fraud lawyer

BSQ Fraud Team instructed to Challenge £64m Confiscation Order

BSQ’s Fraud defence team has been appointed to represent Dr Gerald Smith in enforcement proceedings concerning one of the highest confiscation orders ever made – now standing in excess of £64m including interest - ever made in the UK.

Mr Smith features in proceedings brought by the SFO in one of the largest cases under the CJA 1988 to be ever heard, presided over by Mr Justice Popplewell before the Commercial Court. The complex litigation involves more than 12 different parties and concerns assets worth in excess of £200 million.    

The BSQ partners instructed are Daniel Godden and Roger Sahota.   

The case has been widely reported in the media including the Evening Standard.  

NCA secures first Unexplained Wealth Orders

The NCA has recently announced that it has secured the first UWO's since the introduction of the new legislation. 

The orders relate to two properties, one in London and one in the South East of England and mean that the assets cannot be sold, transferred or dissipated while subject to the order (IFO).

Donald Toon, Director for Economic Crime at the NCA, said: “Unexplained wealth orders have the potential to significantly reduce the appeal of the UK as a destination for illicit income. They enable the UK to more effectively target the problem of money laundering through prime real estate in London and elsewhere. We are determined to use all of the powers available to us to combat the flow of illicit monies into, or through, the UK.”

Read More here.

If you require advice in relation to a UWO application or are worried that you may become the subject of such an application contact our London offices. 

Cards on the Table - Roger Sahota writes for Law Society Gazette on Ivey v Genting

BSQ Partner has written for the Law Society Gazette on the recent landmark Supreme Court decision in Ivey v Genting. You can read the article here or below.   

Phil Ivey, the professional gambler who failed in his attempt to compel a Mayfair casino to pay out £7.7m in winnings and was branded a cheat by the Supreme Court is likely to become a familiar name to future generations of criminal lawyers.

The facts of Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67 concern an ingenious effort by Ivey to find ’a legal way to beat the house’ whilst playing Punto Banco, a variant of Baccarat, using a technique known as ‘edge-sorting’ which relied on him spotting tiny differences in the cards. Crockfords casino refused to pay out his winnings because they believed that by using ’edge-sorting’ and hoodwinking the croupier on the table he had cheated.

At first instance, Mitting J sitting in the High Court rejected Ivey’s civil claim that Crockford’s should be ordered to pay him what he had won. The Court held that the gaming contract Ivey had entered into with Crockfords was subject to an implied term that he would not cheat. Mitting J found that the evidence suggested he had, noting that Ivey had duped the croupier into rotating the cards differentially to give him an advantage. The casino and the croupier would not have agreed to this if they had known what he was up to.

The Court of Appeal (Sharp LJ dissenting) later affirmed this decision but on different grounds. The case then came before the Supreme Court. In reaching a unanimous decision the Supreme Court Justices (Lord Neuberger, Lady Hale, Lord Kerr, Lord Thomas, Lord Hughes) dismissed Ivey’s appeal. In doing so the Court also delivered a landmark judgment revising the law on dishonesty in criminal proceedings.

A wide range of theft and fraud offences require a finding of dishonesty. And, more often than not, the main issue at trial is whether a defendant has acted dishonestly. Proving dishonesty is therefore a key requirement for the Crown. Previously the test for dishonesty was that set out in R v Ghosh [1982] EWCA Crim 2 which stated that a conviction could only result where a jury was satisfied that;

- the conduct complained of was dishonest by the lay objective standards of ordinary reasonable and honest people; and, if yes
- the defendant must have realised that ordinary honest people would so regard his behaviour.

Following Ivey it is clear that the Ghosh test is no longer good law (para.74). What replaces it is a test similar to the first limb of Ghosh and identical to the civil definition of dishonesty as per Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37. The second limb of Ghosh, known as the subjective test, is discarded. The new post Ivey definition of dishonesty retains a subjective element - a jury must firstly decide what a defendant’s subjective mental state and belief as to their knowledge of the facts are. Having done so the jury must then apply an objective test to the defendant’s state of mind – deciding whether by the ’standards of ordinary decent people’ (para.74) his intent was dishonest. This objective test is ’not a matter of law but a jury question of fact and standards’ (para.48) that did not require any further elaboration from the Court as ’Dishonesty is something which laymen can easily recognise when they see it’ (para.64).

This sea change in the law greatly simplifies the directions juries must be given by Judges in criminal trials on the meaning of dishonesty. It also addresses the Supreme Court’s main concern about the Ghosh test, namely that it did not require a defendant to show that their genuinely held belief refuting dishonesty was also a reasonably held one. Relying on the second limb of the Ghosh test, the Supreme Court justices noted that defendants were entitled to plead as a defence ’I did not know that anybody would regard what I was doing was dishonest’ and to cite a myriad of cultural or other creative explanations in support of their mistake. The Court felt this had ’the unintended effect that the more warped the defendant’s standards of honesty are, the less likely it is that he will be convicted of dishonest behaviour’ [para. 58].

By removing the second limb of the Ghosh test the decision in Ivey has raised the bar for anyone who denies acting dishonestly. In complex fraud and business crime cases in particular the effect will be dramatic. No longer will individuals be able to rely on Ghosh to say in their defence that they mistakenly but genuinely believed that their decision-making and conduct was consistent with industry norms and would not be seen by their contemporaries as dishonest. Closing this window of opportunity was an important objective for the Court, which commented that ’there is no reason why the law should excuse those who make a mistake about what contemporary standards of honesty are, whether in the context of insurance claims, high finance, market manipulation or tax evasion’ [para. 59].

Ivey will therefore be a welcome development for prosecution lawyers involved in fraud cases where establishing dishonesty is an essential ingredient. Anecdotal evidence suggests that proving dishonest intent to the Ghosh standard has often been seen by prosecutors as an obstacle to conviction – the recent acquittal of six accused in the second inter dealer/broker LIBOR criminal trial being one possible example. All six accused relied on the second limb of Ghosh in their defence, claiming that they did not regard their conduct as dishonest in the context of widespread market malpractice in the setting of LIBOR prevalent at the time.

Interestingly, were the same six accused tried today applying this new interpretation of the law they may have been prohibited, as a matter of law, from even raising this type of explanation as a defence addressing the objective test set out in Ivey. In the first LIBOR case - R v Tom Hayes [2015] EWCA Crim 1944 - the Court ruled (Cooke J, upheld by the Court of Appeal) that evidence of a similar nature of ’market ethos’ raised by Hayes was ’iirrelevant to the determination of the objective standards of honesty’ (para. 33) and had the effect of ’diluting the standard’ that a reasonable person would otherwise apply. In the second LIBOR trial Hamblen J treated himself as bound by this decision. Consequently, the six accused in that trial could not rely on the first limb of Ghosh in their defence. Their options post Ivey, with the second limb of Ghosh also removed, would be far more limited.

The latest decision in Ivey may therefore encourage the Crown and other prosecuting agencies to continue pursuing such complex cases. Whether it results in more convictions however remains to be seen.

Client Guide to Financial Statements During the Confiscation Process

Confiscation law is one of the most complicated areas of criminal law. Roger Sahota is one of the leading criminal solicitors in this narrow field. We have prepared this guide for clients who are concerned at what will happen if they are involved in confiscation proceedings after their conviction.

This guide has been prepared in response to many frequently asked questions from of our confiscation clients we have prepared an overview of the confiscation process under POCA 2002.Itr predates the Serious Crime bill 2015. It is a general gude to the law and procedure - for specific advice on your individual case please contact a lawyer.

Below we set out the procedure for defendants who are asked to provide a financial statement after their conviction.

POCA Confiscation Procedure

Which Court?

The Confiscation procedure begins in the Crown Court after an Defendant has been sentenced.

Who Brings the Confiscation Proceedings?

The confiscation process begins as soon as a prosecutor requests it or the court believes it to be appropriate.  If the Prosecution requests it the Court must proceed.

The process begins in a case where the Prosecution brings proceedings when the Crown serves a notice on the Court under s 16 of POCA. This notice confirms their intention to apply for confiscation.

What is the Standard of Proof?

Unlike ordinary criminal cases, the standard of proof in any POCA case, for all parties is the balance of probabilities, a lower threshold than beyond reasonable doubt.

Ordinary rules of criminal evidence also do not apply so, for example, hearsay evidence is admissible.

What Information Must the Defendants Provide?

The Defendant will receive a statement from the Court issued under Section 18 (3) of the Proceeds of Crime Act.

The notice requires an Defendant to provide a statement detailing all of their assets and liabilities by a certain deadline. The Defendant must set out details of all assets including

•    property,
•    bank and building society accounts,
•    savings, investments, premium bonds,
•    stocks and shares,
•    cash deposits,
•    traveller cheques, postal orders and other financial instruments

In lifestyle cases, the defendant must provide details of any gifts of transfers received of property from the relevant date i.e. six years before the present case began.

Supporting documentation must also be provided including receipts, invoices, statements and proof of purchase and ownership.

The Court will provide a timetable for the Prosecution to reply to the statement from the Defence and the date for a final hearing.

What are the Prosecutor’s Powers?

A Section 16 POCA Notice, known as a Statement of Information will be prepared by the Crown’s Financial Investigator early in the proceedings and normally once the Defence statement has been received.

The statement contains all the matters that the Prosecutor believes are relevant for the court to consider when deciding the case.

The statement will indicate if the Crown claim that the Defendant has a criminal lifestyle.

During this process the Prosecution can use their investigative powers under POCA to make further enquiries to determine what assets a Defendant has.

The s 16 statement will set out the
•    relevant facts of the underlying conviction
•    summarise the defendant’s financial circumstances
•    what is believed to be is the defendants benefit, the recoverable and  available amount
•    the amount of the confiscation order requested
•    It will clearly state if the Prosecution believes that the defendant has hidden assets or has made tainted gifts.

What are the Court’s Powers?

The Court has various investigative powers it can exercise at the request of the Financial Investigator and the Crown. Generally the Court also has a wide power to order an Defendant to provide further information to help it carry out its functions. If the Defendant does not co-operate, the court can draw an inference.

What Must the Defence Show?

If the Defence disagree with any of the facts that the Prosecution rely on or the conclusions arrived at they must say why. Failing to object could be seen as acceptance of the Crown’s submissions.

The Defence must serve a formal reply to the prosecutors notice setting out the information requested supported by a statement of truth from the defendant.

Documents should be provided by the Defence to prove any of the points they rely on.   The court will not accept or vague or generalised assertions made by the Defence.

In some cases it may be possible for the Defence and Prosecution to agree on the amount owed and the quantum of the confiscation order.  However, the Court is not bound by any agreement made by the parties.

What Happens At The Final Hearing?

Both parties are entitled to file replies and counter replies to the statements of information they rely on. After the parties have filed the documents, evidence and additional skeleton arguments they rely on a final date will be set for the confiscation hearing.

At this hearing witnesses and experts can be called to give evidence. The Defence have every opportunity to challenge evidence against them and to call witnesses.   Both parties will present their closing arguments before a decision on the Confiscation Order is made.

Client Guide to the Confiscation Order Process

Client Guide to the Confiscation Order Process

Confiscation law is one of the most complicated areas of criminal law. Roger Sahota is one of the leading criminal solicitors in this narrow field. We have prepared this guide for clients who are concerned at what will happen if they are involved in confiscation proceedings after their conviction