Wealthy criminals keep assets after conviction

Britain's wealthiest criminals are managing to keep hold of the vast bulk of their fortunes even after they have been convicted and imprisoned, according to Home Office research seen by the Financial Times.

The report shows the amount of money seized from criminals is a small fraction of initial police assessments of how much they earned from illegal activities. In the year to 2007, only £55.6m ($90m) was recovered in 3,604 cases - even though the individuals concerned were first assessed to have made £1bn in total.

The figures lend weight to accusations that British law enforcers are losing the battle against 4,000 organised crime gangs and a black economy some believe is worth £40bn. About two-thirds of the cases in the report involved drug trafficking and about 10 per cent fraud.

Senior police officers acknowledge that confiscating cash and assets is the most potent weapon against crime bosses.

Sir Ian Andrews, the new head of the Serious Organised Crime Agency (Soca) - which has been criticised for failing to make more seizures - said last week that "going after the money is the way to take these people down".

Much of the difference between the initial assessment of how much somebody has made from crime and how much they eventually pay is the result of over-estimates by police. A court's eventual ruling on how much criminals should pay is also cut after negotiations with defence lawyers and depends on what assets - such as property, cash, cars and jewellery - the individuals still own.

Nevertheless, crime bosses are managing to avoid paying most of the penalties imposed by the courts, the Home Office research shows. In the year to 2007, the courts issued confiscation orders worth £146.3m against organised criminals but only £55.6m was recovered.

Police financial investigators saw a "clear determination on the part of some offenders not to pay", the report says, and assets hidden or moved abroad. There was also a problem with criminals selling belongings while in prison and with the counter-claims of third parties such as spouses.

The research shows the overwhelming majority of cases where money has been withheld involves the wealthiest criminals, leading to criticism from police about how "they saw asset recovery being directed predominantly at relatively minor criminals with limited assets", according to the report.

Jeremy Outen, a partner at KPMG Forensic, said: "At the more sophisticated end of the criminal world, the main objective is power and status. This is reflected through assets and money and they will do everything in their power to avoid giving it up."

The report's authors did acknowledge that UK agencies, including the police, Soca and HM Revenue & Customs, had lifted criminal asset recovery to £148m in 2008/2009 from £25m in 2001/2002 - though "this still represents only a small proportion of the total assets potentially available".

A Home Office spokesman said: "Seizing assets ... is key to stopping organised criminals. The police, Soca and other agencies are already making full use of their powers, with more than £600m of assets recovered since the Proceeds of Crime Act came into force in 2003."

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