The client (referred to for convenience as "Paul"), having been convicted of a serious financial crime, faced confiscation proceedings under the Proceeds of Crime Act 2002 (POCA), in which the prosecution advanced an exceptionally high benefit figure. The prosecution's case included claims over bank accounts in the UK and overseas, property held in both jurisdictions, and a significant allegation that the client held hidden assets.
Through detailed forensic work, rigorous instruction-gathering, and sustained challenge to the prosecution's evidence and methodology, the outcome was a substantially reduced confiscation order and, critically, removing the hidden assets allegation entirely.
Background
Following Paul's conviction for a financial crime, the prosecution applied for a confiscation order under POCA 2002. The prosecution served their Section 16 statement asserting a substantial benefit figure and a corresponding available amount said to reflect assets held by him. The assets identified spanned multiple jurisdictions and included UK bank accounts, overseas accounts held in European financial institutions, a residential property in England, a further property held abroad, and, most seriously, a contention that the client held or had transferred hidden assets beyond the reach of the confiscation process.
The hidden assets allegation was advanced on the basis that the prosecution could not reconcile the client's known lifestyle expenditure and asset base with their declared income and legitimate earnings over the relevant period. The prosecution invited the court to draw the inference that unaccounted-for wealth had been deliberately concealed or dissipated.
The potential consequences were severe: a confiscation order in the full amount sought, with a lengthy default term of imprisonment attached in the event of non-payment, and the reputational damage of a finding that Paul client had sought to hide assets from the court.
Steps to Protect the Client
Taking Instructions and Building the Picture - The starting point was a thorough and detailed instruction-taking process with the client. Confiscation proceedings are factually intensive and the burden of rebutting individual asset and benefit claims rests on the defence. Working methodically through every element of the prosecution's statement was necessary, putting each specific claim to the client and requiring them to provide us with a full explanation and, where possible, documentary evidence to support their account.This included tracing the origin and ownership history of each property, understanding the source of funds used to acquire them, and obtaining documentation from overseas, including bank records, title documents, and correspondence through Paul's own contacts and, where necessary, through formal requests via the relevant authorities. For the overseas bank accounts in particular, working closely with the client was important to obtain certified account histories and supporting documentation that could be placed before the court. Where accounts were held jointly or in the name of a family member, instructions were taken on the true beneficial ownership and we obtained supporting evidence to establish that those funds did not form part of the client's realisable assets.
Challenging the Benefit Figure - undertaking a detailed analysis of the prosecution's methodology in calculating the benefit figure. In financial crime confiscation proceedings, the prosecution will frequently seek to rely on a "criminal lifestyle" assumption under section 10 of POCA 2002, which enables the court to treat all assets and expenditure within a six-year period as the proceeds of crime unless the defendant can prove otherwise. Attention then turned to examining whether the assumptions applied were properly founded and challenged areas where legitimate income, inheritance, gifts, or other lawful receipts had been wrongly included or ignored.
Identifying errors and overstatements - In the Section 16 statement, property valuations did not accurately reflect the market position, there were errors in attribution of assets that were held beneficially by third parties, and the double-counting of certain financial flows through multiple accounts.
Addressing the Overseas Assets
The prosecution's approach to the overseas assets was insufficiently evidenced. The valuations relied upon were based on generalised estimates rather than verified market data, and the assumed exchange rates and account balances were not supported by the underlying banking documentation.
An independent valuation expert was instructed in respect of the overseas property and obtained up-to-date account information for the overseas banking assets. This evidence, placed before both the prosecution and the court, significantly reduced the contribution of these assets to the available amount.
Removing the Hidden Assets Allegation
The hidden assets allegation was the most serious aspect of the proceedings. This could only be addressed comprehensively by producing a detailed and documented account of the client's financial history - effectively, a complete personal financial reconstruction covering the relevant period.
Working with the client and, where appropriate, with a forensic accountant, a schedule was produced demonstrating the client's income from legitimate sources, the timing and circumstances of each significant financial transaction, and a credible account for all material items of expenditure. This resuted in being able to identify sources of wealth that the prosecution had either overlooked or attributed to criminality, including an inheritance, proceeds from a legitimate business sale that pre-dated the offending, and a number of inter-family transfers that had been mischaracterised.
Following detailed engagement with the prosecution, including written submissions, the prosecution agreed that the evidential basis for the hidden assets allegation could not be sustained. The allegation was withdrawn before the matter proceeded to a contested hearing.
Negotiations and the Hearing
Armed with evidence and submissions, the next step was to engage the prosecution in focused negotiations to agree a significantly reduced available amount. Where agreement could not be reached on specific assets, these aspects were presented forensically before the court, cross-examining the prosecution's financial investigator and relying on expert evidence obtained for Paul.
Outcome
The confiscation order ultimately made by the court was substantially lower than the sum originally sought by the prosecution. The hidden assets allegation was removed entirely, and the court accepted Paul's case in relation to a number of the disputed assets. The final order reflected only those assets and that portion of the benefit figure that could be properly substantiated on the evidence.
The client was able to satisfy the order through the realisation of specific identified assets, avoiding the lengthy default term that would otherwise have applied had the full order been made.
Key Takeaways
Confiscation proceedings are as demanding as the underlying criminal trial and require the same level of focused, expert preparation. A failure to engage rigorously at this stage can result in an order that bears no genuine relationship to the proceeds of crime.
Obtaining thorough and detailed instructions from the outset is essential. The defence cannot challenge what it has not first understood, and clients must be supported to engage fully with every aspect of the prosecutor's statement.
Overseas assets and accounts present particular evidential challenges but are not immune to challenge; independently verified documentation and expert evidence will frequently undermine the prosecution's generalised assumptions.
Hidden assets allegations are serious and must be addressed head-on, through a documented financial reconstruction rather than bare denial. Proactive engagement with a forensic accountant at an early stage is often decisive.
Early and constructive engagement with the prosecution, including without-prejudice dialogue and the timely service of expert reports, can achieve significant reductions in the order before the matter proceeds to a contested hearing.
This case study has been prepared for illustrative purposes only. All identifying details have been anonymised to protect client confidentiality.
