Confiscation and Fraud Update – December 2023

06/12/2023

In the article below, Peter Binder discusses three recent confiscation and fraud cases.

• The way in which a convicted defendant’s beneficial interest in the matrimonial home falls to be considered for the purposes of calculating the amount available by which to satisfy a confiscation order was recently considered in R. v. Thompson [2023] EWCA Crim 1244. The case concerned offences of fraud which had resulted in a gain of about £33,500 and it seems the only asset available to the defendant at the time the original confiscation order was made was her interest in a property at which she lived with her husband, son and mother-in-law. The property was held in her husband’s sole name, having been transferred to him by his parents. The judge at first instance determined that the wife held a 45% beneficial interest, which was well in excess, in monetary terms, of the benefit figure. It seems he did so by approaching the calculation of the wife’s benefit figure as if it were simply a question of determining how assets would be distributed in the event of a divorce or judicial separation, i.e. in the same way a court would exercise its discretionary power under the Matrimonial Causes Act. The Court of Appeal, in quashing the order, confirmed that this was entirely the wrong approach, that s.84 of POCA defines property for the purposes of the confiscation regime, and that as such the correct approach to be taken in a sole ownership case such as this is as set out in the well-known property law case of Stack v. Dowden [2007] UKHL 17, i.e. the presumption is that the sole legal owner is the sole beneficial owner and the onus is on anyone claiming a beneficial interest to prove his or her claim, which in this case would necessarily involve consideration of the parties’ common intentions as to whether the wife should share the beneficial interest. In that the judge at first instance failed to take that approach the confiscation order was quashed. (It was not remitted for re-consideration in the court below due to particular circumstances which do not impact on the basis for the Court ruling as it did).

• On a more light-hearted note, R. v. Climate Wiseman [2023] EWCA Crime 1363 concerned the prosecution and conviction of ‘Prophet’ Wiseman, the head of the Kingdom Church in Camberwell, South London, for the fraudulent marketing and sale of a ‘divine cleansing oil’ (priced at £91 a bottle) which the prophet claimed to both protect against and cure Coronavirus. The Crown’s case was that the appellant was engaged in ‘little more than exploitative commercial opportunism disguised as an article of faith’, whereas the defence contended that the oil had been sold in good faith, to people ‘who believed in God’, and that when it was combined with prayer it had the desired effect. The grounds of appeal included the submission that the trial judge had failed to direct the jury adequately, both in relation to the appellant’s state of knowledge as well as to the issue of dishonesty more generally, by virtue of neglecting to direct them to have regard to his religious beliefs. The Court had ‘no hesitation’ in rejecting this and other submissions made on behalf of the appellant and endorsed the trial judge’s comments to the effect that ‘this was not a trial about religion…but about a product..which you will be investigating whether faith has anything to do with it’.

• Lastly, it is always of interest to have an eye to what our American cousins are up to. Following hot on the heels of ‘Crypto-King’ Sam Bankman-Fried’s conviction last month for defrauding investors of billions of dollars (with the jury out for under five hours following a four week trial), we should have judgment relatively shortly in the Attorney General for New York’s civil proceedings against one Donald J. Trump in which it is alleged that Trump and others within the ‘Trump Organisation’ engaged in financial fraud by presenting vastly inflated property values to potential lenders and tax officials in violation of New York State Law. Trump’s counsel’s argument that, ‘There are many ways to value assets and all are accurate even if they give different results’ was widely ridiculed, as well as given short thrift by the trial judge in an excoriating ruling which included the following: ‘Exacerbating the defendants’ obstreperous conduct is their continued reliance on bogus arguments, in papers and oral argument. In the defendants’ world, rent regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air; the Attorney General for New York does not have capacity to sue (never mind all those cases where the Attorney General has sued successfully) under a statute expressly designed to provide that right; and square footage is subjective. This is a fantasy world, not the real world’. Things are not looking up for Mr. Trump currently, on the legal front at least.

Peter Binder

Guildhall Chambers

5th Dec. 2023