Obtaining Property by Deception

Date produced: 6 July 2011
Title: Fraud
Offence: Obtaining Property By Deception
Legislation: Section 15 Theft Act 1968
Commencement date: Repealed as from 15.1.2007 by the FRAUD ACT 2006 , however under transitional provisions this section is still applicable to offences where the offence was partly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 15 January 2007 - see section14(2) and schedule 2 of the Fraud Act for detailed provisions.
Mode of Trial: Either way
Statutory Limitations & Maximum Penalty: 10 years imprisonment

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 (If any)

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.

R v STEWART AND OTHERS [1987] 9 Cr. App. R.(S.) 115
Guideline Benefit Fraud Case

Professional fraudsters who target the benefit system who operate carefully organised frauds on a large scale in which considerable sums of money are obtained, often by means of frequent changes of name or address or of forged or stolen documents. The length of the custodial sentence will depend in the first instance on the scope of the fraud. 2 and a half years imprisonment and upwards.

Others cases consider:

a guilty plea;
the amount involved and the length of time over which the defalcations were persisted in (bearing in mind that a large total may in fact represent a very small amount weekly);
the circumstances in which the offence began (e.g. there is a plain difference between a legitimate claim which becomes false owing to a change of situation and on the other hand a claim which is false from the very beginning);
the use to which the money is put (the provision of household necessities is more venial than spending the money on unnecessary luxury);
previous character;
Matters special to the offender, such as illness, disability, family difficulties, etc.
Any voluntary repayment of the amounts overpaid.

If immediate imprisonment is necessary, a short term of up to about nine or 12 months will usually be sufficient in a contested case where the overpayment is less than, say £10,000.

(The case of GRAHAM, WHATLEY [2005] 1 Cr. App. R.(S) 115 revises the starting amount in Stewart and decides that that short terms of up to about 9 to 12 months would usually be sufficient in contested cases where the overpayment was less than £20,000. Sentences would depend on an almost infinite variety of factors. Serious aggravating factors, such as the obtaining of large sums, frauds persisted in over lengthy periods, claims for benefit that were fraudulent from the inception, sophisticated fraud involving the use of false and/or multiple identities, and the maintenance of an extravagant lifestyle over the period in question, would be likely to result in substantial periods of imprisonment.)

STEVENS AND OTHERS (1993) 14 Cr. App. R.(S) 372
Guideline Mortgage Fraud Case

In this case, 19 appellants had made 128 mortgage applications in relation to 90 properties. A total of £1.8 million had been obtained over eight years, and £2.5 million worth of further attempts had been made.

The Court of Appeal held that the following should be considered when sentencing for mortgage fraud:

Whether false names and values were used
Whether properties and borrowers were invented
It is an aggravating feature to recruit others to participate in the fraud
Whether loans for commercial properties were obtained at domestic rates
The part played by the offender; whether he was a professional man or not (breach of trust)
Period over which the fraud was persisted in
Personal benefits derived from the fraud
Delay between the acts ending and the arrest; between arrest and plea; the nature and timing of the plea is important when there has been a delay
Character and age of offender

Relevant Sentencing Case Law

ROACH [2002] 1 Cr. App. R.(S) 43
Breach of trust by carer

It was held that the Clark guidelines were restricted to acts of theft or deception committed in breach of trust from employers, charities etc and were not applicable to a case where the offender, a carer looking after an elderly woman, had received signed, blank cheques from the woman and cashed them for herself, thereby obtaining £2,875. This qualification to the Clark guidelines has subsequently been confirmed in Hooper [2003] 2 Cr. App. R.(S) 96.

Barrick and Clark have also been held NOT to apply to cases where forged identities have been used to defraud banks, as in MAHMOOD and OTHERS [2007] 2 Cr. App. R.(S) 17 and have also been held not to apply in the case of Independent Financial Advisers. (GIBSON [1999] 2 Cr. App. R.(S) 52)

OLUSOJI (1994) 15 Cr. App. R.(S) 356
Student Grants

3 years imprisonment for guilty pleas to 6 counts was upheld where the appellant had used 29 different aliases to obtain £20,7000 of student grants and attempted to obtain a further £50,000. He pleaded guilty to obtaining property by deception.

MICHAEL (1990) 12 Cr. App. R.(S) 223
Insurance Fraud

A sentence of 3 months imprisonment and £3,300 compensation for pleas of guilty to 1 count of obtaining property by deception and 1 of an attempt to do the same was upheld on appeal. It was held that "Frauds or attempted frauds or attempts to obtain money from insurance companies by deception are serious offences. They are difficult to discover and they involve, as in this case, detailed and planned dishonesty."

MORGAN (1994) 16 Cr. App. R.(S) 478
Insurance Fraud

A sentence of 2 years imprisonment for guilty pleas to attempting to obtain property by deception was upheld on appeal where the appellant and his wife, who had purported to be his sister, falsely reported and documented the wife's death and claimed for a total amount of £202,558 on 3 life assurance policies.

SEYMOUR [2002] 2 Cr. App. R.(S) 96
Unscrupulous Builder

The appellant was convicted of obtaining property by deception. The appellant operated a company which advertised in the yellow pages. He had quoted roof repair work at £3,000, and agreed that the sum would be payable upon completion. The man and another attended and claimed the money which was paid. It was discovered that no work had been done and contact details provided were false. Sentence of 15 months imprisonment upheld on appeal.

R V CONNORS [2006] 2 Cr. App. R. (S.) 31
Unscrupulous Builder

The appellant was convicted of obtaining by deception. The appellant was one of a group of men who visited a man aged 60 and offered to clear his guttering at a cost of £32.50. They then told the man that the guttering was rotten and would cost £11,000 to repair. The victim was then driven to his bank, were he took £3,150 from his account, which he gave to one of the men. It was later discovered that the repairs to the guttering would have cost about £ 134. Sentence of three-and-a-half years' imprisonment upheld on appeal.

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

How to use this Legal Guidance