POCA & Confiscation Proceedings Successfully Concluded
Client Delighted as KANGS Secures Favourable Settlement
KANGS has successfully resolved Confiscation Proceedings, brought under the Proceeds of Crime Act 2002 (POCA), to the complete satisfaction of our client, who had previously, along with his co-conspirator, pleaded guilty to conspiracy to defraud.
John Veale of KANGS outlines how this successful result was achieved.
The Circumstances Leading to Confiscation Proceedings
Our client, the director of an industrial supply company, which provided postage bags and packaging had fraudulently arranged with the buyer employed by one of its customers, to submit artificially inflated Purchase Orders and falsified delivery notes.
This resulted in loss to the customer, which was paying considerably more than the value of stock which had been supplied, and fraudulent financial gain to our client and his co-conspirator.
Following discovery, prosecution proceedings resulted in our client and his co-conspirator pleading guilty to conspiracy to commit fraud by false representation.
Confiscation proceeding under POCA were commenced.
How We Assisted Our Client
During the course of a complicated process over a number years, the team at KANGS:
- represented our client during the initial stages, involving interviews under caution and attendance before the Magistrates’ Court,
- carefully examined and thoroughly considered all the case papers and relevant material,
- liaised with our client’s accountant in respect of a number of pertinent issues,
- advised our client upon his position and the appropriate cause to adopt given his decision to plead guilty,
- prepared and served a detailed ‘Basis of Plea,’ including detailed comments on the ‘benefit figure’ derived from the criminal activity, which would be of significance in the inevitable POCA proceedings,
- advised and assisted our client with regard to paying £750K into a designated Police account, in the anticipation that the sum could be negotiated as a settlement figure by way of confiscation, reflecting an entirely successful outcome for our client,
- prepared detailed replies to all POCA Prosecutor’s Statements and requisite court documents throughout the process.
Important POCA Procedural Considerations
Benefit Figure and Realisable Assets
Essential elements within the POCA process are the extent to which the defendant benefited from the criminal activity and the value of assets to meet the calculated debt.
The Prosecution contended that our client had benefitted from the fraud to an amount, including uplift for change in value over time, in excess of £1.4 million and that he had realisable assets in value to a similar figure.
It was acknowledged by our client that he possessed considerable assets by way of real property, company shares and money held in personal and business banking accounts.
At an early stage, a Court Restraint Order had been imposed against our client in order to prevent him from dissipating those assets in any way.
Responses to Prosecution POCA Allegations
Within our various responses to the Prosecution, we emphasised on behalf of our client that:
- all appropriate VAT, Corporation Tax, and Self-Assessment tax had been paid, the benefit figure it sought should be reduced appropriately,
- their remained unpaid invoices due to our client’s company, which needed to be incorporated into the calculations,
- the benefit figure calculated against our client’s co-conspirator should not form part of the calculations leading to our client’s benefit figure,
- the calculations had to reflect the large proportion of the invoiced stock which had been delivered.
The Corporate Veil in POCA Proceedings
In certain circumstances, the Prosecution can treat the benefit obtained by a company as the personal benefit received by a director. Known as ‘piercing the corporate veil’ this is restricted to limited circumstances, such as where a company has specifically or largely been set up to perpetrate a fraud.
It was forcefully pointed out that this potential argument was not valid as our client’s company had a history of legitimate trading, and the fraudulent activity only represented a very small proportion of the company’s turnover.
The Successful Outcome
Having considered all the detailed submissions, the Prosecution agreed to settle the POCA proceedings without the need for a full hearing, accepting that the appropriate benefit figure should be reduced to £750K, being the amount we had previously tactically advised our client to pay into the designated Police account.
Naturally, our client was absolutely delighted that we had resolved the claim against him for the amount previously lodged with the Police, and that he was not required to realise any further assets.
How Can We Assist?
KANGS has a proven history of successfully representing clients in POCA and Restraint Proceedings, which are extremely complex by nature and should only be conducted by experienced professionals.
We fully understand the consequences and the distress that POCA proceedings can be caused to both our clients and their families, given the enormous detriment to the family assets including the family home, valued possessions, and even pension entitlements.
The team at KANGS are committed to achieving the best possible outcome for our clients. We have many years of experience in dealing with the most complex POCA, Restraint Order and confiscation proceedings.
Should you require assistance with a confiscation matter, please do not hesitate to get in touch using the contact information provided below.
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
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