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Fraud by abuse of position

Date Produced: 5 July 2011

Title: Financial crime

Offence: Fraud by abuse of position

Legislation: S4 Fraud Act 2006

Commencement Date: 15/1/07

Mode of Trial: Either Way

Statutory Limitations & Maximum Penalty: 10 years imprisonment

Sentencing Range:

Aggravating & 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
  • Number of people involved in offence
  • Use of another person's identity
  • 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
  • Behaviour not fraudulent from the outset
  • Misleading or incomplete advice
  • Voluntary cessation of offending

Relevant sentencing Guidelines

Sentencing guidelines for fraud apply

Fraud guidelines also reproduced at paragraph K-228 of the 2nd supplement to Archbold 2011 edition

Confidence Fraud

Convicted on or after 26 October 2009

First time offender aged 18 or over who pleaded not guilty.

Large advanced fee fraud or deliberate targeting of a large number of vulnerable victims

£500K (SP £750K) - Start Point (SP): 6 years. Range: 5 - 8 years 

£100K- £500K (SP £300K) - Start Point (SP): 5 years. Range: 4 - 7 years 

£20K - £100K (SP £60K) - Start Point (SP): 4 years. Range: 3 - 6 years 

<£20K (SP £10K) - Start Point (SP): 3 years. Range: 2 - 5 years

Lower advance fee fraud or degree of planning and / or multiple transactions 

£500K (SP £750K) - Start Point (SP): 5 years. Range: 4 - 7 years 

£100K- £500K (SP £300K) - Start Point (SP): 4 years. Range: 3 - 6 years 

£20K - £100K (SP £60K) - Start Point (SP): 3 years. Range: 2-5 years 

<£20K (SP £10K) - Start Point (SP): 18 months. Range: 26w - 3years

Single transaction involving targeting of a vulnerable victim   

£20K - £100K (SP £60K) - Start Point (SP): 26 weeks. Range: CO (High) - 18 months 

<£20K (SP £10K) - Start Point (SP): 6 weeks. Range: 2 - 5 years

Single transaction not involving targeting of a vulnerable victim, no or limited planning   

£20K - £100K (SP £60K) - Start Point (SP): 26 weeks. Range: CO (Medium) - 36 weeks 

<£20K (SP £10K) - Start Point (SP): CO - (Medium). Range: Fine - 6 weeks

Additional Aggravating Features
  • Number involved in the offence and role of the offender.
  • Offending carried out over a significant period of time.
  • Use of another person's identity.
  • Offence has a lasting effect on the victim.
Additional mitigating factors
  • Peripheral involvement
  • Behaviour not fraudulent from the outset
  • Misleading or inaccurate advice.

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Banking and Insurance Fraud and Obtaining Credit Through Fraud

Convicted on or after 26 October 2009

Fraudulent from the outset, professionally planned and either carried out over a significant period or multiple frauds

£500K (SP £750K) - Start Point (SP): 5 years. Range: 4 - 7 years 

£100-500K (SP £300K) - Start Point (SP): 4 years. Range: 3 - 5 years 

£20-100K(SP £60K) - Start Point (SP): 2 years. Range: 18 months - 3 years  

Fraudulent from the outset, and either fraud carried out over a significant period of time or multiple frauds 

£500K (SP £750K) - Start Point (SP): 4 years. Range: 3 - 7 years 

£100-500K (SP £300K) - Start Point (SP): 3 years. Range: 2 - 4 years 

£20-100K(SP £60K) - Start Point (SP): 15 months. Range: 18 months - 3 years 

£5-20K (SP £20K) - Start Point (SP): 12 weeks. Range: CO (High) - 12 months 

Less £5K - Start Point (SP): CO (High) . Range: CO (Low) - 6 weeks

Not Fraudulent from the outset, and either fraud carried out over a significant period of time or multiple frauds 

£500K (SP £750K) - Start Point (SP): 3 years. Range: 2 - 6 years 

£100-500K (SP £300K) - Start Point (SP): 2 years. Range: 12 months - 3 years 

£20-100K(SP £60K) - Start Point (SP): 36 weeks. Range: 12 weeks - 18 months 

£5-20K (SP £20K) - Start Point (SP): 6 weeks. Range: CO(Med) - 26 weeks 

Less £5K - Start Point (SP): CO(Med). Range: Fine - CO(High)

Single fraudulent transaction fraudulent from the outset   

£20-100K(SP £60K) - Start Point (SP): 26 weeks. Range: 6 weeks - 12 months 

£5-20K (SP £20K) - Start Point (SP): CO (High). Range: Fine - 18 weeks 

Start Point (SP): CO (Low). Range: Fine - CO (Med)

Single fraudulent transaction not fraudulent from the outset   

£20-100K(SP £60K) - Start Point (SP): 12 weeks. Range: CO (Med) - 36 weeks 

£5-20K (SP £20K) - Start Point (SP): CO (Med). Range: Fine - 6 weeks 

Less £5K - Start Point (SP): Fine. Range: Fine - CO (Low)

Additional Aggravating Features
  • Number involved in the offence and role of the offender.
  • Use of another person's identity.
Additional mitigating factors
  • Peripheral involvement
  • Misleading or inaccurate advice.

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Benefit Fraud

Convicted on or after 26 Oct 2009

Fraudulent from the outset, professionally planned and either carried out over a significant period or multiple frauds 

£500K (SP £750K) - Start Point (SP): 5 years. Range: 4 - 7 years 

£100-500K (SP £300K) - Start Point (SP): 4 years. Range: 3 - 5 years 

£20-100K (SP £60K) - Start Point (SP): 2 years. Range: 18 months - 3 years  

Fraudulent from the outset, and either fraud carried out over a significant period of time or multiple frauds 

£500K (SP £750K) - Start Point (SP): 4 years. Range: 3 - 7 years 

£100-500K (SP £300K) - Start Point (SP): 3 years. Range: 2 - 4 years 

£20-100K (SP £60K) - Start Point (SP): 15 months. Range: 18 months - 3 years 

£5-20K (SP £20K) - Start Point (SP): 12 weeks. Range: CO (High) - 12 months 

Less £5K - Start Point (SP): CO (High). Range: CO (Low) - 6 weeks

Not Fraudulent from the outset, and either fraud carried out over a significant period of time or multiple frauds 

£500K (SP £750K) - Start Point (SP): 3 years. Range: 2 - 6 years 

£100-500K (SP £300K) - Start Point (SP): 2 years. Range: 12 months - 3 years 

£20-100K (SP £60K) - Start Point (SP): 36 weeks. Range: 12 weeks - 18 months 

£5-20K (SP £20K) - Start Point (SP): 6 weeks. Range: CO (Med) - 26 weeks 

Less £5K - Start Point (SP): CO(Med). Range: Fine - CO (High)

Single fraudulent transaction fraudulent from the outset   

£20-100K (SP £60K) - Start Point (SP): 26 weeks. Range: 6 weeks - 12 months 

£5-20K (SP £20K) - Start Point (SP): CO (High). Range: Fine - 18 weeks 

Less £5K - Start Point (SP): CO (Low). Range: Fine - CO (Med)

Single fraudulent transaction not fraudulent from the outset   

£20-100K (SP £60K) - Start Point (SP): 12 weeks. Range: CO (Med) - 36 weeks 

£5-20K (SP £20K) - Start Point (SP): CO (Med). Range: Fine - 6 weeks 

Less £5K - Start Point (SP): Fine. Range: Fine - CO (Low)

Additional Aggravating Features
  • Number involved in the offence and role of the offender.
  • Use of another persons identity.
Additional mitigating factors
  • Peripheral involvement
  • Misleading or inaccurate advice.

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Theft in Breach of Trust

Convicted on or after 5 January 2009

First time offender aged 18 or over who pleaded not guilty.

Type Less than £2000

Starting Point community Order (Medium)
Range Fine - 26 Weeks

Type £2000 - £20,000 or less than £2,000 High Degree Trust

Starting Point 18 weeks
Range Community Order - 12 months

Type £20,000 - £125,000 or less than £20,000 High Degree Trust

Starting Point 2 years
Range 12 months - 3 years

Type £125,000 plus or £20,000 plus high Degree Trust

Starting Point 3 years
Range 2 years - 6 years

Relevant sentencing Guidelines (If any)

Guideline Breach of Trust Case

R v CLARK [1998] 2 Cr.App.R. (S.) 95
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.

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Relevant Sentencing Case Law

R v McCLUE [2010] EWCA Crim 311

D pleaded guilty to fraud by misrepresentation.  She was a manager at a betting shop and was involved in a scheme where she put £285,470 worth of fraudulent transactions on the system.  D stood to gain £28,000 but the scheme was discovered so the shop suffered no loss.  A sentence of 18 months was reduced on appeal to 8 months due to the D's particular circumstances.

R v CHASE [2010]EWCA Crim 1630

D was convicted of fraud by abuse of position.  D was employed as an operations manager to oversee work of contractors who supplied services to a council.  He manipulated the computer system so that the cost of items he was ordering for himself from a contractor were hidden in legitimate invoices.  Total loss was just under £10,000.  D was sentence on appeal was reduced to 2 and half years which took into account his previous conviction for a similar offence.

Ancillary Orders

(Archbold paragraph references in brackets)

  • Compensation Orders / Restitution: (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

  • Archbold 21-364

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