Opinion: Judges set for fraud crackdown

Clarification could see courts get tough when sentencing on common law fraud prior to the SGC review

Sentencing for the common law offence of conspiracy to defraud is back in the spotlight following the Court of Appeal’s judgment in Levene v R [2013] and R v Kallakisand Williams [2013].

Nicholas Levene, a former financier convicted of orchestrating a high-yield Ponzi scheme, appealed against his sentence of 13 years as being manifestly excessive in light of his guilty pleas to 14 of 19 substantive counts under the Theft Act 1968 and Fraud Act 2006. His appeal was joined by a reference from the Attorney General, who referred the seven-year sentence of former property magnate Achilleas Kallakis for common law conspiracy to defraud on the grounds that it was unduly lenient.

The Attorney General also asked the Court of Appeal (CoA) to consider afresh whether guidelines for the sentencing of the most serious cases of conspiracy to defraud should apply (sentencing for substantive fraud offences is governed by the Sentencing Guidelines Council’s (SGC) guidance of 2009).

The court concluded that no such review was required, but did seek to clarify a number of areas of policy.

First, when sentencing for conspiracy to defraud judges can seek guidance on general principles from the guidelines. This is on the basis that the underlying principles of sentencing apply to the substantive offence and to conspiracy to defraud. But sentencers must not be inhibited in the exercise of their discretion.

Second, the court clarified the definition of “most serious offence”.The court relied on dicta in Bright [2008] which states that to justify sentences in excess of statutory maximums a judge need not deem a case as the worst offence of its kind, but should assess whether it is one of the utmost gravity.

Finally came a renewed emphasis on totality. The court sought to remind sentencers that the SGC’s guidelines on totality apply to all sentences passed after 11 June 2012 and judges have an obligation to review the aggregate and ensure it is proportionate to the level of criminality. Furthermore, there is no rule governing whether sentences should be structured as concurrent or consecutive, and when sentencing on multiple counts a judge should first consider the sentence for each offence and then determine whether the circumstances call for concurrent or consecutive sentence and whether the sentence as an aggregate is ultimately fair.

Thus, the CoA has preserved the flexibility given to judges sentencing for conspiracy to defraud while attempting to resolve any confusion caused by the unguided use of judicial discretion, especially in respect of the totality principle.

Coincidentally, the SGC will launch an official consultation into fraud sentencing in July in which the potential benefit of producing separate guidelines for conspiracy offences will be considered. The consultation paper will be published in the autumn, but for now we may see a toughening of the judicial stance when sentencing for common law fraud offences.

Corker Binning paralegal Francesca Cassidy-Taylor assisted with this article