Challenging the prosecutor's section 16 statement

The prosecutor's section 16 Proceeds of Crime Act 2002 (PoCA 2002) statement is a key document in confiscation proceedings. In preparing it, the prosecution will have considered information from a number of sources. These may include:

• details of the offence or offences of which the defendant has been convicted;

• the evidence at trial and other information collected during investigation of the offences;

• information provided by the defendant in any statement under section 18 or in response to any requirement in a restraint order under section 41 (7);

• information obtained from banks and others;

• and the results of the prosecution's own investigations - probably undertaken by an accredited financial investigator.

No two section 16 statements will be the same though they all have some similarities. In any event it will need careful study.

The statement is likely to include some background narrative which sets the confiscation proceedings into context, including information about the defendant and his known legitimate income. The defence team will wish to challenge any incorrect factual assertions in that narrative, but this is not at the heart of the statement.

The statement will then provide some details about the financial investigations undertaken and their findings, as the basis to the prosecution assertions about the defendant's 'benefit' and 'available amount'.

The first element of the defendant's 'benefit' which the statement will deal with is the 'benefit' of the offences of which the defendant has been convicted.

If the prosecution assert that the defendant has a 'criminal lifestyle' then the statement will also deal with additional assumed 'benefit' which arises under the statutory assumptions of section 10 of PoCA 2002.

Typically the prosecution will have obtained bank and credit card statements for all known bank and credit card accounts held by the defendant and will have reviewed all deposits to those accounts since the 'relevant day'.

Then the prosecutor's statement will deal with the defendant's 'available amount'. This is normally the current market value of the defendant's assets, less any mortgage or other liability which is secured on those assets, plus the current value of any 'tainted gift' which the defendant has made.

The statement may conclude with a table of maximum default sentences applicable where a confiscation order remains unpaid.

 

Challenging the statement

The defence will wish to scrutinise in detail the prosecution assertions in relation to both the defendant's 'benefit' and his 'available amount'. The focus of the defence challenge to the prosecutor's figures will depend very much on the details within the statement.

In relation to the 'benefit' of the offences of which the defendant has been convicted the defence will wish to consider the existence of the asserted 'benefit'; whether it has been 'obtained' by the defendant himself, solely or jointly; and whether it is correctly valued.

Where the defendant has been a member of a conspiracy it will be necessary to ascertain the amount 'obtained' by this particular defendant, solely or jointly, in his role in that conspiracy.

Regarding the assumed 'benefit' the defence will wish to consider the following:

• whether the criteria for a 'criminal lifestyle' have been met;

• whether the 'relevant day' has been correctly identified;

• the existence of the asserted receipts, expenditures and assets of the defendant himself (which may involve detailed examination of bank accounts and consideration of 'lifting the corporate veil');

• any evidence of the legitimate nature of those receipts and legitimate funds used to finance those expenditures;

• any overlap or double counting; and

• the valuation of the various items reflected in the assumed 'benefit'.

In relation to the asserted 'available amount' the defence will consider the existence of the assets, the ownership of them by the defendant himself so as to exclude any legitimate interests of third parties, the current market value of those assets and the amount of any liabilities secured on those assets.

Particular difficulties may arise where the 'available amount' is said to include any 'tainted gifts' or 'hidden assets'.

Ultimately the defence will also wish to consider whether the use of the statutory assumptions involves a 'serious risk of injustice' or the confiscation order sought by the prosecution would be 'disproportionate' and so infringe the defendant's human rights.

 

Forensic accountants

A forensic accountant may be able to assist the defence in challenging a number of aspects of the statement, and may be better placed than the solicitor to undertake detailed examination of the figures and financial documents underlying the prosecution's assertions.

The cost of a forensic accountant's report will normally be met by criminal legal aid under prior authority arrangements.

As a first step it is advisable to ask the forensic accountant to provide a fee quotation (to be forwarded to the Legal Aid Agency with an application for prior authority). In order to prepare his quotation the forensic accountant should ideally be provided with a copy of the body of the prosecutor's statement, an approximate page count of the appendices to that statement, a copy of the defendant's section 18 statement, any advice which may have been obtained from counsel in relation to the section 16 statement, and a note of the court timetable.

Where the appendices to the statement include spreadsheets it is usual to ask the prosecution to supply electronic copies of the excel spreadsheets (as excel files not PDFs) either on disc or as email attachments.

Once the prior authority has been obtained the forensic accountant's work can get underway.

David Winch is director of Accounting Evidence, a forensic accountants specialising in crime and proceeds of crime www.accountingevidence.com