Councils get 'Al Capone' power to seize assets over minor offences

Sean O’Neill, Crime Editor

Draconian police powers designed to deprive crime barons of luxury lifestyles are being extended to councils, quangos and agencies to use against the public, The Times has learnt.

The right to search homes, seize cash, freeze bank accounts and confiscate property will be given to town hall officials and civilian investigators employed by organisations as diverse as Royal Mail, the Rural Payments Agency and Transport for London.

The measure, being pushed through by Alan Johnson, the Home Secretary, comes into force next week and will deploy some of the most powerful tools available to detectives against fare dodgers, families in arrears with council tax and other minor offenders.

The radical extension of the Proceeds of Crime Act, through a Statutory Instrument which is not debated by parliament, has been condemned by the chairman of the Police Federation. Paul McKeever said that he was shocked to learn that the decision to hand over “intrusive powers” to people who were not police was made without consultation or debate.

“The Proceeds of Crime Act is a very powerful tool in the hands of police and police-related agencies and it shouldn’t be treated lightly,” Mr McKeever said. “There is a behind the scenes creep of powers occurring here and I think the public will be very surprised. They would want such very intrusive powers to be kept in the hands of warranted officers and other law enforcement bodies which are vetted to a very high standard rather than given to local councils.”

His concerns are shared by leading legal figures, who believe that there is a risk of local authorities abusing the powers to search people’s homes, seize their money, freeze their accounts and confiscate their property. They also see parallels with the spread of counter-terrorist surveillance powers to monitor refuse collections and school catchment areas.

Wideranging confiscation powers were given to police and law enforcement bodies in 2003 to seize the cash and property from drug dealers, people-traffickers and money launderers. They were viewed as “Al Capone powers” — a means of getting at the Mr Bigs of organised crime by seizing wealth accrued from criminality. David Blunkett, then Home Secretary, said law enforcement was targeting “the homes, yachts, mansions and luxury cars of the crime barons”.

The expansion of seizure powers is part of a Home Office plan to “embed” financial seizure across the criminal justice system. Ministers set a target to recover Ł250 million in criminal assets by 2010, rising to Ł1 billion per year soon after.

An “explanatory memorandum” says that a swath of financial investigators attached to the newly empowered bodies will be accredited, trained and monitored by another quango, the National Policing Improvement Agency. The memo adds that asset seizure will result in financial rewards: “Investigation bodies will receive a share of money recovered as additional funding to incentivise further work in recovering the proceeds of crime.”

Councils and other bodies had access to asset recovery powers before but only with with the authorisation and involvement of the police. Now they will be able to act independently of any police force or law enforcement agency.

The memo says councils and quangos will employ “trained internal financial investigators” and be “less reliant on more traditional law enforcement agencies, notably the police”.

The extension of such draconian powers to civilian investigators coincides with mounting legal concern about the operation of the law of confiscation. But the Home Office maintained last night that the measures would “boost the fight against crime” and “free up valuable police time”.

Lawyers who specialise in confiscation law have been expressing concern about the extension of the powers for some time. One judge said: “It looks like this has been sneaked through.”

Andrew Bodnar, co-editor of a book on asset recovery law, said that the Proceeds of Crime Act had been carefully crafted and designed but its implementation often left much to be desired. “The theory behind the law is right. But if these powers are to be used to seize the assets of — to take an extreme example — fare dodgers or council tax defaulters, it is very difficult to see how those theoretical aims are being met.

“The extension of these powers should be monitored very closely. The spectre of counter-terrorism powers being used to monitor people’s bin- filling habits, or what school they’re trying to send their children to, should be cautionary.”

Mr Bodnar, of Matrix Chambers, said that the agencies given the powers must be resourced properly and be able to apply them “with a full understanding of the law”.

“Having these Al Capone powers in the back pocket is very valuable for a senior prosecutor but in the hands of someone less experienced and less skilled, particularly when combined with the incentive of their department collecting a share of the confiscated money, there is the potential for charges to be brought which are intended to maximise confiscation recovery rather than reflect the level of criminality concerned.”

Sir Ivan Lawrence, QC, a former senior Conservative MP, said that extending such police powers to bodies like Transport for London and local authorities was highly questionable.

“Far worse is the encouragement being given to non-police bodies to search for what they think are proceeds of crime but may not be and subject the victim to the draconian and manifestly unjust processes of the Proceeds of Crime Act. Does anyone in Government understand that if you give prosecutors, who are supposed to be unbiased ministers of justice, the bribe of a proportion of the money they can find, you are actually poisoning the roots of justice in our society?”

A Home Office spokesman defended the extension of the powers. “Seizing ill-gotten gains is a key part of the fight against criminals — whether it is from small-time offences or organised crime,” he said.

The POCA powers . . .

- Freezing a suspect’s assets at the beginning of a criminal investigation

- Presumption that all an individual’s assets are acquired through a criminal lifestyle

- Search for and confiscate cash of Ł1,000 or more

- Demand that banks and other institutions disclose financial information

- Seek confiscation order for assets after a conviction

- Collect a share of confiscated assets

. . . and the agencies that will get them

Councils in England and Wales Could seize assets from people in council tax arrears or parking fine defaulters

Gangmasters Licensing Authority Might seize property from someone profiting from underpaying wages

Counter Fraud and Security Management Service Investigating prescription fraud and theft by NHS staff

Gambling Commission Could seize assets from rigged betting rings

Rural Payments Agency Could confiscate money from farmers fraudulantly claiming agricultural grants

Financial Services Authority City regulator could seize assets of those convicted of insider dealing

Vehicle and Operator Services Agency Could pursue profit made by haulier defrauding MoT or licensing laws

Transport for London Could go after assets of fare dodgers or ticket forgers

Royal Mail Might confiscate assets from a fraudulent postmaster or employee

Medicines and Healthcare products Regulatory Agency Could recoup profits from sale of counterfeit medicines

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