The judgment of the Court of Appeal in R v Druce ( EWCA 40) delivered on 31 January is a stark lesson in how confiscation proceedings can go badly wrong for an ill-prepared defendant.
Mr Druce had pleaded guilty to money laundering offences. The Crown’s case was that he controlled bank accounts into which gullible victims paid their money which Druce then transferred to the fraudsters. The Crown alleged and Druce admitted that about £1 million had been so laundered by him. But despite this, at the confiscation hearing 18 months later, and before a different judge to the one who had sentenced Druce, the Crown contended that for confiscation purposes, the court should deem that Druce’s benefit was the entire amount laundered. Second, that as he had not adequately explained what had come of it, the court should also deem that he was seeking to conceal his true wealth and so make a finding of hidden assets.
It appears from the judgment that the defendant’s first major mistake was not to contend at the outset of the confiscation hearing that the Crown’s case at confiscation contradicted what it had alleged at the trial. The second apparent error was not to point to the line of authorities since the seminal 2008 House of Lords case of R v May which hold that a launderer who is not the principal offender should not be deemed, without further evidence, to have access to the entire fruits of the underlying crime. Had both these points been taken, the Crown’s case, that Druce obtained the entire £1 million, would have been rejected. This would have potentially inflicted another major blow on the Crown’s case in that it would then have had to specify what it contended was his actual benefit instead of being able to say nothing about this and so avoid any evidential burden. Druce’s case on what his true wealth was would inevitably have begun from a far stronger position.
Druce elected to give oral evidence essentially to dispute the Crown’s allegation that he had hidden assets. The Crown’s strategy on cross-examination of him was to discredit his assertion that he had withdrawn all of the £1 million in cash and given it to the fraudsters. With the burden of proof all upon him to prove his case to the civil standard, it was vital that he was a credible witness. Unfortunately it seems that he was a poor witness: for example he said he could not now remember (three years after his crime and he was now aged 73) the details of his meetings with the fraudsters. Similarly he could not recall how much cash he passed at each meeting. Disastrously in relation to the issue of how much of the above amount he had kept, Druce said he could not recall, and had earlier said about £50,000 only because his lawyer advised him to.
The judge duly dismissed all his evidence and held that he had hidden assets of £142,000. After taking into account other assets which Druce accepted he had (another point going to his credibility which apparently was not highlighted), he fixed the confiscation order at £327,000 and sentenced Druce to a term of three years imprisonment if he failed to pay that amount within six months.
With the benefit of hindsight it seems that much more work could have been done by or on behalf of Druce to shore up or strengthen his case on hidden assets in advance of his confiscation “trial”. Instead of allowing his case to be entirely dependent upon his performance in the witness box, probably a lot of evidence could have been presented as to Druce’s relationship with the fraudsters and why it was inherently unlikely that they would have generously allotted him a sizeable chunk of their gains in addition to the fee they paid him. Possibly the Crown could have been asked to disclose what it knew about the fraudsters, and the officer in the case called to be cross-examined on Druce’s behalf about their modus operandi. Overall it appears that many of the inadequacies which afflicted Druce’s testimony could have been foreseen and overcome.
So the lesson of course is careful preparation. It is complacent and, as this case shows, woeful to believe that truth is its own advocate. With fresh lawyers appearing for him at the appeal, Druce presumably hoped that the mistakes and missed opportunities in the court below could be appreciated and then rectified by the Court of Appeal. This case is a lesson as to why that is naïve.
The Court was entirely uncharitable to every appeal point made on his behalf on the basis that Druce had had his day in court and was stuck with the outcome. In the Court’s mind there were no issues of law in play and its judgment does not cite a single authority. True to this approach, it held that the judge’s assessment of Druce’s oral evidence as unreliable was a finding he was entitled to make. An attempt to have fresh evidence admitted at the appeal which sought to explain his poor performance was rejected: “There is no rational basis upon which to admit a witness’s statement for the purpose of trying to explain away the inadequacies of his earlier evidence.”
A reading of this judgment (http://www.bailii.org/ew/cases/EWCA/Crim/2013/40.html) does not leave an impression that justice was done and that the reason why Druce will surely shortly return to prison to serve his default sentence of three years, having only got 18 months for his crime, is because he failed to properly prepare for his confiscation hearing.
Corker Binning is a law firm specialising in business crime and fraud, confiscation proceedings and general criminal work of all types. For more information on how we can help you, call us on 0207 353 6000.