No:
200701887/A9
Neutral Citation Number:
[2008] EWCA Crim 914
IN THE COURT OF APPEAL
CRIMINAL DIVISION
Royal Courts of Justice
Strand
London, WC2A 2LL
Date:
Wednesday, 9th April 2008
B e f o r e
:
LORD JUSTICE LATHAM
(THE VICE-PRESIDENT OF THE CACD)
MR PENRY-DAVEY
MR JUSTICE FOSKETT
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R E G I N A
v
TERRANCE ADAMS
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Computer Aided Transcript of the Stenograph Notes of
WordWave International Limited
A Merrill Communications Company
190 Fleet Street  London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)
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Mr G Cox QC & Mr C Benson
appeared on behalf of the
Appellant
Mr A Mitchell QC & Ms F Schutzer Wetssman
appeared on behalf of the
Crown
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J U D G M E N T
1.
THE VICE PRESIDENT: On 6th February 2007 in the Crown Court at Blackfriars before His Honour Judge Pontius, the appellant pleaded guilty on rearraignment to a count of conspiracy to conceal the proceeds of criminal conduct. It may perhaps be relevant just to identify the precise terms of that count at the outset. It charged this appellant, together with others, of conspiring to "conceal or disguise property which in whole or part directly or indirectly represented proceeds of relevant criminal conduct of [the appellant] with intention of avoiding prosecution for an offence to which Part 6 of the
Criminal Justice Act 1988
applies or for the purpose of avoiding or enforcing this case of a confiscation order."
2.
The matter was adjourned for sentence. On 9th March 2007 he was sentenced, firstly, to a sentence of 7 years' imprisonment. A confiscation order was made against him in the sum of £750,000 pursuant to
section 71
of the
Criminal Justice Act 1988
, with a default period of 4 years' imprisonment to be served consecutively to the substantive sentence. He was also ordered to pay £50,000 prosecution costs and a recovery of defence cost order was made. That was the subject of judicial review proceedings which have been heard at the same time as this appeal and in which a judgment will be given tomorrow morning.
3.
The order for defence costs was subsequently quantified in the sum of £4,606,057.85, following an investigation by the Special Investigation Unit. That sum was identified at a hearing which ultimately took place on 21st May 2007, when he was also made subject to a financial reporting order, pursuant to
section 76
of the
Serious Organised Crime and Police Act 2005
, for 10 years. He appeals against his sentence by leave of the Single Judge.
4.
The background facts are as follows. The appellant was for a significant period of time a highly successful career criminal and was well known as such. By his basis of plea it is plain that he was asserting, and it was accepted by the prosecution, that the criminality in question had ceased in or about 1993. The basis of plea was as follows:
"(a) I will plead guilty to count 10 only excluding drugs on the basis of a full fact opening.
(b) The prosecution will not undermine any suggestion that the criminality which created the funds was 5 to 6 years before 1998 (consequently the defence will mitigate on the basis that although money from crime was laundered in accordance with the time frame in count 10, no other crime has been committed since 5 to 6 years before 1998).
(c) The prosecution are content for the defence to mitigate on the basis that the total value of the criminal activity at the time of offences was £1 million.
(d) Confiscation - figure for realisable assets is £750,000.
(e) Prosecution costs £50,000."
5.
The appellant had clearly amassed a considerable fortune by the time of the end of his criminal activity and it was expended on a lavish life-style which involved, according to the prosecution, significant numbers of first class flights to different destinations around the world, expensive jewellery, private education for his child and the acquisition of antiques works of art and other property. When he was ultimately arrested on 30th April 2003 his home, Fallowfields, was a large property in a desirable area of North London. The police found substantial quantities of valuable property and the clear indications were that the appellant had been able to maintain his life-style because of the criminal activities in question.
6.
The appellant had paid no income tax for a significant period. There was an investigation into his position in 1995, and eventually in 1996 he agreed to pay a £95,000 settlement, covering his tax liabilities. But that was on the basis of false information that he had provided. It then became apparent to him that he would have, in some way or another, to account in a way which would satisfy the authorities for the wealth that he had amassed. It was in those circumstances that he obtained the assistance of others in order to disguise the proceeds of crime.
7.
It was principally done through sham companies that were set up, in particular Skye Consultancy Limited and Clouds Consultancy Limited, which gave him effectively bogus employment and an apparent income generated by the companies on the basis that he was some form of consultant. The precise details of the way in which those companies were operated is not of any materiality for the purposes of the sentencing exercise. Suffice it to say that means were found to enable an apparently honest source of income to be developed over a substantial period of time. Indeed, the prosecution case was, in reality, that the whole of the period from 1996 onwards was a period in which the appellant was seeking, by bogus means, to hide the way in which he had come by his money.
8.
Although, at the end of the day, the prosecution were prepared to accept the basis of plea, it remains to some extent uncertain what the full extent of the financial situation was or indeed is. Nonetheless the judge was prepared to sentence the appellant on the basis of the matters which were accepted by the prosecution in that basis of plea.
9.
It should be said that the basis of plea was put forward in February 2007, that is shortly before the plea was entered, against the background that a year earlier counsel then acting on behalf of the appellant had been to see the judge in chambers, in order to ask for an indication as to the sentence that might be imposed whatever the outcome of the trial might be. In other words the sentence irrespective of plea and personal mitigation.
10.
The relevant part of the transcript that we have appears at pages 10 and 11 and reads as follows:
"MR BURKE: I know it is very difficult and judges' practices tend to vary in my experience. The middle range can cover with a 14 year maximum five to eight or five to 10 years but to an individual defendant contemplating his position, fairly realistically nobody is expecting a sentence of nothing less than 5 years. So we can pretty much work out what the bottom limit would be. But if he asked and inevitably he will: what sort of sentence am I facing?
JUDGE PONTIUS: I think I can help to this extent. On everything I know thus far, and with the benefit of looking at the authorities as you rightly surmise a sentence would not be below five, and indeed I say the lower end likely to be seven, top end ten.
MR BURKE: That is without hearing any mitigation from me.
JUDGE PONTIUS: Yes."
It should be said that, at that stage, the question that was being posed by counsel was on the basis of the possibility of a plea not simply to the count to which he ultimately pleaded but also to a second count of money laundering in respect of the proceeds of crime of a relative.
11.
The judge, when he came to sentence the appellant, on 9th March 2007, had submissions before him to the effect that the sentence should reflect the fact that this was money laundering of an unusual nature in one sense, namely this was not money laundering by someone who was seeking to help a criminal to dispose of the proceeds of crime and to continue his criminal activity, but was the activity of a criminal who had changed his ways and was leading a perfectly honest life, in order to enable him to retain the proceeds of his criminal activity. It was submitted that he was entitled to credit for the plea of guilty, albeit late, because the costs of a substantial trial would be saved, a substantial trial expected to last some 4 to 5 months, in which it was proposed that there should be jury protection, and accordingly, although there had been a substantial amount of preparatory work up until the time of the plea, nonetheless the plea had had a significant effect in relation to the saving of public funds, which is one of the purposes of granting credit for guilty pleas.
12.
It was further submitted that there was powerful personal mitigation in this case, which was directly related to the way in which the prosecution case had been prepared. A substantial proportion of the evidence, which the prosecution were intending to rely upon in relation to the counts in question was evidence which had been obtained by means of covert listening devices in the appellant's own home in which the activities of not only himself, but his wife, his family and all guests had not only been recorded but had been the subject clearly of investigation over a period of years. The effect of the knowledge that their private life had been exposed in that way was, it was submitted, clearly a matter which should have be taken into account by the judge. Further personal mitigation related to the fact that during the period running up to the trial the appellant's wife had become extremely ill, to a significant extent by reason of the strain of the proceedings; and the proceedings had had a significant effect also on the health of his daughter.
13.
The judge, in sentencing the appellant, having related the prosecution case and having indicated that he had concluded that this was a very serious case of money laundering, bearing in mind the amount of money involved and the period over which the activity had extended, did not, it is true, expressly refer to personal mitigation; but he did refer to the credit that he was giving for a guilt plea. He did so in a number of places in his sentencing remarks; and it is plain that he concluded that he could only give a small amount, if any, of credit for that guilt plea. His final comment in relation to that, which is at page 150 of the transcript, was as follows:
"As I have also made plain however, minimal credit can be given by this court for a plea entered at such a late stage."
14.
It is against that background that Mr Cox, on behalf of the appellant, submits that 7 years' imprisonment was manifestly excessive. He submits that analysis of the previous decisions of this Court in relation to money laundering may not be in one sense of the greatest assistance, because as this Court has said money laundering cases vary so significantly in their characteristics one to the other. The quotation which is perhaps relevant in this context is from the case of
Monfries
[2004] 2 Cr App R(S) 3, at page 9, where at paragraph 7, the court said as follows:
"The relevant considerations that apply in cases of this type include the following:
(i) The circumstances of assisting another to retain the benefit of drug trafficking and/or criminal conduct vary so widely that this Court has not to date provided detailed guidelines.
(ii) There is not necessarily a direct relationship between the sentence for the laundering offence and the original antecedent offence. Where, however, the particular antecedent offence can be identified, some regard will be had to the appropriate sentence for that offence, when considering the appropriate sentence for the laundering offence.
(iii) The criminality in laundering is the assistance, support and encouragement it provides to criminal conduct.
(iv) Regard should be had to the extent of the launderer's knowledge of the antecedent offence.
(v) The amount of money laundered is a relevant factor."
It is can be seen that those considerations are on the whole related to the person who assists to dispose of another's criminal conduct. But they assist in relation to the present type of case because they identify the fact that one of the relevant considerations clearly is the extent to which the person is dealing knowingly with as opposed to suspecting, criminal proceeds. Nonetheless, Mr Cox submits that the authorities do not support the starting point that the judge must have adopted in this case which, if he allowed any credit for plea, must have been in excess, even if it was only to a small extent, of the 7 years that he imposed. What he has not reflected at all, it is submitted, in the sentence is the personal mitigation. Returning to the credit for plea, the fact that it was indicated by the judge to be a minimal reduction suggests that he failed to take into account the public policy consideration which is so relevant, as we have already indicated in this case, that of the saving of public monies in a lengthy trial. He accepts that in a sense he is putting forward a figure which may be thought to be a bold figure, but he submits that in all the circumstances the appropriate sentence should have been in the 4 to 5 year bracket.
15.
There is undoubtedly force in Mr Cox's submission that the judge did not expressly deal with the personal mitigation to which we have referred. But it has to be remembered that this was a case of serious criminality. This was money laundering over a long period, in order to hide wealth which had been created by criminal activity. That, in our judgment, had to be reflected in a significant sentence of imprisonment, as to which personal mitigation plays a relatively small part.
16.
As far as the plea of guilty is concerned, the judge was perfectly entitled in the circumstances of this case to conclude that only a minimum amount of credit could properly be given. The position in this case was that the preparation of the trial had taken place over a number of years, during the course of which there had been numerous applications which had resulted in very substantial work, in particular, in relation to transcription of covert material, which had all been engendered by the fact that the appellant had not pleaded guilt in the first instance to the offence which he now accepts that he had committed. It follows that the judge was entitled to take the view that he should not give any substantial amount of credit for the plea.
17.
However, it does seem to us that he, although not expressing it in numeric terms, must be taken to have given some credit for plea. That means necessarily that the sentence that he had in mind must have been as a starting point in excess of 7 years' imprisonment. Was that manifestly excessive as a starting point?
18.
It was undoubtedly severe. But we have come to the conclusion that it was not so severe to be manifestly excessive, bearing in mind the fact that this was money laundering in relation to professional criminal activity. We do not accordingly consider that we can interfere with the sentence of 7 years' imprisonment.
19.
We turn to the appeal again the financial reporting order, which raises in the first instance a question of the jurisdiction of this court to deal with it. The financial reporting restriction order was imposed pursuant to the provisions of
section 76(1)
of the
Serious Organised Crime Police Act 2005
which provides as follows in subsection (1):
"A court sentencing or otherwise dealing with a person convicted of an offence mentioned in subsection (3) may also make a financial reporting order in respect of him."
20.
As originally enacted the offence in respect of which the appellant pleaded guilty, that is the conspiracy in relation money laundering as identified in the count to which we have already related, was not an offence mentioned in subsection (3) until, by order pursuant to subsection (4) of that section, it was added, the order taking effect on 4th May 2007. At the time of the original sentencing hearing that fact was known, at least it was known that the order would be taking effect at some time early in May. In the course of proceedings in chambers and also in open court, counsel for the prosecution made it plain that he was going to invite the judge to make a financial reporting order, but that in order to do so he would have in effect to ask the judge to put over, by way of adjournment the application to a date when the order had taken effect.
21.
In the course of the sentencing hearing the judge indicated that he was not minded to adjourn the sentencing hearing itself, and was proposing to make the orders which he made on that day, but indicated that the prosecution could bring the matter back at a subsequent stage at which he would hear submissions as to whether it would be appropriate for him to make a financial reporting order. It was in those circumstances that the application was made in May on three separate occasions, culminating on the 21st May, when the order was ultimately made, when the judge acceded to the prosecution application against objection on behalf of the appellant. That objection had first been made indeed at the original sentencing hearing when Mr Salmon QC, then acting on behalf of the appellant, had said that the standing over of that application, for the making of that order was a device simply to enable the court to have further power to deal with the appellant. The judge indicated at the March hearing that he would hear that argument if and when the prosecution eventually made their application.
22.
The position, when it came to May, was that there was outstanding an issue, as it was seen by the judge, as to the quantification of the order relating to the recovery of defence costs; the Legal Services Commission having been asked in the March hearing to make certain investigations, which culminated in that matter being brought before the court in May; and it was at that stage that the prosecution took the opportunity to repeat their application for a financial reporting order.
23.
On behalf of the appellant Mr Cox submits to us today that the judge was simply wrong to have allowed the prosecution to have had the opportunity to come back before the court in May in order to impose such an order. The position, he submits, was that by the end of the hearing on 9th March, he was effectively
functus officio
in relation to all sentencing matters. There was nothing left for him to deal with within the meaning of
section 76
of
the Act
. He accordingly submits that there was in May no power to make the financial reporting order and that we should accordingly quash it.
24.
The first question however is whether this court has jurisdiction to deal with the financial reporting order at all. That is because there is no statutory provision which expressly provides (as has been the case in a number of other statutory provisions) that such orders shall be considered to be sentences of the court for the purposes of the right of appeal under the
Criminal Appeal Act 1968
. The problem that would be presented if it was not to be treated as a sentence of the court, is that it would be an order made which was related to a matter arising on indictment, and therefore judicial review would be precluded as well. The consequence would be that there would be no apparent means whereby any defendant wrongly subjected to a financial reporting order could have the matter rectified. That is clearly a consequence which this Court should avoid if it can possibly do so. The solution, it seems to us, is that, for the purposes of
the 1968 Act
, the financial reporting order is indeed a sentence. It is an order made on conviction. That is, it is an order that can only have been made after conviction. This Court, considering a different form of ancillary order in the case of
R v Hayden
60 Cr App R 304, held that an order which fell into that category was to be treated as a sentence for the purpose of
the 1968 Act
, and accordingly there would be a right of appeal.
25.
We consider that that is the approach that we should adopt to this particular form of order. There is accordingly a right of appeal. We should say, although the point was not fully argued before us, that the question which must also be answered, if an order is to be treated as a sentence, is whether it is a penalty, which would result in it being a breach in the circumstances of this case of the appellant's rights under Article 7(1) which preclude a court from imposing any penalty which was not a penalty applicable to the offence at the time that the offence was committed. We have no hesitation in saying that a financial reporting order is not a penalty for the purposes of that Article; it is a preventative measure intended to enable the courts to keep control over those in respect of whom there is the risk that they may indulge in criminal activity. Accordingly, there is no question of a bar on retrospective application of the provisions of
section 76(1)
.
26.
Returning to the order that was in fact made, we take the view that the judge was entitled to make the order. When the matter came back before him, it matters not in what guise, he was dealing with the offender within the meaning of
section 76
. That gave him the jurisdiction and the power to make the order. It is not suggested that there was no material upon which he could properly make it; and it is not suggested before us that the order was one which was not an appropriate order in all the circumstances. But we have considered whether the order as made imposed more onerous provisions than were required. The position is that the appellant is required to make the appropriate reports as to his financial position every 6 months while he remains in custody and once every 4 months after his release. In our judgment, those requirements are proportionate to the problem presented by the fact that this appellant had for so long manipulated his financial activities to hide the proceeds of crime. Accordingly we do not consider that we should interfere in any way with its terms. For the reasons that we have given, we accordingly dismiss the appeal against sentence.
27.
MR COX: On the FRO it was an application for leave, your Lordships did not say whether you granted leave.
28.
THE VICE PRESIDENT: Yes. We will say, in relation that, in relation to the financial reporting order, we grant you leave. There were clearly arguable issues which needed to be resolved, but we dismiss the appeal.
29.
MR MITCHELL: My Lord, when your Lordship comes to perfect the transcript may I respectfully refer to paragraphs 56 onwards in our skeleton argument where we dealt with the retrospective and the question of penalty. Your Lordship in his judgment said that it had not been raised by either party.
30.
THE VICE PRESIDENT: It had not been argued is what I meant.
31.
MR MITCHELL: It was argued in writing in other words.
32.
THE VICE PRESIDENT: Yes, thank you very much.