Guilty until proven innocent

Call it the Cleven clause: a law change inspired by the justice system's failure to snare the money of a notorious alleged drug lord.

Peter "Pedro" Cleven was the Headhunters gang member accused of making a fortune from drugs including cannabis and methamphetamine. Described by police as a kingpin of organised crime, he boasted, in bugged conversations, of dealing "a hundred pound of dak a week" and making a million dollars a year from the harder stuff.

When they arrested him on supply charges in 2000, police used the Proceeds of Crime Act to freeze his assets, including a Titirangi mansion, Harley-Davidson motorbike, Mercedes-Benz convertible and swanky powerboat.

But two years later, they had to hand it all back when the 39-year-old was acquitted after two incident-laced trials.

Cleven provides just one example of long-standing police complaints about gang bosses who remain at arm's length from offending but reap the rewards. There is considerable political mileage to be gained from stopping that happening.

This week, Justice Minister Phil Goff announced legislation to make it easier to confiscate the assets of suspected criminals - even without a conviction. A bill is being drafted allowing the Crown to have assets frozen if it can persuade a High Court judge it has "reasonable grounds" to suspect the assets were criminally acquired.

Assets can then be confiscated if the Crown can show that the person benefited from crime in the previous seven years. Only a civil standard of proof is required: on the balance of probabilities (a 51:49 per cent likelihood) rather than the criminal standard of beyond reasonable doubt.

Suspects who want to dispute confiscation must prove to the court that their assets did not come from crime. If they can't, their entire estate may be forfeited. So much for innocent until proven guilty.

A new asset recovery unit, made up of police and investigative accountants, will pursue civil forfeiture cases, with powers to compare income declared in tax returns with a person's apparent wealth. The new unit will work independently and could go after assets in cases that police have no intention of prosecuting.

Until now, they have needed a conviction to recover assets under the Proceeds of Crime Act - a law that has proved far from satisfactory. Criticised for recovering less than $10 million in 11 years, police say it is weighted in favour of the accused.

Hawkes Bay farmer Shaun Allen would argue differently. The first to lose his property under the act in 1993, after police found more than 1000 cannabis plants on his Esk Valley farm, Allen continues to maintain his innocence and is fighting for a pardon. He brought the bush-covered land less than six months earlier, and says the cannabis plots had been there for many years. But his conviction and 18-month sentence for growing allowed the Crown to take his land. Under the new proposal, it wouldn't need a conviction.

Goff says the measure is aimed at organised crime and gang bosses "at the top of the criminal hierarchy" who continually evade prison. He looked at civil confiscation laws in Ireland, Britain and several Australian states before opting for the New South Wales version.

Police see obvious benefits and, as the latest of Goff's tough-on crime initiatives, it will do the Government no harm in appeasing the tougher sentencing advocates.

Goff says such laws have caused little controversy overseas. But then, who is going to speak out for gang bosses and other scumbags whose currency is violence, intimidation and the misery of drugs? He's betting on similar public sentiment here: if hardened crims lose all they've got, it serves them right.

Until now, however, we've always expected the police to prove it in court, and beyond reasonable doubt. Now they won't have to. With insufficient evidence for a conviction, police can approach a High Court judge and offer a lower standard of proof to seize assets. The suspects may not even know they face action.

Sydney lawyer Lesly Randle explains that under the New South Wales law, assets are often initially frozen under ex parte orders - issued without the defendant or his lawyer being present - on the premise that assets would "disappear" if suspects got wind of an investigation.

From then on, things get even more draconian, say lawyers and academics. Suspects wanting to dispute confiscation cannot use frozen funds to engage a lawyer - another protective measure. Goff says assets can be "considerably devalued through lavish defence cases".

Overseas, he says, up to 90 per cent of seizures are not challenged, suggesting crims accept the game's up. But critics say defendants face an uphill struggle to get assets excluded from a restraint or confiscation order.

Scott Optican, senior lecturer in criminal law and procedure at Auckland University, says unless all income and assets are lily-white, suspects won't risk fighting to get them back.

"Why would you front up to some Government office and say `you took my hundred grand but 50 per cent of it was derived honestly'. You'd have to be some kind of psycho - it's tantamount to an admission of guilt.

"It's a risk-shifting exercise, a burden of proof-shifting exercise, which basically makes it easier to go and get assets and may have some collateral benefits such as getting you to fess-up.

"And who's going to object to it?"

Brisbane criminal lawyer Ian Dearden, president of the Queensland Council for Civil Liberties, says the measure has caused some appalling miscarriages of justice.

"Most of the people being screwed are people who by and large have skirted around the edge of big-time behaviour rather than the big-time criminals. But that doesn't necessarily mean they have acquired property unlawfully or it's the proceeds of crime.

"It's classically opinion-poll-driven legislation that seeks to wipe out the rights of people who legitimately own property by seizing that property on what's often no more than a suspicion. The onus is then on the owner of that property to prove otherwise.

"Innocent people get burned but they are not necessarily people who get a lot of sympathy."

Randle says it's the wives and children who suffer most from asset seizures, often losing their home and means of transport. "Maybe seven times out of 10, the Government has every right to take their home, but a lot of wives I deal with wouldn't have a clue what their husbands have been up to.

"It can be very hard to prove income was legally derived without documented evidence and you have to go back six years [under the NZ proposal, seven].

"You can apply for exclusion orders for reasonable living expenses but if the woman has done one thing wrong in her life she won't get the property excluded."

It's not just gang members' families who can be affected. The law is often used against white-collar crime, says Randle. In New Zealand, the proposed threshold will be unexplained assets worth more $30,000.

The measure will dampen criticism of the existing law with its poor recovery record. New South Wales has raked in $84 million since 1995, nearly 10 times the New Zealand figure. Police here believe the local law will reap $20 million a year.

Acting national crime manager Bill Peoples says police struggle to convict those who distance themselves from crime but benefit from the proceeds.

"There's nobody I know who owns a house or asset who can't explain where the money came from to buy it."

White-collar fraud is a legitimate target, says Peoples. "We wouldn't want to restrict it to drug crime - there's other forms of serious crime, particularly if a person has defrauded the state in a serious way."

But Phillip Morgan QC, convenor of the Law Society's criminal law committee, is concerned that the new powers will invite police to "take the easy route" rather than go for a conviction.

"They may look at somebody they think is a drug dealer then think `Gosh, why not just seize his assets' and, if we get some evidence he's been dealing, well and good.

"It' a very large departure from the principles of justice."

Morgan agrees with Randle that it's likely to be used to attack "ordinary members of the public who are easier to get" rather than organised crime.

He says police already have sufficient powers under the existing act but have been more focused on putting crims behind bars.

After all, did Pedro Cleven really walk away from his brush with the justice system laughing all the way to the bank?

He claimed the trials cost him the Mercedes-Benz, the 700hp powerboat and a rental property. His prized Harley was sold from under him to pay part of a disputed $175,000 legal bill from his first trial.

Six months after he was acquitted, the palatial Titirangi home was sold below valuation, for just under $1 million.

Cleven claimed his money came from hard work and legitimate business ventures including angora goat farming, property developments and a bondage and discipline parlour called Salon Kitty.

At the end of two trials, the jury was not satisfied he was the drug kingpin depicted by police. Under the new law, he might not even go before a jury - and he would need all his receipts.