once the shares had been purchased, the unfortunate investor would then be contacted by someone offering to purchase them at an attractive price. This could only be achieved, however, on the basis that the investor would pay to the "trader" a fee per share to achieve the removal of the supposed restriction. The proposal was attractive to the relevant victims because they would appear to have the opportunity of making a substantial profit.
5. The fraud involved creating the impression that the relevant "trader" was operating from a respectable address, in the United States, and had apparently genuine letterheads and a website. They were in fact offshore front companies which existed only for the fraudulent purposes. Once the relevant fee had been paid, supposedly to achieve the necessary de-restriction, the trader would disappear from the scene and the payment would actually achieve nothing.
6. Some of the proceeds had been paid into various bank accounts set up by this Appellant. He had 16 accounts with the Borehamwood branch of HSBC and one account at the Edgware branch of the NatWest Bank. Enquiries revealed that eight of the accounts, at least, had received some of the proceeds. It appeared that a total of £1,096,818.90 had been transferred to those accounts, much of it thereafter being passed on to others. This was the criminality to which Count 1 on the indictment related.
7. Following his arrest, £1,080 was found in the glove compartment of the Appellant's car and a further £90,130 discovered in a safe deposit box. Count 2 related to this last item.
8. When originally interviewed, the Appellant claimed that he had been approached by two Romanians in 2007, while he was on a cruise, and they asked him to set up a business account to assist them in running a property business. He was to receive the difference in the currency exchange rates. He was unable to say how much he had received in the course of the fraudulent activity. In a subsequent interview, he made no comment. In due course, however, a basis of plea was offered to the effect that (on Count 1) his personal gain was "significantly less" than the total of the sums entering his accounts and (on Count 2) that £20,000 represented "his own money from a legitimate source(s)". But these proposals were not acceptable to the Crown.
9. When granting permission to appeal, the single judge observed that it was "unfortunate that the sentencing judge did not conduct the confiscation hearing", although Judge Robbins does not appear to have been at any significant disadvantage in this respect, since he heard evidence from the investigating officer and from the Appellant himself. He had fuller information than that available to Judge Goymer, who had to sentence on the basis of certain assumptions. It is to be noted that at the hearing a concession was made on the Appellant's behalf as to the benefit obtained. Subject to one point of double counting, there was no reason for the judge or for this court to go behind that concession.
10. Judge Robbins arrived at a benefit figure of £1,257,275.14 consisting of three amounts. It was accepted that a figure of £1,096,819.20 had been received into the eight tainted accounts. Secondly, there was the £90,130 recovered from the security box. Thirdly, there was a sum of £70,325.94 representing unexplained deposits into untainted accounts (but in respect of which the Appellant was unable to rebut the presumptions raised pursuant to the statutory criminal lifestyle provisions). As it happens, one of the grounds raised on appeal before this court is that there had been double counting of the sum recovered from the security box and that is conceded by the Crown. It is thus accepted by the Crown, for the purposes of this appeal, that the benefit figure as found by the Judge should be correspondingly reduced to £1,167,145.14. Accordingly, as it soon emerged, the substantive point raised on the appeal was in relation to the Judge's assessment of the available funds rather than the benefit received. As we have noted above, the Judge had ruled that the available amount was £326,906.74 and it was in respect of this sum that the confiscation order was made. The amount currently outstanding is £157,605.99.
11. There were four grounds of appeal in respect of which the single judge gave permission. The first, however, related to benefit. It is now claimed that the Judge erred in finding that the Appellant had obtained, for statutory purposes, the entirety of the sums paid into the laundering accounts. Since a concession was made at the hearing before Judge Robbins, however, it is not appropriate for this court to go behind it.
12. The second ground related to the double counting of the sum of £90,130 which is conceded by the Crown. The corrected benefit figure is set out above.
13. The third ground is based on the proposition that the Judge erred in finding that the available amount included hidden assets in the sum of £141,119.91. The essential complaint is that the sums in question had passed out of the Appellant's control and been forwarded to others engaged in the fraudulent activity, at whose behest the Appellant had been holding the relevant funds, and that the Judge should have therefore found them to be irrecoverable. The burden lay upon the Appellant: see s.7 of the 2002 Act and generally Archbold at 5-1057.
14. The fourth ground is that the Judge is said to have erred in finding that the available amount included sums allegedly expended on gifts to a former girlfriend equivalent to £14,550.
15. The Crown's opposition to the third and fourth grounds is simply that there is no basis for challenging the Judge's findings on the evidence as being either unjust or disproportionate. It is upon these arguments that we now briefly focus.
16. The transcript of the ruling makes clear what the Judge found, as to the funds available, in the light of the documents before him and the oral evidence of the Appellant himself.
17. The tone was set by the following general observation:

"I cannot accept Mr Druce's evidence as reliable. It is grossly inadequate as far as any explanation is concerned about expenditure. I therefore plan to reject his evidence and I do."

18. The Judge went on to accept that the "hidden assets" stood at £141,119.91. He also accepted the evidence relating to the "tainted gifts" in the sum of £14,500.50. It is not clear to this court upon what basis it is suggested that these were impermissible conclusions.
19. It is necessary to consider how the supposedly hidden assets were addressed by the Appellant in the course of his evidence:

"Q. However, there is £141,000 in cash which the prosecutor cannot explain. Can you explain where the £141,000 in cash has gone?

A. I can't explain. That I cannot explain.

… "

It was suggested by the Appellant, when asked about the modus operandi of the offence, that he sometimes passed money to unidentified people he met in car parks. He suggested, in rather vague and general terms, that from time to time he would take money out of one or other of the accounts in cash and hand over (say) £5,000 in an envelope. There would usually be "two guys there". One of them would count the money and the other would give him £500 (i.e. the suggestion was that he was receiving 10%). He was then asked:

"Q. … Given what you have just told the court, are you able to suggest where some of this £141,000 may have gone?

A. No, I can't.

Q. Is it possible that some of the £141,000 was the money that was given to these gentlemen in the car parks?

A. I should imagine so. I never really checked it out. I wasn't so involved. I was just the pawn in a small, small game.

Q. Mr Druce, how much money did you receive into your accounts that you took out in cash, do you think, you kept or spent on yourself?

A. Well, the fee was given between £40,000 and £50,000 altogether. That's what I remember from the court case which my lawyer said would be between 40 and 50. That was at the time and a lot of water has flowed under the bridge since then."

Despite being led by his counsel, on a number of occasions, the Appellant gave no positive evidence as to how much, if any, of the £141,000 in hidden assets had been disposed of – either by way of personal expenditure or by being passed to those involved in the fraudulent conspiracy. As to the amount of his own receipts, he agreed in cross-examination that his estimate of £40,000 to £50,000 by way of personal receipts was simply based on something he was told to put down by his lawyer (" … so I agreed to that and of course signed it").

20. In re-examination, his then counsel made another attempt to extract an explanation about the hidden assets by a series of leading questions. With reference to the figure of £141,00, counsel asked:

"Q. … Is it likely that the remaining money can be explained as money that was given to the men in the car park?

A. A possibility."

21. In view of the quality of the evidence before him, it is difficult to see how the Judge could have come to any other conclusion. No attempt was made to explain what happened to the £141,000. Subsequently, the Appellant has applied through counsel to admit a fresh affidavit, in which he seeks to explain to some extent why his earlier evidence was (in the words of his own counsel) "woeful". This court, however, rejected the application. There is no rational basis upon which to admit a witness's statement for the purposes of trying to explain away the inadequacies of his earlier evidence. We had read the evidence before the ruling was given, but we have ignored it in coming to our own conclusion.
22. Accordingly, we (like the Judge) must make our assessment on what the Appellant said in the course of his oral evidence in October 2010.
23. As to the gifts to the former girlfriend, there is no doubt that it would have been proper for the Judge to take into account any evidence of irrecoverability and to make a finding accordingly. In the event, nothing was put forward and he did not do so. We can see no reason, in all the circumstances, why this court should conclude that the Judge was in error in this respect either. His determination was neither unjust nor disproportionate.
24. Accordingly, this appeal will be allowed to the limited extent that the benefit figure will be reduced in accordance with the concession. In all other respects the appeal is dismissed. We were invited in written submissions to consider an adjustment to the default period, but we see no reason to vary it.