SOCA v (1) Hakki Yaman Namli (2) Topinvest Holding International Ltd

[2013] EWCH 1200 (QB)

On 10 May 2013, Mr Justice Males held that (1) an acquittal in foreign criminal proceedings was not conclusive as to the defendant's innocence for the purposes of English civil recovery proceedings and was merely evidence the judge could take into consideration when reaching a decision on the balance of probabilities and (2) in the context of money laundering offences, inferences drawn from the manner in which the defendant handles money can be relied on when determining whether the proceeds are derived from unlawful conduct.

Factual Background

The Serious Organised Crime Agency (SOCA) brought a claim for a civil recovery order under ss.243 and 266 of the Proceeds of Crime Act 2002 (POCA) against Hakki Yaman Namli, a Turkish resident, and Topinvest, a BVI company owned and controlled by Namli, in respect of US $7 million held in a bank account at Coutts & Co in London. SOCA alleged that six credits into the account, along with subsequent profits, represented property obtained through the unlawful conduct of Namli and First Merchant Bank OSH Limited (FMB), a bank owned and controlled by Namli himself and incorporated in Northern Cyprus (TRNC). The justifications given by SOCA were the nature of the business conducted by the defendants, Namli's failure to identify a legitimate source and the direct link they could show between some of the credits and the unlawful conduct.

SOCA argued that the unlawful conduct carried out by Namli and FMB extended more widely than the six instances of fraud and money laundering SOCA had outlined specifically as occurring between 1996 and 2002 in several jurisdictions including the US, Germany, England and Turkey. The fraudulent conduct consisted of a form of advance fee fraud where FMB would entice victims to participate in an investment programme producing high returns if they could prove that they had access to a certain level of funding. FMB and Namli (as signatory on the instruments) would then issue bogus banking instruments, these included credit reference letters, revolving underwriting facilities and a standby letter of credit, confirming the availability of funds to these victims who would in turn pay substantial advance payments to Namli and FMB. However SOCA's contention was that the victims were never able to draw on the funds as FMB had knowingly subjected them to unrealistic and vague conditions in the instruments which the victims were rarely able to satisfy, leaving FMB...