Taktouk – Proof that a finding of ‘hidden assets’ can lead to serious injustice?

The confiscation regime is frequently described as draconian for shifting the burden of proof to the defendant and requiring them to prove a negative. With their credibility shot to pieces after conviction for offences of dishonesty, it is often practically impossible for a defendant to prove that they do not have hidden assets. Furthermore, there is a hard-edged rule barring a defendant from applying to the Crown Court, under Section 23 of the Proceeds of Crime Act 2002, to vary their confiscation order on the basis that a hidden assets finding was made in error. It can rarely ever be known if a defendant really does have wealth secreted away on some foreign shore, or if they are instead the impecunious victim of a miscarriage of justice. Yet last week, in Taktouk [2025] EWCA Crim 71, the Court of Appeal quashed a confiscation order after fresh evidence cast doubt on the existence of hidden assets…

In 2021 the appellant, Elie Taktouk, was convicted of a property investment fraud at Southwark Crown Court. The prosecution case was that he had diverted investors’ funds for his own private use. The defence case was that, whilst he had mixed investors’ money with his own, he had access to £150m of family wealth and had acted without dishonesty.

Confiscation proceedings followed conviction with the prosecution asserting that the appellant had hidden assets; despite reports from a private investigator –  not disclosed to the appellant – which had failed to find any. The appellant gave evidence at his confiscation hearing yet the judge found that he had failed to prove that the available amount was less than the £4.5m benefit figure. A confiscation order was made in the full amount with a default sentence of 8 years imprisonment. The appellant never paid the order and began to serve the sentence in default.

Subsequently, the appellant’s estranged brother, who had not given evidence in the confiscation proceedings, came forward and made a witness statement, confirmed on oath at the Court of Appeal, asserting that the appellant had no interest in any of his father’s estate or in any other family assets. The Court of Appeal found the brother to be an honest witness and his evidence to be capable of belief, creating “the possibility that the appellant may be serving a long prison sentence when plausible evidence exists which may show that the available amount was significantly less than the benefit, and that the default sentence is not the right sentence.”

Only time will tell whether the Crown Court will go on to drastically reduce the appellant’s confiscation order in the light of the fresh evidence from his brother. If it does, it will serve as proof that the Proceeds of Crime Act 2002, rather than removing the proceeds of crime, sometimes simply imposes an extra punishment.

The case shows that hidden assets findings are not always terminal; the Court of Appeal are alive to the possibility of reconsidering them if fresh evidence is forthcoming. The route to overturning a confiscation order based on a finding of hidden assets is to appeal the sentence to the Court of Appeal under Section 9 of the Criminal Appeal Act 1968. Section 23  states that the Court of Appeal may receive any evidence which was not adduced in the Crown Court if it thinks it necessary or expedient in the interests of justice, with particular regard to the following:

1. whether the evidence appears to the Court to be capable of belief;
2. whether it appears to the Court that the evidence may afford any ground for allowing the appeal;
3. whether the evidence would have been admissible in the proceedings from which the appeal lies on an issue which is the subject of the appeal; and
4. whether there is a reasonable explanation for the failure to adduce the evidence in those proceedings.

The Court of Appeal can quash the confiscation order (section 11(3)(a)) and either replace it with an order it deems appropriate (section 11(3)(b)) or, as happened in Taktouk, direct the Crown Court to admit fresh evidence, pursuant to section 11(3B), and proceed afresh to determine what order to make under section 11(3A).