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Posts Tagged ‘criminal assets’

Proceeds of Crime not Being Reclaimed Effectively

March 15, 2016 by Kelly No Comments »

A recent review by the National Audit Office (NAO) has said that the government is failing to reclaim much of the money that it could confiscate from offenders as proceeds of crime. According to the report, the system for reclaiming money that has been earned through criminal activities has “fundamental weaknesses,” which has led offenders now owing the government around £1.6 billion in unreclaimed assets.

Previously, in December 2013, the NAO reported that the government was only reclaiming 26p out of every £100 of assets that had been identified as being earned through criminal activity, or 0.26% of the total. While the watchdog recognises in its more recent report that there have been improvements to the system in the intervening period, it says that these simply “have not been enough” to reduce the debt owed to the state by offenders. On the contrary, the debt in question has increased since late 2013 by a total of £158 million, largely as a result of interest on existing debts, which accrues at an annual rate of 8% as long as that debt remains unpaid.

2014 saw the establishment of the Criminal Finances Improvement Plan, designed to facilitate the reclamation of assets from criminals. However, while the NAO’s recent progress report recognises that this has played some role in encouraging the improvement of enforcement orders, it also remains limited in its achievements. This is partly, the NAO says, down to the plan’s failure to provide clear goals or to set out specific metrics for success. Furthermore, enforcement and prosecution agencies have failed to increase their usage of early-action measures. Usage of orders to freeze criminal assets (restraint orders) has actually decreased, as has the number of professional financial investigators.

The NAO’s recent progress report did recognise some positives, however. It said that on an “operational” level, joint working between agencies and organisations had been improved. Information-sharing and the use of expertise from multiple departments has been improved, partly due to the decision that certain key teams should be based in the same location. The report also praised the government’s efforts to improve the recovery of criminal assets that have been earned in the UK through illegal activities and then transferred abroad.

Furthermore, the watchdog recognised improvements in the way that confiscation orders are administered, but said that the impact of this was limited. Justice agencies need to “address the deeper systemic problems” in this area, the report said, as well as “show more determination and urgency.”

 

Legal Aid Agency Gains Claim to Criminal Assets

March 20, 2015 by Kelly No Comments »

Recent years have seen the introduction of a number of unpopular new legal aid reforms. However, the most recent reform to be announced has proved rather more popular within the legal industry than any of the recent funding cuts and restrictions of access. Under changes outlined by the Ministry of Justice recently, the Legal Aid Agency would gain power over the assets of convicted criminals in order to recoup legal aid costs associated with providing their defence.

Under the new rules, which must gain parliamentary approval before they come into force, “restrained” assets belonging to those who are convicted of the charges against them.  This is designed to offset the cost of providing legal aid to individuals who are, according to the verdict of the court, guilty. Other outstanding defence costs could also be paid by the seizure of such “restrained” assets. Usually, these are profits or items of value gained or believed to be gained as a result criminal activities.

Currently such assets are restrained under 2002’s Proceeds of Crime Act. While restrained, the assets cannot be spent, moved or otherwise utilised by the defendant. If the defendant is subsequently convicted, the court may confiscate these assets.

Other considerations would continue to take priority over the reclamation of legal costs, the Ministry of Justice said. First, compensation and confiscation orders benefitting the victims of the crime will be fulfilled. If any assets are left over when the victims have, as far as possible, had their property returned and/or received all compensation due, the Legal Aid Agency will then have a claim to those remaining assets in order to recoup costs.

The move is designed to relieve strain on the legal aid budget by reclaiming a portion of the money spent on defending the guilty. According to the Ministry of Justice, estimates suggest that this could result in savings of up to £2 million in legal aid costs every year.

Chris Grayling, the Justice Secretary, welcomed the move. He said: “For too long people convicted of crimes have avoided paying what they owe. Legal aid is taxpayers’ money and we have a duty to make sure it is not being spent on those we believe can afford to pay towards their legal costs.”

Grayling also described the changes as a “vital further step in making the legal aid system fair and credible.”

If they gain parliamentary approval, these changes could take effect as soon as the 1st of June this year.