Feeling the benefit

One of my very favourite things in my professional life is the concept of criminal benefit.  I like what this says about our attitude to crime and those who commit it.  Put very simply – and I am sure a lawyer or asset recovery specialist could elaborate enormously – when decisions are being made in sentencing and confiscation hearings, what matters is not the amount of money the criminal originally stole or made illegally, but what benefit he has accrued from that money.  In a ridiculous example, if someone picks my pocket and steals a pound and then buys a lottery ticket with that pound and wins a million quid, then their benefit is one million pounds – and any subsequent confiscation proceedings will seek to recover the million, not just the original pinched pound.  As you can imagine, criminals are not keen on this way of calculating things.

But there’s no getting away from it, as a recent case confirmed.  Between early 2010 and late 2011, Cornishmen Gary Fulton and Daniel Wood were involved in a missing trader scam – a sort of carousel fraud.  In June 2016 they both pleaded guilty to money laundering and were jailed – Fulton for four-and-a-half years and Wood for seven.  In June 2017 they appealed (R v Fulton and Wood 2017 EWCA Crim 308, for those of you who track these things), on the basis that their sentences had been calculated on the total amount laundered in the scam (there were demonstrably 597 transfers involving about €35 million), with the judge assessing the relevant harm as £30 million.  Fulton’s defence, however, contended that the relevant loss was the loss to foreign revenue authorities, and as the tax in Germany was 19% and that in the Czech Republic 20%, the relevant harm was only £6.1 million.  Moreover, as Fulton claimed that he was involved in only 60% of the trading, he felt that his sentence should be based on 60% of £6.1 million, making £3.6 million.

Sadly for the two gentlemen concerned, the Court of Appeal was not with them on this point, noting that it is inherent in the concept of money laundering that criminal property will be mixed with other money in the financial system.  Thus the criminality of the offence must be gauged by the nature and scale of the laundering, not the nature and scale of the underlying crime.  As the appeal judges correctly observed, it is the whole amount involved, not merely the part that comprises criminal property, which impacts the financial system.  Dismissing their appeals, Mr Justice Popplewell said the original trial judge was entitled to take the whole sum into account when considering how serious their roles were.  Sitting with Lord Justice Gross and Judge David Griffith-Jones QC, he added: “We take the view the sentences were not excessive, let alone manifestly so.”  And so say all of us.

This entry was posted in Legislation, Money laundering and tagged , , , , , , , . Bookmark the permalink.

One Response to Feeling the benefit

  1. I have today (2 February 2018) received the following email, which I reproduce in its entirety with the permission of Mr Shaw:

    I have just come across your blog regarding Gary Fulton and Daniel Wood and would just like to set the record straight with a few facts. To the best of my knowledge they were both tried for money laundering at Salisbury Crown Court in 2015, Gary Fulton was found not guilty and with Daniel Woods the jury could not agree and a retrial was set. In June 2016 they were found guilty of tax fraud at Manchester Crown Court (they both entered a plea of not guilty) and were sentenced etc. as per your blog. Daniel Woods was sentenced first and after sentence was passed he stated that Gary Fulton knew nothing about the fraud.
    I happen to know Gary very well. He is ex army and has worked in a variety of jobs since leaving. About 15 years ago he had a catastrophic m/c accident which left him with severe injuries to his brachial plexus and total loss of the use of his right arm. He also had severe concussion which has affected some of his cognitive abilities and also had a heart attack soon after the accident.Gary received about £500,000 in compensation but then proceeded to lose most through bad investments.
    Whilst working for Omnia FX Gary had a basic wage of approx.£23,000 pa + commission (which for the time he worked there was in the order of £8,000 in total.) He left Omnia when they dropped his basic wage. Not really the action of someone who was raking in illegal gains.
    Because he has been deemed to have had a criminal lifestyle he has been ordered to pay £104,000 under POCA, and the only way that he can pay this is to evict his mother from the house that she rents from him . The rent from that is used to pay the mortgage on his family home so without that income they could lose that as well. The main impact will fall on totally innocent parties
    Knowing Gary as I do I am convinced that the only thing that he was guilty of was perhaps naivity in not challenging or questioning some of the directions of his boss Daniel Wood.
    Regards,
    Graham Shaw

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s