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If a thief gives all the stolen money to their friend/family/charitable organization/etc. who has no idea that the money is stolen, and he gets caught, can the money be taken back?

I know that if the prosecution cannot prove the recipient knowingly took stolen money, they cannot be charged guilty. But can that money still be taken away? If not, this could be a huge loophole (e.g. corrupted politician donates to PAC, parents steal money to give their children). But if yes, it's not fair to take money away from someone who's done essentially nothing wrong.

My question is also: Has a case like this happened before? I assume giving stolen money away is not uncommon.

Edit: What if it's not a gift but a purchase; can the seller be forced to take the item back and return the money? What if the item is not tangible hence not returnable (for example, doing a favor)?

Edit 2: Okay, it seems like the seller must give up the money. Then does it mean every seller needs to scan the buyer to suspect whether he or she is a thief? That sounds like a real nuisance. If I sell something on eBay, there's no way I could reasonably know if the money is clean. Is there some legal protection for good faith sellers?

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My recollection is there's a big difference between money and property. I found a 1929 law journal article that supports my recollection.

The owner of stolen property is entitled to have it returned. If the person who obtained it from the thief didn't know it was stolen, the person didn't commit a crime, but must give up the property and is not entitled to any compensation (unless the person can get compensation from the thief).

A person who innocently receives money is the holder in due course, and gets to keep it. The victim's only recourse is to get compensation from the thief.

Gerard Ashton
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In England and Wales there is no distinction between money and any other type of property that may be stolen. In fact, it is expressly included in the definition of such property at s.4(1) of the Theft Act 1968

“Property” includes money and all other property, real or personal, including things in action and other intangible property.

[...]

Even if it has been passed to an "innocent" party, the money will remain stolen until it is restored to the rightful owner or taken into lawful custody by, say, being seized as evidence by the police under s.24(3) of that Act

[...] no goods shall be regarded as having continued to be stolen goods after they have been restored to the person from whom they were stolen or to other lawful possession or custody... [...]

Therefore, the "innocent" party has to return the money to the victim of the original theft. If this is not done voluntarily, the owner may make a claim to the civil court for an order compelling its return, or (if seized as evidence)  the police or owner may make an application to a Magistrates' Court under s.1(1) of the Police (Property) Act 1897

Where any property has come into the possession of the police ... a court of summary jurisdiction may, on application, either by an officer of police or by a claimant of the property, make an order for the delivery of the property to the person appearing to the magistrate or court to be the owner thereof...

Depending on the circumstances, there may be the potential money laundering and/or handling stolen goods offences - but these can get rather complicated and are potentially off topic.