Adams, In the matter of the Criminal Justice Act 1988

Factual and Procedural Background

An application for a Certificate of Inadequacy was made by the Applicant pursuant to Section 83 of the Criminal Justice Act 1998 following a Confiscation Order imposed after his 2007 guilty plea and sentencing for conspiracy to conceal the proceeds of criminal conduct. The Confiscation Order required payment of £750,000, based on an agreed value of realisable assets, with a default imprisonment sentence for non-payment. The Applicant was also subject to a Financial Reporting Order (FRO) requiring periodic financial disclosures. Subsequent to release from prison, the Applicant was re-imprisoned for breaches of the FRO. The Applicant contended that all realisable assets had been exhausted and denied possession of hidden or additional assets beyond those considered in the original Confiscation Order. The Respondent disputed this, asserting the existence of undisclosed assets and cash reserves supporting the Applicant’s lifestyle.

The criminal background involved extensive covert surveillance and implicated the Applicant and associates in money laundering schemes using sham companies to disguise income. The Applicant’s wife was initially charged but the prosecution did not pursue charges against her following the Applicant’s guilty plea. A Restraint Order was made to prevent disposal of assets.

Following the Confiscation Order, the Applicant’s assets, including the matrimonial home and other valuables, were sold or realised by a Receiver, with partial satisfaction of the Order. The outstanding balance remained substantial, and the Applicant sought a Certificate of Inadequacy claiming an inability to pay the remaining sum.

Legal Issues Presented

1. Whether the Applicant has proven on the balance of probabilities that his current realisable assets are inadequate to satisfy the outstanding balance of the Confiscation Order.
2. Whether the Respondent is entitled to assert the existence of hidden or unidentified assets at the time the original Confiscation Order was made, contrary to the basis of plea and sentencing agreement.
3. The scope and limitations of the Certificate of Inadequacy procedure under Section 83 of the Criminal Justice Act 1998, particularly regarding going behind findings made at the original confiscation hearing.

Arguments of the Parties

Applicant's Arguments

• The realisable assets figure of £750,000 was agreed at the original hearing and did not include any hidden or unidentified assets.
• All assets identified in the Confiscation Order have been realised and exhausted.
• The Applicant has no current income or assets and is financially dependent on his wife, who herself has no available capital reserves for payment.
• The Respondent cannot now assert the existence of hidden assets or tainted gifts beyond those agreed at the original hearing.
• The Applicant has complied fully with financial reporting and asset realisation requirements, cooperating with authorities and the Receiver.

Respondent's Arguments

• The Applicant has failed to prove that his current assets are worth less than the outstanding balance on the Confiscation Order.
• Evidence suggests that money paid to the Applicant and his wife, whether described as loans or investments, is in reality the Applicant’s own hidden assets.
• The Applicant and his wife’s cash usage and spending patterns are inconsistent with their claim of having no substantial capital or income.
• The intertwined financial affairs of the Applicant and his wife indicate the existence of concealed funds used to maintain their lifestyle.
• The Certificate of Inadequacy procedure does not preclude the Respondent from presenting evidence of assets concealed at the time of the original Confiscation Order if they are now available to satisfy it.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court analysed the application under the framework of Section 83 of the Criminal Justice Act 1998 and relevant case law. It recognized that the burden lies on the Applicant to prove, on the balance of probabilities, that his realisable assets are inadequate to meet the outstanding balance of the Confiscation Order. The Court emphasized that the Certificate of Inadequacy procedure is intended as a safety net to address genuine changes in financial circumstances post-Order, not as a mechanism to revisit or challenge the original findings regarding realisable assets.

The Court accepted that no Schedule of Assets was available from the original proceedings but found no dispute as to the assets that were likely included in the Confiscation Order. The Applicant’s argument that the Respondent was precluded from asserting the existence of hidden assets at the time of the original hearing was considered. The Court held that while the Applicant cannot challenge the original order’s findings, the Respondent is not barred from asserting the existence of assets concealed at that time but now available to satisfy the Order.

Extensive evidence was reviewed, including witness statements and financial investigations revealing the Applicant and his wife’s intertwined financial affairs, use of cash to conceal spending, and loans and investments from associates. The Court found inconsistencies and a lack of full and candid disclosure by the Applicant regarding current assets, concluding that the evidence suggested the existence of undisclosed financial resources.

The Court also examined the nature and legitimacy of the Applicant’s and his wife’s business activities and employment, finding them insufficiently substantiated to support their claims of limited income. The Applicant’s lifestyle and spending patterns were inconsistent with the assertion of no assets or income. The Court considered the Applicant’s failure to provide a transparent and full account of his financial position as undermining his case.

Consequently, the Court was not satisfied that the Applicant had met the evidential burden to show his assets were inadequate to pay the outstanding balance.

Holding and Implications

The Court REFUSED the application for a Certificate of Inadequacy.

The direct effect of this decision is that the outstanding balance of the Confiscation Order remains payable by the Applicant. The Court found no basis to reduce the amount due on the grounds of inadequacy of assets. No new precedent was established; the decision reaffirmed established legal principles that the burden lies with the Applicant to prove inadequacy and that the Certificate of Inadequacy procedure cannot be used to challenge the original confiscation findings. The ruling underscores the Court’s approach to ensuring convicted persons are held accountable for the proceeds of their criminal conduct and that attempts to conceal assets will be scrutinized thoroughly.