Criminal Law: Money Laundering

Defendants charged with tax evasion and fraud are often charged with money laundering.

The Proceeds of Crime Act 2002 came into force on 24 February 2003.

Money Laundering is the process by which the proceeds of a criminal offence are converted in order to give the appearance that they are of legitimate origin.

Section 340 of the Proceeds of Crime Act define ‘proceeds of crime’ as property that constitutes a person’s benefit from criminal conduct.

Money laundering schemes can be very simple or highly sophisticated. Most sophisticated money laundering schemes involve three stages:

  • Placement – the process by which ‘criminal’ money is placed into the financial system;
  • Integration – the process by which ‘criminal’ money is absorbed in the financial system through, for example, the purchase of property;
  • Layering – the process of moving money in the financial system through complex webs of transactions, often via offshore companies;

The new principal money laundering offences are ‘Concealing’ (Section 327) (Concealing), ‘Arrangements’ (Section 328) and ‘Acquisition, use and possession (Section 329) of the Proceeds of Crime Act 2002.

Money laundering is defined as an act which constitutes an offence under S.327, 328 and 329 or a conspiracy or attempt to commit such an offence. Money laundering includes counselling, procuring, aiding or abetting.

Offences which were committed abroad are relevant predicate crimes if laundering acts are committed in England & Wales where the predicate offence committed abroad (from which proceeds were generated) would also constitute an offence in any part of the United Kingdom if it occurred here (S.340 (2) b).

It is immaterial whether the criminal conduct occurred prior to the Act becoming law so long as the laundering act takes place after commencement.

To prove that property is the proceeds of crime, the prosecutor must show the property:

  • The property constitutes a benefit from criminal conduct or that it represents such a benefit (in whole or part and whether directly or indirectly) and;
  • The alleged offender either knew or suspected that it constitutes or represents such a benefit [section 340(3)].

The definition of criminal property makes no distinction between the proceeds of the defendant’s crimes and crimes committed by other persons.

Proving that proceeds are the product (or “benefit”) of ‘criminal conduct’ will usually be based on circumstantial evidence.

Prosecutors are not required to prove that the property in question is the benefit of a particular or a specific act of criminal conduct, as such an interpretation would restrict the operation of the legislation. The prosecution must adduce sufficient circumstantial evidence or other evidence from which inferences can be drawn to the required criminal standard that the property in question has a criminal origin.

Malcolm Simmons

Malcolm Simmons

Consultant Solicitor
Criminal Law

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Significant experience advising clients who are the subject of HMRC investigations and criminal prosecutions for tax-related offences, fraud and money laundering and other offences including:

  • Serious and Organised Crime
  • Fraud and Financial Crime
  • Corporate Crime
  • Tax Investigations
  • Bribery & Corruption
  • Insider Dealing
  • Corporate Manslaughter and Health & Safety Law
  • Cash Seizures, Restraint Orders and Confiscation Proceedings

Former international judge who presided in many complex serious and organised crime cases including complex financial crimes, tax evasion, money laundering, fraud and asset confiscation cases.