Many people do not know how does a confiscation order work? This is usually added to the benefit alleged from crime. Thus, somebody who has flaunted health and safety rules on a couple or so occasions, or evaded a few thousand pounds of tax, may be threatened with the loss of their main asset worth many more times the scale of the crime. Read on for you to understand how does a confiscation order work?
The regulators will allege a level of benefit within their Statutory Statement of Information that they must produce under Section 16 of the Proceeds of Crime Act so that a court can consider how much they have obtained from their life of crime. When an independent forensic accountant is faced with this statement there is often a gasp of horror. The reason for this is that there is no constancy in the treatment by the various Crown investigators who are looking at all the ways to include assets within the benefit. Property is usually a feature, and it can be included in any number of ways.
It could be the family home that was bought twenty years ago. In this case, the actual acquisition of the house should be excluded from the benefit. It was acquired a long time before the Relevant Date. The Relevant Date is six years before proceedings were commenced against the convicted person and define the period in which the regulators can look for the proceeds of crime.
If the house increased in value since the Relevant Date, this may represent additional equity that can be considered as the benefit. However, this is only in respect of any increase that can be matched to mortgage payments and then only if the source of those mortgage payments can be deemed to represent criminal benefit.
Confiscation proceeding that is currently in the courts represents proceedings commenced a year or two ago. Therefore the Relevant Date is going to be around 2003 – 2006 in most cases. As a result of the drastic property crash in 2007 and 2008, very few houses will be showing growth in value during this time – many houses bought with a mortgage being in negative equity!
These are all very important considerations and after the initial shock of seeing a claim for the full market value of a property included within every confiscation order sought, it is often possible to present an argument for a more realistic sum.
Criminals should be made to know how does a confiscation order work. However, the assumptions allowed by the Proceeds of Crime Act 2002 often mean that unreasonable benefit estimates are presented and therefore there is a strong case for the employment of the forensic accountant to rationalise the claim. This will increase the expense of the whole criminal justice system certainly but does ensure a more balanced outcome. At the end of the day, large sums of assets are recovered from criminals in this way and serve as a deterrent for those thinking of straying from their legitimate trading methods to abusing the regulations which are effectively considered these days to be a life of crime.