Jurisdiction in relation to the offence of converting criminal property – R v Bradley David Rogers and others
- The FOLLOWING case presents possibly the strongest illustration yet of the length and breadth of POCA’s reach.
- The court considered that the offence of money laundering is par excellence an offence which, in effect, has no national boundaries.
- Rogers was the holder of a UK passport and yet the judgment as to jurisdiction does not appear to turn on this fact. It may once have been thought that in looking at the question of jurisdiction the analysis would focus on whether some part of the relevant money laundering offence took place within the UK.
- The court however was concerned with the fact that a significant part of the criminality underlying the case took place in England, including the continued deprivation of the victims of their monies by virtue of the activity in Spain.
- Given that Rogers was charged with two counts of conspiracy to defraud (which went to the jury for determination) it safe to assume that he had more than a suspicion as to the nature of the property in question in this case.
- In other cases the position may be different and, given the mens rea for substantive money laundering offences, it will be interesting to observe the full ramifications of this authority for enforcement cases involving transnational money flows.
R v Bradley David Rogers and others
Outline
The case concerned, among other matters, the issue of jurisdiction in relation to the offence of converting criminal property contrary to section 327(1) of the Proceeds of Crime Act 2002 (POCA).
The case concerned a series of advance fee frauds and the related money flows. Rogers was charged with two counts of conspiracy to defraud as well as a substantive money laundering offence. He was acquitted of the conspiracies but convicted of money laundering. He challenged his convictions on various grounds, including that the judge had erred in ruling that the Crown Court had jurisdiction to deal with the money laundering offence in circumstances where all of the activities were undertaken in Spain by a non-resident of the UK in relation to a Spanish bank account.
Facts of the case
On 19 June 2013 in the Crown Court at Ipswich the appellant, Bradley David Rogers was convicted of certain offences after a trial lasting two months. He was sentenced to two years and 10 months imprisonment for converting criminal property contrary to section 327(1)(c) of POCA. He had originally been charged with an offence under section 327(1)(e) in relation to the removal of the proceeds of the fraud from the UK. During the trial the prosecution amended the indictment when it became clear that he could not be convicted of an offence under section 327(1)(e).
The allegations involved two ‘advance fee” frauds operated by a co-accused, Muldoon. The frauds involved call centres based in Spain or Turkey, employing British nationals who dealt with calls in respect of debt elimination or escort services. Consumers in the UK who called the centres were pressured by staff to pay advance fees based on false promises made to them. In both frauds the calls appeared to come from the UK and gave the false impression that the businesses operated in the UK.
Consumers sent fees generated by the frauds to UK bank accounts, which were controlled by a series of UK companies. Around £5.7m was obtained in total. These accounts were controlled from Spain by the use of passwords. Rogers, Muldoon’s lieutenant in Spain, also provided Spanish bank accounts into which some of the proceeds from the fraud were paid. Approximately £715,000 was received in Spain via numerous small transfers designed to avoid detection by automated anti-money laundering controls. Rogers allowed Muldoon to control one of his accounts from which substantial amounts were withdrawn.
Rogers’ appeal against the conviction was on three grounds, including that the judge had erred in ruling that the Crown Court had jurisdiction to deal with the offence as all activities alleged were undertaken in Spain by a non-resident of the UK in relation to a Spanish bank account.
The appeal
Rogers’ counsel submitted that the judge was wrong to conclude that there was jurisdiction in the English courts to cover the allegation of money laundering relating to criminal property obtained by fraud in the UK and in respect of a person living and working in Spain who merely permitted money to be received into his Spanish bank account and allowed for it to be withdrawn by others.
It was argued that when UK consumers paid money into the UK bank accounts, the consumers suffered a loss at this point. The appellant was not involved in the subsequent transfers of those funds and hence could not be guilty of an offence under section 327(1)(e). The subsequent receipt and withdrawal of money from the Spanish bank account did not involve an additional loss to any UK consumer, nor did it involve any activity taking place within the UK by the appellant. Anything done by the appellant was therefore outside the jurisdiction of the English courts and outside of the scope of section 327(1)(c). It was submitted by the appellant that the primary basis of English criminal jurisdiction is territorial. In the absence of clear statutory provision it was not intended to make conduct taking place outside of England and Wales triable in an English court. It was argued that there was no such specific wording in POCA.
The Crown submitted in response firstly that POCA did provide the necessary jurisdiction and that secondly, in any event the modern law on jurisdiction had moved away from a strict territorial approach. The Crown referred to the decision in R v Smith (Wallace Duncan) [Smith No 4] [2004] 2 Cr App R 17 where the court held that where a substantial measure of the activities constituting a crime takes place within the jurisdiction, then the courts of England and Wales have jurisdiction to try the crime, save only where it can seriously be argued on a reasonable view that the activities should, on the basis of international comity, be dealt with by another country.
The court’s decision
The following provisions of POCA were particularly relevant:
‘Section 327
(1) A person commits an offence if he -.
(a) conceals criminal property
(b) disguises criminal property
(c) converts criminal property
(d) transfers criminal property
(e) removes criminal property from England and Wales or from Scotland or from Northern Ireland”
It was noted that while section 327(1)(e) states that criminal property must be removed from this country, no such geographical limitation is placed on the other ways of committing the offence.
‘S327 (2A) Nor does a person commit an offence under subsection (1) if –
(a) he knows or believes on reasonable grounds, that the relevant criminal conduct occurred in a particular country or territory outside the United Kingdom, and was not unlawful there.
Section 340
(2) Criminal conduct is conduct which –
(a) constitutes an offence in any part of the UK, or
(b) would constitute an offence in any part of the United Kingdom if it occurred there
(3) Property is criminal property if –
(a) it constitutes a person’s benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and
(b) the alleged offender knows or suspects that it constitutes or represents such a benefit.
(9) Property is all property wherever situated and includes… ‘
The court noted that the provisions of section 327(2A) and section 340(2)(b), as well as the definitions of criminal property in section 340(3) and (9) gave a strong indication that money laundering abroad was potentially within the reach of the UK courts and that Parliament had intended for POCA to have extraterritorial reach.
‘S340(11) Money laundering is an act which –
…
(a) constitutes an offence under section 327, 328 or 329,
…
(d) would constitute an offence specified in paragraph (a), (b) or (c) if done in the United Kingdom..”
Finally the court noted that the specific provision at section 340(11)(d) appeared to admit of no other construction than that Parliament intended, extraterritorial effect to POCA.
The court went on to state that even if they were wrong about the provisions of POCA, the conduct was within the jurisdiction of the UK courts by virtue of the R v Smith (Wallace Duncan) No 4. Noting this change in approach to jurisdiction, the court stated that the criminal acts in the case plainly took place within and impacted upon victims in the UK. The laundering of these proceeds by Rogers was directly linked to these criminal acts. The proceeds of the fraud were criminal property in the UK and did not cease to become criminal property in Spain. A significant part of the crime took place in England and there was no reasonable basis to assume the Spanish authorities would have an interest. Accordingly there was no reasonable basis to withhold jurisdiction.
Commentary
The case presents possibly the strongest illustration yet of the length and breadth of POCA’s reach. The court considered that the offence of money laundering is par excellence an offence which, in effect, has no national boundaries. Rogers was the holder of a UK passport and yet the judgment as to jurisdiction does not appear to turn on this fact. It may once have been thought that in looking at the question of jurisdiction the analysis would focus on whether some part of the relevant money laundering offence took place within the UK. The court however was concerned with the fact that a significant part of the criminality underlying the case took place in England, including the continued deprivation of the victims of their monies by virtue of the activity in Spain. Given that Rogers was charged with two counts of conspiracy to defraud (which went to the jury for determination) it safe to assume that he had more than a suspicion as to the nature of the property in question in this case. In other cases the position may be different and, given the mens rea for substantive money laundering offences, it will be interesting to observe the full ramifications of this authority for enforcement cases involving transnational money flows.
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