Clients often come to us for representation when they’ve been involved with drug offences or money laundering. We help clients defend these allegations and mitigate long sentences if they have a valid defence.

Many people that are accused of drug offences or money laundering are given Civil Recovery Orders, and then an investigation is launched into their activity. The person’s assets may also be frozen in that time.

Increasingly, we’re seeing defendants who use cryptocurrency in the course of their business and activities.

In this blog, we look at the way Civil Recovery Orders work in practice, particularly in relation to Bitcoin. Recently, a high-profile case drew attention to this issue, so we’ll explain how the legal procedures worked in this case, and how they may be applied to your case if you’re in a similar position.

Brief facts of the case

The case was called Director of Public Prosecutions v Alexander Surin. The defendant, Alexander Surin, had to give up around £3.5 million worth of Bitcoin because it was decided that he had received the money through drug trafficking and money laundering.

Alexander Surin said that he received the Bitcoin in the course of legitimate trading activities in gold bullion, luxury watches, and cars, which he carried on from his base in Dubai.

However, the judge did not think that the evidence supported this story. Instead, the judge found that the evidence of the Director of Public Prosecutions (DPP) was more compelling and decided that the Bitcoin was obtained by criminal activity.

The legal framework

Back in June 2022, a judge ordered a Property Freezing Order over the Bitcoin.  Then the DPP carried out a civil recovery investigation into the defendant.

The DPP also applied for a Civil Recovery Order to be made under section 266 of the Proceeds of Crime Act 2002 (POCA).

The DPP is the enforcement authority, so it has special powers under Part 5 of POCA to bring civil proceedings for the recovery of property which is obtained through unlawful conduct. Cryptocurrency falls within this wide definition of ‘property.’

In the civil recovery investigation, the DPP identified criminal cash and traced it to any property that it had been converted into. The DPP was not trying to establish the criminal conduct of the individual.

Mistakes by the defendant

The defendant, Alexander Surin, made a few mistakes in the course of defending the allegations against him.

First, he didn’t respond to the freezing of his account for a long time. That meant that the judge was able to draw inferences from his behaviour, and the inference was that the cryptocurrency was received through unlawful means.

Secondly, he didn’t provide evidence in response to a formal legal claim against him. Again, the judge considered this to be suspicious.

Thirdly, there were holes in the defendant’s evidence and he did not sufficiently address the allegations against him.

In this context, the Claimant was allowed to rely on the defendant’s past criminality and previous forfeiture and civil recovery proceedings.

All of these things counted against him and made the judge think that the DPP’s evidence was more believable. That led to the property being ‘recovered’ and Alexander Surin had to give up his Bitcoin.

Lessons learned and how we can help you

If you’re facing similar charges of money laundering and / or drug trafficking, or you’ve received notice of legal proceedings, we can help.

Our top tips are:

• Don’t bury your head in the sand

  If you delay or don’t respond, it makes the situation worse.

• Gather your evidence

  We can help you gather the evidence you need to defend the claim properly.

• Get a lawyer quickly

  The legal process can be a bit confusing if you’re not familiar with it. We’ll make sure you do all the right things at the right time, to put yourself in the best light in front of the judge.

If you’d like any help defending a claim against you, please get in touch. One of our friendly lawyers will talk your through the process and help you prepare what you need.

0333 3448377 | info@harewoodlaw.com