Money laundering – entering into an arrangement – s328 PoCA 2002
02 Oct 2012
Money laundering, Prosecutions Prosecutors are sometimes tempted, unwisely, to strain the meaning of statutory provisions in order to charge a defendant. There have been a couple of successful appeals recently against money laundering convictions under s328 Proceeds of Crime Act 2002 where a defendant has been charged with “entering into or becoming concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person”.
In effect the courts have held that this statutory provision should be given its natural meaning and not artificially stretched to cover situations which it had not originally been intended to encompass.
The Geary case
That concealment would have involved a criminal offence of conspiracy to pervert the course of justice
So in the case of R v Geary [2010] EWCA Crim 1925, the defendant was asked to ‘look after’ some money for a friend who said he was about to become involved in divorce proceedings. The intention was that this money would be concealed from the friend’s wife and from the divorce court. That concealment would have involved a criminal offence of conspiracy to pervert the course of justice. It was not disputed that Mr Geary had received over £100,000 from his friend and had returned it (keeping a few thousand pounds as payment for his services).
During his Crown Court trial the judge indicated that what Mr Geary was admitting amounted to the money laundering offence of entering into an arrangement contrary to s328. In the light of that Mr Geary changed his plea to guilty – but he subsequently appealed.
The Court of Appeal’s decisions
On appeal it was argued by the Crown that, even on the ‘facts’ as Mr Geary had understood them to be (in reality his friend had lied to him, he was not involved in a divorce – the money was part of the proceeds of a fraud which the friend was trying to launder by duping Mr Geary) the money became ‘criminal property’ in Mr Geary’s hands when he received it with the intention of concealing it from the divorce court. Therefore, the Crown submitted, Mr Geary had knowingly entered into an arrangement facilitating the retention of ‘criminal property’ by his friend.
To be caught by s328 the money had to be ‘criminal property’ before the arrangement affected it – not because the arrangement affected it
No, said the Court of Appeal.
To be caught by s328 the money had to be ‘criminal property’ before the arrangement affected it – not because the arrangement affected it. To put this another way, there was a difference between a plan to use lawfully acquired money in an unlawful way (which was what Mr Geary had in mind) and a plan to deal with unlawfully acquired money (which could amount to a money laundering offence under s328). In this case the money would only become ‘criminal property’ as a consequence of the arrangement, and that was not caught by s328.
But the Crown also submitted that, in that event, when Mr Geary returned the money to his friend it had by that stage become ‘criminal property’ and so Mr Geary was then guilty of a s328 offence.
It was not permissible to dismantle that arrangement into its constituent parts
Again the Court of Appeal said no. The ‘arrangement’ in this case was that Mr Geary should receive the money and later return it (or most of it) to his friend. It was not permissible to dismantle that arrangement into its constituent parts and then seek to base a conviction under s328 on only the later elements. With hindsight the prosecution could have charged Mr Geary with an offence of transferring criminal property contrary to s327 (which is another money laundering offence) in relation to the repayment to his friend, with better chances of success. But that had not been done.
So Mr Geary walked free from the court.
Mr Dare wins
In the second case the defendant, Mr Dare, met with a man named Mick (whom he knew to be involved in dealing in stolen cars) who offered to sell him a car for the bargain price of £800. Mr Dare thought he would be able to re-sell the car for £3,500 and, after taking the car for a test drive, asked Mick to give him some time to get the money together. In the event Mr Dare got £500 together and arranged to meet Mick again with a view to buying the car at that price.
But something intervened (presumably in the shape of the boys in blue)
But something intervened (presumably in the shape of the boys in blue) and the deal was never completed. Nevertheless Mr Dare was charged with, and convicted of, a money laundering offence under s328 on the basis that he had entered into an arrangement with the intention of facilitating the acquisition of criminal property by whoever ultimately bought the car off him.
On these facts Mr Dare could have been charged with handling stolen property, contrary to s22 Theft Act 1968, if he had actually received the car – but he did not receive it because the deal was never completed.
On appeal, Dare v Crown Prosecution Service [2012] EWHC 2074 (Admin), Mr Dare’s conviction under s328 was quashed. What Mr Dare had done was not something which, at the time, could be said to facilitate the acquisition of criminal property by another (who was at that time neither identified nor identifiable). What he had done was far too preparatory to be caught by s328 both because a price had not been agreed for his purchase of the car from Mick and because he had taken no steps to identify a prospective purchaser to whom he could sell the car on.
The lesson
The lesson from these cases seems to be that there are in reality sensible limits on the scope of the s328 money laundering offence of entering into or becoming concerned in an arrangement which facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person.
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