Appellant: Gilchrist, Q.C.; Paterson Bell

Respondent: A N Brown; Crown Agent

1 February 2011

[1] On 10 March 2006 the appellant was found guilty by unanimous verdict of charge 1 and by majority verdicts of charges 2 and 3 of the indictment. Following an earlier hearing - see Ahmad v HM Advocate [2009] HCJAC 60, 2009 SCCR 821 - at which certain grounds of appeal were refused, and further procedure thereafter in which the appellant abandoned any further challenge to his conviction on charges 2 and 3, there remained for consideration by us the challenge to his conviction on charge 1 in terms of grounds of appeal 2, 4 and 5 and his appeal against the concurrent sentences imposed on charges 1, 2 and 3, viz 2 years, 6 years and 6 years. We refused the appeal against conviction and the appeal against sentence so far as relating to charge 1. However, we allowed the appeal against sentence in respect of charges 2 and 3, quashed the sentences of 6 years and imposed sentences of 4 years on each charge to be served concurrently with each other and with the sentence of 2 years on charge 1. We now explain our reasons for reaching these decisions.

Appeal against Conviction on Charge 1

[2] Although the appeal is confined to charge 1, it helps to understand the whole circumstances to be aware of the terms of charges 2 and 3. The co-accused Zohaib Assad was convicted on all three charges and also on charge 4, but died before his appeal could be determined. Verdicts of not proven on each of charges 2 and 3 were returned in respect of the co-accused Gurie. The four charges were in the following terms:

"(1) you ZOHAIB ASSAD and MOHAMMAD AHMAD, being engaged in a business in the regulated sector (namely transmission of money) and, as a result of information or other matter which came to you in the course of said business (namely repeated visits to you by WILLIAM ANTHONY GURIE to deposit large, unexplained quantities of cash for transmission to a jurisdiction with which he had no legitimate connection known to you) knowing, suspecting or having reasonable grounds for suspecting that WILLIAM ANTHONY GURIE was engaged in money laundering did, between 23 February 2003 and 26 September 2003, both dates inclusive, at the shop at 159 Kenmure Street, Glasgow, occupied by Makkah Travel Ltd, fail to make the disclosure required by Section 330(5) of the aftermentioned Act as soon as was practicable after the information or other matter came to you; CONTRARY to the Proceeds of Crime Act 2002, Section 330(1);

(2) you ZOHAIB ASSAD, MOHAMMAD AHMAD and WILLIAM ANTHONY GURIE did, between 23 February 2003 and 26 September 2003, both dates inclusive, at the shop at 159 Kenmure Street, Glasgow, occupied by Makkah Travel Ltd, at the premises at 14 Blythswood Square, occupied by National Westminster Bank plc and at the premises at 221 Albert Street, Glasgow occupied by Clydesdale Bank plc have possession of criminal property, namely quantities of cash amounting to £2,442,318.75 of money: CONTRARY to the Proceeds of Crime Act 2002, Section 329(1)(c);

(3) you ZOHAIB ASSAD, MOHAMMAD AHMAD and WILLIAM ANTHONY GURIE did, between 23 February 2003 and 26 September 2003, both dates inclusive, at the premises at 14 Blythswood Square, Glasgow, occupied by National Westminster Bank plc, Leslie Street, Glasgow and elsewhere in the United Kingdom, transfer and remove from Scotland criminal property namely quantities of cash amounting to £2,256,646.00 of money by paying said cash into said bank and transmitting its value to Pakistan, United Arab Emirates and China: CONTRARY to the Proceeds of Crime Act 2002, Section 327(1)(d) and (e)

(4) you ZOHAIB ASSAD, MOHAMMAD AHMAD and WILLIAM ANTHONY GURIE did no 26 September 2003 at the shop at 159 Kenmure Street, Glasgow, occupied by Makkah Travel Ltd, at the house at 54 Waukglen Crescent, Darnley, Glasgow occupied by you ZOHAIB ASSAD and elsewhere, have possession of criminal property, namely £384,760.00 of money; CONTRARY to the Proceeds of Crime Act 2002, Section 329(1)(c)"

[3] There were three strands to the argument in support of the appeal: firstly, that there was insufficient evidence for conviction on charge 1; secondly, that there was insufficient evidence to exclude the "training limitation" or defence under section 330(6) and (7) of the Proceeds of Crime Act 2002 ("POCA"), which in the circumstances the Crown were bound to exclude; and thirdly, esto the evidence was sufficient to meet the point made in strand two, the trial judge's directions to the jury on that matter were inadequate and amounted to a misdirection.

General Sufficiency of Evidence on Charge 1

[4] Charge 1 alleges a contravention of section 330(1) of POCA. That subsection provides that an offence is committed if each of three conditions is satisfied. The three conditions are set out in subsections 2, 3 and 4 as follows:

"(2) The first condition is that he -

(a) knows or suspects, or

(b) has reasonable grounds for knowing or suspecting,

that another person is engaged in money laundering.

(3) The second condition is that the information or other matter -

(a) on which his knowledge or suspicion is based, or

(b) which gives reasonable grounds for such knowledge or suspicion,

came to him in the course of a business in the regulated sector.

(4) The third condition is that he does not make the required disclosure as soon as is practicable after the information or other matter comes to him".

The debate centred on the sufficiency of evidence to establish the first condition. There was no dispute that the appellant was involved in a business in the regulated sector and that the information or material relied upon by the Crown, if it came to him, came to him in the course of that business. It was also accepted that the third condition had been satisfied.

[5] The appellant's note of argument addressed the issue of sufficiency of evidence on charge 1 in the context of all the evidence before the jury, including that of the appellant and his co-accused Gurie. However, before us Mr Gilchrist also relied upon a "fallback position", that in any event at the end of the Crown case there had clearly been sufficient evidence to warrant the conviction of the appellant on charge 1. While he presented that as a fallback position, it emerged in the course of the discussion that that had to be his principal case. Although there was no ground of appeal directed to insufficiency at the close of the Crown case, a submission had been made in terms of section 97 at the trial. The Advocate depute, therefore, did not object to the extension of the appellant's case to include insufficiency at the close of the Crown case, and also conceded that, were the court to be satisfied that there was insufficient evidence at that stage, the appeal against conviction on charge 1 should be allowed on that ground.

[6] In support of his submission Mr Gilchrist stressed the significance of the particular terms of the charge. It depended exclusively on the Crown being able to demonstrate knowledge on the part of the appellant of deliveries of "unexplained quantities of cash" by the co-accused Gurie. Only if there was evidence of such knowledge would it be open to the jury to conclude that the appellant had reasonable grounds for suspecting that Gurie was engaged in money laundering which was the essence of the charge. As the result of surveillance carried out by officers of HM Revenue and Customs, there was evidence before the court of the delivery of large quantities of cash by Gurie to Makkah Travel Ltd on 2 April 2003 and then on 20, 22, 24, 25 and 26 September, i.e. during the period of the libel "between 23 February 2003 and 26 September 2003". However, there was no direct evidence that the appellant knew that Gurie had delivered money to Makkah Travel Ltd on any of these occasions, nor that he knowingly handled or otherwise dealt with any of the money delivered there. At its highest, the evidence established no more than that the appellant was at or near the business premises at times when Gurie delivered money to the other co-accused Zohaib, either in the shop or in the street nearby.

[7] The only Crown evidence placing the appellant at or near the shop when Gurie was making his deliveries related to surveillance on 20 and 24 September. In relation to 20 September one customs officer spoke to seeing Gurie stop his car close to Makkah Travel Ltd, remove a large heavy holdall from the boot and give it to Zohaib, who placed it in the boot of his own car. Another officer spoke to seeing Gurie enter the premises and then leave with Zohaib. As they were leaving, they were seen to meet the appellant, who was approaching the shop from another direction. The appellant shook hands with both men before Zohaib and Gurie entered a car which drove off. At that time Gurie had no bag. The evidence relating to 24 September 2003 was that two customs officers saw Gurie arrive by car at Makkah Travel Ltd and take a relatively full bag into the premises. The appellant was seen to be inside the shop. Thereafter Gurie emerged from the shop without the bag. Over an hour later Zohaib was seen to leave the shop with the bag. Taking that evidence at its highest, submitted Mr Gilchrist, it did not provide a basis for the jury to conclude that the appellant had knowledge of Gurie delivering cash to the premises.

[8] The Advocate depute accepted that in this particular case it was necessary for the Crown to demonstrate knowledge of deliveries of cash by Gurie. However, that was because of the particular terms of the libel in this case. The degree of knowledge or suspicion required in any case will depend on the particular circumstances of that case. In this case the Advocate depute relied, as he had done in responding to the appellant's no case to answer submission at trial, upon the events of 20 and 24 September as narrated in the previous paragraph in the context of the surrounding circumstances. In particular he relied on the circumstances of the appellant's offending in terms of charges 2 and 3, which concerned his personal involvement, with Zohaib, in dealing with large quantities of unexplained and unrecorded cash by banking it and giving instructions for its transfer to Pakistan, sometimes by unusual routes. In particular the appellant had banked substantial quantities of cash in the course of the week culminating on 26 September. The Crown had led evidence of the book-keeping arrangements within the business, which reflected that recorded deposits were generally of fairly small amounts up to a maximum of £2,000 or exceptionally £3,000. However, much larger unrecorded sums had been paid into banks by the appellant.

[9] We were satisfied that there was at the close of the Crown case sufficient evidence for the jury to convict the appellant on charge 1. The very nature of the business of Makkah Travel Ltd was the conduct of transactions in cash, whether to purchase travel documents or transfer money to relatives and associates in Pakistan. It was a "travel agency and money services bureau". The appellant was the secretary of the company, director, and a 50/50 shareholder with the founder "Mr Bhatti". By far the greater part of the business was to effect fairly small money transfers from Asians employed in the United Kingdom to their relatives in Pakistan. Although by the time the surveillance operation was carried out the co-accused Zohaib, son of Mr Bhatti, was playing a significant part in the operation of the business, the appellant continued to be secretary, director and 50% shareholder and to actively manage the business of the company, in particular the handling of cash and the delivery of large sums to banks. The appellant was thus well aware that the large deposits of cash he was making at banks, and indeed carried to the banks in plastic carrier bags, included large sums of cash not accounted for through the business's regular systems. The shop itself was a small rectangular space with a private office at the back. The desk which the appellant used lay near the door into the private office. On 24 September, while the appellant was in the main part of the shop, two customs officers observed Gurie enter the shop carrying a holdall which appeared to be reasonably full. A copy of the security video from the shop showed the appellant and Zohaib in the shop and Gurie entering the shop and going towards the private office at the rear. There was also evidence that the appellant was aware of Gurie coming from the shop in the company of Zohaib on 20 September. There was a case to answer. In endeavouring to answer the case, the appellant provided certain additional information which was relevant to his knowledge, and in the course of his case Gurie gave evidence of seeing the appellant in the shop when he delivered cash. However, it was unnecessary for us to consider the significance of that evidence in view of the decision we made on the position at the end of the Crown case.

Training Limitation

[10] Mr Gilchrist used the term "training limitation" as a shorthand description of the particular point about sufficiency that he sought to make in relation to the requirements of section 330(6) and (7) of POCA. These provisions are in the following terms:

"(6) But a person does not commit an offence under this section if -

(a) he has a reasonable excuse for not disclosing the information or other matter;

(b) he is a professional legal adviser and the information or other matter came to him in privileged circumstances;

(c) subsection (7) applies to him.

(7) This subsection applies to a person if -

(a) he does not know or suspect that another person is engaged in money laundering, and

(b) he has not been provided by his employer with such training as is specified by the Secretary of State by order for the purposes of this section".

The effect of these subsections is that, where conviction is sought on the basis of "reasonable grounds for knowing or suspecting", there is no offence where the accused has not been provided by his employer with the prescribed training. However, both counsel were at one in stating that exclusion of the possibility of the application of subsection 6 is not a further pre-condition to conviction under section 330(1), in addition to the three conditions set out in subsections (2), (3) and (4). Rather the application of subsection (6) requires to be addressed only where relevant matters covered by it and subsection (7) are put in issue in the trial. Were that to happen, the onus would be on the Crown to exclude the application of subsection (6). That is consistent with the view of the Divisional Court in England in Hogan v DPP [2007] EWHC 978 (Admin) at paragraph 27 and the views of the learned authors in Archbold: Criminal Pleading, Evidence & Practice 2011 Edition, Sweet & Maxwell, page 2440, paragraph 26-10.

[11] It was Mr Gilchrist's contention that subsections (6) and (7) were put in issue by the Crown leading evidence about training and relying upon it. He acknowledged that the matter had not been raised in the course of the submission of no case to answer. He submitted that, when the customs officer, Mr Houston, visited the premises and spoke to the appellant, he dealt with matters relating to training. In light of the fact that "training" was mentioned, it was necessary for the Crown to exclude the defence that the company had failed to provide the appellant with training.

[12] In response the Advocate depute submitted that the matters focused in subsections (6) and (7) were never an issue in the case. The evidence of Houston was led as part of the evidence of the whole surrounding circumstances to show that a check had been made on the appellant's understanding of what was required to ensure regulatory compliance. Houston had met with the appellant for an hour during which many aspects of the regime of anti-money laundering measures were discussed. That evidence also went towards showing the level of the appellant's appreciation of the requirements of POCA.

[13] In our opinion the evidence relating to the compliance visit by Mr Houston did not raise and bring into play as an issue the requirements of subsections (6) and (7). The evidence was not led for that purpose and did not even accidentally put those requirements in issue. There was no cross examination on behalf of the appellant in relation to the provision of training by the company. We noted also that the training to which subsection (7) relates is "such training as is specified by the Secretary of State by order for the purposes of this section". The issue is a very specific one which was not focused at any stage of the trial. In his address to the jury counsel for the appellant made passing reference to subsection (7) as follows:

"There are sections of the Act here, there is, and I mention it in passing, there's section 331 of the Act, there is also section 337 of the Act, no doubt 330(7), I meant to say, my Lord, of the Act, no doubt his Lordship will be giving you legal direction".

That was it. There was no indication in the speech of any factual basis on which subsection (7) could be said to come into play.

Misdirection in Relation to Section 330(6) and (7)

[14] Following on from the foregoing point it was contended by Mr Gilchrist that the directions of the trial judge in relation to these provisions amounted to a misdirection. What the trial judge said was this:

"Now, I come to subsection (7) which was a matter which was raised by Mr Jackson and may be of some importance. Subsection (7) provides 'this subsection applies to a person if (a) he does not know or suspect that another person is engaged in money laundering, and (b) he has not been provided by his employer with such training as is specified for the purposes of this section'. Now, Mr Jackson spent a long time on the question of what he called, not improperly if I may say so, the question of criminality involved and this, I would suggest to you, ladies and gentlemen, is the way in which the Act treats the question of criminality. That is to say, it provides, and I will come back to this in relation to the offences and other offences in a moment, it provides defences, in other words, it says that the subsection applies if a person does not know or suspect that another person was engaged in money laundering and that was the crux, I think, of Mr Jackson's argument, that there was insufficient elements to demonstrate that the second accused knew or suspected that matter.

Now, when I say defences one has to be very careful and you will remember what I said to you a moment ago about special defences such as incrimination and so on. There is no onus on an accused person to prove these defences as they are called. The name seems to suggest that, as I said you, but, in fact, that is not the case. The duty lies on the Crown to exclude these defences because the onus of proof is on the Crown throughout so the Crown have to lead evidence which excludes that defence and that is the way in which the system works".

In view of the conclusion we reached on the foregoing question of sufficiency, this direction, so far as relating to subsection (7), was unnecessary. Mr Gilchrist conceded that, against that background, it could not possibly be argued that, even if what was said amounted to a misdirection, there was a miscarriage of justice.

Conclusion on Conviction

[15] For the reasons we have given, each of the submissions made for the appellant fell to be rejected and the appeal against conviction on charge (1) was therefore refused.

Sentence

[16] Each of the sentences imposed was challenged as excessive, but the submission made by Mr Gilchrist concentrated on the sentences of 6 years imposed on charges (2) and (3). He conceded that, in view of the gravity of the offences involving very large sums of money over a considerable period of time, a custodial sentence was inevitable. However he submitted that insufficient weight had been given to the nature of the appellant's involvement and the absence of significant financial gain. He was a first offender, aged 54 at the time, a family man with two young children and health problems. He had agreed to become involved because the job would be physically easier than stacking shelves at the cash and carry where he then worked. Although he was on the face of it Makkah Travel Ltd, that was not the reality. He had been duped into fronting the business which he only discovered to be a criminal enterprise once he had started in the job. He received a relatively low wage, somewhere between £130 and £200 per week. His co-accused Zohaib had been given concurrent sentences of 3 years on charge (1) and 7 years on each of charges (2) to (4). He was directly involved in the arrangements for receiving and depositing the large sums of criminal money and was convicted on charge (4) in relation to which the evidence included recovery of £380,000 from his home.

[17] Having regard to the sentences imposed on Zohaib, we considered that the trial judge gave insufficient weight to the factors distinguishing the appellant's responsibility from that of Zohaib. We therefore had to address the question of the appropriate sentence afresh. We were presented with material indicating that the appellant suffers from significant health problems which will exacerbate the impact of a custodial sentence in his case. Having regard to that feature of the case in particular, and also to the factors identified by Mr Gilchrist, we considered that the appropriate sentence in respect of each of charges (2) and (3) is one of 4 years imprisonment. We accordingly quashed the sentences of 6 years on these charges, imposed sentences of 4 years on each and ordered that these sentences should be served concurrently with each other and with the sentence of 2 years on charge (1).