A new client who had already pleaded guilty to large-scale money laundering and agreed a substantial confiscation order approached Mr Khan after becoming unable to pay the amount demanded under the Proceeds of Crime Act 2002.
The original POCA proceedings had concluded while the client was represented elsewhere. On reviewing the case, concerns arose that the calculations and asset valuations used to determine the client’s available amount were inaccurate.
An application was made to revisit the amount payable. Fresh professional reports were obtained concerning the true value of the relevant assets. Following consideration of that evidence, it was accepted that the client’s available amount should be reduced considerably. The reduction amounted to hundreds of thousands of pounds, and a certificate of inadequacy was granted.
What is the “available amount” in POCA proceedings?
A confiscation order may distinguish between the benefit attributed to criminal conduct and the assets actually available to meet the order. The available amount can include money and property held by the defendant, subject to the statutory rules.
Asset valuations can therefore have major consequences. Property, business interests and other assets may have been valued incorrectly, may have fallen in value or may not be realisable in the way originally assumed.
What is a certificate of inadequacy?
Where the assets genuinely available are inadequate to pay the outstanding confiscation order, an application may be made to the Crown Court under section 23 of the Proceeds of Crime Act 2002. If the statutory requirements are satisfied, the court may substitute a lower amount that it considers just.
This is often referred to as an application for a certificate of inadequacy. It is not an opportunity simply to renegotiate an order or avoid payment. The application must be supported by reliable evidence demonstrating why the available amount is inadequate.
Why updated expert valuations were decisive
In this case, new reports were commissioned to assess the client’s assets properly. The evidence showed that the figures relied upon in the original proceedings did not reflect their correct value.
A detailed POCA review may require:
- independent property or business valuations;
- Land Registry, mortgage and secured-lending records;
- company accounts and shareholding evidence;
- evidence of third-party ownership or beneficial interests;
- information about sales, market changes and realisation costs; and
- a clear reconciliation of payments already made.
Once the updated valuation evidence was considered, the substantial reduction was conceded. The resulting variation removed hundreds of thousands of pounds from the amount treated as available for repayment.
The CPS Proceeds of Crime guidance explains that, where the Crown Court finds the available amount inadequate, it may substitute the amount it considers just.
Unable to pay a confiscation order?
Contact Ghafar Khan promptly if a POCA confiscation order was based on incorrect valuations or the available assets cannot meet the amount outstanding. Mr Khan is a Criminal Defence Solicitor and High Court Advocate experienced in money laundering, confiscation and complex financial evidence.
See our money-laundering solicitor page and selected cases involving Ghafar Khan.
24/7 mobile: 07500 556587
Telephone: 03330 110 210
Email: notguilty@ghafarkhan.com
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This anonymised summary is general information and not advice on an individual confiscation order. Section 23 applications are fact-specific and require evidence. A previous outcome does not guarantee a future result.