Evading Liability by Deception

Date produced: 5 July 2011
Title: Financial crime
Offence: Evading Liability by Deception
Legislation: s.2 Theft Act 1978
Commencement date: This section is repealed as from 15.1.2007 by the FRAUD ACT 2006, however under transitional provisions this section is still applicable to offences where the offence was partly committed before 15th January 2007 - see section14(2) and schedule 2 of the Fraud Act for detailed provisions.
Mode of Trial: Either Way
Statutory Limitations & Maximum Penalty: 5 years

Aggravating and Mitigating Factors

• The amount involved
• The use to which money was put (spending on luxuries more venal than on necessities)
• Breach of position trust, such as by employee, director or trustee
• Elderly or vulnerable victim
• Extent of loss - intended and actual
• Extent of gain - intended and actual
• The period over which and the persistence with which the fraud was carried out
• Guilty plea
• Voluntary repayments
• Personal factors such as illness, disability, family difficulties, etc

Relevant sentencing Guidelines

R v CLARK [1998] 2 Cr. App. R. (S.)95
Guideline Breach of Trust Case

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 his partners, clients employers or the general public of sizeable sums of money immediate imprisonment is inevitable unless there are exceptional circumstances or the amount of money involved is very small. The amount defrauded is an important factor and the following guidelines apply where the sums involved are:

• Less than £17,500 up to 21 months imprisonment
• £17,500 to £100,000 2-3 years
• £100,000 to £250,000 3-4 years
• £250,000 to £1 million 5-9 years
• £1 million or more 10 years +

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

K was employed by a building society and opened false accounts into which he made windfall payments and then withdrew money as needed. The amount of £11,120 was taken. When interviewed the appellant immediately made full and frank confessions. He had no previous convictions. After the discovery of the offences the appellant sold his home so as to be able to repay the sums he had taken. Convicted of theft and false accounting. On appeal his sentence 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, the guidance in Clarke was still applicable even where it was a first offence, however, a sentence of imprisonment should only be imposed when necessary and only for as long as was necessary in view of the overcrowded prison system. For economic crimes, especially where the offender was of previous good character, alternative sentences to imprisonment could be appropriate punishment.

Relevant Sentencing Case Law

See cases cited under 'theft'

KOBEISSI [2000] WL 1918619

Total of 4 years upheld: K appealed against concurrent sentences of 18 months' imprisonment for fraudulent trading and a total of 13 counts which were variously of obtaining by deception, attempting to obtain by deception and evading liability by deception made consecutive to two terms of 30 months' imprisonment for obtaining by deception. He contended that it had been incorrect to impose consecutive sentences and that the judge had failed to take account of the mitigating features.

OFFORD (1985) 7 Cr App R(S) 327

5 years reduced to 3 on appeal for a solicitor who had acted as such whilst unqualified and had leaded guilty to theft and evading a liability by deception. Over a period of 18 months he had defrauded clients of £242,000.

Ancillary Orders

(Archbold paragraph references in brackets)

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

Consider Also 

• Confiscation
• Attorney General's Guidelines on plea discussions in cases of serious or complex fraud

Links 

2007 Archbold 21-343 (omitted from 2011 edition)

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