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http://www.lawyers.com.au/legal-articles/2011/2/14/seized-criminal-assets-go-towards-legal-costs/

Seized criminal assets go towards legal costs

Sydney Morning Herald

Monday February 14, 2011

Linton Besser

The police watchdog is now investigating the Crime Commission, writes Linton Besser. THE NSW Crime Commission has taken substantial slices of seized criminal assets to pay for its own legal costs and rewarded defence solicitors with hundreds of thousands of dollars for work that may have taken only several hours, says a top-secret inquiry.The inquiry, by the NSW police watchdog, also raises concerns that the commission failed to adequately audit the assets of criminals it was acting against, meaning the state is potentially missing out on millions of dollars in criminal assets.A Herald investigation has revealed that the commission has been sharing the proceeds of crime with organised crime figures, cutting deals allowing them to walk away with millions.The Police Integrity Commission (PIC) is now investigating the NSW Crime Commission and the way it manages its assets confiscation powers.The inquiry has included a focus on one crime commission financial analyst and his defence solicitor partner, over allegations the pair colluded to secure the solicitor large amounts in legal costs. The PIC is also examining whether the analyst leaked sensitive financial information to his partner.Both the analyst and the solicitor have been hauled into secret hearings, where the solicitor was accused of receiving hundreds of thousands of dollars for only a few hours' work.Now the crime commission is believed to be resisting plans by the acting head of the PIC, Jerrold Cripps, QC, to hold public hearings into the affair.The investigation, dubbed Operation Caesar, has revealed several separate instances in which substantial legal costs have been carved up between the commission and defence lawyers.A senior law enforcement source said: "It is not necessarily illegal, but they have not done the work that might have justified those thousands of dollars."Costs are meant to repay you for the work you've done ... They were taking a slice of money that was meant to be the result of illegal activity and all of a sudden it is proceeds [for the commission]."Since July 1997, when the then NSW treasurer, Michael Egan, gave the commission permission to retain its legal costs in seizure proceedings, it has taken more than $21 million out of a total pool of $160 million, or about 13 per cent, in criminal proceeds.The commission boss, Phillip Bradley, told Parliament in 2007: "The costs we recover for the conduct of the litigation ... is in the order of about $3 million [that year]. You will see that in the accounts as the biggest revenue item".But in July 2008 Mr Bradley agreed to stop taking the costs from individual confiscations due to concerns expressed by the PIC. The source said: "The crime commission was benefiting from [seizing] money, and Bradley must have realised that it was not a good look."Five years ago the commission recouped 21.1 per cent of its total criminal confiscations to pay for what it described simply as "costs".More than $8 million has been retained by solicitors acting for alleged criminals since 1999.The PIC has recommended that the crime commission's four-person management committee receive far more information about the nature and extent of assets the commission seized.The police watchdog urged that the management committee be advised on "the amounts claimed and recovered by the NSWCC as professional costs" in each confiscation matter.The concerns about the payments come on top of a series of questions about opportunities for misconduct at the commission, which were raised in a previous PIC review.In one case in January 2007 the crime commission seized about $1.2 million in cash and then claimed $595,000 in what it described as "NSWCC costs". The government received $414,000, about a third of the seizure.Do you know more?investigations@smh.com.au

© 2011 Sydney Morning Herald

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