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Conspiracy to Defraud (Common Law)

Date produced: 5 July 2011Title: Financial crimeOffence: Conspiracy to DefraudLegislation: Common Law (preserved by section 5(2) of the Criminal Law Act 1977)Commencement date: N/AMode of Trial: Indictable OnlyStatutory 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 needto specify why this charge is being chosen as opposed to any other and will need management approvalto charge, as well as complete monitoring forms - check local arrangements.Sentencing Range: Variable

Aggravating and Mitigating Factors

The amount involvedThe use to which money was put (spending on luxuries more venal than on necessities)Breach of position trust, such as by employee, director or trusteeElderly or vulnerable victimExtent of loss - intended and actualExtent of gain - intended and actualThe period over which and the persistence with which the fraud was carried outGuilty pleaVoluntary repaymentsPersonal factors such as illness, disability, family difficulties, etc

Relevant Sentencing Council Guidelines

Fraud guideline does not applyRelevant Sentencing Guidelines

R v BRIGHT [2008] EWCA Crim 462.

Held: The maximum prison sentence available following a conviction for conspiracy to defraud was 10years 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 hispartners, clients employers or the general public of sizeable sums of money immediate imprisonment isinevitable unless there are exceptional circumstances or the amount of money involved is very small. Theamount defrauded is an important factor and the following guidelines apply where the sums involved are:

Less than 17,500 up to 21 months imprisonment17,500 to 100,000 2-3 years100,000 to 250,000 3-4 years250,000 to 1 million 5-9 years1 million or more 10 years +

R. V KEFFORD (MARK JAMES) [2002] 2 CR. APP. R. (S.) 106For economic crimes, alternative sentences to imprisonment could be appropriate punishment.

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K was employed by a building society and opened false accounts into which he made windfall paymentsand then withdrew money as needed. The amount of 11,120 was taken. When interviewed the appellantimmediately made full and frank confessions. He had no previous convictions. After the discovery of theoffences the appellant sold his home so as to be able to repay the sums he had taken. On appeal hissentence 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, theguidance in Clarke was still applicable even where it was a first offence, however, a sentence ofimprisonment should only be imposed when necessary and only for as long as was necessary in view ofthe overcrowded prison system. For economic crimes, especially where the offender was of previousgood 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 largescale in which considerable sums of money are obtained, often by means of frequent changes of name oraddress or of forged or stolen documents. The length of the custodial sentence will depend in the firstinstance 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 falsefrom the very beginning);

the use to which the money is put (the provision of household necessities is more venial than spendingthe 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 besufficient 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 anddecides that that short terms of up to about 9 to 12 months would usually be sufficient in contested caseswhere the overpayment was less than 20,000. Sentences would depend on an almost infinite variety offactors. Serious aggravating factors, such as the obtaining of large sums, frauds persisted in over lengthyperiods, claims for benefit that were fraudulent from the inception, sophisticated fraud involving the use offalse and/or multiple identities, and the maintenance of an extravagant lifestyle over the period inquestion, 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 1.8million 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

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Whether properties and borrowers were inventedIt is an aggravating feature to recruit others to participate in the fraudWhether loans for commercial properties were obtained at domestic ratesThe part played by the offender; whether he was a professional man or not (breach of trust)Period over which the fraud was persisted inPersonal benefits derived from the fraudDelay 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 delayCharacter 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 whohe persuaded to access account details of customers. Total loss was 38,320. De was also involved inanother 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 thesecond).

R v NDAMBA [2011] EWCA Crim 139

D pleaded guilty to two counts of conspiracy to defraud. He was involved in a sophisticated conspiracy tosteal 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 was60,000. D was arrested with 1600 in cash on him and a folder containing various names, addressesand amounts of money. Sentence of 27 months on each count reduced to 18 months on appeal becausethe sentencing judge had overstated the D's involvement.

Ancillary Orders

(Archbold paragraph references)

Compensation Orders: 5-411Deprivation Orders: 5-439Disqualification from acting as a Company Director: 5-851Financial Reporting Orders: 5-886c