[2007]JRC203
ROYAL COURT
(Samedi Division)
19th October 2007
|
Before :
|
Sir Geoffrey Nice, Esq., Q.C., Commissioner,
and Jurats Le Brocq, Le Breton, Allo, Newcombe and Liddiard.
|
The Attorney General
-v-
Peter Wilson Michel
C. E. Whelan, Esq., Crown Advocate.
Advocate D. F. Le Quesne for the Defendant.
JUDGMENT in respect of a Confiscation
Order
THE COMMISSIONER:
PROCEDURAL HISTORY:
1.
Peter
Michel was convicted in 2006 and 2007 at two trials before differently
constituted Inferior Numbers of 10 counts of money laundering. The offences were committed by him in
the course of his work as an accountant practising in Jersey. A detailed account of the facts of the
case would make this judgment over-long.
In any case the facts have been set out in various documents, including
schedules used at trial and in these proceedings, that summarise the evidence
on both sides. In short the
Defendant established trusts,
companies and bank accounts for clients who enjoyed the fruits of criminal
conduct – tax evasion in the UK and elsewhere and other crimes – by
hiding funds in these entities, thereafter taking the money out in cash
(sometimes delivered by the Defendant personally, usually to London) or by bank
transfer to other places and for various purposes where the use of the funds
would not be traced back through the Defendant’s labyrinth of companies,
etc to the principal offender. This
judgment must otherwise assume a familiarity with the facts in detail where required.
2.
On Monday 18th June, 2007
the Superior Number sentenced Michel to 6 years’ imprisonment concurrent
on all counts and put back the question of confiscation under the relevant act
for later determination.
3.
Hearings
on confiscation lasted from Monday
10th September 2007 (with gaps) until Thursday 20th September
2007. During the
hearings the Court was provided with 2 volumes of Prosecution material in 18
tabs and 2 volumes of Defence Material in 15 tabs, 20 tabs and other unnumbered
divided tabs. These volumes
included statements served under the provisions of Article 7 of the Proceeds
of Crime (Jersey) Law 1999.
4.
Evidence
was called by the Prosecution from Mr Sowden, the Prosecution’s
accountant. The Defendant called no
evidence.
5.
The Jurats
were provided with material in written form during the hearings at the
direction and request of the Commissioner including:
(i)
‘Final
Submissions’ of the Crown in 15 paragraphs dated 18th
September.
(ii) ‘Peter Michel: Defence Final Submissions in 15 pages
dated 19th September.
(iii) A Schedule of 34 A3 pages titled ‘Prosecution
table of Evidence Relevant to Benefit’ on which 3 Defence column entries
had been added (at the Commissioner’s request). This document was intended to and did
provide a starting point for discussion by the Jurats in retirement of the
principal issues identified by the parties.
6.
Oral
closing arguments were delivered by both counsel.
7.
A written
note of directions in law was distributed to Jurats and to the parties on
Thursday 20th after
counsel had delivered their closing arguments.
8.
Deliberations
started on Thursday 20th
September, 2007 and continued on Friday 21st September, 2007 with no
conclusion announced or reached by close of business on that day. The case was adjourned to 17th October, 2007.
9.
On Friday
21st September, before the court adjourned, counsel were asked for
assistance with two topics – Statutory assumptions in respect of payments from client accounts and what
discretion existed to reduce the ferocity of the law as urged on the Court by
the Prosecution.
10. By a joint filing dated 24th September, 2007, Crown
Advocate Whelan for the Prosecution and Advocate Le Quesne for the Defendant
Michel concluded that they should proffer no further [legal] directions.
11. By a filing dated 25th September,
Crown Advocate Whelan set out the Prosecution’s position on the
application of Assumptions under Article 5 of the 1999 Law to expenditure in
the form of payments on accounts of clients as opposed to payments of the
Defendant himself. Advocate Le
Quesne did not respond specifically in writing on this issue. In the event no issue arose on
application of the Assumptions to such expenditure.
12. By response in email form dated 28th September, 2007,
to both advocates’ failure/refusal to proffer further legal directions,
the Commissioner repeated his request in terms (inter alia):
‘The Commissioner can
properly inform counsel – and possibly add to what he said in Court at
the close of the last hearing – that there is concern about the Jurats
being left – in reality – with little or no possibility to reduce
confiscation orders that may be calculated once any decision to make such an
order is reached by exercise of discretion.
Notwithstanding case-by-case
decisions where reductions or eliminations of orders otherwise appropriate for
particular factual situations may have been approved by some higher courts,
principles in support of such decisions are hard to identify.
Would counsel please reconsider
the Commissioner’s request and have in mind – generally but
particularly in respect of the problem identified in the previous paragraph
– that questions might at any stage be asked by the Jurats (as they might
be asked of a judge in open court by a jury in a jury matter) and that there
would then be no scope for advocates to wash their hands of responsibility for
any direction in law that they had been given a specific opportunity to amplify
or correct.’
13. By a filing of 10th October, 2007, Crown Advocate
Whelan responded to the Commissioner’s repeated request. Advocate Le Quesne provided a response
in a filing served a few days later.
14. The deliberations of the Superior Number
re-commenced on Wednesday
17th October, 2007.
The Defendant was late attending and a hearing in the absence of the
Jurats between the Commissioner and counsel took place in the course of the
morning where both counsel were invited to make observations about the
directions in law already given and about their subsequent filings provided in
response to the Commissioner’s repeated request. Advocate Whelan identified certain
directions he asserted were erroneous and points that he would prefer to see
amplified/corrected. Advocate Le
Quesne declined the opportunity for further oral argument preferring to rely on
his recent filing, a filing that the Commissioner had found helpful but that
did not, in itself, require further elaboration of the law beyond the
directions already given.
15. The Jurats were reminded of certain of the
matters referred to by Advocate Whelan, although they constituted no
significant change from the Crown’s position as already known to the
Jurats, namely:
Paragraph 12 of the directions in law:
differences between the case of Glatt and Michel’s case.
Paragraph 14: That the Prosecution had presented
arguments about discretion in its closing submissions.
Paragraph 23: That the case of Johannes
was concerned with a different issue, namely the application of an assumption.
Paragraph 31: that being merely a signatory on a bank
account was sufficient to give a person control of the account for confiscation
purposes.
Paragraph 32: That a third person can be a corporate
person.
Paragraph 33: That there is no double recovery where a
tax authority happens to have recovered unpaid tax from a client of the
Defendant if he then faces confiscation on the basis of having received funds
that included the tax evaded.
Two passages from the case of Glatt were
provided to the Commissioner in the ‘Prosecution’s Further
Submissions’ of 5th September.
These two passages were read in full to the Jurats although it should be
observed that, in addition to the points relied on by the Prosecution, they
also provide some ammunition for arguments that confiscation is to serve the
purposes of compensating for loss or to avoid defendants retaining what should
be paid to victims and that multiple recoveries should be dealt with by
exercise of discretion, none of these being points that the Prosecution
advanced or adopted.
16. Save as dealt with above no further directions
in law were given to the Jurats in the course of their deliberations. Reference was made to the printed
directions on law distributed to all parties.
17. Deliberations concluded on 19th October, 2007.
18. It should be remembered that the 10 counts with
which the Superior Number were dealing, both in sentence and in these
confiscation proceedings, had been heard as two separate trials. The first trial of one count, known as
Count 4 for the purposes of these proceedings and concerning a company called
Travco, was by Commissioner Sir Richard Tucker sitting with Jurats de Veulle
and Allo. The second trial of the
remaining 9 counts was tried by Commissioner Sir Geoffrey Nice sitting with
Jurats Le Brocq and Le Breton. It
should also be borne in mind that whereas counts 2 -10 of the complete
indictment each concerned transactions relating to a particular client or
business, Count 1 was a composite count where the Prosecution relied on cash
transactions involving 20 different clients, three of those clients (mason
Krejzl and Graham) appearing later in the indictment as the subject of
individual counts but in respect of transactions not limited to receipt or
provision of cash. There were
factual similarities between some counts and between the cash transactions
relied on for the 20 clients identified in Count 1. However each count and each of the
allegations made for cash clients in Count 1 were to a degree factually unique.
19. the Jurats in retirement were guided in their
deliberations by the A3 schedule, by the written arguments presented by both
sides, by the report of Mr Sowden at tab 8 of the Prosecution’s papers
and by a chart headed ‘Estimated Tax Evasion by Hansarded Client’s
produced by Advocates Whelan and Le Quesne at the Commissioner/’s
request. The decisions of the
Jurats were unanimous. The
Commissioner took no part in the factual discussion save to the extent
necessary to identify issues between the parties by reference to the schedule
compiled by the parties and the parties’ other printed documents.
The Law
20. In addition to the material identified above
that was available to the Jurats the parties had been invited to and had
provided filings as follows to assist the
Commissioner:
(i)
Prosecution
Further Submission of the Attorney General dated 5th September.
(ii) Further Submissions of the Attorney General on
sundry issues.
(iii) ‘The Meaning of Benefit’ from Advocate
Whelan dated 18th September.
(iv) Filings from both counsel providing proposed
draft directions on Obtaining Benefit and (Advocate le Quesne only) Discretion.
21. Authorities were assembled by the Prosecution
for the use of the Commissioner only in a chronological bundle of 15 tabs and
all authorities were considered.
Additional authorities were included in the volumes of defence papers
and were also considered.
22. The relevant law is the Proceeds of Crime (Jersey) Law 1999; it follows the United Kingdom 1988
Criminal Justice Act, although it is not identical with that statute. No significance was placed on any
differences between the two statutes.
23. Relevant pats of the 1999 Law include:
“3 (3) ….Where
the Court is proceeding under this Article, it may first determine whether the
defendant has benefited from any relevant criminal conduct.
3 (4) If the
Court determines that the defendant has so benefited it may, before sentencing
or otherwise dealing with the
defendant in respect of the offence or (as the case may be) any of the
offences concerned –
(a) determine
in accordance with Article 4 the amount to be received in the defendant’s
case by virtue of this Article; and
(b) make
a confiscation order, to the effect that the defendant pay that amount.
4. Amount
to be recovered under confiscation order
(1) the
sum that a confiscation order requires a defendant to pay shall be equal to
–
(a) the
benefit in respect of which it is made; or
(b) the
amount appearing to the Court to be the amount that might be realised at the
time when the order is made, whichever is less.
“to benefit from relevant
criminal conduct”, “to benefit from an offence” and “to
benefit from criminal conduct” mean to obtain property as a result of or
in connection with that conduct or the commission of that offence, and the
benefit is the amount of the property so obtained.
ASSUMPTIONS
5. Confiscation
order relating to a course of relevant criminal conduct
(1) This
Article applies for the purposes of Article 3 where a defendant appears before
the Court to be sentenced in respect of one or more qualifying offences -
(a) if
the Attorney General asks the Court to apply it for the purposes of that
Article; or
(b) if
the Court considers that, even though the Attorney General has not asked it to
do so, it is appropriate for it to do so, and either the defendant is convicted
in the proceedings of at least 2 qualifying offences (including the offence in
question) or the defendant has been convicted of a qualifying offence on at
least one previous occasion during the relevant period.
(2) An
offence is a qualifying offence for the purposes of this Part if it is an
offence in respect of which all of the following conditions are satisfied,
namely –
(a) it is
an offence specified in Schedule 1;
(b) it is
an offence committed after this Article comes into force; and
(c) the
Court is satisfied that it is an offence from which the defendant has
benefited.
(3) the
relevant period for the purposes of this Article, in relation to a defendant,
is the period of 6 years ending when the proceedings in which this Article
applies were instituted against the defendant.
(4) When
this Article applies for the purposes of Article 3, the Court may if it thinks
fit (but subject to paragraph (6)) make the assumptions in paragraph (5) for
the purpose –
(a) of
determining whether the defendant has benefited from relevant criminal conduct;
and
(b) if
the defendant has, of assessing the value of the defendant’s benefit from
such conduct.
(5) Those
assumptions are –
(a) that
any property appearing to the Court to beheld by the defendant at any time
since the date of the defendant’s conviction, or appearing to the Court
to have been transferred to the defendant at any time since the beginning of he
relevant period –
(i) was
received by the defendant at the earliest time when he or she appears to the
Court to have held it, and
(ii) was
received by the defendant as a result of or in connection with the commission
of offences specified in Schedule 1;
(b) that
any of the defendant’s expenditure since the beginning of the relevant
period was met out of payments received by the defendant as a result of or in
connection with the commission of offences specified in Schedule 1; and
(c) for
the purposes of valuing any property that the defendant had or is assumed to
have had at any time, that the defendant received the property free of any
interests in it.
(6) The
Court shall not make an assumption in paragraph (5) in respect of any
particular property or expenditure –
(a) if
the assumption, so far as it relates to that property or expenditure, is shown
to be incorrect;
(b) ….
(c) if
the Court is satisfied that, for any other reason, there would be a serious
risk of injustice if the assumption were made in respect of that property or
expenditure.
24. The issues before the Jurats, count by count
and client by client for Count 1 were:
(i)
Whether
the Defendant had benefited from any relevant criminal conduct (a judgement for
the Jurats to make following the exercise of a discretion)
(ii) Whether the Court would make a confiscation
against the Defendant (a discretion for the Jurats to exercise)
(iii) Whether the Defendant had obtained property as
a result of or in connection with relevant criminal conduct (or the commission
of that offence)
(iv) If so whether the benefit from relevant
criminal conduct was identical to the amount of the property so obtained.
(v) If so whether there was any way in which any
individual finding of ‘benefit’ could be reduced as a matter of
discretion
(vi) If it was decided to make any confiscation
order what Michel’s net realisable assets were.
25. The terms “to benefit from relevant
criminal conduct” and “to obtain property as a result of or in
connection with that conduct” are no longer to be interpreted as ordinary
English language terms – if they ever were – but have become terms
of art particular to this legislation.
26. The way in which these terms have come to be
interpreted – and the way in which this legislation generally has come to
be interpreted and understood – can be traced back to earlier Drug
Trafficking Law that instituted confiscation proceedings for drug trafficking
offences.
27. Courts are cautioned about applying the
approach to those laws to the different provisions of money laundering laws but,
by reason of the considerable similarity of the drug trafficking and money
laundering provisions, authorities on drug trafficking confiscation provisions
are relied on heavily for money laundering confiscation.
28. Perhaps two points of particular significance
emerged from Drug Trafficking law and practice. First, that where drugs or drug related
money passed from hand to hand (with or without profits and losses of trade
being reflected in value passed at each stage) every person involved criminally
in this chain could be subject to a confiscation order to the extent of the
full value (not the profit element only) of what passed through his/her
hands. Second, in drug trafficking
cases it is often the case that a defendant of low personal wealth will have
traded in or dealt with drugs of very high value. In these circumstances it has often been
inevitable that the Determination of ‘Benefit’ in drugs cases has
far exceeded a defendant’s net realisable assets thus leading to an
inevitable order that will leave the defendant penniless on his/her release
from prison. The possible
significance or influence of these two points will be considered below.
29. In all confiscation law – drugs or money
laundering – the following has been a reality. Determinations have been made by judges
alone without juries. Accordingly
there has been no occasion for a judge to direct a jury in general terms about confiscation law (there is no Judicial Studies
Board Model direction in consequence).
Each determination has been on the facts of the case that the judge has
been dealing with. Every such
judgment looks at the facts and fits those facts to the relevant statute
– drug trafficking or money laundering – announcing points of
general application only so far as relevant for the particular case.
30. In this case there are 10 separate counts each
with a unique factual setting.
Count 1 has 20 sub-sets of facts.
It is clear that a general direction to the Jurats would have been
desirable if one had been available.
31. In the absence of such a general direction
– and the Commissioner was no more able to reconcile recent authorities
than the Court of Appeal of England
and Wales
that has acknowledged that some of these authorities are hard to reconcile
– the Jurats were informed of certain principles of interpretation or
application of the law on which to make their determination. Of those in the printed directions the
following may be seen – in the light of the determinations ultimately
made – to be of central importance using paragraph numbers of the original
direction:
“(5) The law in this
area is clearly still in development.
The UK
CofA as recently as 2005 (in a case that may go to the HoL on a topic that
could be interest in this case) suggested that the word ‘benefit’
or the phrase ‘simple benefit’ could really be a misnomer. In understanding that term misnomer or
not, the court observed that although Drug Trafficking cases – with which
you as Jurats may be more familiar than you are with money laundering cases
– may be of value but need to be treated with some caution as the wording
of the relevant statutes are not identical and that there are a number of
decisions under both drug trafficking legislation and the Criminal Justice
Act 1988 (the act most parallel to the statute you are dealing with) are
not always easy to reconcile.
(6) In these circumstances I must
identify what clear principles of law can be found ion the authorities for you
to apply in your task, leaving to you the application of the law in your
exercise of judgement and discretion, knowing that gaps in the law that cannot
be filled by me must not be filled in a capricious way or in a way likely to
harm the interests of the defendant.
(7) This short process will, I hope,
provide you with sufficient direction to decide on ‘benefit’ count
by count. If you cannot decide and
feel that you need further assistance in law you must let me know and I will
attempt to give you that further direction after discussion with counsel. I will not add in private when you are
in retirement to the direction I give publicly.
(8) Because of the difficulties in
identifying what the word benefit should be held to mean and in a case with
consequences for the defendant of considerable scale in financial terms, or
even in terms of lost liberty should he fail to meet any order made, I have not
stopped counsel for the Defendant from saying something about other cases
although this might not normally be regarded as relevant. It may be that from what you have heard
you will decide that there can be instances – including instances in
higher courts – where identifiable principles seem not to have been
followed and where confiscation orders lesser than the strict application of
the law would require have been approved.
Any order made is your order and were you to feel in conscience that you
could not follow the law because its consequences are simply too harsh then
– as with the jurors commemorated in the Old Bailey who refused to follow
a judicial direction to convict despite efforts to starve them into compliance
– you should recognise that the decision is yours and nobody
else’s. However you are here
to administer the law ad it is clear on authority that the law is harsh or
‘Draconian’ in its potential effect. You may think that in law the most
obvious way in which you can reflect a conscientious inability to meter out an
order you find excessive is by stopping at the discretion stage and declining
to make any order on a particular count or on all the counts. But the decisions – count by count
are yours. And there may possibly
be one way in which you can legitimately mitigate an order you would otherwise
make and I will return to that later.
DISCRETION (whether to make an
order at all; count by count)
(9) The legislative purposes of the
law and of similar laws has been considered in several cases. Most recently it has been said that a
confiscation order:
‘(i) is
a penalty….
(ii) is
designed to deter those who consider embarking on criminal conduct
(iii) is
designed to deprive a person of profits received from criminal conduct and to
remove the value of the proceeds received from criminal conduct from possible
future use in criminal conduct
(iv) is
designed to impoverish defendants, not to enrich the Crown’.’
If a proposed confiscation
order would not meet the identified purposes then this could be a powerful
reason not to exercise your discretion to make the order sought. But this is an all or nothing decision:
to decide that the confiscation order would only serve some or one of the
identified purposes o would only do so to a limited extent would not allow you
to make a reduced order.
(11) There is, as noted above, one possible
exception or seeming exception to this strictness of approach and I will deal
with when covering Benefit.
(12) The Defence have relied heavily on the case
of Glatt and I draw the following from the written argument you have
received [extensive citation from Defence written argument on Glatt].
(15) There have been other observations about the
purpose of the statute being to deprive a defendant [only] of his ill gotten
gains. But these have all been
without identifying a clear principle that would limit recovery to such sums
(as they may be commonly understood to be) and I cannot advice you that it
would be appropriate to measure the scale of the confiscation order that might
otherwise be calculated against the [lesser] personal ill gotten gains to
justify an exercise of discretion against making any order.
BENEFIT
(16) Clear from early on that you face a question
about ‘obtaining’ not ‘retaining’ and any observations
that might suggest a match of ‘obtaining’ to ‘ill-gotten
gains retained’ would be clearly wrong.
(17) As I explained at the start of the case,
other cases from superior courts have made it quite clear that you are not
concerned with ‘benefit’ as might be understood in ordinary
language; here a term of art particular to this and associated statutes.
(18) There have been cases where funds or
property jointly held have led to apportionment of that money or property
between the several defendants concerned; there has been at least one such case
in the UK Court of Appeal. But
where the issue has been further examined there has been no identifiable
principle that can be found to justify that course. This may be of importance were you to
consider whether there should, in principle, be a sharing of
‘benefit’ between the defendant the clients he served but who were
involved with him in the crime.
(19) In drug cases with which you will be
familiar it has been authoritatively established that in a chain of individuals
through whose hands drugs pass each can be subject to confiscation in respect
of the total value of drugs passing not just in respect of his/her profit.
(20) A chain can be of only two people and so it
must be the case – and DLQ effectively acknowledged this – that if
all criminal money passes first through A to B then both A and B can be liable
for the full amount for confiscation.
(21) In drugs cases joint holding of an account
can expose those jointly holding to orders in the full amount of what is held,
even if two or more might be liable to the same order.
(22) To defend the consequences of these
authoritative positions, Mr Le Q told you of another fact situation revealed in
another case:
‘Defendant was in charge
of an office in a shop. Drugs were
found in a cabinet in his office.
He would on instructions remove amounts of the drugs and put them in his
car for collection by others. He
was paid £10 per kilo for this.
Judge said “I am satisfied ….. that the was not a retail
seller of the drugs to addicts, but I am equally satisfied that e was a trusted
participating custodial or ‘minder’ of the drugs
………
On appeal, the confiscation
order of the value of the drugs found in defendant’s possession was
squashed; the benefit was found to be the money which defendant had been paid,
and confiscation was ordered of £3,475.00
Note that defendant, was not
just a minder, but a “participating custodian”, who sub-divided the
drugs which he minded and put smaller amounts in his car for collection, yet
the benefit he obtained was not found to be the value of the drugs, but what he
was paid. The analogy with PM and
client money is clear; he was no more than a ‘trusted participating
custodian’ of his clients’ assets.
(23) If on the balance of probabilities you
conclude that Michel matched the role of custodian and no more then it would be
open to you to make confiscation orders (wherever that applied) in the sums re
received and no more.
(24) If you do not reach this conclusion then you
have to look at the facts as you know them to be with the concept of joint
account holding or chain of possession in mind, each of which might allow you
to make a full order in the sums sought by the prosecution.
(25) Seeking analogous fact situations that might
guide you it is clear on authority that;
(26) “a conspirator who acts as the
collector or banker for the other conspirators will be regarded as having
obtained a benefit in the total sum passing through his hands.
(27) Where proceeds are paid into a joint bank
account, each account holder has received the whole amount and each may be
vulnerable to a confiscation order in the full amount – someone who has
joint control of property has ‘obtained’ the property.
(28) Even where money enters someone’s
account at first innocently, the person not suspecting that it was the proceeds
of crime on becoming suspicious, and with that state of mind transferring the
money out, he is in possession sufficient for a confiscation order in the full
amount. By dealing with it following
the acquisition of knowledge, upon the instructions of the alleged criminal he
was for the purpose of onward transmission, obtaining property in connection
with the commission of the offence … accordingly his benefit was the
value of the property so obtained.”
(29) Another approach that can guide you is
whether the Defendant was instrumental in getting the property out of the
crime. His acts must have been a
cause of that being done. Not
necessarily the only cause: there
may, plainly, be other actors playing their parts. All that is required is that the
defendant’s act should have contributed, to a non-trivial (that is, not
de minimis) extent, to the getting of the property.
(30) All the above approaches may not involve a
separate requirement that the defendant must be shown to have control over the
property, although in reality if he has been instrumental in getting it he
will, no doubt, in some sense (and at some stage) have had control over
it. You may find consideration of
the extent if any of his control a useful guide.
(31) On this topic remember how Mr Le Quesne
relies on the ‘Admissions’ (his tab 14)[admissions sought by the
Prosecution for the purposes of the trial to the effect that Michel did not
control the companies of his clients].
Recall the Prosecution answer
that ‘control’ for those purposes – the trial – does
not limit the real picture you have of the control of funds that are tainted
and of businesses that were criminal.
Mr Le Quesne is entitled to ask you to look at the Prosecution’s
sought admissions and to question whether the change of meaning for the word
control is not in reality a significant change of approach, significant for
this hearing. But you must then
look at the facts and ask whether in fact there was control, if so with what
effect on your decision about obtaining.
(33) If,
having exercised your discretion and decided to make an order and if after
having calculated what that order must be in law you remain
concerned about the scale of the award can you do anything to reduce the award
in accordance with the law? It has
been argued that it may be disproportionate to take identical sums from more
than one person and indeed in breach of European Law to do so. Well here there is no question of others
being subject to confiscation orders but there is evidence of recovery of sums
by the Revenue, of sums sent back to those very people who have been involved
with the defendant and on some counts evidence of little or no established
loss. The Courts have said no more
to date than that there may be circumstances where an apportionment approach
might be justified, for example where several defendants all have substantial
assets so that double or triple orders would lead to double or triple recovery
and that in such circumstances one relevant consideration would be whether the
revenue authority that was the loser had lost more or less than was being
recovered by confiscation
orders. Here although the
facts a re different you might be justified in reducing any order if satisfied
that it dwarfed the loss, if any, sustained. But there is no present authoritative
guidance to justify this step although I remind you that the orders to be made
are ultimately your orders.
32. In light of directions given, the Jurats
identified the purposes of confiscation in this case to be:
(i)
A penalty
(ii) A deterrent
(iii) A deprivation of profit from criminal conduct
from possible future use.
33. The Jurats recognised the difference between
this case and the Glatt case, to which Advocate Le Quesne referred.
34. Turning to the issues before the Jurats
(paragraph 25 above) determinations were as follows:
(A) WHETHER THE DEFENDANT HAD BENEFITED FROM ANY RELEVANT CRIMINAL
CONDUCT (A JUDGMENT FOR THE JURATS TO MAKE FOLLOWING THE EXERCISE OF
DISCRETION).
This was not seriously challenged by Advocate
Le Quesne wherever criminal conduct was established. The Jurats decided as an exercise of
discretion in all cases to determine whether the Defendant had benefited from
relevant criminal conduct. They
found that Michel had so benefited wherever, on the evidence or by application
of the Assumptions, they were satisfied that there was underlying criminal
conduct. The Jurats found that the
Defendant had benefited from relevant criminal conduct in respect of 10 of the
clients identified in count 1 and in respect of all Counts 2 -10.
(B) WHETHER THE COURT WOULD MAKE
A CONFISCATION ORDER AGAINST HIM (A DISCRETION FOR THE JURATS TO EXERCISE)
The Jurats followed the
Commissioner’s direction that they had discretion count by count, and
client by client for Count 1. There
may be two (or more) points in deliberation on any possible confiscation order
to consider whether the discretion should be exercised: at the start of
deliberation; part way through if some particular fact in the matter under
consideration required reconsideration of the discretion; at the end of the
consideration of the particular count (or particular client in Count 1) and/or
at the end of the assessment of all possible confiscation orders where general
issues including questions of overall proportionality might arise. In all cases where it was found that
Michel had benefited from relevant
criminal conduct the Jurats’ initial
decision was that a confiscation order should be made. Those initial decisions were on no
occasions displaced by later considerations.
(C) WHETHER HE HAD OBTAINED
PROPERTY AS A RESULT OF OR IN CONNECTION WITH RELEVANT CRIMINAL CONDUCT (OR THE
COMMISSION OF THAT OFFENCE).
In all cases where the Jurats found
underlying criminal conduct, and following the direction in law of the
Commissioner, the Jurats found that he had obtained property as a result of or
in connection with relevant criminal conduct.
(D) IF SO WHETHER THE BENEFIT
FROM RELEVANT CRIMINAL CONDUCT WAS IDENTIACAL TO THE AMOUNT OF THE PROPERTY SO
OBTAINED.
In all cases the Jurats found that Benefit
was identical to the amount of property obtained, each term being used in the
way explained by the directions in law.
(E) IF SO WHETHER THERE WAS ANY
WAY IN WHICH ANY INDIVIDUAL FINDING OF ‘BENEFIT’ COULD BE REDUCED AS
A MATTER OF DISCRETION.
In all cases where the Jurats found there
was underlying criminal conduct and where they found that Michel had obtained
property as a result of, or in connection with, relevant criminal conduct they
were unable, and or not disposed as a matter of discretion, to reduce the
finding. For reasons that appear
below it did not become necessary to consider whether in light of the overall findings of benefit to be made
further consideration should be given to the overall confiscation order(s) that
resulted.
35. The Jurats’ overall factual findings that
led to the above results, particularly to the results in sub-paragraphs c to e
above were that they accepted that Peter Michel responded to the directions of
his clients but found that his central position of being the signatory of the
company or trust accounts gave him a controlling influence. At any time he could have stopped
whatever process was taking place.
His clients trusted him to carry out the necessary concealment which
then enabled them to evade tax or to pursue other criminal objectives. He undoubtedly controlled the movement
of the funds from one account to another, and operated a process which often
made the origin of the funds difficult to trace. He controlled the ‘money laundering
process’. He then delivered
the clean cash. On other occasions
he would facilitate activities of his clients by responding favourably to their
instructions without question, even though their requests were highly
suspicious. In the Bhandal case he knew
the proceeds of crime were involved and yet was willing to conceal the identity
of the crooked beneficial owner of Heatherside.
36. In the overall assessment of Benefit etc the
Jurats had in mind the statements made by the Defence relating to benefit obtained
and in particular to the following key indicators:
(i)
Substantial
causation of the creation or transfer of the criminal property.
(ii) Control over the criminal property.
37. They considered the approaches suggested by
Advocate Le Quesne for the Defendant – restriction to fees received,
calculation by reference to tax evaded etc – and while recognising that
such results might appear to have been indicated as appropriate in other cases
or even in the language of the 1999 Law construed in an ordinary way, could
find no support in the Commissioner’s direction on the law that would
justify saving the Defendant from an order that reflected in value the assets
coming into, or passing through, accounts of entities he had established and
over which he had control. They
noted that in no case had the UK
authorities or the Jersey authorities pursued
the Defendant’s clients in the criminal courts for the same activities as
were pursued against the Defendant here.
In those circumstances, apportionment (between the Defendant and his
clients) – something that might otherwise have been appropriate –
was not considered possible.
38. In general the Jurats determined that
‘criminality’ (benefiting from relevant criminal conduct) was
established in respect of any particular client where there had been a ‘Hansard’
deal. In cases where there was no
evidence of a Hansard deal the Jurats were, subject to three exceptions,
not satisfied that criminality was established. The three exceptions where the Jurats
were satisfied of criminality despite no Hansard deal are Bhandal and
Pearce, Smith and Peltola, for the reasons set out below and/or in the table at
paragraph 41.
39. As to the Bhandal counts (Counts 7 and 8) the Commissioner
directed the Jurats specifically:
(32) Turning to the Bhandal counts the following
can be asserted as a matter of law:
It may be that “obtains” does not include a case where a
person causes property in which he has no beneficial interest to be received by
someone else over whom he has no control.
Although “obtain” does include the cases where a defendant
retains control over property received by a third person as a result of steps
taken.
(34) In the Bhandal count there is a request that
you should make an order in the amount of the loan facility itself. The Prosecution says that the facility
is worth what the loan was to be.
It happens that the prosecution can, by way of alternative, invite you
to consider the drawing down on the loans as justifying orders in a way much
more like all other counts although subject to the direction above about
property passing to third parties.
If the Prosecution is right about your being able properly to make an
award in respect of the facility itself then that order would be justified the
minute the facility was available even if not one penny had been drawn from
it. You may think that in those
circumstances issues of proportionality would arise, there being nothing
whatsoever gained in any real sense by the wrongdoer, s/he becoming immediately
vulnerable for an order in millions of pounds. You may prefer to focus your attention
on the other approaches of the Prosecution by reference to sums that were drawn
down, looking at where they went and considering what control, if any, the
defendant had on them.
40. For these counts the Jurats were presented by
the Prosecution with a very
stark choice on limited evidence. First,
the Prosecution sought an order in
respect of the mere granting of loan facilities in the sums of
£13,650,000 or £5,400,000 saying that the mere grant of the loan
facility was to create property received by the Defendant in the amount of the
loan even if it was not taken up.
This position would have had the Defendant liable for confiscation orders
in the sums sought on the very day that the facility was granted and even if no
drawing down were ever made on the loan!
The Jurats rejected this argument as being completely unrealistic and
self-evidently disproportionate.
Alternative formulations that led to the Prosecution seeking an order in respect of Bhandal
counts in excess of £20 million were also regarded as disproportionate
and the Jurats found themselves having to identify themselves a fair figure
that would result from the exiguous material available to them, and did so as
follows focusing on money shown as having passed through entities under
Michel’s control:
Heatherside (See Sowden’s Report at
page 34):
|
Balance held in
bank accounts as at 1 July
1999
|
5,624
|
|
Funds received
into bank accounts after 1
July 1999
|
48
|
|
Value of Updown Court as
at 1 July 1999
|
1,550,000
|
|
Net Benefit
|
1,555,312
|
Abey (See Sowden’s Report at page 35 464,122
Bridgeland (See Sowden’s Report at
page 36 31,652
Oakbrook (See Sowden’s Report at page
37) 7,482
TOTAL BENEFIT 2,058,568
Inflated benefit (Applying factor of
1.1893) 2,448,254.
The benefit for these two accounts (Counts
7 and 8) may well be regarded by the Prosecution
as low. The Jurats, however,
are satisfied that this figure is proportionate and derives from the available
evidence whereas the massive £20 million urged upon the Jurats by the Prosecution was disproportionate and
insufficiently evidenced. Drawings
from loans that did not pass through Heatherside or any other Michel entity
have not been included on the ground that they were not ‘obtained’
by the Defendant – in the sense of that word in these proceedings –
and that he exercised insufficient control over the monies passing for an order
to be made.
41. So far as Gavin Graham is concerned (Counts 1
and 10) the Jurats were not satisfied that the Van der Aa monies of some
£1,340,000 qualified as the Defendant’s benefit; further the
opening share portfolio of £816,387 (see Sowden’s report page
44/45) did not qualify as property obtained by the Defendant given the lack of
control he was revealed as having over this portfolio. Accordingly in this case the total
figure of benefit before inflation is £3,422,446 (Sowden page 47) less
£1,340,000 less £816,387 = £1,266,059. Applying the same inflation factor of
1.1893 results in a benefit figure of £1,505,724.
42. It will be seen that for 10 cash clients a nil
finding results from the Jurats not being satisfied as to
‘criminality’. For all
these cases involving UK clients but where there was no evidence of a Hansard
deal the Jurats decided NOT to apply the Assumptions considering it
inappropriate to do so in circumstances where the possibility of monies being
held by the Defendant for clients who were wholly without criminality had to be
considered. In the case of Peltola
they did rely on the Assumption, given a more substantial evidential substratum
(false invoicing) and notwithstanding the absence of any evidence of Finnish
tax evasion.
43. The Jurats have found the Williams Settlement a
difficult feature of the case, even during the substantive trial (Jurats Le
Brocq and le Breton). The
settlement holds very large sums of money or other assets. The Prosecution have at all times – for good reason –
asserted that the Defendant is the beneficial owner of the assets in the
Williams Settlement. Not least by
way of evidence is a handwritten document of the Defendant where he lists the
Williams Settlement as his property!
If the Settlement is the Defendant’s property then the question
arises of where the money came from to build the settlement and how it reached
the settlement – for no satisfactory evidence on either of these issues
has been provided. It might have
been expected that the assets of this settlement would have been part of the
Prosecution’s positive case at trial against the Defendant had the Prosecution assessed the evidence they
had to be sufficient to include an allegation about the Williams Settlement. Alternatively, an invitation to place
reliance on the Assumptions in respect of the settlement at the confiscation
stage might have flushed out details from the Defendant that would have enabled
the Court to know with some precision what was the underlying reality of this
trust and whether it should itself be the subject of a confiscation order
additional to what would be ordered for in respect of all other
transactions. The consequences of
the Jurats being able to make a better decision about the Williams Settlement
would be significant, one way or another.
If the Jurats were to have been satisfied that the money represented,
for example, gains of the Defendant from some otherwise un-revealed criminal
conduct then the Court’s whole view of the Defendant might have been
different and with marked consequences.
On the other hand, were the court to have been satisfied that the money
was actually not the
Defendant’s then it might have had to reconsider the orders being made on
the grounds that the orders would have stripped the Defendant of all assets and
would have sent him penniless from prison to a life where both his wife and Mrs
Buckley would have had to suffer sale of the homes they occupy, conclusions or
results the Jurats might then have
adjusted by exercise of the discretion they have. In the event the Jurats are entirely
satisfied that the Williams Settlement is
property of the Defendant and thus available to meet the confiscation order
being made, but they know no more.
This bare finding also means that the order being made may be met
without the Defendant being rendered penniless and dependent on charity when
released from prison, but in a somewhat ‘hit and miss’ way.
44. It may be that the Prosecution’s approach was influenced by the experience (referred
to in paragraph 28 above) of confiscation orders in drugs cases dwarfing
personal assets with the result that defendants are deprived of all they
possess and that they (the Prosecution) thought it safe to let the Williams
Settlement feature simply as assets to be recovered in respect of an order that
would have to be reduced from some huge Benefit figure to the Defendant’s
net realisable assets, that would then have included the assets of the
settlement. Any such calculation by
the Prosecution would now to be shown to be flawed, as appears below.
45. The decision
of the court is set out count by count and client by client for Count 1 in an
extended version of the table helpfully provided by Advocates Whelan and Le
Quesne at the hearing. Where a Prosecution
figure is accepted and a confiscation order made in that figure without further
explanation then the Jurats accepted the Prosecution’s reasoning, usually
as set out in the report of Mr Sowden, and found that the Defendant’s
measure of possession and/or control as evidenced complied with the legal
requirement for ‘obtaining’.
Where clients appeared in Count 1 and in another count the Jurats’
decision has been consolidated for that client on one or other part of the
schedule. The Figures used are
those appropriately inflated to the date of the hearing in September. The Prosecution declined the invitation
to adjust inflation further to the date of this decision on the ground that the
increase would be slight. In
respect of the figure achieved for the Bhandal counts the Jurats have inflated
from the base figure they achieved by the same inflationary factor of 1.1893
that was used for all other figures.
AG –v- Peter Michel
Estimated tax evasion by Hansarded clients
|
|
Count
|
Cash deliveries
£
|
Benefit pre inflation
£
|
Benefit including inflation
£
|
Hansard deal
£
|
Tax evasion estimated at 2/3 of
Hansard
£
|
Fees
£
|
Jurats Decision
£
|
Jurats’ figure including
Inflation
£
|
|
Cash clients
|
1
|
|
|
|
|
|
|
|
|
|
Nigel Mason
|
|
237,020
|
716,305
|
851,878
|
1,068,988
|
712,659
|
15,806
|
Determination here includes Count
6
|
851,878
|
|
Robert Rodwell
|
|
130,000
|
156,359
|
185,953
|
0
|
0
|
22,648
|
Nil; no established criminality
|
0.0
|
|
Allen, Goncalves and Gills
|
|
133,700
|
1,456,177
|
1,731,783
|
2,500,000
|
1,666,667
|
34,391
|
Determination here includes Count
4
|
1,731,783
|
|
Les Gray
|
|
50,400
|
56,852
|
67,612
|
0
|
0
|
7,360
|
Nil, no established criminality
|
0.0
|
|
Rob Oubridge
|
|
225,000
|
813,693
|
967,698
|
0
|
0
|
14,515
|
Hughes said no tax liability
|
0.0
|
|
Tony Wynne
|
|
168,000
|
1,119,765
|
1,331,700
|
500,000
|
333,333
|
26,776
|
Nil; no established criminality
|
1,331,700
|
|
Kevern Knight
|
|
20,000
|
2,152,304
|
2,559,664
|
0
|
0
|
11,466
|
Nil; no established criminality
Although no Hansard deal client in Finland and other evidence of
criminality – vis false invoicing – satisfied Jurats.
|
0.0
|
|
Risto Peltola
|
|
28,668
|
38,629
|
45,940
|
0
|
0
|
4,887
|
Assumption relied on
|
45,940
|
|
Prab Nallamilli
|
|
10,000
|
18,010
|
21,419
|
0
|
0
|
4,026
|
Nil; no established criminality
|
0.0
|
|
Robert Wylde
|
|
49,000
|
49,000
|
58,274
|
400,000
|
266,667
|
3,897
|
|
58,274
|
|
Gerry Kreizl
|
|
30,000
|
30,000
|
35,678
|
386,717
|
257,811
|
20,153
|
Determination here includes Count
9
|
1,315,057
|
|
Verna Haughton
|
|
30,000
|
30,000
|
35,678
|
0
|
0
|
1,633
|
Nil; no established criminality
|
0.0
|
|
Patrick Cantwell
|
|
48,654
|
48654
|
57,863
|
650,000
|
433,333
|
1,112
|
|
57,863
|
|
Derek Bell
|
|
5,000
|
5,000
|
5,946
|
0
|
0
|
0
|
Nil; no established criminality
|
0.0
|
|
Tony Pearce
|
|
32,000
|
32,000
|
38,057
|
0
|
0
|
0
|
Dealt with below
|
0.0
|
|
Michael Sampson
|
|
35,000
|
35,000
|
41,624
|
0
|
0
|
408
|
Nil; no established criminality
|
0.0
|
|
Andrew Wightman
|
|
10,000
|
10,000
|
11,893
|
86,100
|
56,400
|
498
|
|
11,893
|
|
Selwyn Tash
|
|
17,000
|
17,000
|
20,218
|
0
|
0
|
0
|
Nil; no established criminality
|
0.0
|
|
Matthew Yallop
|
|
20,000
|
20,000
|
23,785
|
250,000
|
166,667
|
543
|
|
23,785
|
|
Gavin Graham
|
|
5,000
|
5,000
|
5,946
|
1,189,026
|
792,684
|
31,325
|
Determination here includes Count
10, see paragraph 41 above.
|
1,505,724
|
|
Total Cash Clients
|
|
1,284,442
|
6,809,748
|
8,098,610
|
7,030,831
|
4,687,221
|
201,439
|
|
|
|
Simon and Timothy Trant
|
2
|
89,000
|
107,898
|
128,321
|
168,754
|
112,503
|
8,280
|
|
128,320
|
|
Hutchings and Bennett
|
3
|
0
|
54,719
|
65,076
|
117,000
|
78,000
|
1,650
|
|
65,076
|
|
Allen, Goncalves and Gills
|
4
|
133,700
|
1,456,177
|
1,731,783
|
2,500,000
|
1,666,667
|
34,391
|
Dealt with above
|
0.0
|
|
Smith
|
5
|
0
|
130,000
|
154,605
|
0
|
0
|
1,500
|
No Hansard as a Jersey
case; criminal conduct proved and/or admitted
|
154,605
|
|
Nigel Mason
|
6
|
237,020
|
716,305
|
851,878
|
1,068,988
|
712,659
|
15,806
|
Dealt with above
|
0.0
|
|
Bhandal and Pearce
|
7 & 8
|
32,000
|
20,638,412
|
24,544,568
|
0
|
0
|
81,870
|
See paragraph 40 above
|
2,44,254
|
|
Gerry Krejzl
|
9
|
30,000
|
1,105,771
|
1,315,057
|
386,717
|
257,811
|
20,153
|
Dealt with above
|
|
|
Gavin Graham
|
10
|
5,000
|
3,422,446
|
4,070,203
|
1,189,026
|
792,684
|
31,325
|
Dealt with above
|
|
|
Total all clients (including double counting)
|
|
1,811,162
|
34,441,476
|
40,960,117
|
12,461,316
|
8,307,544
|
396,414
|
This figure excludes double counting by dealing with clients who
appear on Count 1 and another count once only
|
9,730,152
|
|
Less cash count clients who also
had separate count
|
|
437,720
|
2,239,482
|
2,663,342
|
5,144,731
|
3,429,821
|
101,675
|
|
|
|
Totals after adjusting for double counting
|
|
1,373,442
|
32,302,994
|
38,296,774
|
7,316,585
|
4,877,728
|
294,739
|
|
|
REALISABLE ASSETS
46. The final issue for the Jurats was (f).
IF IT WAS DECIDED TO MAKE ANY CONFISCATION
ORDER WHAT WERE MICHEL’S NET REALISABLE ASSETS?
47. The relevant law on realisable assets is to be
found in Section 2 of the 1999 law:
2. Meanings
of expressions relating to realisable property
(1) In
part 2, “realisable property” means
(a) any
property held by the defendant;
(b) any
property held by a person to whom the defendant has directly or indirectly made
a gift caught by Part 2; and
(c) any
property to which the defendant is beneficially entitled.
(2) However,
property is not realisable property if an order under Article 32 of the Drug
Trafficking Offences (Jersey) Law 1988 or
Article 29 of the Misuse of Drugs (Jersey)
Law 1978 is in force in respect of the property.
(3) For
the purposes of Part 2, the amount that might be realised at the time a
confiscation order is made is the total of the values at that time of all the
realisable property, including –
(a) the
total value of any property to which the defendant is beneficially entitled,
less –
(i) any
amount due in respect of a fine or other order of the Court or the Court of
Appeal or the Magistrate’s
Court or the Youth Court, imposed or made on conviction
for an offence, where the fine was imposed or the order was made before the
making of the confiscation order,
(ii) any
sum in respect of which the person to whom it is due would, if the defendant
had become bankrupt before the making of the confiscation order, be entitled to
claim preference (“préférence”) or privilege
(“privilège”), as the case may
be,
(iii) any
sum the payment of which is secured on all or any of the realisable property by
a simple conventional hypothec or a judicial hypothec created in accordance
with the Loi (1880) sur la Propriété Foncière
before the making of the confiscation order, and
(iv) any
sum the payment of which is secured on all or any of the realisable property by
a security interest created in accordance with the Security Interests
(Jersey) Law 1983, before the making of the confiscation order; and
(b) the
total of the values at that time of all gifts caught by Part 2.
(4) Subject to the
following provisions of this Article, for the purposes of Part 2 the value of
property (other than cash) in relation to any person holding the property means
the market value of the property.
(5) References in Part 2 to
the value at any time (referred to in paragraph (6) as the “material
time”) of any property obtained by a person as a result of or in
connection with an offence are references to –
(a) the
value of the property to the person when the person obtained it, adjusted to
take account of subsequent changes in the value of money; or
(b) where
paragraph (6) applies, the value there mentioned,
whichever is
greater.
(6) If at the material time
the person holds –
(a) the
property that the person obtained (not being cash); or
(b) property
that, in whole or in part, directly or indirectly represents in the
person’s hands the property that the person obtained,
the
value referred to in paragraph (5) (b) is the value to the person at the
material time of the property mentioned in sub-paragraph (a) of this paragraph
or (as the case may be) the property mentioned in sub-paragraph (b) of this
paragraph so far as it so represents the property that the person obtained.
(7) Subject to paragraph
(10), references in Part 2 to the value at any time (referred to I paragraph
(8) as the “material time”) of a gift caught by Part 2 are
references to –
(a) the
value of the gift to the recipient when he or she received it, adjusted to take
account of subsequent changes in the value of money; or
(b) where
paragraph (8) applies, the value there mentioned,
whichever
is greater.
(8) Subject to paragraph
(10), if at the material time the person holds –
(a) the
property that he or she received (not being cash); or
(b) property
that, in whole or in part, directly or indirectly represents in his or her
hands the property that he or she received,
the value
referred to in paragraph 7 (b) is the value to him or her at the material time
of the property mentioned in sub-paragraph (a) of this paragraph or (as the
case may be) sub-paragraph (b) of this paragraph so far as it so represents the
property that he or she received.
(9) A gift (including a
gift made before the commencement of this Article) is caught by Part 2 if
–
(a) it
was made by the defendant at any time after the commission of the offence or,
if more than one, the earliest of the offences to which the proceedings for the
time being relate; and
(b) the
Court considers it appropriate in all the circumstances to take the gift into
account,
and
for the purposes of this paragraph an offence to which the proceedings for the
time being relate includes, where the proceedings have resulted in the conviction
of the defendant, a reference to any offence that the Court takes into
consideration when determining his or her sentence.
(10) For the purposes of Part 2
–
(a) the
circumstances in which the defendant is to be treated as making a gift include
those where the defendant transfers property to another person directly or
indirectly for a value that is significantly less than the value provided by
the defendant; and
(b) in
those circumstances, the preceding provisions of this Article shall apply as if
the defendant had made a gift of such share in the property as bears to the
whole property the same proportion as the difference between the values
referred to in sub-paragraph (a) bears to the value provided by the defendant.
48. Gifts to Mrs Michel and to Tracey Buckley,
Justin Michel and Mr Michel’s daughter have been taken into account in
the manner revealed in the schedule below.
49. There was little controversy about realisable
assets. Gifts and other asserted
interests were not supported by recipients, or by the defendant, in evidence. If any such legal rights exist they may
be raised at any time when the assets concerned are to be disposed of in
execution of the order to be made.
50. The Jurats found the Defendant’s net
realisable assets to be as appears on the expanded schedule provided during the
trial by both advocates with explanation only where necessary:
R –v- Peter
Michel
Prosecution Schedule
of Realisable Property
The references to
page numbers in the evidence column are either to the bundle served with the
Attorney General’s statement (marked AG or to the bundle of information
provided by the Viscount (marked V)
Bank balances are as
at 30th June.
Total Realisable
Property = £13,869,507 + Spanish property
DEFENCE POSITION FOR
MR MICHEL’S REALISABLE PROPERTY (see columns 5 and 6) = £2,347,193
|
Property
|
Why Realisable
|
Value of Property
|
Value of Realisable Property
|
Defence say realisable value is
|
Because
|
Issue as per Defence response to
AG’s statement
|
Prosecution comment
|
Pros. Evidence
|
Court’s decision
|
Court’s determination of amount realisable
|
|
Bank balances in name of Michel
|
(i) Held by Michel (ii)
beneficially owned by him
|
£667,161
(£100,000 of this has been
transferred to the Viscount’s account to cover costs. It nonetheless remains realisable property
until spent)
|
£667,161
|
333,580
|
50:50 marital asset
|
Michel claims his wife has an
interest in this
|
Wife has no interest in property
paid for by him, and in his name.
No property adjustment order has been made, or is being sought
|
1) Prosecution schedule AG p.8;
2) V pp 86 - 89
|
|
667,161
|
|
Bank balances in name of Michel
and his wife
|
(i) Held by Michel and
(ii) Beneficially owned by him
(iii) to extent wife has an
interest, it is a gift caught by the Law
|
£775,312
|
£775,312
|
£387,656
|
50:50 marital asset
|
Michel claims his wife has an
interest
|
Placing money in a joint account
is very limited evidence that both parties have an interest. Any interest is
a gift that fulfils the criteria of the Law. It should be counted as its ultimate
source was the Williams Settlement via the PTC transaction. It is wrapped up in criminal
conduct. Mrs M’s interest
in her home has been allowed for.
|
1) Prosecution schedule AG p.8;
2) V pp 86 – 89
|
|
775,312
|
|
Bank balances in name of Michel
& Co.
|
(i) Held by Michel; and
(ii) Beneficially owned by him
|
£91,427
|
£91,427
|
£45,713
|
50:50 marital asset
|
Michel claims his wife has an
interest
|
Wife has no interest in property
paid for by him, and in his name.
No property adjustment order has been made, or is being sought.
|
1) Prosecution schedule AG p 8;
|
2) V pp 86 - 89
|
91,427
|
|
Bank balances in name of
Chimel. (this does not include
Chimel funds held for the benefit of clients. It was proved at trial that Michel
mixed his own money with that of his business and his clients).
|
i) Held by Michel; and
ii) Beneficially owned by him
|
£926,576
|
£926,576
|
£463,288
|
50:50 marital asset
|
Michele claims his wife has an
interest
|
Wife has no interest in property
paid for by him, and in his name.
No property adjustment order has been made, or is being sought.
|
1) Prosecution schedule AG p
8;
2) V pp 86 – 89
|
|
926,576
|
|
Bank accounts in name Williams
Settlement
|
i) Held by Michel and
ii) Beneficially owned by him
|
£7,955,192
|
£7,955,192
|
£0
|
Belongs to ACJ, if prosecution
correct, then would be 50:50 martial asset
|
Michel claims ACJ is beneficial
owner
|
Prosecution do not accept defence
assertion
|
Bank balances: AG, 8, V pp 86-89.
Ownership of Williams: 1) Reports of accounts, AG tabs 14 and 17; 2) Asset
List at tab 15
|
|
7,955,192
|
|
Investments in Infinitum held in
name Chimel for PWM
|
i) Held by Michel and
ii) Beneficially owned by him
|
£389,513
|
£389,513
|
£194,756
|
50:50 marital asset
|
No issue notified
|
Paid for by Michel and Williams
Settlement
|
Balances AG p 9, V p 89
Ownership, V p 89; Extract from statement by Sowden, AG p. 9a; Extract from
report on Williams Settlement, AG pp 108 -109
|
|
389,913
|
|
Savings Investment
|
Property of insufficient value to
assess
|
£80
|
Nil
|
£0
|
|
Belongs to Steve Fass
|
|
N/A
|
|
0.0
|
|
Pot du Rocher
|
i) Held by Michel (and wife)
ii) Beneficially owned by Michel
(& wife)
|
£1.3 million
|
£650,000
|
£650,000
|
Purchased for £62,000 in
1978 using funds from previous property sale plus mortgage
|
Wife has interest
|
Wife’s interest allowed for
|
Legal ownership not disputed, but
see St By DS Gay @ AG, p.11. Valuation by estate agent @ AG 30 d.
|
|
650,000
|
|
Villa Sul Mare
|
i) Held by Michel and Buckley.
ii) Beneficially owned by Michel
and Buckley
iii) Buckley’s interest
arose by way of gift. The
prosecution does not contend that his gift should be caught by the Law, as it was made
before the raid on Michel and Co.
In July 01. Only
Michel’s interest is claimed
|
£670,000
|
£335,000
|
0
|
Intended to be for Tracey and the
children, Mr Michel makes no claim
|
Belongs to Buckley
|
Buckley’s interest allowed
for
|
Legal ownership not disputed but
see DS Gay st. at AG p 12; Property paid for by Williams Settlement see
report at AG tab 14, esp AG p.104
|
|
335,000
|
|
121
Escourt Rd Fulham
|
i) Held by Michel
ii) beneficially owned by him
|
£490,000
|
490,000
|
£245,000
|
50:50 marital asset
|
Bought for Justin, but
“accounted for” as belonging to Michel and his wife
|
1) Property registered in name of
Michel;
2) Included on M’s asset
list
3) Statement re payment of
council tax awaited;
4) Wife has no interest in
property which she did not pay for, and which is in his name. No property adjustment order has been
made, or is being sought
|
1) Legal ownership DS Gay, AG p
13;
2) statement re council tax
awaited;
3) estate agent valuation pending
4) asset list AG tab 15.
|
|
490,000
|
|
3 shares in capital holding
|
i) share held by Michel, 2 shares
held by Buckley;
ii) 1 share beneficially owned by
Michel, 2 shares owned by Buckley
iii) alternatively, if
Michel’s 1 share is beneficially owned by Buckley, it is a gift caught
by the Law;
iv) the shares in Buckley’s
name were given to her by Michel before the raid in July 01; the prosecution
do not contend that this givt is caught by the Law
|
£257,481
|
£85,827
|
£0
|
Bought for Tracey’s
children, Mr Michel makes no claim
|
Buckley owns company for benefit
of children
|
Buckley’s interest allowed
for. Property bought by M, with
Williams Settlement money. The
evidence that Buckley beneficially owns the share held by M is a declaration
of trust signed by M and Gallichan dated August 02 – post raid. If this is a genuine gift to Buckley,
it is difficult to see why it was not made when the other shares were gifted
to her in January 2001. the DOT
is a sham, alternatively a gift
|
Valuation of shares at V. p 77;
Share ownership and DOTs at AG
pp.21 – 30 Purchase evidence in Accountants’ report on Williams
Settlement AG, tab 14, p. 03 -104.
|
|
85,827
|
|
Shares held in name of Chimel
|
i) held by Michel and;
ii)beneficially owned by him
|
£77,000 as at 2004
|
Up to date valuation awaited
|
|
50:50 marital asset
|
No issue notified
|
|
Sowden’s statement at AG p.
9a
|
Up to date figure given during hearing
|
90,900
|
|
Porsche 966 + plate registered in
name Buckley
|
i) beneficially owned by Michel;
or
ii) gift caught by the Law
|
£24,000 + £500
|
£24,000 + £500
|
£0 + £250
|
Belongs to ACJ, financed by
distribution from Williams Settlement see Tab 14 of defence bundle
|
Car belongs to ACJ (relies on
Williams distribution memo). Plate belongs to Mrs M.
|
1) Bought with money from
Williams Settlement;
2) Transfer to Buckley was in May
2002. Car found at Pot du Rocher
in 2004;
3) Transfer is sham alternatively
gift.
|
1) Fount at Pot, Jandron’s
statement AG p.58;
2) bought by Williams, AG tab 14,
p 109 -110;
3) Valuation obtained by Viscount
is at AG p.10
4) transfer from Michel to
Buckley May 02, DS Gay’s statement AG p 13
|
Number plate may belong to Mrs Michel and its value excluded
|
24,000
|
|
Ferrari + plate registered in
name Justin Michel
|
i) beneficially owned by Michel;
or
ii) gift caught by the Law
|
£37,000 + £6,000
|
£37,000 + £6,000
|
£0 + £0
|
Car belongs to Justin plate
belongs to Paul Doran
|
Car belongs to Justin; plate
belongs to Paul Doran – but he does not want to claim it.
|
1) Acquired by Michel in 1997
registered in his name;
2) Registration transferred to
Justin Michel in May 2002; car found at Pot du Rocher in 2004;
3) Transfer is sham,
alternatively gift.
|
1) Registration of car, statement
of DS Gay, AG p. 18;
2) Found at Pot statement of
Jandron AG p. 58;
3) Valuation obtained by
Viscount, AG p.10
|
Number plate excluded as property of a friend
|
37,000
|
|
Jaguar + plate registered in name
of Michel
|
i) Held by Michel; and ii)
Beneficially owned by him
|
£15,000 + £ 500
|
£15,000 + 500
|
£7,500 + £250
|
50:50 marital asset, purchased
for £500 2nd hand in the 1970s
|
No issue notified
|
|
Valuation obtained by Viscount,
AG p 10
|
Number plate included
|
15,500
|
|
Austin Healey + plate
|
i) Held by Michel; and ii)
Beneficially owned by him
|
£15,000 + £500
|
£15,000 + £500
|
£7,500 + £250
|
50:50 marital asset, left hand
drive purchased for £4,500
|
No issue notified
|
|
Valuation obtained by Viscount,
AG p.10
|
Number plate included
|
15,500
|
|
Mercedes + plate
|
i) Held by Michel; and ii)
Beneficially owned by him
|
£10,900 + £4,000
|
£10,900 + £4,000
|
£5,450 + £2,000
|
50:50 marital asset
|
No issue notified
|
|
Valuation obtained by Viscount,
AG p.10
|
Number plate included
|
14,900
|
|
Household items
|
i) Held by Michel; and ii)
Beneficially owned by him
|
£8,000 (but valued at
£70k in asset list)
|
£4,000
|
£4,000
|
50:50 marital asset
|
Nothing of value
|
Interest of wife allowed for
|
Bonham’s valuation for
Viscount is at AG p.30 m
|
Discounted to nil;
|
0.0
|
|
Spanish flat and boat or sale
proceeds thereof
|
i) Held by Michel; and ii)
Beneficially owned by him
|
?
|
?
|
£0
|
No boat or property. Pesetas converted to Euro or Sterling when Pesetas
ceased to exist
|
Owns no boat
|
Property not located by
prosecution. Pesetas coming in
were identified, but their whereabouts is now unknown
|
|
No material to make valuation
|
0.0
|
|
Paintings
|
i) Beneficially owned by Michel
in asset list
|
Valued at £120,000 by
Michel in assetlist
|
£120,000
|
£0
|
Genuine gifts, if not accepted
then 50:50 marital asset
|
Genuine gift first to wife, then
by her to children
|
1) Michel valued these paintings
on his asset list, on a date after he claims to have gifted them to his wife;
2) It is odd that his wife gifted
all the paintings to her children after the raid, at the same time as other
“gifts” were made
3) Prosecution say these assets
have been put out of the way to evade confiscation.
|
1) Statement of Jandron who was
told of transfers, AG p. 59;
2) Asset list, AG tab 15.
|
50% property of Mrs Michel for whom bought as presents but jointly
held.
|
60,000
|
|
50% of shares Le Blonde &
Mallin which are registered in the name of Adv Justin Michel
|
i) Beneficially owned by Michel
or
ii) gift caught by the Law
|
Company’s net value, after
secured creditors: £148,927
|
£74,463
|
£0
|
Genuine transfer in exchange for
legal services plus value negligible if not developed, if not accepted, then
50:50 marital asset
|
Genuine transfer in exchange for
legal services; value reduced by loans
|
1) Transfer to Justin Michel on 5/11/01 is sham, for
reasons in AG’s statement para 42;
2) Value of secured creditors
allowed for
|
Documents evidencing share
transfers AG, pp 31 – 35;
2) Valuation of companies are at
V. p74;
3) Evidence of sham includes
correspondence at AG tab 13.
|
|
£74,463
|
|
50% of shares PMP registered I
the name of Adv Justin Michel
|
i) Beneficially owned by Michel
or
ii) gift caught by the Law
|
Company’s net value
£176,362
|
£88,181
|
£0
|
Genuine transfer in exchange for
legal services plus value negligible if not developed, if not accepted then
50:50 marital asset
|
Genuine transfer in exchange for
legal services; value reduced by loans
|
1) Transfer to Justin Michel on
5.11.01 is sham, for reasons in AG’s statement para 42;
2) Value of secured creditors
allowed for
|
1) Documents evidencing share
transfers AG, pp 36 – 4-);
2) Valuation of companies are at
V. p74;
3) Evidence of sham includes
correspondence at AG tab 13
|
|
88,181
|
|
50% of shares in Parade Hire Cars
|
i) Beneficially owned by Michel
or
ii) gift caught by the Law
|
Company’s net value after
secured creditors £662,878
|
£331,439
|
£0
|
Genuine transfer in exchange for
legal services; plus value
negligible if not developed, if not accepted then 50:50 marital asset
|
Genuine transfer in exchange for
legal services; value reduced by loans
|
1) Transfer to Justin Michel on 5/11/01 is sham for
reasons in Ag’s statement para 42;
2) Value of secured creditors
allowed for
|
1) Documents evidencing Share
transfers AG, pp 41 – 44;
2) Valuation of companies are at
V. p 74;
3) Evidence of sham includes correspondence
at AG tab 13
|
|
331,439
|
|
50% of shares in Pellin
|
i) Beneficially owned by Michel
or
ii) gift caught by the Law
|
Company’s net value after
secured creditors £183,366
|
£91m683
|
£0
|
Genuine transfer in exchange for
legal services; plus value negligible
if not developed, if not accepted then 50:50 marital asset
|
Genuine transfer in exchange for
legal services; value reduced by
loans
|
1) Transfer to Justin Michel on 5/11/01 is sham, for
reasons in AG’s statement para 42;
2) Value of secured creditors allowed
for
|
1) Documents evidencing Share
transfers AG, pp 45 – 49;
2) Valuation of companies are at
V. p74;
3) Evidence of sham includes
correspondence at AG tab 13
|
|
91,683
|
|
6 shares in Combe Dingle
registered in name of Adv Justin Michel
|
i) Beneficially owned by Michel
or
ii) gift caught by the Law
|
Combe Dingle’s value is
£425,000
|
£283,333
|
£0
|
Genuine gift to Justin Michel, if
not accepted then 50:50 marital asset
|
Shares are beneficially owned by
Justin Michel
|
Prior to December 2001 these 6
shares were held by Michel. In
December 2001 they were transferred to Justin Michel. Prosecution say that transfer is a
sham, or gift caught by the Law, for the reasons set out in the AG’s
statement at para 42.
|
1) IDENTIFICATION OF ASSETS OF
Combe Dingle is in DS Gay’s statement, at AG p. 14;
2) Valuation of those assets is
at V p.90.
3) Share transfer docs at AG p.
50 -53;
4) Correspondence relevant to
sham are at AG tab 13
|
|
283,333
|
|
Shares in EMG and Norac referred
to in AG’s statement
|
These were gifted by Michel or
his wife to their children. Where
gifts were made by Michel this was done before the raid. These assets are not claimed
|
N/A
|
N/A
|
£0
|
|
Genuine gift to Sara, presumably
should not count. Appears to be
dispute as to assets of companies
|
N/A
|
N/A
|
|
0.0
|
|
Bank transfers to Mrs Michel
|
Gifts
|
£398,000
|
£397,000
|
£0
|
Genuine transfers to Mrs Michel,
Mr Michel considered 50% of the sale of business to PTC to be due to Mrs
Michel, in addition £48,707 said to have been transferred to Mrs Michel
was actually transferred to another Mr Michel account
|
No issue notified
|
Transfers to Mrs Michel from Mr
Michel after the raid, ultimately funded by Williams Settlement money
|
Charts produced by Sowden, AG tab
16, pp 130 – 135
|
Unclear whether included in 775,312 2nd entry of this
table. If not then £397,000
should be added to the total figure otherwise achieved
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
13,492,907
|
51. It follows that the defendant is able to pay a
confiscation order in the sum of £9,730,152 and he is ordered to make such
a payment within 12 months.
52. In default the defendant will service a prison
sentence of 3 years consecutive to the present 6 years term he is serving.
Authorities
Proceeds of Crime (Jersey)
Law 1999.
R v Glatt [2006] EWCA Crim 605.
Johannes Case
1988 Criminal Justice Act.