This is a guest post by Craig Fletcher of Manchester Metropolitan University who is currently writing his PhD on the impact of the Proceeds of Crime Act 2002 (POCA) on the defendant and their wider families.
Making it so crime doesn’t pay
As criminals become more sophisticated and ‘organised’ in the way they conduct their business and in an ever-increasing global market law enforcement agencies across the world have felt the need to develop, in tandem, ways in which they are able to track, apprehend and prosecute those who break the law. Consequently, anti-money laundering, post-conviction confiscation and civil forfeiture legislation have been introduced and developed in the UK over the past few decades and are being used increasingly against (some of) those criminals that make financial gain through their crimes.
What is POCA?
POCA is the latest piece of legislation available to law enforcement agencies which provides specific powers aimed at depriving criminals of their ‘ill-gotten gains’. This piece of legislation is a synthesis of various provisions that were previously situated across various laws. It has recently been amended by the Serious Crime Act 2015 with the specific aim of making confiscation legislation more punitive. The ideology that underpins the Proceeds of Crime Act 2002 is that no criminal should be able to enjoy a luxurious lifestyle via the proceeds of crime, a principle that most people would consider axiomatic.
POCA policy documents discuss a number of objectives that help ‘legitimize’ confiscation practice. They include: to deny criminals the pleasure of their ill-gotten gains; to disrupt criminal enterprise; to deter future criminality; and to reassure the public that crime does not pay (National Audit Office, 2013: 5). The rhetoric that has surrounded the introduction and the continuing development of confiscation legislation has professed to target the ‘Mr Bigs’; those at the top of the criminal hierarchy.
Who does it target?
Over the years confiscation legislation has come under increasing scrutiny due to its failure to catch those at the top; the majority of confiscation orders are for amounts less than £1,000 which hardly conjures up images of ‘Mr Big’. However, instead of addressing its acute deficiencies, politicians and policy makers alike have chosen to make the legislation more punitive and in so doing extending its reach.
The POCA 2002 is a complex piece of legislation that has been ‘loosely’ drafted allowing for a wide interpretation of the legislation that will naturally favour the prosecution. It also straddles both criminal and civil law allowing for a number of provisions that enable it to bypass due process protections widely considered to be key principles of the justice system. Research suggests that confiscation orders are often miscalculated partly because of the pursuit of gross profit as opposed to net profit, its civil burden of proof, it’s ‘criminal lifestyle’ and ‘hidden asset’ assumptions and the wide interpretations of ‘benefit’ and ‘obtain’.
A financial investigator produces a financial statement which outlines the ‘benefit’ that the defendant has made from their crimes alongside an amount which is considered ‘recoverable’. If the defendant’s offence/s meet the ‘criminal lifestyle’ criteria outlined in the legislation, the court may assume all monies and assets going back six years have derived from crime and are liable for confiscation. The responsibility then lies with the defendant to prove the legitimacy of these assets. In reality, accounting for every penny for the past six years typically from the confines of a prison cell and without access to expert legal and accountancy advice makes this a difficult, if not impossible, task.
Real life impact
‘Who cares?’ one might say. Well, failure to satisfy a confiscation order carries a default prison sentence and the amount outstanding continues to accrue interest at 8% which means that for many defendants the amount outstanding moves further out of reach as they are in prison and unable to earn.
“Frank” (aged 58) was sentenced to 8 years for his role in a complex fraud. A year into his sentence, Frank was ordered by the court to pay a £200,000 confiscation order. A year later he was informed that his confiscation order remained unpaid and that it was accruing interest at a rate of £44 a day which had already resulted in a further £14,000 being added to his confiscation. The judge imposed a default custodial sentence of 33 months for non-payment of his confiscation order which Frank was ordered to serve at the end of his original sentence. The letter also reminded him that serving the default sentence does not wipe out the debt which continues to accrue interest.
Despite being a model prisoner and suffering from ill-health, Frank was denied his application to be moved to an open prison on the basis that his substantial confiscation order made him a ‘flight-risk’.
Frank says he he has no assets available to pay his confiscation order (his house was repossessed while he was on remand) and so sees it as a life-sentence that will be with him until he dies. By the time he is released, Frank’s confiscation order will be tens of thousands of pounds higher and he will have very little chance of getting a job as a man in his mid-60s with a serious conviction.
Who was the punishment aimed at? Was it me? because I was in prison. The people it really damaged was my children.
She describes how having to deal with all of this from the confines of a prison cell riddled with guilt, shame and anger meant that her head was constantly in a place of POCA and self-loathing, not rehabilitation. She describes how the burden of a confiscation order takes its emotional and psychological toll:
It was a crazy figure, who knows where they found that from. This is what I’m saying, the way in which they compute that figure it’s a science in itself and you have no real ability from a prison cell to dispute it, yeh? Because I really tried and you’re very disadvantaged in that you haven’t got access to the internet and you can’t look at all your expenditure, you can’t look at your bank statements, you can’t remember things, do you understand what I’m saying? And how they compute it, well I was really disconnected from that process because it simply didn’t make any sense’
On release Jo successfully managed to appeal her confiscation order and get it significantly reduced. However, by that point the damage had been done. She had come out of prison traumatised by her experiences, separated from her partner, no job, and desperate to rebuild her relationships with her children.
Many criminals live ‘spend-as-you-go’ lifestyles and so trying to recover money that simply is not there because it has been spent becomes a futile excise that costs the tax-payer substantially in both legal and prison fees, not to mention the disastrous consequences of extending prison sentences on an already over-populated and under resourced prison system. It is also worth remembering that the POCA defendant has already been sentenced to a punishment for the predicate offence leading accusations of ‘double punishment’ and disproportionality.
Furthermore, in order to avoid the activation of the default prison sentence my research discovered that some prisoners consider reoffending in order to raise the necessary funds creating further victims, negating the proposed deterrence objectives.
As with any prison sentence, families and children are the unseen victims of further periods of imprisonment.
In conclusion, until policy makers acknowledge the real impact of POCA, this piece of legislation will continue to do more harm than good.
The principles and objectives of confiscation are worthy but in its over-zealous desire to achieve them the criminal justice system must find more ethical and ‘effective’ ways of doing so that reduce harm as oppose to creating it.
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