Criminal Assets Bureau v Gately & Anor (Approved)

Factual and Procedural Background

These proceedings were initiated by an originating notice of motion in December 2021 brought by the Criminal Assets Bureau (the Bureau) under section 3(1) of the Proceeds of Crime Act 1996 (the 1996 Act). The Bureau sought orders relating to three assets: a semi-detached house located in Glyn Drive, Coolock in Dublin City; a 132D VW Golf motor car seized outside that property in June 2019; and a Rolex watch seized during the same search.

The respondents, referred to as the Appellants, are a couple who have lived in the house with their children. The Bureau alleged that these assets were acquired and maintained using proceeds of crime, specifically implicating the male Appellant as a leading member of an organised crime group known as the Hutch organised crime gang (OCG).

The Appellants had declared income from various sources including a beauty salon business and a hair and beauty company, but the Bureau challenged the legitimacy of their declared income and savings. Extensive financial analysis was conducted, including examination of bank accounts, tax returns, social welfare records, and travel records. The Bureau asserted that the Appellants’ lifestyle and asset acquisitions were substantially funded from undisclosed and illegitimate sources.

The court evaluated belief evidence tendered by the Chief Bureau Officer, admissible evidence including affidavits and exhibits, and additional financial information obtained after the commencement of proceedings. The Appellants provided affidavits repeating earlier assertions but failed to adequately address or rebut the evidence presented by the Bureau.

Legal Issues Presented

1. Whether the assets in question—the Glyn Drive property, the 132D VW Golf, and the Rolex watch—were acquired or funded by proceeds of crime under section 3(1) of the Proceeds of Crime Act 1996.
2. Whether the Appellants had legitimate means to acquire and maintain these assets and fund their lifestyle.
3. Whether mortgage payments made after April 2019 were funded by proceeds of crime and the related discretionary considerations under the proviso to section 3(1) of the 1996 Act.
4. The extent to which the Appellants discharged their reverse burden of proof under the 1996 Act to demonstrate legitimate sources of funds.
5. Whether an order under section 3(1) should be made subject to considerations of justice and proportionality, including recompense to the Appellants for certain mortgage payments.

Arguments of the Parties

Appellant's Arguments

• The Appellants asserted that declared income from their businesses and social welfare benefits funded their lifestyle and asset acquisitions.
• The male Appellant claimed legitimate earnings from operating a hair and beauty business and occasional buying and selling of motor cars.
• The female Appellant claimed to have purchased the Rolex watch from a family acquaintance for a modest sum and that monies used for renovations and mortgage payments came from legitimate sources including a personal injuries compensation award and assistance from her late father.
• The Appellants contended that some financial calculations and assumptions by the Bureau’s forensic accountant were questionable.
• They disputed the timing and source of funds for renovations and mortgage payments, asserting some renovations occurred later than alleged and were funded legitimately.
• The Appellants challenged the Bureau’s financial analysis post-2019, arguing insufficient evidence existed to establish that mortgage payments after that date were subsidised by proceeds of crime.

Applicant's Arguments (Criminal Assets Bureau)

• The Bureau contended that the Appellants lived a lifestyle and acquired assets far in excess of their declared legitimate income.
• The Bureau presented belief evidence that the male Appellant was a leading member of an organised crime gang and that proceeds of crime funded the purchase, renovation, and mortgage payments of the Glyn Drive property, as well as acquisition of the vehicles and the Rolex watch.
• Financial records showed extensive cash lodgements from undisclosed sources inconsistent with declared income or social welfare.
• The Bureau argued that explanations by the Appellants regarding the source of funds were unsupported, vague, or contradicted by objective evidence.
• The Bureau submitted that the assets were acquired and maintained substantially with proceeds of crime, and that mortgage payments up to April 2019 were largely subsidised by such proceeds.
• They acknowledged insufficient evidence to conclusively establish mortgage payments after April 2019 were funded by proceeds of crime but maintained that the overall lifestyle was heavily subsidised by illicit funds.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court undertook a detailed evaluation of the evidence, beginning with belief evidence tendered by the Chief Bureau Officer under section 8 of the 1996 Act. This belief evidence was supported by affidavits, exhibits, and financial records, some of which were inadmissible as evidence but permissible to consider in forming belief.

The court excluded evidence tendered after December 2021 when assessing the reasonableness of the Chief Bureau Officer’s beliefs but included such evidence in the overall evaluation of the prima facie case.

Extensive financial analysis revealed that the Appellants’ declared income and legitimate savings were insufficient to account for the purchase price, renovation costs, mortgage payments, and lifestyle expenditures. The court found credible evidence that significant sums originated from undisclosed sources, likely proceeds of crime related to the male Appellant’s involvement in organised crime.

The Appellants’ explanations, including claims of legitimate business income, personal injury compensation, and family assistance, were found to be vague, unsupported, or contradicted by objective evidence. The court rejected claims that renovations were done gradually by friends or family without cost, and found that the renovations were a single, professionally executed project funded largely by illicit funds.

Regarding the Rolex watch, the court found the Appellant’s claimed purchase price and source of funds unlikely and inconsistent with the watch’s value and the Appellant’s financial position at the time.

While the court accepted there was insufficient evidence to conclude that mortgage payments after April 2019 were funded by proceeds of crime, it found on the balance of probabilities that payments up to that date were substantially subsidised by proceeds of crime.

The court noted the reverse burden of proof imposed on the Appellants under the 1996 Act once the Bureau established a prima facie case, and found that the Appellants did not adequately discharge this burden.

The court also considered proportionality and the risk of injustice, concluding that any order made should allow for recompense to the Appellants for mortgage payments demonstrably made from legitimate sources.

Holding and Implications

The court made an order under section 3(1) of the Proceeds of Crime Act 1996 in relation to the three assets: the Glyn Drive property, the 132D VW Golf, and the Rolex watch (or their proceeds if already sold).

The court held that these assets were acquired and maintained, at least in substantial part, using proceeds of crime.

The order concerning the Glyn Drive property is subject to a lien to recompense the Appellants for €5,087 and any mortgage payments made after April 2019 that can be demonstrated not to have been funded by proceeds of crime. The Appellants will be given an opportunity to address this issue further.

The direct effect of this decision is that the Bureau may take possession or dispose of the assets subject to the conditions set out, reflecting the court's finding that the overwhelming equity in the property represents proceeds of crime.

No new legal precedent was established; the decision applies established principles under the Proceeds of Crime Act 1996 to the facts of this case.