News type:
Press releases

News topic:
Fraud, bribery and money laundering offences

Published on:

23 May 2014

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

It aims to provide clear guidance to judges and magistrates and will help promote a consistent approach to the sentencing of these offences in courts in England and Wales. The Council has ensured that the impact on victims is central to how offenders should be sentenced. These offences are committed by offenders for financial gain but can mean much more than financial loss to the victim; even a relatively small sum lost can leave some victims badly affected.

Publication of the guideline also marks the first time that there has been a guideline for the sentencing of money laundering. The Council recognises that this offence is an integral part of much serious crime and wants to ensure that effective guidance is in place.

In 2012, 17,926 people were sentenced for fraud, a hugely varied offence that can affect individuals, businesses, public money and charities.

  • Fraud against individuals cost victims £9.1bn in 2012-3. 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 and social media users.
  • Private sector fraud cost business £21.2bn in 2012-3. 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 £20.6bn in 2012-3. This mainly comprises 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 £147m in 2012-3. 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.

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 guideline therefore increases the emphasis on the effects on victims of fraud in the sentencing process.

The previous guideline for confidence fraud only refers to the harm to victims as an aggravating factor and the banking and insurance guideline makes no reference to the impact the offence may have on either an individual who has had their account or identity compromised or on a corporation that has suffered the loss.

This new guideline instead places victim impact at the centre of considerations of what sentence the offender should get. This may 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.

It also aims to ensure that the victim’s vulnerability is given due weight. An example would be where the victim is particularly vulnerable due to, for example, age, such as cases where an unscrupulous builder targets an elderly pensioner, convincing them to have unnecessary work done on their home at extortionate costs.

A public consultation on the Council’s draft guideline was held last year and its proposals about putting the victim at centre of sentencing for these types of offences were welcomed by the judiciary, lawyers, law enforcement officials, professional bodies and members of the public.

The Council has also broadened how harm is described in the guideline so that sentencers are not restricted in what they take into account since harm to fraud victims can be extremely varied. This could include physical harm from ‘cash for crash’ scams, distress and inconvenience from identity frauds and increased premiums on policyholders by insurance scams.

Sentencing Council chairman Lord Justice Treacy said:

“Fraudsters are in it to make money, but for their victims it can mean much more than losing money. Our research with victims showed the great impact it can have on them, so the guideline puts this impact at the centre of considerations of what sentence the offender should get.”

The guideline will come into force in courts from 1 October 2014, replacing the guideline produced by the Sentencing Council’s predecessor body.