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Page last updated at 10:45 GMT, Sunday, 15 March 2009
About Crime Pays

Samantha Poling
Samantha Poling exposes how criminals are hanging on to their assets

When The Proceeds of Crime Act was passed in 2002, it was meant to hit criminals where it hurts - in their pockets - by stripping them of illegally obtained assets.

But as Panorama reveals, years on, a combination of judicial failure and crafty criminals mean that many crooks are still enjoying lavish lifestyles funded by their ill-gotten gains.

In Panorama's Crime Pays, Samantha Poling goes undercover to meet the crooks who are beating the system and discovers how the Act is failing to do its job. And that often instead of ensuring the recovery of the criminals' spoils, it is actually costing us money.

One convicted fraudster Poling speaks to is Michael Voudouri who pocketed millions in unpaid tax. He went to jail and now lives in a £2m house and drives a luxury car, despite not handing over a penny.

We've failed on the ambition of bankrupting those who had made enormous amounts of money out of criminal behaviour.
Former Home Secretary David Blunkett

Voudouri says the ongoing court case to recover his dodged tax payments is costing taxpayers millions. "I went to prison for evading tax of £3m, that's money that should have gone into the public purse. It's now cost the public, though, since 2000 to date £10m," he says.

Poling also discovers that even when the money is recovered, criminals can appeal, meaning the assets are held in-limbo by receivers, whose fees can quickly eat into any sum actually recovered.

Dodging payment

As the programme reports, a 2007 National Audit Office enquiry found over £16m had been spent on receiver's fees and in 12 cases the fees amounted to more than the initial assets frozen, leaving the taxpayer to pick up the difference.

Michael Vidouri
Voudouri went to prison for avoiding tax payments of 3m

According to Graham Pearson, who once headed the elite police enforcement agency - tasked with bringing down criminals and going after their assets - the criminals have got wise and found ways to circumvent the Act.

"The Mr Bigs are best positioned to protect themselves, so they hire the best lawyers, they attach to the best processes to protect themselves," he tells Panorama.

Even David Blunkett, the architect of the Act is agreed on its impotence: "We've failed on the ambition of bankrupting those who had made enormous amounts of money, out of criminal behaviour and we've got to renew our efforts to achieve that," he tells our reporter.

Compensation

An important part of the Act was to allow investigators, without enough evidence for a conviction, to still initiate asset recovery if they believe the individual is living off the proceeds of crime.

David Blunkett
David Blunkett was one of the main architects of the legislation

The process, played out in the civil courts, means the individual has to prove their assets are legitimate, but as Panorama hears, this is also failing and costing the taxpayer money.

Our reporter speaks to convicted counterfeiter and self-styled paralegal Jim McDonald, who has set up a business advising some of Scotland's most successful criminals on how to preserve their fortunes.

He explains how two of his clients, who have not been convicted of a crime, are being paid £10,000 a month living expenses, as the civil court attempts to take their money. "Because of the compensation that's written into the Act, they must be compensated," he says.

Concerns

Outside Scotland, the organisation tasked with civil recovery, the Asset Recovery Agency (ARA), managed to freeze almost £190m over the last five years. But it only actually took £30m - a 15% percent success rate.

Graham Piper
Graham Piper was secretly filmed for the programme

This failure, has led the government to hand the ARA's civil recovery functions to another body - the Serious Organised Crime Agency (SOCA).

Describing the failure as regrettable, Andrew Mitchell, ARA's former senior litigator, tells Panorama he is also worried about the government's SOCA solution.

"I'm not confident. From what I'm hearing, there is anywhere near as much new litigation starting as there used to be," he says.

"It plainly has been parked. Have the resources been increased at SOCA to take account of the arrival of ARA? I think the answer's no." he says.

In May, SOCA will publish figures on its first year of civil recovery. This will go some way to answering whether the promise of bankrupting organised crime will be kept, but as Panorama hears, there are still a lot of people finding that in Britain, crime still pays vey nicely indeed.

Panorama: Crime Pays, Monday 16 March at 8.30pm on BBC One.



SEE ALSO
Criminal asset measures 'failing'
Sunday, 15 March 2009, 00:09 GMT |  UK
Bling campaign targets criminals
Monday, 19 January 2009, 09:09 GMT |  Sussex
Record 'proceeds of crime' haul
Wednesday, 6 June 2007, 20:45 GMT |  Scotland
Assets Recovery Agency abolished
Thursday, 11 January 2007, 14:38 GMT |  UK
Crime assets agency 'ill-planned'
Thursday, 11 October 2007, 23:30 GMT |  Politics
Jailed millionaire 'driven by greed'
Monday, 19 January 2004, 14:03 GMT |  Beds/Bucks/Herts

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