R v Michael Geary
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moore-Bick |
| Judgment Date | 30 July 2010 |
| Neutral Citation | [2010] EWCA Crim 1925 |
| Docket Number | Case No: 201001052B3 T20097086–90) |
| Court | Court of Appeal (Criminal Division) |
| Date | 30 July 2010 |
[2010] EWCA Crim 1925
IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE CROWN COURT AT LEEDS
(THE RECORDER OF LEEDS)
Before: Lord Justice Moore-Bick
Mrs Justice Rafferty DBE
and
His Honour Judge Gilbert QC
(Sitting as a Judge of The Court of Appeal, Criminal Division)
Case No: 201001052B3
(T20097091, T20087805, T20087789, T20097068
T20097086–90)
Mr. Dafydd Enoch Q.C. (instructed by Clarion Solicitors Ltd) for the appellant
Mr. Andrew Robertson Q.C. and Mr. Andrew West (instructed by Her Majesty's Revenue and Customs) for the respondent
Hearing dates: 20 th July 2010
Lord Justice Moore-Bick:
On 7 th October 2009 in the Crown Court at Leeds before the Recorder of Leeds the appellant pleaded guilty on re-arraignment to entering into or becoming concerned in an arrangement which facilitated the acquisition, retention, use or control of criminal property for or on behalf of another contrary to section 328(1) of the Proceeds of Crime Act 2002 (“the Act”). On 20 th November 2009 he was sentenced by the Recorder to 22 months’ imprisonment.
He now appeals against conviction and sentence by leave of the single judge.
The conviction arises out of the part played by the appellant in an extensive fraud perpetrated by an Operations Manager of the Norwich Union Bank in York, John Taylor. There were two limbs to the fraud. Under the first Taylor used computer identities and passwords issued to himself and other employees of the bank to reactivate dormant accounts and steal the funds in them. He transferred the money to a friend of his, a serving police officer, Stephen Spellacy, who, using the false name “Hamilton”, laundered it by buying high quality watches and gold coins which could easily be converted into cash and which he later sold.
Taylor's fraudulent activity came to light as a result of the second limb, which involved the diversion of £1,130,369 from one of Norwich Union's trading accounts to accounts operated or controlled by his Taylor's accomplices. One of the co-accused, Keith Swift, took charge of finding willing recipients who would help to launder the proceeds. After an attempt to transfer the funds into the account of his girlfriend failed the money was transferred to the account of another of the co-defendants, Peter Harrington, who in turn passed various amounts to others, including the appellant. Each of the final recipients retained part of the money as payment for his services. The appellant received a total of over £123,000, of which he retained a little over £5,000.
The appellant was charged on count 9 of the indictment with an offence contrary to section 328(1) of the Act. The particulars of offence were that he had
“entered into or become concerned in an arrangement which [he] knew or suspected facilitated … the acquisition, retention, use or control of criminal property, namely a credit balance of £123,600 belonging to Aviva plc/Norwich Union, by or on behalf of another person”.
In his defence case statement the appellant said that he had been approached by Harrington, who had told him that he was about to become involved in divorce proceedings and had asked him to help him hide money from Mrs. Harrington. The appellant said that he had agreed to help Harrington by accepting the money into his account, spending some of it and then within a short period of time returning the balance together with the goods he had purchased. The purpose, obviously, was to reduce the amount Harrington would have to pay his wife in connection with the divorce. However, he said Harrington had misled him about the reason for wanting to transfer the funds because in reality there had been no divorce proceedings, either pending or in contemplation. He maintained that he was not guilty of the offence charged.
There was some discussion between the Crown and the defence about whether the case put forward by the appellant amounted to a defence in law. The Crown was willing to accept a plea to the count as charged because it took the view that the appellant was guilty of the offence even on the facts as he said he had believed them to be. However, the defence took the view that if the appellant's account were accepted, he was not guilty. In the end on the second day of the trial the defence asked the judge to indicate how he would direct the jury and in response the judge said that in his view the facts as alleged by the appellant did not provide him with a defence. The appellant thereupon pleaded guilty on the following basis:
“I am Michael Geary. I plead guilty to the charges against me on the following basis.
I know Peter Harrington as a friend and as a property developer. In December 2007 Peter Harrington explained that he had matrimonial problems and wished to ensure that his wife did not acquire his assets. Harrington paid me £71,300 on 14 th December 2007. Harrington had the majority of the money returned in cash but certain amounts were used to purchase gifts for Harrington, e.g. a mobile phone, a Play Station 3 etc.
On January 2 nd a further £52,300 was paid by Harrington and £45,000 cash returned the next day.
In total I received £123,600 from Harrington and paid back £118,278.94
At no time did I believe the monies were the result of criminal activity, but accept that by hiding monies when court proceedings were, as I was told, and believed due to commence, I am guilty of the offence as charged.”
The grounds of appeal are that the appellant's conviction is unsafe because, on the facts as he alleged them to be and as they were set out in his basis of plea, he was not guilty of the offence with which he was charged.
Before turning to consider the arguments it may be helpful to refer briefly to the provisions of the Act which are of most relevance to this appeal. Section 328(1), under which the appellant was charged, provides as follows:
“A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.”
“Criminal property” is defined for these purposes in section 340, the material parts of which provide as follows:
“…
(2) Criminal conduct is conduct which—
(a) constitutes an offence in any part of the United Kingdom.
…
(3) Property is criminal property if—
(a) it constitutes a person's benefit from criminal conduct … and
(b) the alleged offender knows or suspects that it constitutes or represents such a benefit.
…
(5) A person benefits from conduct if he obtains property as a result of or in connection with the conduct.
…
(10) …
(a) property is obtained by a person if he obtains an interest in it.”
It follows from these provisions that property becomes criminal property only when a person obtains an interest in it as a result of, or in connection with, criminal conduct, that is, conduct which constitutes a criminal offence.
Mr. Enoch Q.C., who did not appear on behalf of the appellant at trial, submitted that on a natural reading section 328(1) is concerned with arrangements which facilitate the acquisition, retention, use or control of property which has already acquired a criminal characteristic as a result of someone's having obtained an interest in it as a result of, or in connection with, criminal conduct. To put it in more colloquial terms, the section is directed at arrangements which make it easier for someone else to acquire, retain, use or control the fruits of crime. However, if the facts had been as the appellant believed them to be, the money Harrington asked him to look after would not have represented the fruits of crime. It would not have been criminal property because Harrington would not have obtained it as a result of, or in connection with, criminal conduct. The appellant would have had no reason to think or suspect that he had, and did not in fact do so. Accordingly, the mental element necessary for an offence contrary to section 328(1) was not present.
However, on behalf of the Crown Mr. Robertson Q.C. submitted that, on the facts as the appellant understood them to be, the money in question was or became criminal property when it reached his hands, because it was transferred to him pursuant to an agreement whose object was to defraud Mrs. Harrington and mislead the court. That involved a conspiracy to pervert the course of justice and the appellant obtained an interest in the money, and therefore a benefit, as a result of, or in connection with, criminal conduct. Alternatively, he submitted that the appellant committed the offence when he repaid the money to Harrington.
It was common ground that the actus reus of the offence was established in this case. The money which Harrington transferred to the appellant was criminal property, having been stolen by Taylor from the bank and transferred to Harrington, and the arrangement which the appellant entered into with Harrington facilitated its retention, use or control by Harrington. The only question is whether the appellant had the necessary mens rea to render him guilty. It is important to keep that firmly in mind because much of the argument was directed to a different question, namely, whether the facts set out in the appellant's basis of plea constituted the actus reus of an offence (though not the offence described in the indictment) under section 328(1). As it turned out, that became an important part of the Crown's argument.
There are two aspects to the mental element of the...
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