G & Anor, R. v [2013] EWCA Crim 2237

[2013] EWCA Crim 2237Case No 201304937 B1+ 201304938 B1
IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE CENTRAL CRIMINAL COURT
Miss Recorder Greenberg QC
T2012/7437+7438
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 05/12/2013
Before
LORD JUSTICE LLOYD JONESMR JUSTICE IRWINMR JUSTICE GREEN
Between
RApplicantG and HRespondents
Ms. Ann Mulligan (instructed by the Crown Prosecution Service) for ApplicantMs. Nicola Howard (instructed by The Johnson Partnership Solicitors) for Respondent GMr. Mark Summers (instructed by Lound Mulrenan Jeffries Solicitors) for Respondent HHearing Hearing date: Tuesday 12 th November 2013.
JudgmentLORD JUSTICE LLOYD JONES :
[1]The respondents stood trial at the Central Criminal Court (Miss Recorder Greenberg QC and a jury) on two counts of entering into or becoming concerned in a money laundering arrangement contrary to section 328(1), Proceeds of Crime Act 2002. Count 1 concerned G and Count 2 concerned H. On 20 September 2013 the judge ruled that the respondents had no case to answer. On the same day the applicant confirmed that it would appeal the judge’s decision pursuant to section 58, Criminal Justice Act 2003. The applicant also gave an undertaking that the respondents would be acquitted if either of the conditions stated in section 58(9) Criminal Justice Act 2003 was met i.e. that leave to appeal to the Court of Appeal was not obtained or the appeal was abandoned before determination by the Court of Appeal. The judge refused the application for leave to appeal. On 25 September 2013 the applicant served a notice of appeal on the Crown Court, the Registrar of Criminal Appeals and the respondents. The Registrar has referred to the full court the Crown’s application for leave to appeal.[2]We grant leave to appeal.[3]G is charged in count 1 with an offence contrary to section 328(1), Proceeds of Crime Act 2002, the particulars of offence being that between 1 March 2011 and 17 August 2011 he “entered into or became concerned in an arrangement which he knew or suspected would facilitate the retention, use or control of criminal property, namely money received into NatWest Bank accounts numbered 86730606 and 86730584 from the sale of motor insurance through the Car Insurance Warehouse and Astuto Insurance websites, by or on behalf of Daniel Buckharee”.[4]H is charged in count 2 with an offence contrary to section 328(1), Proceeds of Crime Act 2002, the particulars of offence being that between 1 August 2011 and 13 January 2012 he “entered into or became concerned in an arrangement which [he] knew or suspected would facilitate the retention, use or control of criminal property, namely money received into a Lloyds Bank account number 2148560 and a Barclays Bank account number 73347664 from the sale of motor insurance through the Aston Midshires Insurance website, by or on behalf of Daniel Buckharee”.[5]Section 328(1) Proceeds of Crime Act 2002 provides:
“328 Arrangements (1) A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.”
[6]“ Criminal property” is defined in section 340, Proceeds of Crime Act 2002:
“(3) Property is criminal property if— (a) it constitutes a person’s benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and (b) the alleged offender knows or suspects that it constitutes or represents such a benefit. (4) It is immaterial— (a) who carried out the conduct; (b) who benefited from it; (c) whether the conduct occurred before or after the passing of this Act. (5) A person benefits from conduct if he obtains property as a result of or in connection with the conduct. (6) If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage. (7) References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained in both that connection and some other. (8) If a person benefits from conduct his benefit is the property obtained as a result of or in connection with the conduct. (9) Property is all property wherever situated and includes— (a) money; (b) all forms of property, real or personal, heritable or moveable; (c) things in action and other intangible or incorporeal property. (10) The following rules apply in relation to property— (a) property is obtained by a person if he obtains an interest in it; (b) references to an interest, in relation to land in England and Wales or Northern Ireland, are to any legal estate or equitable interest or power; (c) references to an interest, in relation to land in Scotland, are to any estate, interest, servitude or other heritable right in or over land, including a heritable security; (d) references to an interest, in relation to property other than land, include references to a right (including a right to possession).” (a) it constitutes a person’s benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and (b) the alleged offender knows or suspects that it constitutes or represents such a benefit. (a) who carried out the conduct; (b) who benefited from it; (c) whether the conduct occurred before or after the passing of this Act. (5) A person benefits from conduct if he obtains property as a result of or in connection with the conduct. (6) If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage. (7) References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained in both that connection and some other. (8) If a person benefits from conduct his benefit is the property obtained as a result of or in connection with the conduct. (a) money; (b) all forms of property, real or personal, heritable or moveable; (c) things in action and other intangible or incorporeal property. (a) property is obtained by a person if he obtains an interest in it; (b) references to an interest, in relation to land in England and Wales or Northern Ireland, are to any legal estate or equitable interest or power; (c) references to an interest, in relation to land in Scotland, are to any estate, interest, servitude or other heritable right in or over land, including a heritable security; (d) references to an interest, in relation to property other than land, include references to a right (including a right to possession).”
[7]The prosecution case concerns a total of four fraudulent car insurance websites, referred to as ghost broking websites, created by the co-accused Buckharee. The fraud operated by offering car insurance at a discount of around 15% below the average price being offered by genuine motor insurance companies. Unsuspecting members of the public accessing the fraudulent websites were duped into paying for car insurance cover which did not exist. The four ghost broking websites were Car Insurance Warehouse and Astuto Insurance (June 2011 to August 2011), Aston Midshires Insurance (1 September 2011 to January 2012) and First Car Direct Insurance (29 March 2012 to 17 April 2012).[8]The case against the respondents is similar on the facts. It is alleged that each was recruited by Buckharee to set up bank accounts or facilities which were then used by him in connection with the money fraudulently generated by the ghost websites.[9]The prosecution case against G is that on 11 April 2011 he opened an account at the Lincoln branch of Royal Bank of Scotland (10543303) (“the RBS account”) and that this account was associated with two other linked accounts opened on the same day. The monies which were eventually paid into the RBS account arose from a website set up by Buckharee that went live in late June 2011 and ran until mid August 2011. The prosecution case is that those monies were first paid into accounts at NatWest bank in the name of Lewis, a criminal associate of Buckharee. (Those are the accounts referred to in count 1.) The Crown maintains that between 30 June 2011 and 17 August 2011 a total of £19,060.00 was transferred from the Lewis NatWest accounts to the RBS account.[10]The prosecution case against H is that he opened an account at Lloyd’s Bank on 18 August 2011 and an account at Barclay’s Bank on 23 August 2011. On 1 September 2012 the Aston Midshires website went live and it generated fraudulently £594,000.00, between that date and 9 January 2011, on which date it ceased operation. The World Pay online payment facility opened by Buckharee which facilitated payments into the accounts opened by him also came into existence after H had set up the bank facilities. The prosecution case is that £417,709.97 from the Aston Midshires fraud was credited to the Lloyd’s Bank account and £176,434.50 to the Barclay’s Bank account. No fraudulently obtained money from the Aston Midshires fraud went into H’s accounts or passed through the World Pay facility before the website went live.[11]On 1 February 2013 at the Central Criminal Court Buckharee pleaded guilty to a number of offences including one count alleging fraud contrary to section 1, Fraud Act 2006. The particulars of the offence were that he dishonestly and intending thereby to make a gain for himself or another made a representation to such persons as might be induced to purchase car insurance which was untrue, namely that motor vehicle insurance provided through the Aston Midshires Insurance website was genuine and valid motor insurance. These pleas were acceptable to the Crown and, as a result, other counts on the indictment against Buckharee were left on the file. Those other counts included a corresponding count alleging fraud in respect of the operation of Car Insurance Warehouse and Astuto Insurance websites which generated the money eventually paid into G’s account. Other associates of Buckharee, namely Recchia, Lewis and Alli, either pleaded guilty to or were convicted of offences relating to their parts in the fraud.[12]The Crown opened its case on the basis that G and H had been recruited by Buckharee to open bank accounts on his behalf into which the proceeds of the insurance frauds could flow. It was the Crown’s case that G and H may well not have known that this was in fact a car insurance fraud. However at the time they opened their respective bank accounts on behalf of Buckharee they did so in circumstances such that it could safely be inferred that they must have known or at the very least suspected that they were doing so for a criminal purpose. The Crown alleged that Buckharee took control of the documentation and bank cards relating to these accounts enabling him to access those accounts and that in this way he succeeded in obtaining the fraud monies. The Crown opened its case on the basis that G and H were recruited to open the bank accounts and had no real involvement in the organising or running of the insurance frauds. It was believed that, once they had opened the accounts, all bank cards and documents were handed to Buckharee to facilitate the fraud and launder the funds.[13]At the trial of G and H the central issue was whether they had the required knowledge or suspicion.[14]At a late stage in the trial, at the close of evidence, a submission of no case was made on behalf of G and H. It appears from the skeletons below that they were made in virtually identical terms. On behalf of G, Mr. Ronald Jaffa submitted: “For an offence to be committed under section 328 POCA, the property in question has to be “criminal property” within the meaning of the 2002 Act at the time the accused person enters into or becomes concerned in an arrangement to facilitate the acquisition, retention, use or control of the property within section 328. For property to be “criminal property” for these purposes, the effect of the definition section (section 340(3)) is that it has already to constitute a person’s benefit from criminal conduct or to represent such benefit, and further the alleged offender must know or suspect it constitutes or represents such benefit.” (original emphasis) On this basis it was submitted that the evidence called by the Crown did not make out the alleged offence again G. A corresponding submission was made by Mr. Summers on behalf of H. The respondents relied on Akhtar [2011] EWCA Crim 146; Geary[2010] EWCA Crim 1925 and Dhar v The National Office of the Prosecution Service of the Netherlands [2012] EWHC 697 (Admin).[15]On behalf of the Crown, Miss Mulligan conceded that at the time these respondents entered into the arrangements alleged, no criminal property existed as no fraud had at that time been committed by Buckharee. However, she submitted that it did not follow that there was in law no money laundering arrangement within section 328(1). Miss Mulligan addressed the authorities relied on by the respondents and also referred the court to Kensington International Ltd v Republic of Congo [2008] 1 WLR 1144. In her submission these authorities could all be distinguished. They establish that what mattered was the nature of the property at the time the arrangement operated upon it. If it was the arrangement itself which rendered the property criminal property, then difficulties would arise under section 328(1). However that was not the situation here. The fraud monies with which the case was concerned were, it was accepted, all derived from car insurance frauds. At the times when the arrangements began to operate in relation to those monies they were already criminal property.[16]In her ruling

the judge referred to section 328(1) and stated:

“In the present case it is accepted by all parties that the money which passed through the accounts which are identified by the two counts of the indictment and which were opened by [G] and [H] was criminal property within the meaning of section 340…”
She stated that the essence of the submission on behalf of the respondents was that criminal property did not exist when G and H entered into the arrangements with Buckharee as no relevant fraud had been committed by him at that date and that, unless the criminal property existed, no offence would be committed under section 328(1) even if the respondents knew full well that Buckharee intended to launder criminal property. The judge, having referred to Geary and Akhtar, rejected the submission for the Crown that it was the fraudulent conduct of Buckharee and not the operation of the arrangement which turned the property into criminal property. She considered that the innocent purchasers of Buckharee’s bogus insurance policies were not transferring criminal property. Moreover, she considered that the use of “facilitates” in the present tense in section 328(1) supported the defence submission. In addition she made two further points. First she considered that if a defendant had knowingly entered into a plot with Buckharee to provide the means through which Buckharee could acquire or keep or spend dishonestly obtained property then there would be an appropriate conspiracy charge that could be laid against that defendant. Secondly she observed that section 328(1) creates an offence which may be committed by a person whose mens rea is no more than mere suspicion. It was likely that another charge that might be preferred against these defendants would require either knowledge or belief and therefore impose a higher burden on the prosecution. She considered that the fact that a person might be convicted of the offence contrary to section 328(1) on the basis of suspicion alone was a departure for the criminal law in this country and a valid reason for interpreting the provision strictly.[17]Notwithstanding the statement by the judge that it was accepted by all parties that the money which passed through the accounts opened by G and H was criminal property within the meaning of section 340, it became clear at the start of the hearing before us that in fact two linked issues arise on these appeals and that they have become elided. The first is whether the property in question was criminal property within section 340. The second is whether it is necessary that the property in question was criminal property within section 340 at the time the respondents entered into or became concerned in an arrangement to facilitate the acquisition, retention, use or control of the property within section 328, it being common ground that the accounts were opened before any fraud was perpetrated.[18]We therefore sought clarification of the Crown’s case and the admitted facts. All counsel before us agreed the accuracy of the further facts set out in the following paragraphs and that we should proceed on that basis in hearing this appeal.[19]The only sums transferred into the RBS account opened by G were two transfers totalling £19,060.00, which were transferred from accounts held by Lewis, a criminal associate of Buckharee. Although these sums originated from members of the public defrauded by Buckharee, Miss Howard, who appeared for G on this appeal, accepted that these sums would have become criminal property when they were received by Lewis in his account and would have retained this character thereafter. Accordingly, it is not open to Miss Howard to argue that these sums became criminal property only on receipt into G’s account. Accordingly G’s appeal is limited to the second issue.[20]In the case of H, however, both issues arise. The sums transferred to the accounts opened by H were paid directly to those accounts by money transfers by members of the public who were defrauded by Buckharee. Mr. Summers on behalf of H submits that the money received and held in the accounts opened by H did not acquire the character of criminal property until it was received in those accounts and that accordingly the offence cannot be made out. In the alternative, he makes the same submission as that advanced by Miss Howard and contends that even if the property had the character of criminal property, no offence is made out because there was no criminal property in existence at the time the arrangement is alleged to have been entered into. Ground 1: Criminal property.[21]The starting point for the consideration of this issue is the proposition, founded on the natural and ordinary meaning of section 328 and on the scheme of the statute, and well established by a consistent line of authority in this court, that the arrangement to which it refers must relate to property which is criminal property at the time the arrangement begins to operate on it. The section is directed at certain forms of money laundering. The property in question must have attained the status as criminal property independently of the operation of the arrangement in question. This offence and those created by sections 327 and 329 proceed on the premise that an earlier criminal offence has been committed.[22]In Loizou [2004] EWCA Crim 1579; [2005] 2 Cr. App. R. 37, the court was concerned with an offence of transferring criminal property contrary to section 327(1) of the 2002 Act. The particulars alleged a transfer of cash, which was criminal property, knowing or suspecting that the cash constituted a personal benefit from criminal conduct. Clarke L.J., delivering the judgment of the court (Clarke L.J., Hughes, Dobbs JJ.), explained that that naturally meant earlier criminal conduct and not the conduct which was the subject of the indictment. He provided a striking example: “Suppose I receive pay as a judge in cash, that cash is not criminal property. Suppose I use that money to pay Hughes J. for a car which I know he has stolen. In that event I, of course, commit the offence of receiving goods knowing them to be stolen. I do not, however, commit the offence of transferring criminal property because the property I am transferring, namely the money which I earned as a judge, is not criminal property. Of course, in the hands of Hughes J. as the seller of the stolen car, the cash is criminal property because it constitutes "a person's benefit from criminal conduct" within section 340(3)(a) which he knows or suspects constitutes such a benefit within section 340(3)(b). Does Hughes J commit an offence under section 327(1)? The answer is plainly no, because he has not concealed, disguised, converted or transferred criminal property. He has simply received what is now criminal property and retained it. Section 327(1) does not create an offence of receiving criminal property.” (at [32])[23]In Kensington International Ltd. v. Republic of Congo [2007] EWCA Civ. 1128; [2008] 1 WLR 1144 it had been submitted that by giving a bribe a person necessarily enters into an arrangement which he knows facilitates the acquisition of criminal property by the recipient, since the bribe, once received, constitutes the latter’s benefit from criminal conduct. In rejecting that submission Moore-Bick L.J. explained that in order for an offence under section 328 to be committed the arrangement must facilitate the acquisition, retention, use or control of property which has already become criminal property at the time when the arrangement becomes operative. That requirement is not satisfied if the only arrangement into which he enters is one by which the property in question first acquires its criminal character (at [67]).[24]The issue arose for consideration once again in Geary [2010] EWCA Crim 1925; [2011] 1 WLR 1634. So far as the facts are concerned, it is sufficient for present purposes to state that the court had to consider whether an offence contrary to section 328 could be made out if the defendant had agreed to help a friend who wished to conceal property from his wife in divorce proceedings by receiving money from him, spending some of it on goods and subsequently returning the balance and the goods purchased to the friend. This court accepted the submission on behalf of the defence that section 328(1) is concerned with arrangements which facilitate the acquisition, retention, use or control of property which has already acquired a criminal characteristic as a result of someone’s having obtained an interest in it as a result of or in connection with criminal conduct. Moore-Bick L.J. stated: “In our view the natural and ordinary meaning of section 328(1) is that the arrangement to which it refers must be one which relates to property which is criminal property at the time when the arrangement begins to operate on it. To say that it extends to property which was originally legitimate but became criminal only as a result of carrying out the arrangement is to stretch the language of the section beyond its proper limits. An arrangement relating to property which has an independent criminal object may, when carried out, render the subject matter criminal property, but it cannot properly be said that the arrangement applied to property that was already criminal property at the time it began to operate on it.” (at [19])[25]Having referred to Loizou and Kensington International he concluded: “Part 7 of the Act, as the heading indicates, is concerned with money laundering and sections 327, 328 and 329 are all directed to dealing with criminal property in one way or another. In each case the natural meaning of the statutory language is that in each case the property in question must have become criminal property as a result of some conduct which occurred prior to the act which is alleged to constitute the offence, whether that be concealing, disguising, converting, transferring or removing it contrary to section 327 or entering into or becoming concerned in an arrangement which facilitates its acquisition, retention, use or control by another contrary to section 328. We think that the same must be true of acquiring, using or having possession of criminal property contrary to section 329(1). Moreover, it follows from what we have said that the only authorities directly in point on the interpretation of sections 327 and 328 support that conclusion.” (at [36])[26]In Amir and Akhtar [2011] EWCA Crim 146; [2011] 1 Cr. App. R. 37 Akhtar owned a mortgage business and introduced clients to mortgage brokers who paid a fee for the introduction. He was prosecuted for knowingly submitting false mortgage applications to brokers on behalf of third parties. Akhtar pleaded guilty on re-arraignment to five counts of money laundering contrary to section 328(1). He was subsequently given leave to appeal against conviction out of time on the ground that the component elements of the offences were not made out. On his behalf it was submitted that when he entered into the arrangements with the mortgage brokers and even when they were carried into effect he was not thereby facilitating the acquisition of criminal property because the money only became criminal property when it came into Akhtar’s hands or the hands of those for whom he was securing the mortgage. Allowing the appeal, Elias L.J. observed: [Sections 327, 328 and 329] are all concerned in one way or another with dealing with criminal property. By section 340(3) that is property which in fact constitutes a person's benefit from criminal conduct or represents such a benefit and the offender knows or suspects that that is so. The definition does not embrace property which the accused intends to acquire by criminal conduct and the language of the statute is not capable of construing the definition in that way. Property is not criminal property because the wrongdoing intends that it should be so. (at [20])[27]Referring to the submissions of counsel for the Crown he encapsulated an essential distinction: “Mr Morse's argument, in our submission, involves a re-writing of the statutory provision. On his analysis an offence is committed where a defendant becomes concerned in an arrangement which facilitates the criminal acquisition of property. The statute requires an arrangement facilitating the acquisition of criminal property. There is a material distinction.” (at [21])[28]This reasoning was subsequently applied by a Queen’s Bench Divisional Court (Moore-Bick L.J., King J.) in Dhar v. National Office of the Public Prosecution Service, The Netherlands) [2012] EWHC 697 (Admin.) (at [89]).[29]In the present case, Mr. Summers on behalf of H relies on these authorities in support of his submission that the property in the accounts opened by H did not acquire the character of criminal property until it was received into those accounts. The fact that the property may become criminal property by the operation of the arrangement, he submits, is insufficient for the purpose of section 328(1). In this regard he draws an analogy with Akhtar where, notwithstanding the fact that the arrangement was part of a wider fraudulent purpose, the proceeds of the fraud were not criminal property until they were received by Akhtar.[30]Miss Mulligan sought to counter this with a submission that Bukharee would have acquired an interest in the price to be paid for the insurance prior to the money being transferred to the accounts opened by H and that this would constitute criminal property for the purposes of the section. She drew attention to the wide definition of property in section 340. In a wide ranging submission she submitted, inter alia, that Bukharee would have acquired a proprietary right in a chose in action, namely the obligation of the purchasers of insurance to pay the price and that this could be considered criminal property.[31]In this regard we note that an alternative argument was advanced for the Crown in Akhtar, namely that the monies paid by the mortgage companies had acquired the status of criminal property when the mortgage companies had paid the sums to the third parties. That argument was rejected, the court observing that even if the property had acquired a criminal character when it left the mortgage companies – and the court considered there were difficulties with that analysis arising from section 340(3) – it did not accept that it was therefore criminal property at the time when the arrangement began to operate (at [19], [21]).[32]However, it seems to us that such a line of argument cannot assist the Crown in this case because the particulars of count 2 identify the criminal property as money received into the accounts opened by H. For the reasons set out above, we consider that that money achieved the status of criminal property only when received into those accounts. As a result, it is not necessary to express any view on whether the fraudulent transactions may have given rise to criminal property of another character, a matter which was only touched upon and not fully argued before us. For the same reason, it is not necessary to consider whether such a line of argument is consistent with the reasoning of this court in Akhtar.[33]During the course of argument we drew to Mr. Summers’s attention the fact that the particulars of offence alleged against H in count 2 allege entering into or becoming concerned in an arrangement which H knew or suspected would facilitate “the retention, use or control of criminal property”, namely the money received in the bank accounts. In particular we asked whether the fact that the count related to the retention, use or control of criminal property and not to its acquisition had any bearing on the present issue. Could the offence be made out in relation to the retention, use or control of property which had already been acquired under the same arrangement thereby becoming criminal property?[34]This issue does not seem to have arisen for consideration in Akhtar because it appears that the offences to which he pleaded guilty were offences of entering into or becoming concerned in an arrangement which he knew or suspected facilitated the acquisition of criminal property by or on behalf of another person. Certainly, the discussion in the judgment of Elias L.J. proceeds in relation to an arrangement concerning facilitation of the acquisition of criminal property.[35]Mr. Summers, in response to our questions, drew attention to the judgment of Moore-Bick L.J. in the Kensington International case. There Moore-Bick L.J. considered whether a person who gives a bribe necessarily enters into an arrangement which he knows facilitates the acquisition of criminal property by the recipient, on the basis that the bribe, once received, constitutes the latter’s benefit from criminal conduct. In order to consider this submission it is necessary to set out the precise words of a passage referred to earlier in this judgment. “I accept that section 328 is of broad application, but in my view that seeks to stretch its scope too far. As section 340(3)(b) makes clear, the mental element of the offence includes knowledge or suspicion on the part of the defendant that the property in question is criminal property, but that cannot be the case until it has been acquired by means of criminal conduct. In order for an offence under section 328 to be committed, therefore, the arrangement into which the defendant enters, or in which he becomes involved, must be one which facilitates the acquisition, retention, use or control by another of property which has already become criminal property at the time when it becomes operative. That requirement is not satisfied if the only arrangement into which he enters is one by which the property in question first acquires its criminal character. A person who gives a bribe may know that it will constitute criminal property in the hands of the recipient, but that does not make him guilty of entering into an arrangement which facilitates the acquisition of what is already criminal property.” (at [67], original emphasis)[36]Mr. Summers draws attention to the reference to “acquisition, retention, use and control” and submits that this passage is inconsistent with any suggestion that property might within a single arrangement become criminal property by its acquisition and thereafter provide the foundation for an offence contrary to section 328 in relation to retention, use or control. However, it seems to us that the factual situation postulated in Kensington International is not particularly helpful to Mr. Summers’s submission. A person giving a bribe may facilitate its acquisition but it is difficult to see how he facilitates its retention, use or control. Moreover, the final sentence cited above suggests that Moore-Bick L.J. was there addressing facilitation of the acquisition of criminal property.[37]Mr. Summers is able to find more support, however, from the reasoning of this court in Geary where this precise point was taken. There, the Crown, in seeking to overcome the objection that money paid to conceal its existence in divorce proceedings would not be criminal property within section 328 at the time when the arrangement began to operate on it, advanced two arguments. First, it submitted that if the money had been transferred by Harrington to the appellant pursuant to a conspiracy to pervert the course of justice, it would have become criminal property as soon as, or even before, it reached the recipient and that, therefore, the arrangement viewed as a whole was one that facilitated the retention, use or control of criminal property by Harrington. Alternatively it was submitted that the fact that money had been transferred pursuant to a conspiracy to pervert the course of justice would have meant that it became criminal property in the hands of the appellant (having been acquired by him in connection with criminal conduct), that the appellant knew that and that by retaining it and later returning it the appellant he would have entered into or become concerned in an arrangement to facilitate its use or control by Harrington. Moore-Bick L.J. considered that these submissions raised the important question whether it is permissible for these purposes to separate out different aspects of the arrangement so that its implementation can be treated as both criminalising the property and then as facilitating its retention, use or control in its newly acquired criminal character, thus constituting the offence. In rejecting the submissions he stated: “Moreover, we do not accept that an arrangement of the kind under consideration in the present case can be separated into its component parts, each of which is then to be viewed as a separate arrangement. In this case there was but one arrangement, namely, that the appellant would receive money, hold it for a period and return it. To treat the holding and return as separate arrangements relating to property that had previously been received is artificial.” (at [19])[38]In the situation postulated in Geary, without the arrangement there would have been no criminal offence at all. It was the arrangement itself which constituted a conspiracy to pervert the course of justice. By contrast, in the present case there was a series of free-standing offences committed by Bukharee. We have been told that the counts against Bukharee in the original indictment in this case included a count alleging fraud contrary to section 1, Fraud Act 2006 in respect of the monies which were transferred to the accounts opened by H and that on 1 February 2013 Buckharee pleaded guilty to that offence. We also note that the payment of the monies obtained by this fraud into the accounts opened by H was not an element of the offence of fraud committed by Buckharee. The arrangements to pay the monies obtained into these accounts were, in a sense, collateral to the fraud. However, the Crown still faces the difficulty that the property identified in the particulars of count 2 on the indictment as the criminal property, i.e. the money received into the two accounts opened by H, did not become criminal property until it was received in those accounts.[39]It is clear from the wording of section 328(1) and from the scheme of the statute, and has been repeatedly affirmed by this court, that the offence it creates is concerned with an arrangement which facilitates the acquisition, retention, use or control of property which has attained the character of criminal property before the arrangement operates in relation to it. In the present case, the arrangement alleged by the Crown is a single arrangement. The facts alleged by the Crown are that pursuant to an arrangement with Buckharee, H opened the accounts and then delivered to Buckharee the documents and cards so that he should be able to operate and control the accounts. It is then alleged that the proceeds of the frauds were subsequently received directly into these accounts from the parties who had been defrauded. Although the arrangement particularised in count 2 is limited to facilitation of the retention, use and control of criminal property, facilitation of the acquisition of the money via those accounts is, on the Crown’s factual case, an integral part of that arrangement. It seems to us that in these circumstances it is both artificial and illegitimate to seek to sever one element of an integral arrangement (facilitation of acquisition) in order to leave other elements (facilitation of retention, use and control) which, if considered in isolation to constitute the arrangement, would relate to criminal property. Moreover, the position cannot be improved by artificially limiting the particulars of offence alleged in count 2 to certain elements of the wider arrangement which the Crown maintains was in fact entered into.[40]For the avoidance of doubt we should add that in cases where it is established that the property in question has already become criminal property before it engages with the arrangement, the issues addressed in this judgment under Ground 1 will not arise. In such circumstances we can see no objection to framing a count alleging one or more of acquisition, retention, use or control as appropriate.[41]For these reasons we consider that, in the case of H, the property alleged to be criminal property attained that character only as a result of the operation of the arrangement which forms the subject of the charge and that, as a result, the arrangement did not facilitate the retention, use or control of criminal property. Accordingly, we dismiss the Crown’s appeal in the case of H. Ground 2: The existence of criminal property at the time the defendant entered into or became concerned in the arrangement.[42]It was submitted on behalf of both G and H that for an offence contrary to section 328(1) to be made out the criminal property must be in existence at the time at which a defendant entered into or became concerned in the arrangement. Mr. Summers on behalf of H placed at the forefront of his oral submissions the proposition that the offence established by section 328(1) is a substantial departure from generally accepted principles of criminal liability reflected in earlier comparable offences in that it may be committed if the defendant merely suspects that the arrangement facilitates the acquisition, retention, use or control of criminal property. Accordingly, he submits, the court should interpret the provision narrowly. We are unable to accept that submission. It seems to us that Parliament in establishing this money laundering offence clearly intended that suspicion should be a sufficient mens rea to make out the offence and that we would therefore not be justified in departing from the well-established principles which apply whenever the courts are interpreting a statutory provision which creates a criminal offence. Having said that, it does seem to us, for reasons which will become apparent below, that Mr. Summers does in fact contend for a reading of the sub-section which creates an offence of wider ambit than that which is its true effect.[43]On the plain and natural meaning of the words used, we can see no basis for restricting the offence it establishes to a case where the criminal property is already in existence at the time at which a defendant enters into or becomes concerned in the arrangement.[44]At the heart of the case advanced by the respondents is the submission that the offence is committed at the time when a defendant enters into or becomes concerned in the arrangement. Mr. Summers submits that it is clear from the authorities that the crucial point is that at which a defendant enters into the arrangement. Thus, he draws attention to the following statement in Geary: “In each case the natural meaning of the statutory language [of sections 327, 328 and 329] is that in each case the property in question must have become criminal property as a result of some conduct which occurred prior to the act which is alleged to constitute the offence, whether that be concealing, disguising, converting, transferring or removing it, contrary to section 327, or entering into or becoming concerned in an arrangement which facilitates it acquisition, retention, use or control by another contrary to section 328. We think that the same must be true of acquiring, using or have possession of criminal property contrary to section 329(1)” (at [36]) We do not read this passage as supporting the view that an offence under section 328(1) is committed at the time of entering into or becoming concerned in the arrangement, if the arrangement has not yet engaged with the criminal property. On the contrary earlier in the judgment in Geary we find the following statement: “In our view the natural and ordinary meaning of section 328(1) is that the arrangement to which it refers must be one which relates to property which is criminal property at the time when the arrangement begins to operate on it” (at [19])[45]In the same way the passage from Kensington International on which Mr. Summers relies in this regard also focuses on the point at which the arrangement engages with criminal property. “In order for an offence under section 328 to be committed, therefore, the arrangement into which the defendant enters, or in which he becomes involved, must be one which facilitates the acquisition, retention, use or control by another of property which has already become criminal property at the time when it becomes operative.” (at [67])[46]Mr. Summers also points to the following statement in Akhtar: “On [counsel for the Crown’s] analysis an offence is committed where a defendant becomes concerned in an arrangement which facilities the criminal acquisition of property. The statute requires an arrangement facilitating the acquisition of criminal property. There is a material distinction.” (at [21]) We do not read this as supporting the view that the offence is committed when a defendant enters into or becomes concerned in an arrangement. On the contrary the second sentence demonstrates that there is a requirement that the arrangement facilitates the acquisition of criminal property.[47]Paragraph 89 of Dhar is the only one of the passages in the authorities relied on by Mr. Summers which, at first reading, appears to support his contention that the offence is committed when a defendant enters into or becomes concerned in an arrangement. King J. delivering the judgment of the Divisional Court said this:
“…For an offence to be committed under either section [327 or 328] the property in question has to be “criminal property” within the meaning of the 2002 Act at the time the accused person does the acts said to amount to concealing or transferring etc. within section 327, or enters into or becomes concerned in an arrangement to facilitate the acquisition, retention, use or control of the property within section 328. And for property to be “criminal property” for these purposes the effect of the definition section (section 340(3)) is that it has already to constitute a person’s benefit from criminal conduct or to represent such benefit, and further the alleged offender must know or suspect it must constitute or represents such benefit.”
(at para. 89, original emphasis) However the judge there was not addressing the point at which the offence under section 328(1) is committed, that not being an issue in the case. Rather he was addressing the requirement that the property in question must have obtained the status of criminal property independently of the arrangement. In this passage he was merely seeking to summarise the elements of the different offences. Strictly, the offence contrary to section 328(1) is not one of entering into or becoming concerned in “an arrangement to facilitate” the acquisition, retention, use or control of criminal property. Rather, a person commits this offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates the acquisition, retention, use or control of criminal property.[48]We consider that in order for an offence contrary to section 328(1) to be committed not only must the defendant enter into or become concerned in an arrangement, but that arrangement must also facilitate the acquisition, retention, use or control of criminal property. This follows in our view from the use of the present tense of “facilitates”. It is significant that the sub-section does not refer to an arrangement which will facilitate or is intended to facilitate. Thus, entering into or becoming concerned in an arrangement of itself does not constitute the offence. In circumstances where an arrangement already exists which facilitates these objectives, the offence will be committed by a defendant at the point he enters into or becomes concerned in the arrangement if he has the appropriate mens rea. However, it will often be the case – indeed we think it will far more frequently be the case – that the arrangement will facilitate those objectives only after a defendant has entered into or become concerned in the arrangement. We consider that, in such a case, no offence contrary to section 328(1) is committed at the time of entering into or becoming concerned in the arrangement and that it is only when the arrangement engages with criminal property that the offence is committed. Contrary to the submission of Mr. Summers, therefore, we do not consider that a defendant who enters into or becomes concerned in an arrangement in circumstances where criminal property already exists but has not yet engaged with the arrangement, commits an offence if he successfully pulls out of the arrangement before the criminal property engages with the arrangement. What matters, therefore, is that the property should be in existence and should be criminal property at the point at which it first engages with the arrangement.[49]We should add that we can see no reason in principle why the offence should require that criminal property should be in existence at the time at which a defendant enters into or becomes concerned in an arrangement. There is no reason in principle why the entering into or becoming concerned in an arrangement and the engagement of criminal property with the arrangement should be required to occur in any particular sequence.[50]To the extent that the respondents rely on passages in the authorities referred to above as support for the proposition that the criminal property must be in existence at the time a defendant entered into or became concerned in the arrangement, it must be pointed out that these cases were all concerned with a different question, namely whether the property concerned was criminal property and whether it achieved that status independently of the operation of the arrangement. Accordingly, in none of those cases was the point presently under consideration in issue. In summary, all of those cases are concerned with property that first acquires its criminal character by virtue of the arrangement itself. In each case the court stated and endorsed the requirement, if the offence is to be made out, that the property in question must have become criminal property independently of the arrangement. The respondents are correct in their submission that property that first acquired its criminal character by virtue of the arrangement cannot be criminal property within sections 327-9. However, they are wrong in suggesting that the reason for this is because it was not criminal property at the time the defendant entered into or became concerned in the arrangement. The true explanation is that the statute requires an arrangement which the defendant knows or suspects facilitates the specified dealing with criminal property. This line of authority does not lay down any wider principle. In particular it does not establish that the criminal property must be in existence at the time of entering into or becoming concerned in the arrangement. For this purpose it is sufficient that the property has become criminal property by the time it first engages with the arrangement.[51]Finally we should point out that, in the light of the conclusion to which we have come as to the elements of the offence created by section 328(1), we consider that the particulars of offence in counts 1 and 2 on the indictment, which allege in each case that the defendant “entered into or became concerned in an arrangement which he knew or suspected would facilitate the retention, use or control of criminal property” (emphasis added), are defective. In our view, an appropriate form of wording for such a count might read “… entered into or became concerned in an arrangement which he knew or suspected facilitated the [acquisition], retention, use or control of criminal property …” whether the acquisition, retention, use or control took place at the time of entering into the arrangement or subsequently. Conclusion.[52]For these reasons, the Crown’s appeal in the case of G will be allowed and the Crown’s appeal in the case of H will be dismissed.

Cited in 1 later judgment