Benefit calculation should not incorporate the costs of the commission of offence

In Ahmed and Ahmad [2012] EWCA 391 the Court of Appeal was tasked with considering the calculation of confiscation orders made under the Criminal Justice Act 1988 following the conviction of co-defendants in a huge carousel fraud. Both defendants had been ordered to pay £92,333,667 within two months under penalty of a ten year default sentence. It may come as no surprise that the Judge had found both men to have benefited in that amount and held that they had failed to persuade him that their realisable assets did not equate to the benefit figures (because of hidden assets). In fact, the VAT loss to HMRC was £12.6 million but the Judge went on to make a finding that the benefit figure ought to equate to the total amount of money that had passed through the company bank accounts. Having looked at various authorities the Court of Appeal rightly rejected the Judges analysis in an excellent judgment given by Hooper LJ. In particular, the Court rejected any prior decision that suggested that the costs associated to the commission of an offence could be added to the benefit figure. Helpfully the Court also looked at the proper approach where a defendant has been found not to have told the truth about his realisable assets and concluded that in a hidden assets case the Court may properly conclude that realisable assets are less than criminal benefit. The Court quashed the confiscation orders and replaced them with orders for £12.6 million.