The Assets Recovery Agency v Gheorghe Virtosu and Another

JurisdictionEngland & Wales
JudgeMr Justice Tugendhat,MR JUSTICE TUGENDHAT
Judgment Date05 February 2008
Neutral Citation[2008] EWHC 149 (QB)
Docket NumberCase No: TLQ/07/1089
CourtQueen's Bench Division
Date05 February 2008
Between:
The Assets Recovery Agency
Claimant
and
Gheorghe Virtosu &victoria Virtosu
Defendants

[2008] EWHC 149 (QB)

Before:

Mr Justice Tugendhat

Case No: TLQ/07/1089

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Miss Dobbin for the Assets Recovery Agency

Mr Virtosu in person

Mrs Virtosu did not appear and was not represented

Hearing dates: 14, 15, 17th January 2008

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

MR JUSTICE TUGENDHAT Mr Justice Tugendhat

THE CLAIM

1

This is a claim for a Civil Recovery Order, a form of civil forfeiture, brought by the Director of the Assets Recovery Agency (“the Director”) against two Respondents, Mr and Mrs Virtosu under Part V of the Proceeds of Crime Act 2002 (“the 2002 Act”).

2

Mr Virtosu came to this country from Moldova in the early 1990s, and has acquired British Nationality in 2003. In 1999 he married his wife, who is also from Moldova. Mr Virtosu earned a total of about £10,000 during his residence in England between 1992 and his arrest and subsequent imprisonment in France in March 2004. Mrs Virtosu has earned nothing in England.

3

Nevertheless, between February 2002 and January 2004, Mr Virtosu acquired a BMW car for over £35,000, and a number of properties. He bought 61 Briar Avenue and 25 Crescent Way, London SW16, both in 2002 at a cost of £248,000 and £290,00 respectively, a house in South Africa for £106,000 in 2003, a flat in Courbevoie, near Paris, in 2003 for €116,000 and a house in Thornton Heath in January 2004 for £252,000. He paid for extensive improvements to 35 Crescent Way, where his wife has resided. She now resides there with him, since his release in December 2007 from prison in France, together with their son now aged about 8. Mr Virtosu was in France for the purpose of buying another flat there when he was arrested.

4

The first London property was sold on 2 nd June 2005, and all three English properties were brought with the aid of mortgages from the Bank of Scotland. Mr Virtosu holds a bank account with Nat West. Mrs Virtosu is the holder of two bank accounts, one with HSBC and one with Halifax. Full details of these properties and assets are set out in the Claim Form and the Order of this Court.

5

The Director claims that all these assets are, or represent, property obtained through unlawful conduct within s.240 (all reference to sections are to the 2002 Act unless otherwise stated), that they are accordingly recoverable property (s.304), and so that this court must make a recovery order vesting the property in the trustee for civil recovery (s.266). In the evidence put before this Court for the Director Mr Evans states (para 6 of his witness statement of 26 February 2007):

“This case concerns property derived from unlawful conduct, namely; (i) people trafficking; (ii) money-laundering; and (ii) mortgage fraud”.

6

Mr Virtosu denies that the property was obtained through unlawful conduct. He says that he was wrongly convicted in France, and that the source of the funds used to buy the properties, and the funds in the bank accounts, are gifts from his parents and parents-in-law in Moldova, and receipts from business activities he was engaged in with his father-in-law. He appeared in person. Mrs Virtosu did not appear, although she was aware of the proceedings.

THE UNLAWFUL CONDUCT AND THE FORM OF EVIDENCE IN SUPPORT

7

Unlawful conduct must be criminal conduct. Where it is conduct that has occurred abroad, it must satisfy a test of dual criminality, that is, it must have been criminal in the country where it occurred and it must be such that, if it occurred in England, it would be unlawful under the criminal law of England.

8

That is the effect of s.241 which provides:

“241 “Unlawful conduct”

(1) Conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part.

(2) Conduct which—

(a) occurs in a country outside the United Kingdom and is unlawful under the criminal law of that country, and

(b) if it occurred in a part of the United Kingdom, would be unlawful under the criminal law of that part,

is also unlawful conduct.

(3) The court … must decide on a balance of probabilities whether it is proved—

(a) that any matters alleged to constitute unlawful conduct have occurred …”

9

The people trafficking is by far the most important part of the Director's case and, if he succeeds on that, the other two forms of criminal conduct (mortgage fraud and money-laundering) are no more than ancillary or consequential. However, Miss Dobbin made clear that she wished to advance the Director's case on money-laundering and mortgage fraud separately, in the event that the case on people trafficking might have a defect.

10

The people trafficking is alleged to have been conduct occurring in both England and France. The money-laundering and mortgage fraud are alleged to be conduct occurring only in England.

11

In paras 13 to 25 Mr Evans sets out under the heading “Unlawful conduct” the conduct relied on. He refers to a joint investigation by English and French investigators. The results of the English investigation are set out in the form of a four page statement from Mr Griffiths, formerly of the National Crime Squad, and now a Principal Officer with the Serious Organised Agency. This statement is exhibited to the statement of Mr Evans is summarised in this judgment at paras 68 and following. It concludes with a summary of the offences of conspiracy of which he states Gavril Dulghieru and his wife Tamara were convicted in England in October 2005.

12

In paras 14 and 17 to 23 of his statement Mr Evans set out that Mr Virtosu was arrested in France and remanded in custody on 4 th March 2004, and he summarises the findings, verdicts and sentences of the French judgment of 24 February 2005 (“the French judgment”), not only in relation to Mr Virtosu, but also in relation to his nine co-accused (Radj Pintea, Viorel Onofreiciuc, Ruslan Abulkhanov, Guenadie Palamarciuc, Petru Oanta, Alexandru Bejenaru, Alina Bratec, Ozana Grigoruta, Gavril Dulghieru). Gavril Dulghieru was tried in France in his absence.

13

The Director sets out the criminal law of France only in the form in which it is set out in the French judgment, that is, by references which contain information similar to that which is normally found in the Statement of Offence and the Particulars of Offence on an English indictment. The provisions of the French criminal law creating the offences are not set out. The exhibits to Mr Evans's witness statement include only an English translation of the French judgment. At my request a copy of the French original was obtained and put before me during the trial. The layout of a translation can differ from that of the original, which may give rise to misunderstanding, and where, as happened in one instance, a part of the translation is disputed, it can be important to have a copy of the original.

14

The material put before this Court by the Director, including both evidence and written submissions, did not, at the start of the trial, include a separate statement of the conduct involving people trafficking which it was alleged was unlawful under the criminal law of England, nor did it identify the provisions of English criminal law alleged to make such conduct unlawful (s.241(2)(b)). The only provision of English law initially identified was s.15A of the Theft Act 1968 (obtaining a money transfer by deception), which is the offence under which mortgage fraud would have been prosecuted at the time of the frauds alleged in this case.

15

During her closing submissions I asked Miss Dobbin to identify the English offences of people trafficking and money-laundering relied on, and the day after her closing submissions she submitted a document headed Schedule of Offences.

16

Legislation embodying a requirement of dual criminality is not uncommon in English law, much of it being in the field of extradition. Miss Dobbin mentioned (while not taking me to) the Extradition Act 2003. The requirement of dual criminality is also to be found of in much of the recent legislation extending the jurisdiction of the English courts, such as the Criminal Law Act 1977 s.1A. The extradition cases are in one respect obviously different, in that there cannot be reliance in those cases on a foreign judgment or conviction to prove that conduct has occurred in that country which is unlawful under the criminal law of that country. The purpose of the extradition is for that question to be tried in the foreign country. But the cases do show that questions can arise as to what satisfies the requirement of dual criminality, as that is laid down in any given statute (the requirement may differ from one statute do another according to the words of each statute). The court must examine the conduct alleged to have occurred in the foreign country and consider what offences that conduct would give rise to in England. For example, if the conduct said to have occurred, and to be unlawful, in a foreign country, consists of ingredients A+B+C+D, and if similar conduct involving only ingredients A+B+C may suffice to make such conduct unlawful under the criminal law of England, the requirements of s.241(2) would be satisfied. Satisfying the requirements of s.241 might be more difficult for the Director if the foreign judgment proves only ingredients A+B+C, but similar conduct in England is unlawful here only if it also involves the extra constituent D. Assuming he were able to prove the unlawful conduct in the foreign country by a conviction in that country, he would have to prove the extra ingredient required by English criminal law in some other...

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