Author: Francesca Cassidy-Taylor
14 September 2023
3 min read
The Home Office has recently released official statistics on the value and volume of proceeds of crime that have been restrained, seized, or frozen and subsequently recovered in the period from March 2018 to March 2023.
One of the interesting takeaways that emerges from the data is the effectiveness of law enforcement powers against fraud related offences and money laundering in both the criminal and civil sphere.
Included in the data are a few notable decisions in the courts over the course of the last year, which show how law enforcement has adapted to the challenges of wide-ranging fraudulent behaviour.
Proceeds of crime can be recovered through confiscation orders, by which a convicted defendant must pay HMCTS the profits they received from their crime.
In the last year (2022 to 2023), fraud-related confiscation orders accounted for 65% of the value of all confiscation orders in that year. While there were around 400 fraud related confiscation orders imposed, their combined value accounted for £125.6 million, making the average order worth £314,000.
The total value of confiscation orders in 2022 to 2023 is 184% higher than in previous years. On the face of it, that would suggest that law enforcement is becoming more adept at recovering proceeds of crime.
While that may be the case, the high figure is largely explained by the Serious Fraud Organisation’s (SFO’s) investigation into bribery perpetrated by Glencore in Africa. The SFO’s investigation led to a record-breaking penalty of £281 million in 2022. The penalty included a fine, the SFO’s costs, and importantly for this data set, a confiscation order for £93.5 million.
This is the largest confiscation order imposed in the history of the Asset Recovery annual statistical series.
One of the most notable statistics in the report is the level at which the overall value confiscation orders has reduced for money laundering offences. The value has dropped by 93% since the previous year.
In 2022 to 2023, the value of these orders was £3.1 million. But in the year before that, they were £46 million. While the number of orders hadn’t altered significantly (90 last year; 110 the year before) there were no high value cases of over £1 million last year.
This continues a trend, as the value of confiscation orders for money laundering has been falling year-on-year since 2018 to 2019.
However, it’s a different story when you look at the seizures and forfeiture orders for money laundering related offences.
The value of seizure orders for money laundering related offences totalled £124.9 million in 2022 to 2023. On the whole, money laundering related offences have remained the most prominent offence type for all seizure sub-types over the last 6 financial years. These offences account for £599.8 million (51%) of the £1.2 billion seized and frozen in the period. Forfeiture orders for these offences over the last 6 financial years account for £340.1 million.
In part, this can be explained by the recording practices of Proceeds of Crime Act Agencies, who often default to recording seizures and forfeitures as ‘money laundering’ as a catch-all for illicit finances.
A civil recovery orders is an order made by the High Court, and enables an enforcement authority to recover property which is determined to be obtained through unlawful conduct. We have prepared an in-depth guide on civil recovery orders.
In the last year, there was a novel decision on civil recovery orders. While the value of civil recovery orders has remained relatively unchanged over the course of the last 6 years, it hit an “exceptional peak” in 2022 to 2023 due to this one case.
In November 2022 the National Crime Agency (NCA) managed to take control of £53.9 millions of suspected proceeds of fraud. Barclays Bank UK Plc reported the funds, which lay in various unrelated bank accounts, as suspicious. Barclays ringfenced the money and the High Court agreed to grant a civil recovery order to hand the money over to the NCA. This decision was the first time legal powers under the Proceeds of Crime Act 2002 (POCA) were used to recover proceeds of crime without naming the account holders in the court action.
While there have been successes in the civil recovery sphere, it remains notoriously difficult to receive compensation through criminal proceedings.
There has been a gradual decline in the value of total compensation paid to victims since 2018. The total compensation paid to victims fell from its peak of £36.9 million in 2018 to 2019 to its lowest amount of £15.5 million in 2022 to 2023.
However, fraud related offences have remained the most prominent offence type for compensation over the last 6 financial years. Fraud related compensation accounted for 67% of compensation processed since 2017.
While compensation is often difficult to achieve, law enforcement has managed to recover £15.5 million in compensation in the last year through confiscation order receipts.
Despite the impact of COVID-19 restrictions in 2020 to 2021, there has been a steady trend in recovering assets, and investigating and prosecuting wrongdoing.
Enforcement agencies have been particularly adept at recovering assets that were procured by means of fraud or money-laundering and we are starting to see a bold use of large fines and novel applications of the law to crack down on these offences.
Francesca’s experience of top-level, multinational corporate crime investigations and her ability to identify the best route for clients has made her the first choice of many high net worth individuals, senior business figures and professionals.
She is sought by corporates for advice and representation on compliance matters; including responding to whistleblower complaints and conducting internal investigations and risk assessments.