Financial Crime Case Law Updater – March 2023

The case law updater team comprises of Joseph Sinclair and Rachel Pain.

Matthew Hargreaves -v- Powys County Council [2022] EWHC 3176 (Admin)

Case Stated – Confiscation Order – Failure to Pay – Wilful Refusal – Default Term – Discretion

The appellant submitted his failure to pay was not a wilful refusal as he had taken some steps in relation to the sum, and activation of the default term should have been postponed for appointment of an enforcement receiver. However, no payments had been made and the steps taken largely consisted of attempts to negotiate a lower sum.

[20] “The appellant had agreed the available amount that was certified at his confiscation hearing. It is his obligation to meet the sum due. It is a striking feature of this case that nothing at all has been paid to meet the order.”

[28] “We are satisfied that the material before the District Judge did entitle him to conclude that the appellant’s failure to meet any of the order was the result of his wilful refusal to do so.”

[29] “In our judgment, when nothing had been paid at all, the District Judge was entitled to conclude that the appointment of an enforcement receiver with its associated costs was not an appropriate step.”

[30] “We are also satisfied that the District Judge was entitled to conclude that no useful purpose would have been served by postponing the appellant’s committal to custody. On the material before him, there was no prospect as matters then stood that the position would change if a postponement was granted.”

SFO -v- Bluu Solutions & Tetris Projects U20210959, 19 July 2021 (published in March 2023 following the proceedings against the executives concerned)

Deferred Prosecution Agreements – Interests of Justice – Managerial Decisions

The companies were involved in the business of office refurbishment. Bluu had been acquired by a third company, and merged with Tetris. They entered deferred prosecution agreements (“DPAs”) after the parent country self-reported in respect of bribes paid to secure contracts. It was the first time two DPAs had been sought arising out of a single indictment.

It was prudent to have separate DPAs arising out of connect facts and a single indictment where (a) the companies remained separate (cf SFO v Rolls Royce); (b) the financial penalty was separate and distinct for each company; (c) the assessment of culpability was different; and (d) one of the companies was being wound down for dissolution: [75].

[85] “The companies are separate, as are the DPAs, and it is important therefore to give separate consideration to the interests of justice bearing on each agreement….”

[86] “Like Edis LJ in Amec I regard the replacement of management as a necessary feature here, without which I would not have been prepared to give approval. In the case of [Tetris] this is important not because the company is intending to continue in business – on the contrary as I understand it [Bluu] employs no staff and is being run down – but because of the very high culpability attaching to its criminal activity over a considerable period. Replacement of management is a critical factor in the case of CD Ltd precisely because it is still operating and transacting new business.”

[90] “I regard the provision of financial support from the parent company, secured by undertakings attached to each DPA, as a further feature in favour of the agreements. Such support has enabled the amounts required to be paid under each DPA to be set and agreed at sums considerably higher than either company alone would have been able to pay. That is a significant benefit.”