Criminal Assets Bureau v Saunders

• Jurisdiction: Ireland
• Judge: Mr. Justice Alexander Owens
• Judgment Date: 06 September 2022
• Neutral Citation: [2022] IEHC 550
• Court: High Court
• Docket Number: [2020 NO. 22 CAB]

Proceeds of Crime

In the Matter of Section 3(1) of the Proceeds of Crime Acts 1996–2016

Between

Criminal Assets Bureau

Applicant

and

Stephan Saunders & Tammy Saunders

Respondents

[2022] IEHC 550

[2020 NO. 22 CAB]

THE HIGH COURT

Proceeds of crime – Property – Proceeds of Crime Act 1996 s. 3(1) – Applicant seeking an order under s. 3(1) of the Proceeds of Crime Act 1996 – Whether properties were acquired by the respondents using proceeds of crime

Facts: The respondents, Mr and Mrs Saunders, owned a house at Hazelbury Park, Dublin 15 (Hazelbury Park). They bought Hazelbury Park in 2005 for €360,000 with a mortgage loan of €324,000 from Ulster Bank. Hazelbury Park was extended and refurbished shortly after it was bought. The respondents also owned a house at Mayeston Lawn, Finglas, Dublin 11 (Mayeston Lawn). They bought Mayeston Lawn around July 2006 as a buy-to-let investment for €300,000 with a mortgage loan for €255,000 from First Active plc, a subsidiary of Ulster Bank. Mayeston Lawn was sold in their personal insolvency arrangements. A small surplus on this sale was used to reduce the mortgage balance owed on Hazelbury Park. The applicant, the Criminal Assets Bureau (the Bureau), applied to the High Court for an order under s. 3(1) of the Proceeds of Crime Act 1996. The Bureau claimed that Hazelbury Park and Mayeston Lawn were bought with proceeds of crime or in connection with property that, directly or indirectly, constituted proceeds of crime. The Bureau relied on affidavit evidence of belief of the Chief Bureau Officer as to the matters set out in s. 8(1) of the 1996 Act in relation to each of the two houses. This affidavit set out the basis of his belief that Mr Saunders was involved in criminal activities and that the properties were acquired with proceeds of crime and using arrangements to launder proceeds of crime. He relied on information contained in the other affidavits filed on behalf of the Bureau in forming this belief. Those affidavits and the exhibits contained a wealth of details which supported this belief.

Held by Owens J that the material presented by the Bureau in those affidavits and exhibits, including documents submitted to support mortgage applications, revenue information relating to earnings, VAT, and motor vehicles, and copies of statements relating to several bank accounts, provided very strong and persuasive support for the beliefs of the Chief Bureau Officer that Hazelbury Park and Mayeston Lawn were acquired by the respondents using proceeds of crime. Owens J found that there were reasonable grounds for this belief of the Chief Bureau Officer in relation to both assets. Owens J concluded from this evidence that proceeds of crime from activities of Mr Saunders as a member of a gang of robbers funded a spending spree by the respondents on houses, cars, and businesses between 2005 and 2008 and that they got into financial difficulty from 2010 because they did not have access to enough money to meet commitments at that stage. Owens J held that these conclusions applied to the sources of funding for acquisition of the two houses and the renovation of Hazelbury Park, to sources of funding for mortgage payments until 2010 when the mortgages fell into arrears, to rental income received by the respondents for Mayeston Lawn and to surplus funds from the sale of Mayeston Lawn. Owens J held that those benefits were all derived from proceeds of crime. Owens J held that the material advanced in evidence by the respondents was insufficient to demonstrate that these core conclusions were incorrect.

Owens J held that there would be an order under s. 3(1) of the 1996 Act in relation to Hazelbury Park. He held that the residual value of that property after discharge of the mortgage was derived from proceeds of crime and nothing had been identified which would establish that a serious risk of injustice would arise from the making of this order.

Application granted.

JUDGMENT of The Hon. Mr. Justice Alexander Owens delivered on the 6th day of September 2022.

1 This is an application by the Criminal Assets Bureau (the Bureau) for an order under s.3(1) of the Proceeds of Crime Act 1996 (the 1996 Act)

2 Stefan Saunders and his wife Tammy Saunders (née Gillard) own a house at Hazelbury Park, Dublin 15 ( Hazelbury Park) comprised in Folio DN135866F. They bought Hazelbury Park in 2005 for €360,000 with a mortgage loan of €324,000 from Ulster Bank. Hazelbury Park was extended and refurbished shortly after it was bought.

3 Stefan Saunders and Tammy Saunders also owned a house at Mayeston Lawn, Finglas, Dublin 11 ( Mayeston Lawn). They bought Mayeston Lawn around July 2006 as a buy-to-let investment for €300,000 with a mortgage loan for €255,000 from First Active plc, a subsidiary of Ulster Bank.

4 Mayeston Lawn was sold recently in their personal insolvency arrangements. A small surplus on this sale was used to reduce the mortgage balance owed on Hazelbury Park.

5 The Criminal Assets Bureau (the Bureau) claims that Hazelbury Park and Mayeston Lawn were bought with proceeds of crime or in connection with property that, directly or indirectly, constituted proceeds of crime. The Bureau claims that Hazelbury Park and Mayeston Lawn were acquired with proceeds of criminal activities of Stefan Saunders.

6 The Bureau invites me to conclude that the sources of value given to acquire the two houses and to extend and improve Hazelbury Park comprise or include or are connected with proceeds of crime and that each of the properties “…constitutes, directly or indirectly, proceeds of crime…” and “…was acquired in whole or in part, with or in connection with property that, directly or indirectly, constitutes proceeds of crime…” within s.3(1)(a), (i) and (ii) the 1996 Act.

7 The Bureau relies on affidavit evidence of belief of the Chief Bureau Officer as to the matters set out in s.8(1) of the 1996 Act in relation to each of these two houses. This affidavit sets out the basis of his belief that Stefan Saunders was involved in criminal activities and that the properties were acquired with proceeds of crime and using arrangements to launder proceeds of crime. He relied on information contained in the other affidavits filed on behalf of the Bureau in forming this belief. These affidavits and the exhibits contain a wealth of details which support this belief.

8 I have considered the material presented by the Bureau in these affidavits and exhibits. These materials include documents submitted to support mortgage applications, revenue information relating to earnings, VAT, and motor vehicles. They also include copies of statements relating to several bank accounts. This information provides very strong and persuasive support for the beliefs of the Chief Bureau Officer that Hazelbury Park and Mayeston Lawn were acquired by Stefan Saunders and Tammy Saunders using proceeds of crime. There are reasonable grounds for this belief of the Chief Bureau Officer in relation to both assets.

9 In summary, I have concluded from this evidence that proceeds of crime from activities of Stefan Saunders as a member of a gang of robbers funded a spending spree by Stefan Saunders and Tammy Saunders on houses, cars, and businesses between 2005 and 2008 and that they got into financial difficulty from 2010 because they did not have access to enough money to meet commitments at that stage.

10 These conclusions apply to the sources of funding for acquisition of the two houses and the renovation of Hazelbury Park. They also apply to sources of funding for mortgage payments until 2010, when the mortgages fell into arrears. They also apply to rental income received by Stefan Saunders and Tammy Saunders for Mayeston Lawn and to surplus funds from the recent sale of Mayeston Lawn. These benefits were all derived from proceeds of crime.

11 The material advanced in evidence by Stefan Sanders and Tammy Sanders is insufficient to demonstrate that these core conclusions are incorrect.

12 I do not accept some of the contentions advanced in affidavits presented by the Bureau. The Bureau suggests that U Design trading receipts may have been a vehicle to launder money. There is insufficient evidence to support this.

13 It is necessary to avoid speculation where records such as bank account statements or business vouchers are incomplete or not available for periods in the past. However, sufficient records of transactions and other items of documentary evidence are available to enable this Court to draw inferences on matters relevant to the key elements of the Bureau's claim.

14 Evidence presented by the Bureau shows that between 2003 and 2006 Stefan Saunders and Tammy Saunders had access to amounts of money grossly out of kilter with possible sources of legitimate earnings. From April 2005 until 2007 they engaged in a spending spree on expensive cars, houses, and extensive renovation of two properties using funds which cannot be explained except by reference to access to proceeds of crime. I accept the conclusion of Bureau Forensic Accountant No 3 that their expenditure did not square with their identified legitimate sources of income.

15 This spending spree is not capable of being explained away as a mixture of legitimate earnings from businesses or employments and easy access to cheap sources of credit. Evidence establishes that other factors were in play.

16 Money from unidentified sources was used to part-fund acquisition of houses and at least one car and to renovate two houses. Money from unidentified sources was also used to provide working capital for an interior decoration business ( U Design) established in June 2005 in Berkeley Road in Dublin. Money from unidentified sources was used to open and operate hair salons in Berkeley Road and in Meakstown, near Finglas. Stefan Saunders used bank accounts of the hair salons to pay himself weekly income until 2010. The interior...