What is POCA? The Proceeds of Crime Act 2002 (POCA) is a complex, often misunderstood piece of legislation that many find challenging to navigate. If you’re facing confiscation proceedings, understanding the meaning of POCA, and how the Proceeds of Crime Act works in practice is crucial for your defence.
In this blog we will discuss what ‘Proceeds of Crime’ means, as well as looking at the key features of the Proceeds of Crime Act, including when it was introduced, what happens for any cases that predate its introduction, and much more. Finally, we will detail exactly what Inquesta Forensic’s team of experts can do to assist in your case. Read on for the Proceeds of Crime explained.
What is Meant by ‘Proceeds of Crime’?
Proceeds of crime refers to any monies or assets gained by a criminal as a direct result of their illicit activities. Should an offender be found to be guilty of a crime, authorities such as the Crown Prosecution Services (CPS) will gain the power to confiscate said funds.
The purpose of confiscating the ‘proceeds of crime’ is so criminals are unable to come out of prison and still directly benefit from their ill-gotten gains — thereby proving that ‘crime doesn’t pay’.
The CPS have a dedicated unit set up with the explicit purpose of recovering assets — CPS Proceeds of Crime unit.
What is the Proceeds of Crime Act?
The Proceeds of Crime Act (POCA) refers to the process of recovering and confiscating funds made from criminal activities. POCA sets out the formal legislature by which these assets are recovered — with criminal confiscation being the most common power utilised to this end.
Other methods of recovering funds set out in the act include:
- Civil recovery
- Seizure of cash
- Taxation powers
The Proceeds of Crime Act will apply only if a defendant’s conviction is brought before the Crown Court/is committed to the Court for sentencing, the prosecution formally requests that the Court begin the POCA process, or the courts independently deem that it is appropriate.
Should the defendant be convicted, the POCA allows the prosecution to ask the Court to make a ‘confiscation order’. This order is handed to anybody who is believed to have benefited financially from crime. A confiscation order requires the convicted defendant to pay back any money they are seen to have acquired as a direct result of committing their offences.
To determine exactly how much a defendant is required to pay back under their calculation, the Prosecution must first work out the benefit figure and the available amount:
- Benefit Figure: The actual amount the defendant has gained as a direct result of their criminality. This must be as a result of an ‘acquisitive crime’ such as fraud, drug dealing, or other financial crime.
- Available Amount: The available amount refers to how much the defendant has remaining at the time of their prosecution (what assets, funds, etc. they have left)
Once the recoverable amount is calculated using the aforementioned benefit figure and available amount, the confiscation order will be written up detailing exactly how much the defendant must pay back. For information about how Proceeds of Crime Act works, read our blog on the subject.
When Was The Proceeds of Crime Act Introduced?
The official title for the POCA is The Proceeds of Crime Act 2002. However, the act itself was actually introduced on the 24th March 2003. Prior to the POCA, confiscation was governed by either the Drug Trafficking Act 1994 or the Criminal Justice Act 1997. Therefore, any offence committed prior to the introduction of the POCA is still governed under these Acts.
As a result, the Proceeds of Crime Act will only apply to any proceeds of crime-related offences that were committed on, or after, the 24th March 2003.
Types of Crimes Covered by POCA
Many people wonder what crimes POCA applies to. The Proceeds of Crime Act covers a wide range of criminal activities, particularly acquisitive crimes where the defendant is gaining tangible financial benefits
Common examples of POCA offences include:
- Fraud and financial crimes.
- Money laundering.
- Drug trafficking and supply.
- Tax evasion and VAT fraud.
- Corruption and bribery.
- Human trafficking.
- Cybercrime and online fraud.
Key Stages of the POCA Process
Understanding how the Proceeds of Crime Act works requires knowing the key stages of the process:
Investigation & Restraint Orders
- Initial investigation by authorities.
- Application for restraint orders to freeze assets.
- Appointment of enforcement receivers if necessary.
Confiscation Order Process
- Prosecution requests confiscation proceedings.
- Court determines benefit figure and available amount.
- Judge makes confiscation order setting payment amount and deadline.
Appeals & Enforcement Actions
- Right to appeal confiscation orders.
- Enforcement proceedings for non-payment.
- Default prison sentences for wilful non-compliance.
For information about how the confiscation process works, check out our dedicated article outlining this in more detail.
What Happens at a POCA Hearing?
Proceeds of Crime Act hearings involve several key participants and stages, including:
Who’s Involved:
- Crown Court Judge.
- Prosecution counsel (CPS).
- Defence legal team.
- Expert witnesses (forensic accountants).
- Court clerks and administrators.
Possible Outcomes:
- No confiscation order made.
- Confiscation order for agreed amount.
- Contested hearing requiring expert evidence.
- Variation of proposed order amount.
When it comes to a POCA hearing, preparation is crucial. Expert forensic accounting evidence can significantly impact the final order amount.
What Happens if you Can’t Pay a Confiscation Order?
If you are unable to pay a confiscation order by the due date, you may be able to apply for an extension. This extension will be for up to a maximum of six additional months. To qualify for an extension, you must be able to prove that you were unable to make the required payments due to ‘extraordinary circumstances’
Additionally, if you are genuinely unable to pay the amount set out in the order, you may be able to apply to the Court to have the confiscation order varied. This is an attempt to convince the Court that the initial amount set out in the confiscation order was excessive and should be reduced.
However, if you are ever seen to be capable of paying the order but do not, the case may be listed for enforcement. This means that the Court will enforce a default period of imprisonment that will have been ordered by the Crown Court Judge. If you ever find yourself at this point, it is vital that you seek specialist legal advice.
For more information on what happens if you are unable to pay a confiscation order, check out our blog.
Sentencing and Penalties Under POCA
POCA sentencing involves both the original criminal sentence and separate confiscation elements. Many defendants don’t realise that failing to pay a confiscation order can result in additional prison time.
Custodial Penalties
Default terms are additional prison sentences imposed when defendants fail to pay confiscation orders. These run consecutively to the original sentence, meaning defendants serve both their original sentence and the default term.
The length of default sentences varies based on the confiscation order amount:
- Orders under £10,000: Up to 6 months default.
- Orders £10,000-£500,000: Up to 2 years default.
- Orders over £1 million: Up to 10 years default.
Importantly, serving a default sentence doesn’t eliminate the debt. Defendants still owe the full amount plus interest after release. Sentencing guidelines emphasise that default sentences should reflect both the amount involved and the defendant’s culpability in failing to pay.
Financial Penalties
Confiscation orders create ongoing financial burdens that can persist indefinitely. Interest charges are applied to unpaid orders at statutory rates (typically around 8% annually), causing debts to grow substantially over time.
Enforcement costs from court-authorised actions like appointing receivers or bailiffs are added to the defendant’s total debt. These can run into tens of thousands of pounds for complex cases.
Most significantly, confiscation orders create ongoing liability that remains active indefinitely until paid in full. Unlike most debts, there’s no time limit — authorities can pursue payment even decades later if defendants acquire new assets, creating a lifetime financial burden that affects defendants’ ability to rebuild their lives.
Can POCA Affect Family Members or Gifts?
Having your family affected by POCA is a common concern. However, the act includes provisions for tainted gifts and third-party interests that can significantly impact innocent family members.
Tainted Gifts Under POCA
“Tainted gifts” refers to transfers or gifts made by defendants that can be recovered by the court. These are treated as assets held on behalf of the defendant, regardless of who currently owns them.
Gifts can be “clawed back” if they are:
- Made within six years of proceedings (criminal lifestyle cases).
- Made at any time for general criminal conduct.
- Made with intent to avoid confiscation.
The courts interpret “gifts” broadly, including property sold below market value, written-off debts, or assets transferred into joint names without fair payment.
For more information on tainted gifts and how they factor into Proceeds of Crime confiscation, read our dedicated blog:
Impact on Family Members
POCA’s reach extends beyond the defendant, often affecting innocent family members who may lose assets they believed were legitimately theirs. This can include:
- Jointly Owned Property: Courts must determine what portion belongs to the defendant for confiscation. Even if a spouse contributed significantly, they may still lose their home if the defendant’s share warrants a sale.
- Inheritance POCA Implications: Previous inheritances can also be treated as available assets, even if received legitimately before any criminal activity.
- Third-party Claims: Legitimate owners can apply to court for exclusion, such as spouses proving separate contributions to property.
Protection for Innocent Parties
Courts must balance asset recovery against innocent parties’ rights, considering:
- Legitimate third-party interests and whether family members have genuine, independent asset interests.
- Proportionality of recovery action to ensure impact isn’t disproportionate.
- Hardship to innocent family members, particularly children or vulnerable adults.
Early legal intervention is crucial for affected families to establish legitimate interests and protect innocent parties while satisfying confiscation requirements.
Can Proceeds of Crime Take Inheritance?
If you are seen by the court to have a ‘criminal lifestyle’ the Court may be able to take the position that any and all properties and high-value assets you possess were gained as a result of this lifestyle. In this situation, these assets, including inheritance or even lottery winnings, could be taken in order to pay the order.
Virtually any asset can be recovered as part of the POCA proceedings, this includes:
- Money
- Inheritance
- Properties, including your current residence
- Vehicles
- Other high value assets
Find Out What Our Experienced Forensic Accountants Can Do For You
Are you facing the potential ramifications that can come with the Proceeds of Crime Act 2003? POCA asset seizure can be a stressful thing to have awaiting you. As a result, you will want an experienced team to give you support and advice.
An expert Forensic Accountant will have all the knowledge and experience you need in order to ultimately get the best possible outcome for both you and your case. At Inquesta Forensic, we have an in-depth understanding of the POCA, and know how potentially stringent an initial POCA statement can be.
A member of our expert team of Forensic Accountants can attempt to lower this amount by proving that the amount the defendant benefited from was actually significantly lower than stated. To do this, our experts will utilise one of the greatest tools in the arsenal of a Forensic Accountant, their unmatched skill with numbers and data.
Inquesta boasts a highly experienced team of forensic accountants, all of whom have supported clients with cases covering a huge variety of different areas. We are perfectly placed to assist in your defence against confiscation proceedings, as well as negotiating a settlement, providing expert witness evidence, and more. Inquesta Forensic Accountants can provide an all-encompassing service designed to suit your unique circumstances.
