The House of Commons Justice Committee has published its response to the Sentencing Council’s consultation on proposed guidelines for fraud, bribery and money laundering offences, calling for tougher sentences for big commercial organisations that knowingly perpetrate fraud on the public.
The guidelines
The Sentencing Council launched its consultation in June, with the aim of promoting a consistent approach to the sentences imposed by the courts in relation to these type of offences.
The guidelines cover each of the major financial offences, including
- Fraud,
- Possessing, making or supplying articles for use in frauds,
- Revenue fraud,
- Benefit fraud,
- Money laundering,
- Bribery, and
- Corporate offenders.
The proposals include the very first guideline for sentencing organisations convicted of financial crimes, as well as guidelines for bribery and money laundering carried out by individuals.
The impact on victims
Fraud is a big problem in the UK, and affects everyone - from individuals to charities, the public sector to large businesses. The proposed guidelines are designed to cover the wide variety and complex nature of differing fraud offences, and also to take into account the impact on the victims of those crimes. The idea, says the Sentencing Council, is to place victim impact at the centre of sentencing.
This approach could potentially lead to higher sentences for some offenders compared to the current guidelines, particularly where the financial loss is relatively small but the impact on the victim is high.
“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,” commented Sentencing Council member Michael Caplan QC, at the launched of the consultation. “Our proposed guidelines therefore direct courts to start the sentencing process by looking at what victims have been through.”
Larger fines for corporate offenders
In its response to the draft guidelines, the Justice Committee has said that it broadly supports the proposals, with the exception of one area - that of how to calculate the fines to be imposed on corporate offenders for financial crimes.
According to Committee Chair, Sir Alan Beith MP, “We would like the Sentencing Council to revisit their proposed approach to calculating sentences for corporate offenders, to ensure they pay a more meaningful penalty.”
This, says the Committee, means calculating the fine on the basis of a percentage of turnover instead of on an evaluation of the financial harm caused.
“We agree that this would be a more appropriate means of penalising corporate offenders, provided that harm to victims, whether financial or otherwise, remains factored into the sentencing process as an aggravating factor where it is identifiable,” says the Committee, in its report.
Justice Committee’s response
The report also suggests:
- That where the guidelines encourage offenders to make voluntary reparation and to assist in the recovery of funds, “emphasis should be placed on voluntary reparation having been made at an early stage, and the offender’s cooperation in such reparation and where relevant in repatriation of funds from abroad should be mentioned specifically.”
- That the benefit fraud guideline should be more clear about the circumstances in which financial hardship should be taken into account as a mitigating factor.
- That the Council should look again at the ‘remorse’ mitigating factor in cases of benefit fraud, particularly when evidenced by voluntary repayment.
“On the one hand, moneys recuperated by deduction from ongoing benefits cannot really be described as “voluntary” repayments, but on the other, it is important to ensure that more affluent defendants who pay back defrauded amounts are not treated preferentially to remorseful but impecunious defendants who offended in straitened circumstances,” says the report.
Contact Lewis Nedas’ Criminal Lawyers in London
For specialist legal advice on financial offences including fraud, bribery and money laundering, please contact our solicitors Jeffrey Lewis or Siobhain Egan on 020 7387 2032 or complete our online enquiry form here.
