Image from lep.co.uk
You may have seen a story in the press over the past few days about a hedge fund manager who dodged his train fare for about 6 years. (Here, here and here if you want some extra reading.)
The currently unnamed individual lives in Stonegate, East Sussex, and commuted to London where he worked as a hedge-fund manager. He would not buy a ticket at Stonegate, and would travel to London Bridge station. He would then change trains to London Cannon Street and would ‘touch out’ using his Oyster card at London Cannon Street station. Having not ‘touched in’ he would there incur the maximum fare on the Oyster card of just £7.20, instead of the £24.50 each way ticket price.
After being challenged by an observant member of staff at London Cannon Street, he claimed he had dodged the fare on five occasions. He then went on to renew his season ticket a few days later. This prompted Southeastern trains to investigate further. They believed the man had been dodging the fare for 5 years as some digging around revealed that he had last brought a season ticket in 2008. Southeastern trains notified the man of the sum owed (presumably based on 5 years’ worth of train fares).
The man never admitted to dodging the fares for 5 years, but offered to pay the sum of £42,550 plus £450 in legal costs.
This was on the basis that he would not be prosecuted.
The Daily Mail reported:
“Southeastern, who has not named the man, said all passengers have the option to avoid prosecution and settle out of court.
The train company told the Sunday Times that the executive wanted to protect his identity because he was concerned about the impact it would have on his job.
A spokesperson added: ‘All customers have the option to settle out of court and in this case he chose to pay the settlement fee that we put to him.”
What offences could have been charged?
There are a number of offences which could have been prosecuted.
Fraud Act 2006 s 1 (fraud) Max sentence 10 years
Fraud Act 2006 s 6 (possession of articles for use in frauds) Max sentence 5 years
Fraud Act 2006 s 11 (obtaining services dishonestly) Max sentence 5 years
Regulation of Railways Act 1889 s 5 (travelling on a railway without paying) Max sentence 3 months/£1000 fine
It seems to me that the relevant factors are as follows:
- High level of profit from the offence
- Only stopped when he was caught, not of his own volition
- Carried out over a significant period of time
- Vulnerable victim (arguable, as the Stonegate train station was often unmanned and had no ticket machine, relying on the honesty of passengers)
- Lied/tried to conceal the extent of the fraud
- Motivation for the offence (financial gain, and absence of financial pressure)
- Repaid the money quickly
- Not fraudulent from the outset (on the basis he had previously purchased a season ticket prior to 2008)
For Fraud Act 2006 s 1 (fraud) and 6 (possession of an article for use in fraud) offences, the guidelines (numbered page 22 para 13) recommend a starting point of 26 weeks custody.
Many people have commented that this appears to be yet another situation where there is one rule for the rich, and another for the rest of us, on the basis that Southeastern were only willing to agree not to prosecute the man on the basis he paid the huge sum of money off – and quickly.
To my mind, that is a fair point. When courts fine individuals, there is a principle that a rich defendant should not be able to buy his or her way out of a custodial sentence; basically, if an offence deserves custody, the fact that the defendant can afford to pay a large fine shouldn’t allow him or her to avoid a custodial sentence, and conversely, if a large fine is appropriate, a poor defendant should not end up in custody because they cannot afford to pay it. Whilst the sum repaid is not a fine, it is merely restitution of the money defrauded, the principle would seem to apply.
Secondly, is it not entirely appropriate that the man is prosecuted? I consider it right that he ends up with a criminal record for what is a sizeable fraud. It is highly likely that if the man were unable to repay the money, he would have been prosecuted. Southeastern appeared to cite the reason for not prosecuting as partly based on the risk and cost involved in the proceedings. Two matters arise: a) Re the cost: they would have been able to apply to get their costs back (and the man is obviously a man of means) and b) Re the risk: the risk of losing would seem minimal given the information Southeastern appeared to have found (see the Daily Mail article).
Thirdly, currently, the man has not actually paid a penalty, he has merely restored to Southeastern trains the monies that were owed to them. He is no worse off than he would have been had he complied with the law and paid for his train ticket like everybody else.
Finally, on the issue of his ‘anonymity’, the fact that publication of his name would damage his career is no doubt true. Unfortunately, that is not sufficient to trump the principles of open justice and if he were prosecuted his name would undoubtedly be permitted to be published. Of course we do not know the details of the agreement between the man and Southeastern trains.