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||Neutral Citation Number:  EWCA Crim 1147
||Case No: 201603502 C4; 201603847 C4
IN THE COURT OF APPEAL
||Royal Courts of Justice
London, WC2A 2LL
||7 July 2017
B e f o r e :
LORD JUSTICE HOLROYDE
HIS HONOUR JUDGE ZEIDMAN QC
(SITTING AS A JUDGE OF THE COURT OF APPEAL CRIMINAL DIVISION)
||R E G I N A
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Mr N James appeared on behalf of the Applicant
The Applicant Baje did not attend and was not represented
The Crown did not attend and was not represented
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- MR JUSTICE HOLROYDE: On 19 July 2016 in the Crown Court at Maidstone, after a trial before His Honour Judge Joy and a jury, these two applicants and their co-accused were convicted of an offence of converting criminal property contrary to section 327(1) of the Proceeds of Crime Act 2002. On 21 November 2016 they were sentenced by the learned trial judge. Mr Otegbola was sentenced to an immediate term of imprisonment, Ms Baje to a suspended sentence of imprisonment.
- They applied for leave to appeal against their convictions. That application was refused by the single judge, May J. It is now renewed to the Full Court. Mr Otegbola has had the advantage of helpful written and oral submissions by Mr James, to whom we are grateful. In Ms Baje's case, the application is a non-counsel application. She, however, also benefits from Mr James's submissions, which in broad terms apply equally to both applicants.
- The applicants were jointly charged, together with Mr Otegbola's wife, on an indictment which contained a single count of an offence contrary to section 327(1) of the Proceeds of Crime Act 2002. The particulars of the offence were that between 29 December 2011 and 6 April 2012 the three accused "converted criminal property, namely £39,650, by means of transferrinocl75g funds from the trading account of Olubukola Otegbola trading as Checed Enterprise into the account of Vivian Baje and then transferring funds from the Vivian Baje account to the account of Olaoluwa Otegbola, knowing or suspecting that the funds constituted or represented a person's benefit from criminal conduct in whole or in part, directly or indirectly."
- The evidence showed that all three accused were working and earning an income. Mrs Otegbola declared for the tax year 2011/2012 that her business had a turnover of £54,801 and taxable profits of £36,307. Mr Otegbola for the same year declared a turnover for his business of £13,012 with taxable profits of £7,211. For the following tax year 2012/2013 he declared a turnover of £64,026 with taxable profits of £10,449. Ms Baje worked for Lloyds Bank with a gross salary of £19,053. She also declared taxable profits from her self-employment of £19,222. Each of the accused held one or more bank accounts. In Mrs Otegbola's case, one relevant account was the bank account in the trading name Checed Enterprise.
- In summary, the evidence showed that during the period covered by the indictment money was transferred between accounts in the following way. Money was received into the Checed Enterprise account in all but one of the instances relied upon by the prosecution. The apparent source of that money was a named party making a payment into the Checed Enterprise account. From that account in a series of transactions, money was transferred by Mrs Otegbola into Ms Baje's accounts, and then transferred by Ms Baje into an account held by Mr Otegbola. In each instance, the relevant transactions took place either within a single day or at most over the course of two consecutive days. In many instances, the money as it passed between the accounts was subdivided, so that, for example, a sum initially transferred as £1,000 was then transferred onwards in two separate transactions of £500 each.
- There was a schedule before the jury which showed very clearly this pattern of rapid movement of funds between the accounts. One feature of the case upon which Mr James understandably places reliance was that although the source of the payments initially made to the Checed Enterprise account was apparent on the face of the bank statements, there was no evidence that the prosecuting authority had made any enquiry into who those parties were or the nature of the transaction which led to the payment.
- The three accused were arrested. Mr Otegbola when interviewed said that the money which had been moved between the accounts had been a series of loans lent to the accused Ms Baje. He was, however, unable to provide an answer to the obvious enquiry as to why these purported loans were all repaid on the same day.
- Ms Baje gave a prepared statement to the interviewing officers. She simply said that she had allowed Mr Otegbola to use her bank account for legitimate purposes and that the transfers of money arose during her work as a money exchanger.
- Mrs Otegbola for her part said that she had sole access to the Checed Enterprise account but her husband had loaned that money. She too was unable to explain why money which had been loaned was repaid on the same day and into her husband's account rather than back into the account from which it had come.
- The prosecution contended before the jury that this was a classic case of money laundering. They argued that there was no legitimate reason for such large sums of money to be paid out of an account controlled by Mrs Otegbola and into an account held by Mr Otegbola but only after it had been diverted via a third account controlled by Ms Baje. The prosecution contended that there was an irresistible inference that the money which was being dealt with in this way could only have been derived from crime. They relied in this regard on the manner in which the funds had been moved between the accounts, on the fact that Ms Baje was not registered for any money services business, and on the fact that the three accused all put forward different explanations when asked about the relevant transactions.
- All three accused made a submission at the conclusion of the prosecution evidence that there was no case for them to answer. The learned judge refused that submission. In their grounds of appeal, each of the applicants contends that his decision in that regard was wrong. The applicants submit to this court, as they did to the trial judge, that there was no evidence on which a reasonable jury properly directed could find that the monies passing between the bank accounts were criminal property. In the written submissions it was contended that the Crown could do no more than advance a circular argument involving first the assertion that the accused had converted the proceeds of crime, and then the assertion that the monies must have been the proceeds of crime because they were converted in that way by the accused. The applicants sought to support their submission by reference to the decision of the Supreme Court in R v GH  UKSC 24.
- In their response to the submissions at trial, and in their Respondent's Notice to this court, the prosecution submit that GH is not here in point. The prosecution case against the accused was based on what it is submitted was a clear inference that the monies passing between the accounts could only have been derived from crime. The prosecution rely on R v Anwoir  2 Cr App R 36. The judge in his ruling had accepted that the jury could properly draw such an inference and that there was accordingly a case for the accused to answer.
- Sections 327 to 329 of the Proceeds of Crime Act 2002 create offences involving a number of different forms of dealing with criminal property. Those different forms of dealing include under section 327 converting criminal property, which was of course the allegation in this case. For the definition of "criminal property" in this context, one must look to section 340 of the 2002 Act. So far as material that reads as follows:
"(2) Criminal conduct is conduct which—
(a) constitutes an offence in any part of the United Kingdom, or
(b) would constitute an offence in any part of the United Kingdom if it occurred there.
(3) Property is criminal property if—
(a) it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and
(b) the alleged offender knows or suspects that it constitutes or represents such a benefit.
(4) It is immaterial—
(a) who carried out the conduct;
(b) who benefited from it;
(c) whether the conduct occurred before or after the passing of this Act."
- In GH, Lord Toulson, with whom the other members of the court agreed, confirmed at paragraph 20 that:
"[...] it is a prerequisite of the offences created by sections 327, 328 and 329 that the property alleged to be criminal property should have that quality or status at the time of the alleged offence. It is that pre-existing quality which makes it an offence for a person to deal with the property, or to arrange for it to be dealt with, in any of the prohibited ways. To put it in other words, criminal property for the purposes of sections 327, 328 and 329 means property obtained as a result of or in connection with criminal activity separate from that which is the subject of the charge itself. In everyday language, the sections are aimed at various forms of dealing with dirty money (or other property). They are not aimed at the use of clean money for the purposes of a criminal offence, which is a matter for the substantive law relating to that offence."
- Anwoir was concerned with the different question of how the prosecution may prove that property is criminal property before it is dealt with in one of the prohibited ways. At paragraph 21, Latham LJ, giving the judgment of the court, accepted a submission that:
"[...] there are two ways in which the Crown can prove the property derives from crime, a) by showing that it derives from conduct of a specific kind or kinds and that conduct of that kind or those kinds is unlawful, or b) by evidence of the circumstances in which the property is handled which are such as to give rise to the irresistible inference that it can only be derived from crime."
- In the present case, the applicants submit that the prosecution could not prove that the monies which were moved between the various accounts were criminal property; all they could prove was that those monies had been converted by being moved from one account to another. Mr James realistically accepts the principle contained in subparagraph (b) which we have just quoted from the decision in Anwoir, but argues that in this case the evidence was not such that a reasonable jury could regard it as an irresistible inference that the monies in the accounts must have been dirty money before the sequence of transfers began. He points in this regard to the facts that the three accused all had employment and incomes; to the absence of any evidence about the payers of the funds which originally arrived in the Checed Enterprise account; and to the fact that the relevant transfers all involved bank accounts which were held by the accused in their own names and therefore readily identifiable to them.
- In our judgment, the submissions are misconceived. The decision of the Supreme Court in GH makes it clear that the property must already have the status of criminal property at the time of the alleged offence. In a case such as this, the prosecution must prove that the funds which were the subject of the relevant transfers were already dirty money before the movement between the various accounts operated by the accused began. But in order to prove that status, the prosecution were entitled to rely on the Anwoir principle that the circumstances may be such as to give rise to an irresistible inference that the funds could only have been derived from crime.
- This was, in truth, a straightforward case. The sums which were moved between the accounts were quite substantial sums when compared with the net income and business turnover of the accused's employment and self-employment. Merely by reference to the schedule of bank transfers it could be seen that the funds were dealt with in a highly unusual way. As against each accused individually, the explanation which was put forward in interview was wholly inadequate to explain these various transactions. In those circumstances, the jury was entitled to infer that the sums transferred were dirty money and that the accused must have known that that was so. The points made by counsel that the suggested insufficiency of the prosecution evidence were valid points to make to the jury, but did not provide any ground for withdrawing the case from the jury.
- The judge was therefore correct to reject the submissions of no case to answer. In our judgment, there clearly was a case to go before the jury and it would have been wrong for him to have withdrawn it from them. For those reasons, grateful though we are to Mr James for his submissions, these renewed applications fail and are both refused.
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