All you need to know about Proceeds of Crime Act (POCA)

Very often criminal cases need the expertise of a forensic accountant to assist. They analyze and present financial information in a way that a court can readily understand. Frequently their task is to assist the defence lawyers to respond to the allegations being made for a confiscation order appeal.

The prosecution often brings a case in a fraud matter such as tax fraud or a confiscation of assets using the Proceeds of Crime Act legislation following another conviction that involves a large amount of financial data. It is usual for the case summary or statement of information as it may be called in a confiscation, to be written and presented by persons such as an accredited financial investigator.

These are often employed as police officers and may receive training in some areas including investigating, interviewing and evidence handling. Some will receive rudimentary accounting instruction but most will not. It is very rare for the prosecution to employ expert accountants to present financial data owing to budgetary constraints. However, this results in the need for the criminal defence to examine the allegations in very great detail as, more often than not, they will include errors and inappropriate conclusions.

In the case of fraud, it will usually be clear that there is a case to answer. The police will investigate financial losses and in many cases be able to present a modus for the crime that can be readily understood. However, such is the partisan nature of the approach adopted by the regulatory authorities that they will often draw rather zealous or inappropriate conclusions from their evidence. The forensic accountant must consider all aspects of the case and present the information in an independent and unbiased way. Sometimes this can result in the defendant being shown in a more adverse light but mostly will lead to a tempering of the prosecution’s case.

On the other hand, the treatment of confiscation by the authorities can result in the presentation of wholly unreasonable demands for a person to lose all their wealth and suffer lengthy additional prison terms for committing even modest crimes for which they have already received a punishment. The confiscation regime has often been called draconian and presents a much stronger need for a capable forensic accountant to become involved for a confiscation order appeal.

The Proceeds of Crime Act 2002 ensured that criminals involved in not only money laundering and drug dealing were targeted, but also any criminal who could be deemed to have enjoyed a criminal lifestyle. Unfortunately, the criterion for a criminal lifestyle is very easily met!

The prosecution continues to use accredited financial investigators to estimate the extent of a person’s criminal lifestyle, without the benefit of having to prove matters to within “reasonable doubt” as is usual for criminal matters. What is more, the legislation allows sweeping assumptions to be made, with the onus on the defendant to prove otherwise. This is why the defence is tasked with a difficult job and hence the need for the assistance of forensic accountants.

An expert may, therefore, be used to clarify the framework of complex fraud, presenting the evidence in an understandable fashion for a confiscation order appeal. It can point to flaws in the allegations being made but can equally present a poorer picture for the defendant. More often than not, in a confiscation matter, the expert accountant will reduce the extent that the criminal benefit has been estimated as by the prosecution, pointing out flaws in the approach and mistakes in the calculations.

In both frauds and confiscations, there is a strong argument for increased use of expert forensic accountants. This would mean increased funding for the police and prosecution authorities but might mean a corresponding reduction in the amount of work that the defence is tasked with, which at the end of the day is also funded from public money.