The brief facts of the case were that a charge of conspiracy to launder money was brought against Mr Saik who operated a bureau de change in London. He pleaded guilty to the charge on the basis that he did not know that the funds he converted into foreign currency on a number of occasions were the proceeds of crime, but that he suspected they were such. This plea was accepted and he was subsequently sentenced to seven years imprisonment, which was reduced to five and a half years on appeal.
The substantive offence with which Mr Saik was charged is contained in section 93C(2) of the Criminal Justice Act 1988 (amended). The offence of conspiracy is contained within section 1 of the Criminal Law Act 1977. Both of these are reproduced for reference at the end of this article.
Their Lordships held that the criminal provenance of the property is a fact necessary for the commission of the offence and as such section 1(2) of the Criminal Law Act 1997 applies, (paras 23, 81 and 117 of the judgment).
Accordingly, where the property has not been identified when the conspiracy agreement is reached, the prosecution must prove that the conspirator intended that the property would be the proceeds of criminal conduct. However, if the property was specifically identified when the conspirators made their agreement, the prosecution must prove that the conspirators knew that the property was the proceeds of crime, (paras 23 and 25 of the judgment).
It was noted that the Law Commission, when making recommendations which led to the enactment of section 1(2) of the Criminal Law Act 1997, were particularly focused on offences of strict liability and offences where recklessness is a sufficient mens rea. The court observed that the mens rea contemplated in section 92C, namely suspicion on reasonable grounds, was not actually addressed by the Law Commission in its review, and that often the difference between suspicion on reasonable grounds and knowledge is not all that great, (para 61 of the judgment).
However, the crucial point is that the offence of conspiracy is committed at the time of the agreement, without substantive criminal activities taking place. Accordingly, it was the court’s view that it is important to apply the limitations of the offence of conspiracy strictly, (para 123 of the judgment).
Therefore, while the substantive offence of money laundering can be committed as a result of suspicion on reasonable grounds, a conspiracy to launder can only succeed where it is demonstrated that the conspirators knew that the property to be dealt with was the proceeds of crime.
It was noted that the difficulties in this case were exacerbated by the practice of prosecuting several acts of money laundering which have taken place under the umbrella of the statutory offence of conspiracy, requiring concepts which were designed to fit with the idea that conspiracy as an inchoate offence being applied to cases where the only proof that there was a conspiracy is provided by evidence of the course of conduct from which inferences as to state of mind are then drawn, (para 63 of the judgment).
Hope LJ at paragraph 84 of the judgment specifically drew comparisons with the manner in which such offences are charged in Scotland, where the accused would instead be charged with a single count that they engaged in a continuing course of criminal conduct which involved the commission of a series of identical criminal offences. His Lordship recognised that this was an area of law requiring amendment if such offences were not to become very difficult, if not impossible to prosecute, because of the English rules against duplication in charging a defendant, (para 84).
With respect to the new money laundering offences under Part 7 of the Proceeds of Crime Act 2002, the additional requirements for a conspiracy under section 1(2) of the Criminal Law Act 1977 would apply, as the criminal provenance of the property remains a fact necessary for the commission of the substantive offences.
The only offences that can be committed on the basis of a suspicion are ‘entering into arrangements’ (section 328 Proceeds of Crime Act 2002) and ‘failing to report’ (sections 330, 331 and 332 Proceeds of Crime Act 2002). As such, a conviction for conspiracy to commit one of those offences will no longer be sustainable where the only evidence is that a person engaged in the conduct while holding a suspicion that the property involved was the proceeds of crime, rather than having actual knowledge that they were.
An interesting postscript to the Saik case is the decision in The Queen on the application of the Director of Revenue and Customs Prosecutions and Criminal Case Review Commission [2006] EWHC 3064 (Admin) (5 December 2006). The case involved four defendants who had been convicted of conspiracy to launder the proceeds of crime, when the indictments specifically referred to the defendant’s having a reasonable ground to suspect that the property laundered was the proceeds of crime. The High Court re-affirmed the Criminal Case Review Commission’s ability to refer cases to the Court of Appeal (Criminal Division) where there had been a change in the law since the time of the conviction, even if the matter is well out of time, and whether or not there would be a substantial injustice in allowing the conviction to stand.