The following case demonstrates the firm resolve of the Jersey authorities to combat international financial crime and money laundering by freezing the assets of criminals. Speaking after the trial, Attorney General Robert MacRae QC said – It shows that Jersey is no place to hide the proceeds of crime, although at this time there is no news whether the regulator is looking at SG Hambros Bank (Channel Islands) Limited
The case is about the defendants
1. over-harvesting fish product in South Africa,
2. bribed fishery control officers in South Africa to turn a blind eye to such over-harvesting,
3. made false declarations to South African fishery control officers,
4. made false declarations to South African customs in connection with export to Jersey,
5. imported such over-harvested fish product into Jersey, (possibly)
6. made false statements to Jersey customs and then sold such fish product in Jersey through a Jersey company.
1. Was reported in the Jersey Evening Post 21/4/2018 (To read the article click here) and summarised below
2. allows a review of what the “’Proceeds of criminal conduct’ means in Jersey.
The following provides a brief summary on the question what does the “’Proceeds of criminal conduct’ means in Jersey and shown in the (Click here to read )
“’Proceeds of criminal conduct’, in relation to any person who has benefited from criminal conduct, means that benefit.”
1. ‘Criminal conduct’ is defined in Article 1 by reference to Schedule 1 (liable to imprisonment for one year or more) and includes conduct which, if it occurs outside Jersey, would have constituted a Schedule 1 offence if occurring in Jersey.
2. Mere fishing in excess of quota is not criminal conduct for the purposes of the 1999 Law because the maximum sentence under the relevant Jersey legislation is a fine. However,
a. the conduct in South Africa (included in the U.S. indictment) includes bribery of fishery control officers and making false statements to fishery control officers and to South African customs.
b. Articles 5-9 of the Corruption (Jersey) Law 2006 make it an offence to give, promise or offer any person any advantage as an inducement to or reward for any officer or employee of a public body doing or not doing anything in respect to any matter or transaction with which that public body is concerned. Such an offence attracts a sentence of ten years.
c. Under Article 23 of the Sea Fisheries (Jersey) Law 1994, the making of a false statement when providing information under the Law attracts a sentence of up to 1 year’s imprisonment.
Would the defendants, through the Jersey company, have acquired, used or had possession or control of criminal property in Jersey?
3. ‘Property’ is widely defined in the 1999 Law and there is no doubt that fish constitute property for these purposes.
4. Furthermore, it is clear that, on the transposed facts, Mr Bengis would have acquired, or used or had in his possession or control such property in Jersey.
The real question is whether such fish would be criminal property as defined in Article 29 i.e. it constitutes proceeds of criminal conduct or represents such proceeds, whether in whole or in part and whether directly or indirectly.
5. As stated above,
a) overfishing is not a Schedule 1 offence because the maximum penalty for such offending in Jersey would be a fine.
b) It is not therefore criminal conduct for the purposes of the 1999 Law.
c) Bribing a fishery control officer would amount to the offence of corruption contrary to Article 5 of the Corruption (Jersey) Law 2006 if committed in Jersey and would therefore be a Schedule 1 offence.
d) as Article 23 of the Sea Fisheries (Jersey) Law 1994 creates an offence of making a false statement in providing any information required under that Law or pursuant to Regulations made there under which attracts a prison sentence of up to one year,
e)making false statements to fishery control officers would also amount to a Schedule 1 offence if committed in Jersey.
f) both the bribing of the South African fishery control officers and the false declarations made in South Africa would amount to criminal conduct for the purposes of the 1999 Law.
THE STORY = Freeze on illegal lobster magnate’s multi-millions
A SOUTH African fishing magnate who made a fortune selling illegally caught lobster has been told that he cannot get his hands on millions of pounds held in the Island.
The Jersey Royal Court has decided to maintain a freeze on the assets of Arnold Bengis, who admitted his involvement in a conspiracy to land huge amounts of the prized shellfish in excess of permitted quotas between 1999 until 2001.
The illegally caught lobster were shipped to the US.
The [Jersey] court was asked to rule on whether Bengis could have access to more than $23 million, which formed part of the $37.2 million |£26.4 million| which had been the subject of a forfeiture order.
An appeal against the order was launched by a Lichtenstein-based trust company.
Bengis, who owned Hout Bay Fishing Industries, pleaded guilty in a South African court in 2002 to 28 charges under the country’s Marine Resources Act.
South African police alerted the US authorities to his offending, sparking investigations by law enforcement in both countries which led to a number of other individuals being prosecuted.
Around $23.3 million of Mr Bengis’ money was ‘held by three companies with SG Hambros Bank (Channel Islands) Limited in Jersey’ according a judgment issued by the Royal Court setting out its reasons for rejecting the appeal.
On 21 July 2017, following a request from US authorities, the Attorney General granted a forfeiture order of $37.2 million |£26.4million].
The judgment said:
- ‘It |Hout Bay | entered a plea agreement on 29 April 2002, whereby it admitted for a period 1999 to 2001 to over-harvesting fish products and to facilitating the relevant quota holders from over-harvesting West Coast lobster.
- ‘Landing fish products while no fishery control officers were present and/or without recording the true amount of fish product landed as it was obliged to do.’
The operational director of Hout Bay was also charged with multiple offences on the same indictment, including
- the bribing of fishery-control officers so that they turned a blind-eye to Hout Bay’s ‘landing of fish product’ in excess of its permitted amounts.
- Click here to read the judgment
- how the officers were party to the conspiacy and were aware of the amount of fish landed by Hout Bay and how it was being under-recorded.
Liechtenstein-based First Trust Management Limited AG, represented by Advocate Howard Sharp, brought the appeal and applied for the forfeiture to be lifted.
However, The [Jersey] court deemed
- · that there was strong suspicion that proceeds from Bengis’ crimes, committed in the US, had ‘somehow’ found their way into one of the companies listed in the forfeiture order.
The [Jersey court] judgment stated:
- ‘The court does not consider the prospects of the Attorney General as being so weak that the saisie |forfeiture order| should be lifted.
- ‘There is a strong public interest in depriving criminals of the proceeds of their offending and The [Jersey] court should not insist on too high a standard of likelihood of success before granting a saisie.
- ‘It is sufficient if there are reasonable prospects of success.’
Speaking after the case, Attorney General Robert MacRae QC said:
- ‘This case again clearly demonstrates the firm resolve of the Jersey authorities to combat international financial crime and money laundering. It shows that Jersey is no place to hide the proceeds of crime.’
The case was reported in the Jersey Evening Post 21/4/2018 (Click here to read original article )