Fraud, and the Proceeds of Crime Act

[MafiaMolly]

My husband left me last year, and since he's been gone I've discovered that for the last decade he's been committing various frauds.

He's obtained government grant payments totalling at least £150k through our businesses. But worse, his employer qualifies for that same type of grant and my husband is in charge of that part of the business. I can prove that he's now also committed fraud with the grant payments to his employer's businesses. It's potentially worth hundreds of millions of pounds. His employer almost certainly knows about it all.

I took legal advice when I discovered all this and the advice was to report it all to the police, and to the government departments which runs the grant, so that's what I did. I was told that I might get told off a bit, and forbidden from being a company director for a time, as I was a director of one of the companies we own when my husband committed the frauds; but that that would be the extent of my punishment. Because I didn't know about the frauds, and reported them as soon as I found out.

We had a financial hearing a couple of weeks ago for our divorce, and my barrister told me that I have to prepare myself. Because he thinks it's likely that we will lose our house, which is the only real capital we have, to the Proceeds of Crime Act.

I thought that as I hadn't committed any crime my half of the house would be safe, at least. But my barrister should know the law better than I do, and I'm worried that he might be right.

I will be getting more legal advice this week (because I haven't spent enough with lawyers these last six months, damn) but wondered if I am looking forward to homelessness as well as financial ruin. Anyone?

No one can advise you better than your own barrister. I suspect they’ve been briefed with much more information than is contained in your post. Try not to second guess them by condensing your problem in to 6 brief paragraphs and asking a public forum full of anonymous strangers.

POCA applies when a conviction has been obtained - is your husband (or are you) being prosecuted for the frauds? And have the police/CPS/other prosecuting authority obtained an order to freeze the assets?

I know that, @Collaborate. Your comment is not very helpful.

@Isleepinahedgefund, he and his client are being investigated. There's so much evidence that a prosecution is inevitable. His client has been in prison for fraud before, but nothing like the value of this.

Nothing has been done yet to freeze our assets. Our only real asset is our house, which is worth a lot and has no mortgage. We own it as tennants in common, I think--so we each own a distinct 50% of it, rather than us both owning 100% of it. I hope that makes sense. I'd hoped it would help me to hold onto my half of the house, seeing as I knew nothing about the frauds until after they were done, but I'm worried now that it won't.

How did you come to discover it and how come it was after the separation? Could you barrister think you might be found guilty too and having to repay but avoid prison since you've declared it?

I didn't know about it until after the separation. Both my divorce solicitor and barrister believe me about this. There's stuff I can't go into here that make this clear.

Was the house bought with the proceeds of fraud? How long had it been going on for? Ignorance isn't always a defence.

Most of the house was not bought with proceeds of fraud. As far as I can make outand it's all very complicated, with lots of bank accounts and transfersonly a small portion of our mortgage was paid off using money he shouldn't have been paid. But his client's business has also been getting fraudulent payments, and my husband has been running that fraud and being paid by his client, so I assume all his income from that client, for as long as that fraud has been running, will also be dodgy. Especially as he is a director of several of their companies, and directors can be held personally liable if wrongdoing can be shown.

'Most of the house was not bought with proceeds of fraud'

Which means some of the house was. By your own admission. Whether it were aware of this or not, you have benefitted from an asset, that was purchased from ill gotten gains.

The only way through this is via court. If your former partner is facing a POCA, you will be too. You may well be able to file a defence that you were unaware of the finances that purchases the property..... I dont fancy your chances..

@Collaborate is correct. Better to listen to your legal team, that you've instructed. Keep your mouth shut, you're up against one of the most powerful acts in civil recovery. You've already (inadvertently) admitted there may be an asset purchased/paid for with proceeds of crime.

Good luck. I think you're going to need it.

I am sure I've benefited from his frauds. Of course I have. We lived off his earnings, and some of those earnings were down to fraud. I'm horrified by what he's done, and want to pay back every penny that I've "enjoyed" that we shouldn't have received.

I know that most of the mortgage was paid off with money earned legitimately.

A small portionabout 2.5% of the current market valuewas paid off after my soon to be ex had started committing fraud, so I suspect that amount was not gained through legitimate means.

My legal people have advised me to keep cooperating with law enforcement, which of course I am doing. I can prove that I didn't know what he was doing.

What I am worried about is whether I stand to lose everything or not. Because I'm in my early sixties and it looks like I might do. I'm currently unable to work because of stress and a chronic health condition I have, and the idea of starting again now frightens me.

This is worrying.

Surely, your legal representation is advising you on the possible outcomes of this? Which was the point of Collaborate's post up thread.

I know partners who have been subject to action under POCA which has usually followed criminal proceedings. Its impossible to advise or predict the outcome on a forum. I'm not legally trained in any way shape or form.

I an so sorry for you, having this looming over your head. I think you need to follow your solicitor/barrister'advice. I'd also perhaps consider preparing yourself for the worst possible scenario. It may be that your have to consider moving anyway?

Would you go from a meeting with your legal team straight to a pub, and shout out your problem to everyone there and invite their suggestions? Because coming on this message board is about as reliable as that. They are the professionals in full possession of the relevant facts who are being paid to advise you. Do you not think they are a far more reliable source of advice than people in the pub or on here? You might not think my first post helpful, but I think simply asking the question on here when you already have legal advice is utterly mad. Those who know their stuff are unlikely to want to offer any advice because you have paid for lawyers advising you anyway, so why should they second guess their advice on far less information? The risk you run is that it will be the uninformed and unqualified who may have "advice" to give, and you can't tell who is who.

My legal team (solicitor and barrister, and their various clerks and assitants) are giving me different advice. Solicitor has said my half of the house is ring-fenced and can't be lost; barrister has said we could lose everything. I have read online that there are various things I could do which might protect my share of the assets, but I don't know how true any of it is, and as I said, the advice I've been given is conflicting.

I am assuming the family home will have to be sold and to be honest, I want to movethere are too many bad memories here now. So that's not a problem. Significant downsizing wouldn't be a problem either. But ending up with nothingno home, no pension, no savings--is such a worry.

I will continue to take legal advice, and to follow it, because it's all I can do. I am doing all I can to prepare for losing everything. But it would be helpful to hear something definitive.

Ask your solicitor how they reconcile the advice they have given with the barrister's advice. They may now have changed their advice. That is why barrister's advice is sought. This is a particularly niche area of the law.

I do know a little, OP, as I supported a friend through the process. However, I'll not publicise the outcome of her case, due to it not being my information.

Once a director appointed by the Secretary of State is in situ, all secured assets will be investigated. That can include, property, vehicles, stocks, shares, jewellery, art, anything that has tangible value.

Crown court will issue a confiscation order, which will seize all of those assets. An order will be made once a sum has been established, to repay the sum. Established assets will be seized and if that does not cover the sum owed, they'll be sold off to recover and outstanding amounts would be subject to six months repayment period. (I think it used to be 12 months) if not paid, a prison term can be imposed.

I'm going to assume you have a specialist legal team in POCA. If you know nothing, you know nothing, however, if you stand to benefit from the asset now the liability has been paid off, you have no dependents that live in the property, the property may well be used in the recovery proceedings. Any reason you have to remain in the property would be mitigation and a matter for your legal team to argue.

The upside of this, is that your age is in your favour in terms of housing socially. (This depends on where you are geographically ) suffice to say, my friend was rehoused in a sheltered bungalow. She was supported and it is not for me to say whether she knew or not. But as a beneficiary of an asset, she had to rebuild her life alone and she has never been happier.

This isnt the end of your life. Just your life as you know it. What you have to do is to protect yourself going forward and begin to make plans particularly now as you have said you would like to move.

I truly feel for you. But it will get better. Keep up to date with your legal team and plan accordingly. You will be okay.

Thank you, @Absentwomen. That's helpful. I don't want to keep anything that's not rightfully mine: but it seems so horribly unfair that I could lose everything I've worked to build up through my lifetime because my husband did something without me knowing.

It's so stressful. And to make things worse, I've had people arriving at our house and threatening me, since he left, as if I am to blame.

I know I'll get through this somehow. But I could really do with some good news right now.

You're very welcome.

If you're able to prove the audit trail of your items, then that is good.

POCA has its victims and more often, it is women.

You dont deserve to be threatened. At all. Those are separate offences and I'd recommend reporting them.

Have you got some support? The main thing here is your health and safety. Could you stay with a friend or relative while all of this is going on?