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Money Launderers and proceeds of crime


Following on from my previous blog looking back at the last year, I now deal with the recent decision of Allpress which considered the position of money launderers in light of the caveat expressed at the end of May that the position of money launderers might be different.

In brief, May and Jennings considered that the correct focus when considering the benefit obtained by a defendant is to look at what the defendant himself actually received applying the ordinary meaning of the language.  However, their Lordships in May warned that this might not be the case with regards to money launderers.  That issue has now been considered by the Court of Appeal in Allpress.

The appeal considered five joined appeals, three defendants who had acted as couriers for drugs money, one who had acted as custodian of criminal money, and one who had received money into a bank account in his name and effected transfers out on the instructions of another.

The court reviewed the recent authorities (May etc and Sivaraman in particular) and considered a submission by the prosecution that the directives in May didn't apply in respect of cash, nor in relation to cases under POCA. The court rejected both submissions. 

The key issue to consider in each case was, the Court stated, whether the defendant obtained an interest in the property beyond mere possession, but a limited interest in property may suffice in certain circumstances.

The Court concluded that in the case of a cash courier and a cash custodian, if the defendant's role in relation to property connected with his criminal conduct whether in cash or otherwise, was to act as courier on behalf of another, such property does not amount to property obtained by him under POCA s80(1), CJA 1988 s71(4) or to "payment or other reward" under DTA 1994 s2(3).  Accordingly, four of the appeals were allowed, and in the case of three were substituted with confiscation orders in amounts equal to the actual payments received for their role as couriers.

The position of the money launderer through the bank system was considered to be different however.  As such, if monies are paid into a bank account in the defendant's name and under his actual control, then he does obtain those monies and the benefit figure will be the total received.  The court specifically upheld the decision in Sharma in which the defendant had received money into a company bank account for which he was signatory and was held to have obtained the full amount of monies received into the account. 

The court specifically stated, however, that this did not exclude the case where money was paid into an account in the defendant's name but which in reality was operated entirely by another for that other's benefit, in which case, unusually, it may be that the defendant does not obtain the monies into the account.  The court stated that it thought such a situation would more likely to arise in a domestic rather than a commercial context, for example a husband who uses an account in his wife's name for his sole benefit and the wife is a mere nominee.

The court stated that the position of the bank account launderer was no different to that of a dishonest money changer who received monies and agreed to transfer an equivalent amount to an offshore account in a different currency.

That is all well and good, but there seems to be little difference between the custodian who receives cash and stores it for another before handing it back and retaining or receiving a small sum as his reward for his services, in which case the custodian would likely be held to have benefited just by the amount of the reward or fee; and the defendant who pays the money into a bank account and transfers funds out at the direction of another and retains or receives a small fee for his services, in which case Allpress suggests the latter obtains the full amount paid into the account and not just his fee retained at the end. 

It seems to me that this is a rather artificial distinction, and would seem to be one of the complexity of the storage or laundering, something that can be reflected in sentence rather than really an issue of obtaining benefit. There is nothing stopping the custodian who receives a holdall of cash from using the cash in his possession as if it were his own, anymore than the launderer who receives the money into his bank account.

It may be that such a situation is what the court envisaged when it considered the position of someone acting as a mere nominee. However, the reference by the court to this being more likely in a domestic situation, and the apparent limited circumstances that this would apply to, ie where the account is operated solely for the benefit of the other, suggests that this might not be the case.

So, what of the offender who agrees to accept money into his account on the understanding that he will then either transfer it straight on to another account in the principal's name, or to withdraw it in cash and pay it to the principal, in return for which he receives or retains a fee for his services?  Allpress suggests that the benefit will be the full amount received, and not just the fee received for his services. 

Again, there seems to be little real difference between the courier who receives cash, carries it abroad and pays it on to another, receiving a fee for his services, yet this situation was precisely that of three of the defendants who were successful in Allpress

The position seems somewhat confused and it is likely that 2009 will see further appeals coming before the court and perhaps clarifying the position further.  I guess it is a case of "watch this space"...or rather the Court of Appeal...

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