Zenith Crime Current Awareness

Proportionate Confiscation Orders and Hidden Assets – R v Gricevicius [2018] EWCA Crim 1061

5 June 2018

Jonathan Holsgrove

The Court of Appeal has produced a useful review of the applicable principles where a court is dealing with hidden assets.

The Defendant appealed the confiscation made following his conviction for his role in a conspiracy to supply significant amounts of drugs nationwide.  His role was for a period of 10 months during which he supplied 6kgs of cocaine each month at a cost of £39,000 per kg to a gang in the West Midlands.  The Crown calculated the benefit with reference to this particular criminal conduct and the benefit was fixed at £2.34million.  Despite warnings from the Judge the Defendant did not give and did not call any evidence aside from providing a document that stated he did not have any property in Lithuania.  The Judge held that there was significant evidence of hidden assets.  He Found:

(a)  £2.34m had passed through the Defendant’s hands in cash with no explanation as to what had happened to it.

(b)  The Defendant was close to the source of importation and was a Lithuanian national.  It would not be hard for him to have assets in Lithuania or elsewhere.

(c)  There was evidence of a cash-rich lifestyle with no corresponding withdrawals from the Defendant’s known accounts.

(d)  There was no legitimate income.

(e)  The use of overdrafts did not support the contention of hidden assets.

The Judge assessed the available amount as £2.34m and in doing so rejected any argument that the available amount should be reduced to account for the cost of purchasing the drugs.

The Defendant appealed on the basis that the confiscation order was disproportionate because no consideration had been given to the likely costs of the drug trade and the actual profit of the Defendant’s drug dealing.  Further the failure to give evidence did not entitle the Court to simply make an order in the sum of the benefit.  Reliance was placed on R v Waya and R v McIntosh.

The Court of Appeal in dismissing the appeal held:

(a)  The legislation is intended to deprive defendants of the benefit they have gained whether or not they have retained that benefit – R v May.  There was no challenge to the Judge’s quantification of benefit and nor could there have been.

(b)  There is no requirement under section 7 POCA for the available amount to derive from the sums obtained through crime.  The aim is to recover the benefit obtained – R v Harvey.

(c)  The Judge had been entitled to find that there were hidden assets available and these equated to the benefit figure.  There was no explanation given by the Defendant at all to quantify his available assets.

(d)  The legislative focus is on the proceeds of crime and not the profits of crime.  R v Waya endorses this approach as being proportionate.

(e)  The Judge had properly considered all the relevant circumstances of the case when assessing proportionality.  The Judge was justified in reaching the conclusion he did.

This case provides a useful review of the interaction of the principles of proportionality and hidden assets when assessing the available amount.  In addition it provides a remainder that POCA in this jurisdiction is draconian and has a very clear purpose.  The onus is very much on a defendant to provide proper evidence of their available assets to discharge the burden on them.  Those that fail to do so risk orders of this type.

Current Awareness

By the Crime team