1  On 5 March 2010, Raj Arjandas Bhojwani was convicted before the Royal Court on three counts of money laundering contrary to Art 34(1)(b) of the Proceeds of Crime (Jersey) Law 1999 (“the 1999 Law”). On 25 June 2010, he was sentenced by the Superior Number of the Royal Court to six years imprisonment on each count, to run concurrently.

2  Mr Bhojwani had been arrested at Heathrow Airport on 8 February 2007 whereupon he was brought to Jersey where, following a two week remand in custody, he was released on bail, one of the conditions of which was the he remain in Jersey. He was then indicted before the Royal Court. Between February 2007 and the close of trial in March 2010, there were numerous hearings before the Royal Court, two hearings before the Court of Appeal and one before the Privy Council. To the date of trial, the case spawned 32 reasoned judgments, often on multiple subjects. Since trial, there have been two more reasoned decisions of the Royal Court and one from the Court of Appeal.[1]

3  To anyone seeking to understand the details of the case, the sheer number of judgments, let alone the complexity of some of the subject matter, presents a daunting task. This article is intended to assist such a task by explaining the route the case took and highlighting the legal points in issue. It is not intended to be a critique and with a few exceptions will not seek other than to record what transpired.[2] As will become apparent, clarity is better achieved by addressing this task by subject rather than in a strictly chronological order.

4  As we shall see, the offence under art 34(1)(b) is not straightforward to understand or apply. This state of affairs was compounded by the facts alleged in the case. It was alleged by the prosecution that Mr Bhojwani had been criminally involved in two contracts in 1996 and 1997 between a company he owned and the Federal Government of Nigeria. Both contracts were executed during the presidency (a military dictatorship) of General Sani Abacha. Both contracts concerned the supply of a large number of military vehicles to Nigeria. And both contracts were alleged to have involved senior Nigerian government officials, including General Abacha. It was alleged that Mr Bhojwani had been involved in the inflation of the contract prices in order to pay the monies so obtained by way of kick-backs to certain parties connected with the Abacha regime. Both contracts involved a significant amount of money. It was alleged that the illegal inflation of the contract prices was in the sum of $130 million. The contract monies were received into a Jersey bank account at the Bank of India Jersey in 1996 and 1997 and significant sums were then paid out to accounts in other jurisdictions. These accounts were alleged to be linked to people in the Abacha regime. Two of these accounts in Switzerland bore the name “Kaiser” and “Seuze”, respectively, said to draw their names from the elusive criminal mastermind in the Oscar-winning 1995 film The Usual Suspects.[3]

5  The 1999 Law came into force on 1 July 1999. Prior to that date, the only money laundering offences in Jersey related to monies derived from the proceeds of drug trafficking and terrorism. The 1999 Law ushered in an all-crimes money laundering regime.

6  In the week beginning 23 October 2000, Mr Bhojwani closed the bank accounts at Bank of India Jersey which contained a residue of monies received from the 1996 and 1997 contracts. On his instructions, the balances were converted into Bankers Drafts which were then sent by courier to London on 25 October. They returned to Jersey on 2 November at which point the monies were credited to other accounts linked to Mr Bhojwani. These actions formed the basis of the three counts alleged against Mr Bhojwani, namely that he had converted, removed and converted again his proceeds of crime.

7  The catalyst for these actions, alleged the prosecution, was a number of articles in The Financial Times, dated 20 October 2000, which revealed large scale efforts by Nigeria to recover monies unlawfully taken from State funds during the Abacha regime by and on behalf of General Abacha and those associated with him. The articles revealed that Nigeria was seeking the assistance of a number of jurisdictions around the world which had received or processed funds. They recorded that Jersey had “frozen” an account and that Switzerland had identified the “Kaiser” and “Seuze” accounts as recipients of funds. These articles, said the prosecution, must have been read by Mr Bhojwani and could be the only explanation for his subsequent closure of accounts and removal of funds. Furthermore, he had taken these actions to avoid a Jersey prosecution for a serious offence and/or a Jersey confiscation order consequent upon a Jersey conviction.

8  Mr Bhojwani denied the allegations and pleaded not guilty to the charges.

Article 34(1)(b) and its interpretation

9  Article 34(1) reads as follows—

“(1) a person is guilty of an offence if the person—

“(a)       conceals or disguises any property that is or in whole or in part represents the person’s proceeds of criminal conduct; or

“(b)       converts or transfers that property or removes it from the jurisdiction.

              for the purpose of avoiding prosecution for an offence specified in Schedule 1 or the making or enforcement in the person’s case of a confiscation order.”

10  “Criminal conduct” is defined in art 1 as follows—

“‘Criminal conduct’ means conduct, whether occurring before or after Article 3 comes into force, that—

(a)     constitutes an offence specified in Schedule 1; or

(b)     if it occurs or has occurred outside Jersey, would have constituted such an offence if occurring in Jersey”.

11  Schedule 1, after setting out the articles to which it applies, is in the following terms—

“OFFENCES FOR WHICH CONFISCATION ORDERS MAY BE MADE

Any offence in Jersey to which a person is liable on conviction to imprisonment for a term of one or more years (whether or not the person is also liable to any other penalty) but not being—

(a)     any drug trafficking offence; or

(b)     an offence under any of articles 15 to 18 of the Terrorism (Jersey) Law 2002.”

12  There are thus three ingredients to the art 34(1)(b) offence with which Mr Bhojwani was charged, namely: (1) conversion or removal of (2) property that represents the defendant’s proceeds of criminal conduct (3) for the purpose of avoiding prosecution for a serious Jersey offence or the making or enforcement of a Jersey confiscation order or both. On the facts alleged in this case, the conduct which was said to have generated the necessary “proceeds of criminal conduct” occurred in Nigeria (the “predicate conduct”). To come within the definition of “criminal conduct” for the purposes of the offence, the prosecution must show that if the predicate conduct had occurred in Jersey, it would have constituted an offence in Jersey at the time at which the conduct in fact occurred. Moreover, the Jersey offence must be an offence specified in Schedule 1, namely an offence in Jersey of which a person is liable upon conviction to imprisonment for a term of one or more years. This is known as a single criminality test and means that notwithstanding that the predicate conduct is committed outside Jersey it can be relied on to criminalise the “proceeds” so that, in consequence, criminal money laundering can be in issue.[4]

13  The intrinsic complexity of the art 34(1)(b) offence and a lack of certainty as to its meaning and ambit gave raise to a number of applications by the defence. These focused on predicate conduct and the purpose element, and we shall turn now to examine the key decisions. In addition, we shall thereafter turn to a number of applications which arose on the facts of the case. The degree of explanation provided is commensurate with the complexity of the subject to hand.

Jersey & Guernsey Law Review – June 2011

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John Kelleher and Paul Sugden

Introduction