Neil Swift, partner, and George Pizzey, trainee solicitor, at Peters & Peters Solicitors LLP, examine R v Fulton which assists in establishing the quantum of confiscation under the Proceeds of Crime Act 2002 (POCA 2002) following criminal conviction. The case serves as a restatement of the well-established principle that ‘benefiting from criminal conduct by obtaining property’ will be interpreted broadly. This means that POCA 2002, s 76(4) can have some eye-catching results following conviction for money laundering. For Mr Fulton, who pocketed just £4,206, was accountable as a matter of law for £17,850,000. This review has been specifically written for Lexis®PSL Corporate Crime.

R v Fulton [2019] EWCA Crim 163, [2019] All ER (D) 84 (Feb)

What are the practical implications of this case?

R v Fulton is a reminder that the law of confiscation is far-reaching and heavy-handed. In the arena of corporate crime, this case highlights how criminal conspirators will not necessarily be held to account simply by reference to any individual profit that they achieve through their conduct, but by their place within that universe of criminality. It is particularly uncomfortable reading for anyone with relative independence in their employment, especially those with practical control of trading accounts. If their role is to launder criminal proceeds, they may be highly exposed.

What was the background?

Mr Fulton worked as a foreign exchange trader for a money service bureau called Omnis FX Capital (Omnis), making transfers in different currencies on the instructions of his clients. Mr Fulton was an account manager at Omnis, with considerable autonomy to conduct trades independently of Mr Wood, the director/shareholder. In collusion with Mr Wood and others, Mr Fulton helped to launder the proceeds of a missing trader intra-community (MTIC) fraud, effectively cheating the German Revenue of a substantial amount of VAT. In total, £29,750,000 was laundered through Omnis. Mr Fulton was responsible for 60% of the transactions.

On 25 April 2016, Mr Fulton was convicted of conspiracy to disguise, convert, or transfer criminal property, and was sentenced to four and a half years imprisonment. The present case concerns the confiscation proceedings that followed his sentencing.

What did the Court of Appeal decide?

The amount of a confiscation order following conviction is determined as the lower of two values—how much can they pay (the available amount) and the value of property they obtained as a result of their criminal conduct (the benefit figure).

Mr Fulton ended up with a confiscation order for £104,228—that is the available amount—because, following established case law on the interpretation of POCA 2002, the Court of Appeal held that Mr Fulton’s benefit figure was the sum of all of the transactions for which he was responsible—£17,850,000.

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POCA 2002, s 76(4) determines how the benefit figure is calculated, stating that ‘a person benefits from conduct if he obtains property as a result of or in connection with the conduct’. The reason why Mr Fulton’s benefit figure was calculated as the sum of his transactions, despite him only pocketing a negligible sum from the crime, is that he was found to have sufficient control of the money transfers within the Omnis account. Even though he did not own the money in the Omnis account, his autonomy to process the transactions satisfied the court that, as a matter of law, he obtained the property.

This position is born of dicta from two cases. Firstly, in R v May [2008] UKHL 28, [2008] 4 All ER 97, Lord Bingham explained that obtaining property ‘…will ordinarily connote a power of disposition or control[…]’. Secondly, in R v Ahmad and Fields [2012] EWCA Crim 391, [2012] 2 All ER 1137, the Court of Appeal confirmed that legal ownership of property is not required in order for a person to obtain it.

Counsel for Mr Fulton attempted to divert the court from the rather low bar of practical control, by asserting that his conduct was entirely in the course of his employment as circumscribed by the instructions from his client, and that in any event his role was akin to that of a mere ‘courier’ in the conspiracy.

However, these propositions stem from a single concern that the law of confiscation not be used to target people who had no meaningful stake in the criminal venture, as clarified by Lord Neuberger in Ahmad and Fields, in which he observed that these authorities are properly concerned with ‘…whether the defendant in question obtained the property in the sense of assuming the rights of an owner over it, either because he received it or because he was to have some sort of share in it or its proceeds[…]’.

Accordingly, the Court of Appeal rejected the submission that Mr Fulton was a mere employee acting within the confines of his job, but instead he ‘…was acting as a money launderer. His employment was the context within which he was able to carry out very large scale money laundering’.

Neither was Mr Fulton a mere ‘courier’, as his conduct was too central to the criminality. In short, ‘he was centrally responsible for laundering money for the benefit of the members of the conspiracy of whom he was aware and for himself[…] He was receiving commission based on the turnover of the business and so directly related to the money he was laundering. It was a share in the proceeds.’

The Court of Appeal agreed with the court below that Mr Fulton benefited from all of the transactions that he processed on the grounds that he had sufficient control over the Omnis account, that money laundering was not otherwise a requirement of his job and that he was a key operative and stakeholder in the criminal conspiracy.

Interviewed by Max Aitchison.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

LexisPSL Corporate Crime.

This review has been specifically written for LexisPSL Corporate Crime.

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