News type:
Press releases

News topic:
Fraud, bribery and money laundering offences

Published on:

27 June 2013

The Sentencing Council has announced new proposals for how people convicted of fraud, money laundering and bribery should be sentenced.

The draft sentencing guidelines, which are likely to lead to tougher sentences for those who leave victims badly affected, aim to provide clear guidance on sentencing for these offences. This will help promote a consistent approach in courts in England and Wales.

More than 16,000 people were sentenced for fraud in 2011. Offences can range from a fraudulent attempt to get a refund in a high street shop to a multi-million pound VAT fraud, and the guidelines cover the great variety of offences that target individuals, businesses, public money and charities.

  • Fraud against individuals cost people £6.1bn in 2011. It includes Ponzi schemes, gangs targeting people using cashpoints, cowboy builders who rip off vulnerable older people, identity fraud and internet offences like phishing, running fake online ticket sites and duping dating site users.
  • Private sector fraud cost business £45.5bn in 2011. Examples are employees claiming for bogus expenses, suppliers making fraudulent payment claims, cash for crash scams and other insurance fraud and people falsifying mortgage applications.
  • Fraud targeting public money amounted to £20.3bn in 2011. The biggest part of this is tax fraud such as income tax evasion and VAT fraud. Other examples are council tax fraud and benefit fraud.
  • Fraud against the not-for-profit sector cost charities £1.1bn in 2011. This may take the form of a charity employee diverting donations to their own bank account, someone conning grant funding from a charity on false pretences, or bogus charity collectors.

As well as providing courts with a consistent set of guidelines for this extremely varied range of offences, the guidelines also aim to take into account more fully the impact on victims of financial crimes. Research commissioned by the Sentencing Council revealed that these crimes can mean far more than just financial loss – even losing quite a small sum can have a big impact on some victims. Individuals may suffer emotionally and psychologically, losing confidence in their ability to manage their financial affairs, as well as finding themselves in financial difficulties and having their credit rating damaged.

The new guidelines therefore place victim impact at the centre of considerations of what sentence the offender should get, and will mean higher sentences for some offenders compared to the current guideline, particularly where the financial loss is relatively small but the impact on the victim is high.

Offenders’ culpability will also be increased if they target people who are particularly vulnerable due to, for example, their age. This would apply to a cowboy builder who targets an elderly pensioner, convincing them to have unnecessary work done on their home at inflated costs.

Confidence Fraud

A builder approached a frail 85-year-old and offered to clear her gutters for £75, which he did.  He convinced her that there were urgent problems with her roof which he could repair for £2,000 and she had to use savings to pay him.  A surveyor valued the work on the roof at less than £100. The builder was convicted at trial.  His victim’s confidence was severely affected and she was unable to continue to live independently.

He had targeted a vulnerable victim which would put him into the highest level of culpability irrespective of the amount of money involved. Under existing guidelines, the sentence would be in the range of community order (medium) – 26 weeks custody. Under Sentencing Council proposals the range would be 26 weeks’ to 2 years custody.

Guidelines for the offences of money laundering and bribery are also being introduced for the first time, along with guidance for sentencing corporate offenders, which the current guidelines do not cover. They will also be able to be applied to conspiracy offences, including conspiracy to defraud.

A public consultation on the Council’s proposals will be open for 14 weeks from today. Anyone can respond whether they are criminal justice professionals, business representatives, victims or members of the public with an interest in fraud issues. People can have their say on the Council’s website.

Sentencing Council member Michael Caplan QC said:

“Fraud is committed for financial gain, but it can mean much more than financial loss to the victim. Our research with victims showed the great impact it can have on them. Our proposed guidelines therefore direct courts to start the sentencing process by looking at what victims have been through.

“This is a consultation: we want people to give us their views on our proposals so we can develop sentences which people understand and have confidence in.”