Cases - Benefit fraud: confiscation
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Secretary of State for Work and Pensions v Crown Court Croydon (24 March 2010)
Secretary of State for Work and Pensions v Crown Court Sitting At Croydon [2010] EWHC 805 (Admin) (24 March 2010) The Secretary of State for Work and Pensions challenged the legality of a decision made by the Crown Court to stop confiscation proceedings under Section 6 of the Proceeds of Crime Act 2002 as an abuse of process. The principal question was whether the judge was wrong in law to consider that it would have been an abuse for the court to proceed with the confiscation application in circumstances where the court had on an earlier occasion told the offender that the matter would not proceed if she repaid the benefit obtained by her from her criminal conduct before the date fixed for the hearing of the application and she had done so. Application dismissed.
CPS (Durham) v Nelson (28 July 2009)
In Nelson [2009] EWCA Crim 1573; [2010] 1 Cr App R (S) 82, Lord Judge CJ averted to it and also to the guidance for prosecutors on the discretion to instigate confiscation proceedings published by the Crown Prosecution Service on 28 July 2009. Lord Judge observed that what the court perceived to be a gap in the statutory process was recognised in the guidance, which the court endorsed. He recognised that the discretion not to proceed belongs to the prosecution and not to the court. Referring to the guidance, he observed:
- "Where the facts demonstrate that the defendant has voluntarily repaid the proceeds of his crime to his victim and has thus deprived himself of any profit from his crimes, we endorse the guidance relating to voluntary repayment of full compensation in a simple benefit case where the proceeds of crime have not been used to the defendant's wider financial advantage, as consistent with the interests of justice within the statutory context."
Stapleton, R v (15 May 2008)
Stapleton, R v [2008] EWCA Crim 1308; [2009] 1 Cr App R (S) 38 (15 May 2008) Confiscation Orders- Benefit Fraud- The appellant pleaded guilty to six counts of furnishing false information in order to receive housing benefits to which she was not entitled. The appellant received a confiscation order to the sum of £24,975. An appeal was made on the basis that some of the benefit fraud had occurred prior to March 24th 2003 thereby preventing the imposition of a confiscation order under the Proceeds of Crime Act 2002. However the Court confirmed that the sentencing court had been entitled to apply the provisions of the 2002 Act to this particular case and the appeal was dismissed.
Shahid R. v (13 March 2009)
Shahid, R. v [2009] EWCA Crim 831 (13 March 2009) The appellant was convicted of two specimen counts of cheating the public revenue. He was also ordered to pay compensation of £1,688.92 to the Council Housing Department. A confiscation order was made against him in the sum of £135,524.60 under Part VI of the Criminal Justice Act 1988, with a default sentence of 3 years' imprisonment. The facts of the offences are that over a period of time the appellant claimed income support and council tax benefit. In order to claim those benefits, a claimant must not have capital in excess of the limits prescribed by the Secretary of State for Work and Pensions. At the relevant time, the prescribed limit for income support was £8,000, and the prescribed limit for council tax benefit was £16,000. The appellant had claimed these benefits without declaring that he had capital in excess of these prescribed limits.
The prosecution asked for the confiscation order to be calculated, not only by reference to the sums which the appellant had obtained in connection with the actual offences of which he was convicted (which was agreed to be £15,178), but also by reference to all the property which had passed through his hands in the 6 years immediately before the criminal proceedings against him were instituted, on the basis that this property represented the proceeds of crime. In other words, the prosecution relied on the section 72AA of the 1988 Act -- which were introduced by section 2 of the Proceeds of Crime Act 1995, and which permits confiscation orders to be made on that basis, unless the defendant proves that the property did not represent the proceeds of crime.
The appellant appealed on the ground that his intervening bankruptcy deprived the judge of the power to make a confiscation order against him. The argument being that a bankrupt is not in control of his own affairs because his assets are in the hands of his trustee in bankruptcy. The provisions of section 102(8), 84(1) and 84(2) of the 1998 Act were said to be in line with that argument.
The Court of Appeal did not agree, holding that "as a matter of principle, we do not think that a bankrupt's assets being in the hands of his trustee in bankruptcy affects the position at all. The bankruptcy may be highly relevant to the enforcement of a confiscation order, but not to the making of such an order in the first place. That, we think, is the explicit effect of section 102(8) of the 1988 Act, which defines what is meant by the phrase "properly held by a person", which relates back, inter alia, to the definition of "realisable property" in section 74(1) of the 1988 Act, which refers to "any property held by the defendant". Section 102(8) reads:
- "References to property held by a person include a reference to property vested in his trustee in bankruptcy, permanent or interim trustee within the meaning of the Bankruptcy (Scotland) Act 1985 or liquidator."
- So if the property held by the defendant for the purposes of making a confiscation order includes property vested in his trustee in bankruptcy, it is impossible to say that a confiscation order cannot be made against a bankrupt."
Appeal dismissed
Richards, Dept for Work & Pensions v (3 March 2005)
Richards, DWP v [2005] EWCA Crim 491 (3 March 2005) The fact that the appellant might, if he had acted honestly, have obtained a sum not very much less than that which he dishonestly obtained, in no way mitigates the seriousness of the offence he had committed when it comes to confiscation proceedings.
The appellant had pleaded guilty to nine specimen charges of making a false statement or representation so as to obtain benefit. He had first submitted a claim for benefit in March 1999. In September 1999 his circumstances changed but he failed to inform the DWP. Over a period in excess of 3 years to February 2003 he dishonestly obtained benefits totalling £22,735. However, on the true facts, he would have been entitled to 'Family Credit' of £3,001 and 'Working Families Tax Credit' of £16,521 for that period.
A confiscation order was made in the sum of £19,424 (reflecting the dishonestly obtained benefits less the entitlement to 'Family Credit' and a small amount voluntarily repaid - but with no deduction in respect of 'Working Families Tax Credit'). Mr Richards appealled against the confiscation order. Dismissing the appeal the court held that, for the purposes of confiscation, the legislation "bites at the moment when the property is obtained or the pecuniary advantage is derived" and that "the submission that the appellant could net off whatever the State as a whole may have saved is hopeless. Indeed, the appellant might regard himself as lucky that the notional family credit was credited against the overpayment".
The position in confiscation therefore contrasts with the position in sentencing for the offence (see Parmer, R. v [2006] EWCA Crim 979 (24 March 2006) at Cases – Benefit Fraud sentencing guidelines).
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