Intellectual property crime and money laundering

Intellectual property crime, includes the fraudulent sale of counterfeit goods and pirated content, has never been more prolific.  As well as traditional luxury goods such as handbags and apparel, counterfeit pharmaceuticals, tobacco, foods and drink, cosmetics, automobile parts and household electrical goods pose a greater threat to human health.

The illicit trade also causes a severe detriment to the economy.

• The Organisation for Economic Cooperation and Development estimates that between 2017-19 the value of this trade rose from $461 to $509bn, equating to 3.3% of world trade. It is estimated to be the single biggest transnational crime (Global Financial Integrity, 2017).
• In the UK and the European Union it’s estimated that, between 2013-17, €83bn was lost in legitimate sales, resulting in 671,000 job losses and €15bn per year lost in tax revenue.

In the UK Local Authority Trading Standards (TS) teams, alongside partners including the Anti-Counterfeiting Group, the Police Intellectual Property Crime Unit and UK Border Force are often at the coalface in tackling problem.

One of the most effective tools used against counterfeiters is the Proceeds of Crime Act 2002 (POCA).

1. Offences under the Trade Marks Act 1994 and the Copyright, Designs and Patents Act 1988 are listed as lifestyle offences under schedule 2 of POCA, and
2. All proceeds made from the sale of counterfeit goods can be considered as criminal property.

TWO EXAMPLES OF CASES

One example includes an investigation into an Internet Protocol Television supplier.

1. The SARs data identified several connected bank accounts in the name of individuals which were operated by the defendant and used to purchase previously unknown properties.
2. https://www.technadu.com/police-uk-taking-down-multiple-pirate-iptv-services/120665/ 

Another example is a landmark case taken by Lincolnshire TS in 2019 saw a landlord prosecuted under section 328 of POCA.

1. Although the landlord had no day-to-day involvement with the business operated from his premises,
2. He was repeatedly warned that illicit alcohol and tobacco was being sold from his premises, but continued to accept rental payments (criminal property).
3. https://www.journaloftradingstandards.co.uk/crime/landlord-prosecuted-in-landmark-case/

Information sourced:

• https://www.nationalcrimeagency.gov.uk/who-we-are/publications/534-sars-in-action-issue-5-june-2021/file
• https://www.technadu.com/police-uk-taking-down-multiple-pirate-iptv-services/120665/
• https://www.journaloftradingstandards.co.uk/crime/landlord-prosecuted-in-landmark-case/