'How do you gain from dead puppies?': Council uses anti-drug dealer laws to drain dog breeders of £200k life savings

For over 40 years, Mike and Pauline Watts have been breeding Dobermans in Carmarthenshire, South Wales, with many of their pedigree puppies eventually appearing at the world’s most prestigious dog show, Crufts.

However, in 2022, Carmarthenshire County Council pursued the couple for failing to hold the required breeding licence for the dogs, culminating in an "unbelievable nightmare” and an eye-watering bill of over £196,000.

“Even now we tell people, and they're just in disbelief, or they think we're making it up,” Pauline sighed.

“All that money for nothing but breeding gorgeous, healthy puppies.”

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The couple were prosecuted under the Proceeds of Crime Act, a law introduced in 2002 to recoup money generated through serious criminal activities, such as drug dealing and flipping stolen goods on the black market.

Experts warn the Act is now frequently being used in less serious cases like Mike and Pauline’s, acting as a “cash piñata” for councils looking to cover shortfalls in their budgets.

Carmarthenshire County Council argued that because the couple did not have the relevant licence, cash made from the sale of puppies over a six-year period was gained illicitly;

Forensic accountants assumed that each puppy was sold at the advertised price of £3,000, rather than the final sale price, which was usually lower. As part of their calculations, they included puppies that were not sold because they died in infancy.

“How on earth do you gain from dead puppies?,” an incredulous Pauline, 62, asked.

“That was actually written in one of their statements saying: ‘no, you still gained from it’. What did we gain from that? It was quite sickening. It made me quite ill.”

Under the powers of the Proceeds of Crime Act, investigators at the local authority were also able to look beyond the sales of puppies, taking into account the couple’s other assets.

The burden of proof in such cases is on the individuals being prosecuted, meaning they must provide supporting documentation for all transactions going in and out of their accounts over the previous six years.

It forced Pauline, who spent three decades in the civil service, to show how other sources of income were gained - even having to endure the emotional pain of handing over her mother’s death certificate to prove that her inheritance was lawful.

“To actually ask for the death certificate as well, do you know what I mean? I sent the copies from the solicitor who dealt with my mum's house to them and everything, but no, they still wanted the death certificate.

“They also came after me for my monthly pension when it was blatantly obvious from my bank statements that it was a pension coming from the civil service!”

Though the council was unsuccessful in adding these points to the final bill, it was able to add £18,000 Mike had gained from the sale of a Toyota Land Cruiser several years earlier because the couple no longer had any record of the sale.

Ultimately, the couple’s lawyers settled on a bill of £196,000, which, at a time when Mike was facing a serious health scare, they accepted to end the ordeal.

“I came home [after the ruling] and to be honest, we cried,” he lamented. “It's a lot of money - my life savings, to be honest with you - for nothing. For nothing.”

“I thought of taking my own life,” an emotional Mike admitted. “They emptied my joint account and they emptied my business account. I had to pay them within three months or face two years’ jail.”

Mike and Pauline’s case is the latest in a series of concerns about the application of the Proceeds of Crime Act.

In October, LBC spoke to Ahmed and Sahin Gok, the owners of the Turkish restaurant Meze Mangal in Lewisham, who are facing a confiscation order of up to £3.1m, plus costs, for fitting an extractor fan to their premises without planning permission.

A decision on the brothers’ final bill could be reached by the end of this week. Ahmed has already vowed to leave Lewisham as a result of his treatment.

The brothers’ case led to Conservative MP Simon Hoare raising the issue of councils using the Act against small businesses for planning and licensing breaches.

Local authorities are entitled to over a third of the funds recouped by investigations under the Act. Critics believe it therefore incentivises councils to go after local businesses.

Marc Clifton, a forensic accountant at Frenkels, believes local authorities are turning to the Act in less serious cases as a revenue-raising tool.

“It's becoming increasingly common,” he explains. “I think that the local authorities are tending to use this increasingly as a way of generating cash.

“It's a cash piñata. It's a way of generating income because, you know, it’s an easy way of successfully prosecuting somebody.

“They can throw everything in there because they know the burden of proof is switched to the defendant to prove that it's not criminal,” Mr Clifton added, pointing to a client who was recently threatened with a £4.5 million fine for £120,000 worth of rental income they made from a property developed without planning permission.

A payment of £350,000 was eventually settled on in the courts.

“I was disgusted with this myself. [The client] was happy because, from his point of view, and from his family's, seeing that big £4.5 million number looming over them made them think everything was going to be taken away from them.”

Though Carmarthenshire County Council declined to comment directly on Mike and Pauline’s case, it defended the general use of the Act.

Cllr Aled Vaughan Owen told LBC that their use of the Proceeds of Crime Act is guided by the principle that crime “should not be financially advantageous”.

“The Proceeds of Crime Act is not used punitively, but proportionately and only where a court has determined that criminal benefit has been obtained…. We recognise that investigations can be intrusive, and we take seriously our responsibility to handle all evidence, information, and personal circumstances sensitively and lawfully.” Mr Owen added.

A spokesperson for the Ministry of Housing, Communities, and Local Government, meanwhile, described the Act as “an important tool for councils to take enforcement action against breaches of planning control”, but added that “if there is any evidence of wrong-doing we will not hesitate to act”.