Fraud Sentencing – Have your say

Fraud Sentencing – Have your say

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Introduction

Bankers. Good or bad? Well, I think we all have views on that. Bernie Madoff got 150 years in prison for his fraud (given the way that parole works in the USA, he will be eligible for release when he is 201). Is that crazy sentencing, or does it send a proper signal out for fraudsters?

The Court of Appeal has recently signalled a willingness to give higher sentences for financial crime. On a more formalised basis, the Sentencing Guidelines Council have issued a consultation on sentencing for fraud offences.

What are they looking at?

The consultation homepage has links to all the material that you would need to respond.

They are seeking views relating to sentencing for the following categories of offences:

  • Fraud (general)
  • Revenue fraud
  • Benefit fraud
  • Money laundering
  • Bribery

They will be looking at ancillary offences as well as corporate offenders (as in companies that commit these offences)

Whilst the council will welcome any form of comment, they are particularly looking for feedback on the following areas:

  • the principal factors that make any of the offences included within the draft guideline more or less serious;
  • the additional factors that should influence the sentence;
  • the approach taken to structuring the draft guidelines;
  • the sentences that should be passed for fraud, bribery and money laundering offences for both  individuals and corporations;

What are they proposing?

They have adopted the ‘new style’ method of guidelines with three categories based on harm (five brackets depending on the value of the fraud) and culpability (high, medium and lesser). There is also a new category – the ‘impact’ on the victim (high, medium and lesser).

The draft guidelines are at page 83.

Example

It’s worth having a look at two common examples (comparing to the current guidelines)

Benefit Fraud

Take someone who has a genuine claim for Incapacity Benefit that becomes fraudulent due to her failure to disclose a change of circumstances (a partner moves in). The fraud is over a period of 2 years and the total value is £10,000

Current : 5 weeks custody as a starting point, with a range of up to 26 weeks custody

Proposed : High level community order as a starting point, with a range of up to 26 weeks custody

In practice, there is no change. Looking at the draft guidelines (page 107), it can be seen that there will problems in applying them, particularly is assessing Culpability. Many offences will fall in Cat B by default (as they won’t fall into any of the categories easily).

General Fraud

Taking the case of Darren Smith that we looked at last year as an example. This was a ‘con’ of £140,000 where Mr Smith created false invoices to siphon off the money into a fake account.

Current : Starting point of 3½ years, range of 3-6 years

Proposed : Starting point of 3½ years, range of 3-6 years

Again, no change.

This indicates that for most cases, there will be little change. The cases where there will be a noticeable difference is in the absolute ‘top end’ where sentences may be higher and, more generally, where there is a vulnerable victim who is targeted. People who target the elderly, for example, can expect an increase of about 20% in sentences.

Conclusion

The Council has produced some very helpful research on the impact of fraud as well as the historical impact of, and attitudes to, sentences for fraud.

Will this help? On the plus side, it is useful to have guidelines in relation to money laundering. There is no harm in the additional guidance for the Bribery Act offences, although there are so few prosecutions, and the cases are so fact specific, this is not necessarily going to make much of a difference.

However, this will probably not make much of a difference to most cases (those with vulnerable victims tended to receive a tougher sentence in any event). To my view, the current guidelines are much easier to navigate that the proposed ones, and it is not clear that it was necessary to produce these guidelines (rather than considering other areas).

Whether you agree or disagree, let them know what you think.

The deadline for responses is 4th October.

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Dan is a barrister at 2 Dr. Johnson’s Buildings practising in crime.

6 COMMENTS

  1. Most of what has gone wrong in the British banks is the result of incompetence and arrogance – not fraud.

    And if you lock up all arrogant and incompetent professionals the rents in the Inns of Court might nosedive . . .

  2. As for Madoff’s sentence, it is like consecutive life-without-parole or sentences of 3000 years – both of which have been passed in the Land of the Free. I wonder: if someone so sentenced tried and failed to commit suicide would they charge him with attempting to escape?

    • I wasn’t being completely serious with the headline! Agree with the incompetence point (although no comment on the Inns of Court point…)

      American courts have got into the habit of silly sentencing in some cases. I’m not sure the reason why?

  3. Reblogged this on The Voice Of Australians and commented:
    Thing is, if U Jail the Bankers, U also have to Jail, the Govt, Dept Of Justice & Medical System.
    In that I’m all for it for the tyranny they have done to the disabled

  4. Well by doing it, it will stop the exploitation of the disabled by the Govt, Dept Of Justice & Medical System.

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