Court of Appeal upholds solicitor's conviction and clarifies scope of POCA tipping off offence

On 28 July the Court of Appeal handed down judgement in an application for permission to appeal a conviction for tipping off contrary to s.333A(3) of the Proceeds of Crime Act 2002 (“POCA”).

The case is believed to be the first appeal concerning the regulated-sector tipping off offence in section 333A(3) POCA to reach the Court of Appeal.

The judgment provides important guidance on three core elements of the offence: the meaning of "investigation", the regulated-sector requirement, and the threshold for establishing prejudice to an investigation.

The judgment can be found here.
 

Key Facts

William Osmond, a solicitor and senior partner of Osmond & Osmond Solicitors, acted for a long-standing client, James Redding Ramsay.

In 2013, Ramsay, through a company called Barrow Management Ltd, provided a £4 million loan towards the purchase of 10 Hays Mews in Mayfair. Osmond acted as solicitor in relation to the transaction, including handling client money and documentation.

The Serious Fraud Office (“SFO”), during its investigation into Eurasian Natural Resources Corporation (“ENRC”), became interested in the funding of the Hays Mews purchase and suspected possible money laundering.

On 7 June 2018, an SFO investigator informed Osmond that the SFO was investigating the Hays Mews transaction and would require documents and information about it. A formal section 2 notice followed on 15 June 2018. The correspondence referred to confidentiality and the offence of "tipping off".

Instead of keeping the investigation confidential, Osmond immediately informed Ramsay about the SFO's enquiries, travelled to Malta to discuss the matter with him, and continued to communicate with him regarding how the SFO's questions should be answered.

As a result, the information provided by Osmond to the SFO was not based solely on his own recollection but was the product of discussions with, and instructions from, Ramsay regarding how information should be provided to the SFO

Following a jury trial at the Central Criminal Court, Osmond was convicted of tipping off contrary to s.333A(3) Proceeds of Crime Act 2002. He was also convicted on a count of forgery, relating to the creation of a false letter of engagement relating to the Hays Mews transaction.

Osmond received a total sentence of nine months' imprisonment suspended for 18 months and sought to appeal his convictions.
   

Key Legal Issues

The principal issues in relation to the tipping off offence were:

(i) What investigation had been disclosed?

• The defence argued that the investigation disclosed was the wider ENRC investigation, which was already publicly known and therefore could not amount to "tipping off".

• The prosecution argued that the relevant investigation was the specific investigation into suspected money laundering connected with the Hays Mews transaction, which Ramsay did not know about before Osmond informed him.

(ii) Did the information come to Osmond "in the course of a business in the regulated sector"?

• The defence argued that the information came from the SFO, not from any regulated-sector activity.

• The prosecution argued that Osmond received the information because he was acting as Ramsay's solicitor in a property and financial transaction, bringing him squarely within the regulated sector provisions of POCA.

(iii) Was the disclosure likely to prejudice the investigation?

• The defence argued there was no evidence that the SFO investigation was actually harmed or that the information provided differed because Ramsay had been informed.

• The prosecution case was that the issue was whether the disclosure was likely to prejudice the investigation, not whether actual prejudice had occurred.
   

The Court of Appeal’s findings

The Court of Appeal rejected the appeal arguments and upheld the conviction.
 

Nature of the Disclosure

• The Court held that the prosecution was entitled to define the relevant disclosure as the revelation that the SFO was investigating possible money laundering connected to the Hays Mews transaction.

• Although the Hays Mews enquiry formed part of the wider ENRC investigation, it remained a distinct investigation capable of being the subject of a tipping off offence.

• Ramsay already knew about ENRC, but did not know that the Hays Mews transaction itself was under investigation. Osmond's disclosure therefore constituted tipping off.
    

Regulated Sector Requirement

• The Court held that the information came to Osmond in the course of a business in the regulated sector.

• He received the information because he had acted as solicitor for Ramsay in a transaction involving real property, companies and client funds, all activities specifically covered by Schedule 9 POCA.

• The fact that the information originated from the SFO was irrelevant; the question was the capacity in which Osmond received it.
    

Likelihood of Prejudice

• The Court confirmed that the prosecution did not need to prove actual prejudice.

• The statutory test was whether the disclosure was likely to prejudice the investigation at the time it was made.

• The Court indicated that disclosure of an investigation to its target is inherently likely to prejudice the investigation because it creates risks that evidence may be destroyed, compromised or tailored, witnesses may be influenced, or offenders may evade justice
   

Why this matters?

This judgment is likely to become a leading authority on the regulated-sector tipping off offence under section 333A(3) POCA. It confirms that:

• an investigation can be sufficiently specific for tipping off purposes even where it forms part of a wider investigation already in the public domain;

• firms cannot avoid liability by arguing that information about an investigation came from law enforcement rather than from regulated-sector activity;

• prosecutors do not need to prove that an investigation was actually prejudiced, only that the disclosure was likely to prejudice it at the time it was made; and

• disclosure of an investigation to the subject of that investigation may readily satisfy the prejudice requirement.

For MLROs, legal professionals, accountants, corporate service providers and other regulated-sector firms, the judgment provides a reminder that communications with clients following engagement from law-enforcement agencies must be managed carefully and with close regard to POCA tipping off restrictions.

Practical implications for regulated firms

• Review internal procedures governing responses to SFO, FCA, NCA and police enquiries.

• Ensure staff understand that tipping off risks can arise even where the broader investigation is publicly known.

• Consider escalation to compliance, legal and MLRO functions before disclosing the existence of investigative enquiries to clients or counterparties.

• Record decision-making carefully where communications may create tipping off risks.
   

Concluding thought

The decision demonstrates the broad reach of the regulated-sector tipping off offence.

The Court of Appeal has confirmed that prosecutors need not show that an investigation was actually hindered and that disclosure of a targeted money laundering investigation, even within a wider public investigation, can readily amount to criminal tipping off.

For regulated firms and professional advisers, this case is a timely reminder that communications with clients following law-enforcement contact require particular care.