Conspiracy to Defraud (Common Law)

Date produced: 5 July 2011 Title: Financial crime Offence: Conspiracy to Defraud Legislation: Common Law (preserved by section 5(2) of the Criminal Law Act 1977) Commencement date: N/A Mode of Trial: Indictable Only Statutory Limitations & Maximum Penalty: 10 years imprisonment - s.12 (3) CJA 1987. See Attorney General's Guidance of 9/1/2007 attached to Policy Bulletin 15/2007. Prosecutors will need to specify why this charge is being chosen as opposed to any other and will need management approval to charge, as well as complete monitoring forms - check local arrangements. Sentencing Range: Variable Aggravating and Mitigating Factors The amount involved The use to which money was put (spending on luxuries more venal than on necessities) Breach of position trust, such as by employee, director or trustee Elderly or vulnerable victim Extent of loss - intended and actual Extent of gain - intended and actual The period over which and the persistence with which the fraud was carried out Guilty plea Voluntary repayments Personal factors such as illness, disability, family difficulties, etc Relevant Sentencing Council Guidelines Fraud guideline does not apply Relevant Sentencing Guidelines R v BRIGHT [2008] EWCA Crim 462. Held: The maximum prison sentence available following a conviction for conspiracy to defraud was 10 years not 7 (as for fraudulent trading). Guideline Breach of Trust Case R v CLARK [1998] 2 Cr.App.R. (S.) 95 Save in very exceptional circumstances, where a person in a position of trust, for example an accountant, a solicitor, a bank employee or a postman has used his trusted and privileged position to defraud his partners, clients employers or the general public of sizeable sums of money immediate imprisonment is inevitable unless there are exceptional circumstances or the amount of money involved is very small. The amount defrauded is an important factor and the following guidelines apply where the sums involved are: Less than 17,500 up to 21 months imprisonment 17,500 to 100,000 2-3 years 100,000 to 250,000 3-4 years 250,000 to 1 million 5-9 years 1 million or more 10 years + R. V KEFFORD (MARK JAMES) [2002] 2 CR. APP. R. (S.) 106 For economic crimes, alternative sentences to imprisonment could be appropriate punishment.

K was employed by a building society and opened false accounts into which he made windfall payments and then withdrew money as needed. The amount of 11,120 was taken. When interviewed the appellant immediately made full and frank confessions. He had no previous convictions. After the discovery of the offences the appellant sold his home so as to be able to repay the sums he had taken. On appeal his sentence was reduced from 12 months imprisonment to 4 months. The court commented that even in the present circumstances, in cases involving breach of trust where the sum involved was not small, the guidance in Clarke was still applicable even where it was a first offence, however, a sentence of imprisonment should only be imposed when necessary and only for as long as was necessary in view of the overcrowded prison system. For economic crimes, especially where the offender was of previous good character, alternative sentences to imprisonment could be appropriate punishment. Guideline Benefit Fraud Case R v STEWART AND OTHERS [1987] 9 Cr.App.R.(S.) 115 Professional fraudsters who target the benefit system who operate carefully organised frauds on a large scale in which considerable sums of money are obtained, often by means of frequent changes of name or address or of forged or stolen documents. The length of the custodial sentence will depend in the first instance on the scope of the fraud. 2 and a half years imprisonment and upwards. Others cases consider: a guilty plea; the amount involved and the length of time over which the defalcations were persisted in (bearing in mind that a large total may in fact represent a very small amount weekly); the circumstances in which the offence began (e.g. there is a plain difference between a legitimate claim which becomes false owing to a change of situation and on the other hand a claim which is false from the very beginning); the use to which the money is put (the provision of household necessities is more venial than spending the money on unnecessary luxury); previous character; Matters special to the offender, such as illness, disability, family difficulties, etc. Any voluntary repayment of the amounts overpaid. If immediate imprisonment is necessary, a short term of up to about nine or 12 months will usually be sufficient in a contested case where the overpayment is less than, say 10,000. (The case of GRAHAM, WHATLEY [2005] 1 CR.APP.R.(S) 115 revises the starting amount in Stewart and decides that that short terms of up to about 9 to 12 months would usually be sufficient in contested cases where the overpayment was less than 20,000. Sentences would depend on an almost infinite variety of factors. Serious aggravating factors, such as the obtaining of large sums, frauds persisted in over lengthy periods, claims for benefit that were fraudulent from the inception, sophisticated fraud involving the use of false and/or multiple identities, and the maintenance of an extravagant lifestyle over the period in question, would be likely to result in substantial periods of imprisonment.) Guideline Mortgage Fraud Case STEVENS AND OTHERS (1993) 14 CR.APP.R.(S) 372 In this case, 19 appellants had made 128 mortgage applications in relation to 90 properties. A total of 1.8 million had been obtained over eight years, and 2.5 million worth of further attempts had been made. The Court of Appeal held that the following should be considered when sentencing for mortgage fraud:Whether false names and values were used

Whether properties and borrowers were invented It is an aggravating feature to recruit others to participate in the fraud Whether loans for commercial properties were obtained at domestic rates The part played by the offender; whether he was a professional man or not (breach of trust) Period over which the fraud was persisted in Personal benefits derived from the fraud Delay between the acts ending and the arrest; between arrest and plea; the nature and timing of the plea is important when there has been a delay Character and age of offender Relevant Sentencing Case Law Refer to theft and fraud cases R v SIAW [2010] EWCA Crim 395 D pleaded guilty to 2 counts of conspiracy to defraud. D was in a relationship with a bank employee who he persuaded to access account details of customers. Total loss was 38,320. De was also involved in another fraud involving a dishonest bank employee who created fictitious standing orders. Total loss was 12,295. A sentence of 4 years was upheld (2 years for the first fraud and 2 years consecutive for the second). R v NDAMBA [2011] EWCA Crim 139 D pleaded guilty to two counts of conspiracy to defraud. He was involved in a sophisticated conspiracy to steal and alter cheques. The cheques were altered to match bank cards which had also been stolen. The cards were then used with the cheques to withdraw sums of money. The total value of the fraud was 60,000. D was arrested with 1600 in cash on him and a folder containing various names, addresses and amounts of money. Sentence of 27 months on each count reduced to 18 months on appeal because the sentencing judge had overstated the D's involvement. Ancillary Orders (Archbold paragraph references) Compensation Orders: 5-411 Deprivation Orders: 5-439 Disqualification from acting as a Company Director: 5-851 Financial Reporting Orders: 5-886c