Proceeds of Crime Act: Court of Appeal decisions prompt prosecution to drop charges

Two solicitors who were arrested under the Proceeds of Crime Act 2002 (POCA) last year had all charges against them dropped by the Crown Prosecution Service (CPS) last week.


The CPS dropped charges against Richard Farnworth, former partner at Farnworths in Burnley, Lancashire, and Dermot Woodhead, who is still a partner at the firm, because of recent Court of Appeal decisions on money laundering.


Mr Woodhead was arrested last year after accepting a £20,000 payment on account for legal fees in defending a client against charges under POCA. The arrest was made despite Mr Woodhead having sought advice from the Law Society and leading and junior counsel before accepting the payment, and following that advice.


Mr Woodhead's solicitor Paul Schofield, a partner at Farleys in Blackburn, said: 'Dermot Woodhead should never have been arrested - he did everything he possibly could in terms of the advice he sought, and followed it to the letter. If he can be arrested, then any solicitor can be.'


Mr Farnworth's solicitor, Ian Cooper, a partner at Cooper Kenyon Burrows in Manchester, said his client is considering legal action against the police after £100,000 of loss as a result of the charges.


Mr Farnworth was charged with an offence under the Theft Act 1968 after bidding for the lease of a mill on behalf of his client. He was also charged with conspiracy to launder money after the CPS alleged he should have informed the other side of a transaction that his client had criminal convictions.


Mr Cooper said: 'Mr Farnworth had been due to leave Farnworths and start his own practice when the charges were brought. He could not get professional indemnity insurance as a result of the charge [in April 2004], and he has been unable to work ever since.


'He had to pay redundancy to a team of people who had also resigned from the old practice, and had spent money on IT equipment for the new practice. It has cost him nearly £100,000.'


One of the Court of Appeal decisions that is understood to have influenced the CPS's decision to drop the charges is R v Ali [2005] EWCA Crim 87, which established that a defendant must have actual knowledge that criminal conduct was occurring in order to be convicted of conspiracy to commit money laundering offences.


A joint statement from the CPS and Lancashire Constabulary said: 'In the last six months, there have been four appeal court decisions, which have significantly changed the law in relation to money laundering. The charges in this case have been reviewed in the light of those changes and the CPS now takes the view that it is inappropriate to continue.'