Money Laundering – Essential Facts No:1

29 Nov 2012

The globalisation of crime has led to an increase in specialist and sophisticated
money launderers, exclusively providing services of transferring and concealing
criminal property . Such money laundering allegations are now all too familiar.
But how does the prosecution prove that “criminal property” has been generated
through unlawful activity when no predicate crime is alleged on the indictment?

Such a situation may arise either on account of insufficient evidence on which to charge the predicate offence, or simply because the defendant is alleged to be a “free standing” money launderer.

The current legal position was set out in R v Anwoir [2008] 2 Cr. App. R. 36, which considered a number of not entirely consistent and satisfactory authorities. The principle espoused by the Court can be swiftly summarised: the Crown can prove that the “criminal property” has been generated from unlawful activity in one of two ways

i. By showing that it derives from conduct of a specific kind; or
ii. By relying on the circumstances in which the property was handled, from which an “irresistible inference” can be drawn that the property could only be derived from crime.

Although the test adopted in Anwoir has received some criticism, none the less the law now seems to be settled: the House of Lords has twice refused leave to consider the issue, after it was certified as a point of law of general public importance by the Court of Appeal.

‘Criminal property’ is defined by section 340 (3) of POCA 2002:

Property is criminal property if—

a) it constitutes a person’s benefit from criminal
conduct or it represents such a benefit (in whole or part and whether directly
or indirectly), and
b) the alleged offender knows or suspects that it
constitutes or represents such a benefit.

“Property” includes:

a) money;
b) all forms of property, real or personal, heritable or moveable;
c) things in action and other intangible or incorporeal property.

The appellants in Anwoir were alleged to be money laundering through a money exchange bureaux. In recorded conversations the appellant McIntosh made reference to having previously laundered the proceeds of MTIC fraud through a bureau de change managed by Meghrabi, one the other appellants. There was no direct evidence that some of the monies referred to by McIntosh during the course of conversations were the proceeds of drug trafficking.

The Crown also relied upon the substantial amounts of money that were passing through the bureau de change (Express FX), at which Anwoir worked and which was managed by Meghrabi. The turnover of the business, which had increased from £70,000 to £50 million within two and a half years after its purchase.

Post-Anwoir

Anwoir has been followed by two reported cases. In both the Crown appealed against terminating rulings on submissions of no case to answer, which had been given prior to the reporting of Anwoir. The facts of the first, R v F [2008] EWCA Crim 1868, concerned a couple that had been stopped at an airport, carrying over a million ounds in cash. On initial questioning about their bags, one of the defendants initially denied that she had any money in her main luggage. The Court held that there was clearly material present on the facts upon which a jury could be sure that the property had a criminal origin. In response to a submission that it was “procedurally unfair” to allow the trial to continue past the prosecution’s case, the Court said “We can see no procedural unfairness arising out of the fact that the prosecution at this stage is unable to point to any particular criminality.” (para. 8).

In the second case, R v MK [2009] Crim. 952, the two respondents had been seen at a supermarket car park. MK who was wearing a latex glove, flashed his head lights at AS who then approached MK’s car. He then went back to his own car, retrieved a blue carrier bag, before returning to MK’s car to return the bag. After their arrest the bag was found to contain £22,000. The Court, perhaps not surprisingly, on application of Anwoir, held that the circumstances of the money transfer were such that a jury could draw an irresistible inference that the money was from criminal activity.