False Accounting
Date produced: 5 July 2011
Title: Financial crime
Offence: False Accounting
Legislation: s.17 Theft Act 1968
Mode of Trial: Either Way
Statutory Limitations & Maximum Penalty: 7 years imprisonment s.17(1)
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 Council Guideline
Banks on Sentence (6th edition) invites sentencers to 'inferentially' use the guidelines relating to fraud and financial services offences.
The guidelines apply to adult offenders sentenced on or after 26 October 2009.
The guidelines for confidence fraud and banking and insurance fraud are reproduced at paragraphs K-235 and K-237 of the 2nd supplement to the Archbold 2011 edition. Guidelines also reproduced under fraud template.
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. 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
SMITH (1994) 15 Cr. App. R.(S) 145
Loss to Revenue
30 months imprisonment was upheld on appeal for false accounting where the appellant had obtained a book of Inland Revenue vouchers and used them falsely so as to cause a loss o the Revenue of £50,000.
R v JENNER (NICHOLAS) 2002 WL 31914891
J a former building society facilities manager had diverted some £394, 000 over a seven year period into a false account, the bulk of which he had used to purchase a house. He appealed against a total sentence of four years' imprisonment following guilty pleas for false accounting and obtaining a money transfer by deception. J contended that the sentence was excessive in view of the decision in Kefford that in economic crimes of this nature, imprisonment should only be imposed when necessary and for no longer than necessary. Held: This was undoubtedly a serious series of offences. It required sophistication to carry it out, the forging of documents and the creation of false accounts. The offending only came to an end when the matter came to the attention of the Society. Under the Clark guidelines, a sentence of four years for a sum involved of some £400,000 on a plea of guilty, was well within the guidelines. Nevertheless, we think that in the light of the very full co-operation which this appellant has afforded to the Society, which has had the practical consequence of enabling the Society to recover very nearly all of its loss, and in the light of the renewed emphasis in Kefford on sentencing for economic crimes of this kind for a period that is no longer than necessary, but also in the light of the excellent prison report which this appellant has received, it is possible to reduce this sentence. The sentence of four years was replaced with a sentence of three years and six months.
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) if it falls to be determined as a "lifestyle" offence by virtue of Schedule 2 of POCA)
Consider Also
- Confiscation
- Attorney General's Guidelines on plea discussions in cases of serious or complex fraud
Links
Archbold 21-226
