El-Kurd & Ors, R v

This is the judgment of the Court providing reasons for our decision to quash the convictions of these four appellants. The substantial proportion of the judgment was prepared by Beatson J.

These four appeals are before this Court as a result of references made by the Criminal Cases Review Commission on 5 June 2006. The Commission described the way the indictments were framed and the directions of the trial judges to the juries as perfectly sound at the time. It made the references because of a change in the law, or strictly speaking a change in the understanding of the law, after the appellants were convicted. The legislation under which the appellants were convicted has been superseded by the Proceeds of Crime Act 2003.

The change in the understanding of the law came about as a result of the decision of the House of Lords on 3 May 2006 in R v. Saik [2006] UKHL18, 2 WLR 993, in which the earlier decision of this court in R v. Liaquat Ali [2005] EWCA Crim. 87, [2006] QB 322 as to the consequences of the decision of the House of Lords in R v Montilla [2004] UKHL 50, 1 WLR 3141 was approved. R v. Liaquat Ali and R v. Saik held that the understanding that the mens rea of conspiracy to launder money followed that for the various substantive money laundering offences was wrong. Before those decisions, in part as a result of that understanding, appeals in the cases before us had been dismissed by this court: see R v. El Kurd [2001] Crim. L. R. 234; R v Rana Singh [2003] EWCA Crim 3712; and R v Sakavikas and Reichwald [2004] EWCA Crim.2686.

In a number of substantive money laundering offences, including section 49 of the Drug Trafficking Act 1994 and sections 93A-D of the Criminal Justice Act 1988, the mens rea is defined as "knowing or suspecting" or "knowing or having reasonable grounds to suspect" that the money represents the proceeds of the relevant type of crime. It was generally believed that this was also the mens rea of conspiracies to commit those offences. R v. Liaquat Ali and R v Saik held that, in the light of section 1(2) of the Criminal Law Act 1977, this was not so where the charge is a statutory conspiracy to commit the substantive offence. In such a case, in the case of money identified at the inception of the conspiracy, the mens rea required is knowledge of its illicit origins. In other cases, it is an intention that the money would be the proceeds of relevant criminal conduct.

The consequences of R v. Liaquat Ali and R v. Saik for defendants who were convicted of conspiracy to commit money laundering offences before those decisions were before this court in the appeals and applications in R v Ramzan and others [2006] EWCA 1947 (Crim); [2007] 1 Cr. App. R. 150, R v Suchedina [2006] EWCA 2543 (Crim), R v Mumtaz Ahmed [2007] EWCA (Crim.) 464 and R v Zafar Rizvi [2007] EWCA (Crim.) 467. The cases of Ramzan, Mumtaz Ahmed, and Zafar Rizvi were before this court as a result of references by the Commission. The six cases considered with Ramzan's case and the three cases considered with Suchedina’s case were applications to grant leave to appeal out of time. Those applications were refused in the light of the practice of this court not to grant leave to appeal out of time where the conviction was entirely proper under the law as it stood at the time of trial unless substantial injustice would otherwise be done to the applicant: see R v Ramzan and others at [30]. This court held that the position differed in the case of a reference by the Commission because (at [41]), pursuant to section 9(2) of the Criminal Appeal Act 1995, “a reference stands as if leave has been granted” and this court has no option but to consider the safety of the conviction. It did so in Ramzan's case and allowed his appeal. In Suchedina’s case, where the single judge had granted leave, the appeal was also allowed. In both cases retrials were ordered.

The judgment in R v Ramzan and others was handed down on 21 July 2006, after the Commission made its references in the cases now before us and in the cases of Mumtaz Ahmed and Zafar Rizvi. The cases were all due to be heard by this court in October 2006 but the hearings were vacated as a result of a judicial review by the Director of Revenue and Customs Prosecutions challenging the Commission’s decision to refer the cases. The Crown Prosecution Service, the prosecuting authority in the cases of Sakavikas and Reichwald, was an interested party and made written submissions. It was argued in the judicial review proceedings that, when considering a reference, the Commission was either bound to apply an identical filter to that applied by this court at the leave stage or to have regard to what in Ramzan’s case was described as its “very well established practice”.

The challenge to the reference failed. In December 2006, in R (Director of Revenue and Customs Prosecutions) v Criminal Cases Review Commission [2006] EWHC 3064 (Admin.) at [28], the Divisional Court held the Commission “was under no obligation to have regard to, still less to implement, a practice of the CACD which operates at a stage [the leave stage] with which the Commission is not concerned”. The Divisional Court also commented on the consistency of the application of this court’s practice, and the absence of criticism by this court since R v Kansal (No 2) [2001] EWCA 1260 Crim. when dealing with references by the Commission in change of law cases: see [2006] EWHC 3064 Admin at [32] – [36]. Accordingly, the references proceeded. On 14 February 2007 the appeals in the cases of Mumtaz Ahmed and Zafar Rizvi were conceded by the Crown.

Since these four appeals are the result of references by the Commission the difference between the approach of this court when considering references and its approach when considering an application for leave to appeal out of time on the ground of a change in the understanding of the law does not arise. Nor does the tension and potential conflict between the practice of the Commission and that of this court in such cases: see [2006] EWHC 3064 Admin at [47]. Those matters, however, arise in the appeals in R v. Fletcher and R v Cottrell, two other “change in the law cases” in a different context, which were heard by us together with these appeals. We will consider them in our judgment in those cases.

The principal issue is the safety of the convictions in the four cases. In the cases of El Kurd and Rana Singh, and possibly in the case of Sakavikas, consideration of the safety of the convictions falls into two parts. It is necessary to examine the scope of the decision of this court in Graham [1997] 1 Cr. App. R. 302 in the context of defects in the way the indictments were framed as well as applying the familiar test in Stirland v DPP [1944] AC315 as reformulated in R v Davis, Rowe and Johnson [2001] 1 Cr. App R. 115.

In the cases of Sakavikas and Reichwald, if we conclude the convictions are unsafe, the Crown invite us to exercise our powers under section 3 of the Criminal Appeal Act and substitute convictions for substantive offences under section 93A of the 1988 Act. In the light of the decision in Ramzan’s case no such application is made in the cases of El Kurd and Rana Singh.

The underlying facts are set out in the decisions of this court in the appeals considered and dismissed before the decision in R v Saik. We are therefore able to state them briefly. In doing so we substantially rely on the helpful summaries provided by the CCRC.

The alleged offences related to a bureau de change known as the Notting Hill Exchange. El-Kurd was the proprietor. The prosecution case was that from September 1994 to November 1996 sums in excess of £70 million in used sterling notes were laundered through the business. The money was brought in by a co-defendant called McGuinness. The used notes were brought in and exchanged for high value foreign currency notes. They were either exported to Europe or returned to wherever the notes had originated.

Surveillance identified a number of visits by other alleged conspirators to the Exchange carrying holdalls or suitcases. There were two telephone conversations between them and EI-Kurd. Large sums of cash were identified as having been exchanged following the visits. None of the very large number of substantial foreign currency purchases made by the Exchange appeared in its books, apart from on one occasion when EI-Kurd was on holiday.

EI-Kurd was found to have 55 bank accounts, some of which were not disclosed to his accountants. At the time of his arrest £1m cash was found in El-Kurd's safe and safety deposit boxes.

When interviewed, EI-Kurd denied knowing McGuinness. He denied knowing where the money brought to the Exchange by him came from. He said that he never asked where money came from, and that those bringing it would not tell the truth, particularly if it was the proceeds of drugs. He said that he would not report anyone to the police because he had been threatened so many times. He was unable to find any records of the transactions that Customs officers had identified. He did not give evidence.

The prosecution alleged that a bank account operated by the appellant Reichwald was used to launder the cash proceeds of cigarettes illegally imported by the appellant Sakavickas, and his associates and co-defendants Eddishaw, Roden, and Ms Radzeviciute, from Eastern Europe to the UK. Between October 1998 and January 2001 it was alleged that £5.8 million was passed through this bank account. Police surveillance established that substantial sums of cash sterling were deposited by the appellants on a number of occasions. The sterling deposits were converted to dollars. Some of this money clearly went to cigarette traders. When Sakavickas was arrested, he was found with a substantial amount of cash, as was Reichwald when he surrendered to police.

Reichwald's defence was that he did not know and had no reason to suspect that Sakavickas or his associates were engaged in criminal conduct or had benefited from crime. Sakavickas on the other hand claimed that the money was legally obtained. He accepted that he was involved in the movement of money from a tobacco business that he had helped set up, but claimed to be unaware that the duty on the goods had not been paid.

Reichwald was convicted unanimously. Sakavickas was convicted by a 10 to 2 majority. Ms. Radzeviciute was discharged. Eddishaw and Roden pleaded guilty to a different count.

The prosecution case was that between June 1999 and March 2000, the appellant and his co-accused on all three counts, Dhaliwal, engaged in money-laundering. They exchanged large sums of money obtained illicitly in England into Dutch guilders. They took the guilders out of the jurisdiction or, in March 2000, in the last week or so of their conspiracy, arranged for other co-accused, Navtej Singh and/or Jasvir Singh, to do so. Gulbir Singh was said to be the principal conspirator. The total sum that they were alleged to have laundered over the nine month period was about £6.2m.

The evidence was that the allegedly laundered money was the proceeds of drug trafficking or other criminal conduct. Although the appellant lives near Leicester most of the evidence related to his activities in London. The prosecution relied on observations by Customs and Excise officers of two bureaux de change in Notting Hill Gate. Large bags were taken in and out of them; also, there were day visits to Amsterdam. Mr. Sharif, the owner of those bureaux, members of his staff, and Mr. Assan from another bureau de change in Paddington, gave evidence. The appellant was described as visiting one or other of the bureaux with sterling in a suitcase or shopping bag to exchange for guilders. There were 42 alleged exchanges of sterling for guilders, making up the total of £6.2m. The transactions were set out in a schedule compiled from the records of the bureaux. Mr. Sharif and his employees spoke of a man carrying out substantial transactions on the days and in the amounts set out in the schedule as "Singh" or "Sink." They said that he always conducted the transaction even when accompanied by another man. The prosecution alleged that man was mostly Dhaliwal.

On 13 July 1999, early in the period of the alleged nine months conspiracy, Customs officers stopped Singh in a car at Dover. Under his seat they found 600,000 Dutch guilders. He had obtained them that day in exchange for £188,000. He denied knowledge of the money and said he was on his way to Dusseldorf. The officers allowed him to proceed.

On 11 March 2000 the three conspiracies came to an end on the arrest of the alleged conspirators. Customs officers stopped Navtej Singh and Jasvir Singh at Felixstowe and Dover respectively, each with a large quantity of Dutch guilders in his possession, (counts 2 and 3). On the same day officers arrested the appellant at a party. He denied that he was Rana Singh, that his wife was there with him and that it was his car outside. In interview, he maintained his earlier denial of any knowledge of the guilders found in the car on 13 July 1999. He acknowledged that he had visited Mr. Sharif’s bureaux de change, sometimes with Dhaliwal because he was a friend and sometimes on his own when Dhaliwal had not turned up. He said that Navtej and Jasvir Singh were Dhaliwal's couriers. He maintained that all the transactions at the bureaux were Dhaliwal's and denied any knowledge of money-laundering.

On 2 September 2001, the day before the trial was due to start, the appellant disappeared. The judge concluded that he had absconded and the trial was conducted in his absence. Defence counsel continued to act on his behalf.

On 28 November 2001, the appellant went to the British Embassy in Belgium claiming that he had been kidnapped before his trial. Shortly afterwards he returned to the UK. On 28 February 2002 the trial judge rejected an application by defence counsel seeking a retrial on the basis of the appellant’s claimed involuntary absence from the trial, holding that he had no jurisdiction to make the order sought and that the proper course was for the appellant to seek leave to appeal and call evidence on the issue.

El-Kurd was convicted of four counts of conspiracy to commit the money-laundering offence under section 93C of the Criminal Justice Act 1988; that is conspiracy to remove from the jurisdiction and to convert property which represents the proceeds of criminal conduct contrary to section 1 of the Criminal Law Act 1977. He was acquitted of four counts of conspiracy to commit an offence under section 49 of the Drug Trafficking Act 1994 and eighteen other counts were left on the file. The particulars of the offence in respect of the counts on which he was convicted (counts 2,7,12 and 17) on the indictment, were that he:

"and [named alleged co-conspirators] between [various dates] conspired together and with persons unknown to [remove property in the form of banknotes from the jurisdiction (counts 2 and 17) or convert banknotes (counts 7 and 12)] for the purpose of assisting another to avoid prosecution for an offence to which Part VI of the Criminal Act 1998 applies …knowing or having reasonable grounds to suspect that such property represented in whole or in part, directly or indirectly another persons proceeds of criminal conduct." (emphasis added)

Sakavickas and Reichwald were convicted of a single count of conspiracy to assist another to retain the benefit of criminal conduct. The particulars of offence set out in the indictment were that they and Gouda Radzeviciute:

"[between named dates] conspired with [two named persons and others] to facilitate the retention or control by or on behalf of [Sakavickas and others] of the proceeds of criminal conduct of [Sakavickas]."

The conspiracy alleged was an agreement to commit an offence contrary to section 93A of the Criminal Justice Act 1988, assisting another to retain the benefit of criminal conduct knowing or suspecting that other is a person who is or has been engaged in criminal conduct or has benefited from criminal conduct. There is thus no reference to "suspecting" or "reasonable suspicion" in the particulars.

Rana Singh was convicted of three counts of conspiracy to money-launder. The statements of offence for these counts was "conspiracy to convert, transfer and remove from the jurisdiction the proceeds of drug-trafficking and criminal conduct". The particulars of offence in respect of each count were that Singh and his co-defendants between particular dates:

"conspired together and with persons unknown, knowing or having reasonable grounds to suspect that certain property, namely banknotes, was, or in whole or in part directly or indirectly represented, another persons proceeds of drug-trafficking and/or criminal conduct, to convert or transfer or remove from the jurisdiction that property for the purpose of assisting any person to avoid prosecution for a drug-trafficking offence and/or for an offence to which part IV of the Criminal Justice Act 1988 applies… in contravention of section 49(2) of the Drug trafficking Act 1994 and/or section 93C(2)(b) of the Criminal Justice Act 1988."

The substantive offences under section 49(2) and section 93C are committed by those who know or have reasonable grounds to suspect that any property represents respectively the proceeds of drug-trafficking or criminal conduct. As in El-Kurd's case the indictment states that it is sufficient that a defendant had "reasonable grounds to suspect that the property concerned represented the proceeds of drug-trafficking or criminal conduct."

The test to be applied is that in section 2(1) of the Criminal Appeal Act 1968, as amended by section 2 of the Criminal Appeal Act 1995. This provides that this court:

"(a)

shall allow an appeal against conviction if they think the conviction is unsafe; and

(b)

shall dismiss an appeal in any other case".

The test for determining whether misdirection or non-direction makes a conviction unsafe is well-known and originates in the Criminal Appeal Act 1907 and restated in the Criminal Appeal Act 1995: see R v Pendleton [2002] 1 WLR 72, per Lord Bingham, at [8] and Dial v Trinidad [2005] 1 WLR 1660, at [31-33]. In R v Davis, Rowe and Johnson [2001] 1 Cr. App R. 115 at 132 this court stated that “usually it will be sufficient for the Court to apply the test in Stirland v DPP [1944] AC 315” which, as adapted to reflect the 1995 amendment, might read “assuming the wrong decision on law or the irregularity had not occurred and the trial had been free from legal error, would the only reasonable and proper verdict by the jury have been one of guilty?”

The test requires the court to assume a proper summing up and to consider the evidence to which “no objection could be taken”: Stirland v DPP [1944] AC 315 at 321. The Crown’s “initial written submissions” are principally concerned with the history and development of this test and set out many examples of the general approach, including a number of fresh evidence cases. The cases before us are not fresh evidence cases and, for our purposes, apart from the reformulation in R v Davis, Rowe and Johnson, at this point it suffices to refer to R v Francom [2001] 1 Cr App R 237. Lord Woolf CJ stated (at 250) that the test of safety “is whether, notwithstanding what is… a non-direction, we are satisfied that no reasonable jury could have come to a different conclusion from that which was reached by this jury if they were properly directed”. Our concern is whether the effect of the misdirections deprived these appellants of the right to trial by jury which is a fundamental part of our criminal process. The importance of this right is illustrated by the decision of the House of Lords in Wang [2005] UKHL 9 in which it was held that there are no circumstances in which a judge is entitled to direct a jury to return a verdict of guilty. In our system it is for the jury to reach a decision on all factual questions, including the application of the law as expounded by the judge to the facts as the jury find them to be.

It is submitted by Mr Clegg QC on behalf of El-Kurd and by Mr Krolick on behalf of Rana Singh that, in the light of the decision of this court in R v Graham and others [1997] 1 Cr. App R. 302, the way the particulars of the offence in the indictments were framed means that their convictions must be unsafe. They argued that this is so because the particulars specified cannot, even if established, support a conviction for the conspiracy offences with which they were charged and the allegations in the indictment charge them and their co-defendants with offences unknown to the law. They were charged with conspiracy, "knowing or having reasonable grounds to suspect" that the banknotes were the proceeds of the criminal conduct of another or others when, in the light of the decision in R v Saik it is necessary to prove that a person charged with conspiracy intends or knows that the property he deals with is the proceeds of the relevant criminal conduct.

On behalf of Singh it was additionally submitted that in his case intention is not relevant and only knowledge would suffice. This is said to follow from the statement in the particulars of the counts of the indictment in his case that "certain property… was … another person’s". It was submitted that the use of the past tense indicated that the charge related to identified and thus existing property. In his speech in R v Saik Lord Nicholls made it clear that “intention” is only apt to cover future property; see [2006] 2 WLR 993 at [23] and [25-26].

There is no reference to knowledge or reasonable suspicion in the indictment charging Sakavickas and Reichwald. On behalf of Sakavickas, it was, however, also argued by Mr Clegg (paragraph 12 of his written submissions) that "the essential ingredients of the offence, could not, even if established support a conviction for the offence of which [Sakavickas] was accused". While it may have appeared that Mr Clegg was suggesting that the particulars impliedly included a reference to suspicion, on analysis he did not go that far. Paragraph 10 of his written submissions states that it matters not whether the word “suspicion” was pleaded in the indictment because “the inclusion of that element of the substantive offence was an integral part of the case presented at trial”. His oral submissions were focussed on the safety of Sakavickas's conviction in the light of the way the matter was presented at trial and was left to the jury rather than the form of the indictment. On behalf of Reichwald, the submissions of Mr Rees QC were also focussed on the safety of the conviction in the light of the way the matter was presented at trial and left to the jury.

We turn to the seven appeals heard by this court in R v Graham and others [1997] 1 Cr. App R. 302. They all arose from the decision of the House of Lords in R v Preddy [1996] 2 Cr. App R. 524. In Preddy's case convictions for mortgage fraud, prosecuted under section 15 of the Theft Act 1968, were quashed on the ground that, when a mortgage lender makes a loan, the borrower does not obtain any property which has ever belonged to the lender so the borrower has not dishonestly obtained property belonging to another. This is because the lender’s rights as against his bank to the funds transferred to the borrower’s bank account are extinguished and a new chose in action is brought into existence representing a debt in an equivalent sum owed by the borrower’s bank to the borrower.

In Graham’s case this court considered its role in the light of the 1995 amendment to section 2(1) of the Criminal Appeal Act 1968. Lord Bingham CJ, delivering this court’s judgment, stated that the new provision concentrated attention on one question:

"Whether, in the light of any arguments raised or evidence adduced on appeal, the Court of Appeal considers a conviction unsafe. If the court is satisfied, despite any misdirection of law or any irregularity in the conduct of the trial or any fresh evidence, that the conviction is safe, the court will dismiss the appeal. But if, for whatever reason, the court concludes that the appellant was wrongly convicted of the offence charged, or is left in doubt whether the appellant was rightly convicted of that offence or not, then it must of necessity consider the conviction unsafe. The court is then subject to a binding duty to allow the appeal. It can make no difference that the appellant might, if duly indicted, have been rightly convicted of some other offence. Where the condition in section 2(1)(a) as it now stands is now satisfied, the court has no discretion to exercise." ([1997] 1 Cr. App. R. 302, at 308)

The Crown argued that the removal by the 1995 amendment of the proviso to section 2 effected no change in the law. It relied on the decisions of this court in R v McHugh (1977) 64 Cr. App R. 92; R v Molyneux and Farmborough (1981) 72 Cr. App R. 111, R v Ayres (1984) AC 447 and R v Pickford [1995] QB 203. It submitted that the single test would apply where the offence had been mis-described in the indictment but where the criminality of the defendant is clearly established. This argument was rejected. The Court stated that the decisions relied on did not assist the Crown because since the 1995 amendment the court's sole obligation is to consider whether a conviction is unsafe and in none of those cases did the court find that the convictions were safe. All four decisions involved cases where the court considered that no miscarriage of justice had actually occurred and in which it applied the proviso.

All the cases before the court in Graham’s case were mortgage frauds or otherwise involved the obtaining or attempting to obtain funds through the banking systems and prosecuted under section 15 of the Theft Act. The court held that none of the convictions could stand since the appellants or applicants could not in law be guilty of the offences charged in reliance on the facts pleaded in the indictments. The convictions were quashed.

Mr Clegg, supported by Mr Krolick, submitted that we are bound by the decision in Graham’s case to conclude that the convictions in the cases of El-Kurd and Rana Singh are unsafe. They placed particular reliance on the following passage at page 309D-E of Graham’s case:

“We would deprecate resort to undue technicality. A conviction will not be regarded as unsafe because it is possible to point to some drafting or clerical error, or omission, or discrepancy, or departure from good or prescribed practice. We would, for example, expect R v McVitie (1960) 44 Cr. App R. 201, [1960] 2QB 483 to be decided under the new law in same way as under the old. But if it is clear as a matter of law that the new particulars of offence specified in the indictment cannot, even if established, support a conviction of the offence to which the defendant is accused, a conviction of such offence must in our opinion be considered unsafe. If a defendant could not in law be guilty of the offence charged on the facts relied on no conviction of that offence could be other than unsafe.”

Mr Clegg submitted that the point does not arise frequently because the vast majority of cases do not involve questions as to the effect of a defective indictment which misdescribes the offence. He argued that all the editions of Archbold since Graham’s case, including paragraph 7-46 of the current edition, support his submission as to the effect of that case. We observe that the editors of Archbold focus on whether, if the particulars in the indictment are amended, an appellant could have been found guilty of the offence charged. It is only where he could not have been found guilty of the offence charged that it is stated that the conviction must be regarded as unsafe.

Mr Sells QC submitted that the correct approach for this court is to apply the test in Stirland v DPP [1944] AC 315 as reformulated in R v Davis, Rowe and Johnson [2001] 1 Cr. App R. 115 at 132. The Crown submitted that, where the indictment is not a nullity, save for cases of, or akin to, abuse of process, that test must be applied. Mr Sells submitted that there is no separate category of cases in which a misdirection or non-direction or a defect in the indictment is on its face so fundamental that it leads automatically to the quashing of the conviction. The Crown relied on a number of decisions, including R v Williams [2001] EWCA 932 (Crim.), R v Adetero [2006] EWCA 1716 (Crim.) and R v Boyle & Ford [2006] EWCA 2101 (Crim.) in support of its submission that this court must always consider the impact of a misdirection. None of these cases, however, concerns a defective indictment.

Paragraph 76 of the Crown’s initial written submissions states that the passage we have quoted from the judgment in Graham’s case “cannot be taken to mean that an omission from the pleaded particulars of offence is capable without more of rendering a conviction unsafe, regardless of whether the statement of offence refers to an offence known to law and whether the facts relied upon were capable of constituting the offence charged in the statement of offence”. The Crown relies in particular on the last sentence of the passage which states that no conviction of an offence could be other than unsafe if the defendant “could not in law be guilty of the offence charged on the facts relied on”, and on similar passages in the sections of the judgment in Graham’s case dealing with the individual appellants and applicants: see [1997] 1 Cr. App R. 302, at 320F, 324E, 328A, 332A-B. In reply it submitted that there is no need for a special category for defects in the indictment because the normal approach to the question of safety, as stated in the modified Stirland test, deals satisfactorily with such cases.

We have concluded that the way the indictments in the cases of El Kurd and Rama Singh were framed does not bring them within the scope of the decision in Graham as cases in which their convictions “must” be unsafe. This is because the scope of the decision in Graham is narrower than that contended for by the Appellants.

We start with the decision in R v McVitie [1960] 2 QB 483. The Court in Graham’s case stated it would expect McVitie’s case to be decided under the new law in the same way as under the old law. In that case the appellant was convicted on an indictment charging him and three others with possessing explosives contrary to section 4(1) of the Explosive Substances Act 1883. The particulars of offence in the indictment stated that the men "had in their possession a certain explosive substance … under such circumstances as to give rise to a reasonable suspicion that it was not in their possession for a lawful object". Section 4(1), however, required that the person "knowingly" have an explosive substance in his possession. Although the appellant had admitted that he knew he had explosives in his possession and was not embarrassed by the omission from the particulars of the offence in the indictment, it was argued that the indictment was bad in that it disclosed no offence known to law. This court stated that although the word "knowingly" should have been included in the particulars, its omission did not make the indictment a bad indictment, but simply a defective or imperfect one. It stated:

"A bad indictment would be one disclosing no offence known to the law, for example, where it was laid under a statute which had been repealed and not re-enacted. In the present case the indictment described the offence with complete accuracy in the "statement of offence". Only the particulars, which merely elaborate the "statement of offence", were incomplete." ([1960] 2 QB at 494-495)

The court considered applying the proviso on the basis that the indictment described a known offence with incomplete particulars, and not on the basis that it disclosed no known offence. Amending the particulars of offence by the addition of the word “knowingly” meant the amended particulars specified in the indictment could, if established, support a conviction of the offence under section 4(1) charged in the statement of offence. We accept the Crown’s argument (see paragraph 72 of the initial submissions) that the position taken on behalf of El Kurd and Rana Singh in relation to the indictments in their cases is difficult to reconcile with the statement in Graham that the court would expect McVitie’s case to be decided under the new law in the same way as under the old. We also accept the Crown’s submission that, the appellants’ submissions based on R v Graham would also have applied in R v Saik. The House of Lords considered the safety of Saik’s conviction only in the light of his limited basis of plea. The speeches do not refer to Graham’s case and there is no indication that any matter other than Saik’s factual circumstances as indicated by the qualified basis of his plea was relevant.

Secondly, we consider there is a fundamental distinction between the appeals before us and the appeals and applications considered in Graham’s and Preddy’s cases. Those were all cases in which, on the facts pleaded in the particulars there was no offence known to law, or the facts pleaded and relied on could not amount to the offence charged in the statement of offence. Save for McVitie’s case and, subject to a possible caveat about Pickford’s case (on which see paragraph 51 below), so were the cases which this court in Graham’s case stated turned on the application of the proviso. Thus, in McHugh’s case, the appellant had been convicted of the theft of petrol by driving off without paying when, in the light of the decisions in Edwards and Ddin [1976] 1 WLR 942, it could not be assumed that he had a dishonest intention before he put the petrol in the tank of his car. No amendment to the particulars would have made him guilty of the offence of theft. He had been charged with obtaining by deception contrary to section 16(1) of the Theft Act but that count was withdrawn from the jury by consent and the trial had been conducted on the basis that the offence was theft or nothing.

In R v Molyneux and Farmborough (1981) 72 Cr.App.R.111, Molyneux and Farmborough had been charged with conspiracy contrary to section 1 of the Criminal Law Act 1977. The particulars of the offence averred a conspiracy to rob. At the end of the prosecution case, the trial judge raised the question whether the statement of offence ought not to have been "conspiracy to defraud", in line with the approach adopted in Quinn [1978] Cr. L. Rev. 750. As a result, the statement of offence was amended but the particulars of the offence were not amended. Farmborough pleaded guilty and Molyneux was convicted. Three months after the conviction, in Duncalf (1979) 69 Cr. App R. 206, this court held that conspiracy to steal is not an offence at common law but an offence under section 1 of the 1977 Act and Quinn had been wrongly decided. Again, therefore, although the statement of offence was of an offence known to law, the facts averred in the particulars and which would be relied upon could not constitute that offence charged. Nor, given the facts relied on at the trial, would any amendment to the particulars have done so.

Ayres (1984) 78 Cr. App. R232 was a case in which the appellant was charged upon indictment with a common law conspiracy whereas, in the light of the decision in Duncalf the indictment should have been laid as a conspiracy to obtain property by deception. The case was on all fours with Molyneux and Farmborough. In Ayres’s case Lord Bridge of Harwich stated that if “the statement and particulars of offence can be seen fairly to relate to and to be intended to charge a known and subsisting criminal offence but plead it in terms which are inaccurate, incomplete, or otherwise imperfect, then the question whether a conviction on that indictment can properly be affirmed under the proviso must depend on whether, in all the circumstances, it can be said with confidence that the particular error in the pleading cannot in any way have prejudiced or embarrassed the defendant”: [1984] Cr. App. R. 323, 245. That decision pre-dated the 1995 Act’s reformulation of the test and the removal of the proviso. Since that reformulation, issues of prejudice or embarrassment to a defendant resulting from of an error or defect in the indictment are addressed in the context of the assessment of the safety of the conviction.

The last of the cases referred to in R v Graham is R v. Pickford [1995] 1 Cr. App. R. 420. The appellant had pleaded guilty to inciting a boy to commit incest with his mother. The boy’s fourteenth birthday was on 22 August 1975 but the period in the indictment was between 1 January and 31 December 1975. It was accepted that the state of the evidence was such that the incident may have taken place before 22 August. It was thus neither pleaded nor proved that, at the material time, the boy was over fourteen. On appeal this court held that the appellant had pleaded guilty to an offence unknown to law, since if the boy had been under fourteen at the material time, he was conclusively presumed to be incapable of committing any criminal offence involving sexual intercourse. The proviso was applied because had the indictment been framed so as to charge the appellant with inciting the mother rather than the son there could have been a lawful conviction. In this case, the act incited necessarily involved both the mother and the son and the Court’s conclusion was based on the witness statements. Those statements, if true, justified the conclusion that the appellant had also incited the mother.

The contemplated change in the framing of the indictment was a change as to the identity of the person incited. This was a significant, and possibly fundamental change. But, if the court was entitled to rely on the witness statements in assessing the safety of the conviction (as opposed to determining whether to apply the proviso), Pickford’s case would be in a different category to the other cases considered in R v Graham. This is because, had the particulars in the indictment been amended and the Crown was entitled to rely on the witness statements, despite the change in the identity of the person incited, the appellant could have been found guilty of the offence charged. On this basis it would fall into the same category as R v. McVitie, because like McVitie’s case, with the alteration to the particulars, “the facts relied on” would amount to the offence charged. There is, however, a difficulty in seeking to rely on the witness statements in this way. They had not been tested in a trial, and, as Professor Sir John Smith observed ([1995] Cr. L. Rev. 920, 926), it was not implicit in Pickford’s plea to inciting the boy that he also incited the mother. It was for a jury and not for the Court to determine whether the statements were true. If, as we believe to be the case, this court was not entitled to assume they were true, Pickford’s case is in the same category as the cases of McHugh, Molyneux and Farmborough, and Ayres.

We have concluded that the cases of El-Kurd and Singh (and to the extent that this point applies to his case, Sakavickas) fall into the category of case represented by R v McVitie. In their cases the defect was by an addition to the particulars rather than an omission, as it was in McVitie’s case. The judgment in Graham’s case states that a conviction will not be regarded as unsafe because it is possible to point to some "drafting or clerical error, or omission, or discrepancy, or departure from good or prescribed practice". The absence of a reference to “some addition” is not, in our judgment conclusive. The court in Graham’s case stated it would deprecate resort to undue technicality. Although the inclusion of the reference to "reasonable suspicion" in the appeals before us cannot be said merely to be a drafting or clerical error, neither could the omission of the word “knowingly” in McVitie’s case. They both relate to the required mens rea, and have the effect of lowering it, although in McVitie’s case by an omission rather than, as here, by an addition. To the extent that this point applies to Sakavickas’s case, it is, in fact on all fours with McVitie’s case because the indictment in Sakavickas’s case does not refer to a state of mind.

In our judgment the vital distinction between the present case and Graham’s case is that in that case this court was considering a series of appeals in which, on the facts pleaded and the facts relied on at trial, the offence charged could not be established. In the cases relied on by the Crown in Graham’s case (with the possible exception of Pickford’s case) the proviso was applied because the court considered that no miscarriage of justice had actually occurred because the appellants might, if duly indicted, have been convicted of some other offence. The removal of the reference to "reasonable suspicion" in the pleaded particulars would, leaving aside any question of misdirection in the summing-up, have enabled the appellants in the cases before us to have been lawfully and properly convicted of the offences of which they were charged. The court in Graham did not consider such a case. It was concerned with the nature of the defect in the practice of charging mortgage frauds under section 15 of the Theft Act. In the light of this, and the inability, on the facts relied on in all the cases before the court, to sustain a conviction of that offence, we do not consider that the passage from the judgment which is set out in paragraph 37 above has the very broad effect for which Mr Clegg and Mr Krolick contend.

In the cases of El-Kurd and Singh (and to the extent that this point applies to his case, Sakavickas) the facts relied on could constitute the conspiracy to money-launder offences with which they were charged in the statement of offence. The Crown did not charge them with the wrong offence or an offence unknown to law as had occurred in Preddy’s case and the other cases of mortgage fraud including those considered in Graham's case. The conspiracy count, while partially defective in that reference was made to "having reasonable grounds to suspect", was not wholly defective and, unlike the indictment in Preddy and Graham, could be cured by amending the pleaded particulars of offence.

On behalf of all these appellants it is submitted that the misdirections in the summings up as to the required mens rea are fundamental and that the convictions are accordingly not safe. On behalf of the Crown it is acknowledged that a misdirection as to the required mens rea potentially makes a conviction unsafe, but it is submitted that this Court is required to examine the evidence before the juries. It is submitted that, an examination of that evidence leads to the conclusion that, properly directed as to the required mens rea, it was inevitable that all four juries would have convicted these appellants of the offences with which they were charged.

The difficulty the Crown faces is that the issue of the mens rea required in a charge of conspiracy to money launder was at the core of all four cases. In all but one (Rana Singh’s) the defendants admitted handling the money and the issue was whether they did so dishonestly and with the requisite intention. The misdirection was not as to a discrete matter, for example how to treat a particular piece of evidence, such as the evidence about the conversation between Sakavikas and Reichwald in the Knightsbridge café, but went to the heart of the issue between the defendants and the Crown.

In effect, the Crown is inviting the Court to conclude that notwithstanding a major misdirection on the central issue at trial, the conviction is safe. In the context of dishonesty, there is a sharp difference between “knowledge” and “reasonable grounds for suspicion.” In none of these cases was the jury asked to consider whether, in the light of all the evidence before them, it was sure of the appellant’s guilt on the basis that they are required to have knowledge of the illicit origin of the money. We are being asked to retry these cases and uphold the convictions on a basis which was never put before and accordingly never considered by the jury.

In all the trials the Crown set out to prove a lesser intent than it was obliged to. Depending on the case, the Crown had to prove that the defendant and one other agreed to handle money which each knew was or would be the proceeds of crime or of other specified criminal conduct. The indictment in the cases of El-Kurd and Rana Singh included an intention less than that which had to be proved for a lawful conviction. The summing up in all four cases reflected the way the prosecution had put the case against the appellants. It permitted the jury to convict if they were sure the defendant had a lesser intent than that which was in fact necessary. In asking this court to conclude that the jury would inevitably have concluded that the defendant in question and one other had the necessary knowledge or intention this court is effectively being asked, on the basis of the papers, without seeing any witness or hearing any evidence, to resolve what, in these cases, was an essential factual issue and in the cases of El-Kurd, Sakavikas and Reichwald, given the admitted facts, the essential factual issue.

In the cases of El Kurd and Rana Singh, the Crown may face an additional difficulty. The Divisional Court observed in R (Director of Revenue and Customs Prosecutions) v Criminal Cases Review Commission [2006] EWHC 3064 (Admin) at [44], since their convictions their cases have been affected by the decision in R v Montilla [2004] UKHL50, which held that the Crown must prove that the money came from drug-trafficking or that it came from criminal conduct and that a specific finding as to which is necessary. In the cases of El Kurd and Rana Singh it is difficult to see an evidential basis for such a specific finding. The allegation against El Kurd was that he and his associates processed vast sums of money and had at least a suspicion that it was the proceeds of drug-trafficking or other criminal conduct but the prosecution was not able to say that he knew what the source of the money was: see the summing up at volume 1B,pp.14D-E,19D and in the difference in the treatment in the summing up of the charges relating to an offence under section 93C (the proceeds of criminal conduct) and those relating to an offence under the Drug Trafficking Act: see summing up Vol1B p.5F and p.30 ff. In Rana Singh’s case, the evidence was that he was a courier bringing money to several bureaux-de-change. In the light of the facts relied on by the Crown, it is difficult to see an evidential basis for a specific finding as to whether the source of the money was drug-trafficking or other criminal conduct. The Crown’s submission was that the overwhelming inference from the evidence is that Rana Singh “intended that the cash with which he would be dealing would be illicit.”

We turn to the individual cases.

In El-Kurd’s case the summing up (Vol 1B,p.18G-H) stated that the prosecution did not suggest that any of the defendants had direct knowledge and that the jury could therefore concentrate on whether they had "reasonable grounds to suspect". This was reinforced by the very wide definition of "to suspect" given by the judge on the next page (Vol 1B, p19). In effect the question of knowledge was withdrawn from the jury. Mr Clegg also relied on the difficulty the prosecution would have, on the facts of El Kurd’s case, of securing a specific finding that the money came from drug-trafficking or from criminal conduct.

Mr Clegg also submitted that, since the verdicts in El-Kurd's case were majority verdicts of 10:2 on the basis that reasonable suspicion sufficed, this court could not say that the jury would have returned guilty verdicts if they had been told that knowledge of the illicit source of the money had to be proved. El-Kurd did not give evidence. The defence advanced on his behalf by Mr Marshall-Andrews QC, his trial counsel, was he had engaged in tax evasion on a massive scale (see vol. 1B, p 45; vol. 4, p 51; vol. 5, p 88; [2001] Cr. App. R. 234 at [25]) but not in a conspiracy to money launder. The defence advanced on his behalf was thus that the bureau-de-change which he owned, the Notting Hill Exchange, was run honestly, that he had changed all the money identified, but that he did not suspect that it was the proceeds of criminal conduct.

It was also argued that even if, on the evidence and in the light of the admissions made on behalf of El-Kurd, this court was satisfied that he had the requisite knowledge, it could not be satisfied that his co-defendant McGuinness had such knowledge.

The Crown submitted that there is compelling evidence that El-Kurd either knew or intended the money to be the proceeds of crime. It relied in particular on the admitted facts before the jury. It was admitted that El Kurd was the owner of the Notting Hill Exchange bureau-de-change and that, between May 1994 and November 1996, it changed some £80 million in cash into a variety of foreign currencies at a variety of outlets. None of the transactions were recorded in the exchange's records or accounts. It was admitted that El Kurd had fifty-five bank accounts, and that, following his arrest, the safe at the exchange was found to contain £150,000, 206,00 Dutch guilders and some other currencies. It was also admitted that the following sums were found in a number of safe deposit boxes registered in his or his wife's name, £60,500, £399,950, £70,000, 600,000 Dutch guilders, and US$70,000. There was also some jewellery. The cash in the safe deposits totalled some £530,000 and the overall the cash covered by the admissions is some £800,000. Mr Sells submitted that, on this evidence, had the jury been directed that they must be sure that El-Kurd and the parties to the agreement knew the money was the proceeds of criminal conduct, they would have done so. El Kurd was at the hub of an operation which involved couriers delivering cash to his office in circumstances in which this court in Suchedina and Ramzan said were suspicious. On over a hundred and forty occasions cash was taken abroad by a co-accused shortly after its delivery in sterling to El-Kurd, and El-Kurd was in personal regular telephone contact with the couriers both within the UK and overseas. Mr Sells also relied on the sophisticated and expensive anti-surveillance devices in El-Kurd's office the large number of lies, inter alia about who came to the office, he told on his arrest.

We have referred to the fact that, in El-Kurd's case, while there was reference to knowledge, the jury were told to concentrate on reasonable suspicion. In asking this court to conclude that the jury would inevitably have concluded that El Kurd and one of his co-conspirators had the necessary knowledge or intention this court is effectively being asked to resolve what was, given the admitted facts, the essential factual issue at the trial. This court would in effect have to determine a case which had never been put before the jury. Unless the admitted facts are overwhelming, it should not do so. The strength of case required is illustrated by Ramzan’s case. It involved a similar misdirection to those in the appeals before us. Over a period of eighteen months Ramzan had processed about £97.5 million cash, which had been collected surreptitiously in car parks all over the country and made on his own account a profit of around £700,000. This court stated that, had it been considering an application for leave by him, it would not have granted it because it did not detect any injustice in his conviction. Notwithstanding this, the court concluded that Ramzan’s conviction was unsafe, quashed it and ordered a retrial: [2007] 1 Cr. App. R. 150, at [66].

In R (Director of Revenue and Customs Prosecutions) v Criminal Cases Review Commission the Divisional Court, while expressing no concluded view on the merits of the appeals referred to this Court by the Commission, including those by El-Kurd and Rana Singh, stated ([2006] EWHC 3064 (Admin) at [46]) that even if the Commission had taken account of the substantial injustice test applied by this court when considering an application for leave to appeal out of time, it would have been virtually certain that it would have referred the cases.

The prosecution’s case against El Kurd on the admitted facts was undoubtedly very strong. We are, however, driven to conclude that despite its undoubted strength, his conviction is not safe. In his case the essential factual issue before the jury was his intention. Even if the admitted facts and circumstances concerning El-Kurd himself are regarded as overwhelming and undisputed evidence from which we can be sure that a jury properly directed would have been sure that he had the requisite knowledge, the same cannot be said about the co-conspirators. Additionally, as we have noted, a difficulty may also arise from what can be called the Montilla requirement.

For these reasons, El Kurd’s conviction is unsafe and must be quashed.

In the cases of Sakavickas and Reichwald the criminal provenance of the money from smuggling was identified and proved.

Sakavickas’s position differs from that of the other appellants before us because, whereas the Crown’s case against them was that they were money launderers, its case against him was that he was the primary criminal. This is seen from the way the indictment was framed. It charged him and his co-defendants with facilitating the retention or control "by or on behalf of Rolandas Sakavickas and others with the proceeds of criminal conduct of Rolandas Sakavickas and others". This was also reflected in the summing up: see, for example, vol. 5, pp. 5-7 and 20. He accepted that he was involved in the movement of money from the tobacco business with Eddishaw. His defence was that he was unaware that the duty had not been paid and believed that the tobacco business between Eddishaw and his Lithuanian partners was a normal entrepreneurial deal. However, he also accepted (summing up Vol. 2 p. 88 lines 5-7) that he did not believe that Eddishaw’s tobacco business at the material time was legitimate.

Mr Clegg argued that although the case against Sakavickas was put on the basis of knowledge, much of the prosecution’s case was rejected by the jury. The jury failed to reach a verdict on the co-defendant Radzeviciute, and reached a majority verdict in respect of Sakavickas but a unanimous one in respect of Reichwald. Moreover, as is conceded by the Crown, the summing up left the jury a route to convicting Sakavickas via suspicion because at the time it was thought that sufficed as the mental element in a charge of conspiracy to money launder. While there are references to knowledge in the summing up (see for example vol. 1 p.15 line 4 and vol.5 p.14 line 23) there are also references to "knowledge or suspicion" (see vol.1 p.14 lines 22-3, p.17 line 11 and pp. 15-16, vol.5 p. 15 lines 2, 6-7 and p. 18). Accordingly, he argued that, although the case against Sakavickas was put on the basis that he was the primary criminal and the money was the proceeds of tobacco smuggling by him and others, the jury might have concluded that it sufficed that he suspected that the money was the proceeds of such tobacco smuggling rather than that he knew of it. In the light of the facts relied on by the prosecution and the way the case was summed up by the judge, we do not accept this argument. The jury were told that they had to be sure that the money was the proceeds of tobacco smuggling by Sakavickas and others: see summing up vol.1 p. 10 line 18, p. 13-14; vol. 3 p. 30 and vol. 5 p. 12, lines 9 and 29, and pp. 18-19. Their verdicts mean they must have disbelieved Sackavickas’s assertion that he was not involved in any illegitimate tobacco smuggling and the money he was dealing with was legitimate. Accordingly, they must have been satisfied that he knew that he was engaged in criminal conduct.

Mr Clegg also relied on a departure from the trial judge’s direction in respect of what was described as the first hurdle in support of his submission that we could not be sure of the safety of Sakavickas’s conviction. The trial judge directed the jury that they must be sure that the money was the proceeds of tobacco smuggling by Sakavickas and others; that is that Sakavickas was a principal. However, whereas a majority of the jury found Sakavickas guilty, they unanimously found Reichwald guilty. This, submitted Mr Clegg, meant that two of their number did not find that Sakavickas was a principal and did not follow the judge’s direction; that they could only convict if they found that Sakavickas was a principal. We do not consider that this in itself undermines the safety of Sakavickas’s conviction. A requisite majority of the jury was sure that Sakavickas was a principal and that the money was the proceeds of tobacco smuggling by him and others.

That, however, is not the end of the matter because Sakavickas was charged with conspiracy and the jury had to be sure that one or more of his fellow conspirators had the requisite knowledge or intent as to the criminal provenance of the money. The direction given (vol.1 p.14 lines18-25) was that the case against Sakavickas could be proved by proof of suspicion in the minds of his co-defendants or the other unspecified co-conspirators as to the provenance of the money. Mr Clegg submitted that, in the light of this, his conviction cannot be regarded as safe unless we are satisfied that the only reasonable and proper conclusion was that either his co-defendants or the unspecified co-conspirators had that knowledge. As far as Sakavickas’s co-defendants are concerned, in the light of the jury’s failure to agree about Radzeviciute, the possibilities are Reichwald, Eddishaw and Roden.

The focus of the Crown's submissions concerned Reichwald’s position and state of mind. The Crown relied on the evidence of the close professional relationship between him and Sakavickas and other evidence in support of their submission that the only reasonable and proper verdict for the jury, had they been directed properly, was that Reichwald knew of the criminal provenance of the funds.

In relation to Reichwald, Mr Jeremy QC, on behalf of the Crown relied on the following evidence. Some £5.8 million in cash had been paid into Reichwald's account in the conspiracy period when the evidence was that Reichwald had not received cash from any other fur customer. On one occasion Reichwald was recorded on video paying in £186,000 in cash at the Chancery Lane branch of the HSBC bank and on another occasion on another day Sakavickas was seen paying in £35,000 to the HSBC branch in Knightsbridge and Reichwald waiting nearby in his car. The evidence before the jury was that cash transactions were unusual in the fur trade. Moreover, the cash was in sterling and not US dollars, which was the currency that featured in the Russian fur trade, and a large proportion was in the form of United Kingdom “country” notes, that is Scottish or Northern Irish banknotes. No explanation was given as to why Russian purchasers would pay in sterling and with United Kingdom country notes. Mr Jeremy also relied on the fact that the payments were paid into Reichwald's bank accounts in a fragmented way; that is drop-offs on the same day in different banks or different branches and on conversations overheard between the two. Particular reliance was placed on a meeting at the Knightsbridge Café on 20 October 2000 (vol. 2 pp. 11-22) although what happened at that meeting was disputed. Reliance was also placed on the fact that instructions were apparently sent to Reichwald by non-existent companies, and contracts with those companies were signed by him: vol.2 pp 59-60,63, and 93; vol.3 pp 18-20). The submission was that a large number of forged documents were created to cover the real provenance of the cash. The Crown also relied on what Mr Jeremy described as a cut-throat defence of an extreme kind with disputes as to who was issuing instructions, and the allegation by Sakavickas that, while they were in custody, Reichwald had sent him a document setting out the answers Sakavickas should give to the questions and Sakavickas's evidence of a conspiracy between Reichwald and Eddishaw but not himself.

On behalf of Reichwald, Mr Rees QC submitted that the context in which he Reichwald put £5.8 million in cash through his bank accounts meant that his fee in respect of that sum was 3%, equivalent to the fees he had charged for his work as a fur broker over 30 years. Mr Rees submitted that the jury might have taken the view that, had Reichwald known that what was going on was criminal, he would have charged a greater commission than he charged for legitimate business. Secondly, the evidence of Mr Merriman, largely uncontroversial, was that, in the five year period from 1995, Reichwald shipped skins of a total value of over £11 million. Mr Rees submitted that this sets a different scene from which the jury might not have been satisfied that Reichwald knew of the criminal provenance of the money arriving from Sakavickas.

Mr Rees also relied on the evidence about the effect of the crash of the rouble when Reichwald was said to have been doing his best to stop Sakavickas's company from failing because at that time there was a considerable amount of commission still outstanding: vol.3 pp, 15-16. It was only after the crash of the rouble that Sakavickas and the people acting on his behalf started bringing sterling rather than dollars. Mr Rees submitted that the fact that this did not strike Reichwald as odd or ring alarm bells, and that he had no suspicions about it should be seen in this context. He also submitted that the treatment of this in the summing up showed that the thrust of the way the case was left to the jury was on the basis of suspicion and not knowledge. Mr Rees also pointed to the evidence that the reason for the fragmented payments was that a single deposit made at a single branch of HSBC took hours and tied up a number of members of staff and that it was to avoid this that they chose a fragmented means of paying the money in. He also relied on the fact that the transactions represented by the £5.8 million pounds were all logged in Reichwald's books. As to the forged documents seized at his address, the issue was not whether the documents were forged but what he believed about those documents. Mr Rees submitted that Reichwald was a man in his sixties of good character, a very successful businessman, and that we we are not able to conclude that the jury would inevitably have found that he had the requisite knowledge of the illicit provenance of the money.

We do not doubt that the Crown's case that Reichwald had the requisite knowledge of the provenance of the money was a strong one. There was no explanation by Reichwald as to how sterling and country notes had got into the Russian economy (vol.3 p. 16), or in relation to the creation of a document suggesting the concealment of the source of the money (vol.3 pp 21-23). Reichwald’s admission that it was only Sakavickas who paid him in cash (vol.3 p 29) and the fact that, if Reichwald was an innocent party, Sakavickas would have been taking an enormous risk in allowing bogus companies to remit money and to give instructions to Reichwald concerning vast sums of money, would also be powerful factors for a finder of fact. Again, and as in El Kurd’s case, we are being asked to resolve the essential factual issue in the case. The case was left to the jury on the basis that Reichwald's role was that of a launderer and that suspicion on his part would suffice: vol.1 pp. 14,15; vol.3 p16 and vol.5 p14. As we have already stated, in the context of dishonesty, the difference between a requirement of suspicion and a requirement of knowledge is large. Notwithstanding the strength of the case against him, in the light of the matters Mr Rees put before us, we are not able to conclude that the jury would inevitably have found that he had the requisite knowledge of the illicit provenance of the money.

For these reasons we are unable to conclude that the jury would inevitably have concluded that Reichwald had the requisite knowledge and would have convicted him. Accordingly, Reichwald’s conviction is not safe and must be quashed, and thus provides no support for the safety of Sakavickas’s conviction.

We can deal with the position of the unspecified co-conspirators briefly. Mr Clegg invited us to conclude that there was no evidence before the jury which would have led them to be sure that those persons knew of the criminal provenance of the funds, and that they cannot provide support for the safety of Sakavickas’s conviction. He also argued that the Crown might have faced jurisdictional difficulties if those co-conspirators operated entirely outside this country. We note that the second of these submissions is one that was not raised during the trial or in Mr Clegg’s written submissions. We, however, accept that there was no evidence before the jury which would have led them to be sure that those persons had the requisite knowledge of the criminal provenance of the funds.

We turn to the position of the co-defendants who pleaded guilty. We note that Eddishaw and Roden pleaded guilty to count 1 whereas Sakavickas and Reichwald were convicted of count 2. This may, however, not be significant. Eddishaw and Roden are named as co-conspirators in both counts. Moreover, the period of the conspiracy in the two counts is identical and the criminal conduct is substantially identical. The difference in the conduct charged is that, in count 1 it was “facilitation or control by or on behalf of Sakavickas and Eddishaw” and the criminal conduct charged was “by Sakavickas and Eddishaw”, whereas in count 2 it was “retention or control” and the proceeds of criminal conduct were stated to be those of Sakavickas "and others".

Mr Clegg submits the Crown gains no assistance from the position of the co-defendants who pleaded guilty because those co-defendants may have done so on the basis of suspicion as to the criminal provenance of the money. In Saik's case the plea was offered on the basis that Saik only suspected that the money was the proceeds of crime and (see [2006] 2 WLR 993, at [29]) the Crown accepted it on that basis. Here Eddishaw pleaded guilty on the basis that he joined an existing conspiracy in 2000 but it does not appear that either his plea or Roden’s was qualified by reference to their state of mind. We have little information about Roden’s position or the evidence concerning him beyond observation evidence on 7 December 2000 that he paid £21,000 cash into a branch of HSBC and referred to “tomorrow’s money” and “£8,000 a packet” at a meeting with Eddishaw. In interview he said he thought the money came from the fur trade and that he had checked on loads of timber being imported. Eddishaw was more forthcoming in interview. After being informed of a covert recording of a meeting between him and Sakavickas on the day of their arrest at the London Hilton Park Lane, he made a number of potentially significant statements. He said that Sakavickas had first contacted him over some missing money, and he (Eddishaw) tried to help recover it. He also said that they misused the names of certain companies to import the cigarettes, that he was asked to deposit money for Sakavickas, and the money seized when he Sakavickas and Radzeviciute were arrested was the proceeds of sale of one load of cigarettes. This, in particular, Eddishaw’s knowledge that they “misused” the names of companies to import the cigarettes, strongly suggests that he knew that the cigarettes were being smuggled into the country.

Nevertheless, in the light of the then understanding of the law, Eddishaw’s plea could have been tendered on the basis of either knowledge or suspicion. Mr Clegg is correct in submitting that neither is proved by the plea. Nor do his statements in interview unequivocally state he knew that the cigarettes were being smuggled into the country. For these reasons we are unable to conclude that the jury would inevitably have concluded that the co-defendants who pleaded guilty had the requisite knowledge. Accordingly, Sakavickas's conviction is also unsafe and must be quashed. To echo the statement of Rose LJ in Kansall No. 2, we reach this conclusion with no enthusiasm whatever. We, however, feel driven to it because the misdirection concerned the central issue in the case which lay at the heart of the case throughout a long trial.

On behalf of Rana Singh, Mr Krolick submitted that the prosecution case and the summing up proceeded on the basis that knowledge or reasonable grounds for suspicion by Rana Singh and his co-defendant sufficed. Anticipating the decisions in Liaquat Ali and Saik, at the trial Mr Krolick submitted that in a conspiracy to money launder, knowledge was required but this was rejected. The approach taken by the trial judge and by this court when Rana Singh's case came before it was criticised in Liaquat Ali and Saik, see Lord Hope at [65] and [72].

The Crown relied on two main lines of evidence. Customs and Excise officers had observed Rana Singh and his co-accused Dhaliwal visiting two bureaux-de-change in Notting Hill Gate and carrying large bags in and out of them and Rana Singh visiting other bureaux-de-change in Paddington and Earls Court. The Crown submitted that Rana Singh, as a courier bringing money to the bureaux-de-change, was closer to the principal criminals than a bureau owner such as El Kurd. Observations were also made of a number of day visits to Amsterdam by Rana Singh. Secondly, the Crown relied on evidence by Sharif, the owner of the bureaux in Notting Hill Gate, members of his staff, and one Assan. Assan said he had introduced a man who he knew as Rana to Sharif, and Sharif spoke of having conducted some of the transactions with a man he knew as Singh or Sink who had been introduced to him by Mr Assan. A number of the transactions recorded in the name of Singh or Sink corresponded with the observations of Rana Singh’s visits to one or other of the bureaux.

The other evidence at the trial was a schedule of transactions over the nine month period of the alleged conspiracy showing where and when 42 alleged exchanges of sterling for guilders were transacted. The schedule was compiled from the records of the bureaux and evidence about it was given by Mr Sharif and his employees. Neither Mr Sharif nor his employees had identified Rana Singh or had been asked if they could identify him but they spoke of the man who they knew as Singh or Sink making substantial exchanges on the days and in the amounts set out in the schedule. Early in the period of the alleged conspiracy Rana Singh and his co-defendant were stopped by a customs officer at Dover and 600,000 Dutch guilders were found in the car. Rana Singh denied knowledge of the money under his seat and was allowed to proceed.

The Crown submitted that the evidence in Rana Singh’s case gives rise to “an overwhelming inference” that he “intended that the cash with which he would be dealing would be illicit”. On this basis and in the light of his absconding from his trial and giving an explanation for doing so which this court ([2003] EWCA 3712 Crim. at [65-66]) said was “bizarre” and “unbelievable” they argued that this court could be satisfied that properly directed the only reasonable and proper verdict for the jury would have been that Rana Singh was guilty.

We, however, accept Mr Krolick's submissions that we cannot be so satisfied. He relied on the absence of any evidence led by the Crown which pointed to knowledge as opposed to reasonable grounds for suspicion and to the absence of evidence as to the provenance of the money as criminal. Rana Singh's defence was that it was his co-defendant who effected all the transactions and that he was merely present but not a participant. In the absence of evidence by him and in particular given his absence from his trial, the jury may well have rejected this. But, as in the other cases before us, for us to conclude that they would, involves this court taking a view on the central factual issue in the case, an issue which was for a jury to decide. In Rana Singh's case, unlike El-Kurd's and Sakavickas's cases, there were no substantial admissions. Although the observations of him attending the bureaux were agreed, neither the schedule of transactions nor that he was involved in them were agreed. Moreover, Mr Sells was not able to point to any specific evidence led in the case which necessarily pointed to knowledge or intention as opposed to reasonable grounds for suspicion. The quantity of banknotes exchanged could not in themselves be evidence of the prior intention of the conspirators at the time of the agreement unless there was evidence that, at that time the quantity of notes to be exchanged in the future was known to them.

In relation to what the Crown say is the overwhelming inference of intent from the evidence, Mr Krolick also relied upon what he submitted are difficulties in the chain of identification of Rana Singh by Assan, the man who it is said introduced him to Sharif, the bureaux owner. Mr Krolick was not seeking to reopen submissions rejected by this Court in Rana Singh’s first appeal: [2003] EWCA 3712 Crim. at [41-7]. He, however, argued that the previous submissions were made in the context of a focus on Rana Singh's conduct during the conspiracy but that the Crown's submissions as to intention shifted attention from that to Rana Singh's conduct at its inception when the agreement was made. Mr Krolick submitted that the evidence as to whether Rana Singh was the man introduced by Assan to Sharif, and if so when, becomes material and that the failure to obtain any identification of the man, or the men, with whom they were dealing, prevents any finding by this court concerning the quality of evidence at the inception of any agreement involving Rana Singh. Additionally, difficulty may also arise from the Montilla requirement.

We also accept Mr Krolick’s submission that, even if we were satisfied that the only reasonable and proper verdict for the jury would have been that Rana Singh had the requisite knowledge, we cannot be satisfied that his co-defendants who pleaded guilty had it. They may have pleaded on the basis of reasonable grounds for suspicion about the criminal provenance of the money. In this case we have much less information about them than is available in Sakavickas’s case about Eddishaw: see paragraphs 82-4 above. It is not known whether there was a basis of plea and there is no material before us as to what, if anything, they said in their interviews. We are unable to conclude that the jury would inevitably have concluded that the co-defendants who pleaded guilty had the requisite knowledge, so that their pleas cannot provide support for the safety of Rana Singh’s conviction. Accordingly, his conviction is also unsafe and must be quashed.

Mr. Jeremy submitted that if we conclude the verdicts in these two cases are unsafe, we should substitute convictions for substantive offences under section 3 of the Criminal Appeal Act 1968. That section states:

“(1)

This section applies on an appeal against conviction, where the appellant has been convicted of an offence [to which he did not plead guilty] and the jury could on the indictment have found him guilty of some other offence, and on the finding of the jury it appears to the Court of Appeal that the jury must have been satisfied of facts which proved him guilty of the other offence.

The Court may, instead of allowing or dismissing the appeal, substitute for the verdict found by the jury a verdict of guilty of the other offence…”

Section 6(3) of the Criminal Law Act 1967 provides:

“Where, on a person’s trial on indictment…the jury find him not guilty of the offence specifically charged in the indictment, but the allegations in the indictment amount to or include (expressly or by implication) an allegation of another offence…the jury may find him guilty of that other offence or an offence of which he could be found guilty on an indictment specifically charging that other offence.”

Here, an agreement contrary to section 93A of the Criminal Justice Act 1988 was alleged. Section 93A provides:

“(1)

Subject to subsection (3)…if a person enters into or is otherwise concerned in an arrangement whereby-

The retention or control by or on behalf of another (“A”) of A’s proceeds of criminal conduct is facilitated (whether by concealment, removal from the jurisdiction, transfer to nominees or otherwise)…knowing or suspecting that A is a person who is or has been engaged in criminal conduct or has benefited from criminal conduct, he is guilty of an offence…

“…(4) In proceedings against a person for an offence under this section, it is a defence to prove-

that he did not know or suspect that the arrangement related to any person’s proceeds of criminal conduct…”

Mr. Jeremy submitted that an offence under section 93A is committed if a person is “concerned in” the continuous activity of arranging to launder the proceeds of crime. Such activity may be charged as a single substantive offence, albeit more than one act may be involved. It is analogous to the continuing fraudulent evasion of excise duty under the Customs and Excise Management Act 1979, often charged in such a way: see for example Martin and White [1998] 2 Cr. App. R. 385. Silva [2006] EWCA Crim 1654 was an example of a section 93A charge covering several transactions as part of the same arrangement.

Provided the jury was sure of a defendant’s involvement in one or more specific transactions with the requisite knowledge (either specific knowledge or suspicion), it was open to them, submitted Mr. Jeremy, on the indictment alleging conspiracy, to convict of a substantive offence under section 93A. That being so, he submitted, it would be open to this Court to substitute such a verdict in that defendant’s case.

Here, argued Mr. Jeremy, the commission of what amounted to substantive offences was the basis of the allegation of conspiracy. A conviction for conspiracy must mean that the jury in each case was sure of the commission of substantive offences. It must have been sure that Reichwald was involved in an arrangement by which the proceeds of Sakavickas’ criminal were facilitated. It must too have been sure that Sackavickas was a party to the arrangement between him and Reichwald by which the proceeds of his criminal conduct were facilitated. That being so it could have convicted of the substantive offences.

The ambit of section 6(3) was considered by the House of Lords in R v Wilson (Clarence) (1983) 77 Cr. App. R 319. Lord Roskill, in the only speech, said:

“…the issue…is not whether the allegations in the section 20 charge [of inflicting grievous bodily harm contrary to section 20 of the Offences against the Person Act, 1861] expressly or impliedly, amount to an allegation of a section 47 charge [assault occasioning actual bodily harm], for they plainly do not. The issue is whether they “either expressly or impliedly include such an allegation. The answer…must depend upon what is expressly or impliedly included in a charge of “inflicting any grievous bodily harm…if A includes B, it must be because A is sufficiently comprehensive to include B. Thus A may include B, but B will not necessarily include A, though of course B may do so…I do not think it is relevant, in order to determine whether A includes B, to ask whether proof of B is a “necessary step” to proof of A…”

In Graham Lord Bingham CJ said:

“Before this Court could substitute a conviction of an alternative offence the prosecution would have to establish two requirements: (1) that the jury could on the indictment have found the appellant guilty of some other offence (offence B) and that (2) the jury must have been satisfied of facts which proved the defendant guilty of offence B. As to (1) it would be sufficient if looking at the indictment (not the evidence) the allegation in the particular count in the indictment charging offence A expressly or impliedly contains an allegation of offence B. A count charging offence A impliedly contains an allegation of offence B if the allegation in the particular count would ordinarily involve an allegation of offence B and on the facts of the particular case did so. As to (2) this Court only has the verdict of the jury to go on…” See page 312G.”

The Court in Ramzan considered the application of section 6(3) and substitution (although not in the context of an allegation under section 93A). Lord Justice Hughes said (at paragraph 52):

“A conspiracy is an offence complete at the time of the agreement, whether or not it is subsequently carried out by the commission of the substantive offence. Therefore it is submitted here on behalf of the defendants, that the juries could not have convicted of the substantive offence…The Crown’s argument is that that…would mean that “includes” in section 6(3) adds nothing to “amounts to.” The Crown submits that in a sizeable proportion of conspiracy cases, perhaps the majority, the agreement is proved by overt acts amounting to the commission of the substantive offence. Thus…a count for conspiracy does not amount to a charge of a substantive offence, but includes it…Looking only at the indictment, it can be seen that a conspiracy to commit a particular substantive offence includes that substantive offence…”

The Court however decided that it was not possible to identify substantive offences of which the jury must have been sure. Although it was not necessary for the Court to decide the Crown’s submissions on the first limb, it saw “a good deal of force in the Crown’s submissions on this first stage of the section 3 test.”

It seems to us there are considerable difficulties with Mr. Jeremy’s submission. Our attention was not drawn to any previous occasion when this Court has substituted a conviction for a substantive offence following a conviction for conspiracy. The circumstances, if any, in which it would be appropriate to do so would be unusual. Neither has our attention been drawn to any case in which a jury has been invited to convict of a substantive offence on an indictment alleging only conspiracy. Given that an allegation of conspiracy is made out on proof of the agreement to commit the substantive offence, it does not seem to us that as a matter of logic it can be said that an allegation of conspiracy invariably amounts to or includes a substantive offence, albeit the prosecution may seek to prove the conspiracy by relying on overt acts. It would not have been open to the jury to convict of a substantive offence under section 6(3). This Court cannot therefore substitute such an offence. Mr. Jeremy’s submission fails at the first requirement.

By section 7 of the Criminal Appeal Act 1968:

“(1)

Where the Court of Appeal allow an appeal against conviction and it appears to the Court that the interests of justice so require, they may order the appellant to be retried.

(2)

A person shall not under this section be ordered to be retried for any offence other than-

the offence of which he was convicted at the original trial and in respect of which his appeal is allowed…

an offence of which he could have been convicted at the original trial on an indictment for the first-mentioned offence…”

As to the appropriate approach for the Court to adopt, Lord Bingham CJ said in Graham:

“[Whether the interests of justice require a retrial requires] an exercise of judgment, and will involve consideration of the public interest and the legitimate interests of the defendant. The public interest is generally served by the prosecution of those reasonably suspected on available evidence of serious crime, if such prosecution can be conducted without unfairness to or oppression of the defendant. The legitimate interests of the defendant will often call for consideration of the time which has passed since the alleged offence, and any penalty the defendant may already have paid before the quashing of the conviction.”

We deal first with an argument advanced by Mr. Krolick on behalf of Singh which goes to the Court’s power to order a re-trial in his case. The submission can be encapsulated in the following way.

Under section 7(2)(a) the Court can only order a re-trial for the offence of which Singh was convicted. Although Singh was convicted of conspiracy, no re-trial could take place on the basis of that indictment, for its particulars were defective. Any re-trial can only take place on an amended indictment. This Court has no power to amend an existing indictment: see Garfield v Maddocks (1973) 57 Cr. App. R 372. It cannot therefore order a re-trial for the offence of which Singh was convicted.

In Hemmings, Miller and Hoines [2001] 1 Cr. App. R. 360 this Court considered whether the trial judge on a re-trial after a successful appeal had the discretion to amend an indictment under section 5 of the Indictments Act 1915, when the Court of Appeal had ordered a re-trial on that indictment. In that case none of the sub-sections of section 7 applied. As it was summarised by Clarke LJ, giving the judgment of the Court, the issue came to this:

“…whether on a re-trial ordered by this Court, the judge has power to permit an amendment of the fresh indictment in an appropriate case; in particular whether he has power to permit an amendment which has the effect of the appellant being re-tried for offences for which this Court has no power to order a re-trial.”

The Court decided section 7(2) did not prevent the judge ordering the amendment of a defective indictment. Provided, first the amendment did not place the defendant in a worse position than he was at the first trial and, second, the criteria of section 5 of the Indictments Act 1915 applied, the judge had the power so to do.

We have the proposed indictment in Singh. There are three counts of conspiracy to contravene section 49(2) of the Drug Trafficking Act 1994 and/or section 93C(2) of the Criminal Justice Act 1988 as amended: see the Statements of Offence. The particulars allege that with those named Singh conspired to remove from the jurisdiction property “intending that [it] would be, or would in whole or in part directly or indirectly represent another person’s proceeds of drug trafficking and/or criminal conduct…”

The significant difference between the original and proposed indictments is that the particulars of the proposed indictment limit the mental element to intention, reference to “having reasonable grounds to suspect” having been omitted. In our view such a change does not take the proposed indictment outside the ambit of section 7(2)(a). The offence as now drafted is still “the offence of which he was convicted at the original trial.” It is not a question of the Court permitting amendment of the indictment. The only question is whether the proposed indictment falls within the provisions of section 7(2)(a). Garfield v Maddocks does not help on the construction of that section. That case concerned a wholly different situation: the substitution on appeal from the magistrates court to the crown court of an offence of insulting behaviour whereby a breach of the peace was likely to be occasioned, the conviction in the magistrates court having been for threatening behaviour with intent to provoke a breach of the peace, a different offence with a different mental element.

We should make it clear that we have not considered the precise form of the proposed indictment. In particular, we have not considered the appropriateness of alternative allegations under the Drug Trafficking Act 1994 and the Criminal Justice Act 1988, considered in Montilla (see paragraph 59 above). Subject to what was said by this Court in Hemmings and others, it would of course be open to the trial judge to permit amendment of the proposed indictment.

It does not seem to us, as Mr. Krolick further submitted, there would be any difficulty in dealing with the position of the co-defendants in any re-trial. The judge would make it clear that the jury could not convict Singh unless it was sure that he and at least one co-conspirator had the intention alleged.

Mr. Krolick also submitted that in the light of Saik the judge at the first trial was wrong not to allow his application to quash the indictment. He should too have found there was no case to answer at the close of the prosecution. Mr. Krolick emphasised the time which has elapsed since the incidents relied on at trial. Any re-trial, he submitted, would involve serious factual disputes between the appellant and prosecution witnesses. It would be difficult for the jury to reach any sensible verdict on any counts the Crown might pursue given that one of the proprietors of the exchange bureau and his staff had been informants and that the proprietor had committed perjury in another trial and been criticised for the quality of his record keeping.

We can deal with those further points shortly. It does not seem to us that the judge’s failure to quash the indictment at the first trial is a factor weighing against a retrial. Neither do we accept the jury on a re-trial would not be able to resolve the factual issues raised by Mr. Krolick. Properly directed there is no reason on the information before us to think they could not reach safe verdicts.

We now turn to the general points made by all the appellants.

On behalf of El Kurd Mr. Clegg submitted that it would not be in the interests of justice to order a re-trial in his case. He has served his sentence, including for non-payment of the fine. He is now rebuilding his life. On the last occasion the trial took 5 months. In the circumstances it would not be appropriate for court time to be taken up re-trying him. It would not now be in the interests of justice for him now to stand trial again.

Sakavikas, submitted Mr. Clegg, has served his entire sentence. He is now serving the additional 4 years in default of paying the sum ordered by way of confiscation. He has a year still to serve. By the time of any re-trial he will have served it. He has not been eligible for parole because he is a foreign national with no address in the United Kingdom. The offences are old. The public interest would not best be served by a re-trial.

On behalf of Reichwald Mr. Rees made, among others, the following points. The allegations are now old. A re-trial now would cause severe prejudice. His client has served the custodial part of his sentence. As a result of the trial, in addition to serving his sentence, he lost his professional reputation, his home, the family business he inherited, his standing in the community, his wife divorced him, and his children do not speak to him. He is now 67. His health is poor.

Mr. Krolick on behalf of Singh submitted that the appellant has served his sentence. He is almost 60 and in poor health. He has lost face in his community and has had serious problems with his family. A re-trial would exacerbate the position when he has tried to re-establish himself.

As it seems to us, each of these appellants could have been convicted of conspiracy at the original trial on an appropriately worded indictment. In none of these cases, even on the basis of knowledge, was the evidence less than cogent. We are conscious of the stress of any re-trial. We bear in mind the medical evidence submitted to us. We bear in mind too that the events occurred some time ago. While acknowledging all the points made on behalf of these appellants, we have no doubt it is in each case in the interests of justice for there to be a re-trial. These are very serious allegations. The public interest requires they be tried. The time which has elapsed has not been such as to make a fair trial impossible. Much of the evidence is documentary. Although not decisive, we observe too, that in Ramzan and very many similar cases, this Court has ordered a re-trial.