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Landmark Supreme Court victory for the Serious Fraud Office

2 Ebrill, 2014 | Eitemau newyddion

The Supreme Court today ruled in favour of the SFO in saying that disobedience of a pre-trial criminal restraint order is a civil contempt of court and not a criminal offence.   The court also agreed with the SFO that civil contempt is not extraditable even though it attracts a two year sentence.

The ruling follows a challenge by Brian O’Brien (dob 19/09/53), of the USA, who came under investigation by the SFO for a boiler-room fraud and was sentenced to eight years imprisonment in 2012.  In 2009 he was found by a judge of the central criminal court to be in contempt of court and was extradited from Chicago to the UK to face the fraud charges.  The Common Serjeant sent O’Brien to prison for 15 months for the contempt.

O’Brien appealed this and argued that the contempt was a criminal offence.  He said he should not have been dealt with for that offence: he had not been extradited for it.

The Court of Appeal disagreed and so did the Supreme Court.

Had the SFO lost the case, the implications would have been significant.  Restraint orders are enforceable in the same way as freezing, search and disclosure orders.  Had the SFO lost the case, parties to civil, commercial claims would have had to seek the extradition of other parties who refused to comply with court orders.  O’Brien would also have been repatriated to the US where his funds remain.

The SFO was represented in the Supreme Court and Court of Appeal by Edward Jenkins QC and Ben Douglas-Jones of 5 Paper Buildings.

Notes to editors:

  1. In 2009 Mr O’Brien came under investigation on suspicion of involvement in a large scale scheme to defraud investors, commonly known as a “boiler room” fraud. On 24 September 2009 in the Central Criminal Court His Honour Judge Barker made a Restraint Order against Mr O’Brien which prohibited him from dealing with his assets.
  2. The Restraint Order required Mr O’Brien within 21 days to repatriate all his moveable assets held outside England and Wales. Mr O’Brien failed to comply with either the disclosure or the repatriation obligations imposed. On or about the 22 October 2009, Mr O’Brien left the jurisdiction.
  3. On 18 December 2009, following an application by the SFO, the Common Serjeant of London found that Mr O’Brien was in contempt of court for breach of his Restraint Order.
  4. On 8 October 2010, Mr O’Brien was arrested at his home address in Chicago. He was extradited to the United Kingdom on 2 December 2010 and remanded in custody.
  5. On 20 May 2011, Mr O’Brien was committed to prison for 15 months for this contempt. He appealed the decision; the Court of Appeal dismissed Mr O’Brien’s appeal. However, the Court certified a number of points of general public importance involved in the decision to be determined by the Supreme Court.
  6. The Court of Appeal certified the following points of law of general public importance for consideration by the Supreme Court:
    1. Whether a contempt of court constituted by breach of a restraint order made under section 41 of the Proceeds of Crime Act 2002 constitutes a civil or criminal contempt.
    2. If the answer to i) is a civil contempt, whether Section 151A of the Extradition Act 2003 and or article 18 of the United Kingdom-United States Extradition Treaty 2003 preclude/s a court from dealing with a person for such a contempt when that person has been extradited to the United Kingdom in respect of criminal offences but not the contempt in question.
  7. The Supreme Court dismissed Mr O’Brien’s appeal and answered the questions certified by the Court of Appeal as follows:
    1. a contempt of court constituted by a breach of a restraint order made under section 41 of POCA is not itself a crime.
    2. section 151A of the Extradition Act 2003 and article 18 of the United Kingdom-United States Extradition Treaty 2003 do not preclude a court from dealing with the person for such a contempt when that person has been extradited to the United Kingdom in respect of criminal offences.
  8. In March 2012, Mr O’Brien was convicted of offences of conspiracy to defraud, contravening the general prohibition to carry on a regulated activity, attempting to obtain a money transfer by deception, transferring criminal property and hampering an investigation. On 23 April 2012, he was sentenced to a period of 8 years imprisonment.
  9. On 15 April 2013 a confiscation order of £364,938.53 was made against Mr O’Brien of which £364,938.53 was to be paid as compensation to victims.