Proceeds of crime relates to the money or assets gained by criminals whilst undertaking criminal activities and money laundering. The Crown Prosecution Service, have the power to confiscate such assets under the Proceeds of Crime Act 2002.

There are three primary offences under the Proceeds of Crime Act 2002, which are:

Concealing

Concealing is where someone knows about or suspects money laundering but aims to cover up its existence. Someone commits this offence if they do any of the following:

• Disguise criminal property. For example, by placing funds sourced from illegal activity into a gambling account and then removing the funds at a later date.
• Conceal criminal property. For example, by placing funds sourced from illegal activity into a bank account.
• Transfer criminal property. For example, transferring the funds sourced from illegal activity between various bank accounts.
• Convert criminal property. For example, by purchasing a property with funds sourced through illegal activity.
• Remove criminal property from the UK. For example, by taking the illegal funds overseas.

This form of offence usually takes place at the placement and layering stage of money laundering. These stages involve integrating illegally sourced funds in a legitimate financial system, such as a bank, and covering up the source of the funds by buying and selling assets and transferring funds between multiple bank accounts.

Arranging

This form of offence involves people who launder money on behalf of others. This offence typically occurs at the layering and integration stage of money laundering. These stages include moving the ‘dirty money’ sourced from illegal activities with legitimate funds to hide the true origin and returning the ‘cleaned’ money to the launderer from a seemingly legitimate source.

Usually, this form of an offence under the Proceeds of Crime Act 2002 will catch people in financial or credit institutions, such as accountants, who help a criminal launder their money.

Acquisition, use and possession

This form of offence is where someone looks to benefit from money laundering by:

• Acquiring criminal property;
• Using criminal property; or
• Possessing criminal property

  Proceeds of Crime Act 2002 maximum sentence?
  The maximum sentence you can receive for a Proceeds of Crime Act offence is 14 years imprisonment. However, the sentence you will receive depends on a combination of factors such as your culpability and the amount of money involved.

• Culpability

  Culpability is split into three categories, which are:

  • Category A – high culpability. This category is for people who play a leading role in criminal activity. For example, they have shown evidence of significant planning, pressure to gain the involvement of others, among others.
  • Category B – medium culpability. This category is for people who play a key role in criminal activity. However, they’re not the mastermind.
  • Category C – lesser culpability. This category is for people who were forced into playing a part in the criminal activity, but lacked the understanding of the extent of the criminal activity and was not motivated by personal gain.

  Money involved

  Furthermore, the amount of money involved in criminal activity also plays a part in the sentencing for an offence. 

  The first step in the Proceeds of Crime Act process is to determine how much a defendant should pay under a confiscation order. To do this, there are two figures which need to be calculated – the benefit figure and the available amount.

  Using the benefit figure and the available amount, a final figure known as the recoverable amount is calculated. The confiscation order is then made in the sum of the recoverable amount.

  A confiscation order is an order of the Crown Court which calls for a convicted defendant to pay a particular amount of money to immediately or within a fixed period.

  What if I can’t pay the confiscation order?

  The confiscation can be extended to 6 months in total if the convicted defendant shows to the court within a year of the confiscation order being made that there are exceptional circumstances.

  The starting point is that the recoverable amount is an amount equal to the defendant’s benefit from his criminal conduct. Therefore, as a starting point, the benefit figure is the recoverable amount. However, if the available amount is less than the benefit figure, the recoverable amount is equal to the available amount.

  Example of a Proceeds of Crime Act Confiscation

  • A defendant is convicted of supplying drugs. The benefit from this defendant’s criminal conduct is found to amount to £1 Million. The benefit figure is therefore £1Million.
  • The defendant has assets of £5 Million. The available amount is therefore £5 Million.
  • The recoverable amount, in this case, is £1 Million. This is because the recoverable amount is equal to the benefit figure.
  • The defendant cannot be required to pay more than he has benefited from his criminal conduct.

  
  What is a POCA Court Hearing?

  A POCA court hearing may take place if no agreement can be reached regarding the defendant’s financial benefit and amount to be confiscated. Before a POCA court hearing takes place, evidence will be gathered from the defendant, a Proceeds of Crime Act lawyer, experts, and third parties.

  What is the Proceeds of Crime Act Negligence Test?

  The Proceeds of Crime negligence test means that someone working in a sector (eg. banking or other financial services) can be convicted for neglecting to report money laundering if there are “reasonable grounds for knowing or suspecting” that it is going on in their place of work. If a person fails to report fraudulent activity, they could face five years in prison.

  Proceeds of Crime Act Sentencing

  Proceeds of Crime Act sentencing for offences varies depending on the amount of money ordered to be paid under the confiscation order. A default sentence is set by the court in the event that the defendant doesn’t meet the terms of the confiscation order. These maximum terms and default sentences are as follows:

  Amount of Money Ordered to be Paid	Maximum Term for Proceeds of Crime Act Sentencing
  £10,000 or less	6 months
  More than £10,000 but no more than £500,000	5 years
  More than £500,000 but no more than £1 million	7 years
  More than £1 million	14 years

  If you are being investigated under the Proceeds of Crime Act and would like professional advice please call us on  01207.437710