Fraud, Bribery and Money Laundering Offences Guideline: Consultation

• Report: Fraud, Bribery and Money Laundering Offences Guideline: Consultation
• Report: Fraud, Bribery and Money Laundering Offences Guideline: Consultation (PDF)
• Justice Committee

In its comments on the draft Fraud, Bribery and Money Laundering Offences Guideline, the Justice Committee argues that fines imposed to  punish corporate offenders for financial crimes should be calculated primarily on a percentage of turnover, rather than on an evaluation of the amount of financial harm caused by the crimes. In other respects the Committee broadly supports the Sentencing Council’s draft Guideline.

The Chair of the Committee, Sir Alan Beith MP, said:

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. At the same time, we welcome many aspects of the new Guideline for sentencing offenders convicted of fraud and related offences, in particular the greater weight given to the harm caused to victims.

In its letter to the Sentencing Council, included in the Committee’s Report, the Committee –

• Welcomes the greater emphasis across the guidelines for individual offenders on the impact the crime has had on the victim (rather than focusing exclusively on financial loss), given that victims, particularly vulnerable individuals, may suffer significant financial and psychological harm over the loss of relatively small sums.
  
• Highlights concerns that the proposed approach to sentencing corporate offenders, which involves evaluating the amount of financial harm caused, would be difficult to achieve and likely to result in overly lenient sentences; and suggests instead that sentences are based primarily on a percentage of turnover, or some other indication of the corporation’s financial value.
  
• Recommends that, to optimise the chances of securing compensation for victims of financial crime, the Guideline should be redrafted slightly to incentivise offenders to make voluntary reparation at an early stage.
  
• Recommends that the benefit fraud guideline gives greater clarity to sentencers about the circumstances in which they should take financial hardship into account as a mitigating factor.
  

BACKGROUND:

The Committee is a statutory consultee in relation to draft sentencing Guidelines issued by the Sentencing Council for England and Wales. The Committee’s views on this draft Guideline were informed by a seminar which it held with relevant organisations, and are set out in a letter to the Chairman of the Sentencing Council, Lord Justice Leveson, which is annexed to the Report.

The Committee’s Ninth Report of Session 2013–14, Fraud, Bribery and Money Laundering Offences Guideline: Consultation examines proposed new sentencing guidelines on fraud-related offences published by the Sentencing Council. The draft Guideline is split into separate guidelines for the offences of (i) Fraud, (ii) Possessing, making or supplying articles for use in frauds, (iii) Revenue fraud, (iv) Benefit fraud, (v) Money laundering, (vi) Bribery and (viii) Corporate offenders. A guideline for sentencing organisations convicted of financial crimes has been produced for the first time, as have guidelines for bribery and money laundering perpetrated by individuals.