Adams, In the matter of the Criminal Justice Act 1988

By an application dated 30 May 2012 Terence George Adams applies for a Certificate of Inadequacy pursuant to Section 83 of the Criminal Justice Act 1998 (“CJA 1998”). On 6 February 2007 at the Central Crown Court the applicant pleaded guilty to one count of conspiracy to conceal, between August 1997 and May 2003, the proceeds of criminal conduct. On 9 March 2007 he was sentenced to 7 years imprisonment for the criminal offence. A Confiscation Order was made requiring him to pay £750,000 by 30 September 2007 with a default sentence of 4 years imprisonment. Pursuant to a written basis of plea, it was agreed between the prosecution and the defence that the value of the applicant’s realisable assets for the purpose of the Confiscation Order was £750,000. It was agreed that the amount of money laundered during the 5 ½ year period identified in the offence, did not exceed £1million. Absent from the papers in these proceedings is a Schedule of Assets as was required for the purpose of making a Confiscation Order. The applicant is also subject to a Financial Reporting Order (“FRO”) made on 21 May 2007 for a period of 10 years. The order requires the applicant to submit financial reports; when in custody every 6 months, upon release, every 4 months. The applicant was released from prison in June 2010. He was arrested and returned to prison in August 2011 for breaches of the FRO. He pleaded guilty to breaches of the FRO and was sentenced to 8 weeks imprisonment. He was released from prison on 25 July 2012.

It is the applicant’s case that the major part of the original realisable assets figure was the value of his interest in his matrimonial home at Fallowfield, London NW7. In addition items of jewellery, antiques, art, vehicles, cash seized by the police at the applicant’s home amounting to £58,900, accounted for the remainder together with credit balances at banks. Fallowfield was not sold until 2009 and then at a reduced price. After relevant deductions, the applicant’s share of the net proceeds of sale was £234,166.21. In October 2009 the CPS applied for the appointment of a Receiver in relation to the remainder of the applicant’s assets. On 31 August 2010 the Receiver published his final account. He had disposed of all the assets of the applicant which had been referred to in his letter of appointment and had realised the net sum of £130,323.39 which was paid in part satisfaction of the Confiscation Order. In his letter the Receiver stated that both the applicant and his wife had co-operated with the process. The total sum realised from the disposal of the applicant’s assets and paid in part satisfaction of the Confiscation Order was £364,489.60. As at the date of the hearing the amount outstanding on the Confiscation Order was £651,611.00. Interest is accruing at the rate of £83 per day.

The background to the criminal proceedings is set out in the judgment of the Court of Appeal R v. Adams [2009] 1 WLR 301 by Latham LJ as follows:

“4.

The background facts are as follows. The defendant was for a significant period of time a highly successful career criminal and was well known as such. By his basis of plea it is plain that he was asserting and it was accepted by the prosecution, the criminality in question had ceased in or about 1993. The basis of plea was:

“(a)

I will plead guilty to count 10 only excluding drugs on the basis of a full fact opening. (b) The prosecution will not undermine any suggestion that the criminality which created the funds was five to six years before 1998 (consequently the defendant will mitigate on the basis that although money from crime was laundered in accordance with the time frame in Count 10, no other crime has been committed since five to six years before 1998). (c) The prosecution are content for the defence to mitigate on the basis that the total value of the criminal activity at the time of offences was £1m. (d) Confiscation – figure for realizable assets is £750,000. (e)Prosecution cost £50,000.

5.

The defendant had clearly amassed a considerable fortune by the time of the end of his criminal activity and it was expended on a lavish lifestyle which involved, according to the prosecution, significant numbers of first class flights to different destinations around the world, expensive jewellery, private education for his child and the acquisition of antiques, works of art and other property. When he was ultimately arrested on 30 April 2003 his home, Fallowfields was a large property in a desirable area of North London. The police found substantial quantities of valuable property and the clear indications were that the defendant had been able to maintain his lifestyle because of the criminal activities in question.

6.

The defendant had paid no income tax for a significant period. There was an investigation into his position in 1995, and eventually in 1996 he agreed to pay £95,000 settlement, covering his tax liabilities. But that was on the basis of false information that he had provided. It then became apparent to him that he would have, in some way or another, to account in a way which would satisfy the authorities for the wealth that he had amassed. It was in those circumstances that he obtained the assistance of others in order to disguise the proceeds of crime.

7.

It was principally done through sham companies that were set up, in particular Skye Consultancy Ltd., and Clouds Consultancy Ltd., which gave him effectively bogus employment and an income generated by the companies on the basis that he was some form of consultant. The precise details of the way in which those companies were operated is not of any materiality for the purposes of the sentencing exercise. Suffice it to say that means were found to enable an apparently honest source of income to be developed over a substantial period of time. Indeed, the prosecution case was in reality that the whole of the period from 1996 onwards was a period in which the defendant was seeking, by bogus means, to hide the way in which he had come by his money.

8.

Although, at the end of the day, the prosecution were prepared to accept the basis of plea, it remains to some extent uncertain what the full extent of the financial situation was or indeed is. None the less the Judge was prepared to sentence the defendant on the basis of the matters which were accepted by the prosecution on that basis of plea. …”

Evidence for the purpose of the criminal proceedings was obtained from covert surveillance using listening devices installed in the home of the applicant and his wife between June 1997 and February 1999. Ruth Adams, the applicant’s wife, was jointly charged with her husband and others with offences of fraudulent trading, furnishing false information and Count 10. The Particulars of Count 10 stated that Terence and Ruth Adams together with two others “ Between the 5^th day of August 1997 and the 12^th day of January 2003 conspired together with Saul Solomon Nahome and other persons to conceal or disguise property which in whole or in part directly or indirectly represented the proceeds of relevant criminal conduct and/or drug trafficking of the said Terence George Adams with the intention of avoiding prosecution for an offence to which Part vi of the Criminal Justice Act 1998 applies and/or a drug trafficking offence or for the purpose of avoiding the making or enforcement in his case of a Confiscation Order.” Prior to the hearing in 2007 Ruth Adams had been seriously ill. The prosecution did not pursue the charges against Ruth Adams following her husband’s plea of guilty to Count 10. Following their arrest in April 2003 a Restraint Order prohibiting the disposal of assets was made against Terence and Ruth Adams on 22 July 2003.

At trial it was the Crown’s case that the applicant had retired from crime between 1991 and 1993 which was described as the “clearest measure of his success as a criminal businessman.” It was said that prior to the mid nineties Terence Adams had been able to maintain his lifestyle without the need to demonstrate any visible means of support, he had achieved this by placing his funds in the hands of third parties and nominees, drawing on those funds as and when necessary. It was in early 1995 that the Special Compliance Office of the Inland Revenue began an investigation into Terence Adams’s finances as a result of which it became necessary for him to provide details of his source of income over a period of some six years. Until he was murdered in November 1998, Solly Nahome played a principal part in organising Terence Adams’s financial affairs. Following his death his role in relationship to Terence Adams’s finances was assumed by three others – Ruth Adams, Nahome’s widow Joanna Barnes and a friend, an accountant/bookkeeper. It was the Crown’s case that these three individuals continued to practise the deceits necessary to conceal the fact that Terence Adams derived his income from the proceeds of crime. Joanna Barnes was also charged with forging a loan agreement ostensibly between her husband and Terence Adams, an offence to which she pleaded guilty.

In summary the applicant contends that at the time the Confiscation Order was made the prosecution could agree with confidence that there were no hidden or unidentified assets. If the available amount for the purpose of the realisable assets included an element of hidden or unidentified assets or a tainted gift that should have been included in the Judge’s certification, there was no suggestion by the Crown that there was such a finding. The assets comprising the available amount at the time of the original Confiscation Order have now been sold. The applicant has now exhausted all his assets. He has received minimal remuneration for such work as he has been able to obtain since his release from prison and is financially dependent upon his wife. It is denied that Ruth Adams has any capital reserves but even if she did they would not be available to the applicant in order to pay the Confiscation Order.

Further, as a matter of law, the Crown are not entitled now to make assertions that at the time of the original hearing the applicant had hidden any unidentified assets or had made tainted gifts to a third person in addition to the assets comprised in the agreed £750,000. The Crown are precluded, by the decision of the Trial Judge and their own agreement as to the basis of plea, from asserting that at the time of the Confiscation Order the applicant’s assets exceeded those comprised in the agreed realisable sum. Any assertion by the respondent that the applicant has a substantial capital reserve must be limited to the value of any assets which were comprised in the realizable assets held by the applicant on 9 March 2007 but which have not been realised since that date or realizable assets which have been obtained by the applicant from whatever source since March 2007. There are no further assets. It is accepted that the burden lies on the applicant to provide a full account of what has happened to the original realisable assets and also his assets as at the date of this hearing.

It is the respondent’s case that Terence Adams has failed to prove on a balance of probability that his current assets are worth less than the outstanding balance on the Confiscation Order. The evidence in the case is inconsistent with this proposition of fact in that money provided to Terence or Ruth Adams is in all likelihood his money but has been dressed up as loans or investments. Money paid to Terence and Ruth Adams ostensibly for services/employment is more likely to be a device to channel Terence Adams’s assets to him. Terence and Ruth Adams utilise cash (bank notes) in a manner which suggests a source of funds and a desire to conceal the extent of their spending. Their spending is inconsistent with their case that they have no capital or income of any substance and have accrued debts in the order of £160,000.

It is for Terence Adams to prove the facts necessary to obtain a Certificate of Inadequacy, there is no duty on the respondent to prove anything. It is not for the respondent to satisfy the court as to the source of any capital reserves which are funding the lifestyle of the applicant. The financial affairs of Terence and Ruth Adams are intertwined, they comprise matters which are known peculiarly to themselves. It is incumbent on Terence Adams to set out all these matters in a transparent, full and honest manner. The legal submission made on behalf of the applicant flies in the face of the wording of section 83 CJA 1988 and its purpose. Parliament cannot have intended that the Court upon such an application is required to ignore the existence of assets which are successfully concealed by a defendant when a Confiscation Order is made against him but which are now available to pay it.

Witness statements on behalf of the applicant and the respondent were filed. Pursuant to an order of Nicol J the makers of some witness statements were required to attend court for the purpose of cross-examination. Terence and Ruth Adams gave evidence together with other witnesses identified below. On behalf of the Crown, witnesses were tendered for cross-examination, none of whom had been involved in the original confiscation proceedings.

Criminal Justice Act 1988

– (1) If, on an application by the defendant in respect of a confiscation order, the High Court is satisfied that the realisable property is inadequate for the payment of any amount remaining to be recovered under the order the Court shall issue a certificate to that effect, giving the court’s reasons……

In Glaves v. Crown Prosecution Service [2011] EWCA Civ 69 the Court of Appeal considered the circumstances in which a Certificate of Inadequacy could properly be granted to a defendant who claimed that he was unable to fully comply with a Confiscation Order made against him following his conviction. In these proceedings the report of the case at [2011] 4 Costs LR 556 was used as it provides a report of the full judgment which the neutral citation report does not. Toulson LJ (as he then was) gave the judgment with which his fellow judges concurred. At [13] he stated:

“In Summers [2008] EWCA Crim 872… Penry-Davey J said at para 11:

It is clearly established by authority and was accepted in this case that the burden of establishing that the realisable amount was less than the benefit so as to justify a lower figure for the confiscation order was on the appellant to the civil standard on the balance of probabilities and it is equally clear that if he sought to establish that that he had to do so by clear and cogent evidence; Wallbrook v. Glasgow… followed in Anderson [2005] EWCA Crim 384. Following from that, it is also clear that there is no burden on the prosecution to show a prima facie case of hidden assets, but for the appellant to provide evidence demonstrating the extent of his realisable assets: Barwick [2001] 1 Cr App R [S] 129 (p.445) and Barnham [2006]1 Cr App R (S) 16 (p83).”

14 The expression “hidden assets”, used in Summers and other cases is not an expression found in the legislation and it is capable of misleading. There may be cases in which a court makes a positive finding that a defendant has hidden away all or part of the proceeds of his crime, but it is not incumbent on the prosecution to establish that fact. In Barnham Gage LJ giving the judgment of the court, said at para 41:

“To hold that the prosecution must, in some way, show a prima facie case that the defendant has hidden assets in our judgment would defeat the object of the legislation. It is designed to enable the court to confiscate a criminal’s ill-gotten gains. The expression “hidden assets” is indicative of the fact the prosecution can have no means of knowing how and where a defendant may have dealt with or disposed of the proceeds of his criminal activities.”

At [18] the principles applicable to an application pursuant to section 83CJA 1988 were identified as follows:

“… The general principles were succinctly summarised by Mr David Holgate QC sitting as a deputy High Court Judge, in B [2008] EWHC 3217 at para 74:

(1)

The burden lies on the applicant to prove, on the balance of probabilities that his realisable property is inadequate for the payment of the confiscation order (see Re O’Donoghue [2004] EWCA Civ 1800, per Laws LJ at para 3).

(2)

The reference to realisable property must be to “whatever are his realisable assets as a whole at the time he applies for the certificate of inadequacy. If they include assets he did not have when the confiscation order was made, it is by no means a reason for leaving such fresh assets out of consideration”(IBID and see also Re Phillips [2006] EWHC 623 (Admin).)

(3)

A s 83 application cannot be used to go behind a finding made at the confiscation hearing or embodied in the confiscation order as to the amount of the defendant’s realisable assets. Such a finding can only be challenged by way of an appeal against the confiscation order. (see Gokal v. Serious Fraud Office [2001] EWCA Civ 368, per Keene LJ at para 17 and 24.)

(4)

It is insufficient for a defendant to say under s 83 “that his assets are inadequate to meet the confiscation order, unless at the time he condescends to demonstrate what has happened since the making of the order to realise the property found by the judge to have existed when the order was made”. (see Gokal para 24 and Re O’Donohue at para 3).

(5)

The confiscation hearing provided an opportunity for the defendant to show that his realisable property was worth less than the prosecution alleged. It also enabled the defendant to identify any specific assets which he contended should be treated as the only realisable property. The s 83 procedure, however, is intended only to be used where there has been a genuine change in the defendant’s financial circumstances. It is a safety net intended to provide for post-confiscation order events. (see McKinsley v. Crown Prosecution Service [2006] EWCA Civ 1092 per Scott-Baker LJ at paras 9,21- 24, 34 and 35.)

(6)

A Section 83 application is not to be used as a “second bite at the cherry”. It is not an opportunity to adduce evidence or to present arguments which could have been put before the Crown Court judge at the confiscation hearing (para 38 of Gokal at paras 23,24 and 37 of McKinsley).”

At [44] the concurring judgment of Pill LJ in O’Donohue [18] was quoted with approval:

“The judge has a fact finding exercise to conduct under s83 (1) of the Criminal Justice Act 1988. He has to assess the current value of realisable assets as a whole. All I would add, whilst expressing full agreement with what My Lord has said, is that the judge needs to keep a sense of proportion in conducting that exercise, however dishonest or uncooperative a defendant may have been with respect to what has been found to be one or more of his realisable assets. There could be cases where, on an overall view it would be open to the judge to hold that the value was on balance of probability inadequate within the section, even if the defendant has declined to condescend to give an explanation with respect to every single asset.”

The applicant relies upon the authority of In re McKinsley [2006] 1 WLR 3420 which considered the application by a defendant who had been convicted of a drug trafficking offence pursuant to Section 17 Drug Trafficking Act 1994 to the effect that his realisable property was inadequate for the payment of any amount remaining to be recovered under the Confiscation Order made against him. The Drug Trafficking Act 1994 provides a parallel jurisdiction to that of the CJA 1988. The court upheld the ruling of Toulson J (as he then was) who held that it was not open to the defendant to seek to challenge the Crown Court judge’s findings as to his realisable assets on a subsequent application for a Certificate of Inadequacy on the ground that he did not have, and had not had when the Confiscation Order was made, the hidden assets identified by the Crown Court judge. Section 17 of the 1994 Act mirrors the provisions of Section 83 of the 1988 Act. The issue on the appeal was in what circumstances, if any, it is possible for an applicant in Certificate of Inadequacy proceedings to challenge the findings originally made by the Crown Court as to the amount which might be realised. It was the Crown’s case that the Certificate of Inadequacy procedure pursuant to Section 17 is intended to be used only where there has been a genuine change in the defendant’s financial circumstances since the Confiscation Order was made e.g. an asset has dropped in value. The defendant had a right of appeal against a Confiscation Order and that is the route to be followed on any challenge to the original Confiscation Order. It was the defendant’s case that the wording of Section 17 is not so restricted. It made sense for the Administrative Court to look at the whole picture and, if there had been any manifest error on the part of the court making the original order, then to correct it. It was submitted that a defendant is entitled to a Certificate of Inadequacy whenever he can satisfy the Administrative Court that his assets are inadequate to pay the amount of the Confiscation Order. The court is concerned solely with the current worth of the defendant’s assets.

The thrust of the arguments before the Court centred upon a construction of Section 17. This was in the context of an application by the defendant to go behind the original Confiscation Order by a means other than the appeals process provided by Section 9 Criminal Appeal Act 1968. It is in that context that the Court at [44] found that the Administrative Court does not have jurisdiction in Certificate of Inadequacy proceedings to go behind the basis of the Confiscation Order made by the Crown Court. An attempt to do so would be an abuse of process of the Court. The Court cited with approval the observations of Lord Lane CJ in R v. Dickens [1990] 2 (QB) 102, 105E namely that the object of the drug trafficking legislation is to ensure that the convicted drug trafficker has to part with the proceeds of his trafficking and that the extent of his realisable assets at the time of his conviction is likely to be peculiarly within his own knowledge. It is hardly surprising therefore, that the evidential burdens are placed upon him and that rigorous penalties are imposed in the event of non compliance with Confiscation Orders. At [30-31] the Court stated:

“In our judgment a close examination of section17 against the background of the 1994 Act as a whole points strongly to the construction that the Administrative Court is limited to consideration of post confiscation order events and is not entitled to go behind the confiscation order even if there has been a manifest error.

31.

It is our view therefore that the structure of the Act points strongly towards the construction that it is not open to an applicant on an application for a certificate of inadequacy to challenge the Crown Court judge’s findings as to the applicants realisable assets. …”

Mr Adams prepared two witness statements dated 4 June 2012 and 28 August 2013 exhibited to which were many documents. The statements set out the detail of the criminal proceedings together with the financial investigations and reporting which took place before and subsequent to the hearing in 2007. Mr Adams stated that he has been the subject of a protracted police operation which investigated every aspect of his life and financial dealings. He has also been subject to a detailed and rigorous enquiry led by the Special Investigations Unit of the Legal Services Commission who were making enquiries regarding the making of a Recovery of Defence Costs Order. He described this as “intense financial scrutiny” by the police and the Special Investigations Unit. Since March 2007 Mr Adams has made financial reports; initially to the Serious Organised Crime Agency, now to its successor the National Crime Agency (“NCA”), Mr Adams and his wife co-operated fully throughout the sale process of Fallowfield, any delay was not of their making. They provided total co-operation with the work of the Receiver in the realisation of the remaining assets. There is no dispute as to co-operation of Mr and Mrs Adams in the realisation of assets.

As at August 2013 Mr Adams and his wife were living in a one bedroomed rented flat. The rent was paid by Mrs Adams using income which she had received for design work. Terence Adams receives no state benefit as he has not made sufficient National Insurance contributions. He has tried to find employment. In his oral evidence Terence Adams repeated his written assertion that he had no income, no realisable assets, no hidden assets and was wholly dependent upon his wife for money. He was frustrated by this, it led to arguments between them.

Following his release in 2010 Terence Adams began working for a jewellery company, Universal Imports, in Hatton Garden, London. The principal of the company is Mr Moshe Tobi. Terence Adams was introduced to Mr Tobi by a relative of Solly Nahome. The employment commenced in September 2010 at a salary of £25,000, it was subsequently reduced to £18,000. The employment was terminated in July 2011 because of the economic situation. Terence Adams said that he had always designed jewellery, he had no documents or material to support this assertion. He used to work from “one shop to another”, he worked with semi-precious jewels. Terence Adams had not shown Moshe Tobi any of his previous designs when he began to work for him. The two men worked on pendants and cufflinks which were mastered in Israel. Documents were produced by Ruth Adams which contained drawings of jewellery designed by Terence Adams. He said the inspiration came from looking through jewellery magazines, he would then tweak the ideas and make up the design. None of his designs were produced for Moshe Tobi as he was not interested in this type of jewellery, as it was too expensive. Terence Adams had never designed a piece that had been sold by Moshe Tobi. Moshe Tobi had confidence in him as a designer. Mr Adams’s probation officer had come to Hatton Garden to see him work as a designer. The NCA also make inquiries about Terence Adams employment. Moshe Tobi, however, was unhappy because the jewellery business is very secretive and within Hatton Garden they do not like strangers coming in. As a result, no one in the jewellery business wants to work with Terence Adams.

N 1 Angel is the company of Ruth Adams, it is an online clothing company. Terence Adams is employed by his wife but receives no salary. He creates and designs clothes. It was the idea of himself, his wife and Michael Ellis of Stirling Wholesale Limited to start the business. He has no training in the design of clothing, he has previously designed shirts and suits. Terence Adams would go to the offices of Michael Ellis, look at a number of designs and tweak them. There were no drawings, it was collaboration between himself and Michael Ellis. The company has sold only a few items of clothing. His wife had told him that Dale Golder had provided £25,000 for the company, he did not know how it had been used. Monies from Dale had been transferred from the company account into his wife’s personal account.

Ruth Adams has another company, Stara Stara, a jewellery business. She had also done interior design work. His wife keeps it away from him, he is not interested, he is frustrated because his wife is the breadwinner. They do not speak about matters in their house because of the intrusion of surveillance over the years. He knew nothing about the design work for which Dale Golder paid Ruth Adams.

Ruth Adams pays for everything. Terence Adams was unaware that by January 2012 she had spent all of her share of the proceeds of sale of Fallowfield. Their weekly outgoings are £200 plus £250 rent on the flat, an annual expenditure of £23,000 - £24,000. Terence Adams was aware that his wife had made payments for dental treatment and to the Grove Hotel (the Spa). There had been visits to the Royal Opera House, a visit to the Dorchester Hotel, a visit to the Ivy and some 12/13 visits to Browns Hotel.

Terence Adams loves the opera, when he came out of prison for the first time his wife took him there for his birthday. On two subsequent occasions they were given tickets through a family connection. His wife took him to the Dorchester for a massage. Terence and Ruth Adams do not drink. Save for one occasion in Browns when his wife paid the other occasions are paid for by friends or family. The suggestion that he and his wife have spent £15,000 on restaurants and entertainment was “absolute rubbish”. To suggest that their average annual expenditure was £97,000 was “laughable”.

When Terence Adams was released from prison in June 2010 his wife was living at an address owned by a friend of hers named Haart, he is no friend of Terence Adams. Terence Adams questioned his wife about the situation, he did not like it when he learned that Haart was paying the rent on the property. Terence Adams told his wife it had to stop. Ruth Adams did discuss the loan of £35,000 made by Dale Golder, she never spoke of any repayment. Brian Higgins is Terence Adams’s uncle. Brian Higgins may have loaned money to his wife, if so, he would have done it for Terence Adams but he did not give it to him. He did not know if the loan had been repaid. Terence Adams was aware that Sue Evans, the wife of his cousin, had paid £10,000 for furniture from Fallowfield. As to a second loan of £10,000 he was unaware of it, As it represented more debt Terence Adams had thought his wife had kept it away from him. He was also unaware of a £20,000 loan to his wife from an unnamed friend. When he speaks to his wife about money there are rows because he has no money and it is frustrating. The constant topic is the amount of debt which is owed which causes no end of arguments. As to the fact that the debt represented by the various loans was in excess of £100,000 Terence Adams said that he was unaware his wife was in that much debt.

A witness statement was obtained from Moshe Tobi. Mr Tobi is a manufacturing jeweller and a director of Universal Imports. The company, based in Hatton Garden, primarily specialises in producing bespoke designs for individual customers. Mr Tobi confirmed the employment of Terence Adams who had approached him in August 2010 with an offer of producing expensive jewellery. Terence Adams would be the designer, the company would be the manufacturer. It was agreed that Terence Adams would begin working in September at a salary of £25,000 a year. It was a gentleman’s agreement, not a formal contract. Mr Tobi stated “there was no stipulation about hours he must work in the office. I was only interested in the designs he produced. Terence Adams’s role was to furnish me with ideas and designs”. Exhibited to the statement were pages of designs created by Terence Adams. In March 2011 Mr Adams’s wage was reduced to £18,000 because of poor business. In July 2011 because of a decline in the jewellery trade and the economic situation he terminated Terence Adams’s employment. Mr Tobi produced the P45 and related documents to evidence the employment of Terence Adams.

Ruth Adams, the wife of Terence Adams, made witness statements dated 28 August 2013 and 20 December 2013. In the first statement she detailed the efforts made to realise assets in order to pay the Compensation Order. As her husband was in custody it was Mrs Adams who completed and submitted the financial report in order to comply with the requirements of the FRO. Prior to the sale of Fallowfield in May 2009 Ruth Adams needed money to live. She sold personal items. She received loans from her husband’s uncle, Brian Higgins, in the sums of £30,000 and £10,000 in order to help with refurbishing Fallowfield and legal expenses. She has since repaid the £30,000 loan. Her brother Carmel Tonna also lent her £4000. Ruth Adams would receive cash from friends and family as presents at Christmas, Easter and birthday, as a result she saved between £10,000 and £15,000. On completion of the sale of Fallowfield Ruth Adams received £234,166.21 which was paid into her Co-Operative Privilege Savings Account. In her first witness statement Ruth Adams stated that save for the period when her husband was employed by Universal Imports Limited she had been living off the funds released to her from the sale of the matrimonial home, on various loans and a period of employment in 2006/2007 when she worked at the Emirates Stadium, she has also done some acting.

Following the sale of Fallowfield Ruth Adams moved into a property rented by a childhood friend Ian Haart as he did not require the accommodation. Mr Haart was willing to pay the monthly rental of £1750 because of his friendship with her and having witnessed her personal difficulties. Ruth Adams confirmed her husband’s unhappiness with the arrangement and its termination following his release from prison. On the sale of Fallowfield, Sue Evans, her husband’s cousin’s wife, paid £10,000 in cash for furniture from the house. A subsequent loan of £10,000 from Sue Evans has not been repaid. In June 2012 Ruth Adams’s mother Josephine Tonna, lent £3000 for living expenses, the money has not been repaid. A loan of £20,000 from an unidentified person was made in May 2014. Mrs Adams did not wish to name the lender because she had not received permission to do so.

In her second witness statement and oral evidence Ruth Adams dealt with matters raised by the NCA including credits and debits in her bank account and income from employment and her companies. Since June 2010 Ruth Adams has earned between £8000-£9000. When her husband was working for Universal Imports Limited he would give her an allowance and pay the rent. By January 2012 Ruth Adams had spent the entirety of the proceeds of the sale of Fallowfield save for an amount outstanding which comprised a loan of £60,000 to Broking Limited. The loan has now been repaid to her.

Ruth Adams received £16,630 for work as an interior decorator. She provided design work on five houses in Perthshire for Dale Golder. Some years ago Ruth Adams had done an online course which she did not complete but she has an eye for colour and design. Dale Golder’s wife is a friend of many years standing. Ruth Adams asked Dale Golder for work as she knew he was carrying out restoration of the houses. She did not present a portfolio or references to him, it was unnecessary as Dale Golder had seen her house and he liked the way it was decorated. They did not discuss how much she would charge for the work. Dale Golder came to a decision as to what he would pay and she agreed it. Dale Golder sourced the fixtures and fittings and Ruth Adams chose them. She went to Scotland on three occasions to oversee the work. Terence Adams was not involved in the business. The monies were paid in October 2012 and April 2013 on completion of the work. A document entitled “Invoice” was supplied by Ruth Adams to Dale Golder following payment.

Stara Stara Limited is a jewellery business which was incorporated as a limited company in January 2013. Prior to that it was known as Stara Stara, Ruth Adams was the sole owner. The company has never traded. In February/March 2013, together with her daughter, Ruth Adams visited China to source material for the company. She spent between £4000 and £5000 on the trip. Ruth Adams said that she came out of Stara Stara because her husband was unable to find work and she was encouraging him to design for her.

Ruth Adams is CEO of N1 Angel Limited an online clothing company registered in her sole name. Her husband has always designed jewellery and has always been interested in designing clothes. As he could not find any work in jewellery design and was suffering from depression, Ruth Adams encouraged him to design clothes for her first collection. The company has made no real money. Dale Golder has bought four to six jumpers. The products are manufactured by Sterling Wholesale Limited which is owned by Michael Ellis. Sterling were late in producing the first collection of clothes, as a result a photo shoot could not be done, this delayed the production of the website which caused difficulty in selling of clothes. The company owed Sterling £80,000, now reduced to £52,000 by Sterling who acknowledge responsibility for late delivery. Terence Adams has no shares in the company, he is not a director. He is, however, prominently displayed on the press page as the designer of clothes for the company.

On 28 May 2013 Dale Golder transferred £35,000 to Ruth Adams. This is a loan to assist in the development of N1 Angel. £25,000 was invested in the company, £10,000 was used, with the knowledge of Mr Golder, for living expenses. Ruth Adams provided no documentation, business plan, designs, drawings or written projections as to how the company would make money to Dale Golder. She believed that he thought investing would be a good idea, he could see that Terence Adams dresses well. The written agreement drafted by the solicitor documenting the loan was not drawn up until some two months after the loan was made. It was put to her that the document was prepared three weeks after a directions hearing before Nicol J which required evidence from Mrs Adams and her husband by 8 August 2013. It was suggested that this document was produced so that there was “evidence” to explain the transfer of £35,000. She denied the suggestion. Asked if she was aware of the connection between Michael Ellis of Sterling Wholesale Limited and Dale Golder, Ruth Adams said that as a result of a conversation she had with Dale Golder, she realised that he must know Michael Ellis which is why she went to Sterling Wholesale Ltd.

Ruth Adams produced two schedules: the first detailed her comments on the debits and credits in her Co-operative current account for the period 14 September 2010 to 17 September 2013; the second provided comments on credits in her bank account between 26 April 2007 to 17 September 2013. The first schedule detailed expenditure, said by the Crown to average £97,000 a year, a figure disputed by Ruth Adams. Expenditure for which Mrs Adams accepted responsibility and upon which she was cross examined included:

Ruth Adams was questioned upon the high percentage of cash included in these payments, it being suggested that the reason for the cash was to minimise the appearance of lavish spending so that the bank account did not show how high the spending had been. She responded by saying that she had never hidden the fact that she had made these payments through her bank account. The evidence of Ruth Adams as to expenditure on restaurants and the Royal Opera House was at one with that of her husband. She believed she had paid the bill at Browns restaurant on no more than three occasions. As to trips to Italy in 2009 and New York in 2010 these were paid for by friends or family. Items purchased there were presents for members of the family.

On 8 September 2011 Ruth Adams transferred £60,000 to Mark King, Broking Limited. They intended to go into business as partners in a cuff link company. No written contract exists, the agreement was oral. The company has never traded. As Mr King took so long to work upon a prototype Mrs Adams asked for a return of the money as it was needed for living expenses. At the date of the hearing all monies had been repaid by Mr King. At the time Ruth Adams transferred £60,000 to Mr King £90,000 remained of the proceeds of sale of Fallowfield, £30,000 remained after the investment. It was put to Ruth Adams that the rental monies paid by Ian Haart, the loan of £35,000 from Dale Golder, £10,000 from Brian Higgins, £10,000 from Susan Evans, £20,000 from an unnamed friend together with the £52,000 owed to Sterling Wholesalers Limited represented debts of £150,500. Asked how these were going to be repaid Mrs Adams said that she hoped that N1 Angel would be successful.

Brian Higgins is married to the sister of Terence Adams’s mother. He is Managing Director of a catering company. In his witness statement he says “I was aware that as a consequence of Court proceedings the bank accounts of Terence Adams and Ruth Adams had been frozen. When I was able to assist them by loaning Ruth Adams £30,000 I was happy to do so. I declined Ruth Adams’ offer to pay interest on the loan”. The loan was paid through Garstangs Solicitors on 9 January 2008. It was repaid through the same solicitors on 30 May 2008. In his witness statements he states: “I made a further loan of £10,000 to Ruth Adams again interest free which is still to be paid back. I will be able to supply details of the account which the funds were drawn from and the date of loan if required”. In his oral evidence Mr Higgins said he thought the £10,000 loan was made in 2012 but it could have been earlier. He knew the purpose of the first loan. He was not sure if the second loan was for decoration or legal fees. Mr Higgins said he took Ruth Adams’s word that he would get the money back, that was good enough for him. Mr Higgins was told that it was best to keep it away from Terence, he did his business with Ruth, he did not discuss the matter with Terence. As he has a successful catering business £10,000 did not bother Mr Higgins.

Dale Golder made two witness statements dated 22 August 2013 and 10 December 2013. In the first short witness statement Dale Golder confirmed that he had paid Ruth Adams £16,630 for design work that he had commissioned her to undertake in 2012 and confirmed a loan to her of £35,000 in 2013. Ruth Adams is one of his wife’s closest friends, he has known her for about seven years. To his first statement he exhibited his bank statement which showed a debit of £35,000 to his account on 28 May 2013. It was his understanding that the funds were to be invested in Ruth Adams’s clothing company N 1 Angel Limited. Also exhibited was the agreement drawn up by his solicitors between Dale Golder and Ruth Adams detailing the loan which was signed by Dale Golder on 1 August 2013.

Dale Golder met Jason Topsam who took an Aston Martin, a Bentley and a Shelby Mustang for rental. He paid for one month but has since not honoured payments. Paul Flisher rented cars over a period of two years from the company he is a childhood friend of Timothy Eastgate and was his partner in O2 Box. Dale Golder had never socialised with Paul Fisher. Darren Palmer rented cars from the company, and purchased many tickets from Timothy Eastgate at the O2. Dale Golder invested money in Darren Palmer’s business which has since been paid with interest. Dale Golder was aware of the criminal charges against him, he has lost all contact with Darren Palmer. Dale Golder emphasised the point that he has some 400 acquaintances who span a number of professions, only 1% are convicted criminals. Of the other persons identified by the NCA none of them are friends of Dale Golder he met them all through his car business. Dale Golder denied any involvement in any money laundering offences.

Dale Golder has worked hard all his life, he owns a company called Montana which has been trading for twenty years, he has always paid tax and VAT. The company employs five sub-contractors and they provide specialised cleaning services, tiling, high end decorating and landscaping. Dale Golder confirmed the evidence of Ruth Adams as to the nature and the extent of her involvement in his renovation project of five houses in 2012/2013. As to the invoice provided by Ruth Adams he said it is the same as anyone else provides in order to show what work has been done. As to N1 Angel and the agreement for the loan, Dale Golder instructed his solicitor to draw it up. He saw products provided by N1 Angel he liked the logo on the products and bought five or six jumpers which he subsequently sold to employees.

Susan Evans made a witness statement dated 21 August 2013. Terence Adams is the cousin of her husband, she and Ruth Adams have been close friends for 25 to 30 years. On the sale of Fallowfield Susan Evans bought furniture from the home for which she paid Ruth Adams £10,000 in cash. In December 2012 Ruth Adams asked Susan Evans if she could lend her money to help her set up a clothing business. The loan in the sum of £10,000 was made, exhibited to her statement was a copy of a cheque stub dated 30 December 2012 in the sum of £10,000. In her oral evidence Mrs Evans said that the cash for the furniture was given to her by her husband who drew it from his business account. The money for the second payment of £10,000 was given to her by her husband. She made the payment to Ruth Adams by a cheque drawn on her own bank account. There is no agreement as to repayment, Susan Evans is not worried about this. Terence Adams played no part in any discussion regarding the loan.

The statement of Camilla Hicks dated 27 August 2013 was before the court, the Crown accepted the truth of its content. Ruth Adams is described by Camilla Hicks as one of her best friends. In January 2011 Ruth Adams telephoned her from the Harley Street Clinic where she was to pay for treatment for her husband. Ruth Adams did not have a credit card with her, as a result Camilla Hicks arranged for payment to be made through two of her own credit cards and one of her mother. The total cost of the treatment was £7,500. Exhibited to Camilla Hick’s statement were copies of the receipts for the payments. Ruth Adams has repaid the money.

The statement of Carmel Tonna was before the court, the Crown did not dispute the truth of the statement. In 2007 Carmel Tonna was approached by his sister Ruth Adams who asked if he would lend her money as she was in financial difficulties at a time when her husband was in custody. Carmel Tonna lent his sister £4000 which she has repaid in full.

Josephine Tonna is the mother of Ruth Adams. In a short witness statement she confirms that in June 2012 she loaned her daughter £3000 to help her with living expenses when she was experiencing financial difficulties. The money was drawn from her Halifax account and she produced a copy of the relevant statement for the court. Mrs Tonna had been required by the Crown for cross-examination. During the hearing the court, and for the first time, the Crown were informed that Mrs Tonna would not be attending court. The reason given being her age, Mrs Tonna is in her 80’s and the fact that in May this year she underwent a surgical procedure. Documentation was produced which demonstrated that she had been in hospital in May 2014 but was discharged in that month. Beyond that no detail was provided as to why it was Mrs Tonna was unable to attend court.

The Halifax statement exhibited to the witness statement of Mrs Tonna details an ISA Saver account. On 26 April 2012 the “statement opening balance” is £3974.58. On 20 June 2012 a payment out is recorded of £3000. On the same day a further payment out of £974.58 is also recorded. Save for the addition of interest on 5 April 2013 these are the only entries shown on the account. It was agreed between the applicant and the respondent that the statement of Mrs Tonna together with the exhibits could be placed before the court, the weight to be attached to them was a matter for the court. There is no evidence before the court as to the source of the monies originally placed in the account.

Mark King is a self employed jeweller and the Managing Director of Broking Limited an online jewellery business. The company was incorporated in March 2011, Ruth Adams is the only investor, Mark King put no money of his own into the company. In September 2011 Ruth Adams transferred £60,000 into the Broking Limited account with Barclays. There are no documents relating to Ruth Adams’s agreement to invest in the company.

The company appears to have done no business, no payments have been received, no transactions have taken place save for making what Mr King described as a “couple of transactions” to buy some “bits of gold”. The bank statement for Broking Limited shows a credit from Ruth Adams on 13 September 2011. On 27 September 2011 there is a cash withdrawal of £1000, Mark King said this was to buy gold. On 28 September 2011 there is a cash withdrawal of £6000, his evidence was that this was to buy diamonds. A further bank statement from the account for March 2012 contains one entry. On 2 March 2012 a transfer to Ruth Adams of £15000, the other entries are redacted. A later statement shows a transfer to Ruth Adams on 31 July 2013 in the sum of £10,000 the other entries are redacted.

The “Abbreviated Balance Sheet as at 31 March 2012” of Broking Limited noted as being “Approved by the Board on 30 April 2013” and signed by Mark King director identifies “Called up share capital” of £100. “Cash at bank and in hand” is £708. Net current assets (liabilities) are (£408). As at 30 April 2013 the balance of monies which Mark King had received from Ruth Adams would have been in the order of £42,000. He was asked why this amount was not shown on the abbreviated balance sheet. His answer was that this document was abbreviated because of pressure of time, had it not been submitted he would have faced a penalty. The document was prepared in the latter part of 2013, he gave his accountant bank statements, invoices and purchase receipts. He did not know where the figure of £700 for cash in the bank and in hand came from. The figures came from the accountant, she must have obtained them from the documents which he gave her.

DC Clement is an officer with the Devon and Cornwall Constabulary currently stationed with the Serious Organised Crime Investigation Team. DC Clement is engaged in the investigation of JTD Sports Cars which is described as “a high value vehicle rental business formerly based in Essex.” The business was run from December 2006 until March 2009 as a partnership between Dale Golder and Timothy Eastgate. Examination of the JTD Sports documentation included “hirer records”, these reveal that the most valuable customers were criminals. The records, which were maintained between January 2007 and February 2008, show that the company had 26 customers who spent a total of £665,255. Jason Topsan spent £351,787; Darren Palmer spent £101,763; Paul Flisher spent £62,475. It is the suspicion of the police that JTD Sports Cars was a front for money laundering. Pursuant to this Dale Golder was arrested and interviewed in June 2013. He denies any involvement in money laundering.

Dale Golder has admitted being shot in Spain in March 2011. This occurred when he had been instructed to attend a location where he was to meet a person to discuss a debt owed by Timothy Eastgate. In March 2014 Dale Golder was arrested and subsequently charged by police in Scotland with possession of prohibited ammunition and possessing ammunition without a certificate following the seizure of a loaded Glock handgun magazine and a quantity of 9MM ammunition at his home address.

During the course of his police interviews Dale Golder told the police of the fact that Ruth Adams had provided interior decorating work for him in respect of the five houses and that he had invested money in her business as demonstrated by a loan agreement drawn up by his solicitor. DC Clements investigated this matter and he was satisfied that a solicitor was acting for Dale Golder and there was in existence the relevant loan agreement.

In June 2014 DC Clements was notified by a colleague of messages found in a computer seized from the home address of Dale Golder. DC Clements has not seen the messages himself and exhibited a copy of the text to his witness statement. An email titled “N1Angel Invoice” relates to an email conversation between 7 May and 27 May 2013 between Dale Golder and Ruth Adams. On 13 May Ruth Adams states “further to our meeting I Ruth Adams, agree for you to invest in me and my business N1Angel and with a figure 5% interest on the 2^nd year trading profits. This amount will be paid until the monies are paid back.” Dale Golder replied stating that he will get “his end sorted this week”, he later states that he has spoken with his solicitor regarding the investment and the solicitor is happy with it and will do the paperwork for the week commencing 12 June. Dale Golder states that he would like to transfer £35k now and £15k when he receives more money from his projects. Ruth Adams replies saying that “she won’t let him down” she provides her bank details as Mrs A R Adams, Acc No 10232033, Sort Code, 08-90-33. Dale Golder replies to say he will send confirmation tomorrow. A further email entitled open. “Declaration of trust” is a copy of the agreement which was produced to the court.

Mr Lakhanpaul is an officer of the NCA. He provided three witness statements for the purposes of these proceedings: In the first dated 11 October 2013 he stated that a copy of the Confiscation Order and the Schedule of realisable property taken into account was exhibited to his statement. The Schedule was not exhibited, the later statements deal with the point that no schedule has been found.

The first statement was made in response to the first witness statements of Terence and Ruth Adams. Following service of those statements Mr Lakhanpaul examined the financial position of Terence Adams in order to determine the truth of his assertion that his expenditure and that of his wife is accounted for by loans from family, friends and business associates. He has also examined their financial position to compare their lifestyles against their income. Terence Adams has one bank account. Between 5 October 2010-November 2012 there have been 8 credits totalling £11,756.42 of which 6 emanate from Universal Imports. This is consistent with Terence Adams statements that he was working for the company in 2010/2011. Officers of the company visited the premises in Hatton Garden and obtained a statement from Moshe Tobi confirming Terence Adams’s employment. The remaining credit to the account had been investigated and no issues arise in relation to them.

The Co-operative bank accounts of Ruth Adams are described as “more significant to the couple’s financial affairs”. It is the opinion of Mr Lakhanpaul that these monies, together with cash, fund the couple’s lifestyle. There are five accounts in the name of Ruth Adams, three are dormant, the remaining two appear to be the sole source of any identifiable funds supporting the lifestyle of Terence and Ruth Adams. On 12 August 2009 Ruth Adams received £220,803.71 which represented half of the equity in the matrimonial home. The funds were deposited in her bank account. In addition to the proceeds of sale there are other credits into the same account. For the period 26 April 2007 to 17 September 2013 the additional credits total £142,397.98. In addition in the second bank account during the same period there are two credits totalling £16,442.12. Thus, in addition to the proceeds of sale, there have been credits to the two accounts of Ruth Adams since 2007 in the total sum of £158,840.10. The bank statements demonstrate that a significant number of the credits which are either described as “credit” or “counter card CR” are for “rounded” sums of money. There is no evidence of any regular income or receipt of any state benefits disclosed in the bank accounts. Payments from three sources: Broking Limited; Dale Golder; Barbican Supplies Limited/ Brian Higgins were investigated.

The following payments were credited to the bank accounts of Ruth Adams:

The following payments were made directly into the current account of Ruth Adams:

The credits identified from these three sources total £116,630 of the £158,840.10 paid into the two active Co-operative bank accounts. Ruth Adams claims that she received a further £27,000 in payments by way of loan (cash, cheques and bank transfers) from the selling of personal items to family members. Mr Lakhanpaul is unable to trace the source of any other credits into these bank accounts.

Mr Lakhanpaul identifies as a “noticeable characteristic” of the spending activity, the reliance upon cash to make payments. Between 29 June 2013 to 16 September 2013 Ruth Adams paid £2583.40 to the Court House Clinic for a weight loss dietary programme. £1068.70, was in cash. Between 28 June 2013 and 16 September 2013 Ruth Adams withdrew £550 in cash from her accounts. This is said to demonstrate that Ruth Adams had access to cash or funding in excess of that paid into and through her bank account. Following service of Mr Lakhanpaul’s statement Ruth Adams stated that cash payments came from her friends on whose behalf she was buying sachets. Ruth Adams purchased joint spa membership for herself and her husband at the Grove Hotel, Hertfordshire commencing 28 June 2010, £210 was paid from her bank account, £3640.00 was paid by way of cash instalments. Between July 2010 - January 2011 Ruth Adams spent £12,044.99 on private dental treatment at Azamay Dental Spa. £288.00 was paid from her bank account, £11,756.99 was paid in large cash instalments. On 3 March 2010 Ruth Adams paid £2,717 for her husbands Cartier gold watch. It was sold at auction on behalf of the Receiver, £1000 of the purchase price was paid in cash.

Ruth Adams hires a number of storage units with AJ Stevenson’s removals. Her total expenditure for storage between 24 March 2011 - 25 September 2013 was £5,176.56. £3,205.55 was paid in cash. In the reports for the FRO Ruth Adams makes a declaration of £110 per month to the company. A1 Self Storage has refused to co-operate with the NCA’s request for documentation. Analysis of Ruth Adams bank account shows that payments were first made to A1 Self Storage on 4/11/2009, they continue sporadically until 28 August 2013.

It is the evidence of Mr Lakhanpaul that an analysis of the social outgoings of Terence and Ruth Adams indicates a preference for cash spending but this is difficult to quantify in the form of an evidential trail. It is axiomatic that the true origins of cash cannot properly be traced or authenticated, it implies Terence and Ruth Adams receive regular income from sources that cannot be identified.

The bank statements of Ruth Adams show entries relating to spending on entertainment. They include in August and December 2010, 2 payments to the Dorchester which total £769.88; 2 visits to the Royal Opera House in 2010 totalling £654; a visit to the Ivy in June 2011, to the Groucho Club in July 2011 and to Browns Hotel in November 2011 represent a total payment of £561.42; payments to Chewton Glen (a hotel) in 2011 total £2335.00 (Ruth Adams identified this as their wedding anniversary celebration). In addition on 29 June 2012 there is a debit to Harvey Nichols of £537 said to be an Amanda Wakeley dress; the trip taken to China by Ruth Adams and her daughter is demonstrated by entries in March 2013 the air fare is £2318.92, expenditure in China amounts to £917.79; a Hilton payment in December 2012 for £750 is said to represent the visit to Scotland by Ruth and Terence Adams when she went to oversee the refurbishment of the five houses of Dale Golder. Other items indicate spending on clothing and the theatre. In November 2009 when on a visit to New York which Ruth Adams stated was a present, in a two day period she spent £2835.35 on designer brand clothing. Using the entries in the bank statements Mr Lakhanpaul calculated that the average annual expenditure shown between September 2010 to September 2013 is £97,041.91. This figure does not include the cost of utilities. The applicant took issue with the ‘average’ figure identifying specific payments in identified years.

Between August 2009 and September 2013, based upon bank accounts, Mr Lakhanpaul calculated that Terence and Ruth Adams have spent £14,909.30 on hotels, flights, restaurants and entertainment. He thought that the true figure spent on entertainment was likely to be larger given that payment can be made in cash. It was the belief of Mr Lakhanpaul that Terence Adams has a reserve of funds which provides for his lifestyle. Mr Lakhanpaul was unable to say whether those funds had been available prior to the making of the Confiscation Order or had accumulated since or was a combination of the two. He could not identify the source of the funds as being one particular source nor could he attribute actual expenditure to Terence Adams. As Mr Lakhanpaul had not spoken to the individuals in the financial investigation which led to the Confiscation Order he looked at the pattern of expenditure since 2007. It was his evidence that Ruth Adams had spent a large amount on Terence Adams’s behalf and that could not be explained away by her share of the proceeds of sale of £200,000. It was put to him that all the expenditure had been in the open, Mr Lakhanpaul denied that. He pointed to a substantial number of cash payments and the fact e.g. that it was only following the prosecution of Terence Adams for breach of the FRO that Ruth Adams disclosed the purchase of the watch for £2500. The point that was made by Mr Lakhanpaul was that his figure of £97,000 as annual expenditure excludes any cash payments and the NCA has no means of identifying expenditure that is wholly in cash.

Mr Lakhanpaul confirmed that prior to the criminal trial in 2007 there had been an intense investigation into the financial affairs of Terence and Ruth Adams. It was his belief that there would have been a schedule identifying the assets comprised in the realisable assets figure but he had not seen one. The officers in the original case had retired, the previous agencies had gone through two changes of organisation, finding individuals and papers was difficult.

Mr Lakhanpaul accepted that he had explained to Ruth Adams what was necessary in order to compile the reports, for the FRO. The requirements were for Terence Adams to provide details of income, asset transfers, and expenditure over £500 together with details of bank accounts. It was Mr Lakhanpaul’s role as the officer assigned to Terence and Ruth Adams to match what is contained in the FRO with the information provided. In doing so officers of the agency visited Moshe Tobi, and Michael Ellis.

The visit to Michael Ellis of Sterling Wholesale Limited was unannounced, the business is substantial. Mr Ellis also has other companies. Mr Ellis grew up in Islington and was acquainted with one of the Adams brothers, he would not say which other than it was not Terence. He was approached by Ruth Adams to help with the design and manufacture of a range of menswear for her new label N1 Angel. He met with Terence and Ruth Adams as a result of which he agreed to help on account of Terence Adams’s “vision” for the brand and the style he was trying to create. Terence Adams would visit the Sterling offices, on occasions to work on designs. Michael Ellis described Terence Adams as a “design genius” he had an exceptional eye for detail. At the first visit Michael Ellis was unable to provide Mr Lakhanpaul with any details regarding financial transactions nor was he able to provide any design sketches created by Terence Adams. Another brother involved in the business dealt with financial matters and another brother did much of the design work. It was arranged that Mr Lakhanpaul would return the following week. On that occasion Michael Ellis produced a spreadsheet which he said was created by his brother who was absent that day due to a back injury. Mr Ellis refused to give the document to Mr Lakhanpaul but allowed him to glance at it. As at 16 June 2014 N1 Angel owed Sterling Wholesale around £52,000. Michael Ellis explained the design process involving Terence Adams. His description reflected the evidence of Terence Adams to the court. It was the view of Mr Lakhanpaul who saw a number of the early garments created for N1 Angel that a lot of time and effort had gone into developing the N1 Angel brand and designing the various garments for sale. Company bank accounts for N1 Angel indicate credits from the online sales between November 2013 and May 2014 totalling around £2,000, £800 of which are purchases made by Dale Golder.

The issue for the Court is whether the applicant, Terence Adams, has proven on a balance of probabilities that his current assets are worth less than £651,611.00 the outstanding balance on the Confiscation Order as at July 2014. It is for Terence Adams to prove the facts necessary for a successful application. Terence and Ruth Adams have been the subject of intense investigation into their financial affairs, prior to and following the criminal proceedings in 2007. For a period of 22 months they were subject to covert surveillance. They were arrested in April 2003 and shortly thereafter a Restraint Order was made against them. Following the making of the Confiscation Order and the FRO in 2007 the level of scrutiny did not abate. The FRO required Terence Adams, Ruth Adams acting on his behalf when he was in custody, to furnish information as to his finances.

At the time of the making of the Confiscation Order a Schedule of Assets identifying the basis of the order was required. If it existed it is no longer available. This has not caused difficulty in these proceedings as there is no real dispute as to the assets, which are likely to have been identified as realisable assets for the purpose of the Confiscation Order. It is the applicant’s case that no hidden assets were a part of the Confiscation Order. The figure for realisable assets was agreed as part of the basis of plea. The judge did not feel in a position to go behind that agreement as is evidenced by his sentencing remarks: “The prosecution are content (and I am not in a position to question their decision, nor would it be appropriate to do so) to accept that the amount of money laundered during the five-and-a-half years specified in Count 10 did not exceed £1m, and that your realisable assets, for the purposes of a confiscation order amount to £750,000. In those circumstances I, in turn, am satisfied upon the evidence that your benefit from the criminal activity which resulted in the money-laundering offence you have admitted has now to be assessed at £1,110,743 and your realisable assets, for the purposes of confiscation amount to £750,000. Accordingly I make a confiscation order in that sum.” I am satisfied that in making the Confiscation Order the judge proceeded upon the basis that no hidden assets were identified as at that date. I also accept that subsequently the applicant and his wife co-operated with the Receiver in the realising of assets. Any delay in the sale of Fallowfield was not of their making. Throughout his period of imprisonment Ruth Adams dealt with the applicant’s financial affairs insofar as they involved the realising of assets. She did so working with, on occasion, Mr Lakhanpaul of the NCA.

It is the applicant’s case that, as a matter of law, the respondent is not entitled now to make assertions that, at the time of the original hearing, the applicant had hidden or unidentified assets or had made tainted gifts to a third person, in addition to the assets comprised in the £750,000. It is now the respondent’s case that the applicant has access to a substantial cash reserve which could be used to pay the balance of the Confiscation Order. The applicant contends that the respondent is precluded by the decision of the trial judge and their own payment concerning the basis of the plea from asserting that, at the time of the Confiscation Order, the applicant’s assets exceeded those comprised in the agreed £750,000. Reliance is placed upon the authority of In re McKinsley and above, in particular and [44] of the judgment where Scott Baker LJ stated:

“In our judgment the Administrative Court does not have jurisdiction in certificate of inadequacy proceedings to go behind the basis of the confiscation order made by the Crown Court. In our view an attempt to do so, as in this case, is an abuse of the process of the court.”

In my view, the wording of s 83 CJA 1998 and its purpose create a fundamental difficulty for the applicant. It cannot have been the intention of Parliament upon a Certificate of Inadequacy hearing that the court should ignore the existence of assets which are successfully concealed by a defendant when a Confiscation Order is made against him, but which are now available to pay the order. In McKinsley at [19] the purpose of the confiscation legislation was identified as ensuring that convicted criminals are forced to part with their proceeds from crime. The court at [14] identified the fact that the burden of proof is on the defendant to show he cannot pay the assessed benefit. This reflects the fact that the nature and value of the defendant’s assets is a matter known peculiarly to the defendant. Moreover, the defendant has a right of appeal to the Court of Appeal to correct errors in the original Confiscation Order. The Certificate of Inadequacy procedure provides a safety net to the defendant to cover downward changes in his asset position since the making of the Confiscation Order.

In McKinsley it was the defendant in the Certificate of Inadequacy proceedings who was seeking to go behind the original Confiscation Order. At [6] the issue on the appeal was stated to be “about the circumstances, if any, in which it is possible for an applicant in certificate of inadequacy proceedings to challenge findings by the Crown Court as to the amount which might be realised”. It was in this context that the Court considered the purpose of the confiscation legislation and what, in fact, the defendant was seeking to do. The reasoning of the court as set out in [44] applied to the defendant in that situation. There is nothing in the judgment which suggests that the same reasoning applies to the Crown in Certificate of Inadequacy proceedings and it is upon that basis that I determine this application.

In any event the legal point does not arise upon the facts of this case as the Crown is not challenging the finding made by the Crown Court. A positive case that the applicant’s assets were greater than £750,000 when the Confiscation Order was made has not been raised. The respondent has no evidence of when the applicant’s assets which it contends now exist were obtained nor, critically, is the court required to make a finding as to when the same occurred. It is of note that in R v. Adams above the Court of Appeal which dealt with the appeal in respect of the FRO stated at [8]:

“Although, at the end of the day, the prosecution were prepared to accept the basis of plea, it remains to some extent uncertain what the full extent of the financial situation was or indeed is….”

In considering the application it is relevant to consider the events which led to the conviction for the money laundering offence as identified in the prosecution opening for the criminal proceedings. Further, extracts from the covert surveillance demonstrate that even before their arrest Terence and Ruth Adams were prepared to devise and execute stratagems for channelling Terence Adams’s money to himself. The problem being confronted was to give Terence Adams an income which appeared legitimate and which would withstand the scrutiny of the authorities. On this matter Solly Nahome provided advice. Two false businesses were created for this purpose. Extracts from the covert surveillance demonstrate the knowledge and involvement of Ruth Adams in her husband’s financial affairs. In November 1997 Ruth Adams alerted her husband to a weakness in the companies which had been set up for the purposes of providing an apparent source of legitimate income for him. Ruth Adams is recorded as saying to her husband:

“do you know what I said to Solly, right…. You know its business…the businesses the Midland. .. Although you’re putting it in surely you’ve got to show something coming out. … I said you’ve got to show that you’re working it. … Don’t you think we should go and buy something at an auction. .. and then sell it back… you’re a consultant on antiques and jewellery, everything. .. You can’t keep putting money in an account. You’ve got to take some out and show its working.”

Ruth Adams did not accept the construction put upon this passage, namely her knowledge of and involvement in her husband’s affairs, but she did not dispute the factual content of the recording. The person with whom she is having the discussion was Solly Nahome, the financial advisor to Terence Adams during the period of the money laundering offences. I regard that particular extract as telling and consistent with the view which I formed of Ruth Adams. Having noted her involvement in the handling of her husband’s affairs in respect of the FRO, the subsequent setting up by her of two companies, having read her written evidence and listened to her oral evidence my assessment of Ruth Adams is that she is a shrewd woman, able to conduct financial matters which, in fact, are those of herself and her husband. Even upon their own evidence, the financial affairs of Terence and Ruth Adams are intertwined. Theirs is a lengthy relationship, Ruth Adams has played her own part in it.

It was the Court of Appeal in R v. Adams above who noted that the applicant had ceased his criminality in or about 1993 but had:

“clearly amassed a considerable fortune by the time of the end of his criminal activity and it was expended on a lavish lifestyle which involved, … significant numbers of first class flights to different destinations around the world, expensive jewellery, private education for his child and the acquisition of antiques, works of art and other property.”

The lifestyle was enjoyed by Terence and Ruth Adams, and I believe, is one which neither is inclined to lose. The difficulty is that Terence Adams is subject to a Confiscation Order which means that any substantial sums in his possession are liable to be taken to pay it. He is also subject to the stringent reporting conditions of the FRO. It is to overcome these restrictions that the Crown contend that a variety of means are used by Terence and Ruth Adams to avail themselves of money from a hidden reserve of funds.

On the evidence the following loans received by Ruth Adams are said to have been made:

The immediate source of the £3000 was an ISA savings account, prior to the withdrawal it had a balance of £3974. On the same day that the £3000 was withdrawn the balance of £974.58 was also withdrawn leaving a zero balance. The account was closed some months later with no further transactions. There is no evidence of the source of the £3000 or how Mrs Tonna, a lady in her 80’s, could afford to lend it. No information was before the court as to the financial position of Mrs Tonna. It was Ruth Adams’s case that she required the money for living expenses. Six days after the loan was made, Ruth Adams spent £537 upon a designer dress at Harvey Nichols. It is the Crown’s case that it is not credible that a woman would borrow £3000 without any explanation of how her mother could afford it, continue to engage in luxury spending and still at the date of the hearing owe £3000. The implication is that Mrs Tonna had been repaid or was provided with the £3000 in order to give it to Ruth Adams. In my view there is force in this contention.

Brian Higgins is the uncle of Terence Adams, the loan has not been repaid. No documents were produced in respect of this loan, there is no evidence of its source. Mr Higgins’s family relationship is with Terence Adams. It was the evidence of Brian Higgins and Terence Adams that the applicant was not involved in and that they have never discussed the loan. Given the relationship between the two men I have considerable difficulty accepting this evidence.

Sue Evans is related to Terence Adams through her husband who is his cousin. Sue Evans described herself as a “housewife” and said that the money for the loan came from her husband. It was her evidence that Terence Adams and her husband were not involved in any part of this process, the loan has not been repaid. This is said by the Crown to be a transparent example of the strategy of Terence and Ruth Adams namely that the family relationship is between Terence Adams and Sue Evans’s husband, it is Sue Evans’s husband who provides the money yet Terence Adams is not involved and the husband does not give evidence. Once again there is no evidence as to the source of the funds. It is not disputed that Sue Evans may well be telling the truth in that she is responsible for the transfer of money which came from her husband’s bank account. The question which is not satisfactorily dealt with is how her husband originally sourced the money. Further, I have real difficulty accepting that Terence Adams and Sue Evans’s husband would have had no involvement in the transfer of these monies, given the family relationship and the fact that the monies came from Sue Evans’s husband.

These monies were said to be an investment in N1 Angel Limited, in fact £10,000 was used by Ruth Adams for living expenses. The loan was made on 28 May 2013.The loan agreement was not drawn up until August 2013. On 9 July 2013 there was a directions hearing before Nicol J at which Terence Adams was ordered to file his evidence by 7 August 2013. The Crown contend that the two matters are linked. Mr Lakhanpaul was satisfied that a solicitor had been involved and was responsible for drafting the agreement. Dale Golder’s evidence was that a two month delay in producing such a document is not unusual. The position of Dale Golder is illustrative of another aspect of this case namely the inter relationship between individuals who are included in financial transactions with Ruth Adams. One of Dale Golder’s car hire customers is Michael Ellis a man he has known for some years. Michael Ellis is one of the principals of Sterling Wholesale Limited which works with Ruth Adams in respect of N1 Angel.

In his first witness statement to the court Dale Golder described himself as working in the field of “building and renovation”. It was only as a result of the investigative work of the police that the existence of JTD Sports Cars was identified and its connection with convicted criminals was discovered. It was following disclosure of this information in the first witness statement of Mr Lakhanpaul that Dale Golder made a second statement identifying his involvement in JTD Sports Cars and denying any involvement in any criminal activities, evidence which he repeated in court.

There are no documents before the court evidencing the source of Dale Golder’s funds which provided the basis of the loan. No business documentation relating to the operation of N1 Angel including any projections of sales was provided by Ruth Adams to Dale Golder prior to the loan being made. £35,000 is a significant sum. Dale Golder, on his own account, is a businessman. It is difficult to understand how such a sum is lent in the absence of any documentation from the company relating to its business and its forecasts. Within a short time of monies being transferred Ruth Adams appropriated £10,000 for living expenses. At its lowest, these matters raise a real question as to whether the £35,000 was intended as a genuine investment in N1 Angel.

Ruth Adams refused to disclose the name of the friend who had provided this loan as she said she did not have permission to disclose the friend’s name. The application for these proceedings was made two years ago. Ruth Adams has been involved in the preparation of evidence for this hearing. She knew that she was being required to explain the source of loans. It is surprising that she did not ask her friend for permission to disclose her name.

No documents have been produced to verify the arrangement whereby Mr Haart continued to pay rental of £1,750 on the flat where Ruth Adams, and Terence Adams upon his release from prison, lived. Ruth Adams was living in the flat when she had available to her share of the proceeds of sale of Fallowfield. Ian Haart has provided no evidence. In these proceedings it was said that he had disappeared to America in unexplained circumstances. The effect of the payment of a not inconsiderate sum by way of rent was to enable Ruth and Terence Adams to have money available for spending. The absence of any documentation relating to this arrangement and the absence of evidence from Mr Haart does raise a question as to the legitimacy of these payments and their source.

Terence Adams received £14,650 net from the company, the issue is whether this employment was genuine. Terence Adams has no qualifications or training in jewellery design. It was his evidence that he has always enjoyed this work and did it before working for Universal Imports. He produced drawings of his designs which he said were derived from jewellery magazines which he would tweak. No disrespect is intended but the drawings are somewhat crude and lack any fine detail as would be expected in such design work. Terence Adams’s introduction to Moshe Tobi was through a relative of Solly Nahome. The purpose of his employment was to design jewellery yet he provided no drawings or designs for Mr Tobi to see before the employment commenced. It emerged that the jewellery he designed was too expensive for the company, no design of his was ever sold by the company. It is difficult to accept that a man who possesses no design training or qualifications, is employed and paid for hitherto unseen design work which is then deemed too expensive for the company to produce, is in fact engaged in legitimate employment by the company. The fact that Terence Adams was introduced to the company through a relative of his former financial advisor is an example of the interconnection between associates of Terence Adams.

This is the name of the business on the invoice produced by Ruth Adams to evidence the total monies, £16,630 paid to her for her work as an interior designer on a project for Dale Golder. The circumstances in which this work arose bear some examination. Save for an online course which she did not complete, Ruth Adams has no training in interior design nor any professional experience. The reason given by Ruth Adams and Dale Golder for him being willing to employ her was because he had seen her own home and he liked what she had done. Ruth Adams is a close friend of Dale Golder’s wife. No fee was negotiated for the work, Dale Golder identified a sum and Ruth Adams agreed to it. The only document produced to evidence this business arrangement is the ‘invoice’ provided by Ruth Adams. Dale Golder provided no evidence from the Montana company accounts to identify the source of the payment. The employment of an individual with no proven design experience or training, no negotiated rates for payment, only one document to evidence payment and none from the company employing her does not provide the strongest of evidential bases for stating that the sums paid to Ruth Adams emanated from Montana and represent professional work done by her.

This company has made no profit and is in debt to Sterling Wholesale Limited owned by the Ellis family for £52,000. Terence Adams who has no training in design, is its chief designer and only employee. The design work by Terence Adams is done in the office of Michael Ellis where he will tweak designs or drawings created by others. No documentation was produced, in the form of draft accounts, management accounts, invoices, correspondence with purchasers or purchase orders to evidence the work of this company. The only identified client is Dale Golder who paid £800 for some jumpers which he sold to his employees. The bank account identifies a total of £2000 received by the company. N1 Angel designs provided the means for Dale Golder to transfer £35000 to Ruth Adams in May 2013, Ruth Adams then transferred £10000 from that sum to her own account to pay Terence Adams and meet living expenses.

The company was incorporated on 2 January 2013. The only evidence of any activity is a trip by Ruth Adams and her daughter to China when they spent in excess of £4000 which included flights. There are no documents evidencing the purchase of stock or any other business activity. On Ruth Adams’s own evidence Stara Stara has generated no income in the 19 months since its incorporation. There is no evidence of any effort to do so.

The two companies set up by Ruth Adams have done little by way of business but have provided a means of attracting investment or provide a vehicle for personal expenditure. It is impossible to look at either of these companies in isolation. When viewed in the context of the history of the entire matter, in particular the previous creation of companies in order to provide a seemingly legitimate form of income for Terence Adams, I am not satisfied that either company represents a wholly legitimate endeavour to sell clothes or jewellery.

Ruth Adams is making extended use of cash to purchase goods and services. The purchase of a watch in March 2010, membership of the Grove Spa, June 2010, dental treatment July 10 to January 2011, storage March 2011 to September 2013, the weight loss programme in the Autumn of 2013 all represent payments which include a substantial cash element. Ruth Adams’s share of the Fallowfield money was exhausted by January 2012. Much of the expenditure took place before January 2012, at a time when Ruth Adams had funds available in her bank accounts to meet these payments. No good answer has been given as to why substantial sums of cash were used. Mr Lakhanpaul was only able to find out about the use of cash because of his examination of the bank statements of Ruth Adams. If purchases have been made wholly in cash they are incapable of discovery.

When Fallowfield was searched by the police £58,500 was found in cash in the loft. It is clear that the use of cash, and substantial amounts of cash, is a part of the lifestyle of Terence and Ruth Adams. Both were aware of the restrictions imposed by the Confiscation Order and the FRO. The effect of cash expenditure is to minimise the appearance of spending. Any payments made wholly in cash leave no evidential trail. In my view, the use of cash as a means of payment does indicate the existence of an unidentified cash reserve which is available to Terence and Ruth Adams.

By January 2012 Ruth Adams’s share of the proceeds of sale of Fallowfield was exhausted. Save for some limited income obtained by Ruth Adams from acting, Terence and Ruth Adams had no income. It is against that background that their spending falls to be scrutinised. What it reflects, whether it is restaurants, the spa at the Grove Hotel, designer clothes, costly dental treatment, the opera or the theatre is a liking for the more expensive items in life. It was the evidence of Terence Adams that their expenditure amounted to £200 a week plus rent. The bank statements identify no expenditure on utility bills and cannot include the items of cash expenditure. The broader evidence of expenditure is inconsistent with the evidence of Terence Adams as to their weekly expenditure. Even allowing for ‘loans’ from family or friends the nature of the spending points to the fact that there is a reserve of funds which can be and is utilised by Terence and Ruth Adams. If the reserve of funds was that of Ruth Adams she has no reason to hide it as it cannot be used to satisfy the Confiscation Order.

A curious feature of this case has been the investment made by Ruth Adams on 13 September 2011 of £60,000 in Broking Limited. Broking Limited appears to have done nothing as a business, it has made no sales nor money. For reasons which Mr King was wholly unable to explain, the debt to Ruth Adams was not shown in the company’s account. The investment made by Ruth Adams was at a time when she was coming to the end of her share of the proceeds of sale of Fallowfield. In September 2011, £90,000 was in her account, the investment left her with just £30,000. If it was the case that Ruth Adams wished to make a good investment she seems to have done remarkably little by way of research or proper enquiry as to what the likelihood of returns on her investment into Broking Limited would produce. This is a financial transaction which raises questions as to its purpose to which no good answers have been given.

The spending in which Terence and Ruth Adams are engaged is inconsistent with their claim of having no assets and being reliant on friends and family for loans for living expenses. On their account they have lived in increasingly straightened circumstances with one rapidly diminishing and now extinguished cash asset and no apparent form of income. I do not accept that these two people would behave in the manner identified by the expenditure or make substantial cash payments unless there was another source of funding. The pattern of behaviour demonstrated by Terence and Ruth Adams is consistent with the original case against Terence Adams namely of concealing his assets through associates and using companies to provide an apparent form of legitimate income.

I am not satisfied that Terence Adams has provided full and candid disclosure to the court as to the assets held in July 2014 which fund his life and that of his wife. I believe that there are financial matters known peculiarly to Terence Adams which are not before the Court. Upon the evidence presented to the Court on behalf of the applicant I am not satisfied that the current assets of Terence Adams are worth less than the outstanding balance of the Confiscation Order. Accordingly this application is refused.