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	England and Wales Court of Appeal (Criminal Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Agombar v R. [2009] EWCA Crim 903 (01 May 2009) URL: http://www.bailii.org/ew/cases/EWCA/Crim/2009/903.html Cite as: [2009] EWCA Crim 903

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE CROWN COURT AT CHELMSFORD
Mr Recorder Dugdale
T20060027

		Royal Courts of Justice Strand. London, WC2A 2LL
		01 May 2009

Lord Justice Leveson :

1. On 27^th June 2006, in the Crown Court at Chelmsford, this appellant pleaded guilty to an offence of being knowingly concerned in harbouring, concealing, carrying or in any manner dealing with a Class A controlled drug, namely cocaine. He was sentenced to a term of 9 years' imprisonment which he does not seek to challenge. This appeal concerns the decision of Mr Recorder Dugdale dated as late as 23^rd July 2008 (after hearings on 5^th - 7^th November 2007 and 21^st - 23^rd July 2008) under section 6 of the Proceeds of Crime Act 2002 ("the Act") whereby he made a Confiscation Order in the sum of £889,860 to be paid within 6 months or, in default, a term of 51 months imprisonment to be served consecutively to the period imposed for the substantive offence. It proceeds by limited leave of the single judge.
2. The facts giving rise to the prosecution can be shortly stated. On 20th February 2005, following a period of surveillance by officers of HM Revenue and Customs, the appellant and two others were observed driving their cars in convoy to a McDonald's restaurant near Junction 22 of the M25 where they were joined by a third man. A package later found to be £15,000 was handed over after which a fourth car joined the convoy and all ended up at the Holiday Inn, High Wycombe when a fifth man joined. Bags were seen to be handed over whereupon the officers moved in and all those who had been observed (save for the appellant who escaped) were arrested. In one car there was £1,500 in cash along with the £15,000 which had been handed over. On the back seat of another was £2,700 and in the boot of a third was 8.32 kg of cocaine of 100% purity; at the home of the driver of that car was the equivalent of 41.7 gm of cocaine of 100% purity and a total of £54,030 in cash. Finally in the boot of another of the cars was a further 5.96 kg of cocaine of 100% purity. The wholesale value of the drugs was £444,855 with a street value of some £1.695 m. Two days later, the appellant's car was seized and traces of cocaine were found.
3. The four who were arrested pleaded guilty to various offences and, on 22^nd July 2005, were sentenced to terms between 6½ and 12 years' imprisonment. The appellant, however, was not arrested until 10^th November 2005. He then denied any involvement in the offences which were revealed by what had been observed and pleaded guilty only prior to a jury being sworn to try him.
4. After sentence, the Court proceeded to conduct a hearing under the Act and, after an appropriate adjournment, the prosecution served a statement pursuant to section 16(3) in which it was asserted that the appellant had benefitted from the proceeds of crime to the extent of £2,413,310.42. In his written response, the appellant claimed that the only asset available to him was a cherished number plate worth £1,000. Thus, the battle lines were drawn.
5. Before the Recorder, the law was agreed and he summarised the position in this way:

"It is accepted that this case falls within the "criminal lifestyle" offences under s. 6(4)(a) [of the Act]. Accordingly, the s. 10 assumptions will apply. Those are that any property transferred to [the Appellant] after 10^th November 2000 (being the relevant date) were obtained by him as a result of his criminal conduct; also, that any property held by him after his conviction date (27^th June 2006) was held by him as a result of the general criminal conduct; and the expenditure made by him after the relevant date (November 1999) was met by him from property obtained as a result of his general criminal conduct; and that, for the purpose of valuing any property of [the Appellant], the assumption is that he has obtained such property free from any other interest in it.

The burden is upon [the Appellant] to disprove those assumptions on the balance of probability. The disproving of them is if I find that the assumptions are incorrect or if there is a serious risk of injustice if the assumption is made."

6. As is repeatedly emphasised, the provisions of the Act are draconian in effect. Mr Orlando Pownall Q.C. for the Appellant (who did not appear for him in the Crown Court) recognised that fact and, notwithstanding the way in which the matter had initially been put in the Notice of Appeal, recognised that the assumptions applied to all property held by him at any time after the date of conviction whenever it was acquired. This included, therefore property acquired prior to the period which commenced with the 'relevant day' (i.e. within the period of six years preceding the commencement of the criminal proceedings as defined by s. 10(8) of the Act). He argued that in four regards, although the Recorder was entitled to make the assumption, he should not have done so either because the Appellant had proved on balance that the assumption was wrong or alternatively that there was a serious risk of injustice if he made it.
7. As a more general point, Mr Pownall argued that the burden on the Appellant should be more readily satisfied in relation to property held for a considerable time (or traceable back into property which had been held for a considerable time) to reflect the difficulty which any appellant would have in proving the legitimate source of funding. Such a submission, however, ignores the reality that modern life generates a paper trail which can usually be ascertained very many years later. Employment details and tax returns will remain available as will records of a business however exiguous. Substantial winnings are capable of a degree of verification and even inheritance, however informal, is capable of some degree of proof. Although there may be assets where, for good reason, documentary or other contemporaneous proof is not available, it is for the court to assess what is available and to reach such conclusions as it believes appropriate.
8. In the case of the Appellant, however, his background reveals extremely limited opportunity to demonstrate lawful acquisition of assets, particularly in the period up to 2000. Having twice been fined for handling stolen goods, in July 1988, at the age of 25, he was imprisoned for 4 years for robbery and kidnapping. By November 1991, he was again in custody being sentenced in December 1992 to 14 years imprisonment for conspiracy from which he was released on licence in November 1999.
9. The appellant gave evidence at some length as to his legitimate sources of income in the period which followed his release from prison. The Recorder found him "a charming witness in any ways ... at times ... very amusing". There was, however, very little by way of written records to back up what he said and it is sufficient to record that the Recorder concluded:

"Mr Agombar has failed to satisfy me that any significant part of his income or any monies going through his accounts or into any capital assets during the relevant period does not come from his criminal lifestyle. Also, from [his] evidence, I have formed the view that the assets which form the subject matter of these proceedings form what I am going to describe as a best estimate of the assets upon which Mr Agombar might call. I strongly suspect that there are other hidden assets in this case about which we have not been told."

10. On the evidence before the Recorder, that conclusion is unassailable and its accuracy is only underlined by material produced for the appeal which revealed the existence of an account which the appellant had not previously identified to the court. It is thus against this background that Mr Pownall's complaints must be addressed.

Capital Input into the Sun Lounge Business

11. There is no doubt that the Appellant submitted at least one return to the Inland Revenue in connection with a sun lounge business (although, for cogent reason, the Recorder specifically rejected his evidence that it had generated a substantial legitimate income). In his return for the year 2002-3, however, the business was shown to have received a cash introduction of £108,828. Mr Pownall, however, argues that the proper inference is that this account is a complete fiction: the return was not a reliable basis for concluding otherwise given that the Appellant's dishonesty and criminal conduct had been used to undermine his credibility. Mr Pownall pointed out his evidence which demonstrated that he simply did not understand the implications of such an input while denying that any money had been put into the business. Essentially, Mr Pownall submitted that the Crown could not rely on the accuracy of this figure which itself could only have come from the Appellant for the purpose of reducing tax obligations although he did not demur from the suggestion that an accountant had drawn up the document based on figures provided for him.
12. Mr Andrew Marshall, for the Crown, argued that the court should not provide a dishonest defendant with an advantage by providing him with the benefit of a doubt simply because of the conclusion that he was dishonest. He submitted that this sum "plainly" must have existed as the Revenue had been informed of it and could have asked for proof. Further, the Crown had pointed to this introduction of capital in its original statement; the Appellant had never engaged with the evidence and had not sought to call evidence from an accountant. The fact that there was no audit trail did not disprove its existence but rather was evidence of money laundering.
13. The fact is that the Appellant admitted stealing from the business, not declaring proper profits and not paying VAT though registered. There is no doubt, however, that the Appellant had provided an accountant with information to complete this return and the court is not, without evidence, prepared to conclude that the accountant was simply inventing figures (or accepting that a precise figure included in the accounts had not been evidenced in some way sufficient for him to feel that its insertion within the accounts as capital introduced was justified). In our judgment, the Recorder was entitled to treat this item as reflecting money that had existed. The assumption, therefore, applied to it and although (as the Recorder noted) "something of a mystery", he was equally entitled to conclude that these funds which passed through the account remain available in some form.

Bramleys Barn and Bank Deposits

14. Mr Pownall mounted separate arguments relating to the Appellant's matrimonial home, Bramleys Barn, Collier Street, Kent ("Bramleys Barn") and the origin of money which ended up in an account (number ending 968) amounting to £170,000 which came from the remortgage of the property said to have been arranged as part of a separation agreement. We take them together because they are inextricably linked through the asset Bramleys Barn.
15. The history is important. Mr Pownall explained that there was uncontradicted evidence that, in or about 1989, before the Appellant was sent to prison, he had worked as a haulage contractor and had purchased a property at what 3 Gainsborough Square (to which we shall refer as "Gainsborough" it also being described in the papers as Gainsborough Court and Gainsborough Terrace) for £37,000 with a deposit of £5,000 and a mortgage of £32,000. This was sold in 1999 for £115,000 with the proceeds of sale (after repayment of the mortgage) applied to the purchase of Bramleys Barn together with loans from a friend Mr Burns and Mrs Agombar's brother. The property then required renovation and the family lived in a caravan while than was done. Only in 2002/3 was a mortgage obtained for £55,000 but a further remortgage was arranged with Halifax Bank of Scotland which led to a further advance initially of £100,000 but thereafter in a number of cheques through 2004 totalling £200,000 making something in the order of £300,000 in all. Mr Pownall thus argues that this money could not be claimed to have derived from criminal conduct.
16. Although Mr Pownall had initially sought to argue before the single judge that the assumption under s. 10(3) of the Act applied only to property acquired within six years of the investigations starting, it is now conceded that Bramleys Barn is caught on the basis that the Appellant still had an interest in the property at the time of his arrest. Thus, Bramleys Barn is assumed to be the proceeds of crime, and a relevant benefit, unless the contrary is proved. Mr Pownall submitted that the uncontradicted evidence of the Appellant's haulage business (funding the deposit for the first house) and the evidence of the mortgages and the loans demonstrated that the contrary had been proved.
17. The answer to this submission is to go back to what the Recorder decided. Far from deciding that the Appellant had proved on balance that the renovation of Bramleys Barn had been met from legitimate money, he found the reverse, namely that all funds going into the property from the Appellant would probably have come from some form of criminal lifestyle. He did not specifically make any finding as to the source of the deposit for Gainsborough. He proceeded, however, on the basis that the entirety of equity in Bramleys Barn formed part of the proceeds of crime. Given that the burden rested on the Appellant, the only proper construction that we can put on the Recorder's judgment is that the assumption was not rebutted.
18. In fairness to the Appellant, however, we have re-examined the evidence for ourselves in order to see whether there was material to justify his failure to accept, on the balance of probability, that the statutory assumption had been rebutted. It is present in abundance and does not simply depend on the Recorder's rejection of the credibility of the Appellant. First, the evidence surrounding the acquisition of Gainsborough appears vague in the extreme. In argument, Mr Pownall put it as "in or about 1989": in fact, on 7^th July 1988, the Appellant was sentenced to a term of 4 years imprisonment for robbery and kidnapping and, even if the property was acquired before that sentence (although it is consistent with the date given by Mrs Agombar -just before they got married 17 years before her evidence in November 2007), we would not have been prepared to find, on balance, that a 25 year old involved in robbery would have legitimately saved £5,000 to put down as a deposit on a home. The value of that property, net of the mortgage which was repaid, was therefore the proceeds of crime.
19. Secondly, although the Appellant and Mrs Agombar sought to explain the payment of the shortfall between the purchase price of Bramleys Barn and the net proceeds of Gainsborough as loans from a friend and relative, there was no evidence save for the assertion, still less documentation, to support that claim and, we repeat, the burden lay on the Appellant to rebut the presumption. In any event, even if a loan was made by Mr Burns, it is said to have been repaid which repayment (given the conclusions of the Recorder) has not been shown not to have been from the proceeds of crime.
20. Thirdly, there was evidence before the Recorder that the property was a shell at the time that it was bought and was the subject of substantial renovation. There was no substantial evidence as to who did the work, how much it cost or where the money came from to pay for it. The Recorder specifically found that "all funds going into this property from Terrence Agombar at this stage would, in my view, probably have come from some form of criminal lifestyle".
21. It follows for all these reasons that although the Recorder did not deal separately with the acquisition of Gainsborough, he was right to conclude that the assumption that Bramleys Barn was acquired by the proceeds of crime was not displaced. Further, in the light of our examination of the circumstances and the conclusions which we have reached, we agree with that conclusion and do not consider that it was unfair for him so to conclude. Thus, the Recorder was equally correct to decide that Bramleys Barn was part of the benefit of the appellant's crimes.
22. This brings us to the second argument mounted by Mr Pownall (although presented in reverse order) concerning the mortgage raised subsequent to the acquisition and development of Bramleys Barn and paid into a bank account from which drawings were made. The Recorder grouped three accounts (ending 968, 538 and 353) together on the basis that the same argument applied to all and concluded that each had received substantial deposits over the relevant period with no credible explanation as to where the money came from or where it went. The sums deposited in these accounts (including a Barclaycard account) amounted to £381,168.37.
23. Mr Pownall challenged the premise upon which the Recorder proceeded. He argued that £170,000 of the £381,168.37 came from the remortgage of Bramleys Barn, as part of a separation agreement reached between the Appellant and his wife. Mr Pownall took the court through the audit trail to demonstrate that it was clear that deposits in the 968 account were traceable to the drawdown from the Royal Bank of Scotland remortgage: this money, therefore, was not a benefit.
24. The flaw in the argument, however, is clear. Since the judge concluded that Bramleys Barn had been acquired by and thus represented the proceeds of crime, any money raised by way of mortgage must itself be the proceeds of crime. Assume, for the sake of argument, that the proceeds of sale of drugs are used to acquire an asset against which other money is borrowed. The mere fact that there is legitimate and bona fide documentation backing the loan does not mean that the sum borrowed is any less the proceeds of crime. Similarly for this mortgage. Although Mr Pownall was right to say that there was credible evidence as to the origin of the money (unlike the sums going through the other accounts), that evidence demonstrated that the deposits in the 968 account, were themselves the proceeds of crime.
25. In these circumstances we need not examine Mr Marshall's alternative argument that the mortgage itself was fraudulent in that it was obtained by the appellant telling a series of obvious and demonstrable lies about his income, his marital status and indeed the value of the property. The fact is that the Recorder was both justified and right to conclude that all three accounts represented the benefits of crime.
26. Turning to the question of realisation of benefit, the Recorder, perhaps generously, found that the Appellant's wife had herself acquired a half share of the Bramleys Barn as her own property. He did not, in fact, accept that this money was in truth part of a settlement of matrimonial issues describing the evidence as "very odd and somewhat contradictory" and noting that the house remains in joint names and the parties remain married. He concluded that the separation was merely a device and that the Appellant retained his half share in the property, which remained an asset available for confiscation. We are sure that he was right to do so.
27. In the same way, the Recorder found that the Appellant had given no proper explanation of any of the expenditure out of any of these three accounts, it followed that he had not proved that he no longer had any of these assets available and consequently the judge considered them to be assets which fell for confiscation. We agree: furthermore, this finding is an almost inevitable consequence of the conclusions reached by the Recorder about the Appellant's credibility.

Mrs Agombar's Sun Bed Business

28. We must deal finally with one further argument advanced by Mr Pownall for which he was not granted leave to appeal. It concerns the sum of £30,000 paid by cheque, drawn on the joint account of the Appellant and Mrs Agombar at the Bank of Scotland (not being one of the accounts comprised within the group discussed above). The cheque was made in favour of Mrs Tracey Agombar to help her to establish a sun bed business. Perhaps again somewhat generously, the Recorder considered that one half of that sum belonged to her and only half was the property of the Appellant. The Recorder having concluded that there was no satisfactory explanation as to the source of the funds in this account, he applied the assumption and concluded that £15,000 (being his half share of the £30,000) was both the proceeds of crime and a benefit within the meaning of the Act. The Recorder further concluded that since his association with his wife was continuing, this sum of £15,000 remained available to him as an asset available for confiscation.
29. Mr Pownall argued that the £30,000 came from the remortgage so that its provenance was not unclear. Mr Marshall accepted that if this money had gone into account 968, including it as the benefit of crime and realisable would have represented double counting. On the contrary, however, he demonstrated that the relevant payments had been made by cheques (as to £19,727.67) drawn on the mortgage account (i.e. not from 968) and the third sum of £10,350 had been paid in cash. In those circumstances, there seems ample material upon which the Recorder was entitled to come to the conclusion that this was a separate and freestanding sum representing the proceeds of crime in exactly the same way as the other mortgage drawdown payments. In the circumstances, we refuse leave to appeal on this point.

Conclusion

30. Notwithstanding Mr Pownall's persuasive arguments, we are satisfied that the Recorder reached conclusions open to him on the evidence which are both justifiable and, to such extent as we have felt it necessary to visit issues not specifically mentioned in his judgment, correct. This appeal is, therefore, dismissed.