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Panorama: Crime Pays tonight on Βι¶ΉΤΌΕΔ One reveals the Government has failed to recover assets obtained by convicted criminals – who are still enjoying luxurious lifestyles.

The architect of the 2002 Proceeds of Crime Act, David Blunkett, admits that the legislation has not worked: "We've failed – we've failed on the ambition of bankrupting those who had made enormous amounts of money, out of criminal behaviour."

Michael Voudouri ran an international fraud, pocketing millions in unpaid tax. He admits stealing £3million and served a prison sentence. He now lives in the Stirlingshire town of Bridge of Allan in a £2m house – and drives a car worth around £60,000.

He tells Panorama: "I'm living here because my father-in-law purchased the house, my father-in-law's been a businessman all his life, he saved enough money to purchase the house."

As far as the money he made from crime is concerned, Voudouri says: "I spent it. Having a good life". He says the car is "on finance".

Voudouri has managed to string out the legal process with a series of appeals – mostly funded by legal aid. That means he hasn't yet handed over a penny to the Government which he says has spent millions on legal costs.

Using the Freedom of Information Act, Panorama found that, in the last three years, the Scottish unit responsible for criminal confiscation had frozen £60m of assets – but has only successfully managed to take back just £6m of that total.

In the UK as a whole, Β£137m was recovered last year. David Blunkett is asked how much he would have expected. "I would've thought somewhere between Β£500m and Β£800m a year, would have been a reasonable target to have reached at this juncture."

Graham Pearson was at the forefront of investigating the country's most serious criminals. He headed the elite police enforcement agency tasked with bringing them down and going after their assets. He says: "The 'Mr Bigs' are best positioned to protect themselves, so they hire the best lawyers, they attach to the best processes to protect themselves and distance themselves from investigation."

Graham Piper owned prestigious riding stables backing onto Chequers, the Prime Minister's country residence. He was sentenced to 14 years in prison for his part in aΒ Β£18m Colombian cocaine deal and his assets were frozen. But the taxpayer still hasn't seen a penny as Piper is still denying in court that his assets were from his crimes.

He is filmed undercover admitting spending criminal proceeds on his property and money laundering. "Some of the money I put back into the farm, you know, buying equipment. I hadn't disclosed that to them. I mean, I spent about ... 3 or 400,000 pounds on building work," he says. He also admits taking a five per cent fee for laundering money.

Piper has strung out the asset recovery process. Legal costs and receivers fees have mounted up – eating away at the millions Piper was worth. That means nothing could be left for the taxpayer when it finally comes to an end.

A 2007 National Audit Office enquiry found more than Β£16m had been spent on receivers fees and they discovered 12 cases where the fees amounted to more than the assets frozen, leaving the tax payer to pick up the difference.

Dr Peter Sprout has studied the Government figures on asset recovery. "If you look at... the official documentation, it suggests there is Β£5,000m that could be recovered every year from the most serious forms of organised crime only... and yet they're gathering Β£150m."

The 2002 act opened up another route to reclaim assets. If investigators believe that an individual is living off the proceeds of a crime but don't have enough evidence for a conviction, they can go to a civil court where that individual has to prove he got his assets legitimately. If they can't – the Crown can take them.

Russell Stirton and Alex Anderson were accused of extortion and money laundering. When the criminal case failed five years ago, the Crown then used the civil arm of the new legislation in an attempt to take £5m from them, which included Stirton's luxury home. While their assets were frozen, Stirton and Anderson say the civil court has also had to pay them £10,000 a month living expenses out of their frozen assets. As the legal process dragged on, and the frozen assets were eaten awayc the Crown offered to settle for £1m – reducing that figure in stages to £200,000.  That would be less than four per cent of the amount the Crown originally froze of Stirton and Anderson's money.

The Asset Recovery Agency or ARA managed to freeze almost £190m over the last five years in the UK – but it only actually took £30m – a 15% success rate.

Βι¶ΉΤΌΕΔ Office Minister Alan Campbell said: "We are not content with the progress which has been made so far. We are learning lessons as we go along, just as the criminals have been learning lessons as we've been going through this process too. But I'm confident that we can make further progress in the future."

Panorama: Crime Pays, Monday 16 March 2009, 8.30pm, Βι¶ΉΤΌΕΔ One.

PR