'Costa del Crime' no longer a safe haven

The Crown Office is lobbying for the Court of Session to issue seizure orders for the "heritable property" of suspected criminals in Spain and elsewhere.

They have the backing of the Scottish Government to beef up powers under the Proceeds of Crime Act, or Poca, legislation increasingly used to put pressure on Scotland's mobsters, whether they are convicted of a crime or not.

Senior law enforcement sources admit being frustrated when gangsters invest in bricks and mortar overseas, beyond the current reach of Poca investigators.

Ruaraidh Macniven, who heads the Crown Office's growing Civil Recovery Unit, said: "We have had investigations involving assets in Spain. But we haven't had any great results in respect of foreign assets and that is one of the areas we are hoping to develop.

"The one big limitation is the fact the Court of Session can't grant orders in respect of overseas buildings and land."

If the Court of Session could issue an order, then Macniven's team would liaise with their Spanish or other colleagues overseas to have that order imposed.

Detective Superintendent John Cuddihy of Strathclyde Police's elite Major Crime and Terrorism Investigation Unit (MCTIU) believes such Spanish actions would hurt Scottish gangsters. He said: "These guys think of jail as an occupational hazard. But they like to think they can come out and go to their luxury houses at home or bask in Spain drinking pina coladas. When they come out of jail they should be in high-rise flat, not a penthouse."

Several major Scottish crime figures are based in mainland Spain or the Canary Islands. They play a key role in channelling cocaine to Scotland and have substantial international links.

Recent residents include James "The Iceman" Stevenson, jailed in 2007 for 12 years for money-laundering – he had a home in Marbella. So too does convicted drug dealer Kevin Kelly.

Cuddihy's MCTIU and other law enforcement bodies, such as the Scottish Crime and Drug Enforcement Agency, are increasingly global in their reach.

Cuddihy said: "We have some fantastic relationships through Spain and Holland. Our job is to convince the law enforcement authorities in, say, Marbella, that the person we know causes harm in Strathclyde presents a risk to them too.

"They might think there is a benefit from that person being in their community, investing money there, but if we can identify someone who has derived their wealth from crime we can show them the money is dirty. We are already working on projects now that are having a lot of benefits for both sides."

Macniven and his colleagues are looking at other proposals to beef up proceeds of crime – including proposed "management orders". Currently the only way the Crown can manage assets awaiting recovery is to appoint an external administrator, rather like a company in financial difficulties. But this is costly. A management order would allow a Crown official to, for example, control a bank account and make sure it earns interest for the public.

This isn't an academic issue: today, Strathclyde Police alone has £3 million in cash and bank accounts as "productions" in cases. The interest, even at current rates, could pay for several police officers.

However, the Crown and police don't see raising money as Poca's main purpose.

Macniven's Civil Recovery Unit has seen the amount of cash it hands over to the Scottish Government rise from just under £1.4m in its first year, 2005-6, to more than £9.3m last year. But its core objective is spelled out in its national strategy document name: Maximising Disruption.

Losing money hurts gangsters. It strips away their prestige, their status in their communities with their fast cars and their big houses – and foreign holiday homes.

But it also puts them in what Strathclyde Chief Constable Stephen House bluntly calls "deep shit".

This is because gangsters aren't just frightened of the police, they are also frightened of other gangsters, who don't always play as nicely as law enforcement. If they lose cash, they lose they ability to pay their debts. And that can be deadly.

House, a former London detective, said: "The Met used to use a phrase. When you arrest somebody, they used to say you make two arrests. You arrest the person and you arrest the money. Taking the money can be more significant, because you completely screw them up.

"Organised crime is about money. So destroy the money. Let's say you crash the door of a flat and find £3000 under a bed. You seize the money. You ask the householder, 'Can you explain how you got this?' 'No comment,' he replies. So you take it.

"They go to court. They get bailed. But they are £3000 down. That money was not going in their granny's bank account. They probably owe that money to somebody and now they can't pay it. So basically they are in deep shit. That means they have got to do something they don't want to do. They have to take a risk and that is when we catch them."

Prosecutors and police now admit they are in a Poca "arms race". Gangsters try clever ways of hiding their ill-gotten gains. And law enforcement comes up with even smarter ways of uncovering the hidden wealth, such as looking abroad.

Holyrood made it clear it would be pressing Westminster for more powers. A spokeswoman added: "Scottish ministers have also given a public commitment that they will continue to look at other ways, including suggestions such as those put forward by the Crown Office, to further refine Poca to increase its effectiveness in Scotland."