Illegal tobacco business: landlord burnt by knowingly turning a blind eye
A landlord has been convicted of allowing his premises to be used for criminal activity, notably the sale of illicit tobacco and alcohol which do not meet UK standards. The case serves as a stark lesson that tenant lease covenants to comply with statutory requirements do not release landlords from criminal liability if they have knowledge of the criminal activity and choose to ignore it, despite being warned about it.
The landlord, Leonardi Viscomi, (the "landlord") was prosecuted at Lincoln Crown Court in what is stated by Trading Standards to be the first prosecution of its type in the country. The landlord was given an eight month suspended prison sentence, 150 hours of unpaid work and will be subject to a Proceeds of Crime hearing where it is intended that some, or all, of the rent received by the landlord over the previous six years be subject to confiscation. The court ruled that he failed to take action against his tenants despite repeatedly being made aware of their illegal activity at his property.
The landlord knowing or suspecting that his property (European Foods in Lincoln) was being used for criminal activity. The judge who presided over the case said it was clear that the landlord knew of the criminal activity at the property because he had been specifically told by Trading Standards. He had received correspondence which detailed the activity and the pitfalls of continuing to accept rent payments and failed to take any action.
From 2011 onwards, Lincolnshire Trading Standards carried out numerous raids at the property. Large quantities of illicit tobacco were seized over the period and those responsible for the running of the business prosecuted. Despite this, illicit tobacco continued to be sold from the premises. Trading Standards commented: "Initially it was never our intention to prosecute Mr Viscomi. He is a man of previous good character, so we tried really hard, over a number of years, to give him detailed advice and information about what was happening in his building and the likely consequences if he continued to take rent payments. It is very unfortunate that Mr Viscomi chose not to take that advice - that decision may ultimately prove very expensive."
The Local Government Act 1972 gives local authorities the power to prosecute offences which are being investigated by their own departments, for example trading standards offences and health and safety and food hygiene offences. A local authority department can prosecute where it considers it expedient for the promotion or protection of the interests of the inhabitants of their area. Trading Standards officers have a wide range of enforcement powers available to them so the decision to prosecute in this case demonstrates the seriousness of this offence and should serve as a warning to other businesses about the broad powers local authorities possess if criminal wrongdoing is identified.
The case highlights that prosecution of the primary offender will continue but Trading Standards officers will contact landlords to make them aware of what their tenants are doing at the premises. The intention is to work with landlords to prevent tenants from carrying out illegal activities. The case does show that a proactive approach by landlords is crucial if they become aware of any illegal activity. Suing for tenant breach of covenant is cold comfort and criminal liability may follow if they knowingly turn a blind eye.