Taktouk v R.

Factual and Procedural Background

These confiscation proceedings arise from a private prosecution for fraud offences brought by Company A and Company B against the Appellant. On 2 August 2021, in the Crown Court at The City before Judge Milne KC and a jury, the Appellant was convicted of 10 offences including fraud by abuse of position, fraud by representation contrary to the Fraud Act 2006, and using a false instrument contrary to the Forgery and Counterfeiting Act 1981. On 23 September 2021, the Appellant was sentenced in absentia to 7 years' imprisonment and disqualified from being a company director.

On 3 November 2023, the judge ordered the Appellant to pay a Confiscation Order totaling £4,549,925.29 under section 6 of the Proceeds of Crime Act 2002, payable within three months, with a default term of 8 years' imprisonment if unpaid. Of this sum, £3,230,811.60 was to be paid as compensation to Company B. The Appellant has applied for leave to appeal against this Order. Leave was granted on two of four grounds, and the appeal was heard accordingly.

The Appellant has passed the point in his sentence where release would be due and is now serving the default term of imprisonment because the Order remains unpaid.

The offending related to a failed property redevelopment project involving the purchase of a flat at The City for £7.75 million in 2015, funded partly by mortgage and partly by investors including the Appellant's family and others. The Appellant managed the project and was to receive 5% of profits, but the project failed due to unauthorized works and mortgage default. The Appellant made fraudulent cash calls on investors, diverted funds for personal use, and misrepresented financing arrangements.

The Appellant's defence was that he had access to substantial family wealth and discharged obligations without dishonesty, but the jury did not accept this. His father, who was alive during trial but not called as a witness, has since died.

Confiscation proceedings began in September 2021, with hearings extending from June to September 2023. The judge delivered a detailed ruling on 16 October 2023 and formally made the Order on 3 November 2023.

During the criminal proceedings, an all-assets restraint and disclosure order was made against the Appellant, requiring disclosure of assets including a family company in Nigeria. The Appellant’s disclosures were challenged and he was found in contempt of court for breaches of restraint and disclosure orders, resulting in a 7-month sentence.

Evidence and investigations into the family wealth and company assets were extensive but inconclusive, with difficulties in obtaining evidence from Nigeria and conflicting witness credibility assessments. The judge made findings on the Appellant’s credibility and asset interests, which were not challenged on appeal.

Legal Issues Presented

1. Whether the judge erred in determining the benefit figure from specific criminal conduct, particularly regarding alleged joint receipt of criminal property with a third party.
2. Whether the application of statutory assumptions in a criminal lifestyle case resulted in an unjust benefit figure.
3. Whether fresh evidence from the Appellant’s brother, executor of the family estate, should be admitted to challenge findings on the available amount of assets.
4. Whether the prosecution failed to disclose investigator reports relevant to the Appellant’s claimed family wealth and whether this non-disclosure warrants allowing the appeal.

Arguments of the Parties

Appellant's Arguments

• The benefit figure from specific criminal conduct was flawed because money recovered from a third party should have been treated as jointly obtained criminal property, avoiding double recovery.
• The statutory assumptions applied in the criminal lifestyle case produced injustice and the benefit figure from general criminal conduct should be reduced.
• Fresh evidence from the Appellant’s brother, the executor of the family estate, shows that the Appellant had no significant interest in family assets and challenges the judge’s findings on available assets.
• The prosecution failed to disclose private investigator reports that did not confirm claimed family wealth, which should have been disclosed and are relied upon as fresh evidence.

Prosecution's Arguments

• There is no evidence that the Appellant and the third party received criminal property jointly, so the benefit figure should not be reduced.
• The statutory assumptions and the benefit figure based on receipts into the Appellant’s account were properly applied and not subject to merit-based challenge.
• The Appellant’s brother’s evidence is of limited weight and was not adduced earlier without reasonable explanation; it does not justify allowing the appeal.
• The failure to disclose investigator reports was an error but the defence did not pursue the material; the reports alone do not justify allowing the appeal.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
R v. Butler [2025] EWCA Crim 1	Assessment of confiscation orders and default sentences in relation to asset concealment.	Referenced to reject the argument that serving a long default sentence indicates absence of assets.
R v. Miller [2022] EWCA 1589; [2023] 4 WLR 6	Remittal of benefit determination to Crown Court in confiscation proceedings.	Distinguished as not addressing available asset determination; relevant to procedural directions.
R v. Haden (Mark) [2024] EWCA Crim 344	Interpretation of "proceed afresh" in confiscation appeals and procedural management.	Applied to clarify that fresh proceedings do not require restarting all procedural steps; supports directions given.

Court's Reasoning and Analysis

The court examined the grounds of appeal in two groups, refusing leave on the grounds challenging the benefit figure but granting leave on those concerning the available amount. It found no evidential basis for reducing the benefit figure due to alleged joint receipt of criminal property with the third party, emphasizing that criminal liability does not equate to joint receipt of criminal property. The judge’s application of statutory assumptions to receipts into the Appellant’s bank accounts was upheld as fair and unchallenged in the proceedings.

Regarding fresh evidence, the court carefully considered the witness statement of the Appellant’s brother, the executor of the family estate, who asserted limited family assets and no legal claim by the Appellant. Although this evidence was not presented earlier without reasonable explanation, the court found it credible and relevant. Balancing the interests of justice, the court held that the potential injustice of the Appellant serving a lengthy default sentence when plausible evidence suggests fewer available assets justified admitting this fresh evidence.

The court acknowledged the prosecution’s failure to disclose investigator reports but noted the defence’s failure to pursue them during proceedings. While this non-disclosure was an error, the evidence from these reports alone was insufficient to allow the appeal but may be considered in fresh proceedings.

The court interpreted statutory provisions governing appeals under the Criminal Appeal Act 1968, concluding that the appeal court can quash the confiscation order and remit the matter for fresh determination without restarting all procedural steps. It directed that the benefit figure remain unchanged and that the fresh evidence be admitted in the Crown Court for reconsideration of the available amount.

The judge below was commended for his thorough, fair, and skilled handling of the complex proceedings, with no criticism arising from the appeal decision.

Holding and Implications

i) Leave to appeal on Grounds 1 and 2 (challenging the benefit figure) is refused.

ii) Leave to appeal on Ground 3 (fresh evidence on available amount) is granted and the appeal is allowed; the Confiscation Order is quashed under section 11(3)(a) of the Criminal Appeal Act 1968.

iii) Leave to appeal on Ground 4 (non-disclosure) is granted but the appeal on that ground is dismissed.

iv) The Crown Court is directed under section 11(3A) of the Criminal Appeal Act 1968 to proceed afresh to determine the appropriate confiscation order under section 6 of the Proceeds of Crime Act 2002.

v) Directions under section 11(3B) include:

• The Crown Court must not increase the benefit figure determined by the judge and is not required to reconsider it.
• The Crown Court should admit the fresh evidence of the Appellant’s brother and the investigator reports exhibited in the appeal.
• The fresh proceedings should be listed before Judge Milne KC for case management as soon as reasonably practicable.
• Further management of the case is at the Crown Court's discretion, subject to these directions.

The direct effect is that the Appellant’s confiscation order is quashed and the Crown Court will reconsider the available amount of assets with the benefit figure fixed. No new precedent altering legal principles has been established; the decision clarifies procedural application of fresh evidence and statutory appeal provisions in confiscation proceedings.