R v Christopher Michaelides

MRS JUSTICE MAY: This is a renewed application for leave to appeal sentence following refusal by the single judge.

On 15 April 2021 in the Crown Court at Woolwich the applicant pleaded guilty to a number of offences associated with drugs and firearms: conspiracy to evade the prohibition on the importation of controlled drugs, conspiracy to supply a controlled drug, possession of a prohibited firearm, possessing ammunition without a certificate or authority, possession of an identity document with improper intention, possessing a prohibited weapon and producing a controlled drug of class B.

On 29 October 2021 he was sentenced to a total of 20 years' imprisonment.

Proceedings under the Proceeds of Crime Act 2002 ("POCA") were commenced against him. These proceedings culminated on 26 September 2024 in a confiscation order requiring the applicant to pay £3,450,000 within three months or in default to serve 11 years' imprisonment consecutive to the sentence of 20 years passed for the offending. The present application for leave to appeal sentence solely concerns that confiscation order.

The facts of the offending are fully set out in the Criminal Appeal Office Note. It is unnecessary to repeat them all here. In short, the applicant was apprehended through Operation Venetic, the UK investigation into users of the EncroChat network. The evidence showed that the applicant had occupied a key role in the importation of class A drugs. He had arranged transport for the importation and onward distribution of cocaine. He had close contact with senior members of organised crime groups here and abroad and was proactive in business development, thereby encouraging the international trafficking of very large amounts of cocaine.

Confiscation hearings took place from 1 to 5 July 2024 and on 9 September 2024. The applicant gave evidence over three days at the first hearing from 3 to 5 July. The matters in dispute were:

By his written ruling on 5 August 2024, the judge noted that there was no dispute that this was a criminal lifestyle case to which the POCA assumptions applied. The case of Briggs-Price [2009] 2 WLR 1101 relied on by the defence did not apply as that case had concerned benefit from particular criminal conduct, not the application of the criminal lifestyle assumptions, as here. The judge found that the Court of Appeal cases of R v Whittington [2009] EWCA Crim 1641 and R v Bagnall & Sharma [2012] EWCA Crim 677 had established that the prosecution were entitled to adduce evidence of a defendant's involvement in criminal offences of which he had not been convicted where it was relevant to the making of the assumptions and that the prosecution were not obliged to prove those offences beyond reasonable doubt. However he went on to say that if it was necessary to be sure then he was sure that the applicant had been involved in drug importation for at least six years before he was charged with the offences resulting in conviction and sentence. The judge was satisfied that the applicant's share of the transport fee was £500 per kilo and that from 2 July 2014 to the end of March 2020 the applicant received 138 payments of £25,000 totalling £3,450,000. That was accordingly the benefit figure.

There was a further hearing on 9 September to determine the recoverable amount. The prosecution contended that the applicant had been paid in cash for the transport services which he provided over the six year period and that although the investigation had not succeeded in locating all the cash, or assets purchased with it, the large majority must still be in existence and available to the applicant. The defence case was that the applicant had no hidden assets.

By his ruling dated 10 September 2024 the judge was satisfied that the applicant was capable of concealing his assets and that the defence had failed to establish on the balance of probabilities that the transfers made to the applicant during the course of the six year period were now unavailable to him. He found that the available amount was a sum in excess of the benefit figure and that accordingly the recoverable amount would be a sum equal to the benefit figure.

On 26 September 2024 the judge made the Confiscation Order with the period of imprisonment in default of payment to which we have already referred.

Mr Wainwright for whose helpful written and oral submissions we are grateful, makes these points. First, he says that the judge erred in finding that the standard of proof was a civil standard in respect of criminal activity with which the applicant had not been charged. He argues that the case of Briggs-Price establishes an exception to the ordinary rule in relation to the application of lifestyle assumptions, in that where the assumptions apply but the prosecution can only prove that the defendant has obtained property by alleging the commission of criminal offences, then such offences must be proved to the criminal standard. He submits further that, having reached the conclusion that the civil standard applied, the judge did not give the evidence the scrutiny that he would have done in applying the criminal standard and thus his assertion given in his ruling that he would have been sure is insufficient.

Second, Mr Wainwright submits that the judge failed to take into account relevant considerations in finding that the applicant had benefited to the sum of £3,450,000. In particular, he declined to follow, or he reached different conclusions as to value, than had the sentencing judge in the course of the sentencing hearing.

The prosecution have put in a Respondent's Notice in response which we have read. Mr D'Cruz was here to expand on the prosecution response if necessary, although we did not in the end need to call upon him. In short the Crown says that the judge was right to find that the civil standard applied but even if not then he addressed the application of the criminal standard to the evidence and found that he could be sure. As to benefit, the judge heard evidence over several days and set out clearly in his ruling why he reached the conclusion he did. It was open to him to make the finding on the evidence. There is no proper basis to interfere with it.

The Briggs-Price exception argument is academic in view of the judge's finding that if the obtaining of property needed to be proved to the criminal standard then the prosecution evidence, including the content of the EncroChat messages, had proved it to that standard. In any event, the case of Briggs-Price did not concern the application of the criminal lifestyle assumptions set out at section 10 of POCA. By section 6(7) the applicable standard of proof is the civil standard. As the cases of Whittington and Bagnall and Sharma referred to by the judge make plain, where there is evidence showing that property has been obtained then establishing a source of that property is irrelevant, save in so far as the defendant may seek to do so in order to displace the assumption that it has come from his general criminal conduct. It follows that we reject Mr Wainwright's first ground.

We dismiss his second ground also. It is apparent from his reasons that the judge drew proper inferences from the evidence which he had heard regarding the property which the applicant received (cash payments for transports). He was not constrained by the facts of the offences to which the applicant pleaded guilty or the basis upon which he was sentenced. He heard evidence and full argument over five days at the confiscation hearing. The factual conclusions he drew from that evidence were ones which it was properly open to him to draw. In his excellent ruling he fully set out his reasons for doing so.

For these reasons, which are essentially those given by the single judge, we refuse leave and dismiss the appeal.