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Money laundering part 7

This wide definition of criminal property is extended by sections 340 (5)-(9). They provide that a person benefits from conduct if he obtains property as a result of or in connection with the conduct. Moreover if a person obtains a pecuniary advantage as a result of or in connection with conduct is to be taken to have been obtained as a result of or in connection with conduct in a sum of money equal to the value of the pecuniary advantage. Thus if someone threatens a club doorman with violence unless they are admitted to the particular club for free, the pecuniary advantage would be the admission fee avoided.

Since section 340 (7) provides that references to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained in both that connection and some other. What that means therefore is if there is an advantage which is partly obtained from criminal conduct and partly from other conduct it still ranks as criminal property. Similarly the person benefits from conduct if his benefit is the property obtained as a result of or in connection with the conduct. This is designed to encompass indirect benefits.

Thus for all practical purposes criminal property unless and until forfeited goes on forever for these purposes. If you rob a bank and take large quantities of cash, that is criminal property. If you manage to filter the money through a dishonest trader into a bank account, the contents of that bank account are criminal property. If you buy an office block with that money, that constitutes criminal property. If that asset is then used as security or collateral for a loan, the money obtained thereby is also likely to be criminal property. Nor does it matter that the money is only a part. If the benefit of criminal conduct represents part of the fund, then it is still criminal property because it still represents such benefit in part.

It is similarly important to bear in mind that any crime means any crime. It is not, as was originally the case, limited to serious crime such as drug trafficking. Any crime will do. Therefore for example if a client has obtained a benefit as a result of dishonest tax evasion that would count.

We have seen the limitations on foreign criminal conduct, but those are relatively limited (see the previous articles in this series). Thus even if something is lawful abroad which would be unlawful in the United Kingdom, if a sentence of 12 months or more could be passed for it (apart from certain limited exceptions as referred to in previous articles) it will still constitute criminal conduct for this purpose. This of course can give rise to difficulties where conduct has occurred abroad. Let us say there is a sweatshop in a foreign country which is operating in conditions which would be illegal here, and the relevant person for money-laundering purposes knows this. What would be appropriate charge be? What would the penalty be? One can see that there are difficult questions to answer.

Whilst one might say that this is a theoretical rather than real problem, it is far from that. It will be noted that the definition means that property has to be a benefit from criminal conduct and also the alleged offender has to know or suspect that it constitutes or represents such a benefit. That does not mean that the person has to know the precise criminal conduct. Let us say that a person suspects one type of criminal conduct, but in practice it is actually a different type of criminal conduct. It is still actually criminal conduct and the person knows or suspects that it is a benefit from criminal conduct and therefore on the face of it the section would bite. The significance of this could be that the hapless defendant might know or suspect one type of criminal conduct (the example above) whereas in fact it could be a very different type of criminal conduct (drug-trafficking). It is important to bear in mind therefore that the consequence of knowledge or suspicion can be extremely problematical if the property turns out to be criminal property, even if not in the way you thought it was.

Michael J. Booth QC