JERSEY’S confiscations under the Forfeiture Civil Law – Jersey’s UWO

In August 2018, the Forfeiture of Assets (Civil Proceedings) Law (the Forfeiture Law) came into force in Jersey. This law allows authorities to seize Tainted Property if they are suspected to be connected to criminal activities, even without a criminal conviction. It’s a powerful tool in the fight against financial crime, aiming to disrupt the flow of illicit funds and deter money laundering and other illegal activities.

The law primarily targets “tainted property,” including assets suspected of being connected to unlawful conduct. This can encompass many assets, such as cash, bank accounts, real estate, and other valuable items.

In the context of the Forfeiture of Assets (Civil Proceedings) Law in Jersey, the burden of proof for determining "tainted" property is "on the balance of probabilities" or "preponderance of the evidence." This means that the authorities must demonstrate that it is more likely than not that the property is connected to unlawful conduct. The burden lies with the government or the prosecuting authority to establish that the property is tainted. They must present sufficient evidence to convince the court of the property's connection to criminal activity. The court reviews the evidence presented by the authorities. If the court is satisfied that the property is tainted based on the balance of probabilities, it can issue a forfeiture order. Property owners can challenge the forfeiture by presenting evidence to dispute the government's claims. This ensures a fair process where both sides can present their case.

Since 2018, Several successful applications have already been made, with the proceeds now held in the Criminal Offences Confiscation Fund (COCF), ultimately benefiting the people of Jersey.

TWO EXAMPLES FROM 2019

• The most significant successful application under the 2018 Forfeiture of Assets Law was concluded in 2019, with more than US$ 10 million paid into Jersey's Criminal Offences Confiscation Fund (COCF).  The case is referred to as the Truk Settlement below. The Truk Settlement is a notable case involving confiscating assets linked to organised crime.
• Also, Ian Joseph Ellis, a taxi driver from Glasgow, was involved in a notable case of tax evasion and money laundering.  In the case of Ian Joseph Ellis, the amount seized was £33,804.52. This sum was held in a dormant account at Standard Chartered Bank in Jersey and was confiscated due to its connection to tax evasion and money laundering activities.

IAN JOSEPH ELLIS - DETAILS OF THE CASE

1. Conviction: Ellis was convicted in Scotland in 2001 for being involved in the supply of diazepam and oxazepam, resulting in a 12-month prison sentence
2. Funds: During the investigation, authorities discovered £33,804.52 in a dormant account at Standard Chartered Bank in Jersey, which had been opened in the 1980s
3. Freezing of Account: The account was frozen in 2002 after Standard Chartered Bank filed a suspicious activity report (SAR) with Jersey’s Joint Financial Crime Unit (JFCU)
4. Attempts to Close Account: Ellis attempted to close the account in 2003 after moving to Cyprus, but his request was denied due to ongoing investigations
5. Source of Funds: Ellis claimed the funds were from his taxi business and were placed in Jersey to reduce his tax burden. However, he could not provide evidence as the Criminal Confiscation Unit in Edinburgh had confiscated his business records
6. Court Decision: Due to Ellis' lack of cooperation and admission of understating his income to UK tax authorities, the Jersey Attorney General applied for the forfeiture of the account
7. Outcome: The court ordered the confiscation of the funds, concluding that they were criminal property

This case highlights the complexities of financial crime investigations and the importance of international cooperation in combating tax evasion and money laundering.

TRUK SETTLEMENT

The Truk Settlement is a notable case involving confiscating assets linked to organised crime.

1. The application just concluded, which saw more than US$ 10 million paid into the COCF, related to funds held in the Truk Settlement, believed to have originated from a Liechtenstein foundation called the Abordo Foundation in the 1980s.
2. The now defunct Abordo Foundation beneficiary was a lawyer (now deceased) at the US law firm Miller, Cassidy, Larocca and Lewin, whose client list included high-profile individuals connected to organised crime.
3. The Abordo Foundation funds were held at UBS Jersey until 2014 when they were settled into the Truk Settlement with Allied Trust Company Limited as trustees and held in Standard Bank. 
4. The funds' provenance could not be properly established, so a report was commissioned to identify where the funds in the Truk Settlement derived from.
5. This report identified that the US lawyer, who was made a beneficiary of the Abordo Foundation, had a client relationship with a high-ranking member of the Teamsters Union who had been convicted of conspiracy to bribe in the US in the 1980s.
6. In light of the suspected links of the money to organised crime in the US, the matter was referred from the States of Jersey Police’s Joint Financial Crimes Unit to the Law Officers’ Department’s Economic Crime and Confiscation Unit for further investigation.
7. As a result of that investigation, proceedings began under the Forfeiture Law, as it was suspected that the funds held in the Truk Settlement were tainted property.
8. All the assets of the Truk Settlement, namely US$16,828,956.98, WERE divided between the COCF and charities.
9. The COCF receives 65% of the accounts' net balance, while the charities receive the balance.

The Attorney General, Robert MacRae QC, said:

• “I welcome the successful outcome of this investigation run by the Law Officers’ Department’s Economic Crime and Confiscation Unit in cooperation with the States of Jersey Police’s Joint Financial Crimes Unit.
• The Forfeiture Law is a valuable tool allowing the forfeiture of tainted funds in civil proceedings when criminal prosecution is impossible.”

Here's a detailed overview:

Background

• The funds in the Truk Settlement were traced back to the Abordo Foundation, a Liechtenstein-based entity from the 1980s.
• The foundation's beneficiary was a now-deceased lawyer from the US law firm Miller, Cassidy, Larocca and Lewin.
• This lawyer had a client list that included high-profile individuals connected to organised crime

Investigation and Confiscation

• The funds were held at UBS Jersey until 2014, when they were transferred to the Truk Settlement with Allied Trust Company Limited as trustees, and the funds held in Standard Bank
• Due to the suspicious origins of the funds, a report was commissioned to trace their provenance.
• It was discovered that the lawyer had a client relationship with a high-ranking member of the Teamsters Union, who had been convicted of conspiracy to bribe in the US during the 1980s

Legal Proceedings

• Given the suspected links to organised crime, the matter was referred to the State of Jersey Police’s Joint Financial Crimes Unit and the Law Officers’ Department’s Economic Crime and Confiscation Unit. Proceedings were initiated under Jersey's Forfeiture of Assets Law, which allows for the civil forfeiture of tainted assets

Outcome

• The Royal Court of Jersey confirmed that all assets in the Truk Settlement, totalling $16,828,956.98, were to be divided between the Criminal Offences Confiscation Fund (COCF) and local charities
• The COCF received 65% of the net balance, while the remaining funds were allocated to charitable causes
• This case marked a significant success for Jersey's efforts to combat financial crime and ensure that recovered assets benefit the public

Source:  

• First major confiscation under Forfeiture of Assets - Government of Jersey. https://www.gov.je/news/2019/pages/firstconfiscationunderforfeiture.aspx.
• US lawyer’s $17m criminal cash to benefit Jersey projects. https://www.bailiwickexpress.com/jsy/news/us-lawyers-13m-criminal-cash-benefit-jersey-projects/?cpage=1.
• https://www.gov.je/news/2019/pages/firstconfiscationunderforfeiture.aspx
• https://www.bailiwickexpress.com/jsy/news/us-lawyers-13m-criminal-cash-benefit-jersey-projects/?cpage=1
• https://www.bailiwickexpress.com/jsy/news/court-confiscate-drug-offenders-money-over-tax-evasion-confession/): [Bailiwick Express](https://www.bailiwickexpress.com/jsy/news/court-confiscate-drug-offenders-money-over-tax-evasion-confession/)
• https://www.comsuregroup.com/news/jersey-confiscates-money-after-tax-evasion-confession-2019/
• https://www.comsuregroup.com/news/jersey-confiscates-money-after-tax-evasion-confession-2019/
• Court to confiscate drug offender's money after tax evasion confession. https://www.bailiwickexpress.com/jsy/news/court-confiscate-drug-offenders-money-over-tax-evasion-confession/.
• Jersey confiscates money after tax evasion confession [2019]. https://www.comsuregroup.com/news/jersey-confiscates-money-after-tax-evasion-confession-2019/.
• Forfeiture of Assets (Civil Proceedings) (Jersey) Law 2018. https://www.jerseylaw.je/laws/current/Pages/08.490.aspx.