Criminal defence and proceeds of crime

In this case Defendant X was charged with Possession of Class A Controlled Drugs with Intent to Supply. He pleaded guilty and was sentenced to 21 months’ imprisonment.
 

In Confiscation Proceedings the Prosecution listed the Benefit obtained by X. This included Transfers, Property and Expenditure alleged to have derived from non-legitimate sources.
 

Graham Garbett was appointed as an Expert Forensic Accountant to prepare a Report to Court based on a thorough and detailed examination of X’s financial affairs, which involved:
 

• Identification of errors
• Identification of instances of double  counting (i.e. where inputs and debits represent simple movement of money from one source to another as opposed to the receipt of “new funds”)
• Identification of instances of false assumptions in the Prosecutor’s Report. 
• Identification of a pattern of input which was significantly able to be reconciled with stated events in X’s recollections 
• Identification of further legitimate (although not declared to HM Revenue & Customs!) trading income.

One of the key victories for X was that of successfully eliminating the double counting of each disposal in a chain of property acquisitions and disposals. Graham was able to prove all of the properties were funded from the same initial source.
 

The Report concluded with a substantially reduced Benefit for X.

In this case the Defendant was sentenced to 4 year’s imprisonment for his participation in a conspiracy to produce a class C drug over a period of 3 years. Confiscation proceedings resulted in the Prosecution calculating that the Defendant had obtained £6m in Benefit.
 

Our experts were instructed to prepare a report challenging the Prosecution’s assumptions, undertaking a critical examination of the Prosecution report and identification of instances of double counting and false assumptions.
 

The team (i) identified that the Prosecution had calculated Benefit by multiplying the sale price of the drug by an estimated maximum output level, based on the Prosecution’s assumptions on the capacity of the operation, and (ii) were able to demonstrate that the calculation of Benefit was flawed in that it did not allow for a staggered growth pattern, assumed too much growth area and assumed a growth cycle which was too short.
 

The Prosecution had assessed, as Benefit, all amounts deposited into the Defendant’s bank accounts over the relevant period, plus expenditure incurred and property acquired. Our team were able to identify and agree with Prosecution that there had been a major element of double counting, including all of the amounts deposited into the Defendant’s bank accounts, simply because they had already been assessed as Direct Benefit.
 

The report concluded that the Total Benefit should have been between £300,000 and £600,000, a somewhat substantial reduction on the original £6m. Total Benefit was settled at £400,000. 

In this complex case the Prosecution alleged that the Defendant had benefitted financially from laundering criminal proceeds through the Defendant’s trading businesses and through a series of over 20 property developments held in trusts, companies and partnerships. The Prosecution implied that the Defendant had also evaded tax on the profit on disposal of some of the developments.
 

Graham Garbett was appointed as an Expert Forensic Accountant, to undertake a detailed examination of the Defendant’s financial affairs, to identify legitimate income, to identify criminal proceeds, to unravel the sources of funding for the property developments and to assess the extent of tax evasion.
 

Graham and the team scrutinised the Defendant’s incomplete financial records, charted the flow of funds for all property transactions and identified the extent of funds received from legitimate sources. Graham explained to the Prosecution the financial and tax reasons for holding the property developments in trusts and other entities, and that the Defendant had legitimately offset losses on some developments against profits in others, hence minimising tax liabilities.
 

However, the legitimacy of funds for a small number of developments could not be evidenced. The Defendant was found guilty of money laundering on these developments and received a custodial sentence. The Prosecution subsequently commenced Confiscation Proceedings, assessing the Defendant for £4 million Benefit.
 

How then had Graham helped the Defendant?
 

Graham had identified that the scope of the money laundering was limited, and therefore was able to demonstrate that Benefit was less than a quarter of the Prosecution’s assessment. This resulted in a reduction in settlement value and a reduction in the potential additional sentence if the Defendant was unable to pay the settlement.