England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2
		16th July 2003

1. THE VICE PRESIDENT: In Dosanjh [1999] 1 Cr App R(S) 107, BAILII: [1998] EWCA Crim 1450, this Court gave guidance in relation to the sentencing of defendants for fraudulently evading duty on alcohol or tobacco, contrary to section 170 of the Customs and Excise Management Act 1979. In its recently published advice to the Court of Appeal, the Sentencing Advisory Panel has proposed that sentencing guidelines be issued in relation to these offences modifying Dosanjh and taking into account several matters since Dosanjh was reported. First, the Dosanjh judgment has apparently improved consistency in sentencing in lower-level cross-channel smuggling cases. Secondly, Customs and Excise have revised their prosecution policy so as to focus on high volume seizures and major criminals involved in smuggling. Thirdly, this Court's judgment in Kefford [2002] 2 Cr App R(S) 495, BAILII: [2002] EWCA Crim 519, emphasised the need for sentencers to take into account the increasing size of the prison population so that only those who need to be sent to prison are sent there, and are sent for no longer than is necessary and "in the case of economic crimes... prison is not necessarily the only appropriate form of punishment", particularly in the case of those who have no record of previous offending.
2. It is to be noted that alcohol and tobacco smuggling causes very considerable economic and social harm. In the year 2000 to 2001, loss to the Revenue from alcohol fraud was £800 million and, from cigarette smuggling, £2.7 billion. Eighty three smuggling gangs were uncovered, of which 60 were involved in large scale smuggling and the supply of illicit cigarettes. That being so, we repeat the view expressed in Dosanjh that deterrence is a relevant consideration when dealing with major fraud of this kind and that, in exceptional cases where very many millions of pounds in duty have been evaded, it may be appropriate to impose consecutive sentences or, alternatively, to charge an offence of cheating the public revenue, for which the maximum sentence is life imprisonment, compared with 7 years for an offence contrary to section 170.
3. It is also to be borne in mind, as was pointed out by Mr Morse, appearing before us on behalf of the Crown, that there is likely to be, in smuggling cases, a loss to the Revenue not just of excise duty but also of Value Added Tax.
4. At the other end of the scale of gravity, we accept the Panel's suggestion that non-custodial sentences, or, somewhat shorter sentences than those suggested in Dosanjh, may be appropriate.
5. Before indicating the revised levels which we think appropriate it is convenient to set out those factors which are relevant when assessing the seriousness of a particular offence, those which aggravate it and those which go in mitigation. With some slight amendments, we adopt as correct the factors identified by the Panel.
6. As to seriousness, the principal factors are the level of duty evaded; the complexity and sophistication of the organisation involved; the function of the defendant within the organisation and the amount of personal profit to the particular defendant. An offence will be aggravated if a defendant:

(1) played an organisational role;

(2) made repeated importations, particularly in the face of a warning from the authorities;

(3) was a professional smuggler, to which we shall return.

(4) used a legitimate business as a front;

(5) abused a position of privilege as a customs or police officer, or as an employee, for example, of a security firm, ferry company or port authority;

(6) used children or vulnerable adults;

(7) threatened violence to those seeking to enforce the law;

(8) dealt in goods with an additional health risk because of possible contamination; or

(9) disposed of goods to under-aged purchasers.

In addition to these factors there are statutory aggravating features of offending while on bail or having previous convictions.

7. Evidence of professional smuggling will include:

(1) a complex operation with many people involved;

(2) financial accounting or budgets;

(3) obtaining goods from several different sources;

(4) integration of freight movements with commercial organisations;

(5) sophisticated concealment methods such as forged documents or specially adapted vehicles;

(6) varying of methods and routes;

(7) links with illicit oversees organisations; and

(8) in recognition of a submission made to us by Mr Morse, when the amount of the goods smuggled is of the order of half a million cigarettes, that is when the duty evaded is some £75,000: that is not, of course, a precise indication; but the value of goods involved is, as it seems to us, a potential indicator of professional smuggling, in addition to those factors identified by the Panel.

8. As to mitigating factors, these will include:

a prompt plea of guilty, co-operation with the authorities, particularly in providing information about the organisation and, to a limited extent, previous good character. Pressure from others to commit the offence may, depending on the circumstances, afford mitigation.

9. We adopt the Panel's suggestions that, following trial, for a defendant with no relevant previous convictions and disregarding any personal mitigation, the following starting points are appropriate:

(i) where the duty evaded is less than £1,000, and the level of personal profit is small, a moderate fine, if there is particularly strong mitigation, and provided that there had been no earlier warning, a conditional discharge may be appropriate;

(ii) where the duty evaded by a first time offender is not more than £10,000, which approximately equates to 65,000 cigarettes, or the defendant's offending is at a low level, either within an organisation or persistently as an individual, a community sentence or curfew order enforced by tagging, or a higher level of fine; the custody threshold is likely to be passed if any of the aggravating features which we have identified above is present.

(iii) where the duty evaded is between £10,000 and £100,000, whether the defendant is operating individually or at a low level within an organisation, up to 9 months custody; some of these cases can appropriately be dealt with by magistrates, but others, particularly if marked by any of the aggravating features which we have identified, should be dealt with by the Crown Court.

(iv) when the duty evaded is in excess of £100,000, the length of the custodial sentence will be determined, principally, by the degree of professionalism of the defendant and the presence or absence of other aggravating factors; subject to this, the duty evaded will indicate starting points as follows: £100,000 to £500,000, 9 months to 3 years; £500,000 to £1 million, 3 to 5 years; in excess of £1 million, subject to the comment we have made earlier where many millions of pounds are evaded, 5 to 7 years.

10. We stress two matters. First, our proposals provide guidelines, not a straightjacket. Secondly, from the starting points indicated, sentencers can be expected to move up by reference to aggravating factors, or down, by reference to mitigating factors, particularly a prompt plea of guilty and co-operation.
11. Sentencers should also bear in mind their powers to order: confiscation of assets under the Proceeds of Crime Act 2002 (Crown Court only); compensation in a clear case under section 130 of the Powers of Criminal Court (Sentencing) Act 2000 (Crown Court and, subject to a limit of £5,000, Magistrates' Court also0; deprivation, particularly of vehicles, under section 143 of the Powers of Criminal Courts (Sentencing) Act 2000 (both Crown Court and Magistrates' Court); and disqualification from driving, where a motor vehicle has been used (Crown Court only).
12. If any of these additional orders is contemplated, the court should warn the defence, so that argument in relation to them can be heard (see, only by way of example, Powell 6 Cr App R(S) 354).
13. Finally, where licensed premises have been used for the sale of smuggled goods, the court should notify the licensing authority.
14. Before turning to the specific appeal and applications before this Court, we add this: because of the proposals in the Criminal Justice Bill, presently before Parliament, in relation to a new Sentencing Guidelines Council, this may well be the last occasion on which this Court, acting directly on advice from the Sentencing Advisory Panel, issues sentencing guidelines. Whether the public will benefit from the new body remains to be seen. In the meantime, it is appropriate for this Court to express its gratitude for the efficient and impressive way in which the Panel has discharged its task over the last 4 years. The breadth of experience of Panel members, the responses which they have received and analysed from their statutory and other consultees and the research which they have commissioned, have lent great weight to the 12 Advices which they have given to this Court. In consequence, those Advices have, for the most part, been followed and implemented in the judgments of this Court.
15. In the light of the considerations which we have set out, we turn now to the particular cases before the Court.
16. Czyzewski was convicted by the jury at Birmingham Crown Court on 22nd August 2002 on two counts of being knowingly concerned in fraudulently evading excise duty on cigarettes, contrary to section 170. He was sentenced to 4 years' imprisonment on each concurrent. He appealed against conviction with leave of the Single Judge and we have earlier today dismissed that appeal. He appeals against sentence with leave of the Single Judge.
17. Each of the counts on which he was convicted related to a consignment of goods which included approximately 2.5 million illicit cigarettes. One consignment entered this country through Immingham on 22nd July 2001 and was delivered to an industrial estate in Birmingham on 24th July. The other, destined for the same address, was seized at Felixstowe by Customs and Excise officers on 23rd July and held by them.
18. The appellant had left the industrial estate before Customs and Excise officers pounced and arrested others. He did not give evidence before the jury. His explanation at interview, when he was arrested on 3rd August 2001, which, as it seems to us, the jury obviously rejected, was that he had travelled from Manchester that day to buy a comparatively small quantity of cigarettes because he was a heavy smoker. He had been told to hire a van and put money under the seat but suspected that he was being set up and might be robbed and therefore left without buying.
19. Two convicted co-accused, whose role in events was of a manual kind, were each sentenced to two-and-a-half years' imprisonment. The judge passed sentence on the appellant on the basis that, unlike them, he was an organiser. Before us, Mr Khan, on behalf of Czyzewski, challenged that basis of sentencing. We reject that challenge. Following the trial, which lasted a number of weeks, the judge was well able, on the evidence which the jury heard, to form an assessment of the role played by this appellant. There was material which clearly indicated that he had had dealings with his co-accused, Sarzala, before 24th July. There was evidence that the appellant had driven from Manchester to Birmingham in his own private car. If an explanation was to be plausibly advanced, it would necessarily involve him purchasing only a small quantity of cigarettes. We are satisfied, by reference to these and other matters which it is unnecessary to rehearse, that the judge was fully justified in characterising this appellant as an organiser.
20. Mr Khan submits that, in any event, 4 years was excessive. We do not agree. The excise duty evaded in relation to these two counts was approximately £670,000 and VAT in excess of £150,000 would not have become payable as it ought lawfully to have been paid. It is also pertinent that this appellant, in 1995, was sentenced to 3 years' imprisonment for supplying a Class A drug. He has other convictions but it is unnecessary to refer to them.
21. In our judgment, 4 years was an unimpeachable sentence and his appeal is accordingly dismissed.
22. We turn to Bryan and Mitchell. They were jointly charged at Maidstone Crown Court, on count 1, with conspiracy fraudulently to evade excise duty and, on count 6, with being knowingly concerned in the fraudulent evasion of excise duty. Bryan pleaded guilty to count 6 on 11th October 2002, and count 1 was then ordered to remain on the file on the usual terms. Mitchell was convicted by the jury on count 6 and acquitted on count 1. There were other allegations against him, in relation to which not guilty verdicts were entered on the relevant counts by the judge under section 17 of the Criminal Justice Act 1967.
23. Bryan and Mitchell were both sentenced by His Honour Judge Balston, on 5th June 2003, Bryan to two-and-a-half years and Mitchell to 4 years. Their applications for leave to appeal against sentence have been referred to this Court by the Registrar.
24. There were three co-accused who pleaded guilty to count 6. Each of them played a conspicuously lesser part in the matters to which we now turn than either of these applicants and each of them was sentenced to 6 months' imprisonment.
25. We grant leave to appeal to Bryan and Mitchell.
26. The circumstances were these. On 10th May 2002, while Bryan, who is a lorry driver, was in France, he was approached and asked at first to bring back a few boxes of cigarettes in return for a payment of £1,000. He agreed, but he then took delivery of a load of approximately 1.25 million cigarettes which he was persuaded to bring to the United Kingdom in return for a promised payment of £3,000. After the lorry came through the Channel Tunnel it was followed by customs officers.
27. Officers had that morning also observed a Sierra motorcar driven by Mitchell. Shortly before 9.30 am he had only one passenger. Ten minutes later he had three. The Sierra drove to a service area and stopped, just short of the exit slip road facing the A2. It then pulled onto the A2, heading for London. Very soon afterwards, a van left the HGV park at the service area and travelled in the same direction. At 10.00 pm, customs officers entered a yard in Kent and found Bryan's lorry, Mitchell's Sierra, the van seen leaving the HGV park and another vehicle. There were about ten men around the lorry, the rear of which was open, and they were in the process of unloading. These two appellants, Bryan and Mitchell, the co-accused and others were arrested and the cigarettes were seized. Excise duty evaded was just over £164,000.
28. In interview, Bryan made no comment Mitchell denied being involved in evading excise duty and denied knowing any of the others in the yard, apart from his son, and he declined to comment when told he had been seen driving the Sierra. At trial, he claimed to have been an innocent dupe, recruited to unload bankrupt goods that were being imported to be sold at shops in Nottingham by the man he claimed had duped him.
29. In passing sentence, the learned judge referred to £164,000 as being the figure on the basis of which sentence would be passed. He said that the fact that Mitchell had been acquitted of the conspiracy count did not mean that he was anything other than the organiser and he would be sentenced on that basis. Bryan had played an essential part in carrying out the importation by driving the lorry.
30. Bryan is 34 years of age and of previous good character. Mitchell is also 34. He has previous convictions for theft and handling, a good many years ago, and he has never previously been sentenced to custody.
31. There were a number of reports on Bryan, including a pre-sentence report, referring to his remorse, naivete and failure to consider the consequences. There was a medical report relating to historical matters, to which it is unnecessary to refer, and there were a number of references speaking of Bryan as being a reliable and hard working man, who was responsible and trustworthy. There is a prison report before this Court indicating that he presents no problem there and, indeed, has this week been moved to the enhanced workshop. There was also a pre-sentence report on Mitchell, which indicated that he was still maintaining that he had become involved inadvertently. He was, however, remorseful and appeared to have learnt a lesson.
32. The submissions which are made on behalf of these appellants gain force from the guidelines earlier set out in this judgment. No criticism can properly be made of the sentencing judge having regard to the guidelines in Dosanjh which applied when he passed sentence.
33. However, in the light of the considerations to which we have referred, it seems to us that the sentence of two-and-a-half years passed on Bryan was excessive. He pleaded guilty at an early stage. The amount of duty evaded was that which we have indicated. It is true that he expected a reward of £3,000. But this was a single trip and, taking into account the guidelines which we have now indicated, we quash the sentence of two-and-a-half years' imprisonment and substitute for it a sentence of 9 months' imprisonment.
34. So far as Mitchell is concerned, he was not of good character although he has not previously been to prison. He was rightly treated by the judge as the organiser of these matters but, having regard to the amount of excise duty evaded, we take the view that 4 years must today be regarded as an excessive sentence. We quash it. We substitute for it a sentence of two-and-a-half years' imprisonment. To that extent the appeals of Bryan and Mitchell are allowed.
35. We turn to the application of Diafi, who on 29th May 2003, at Isleworth Crown Court pleaded guilty to four offences of being knowingly concerned in the fraudulent evasion of duty. On 26th June he was sentenced by His Honour Judge Singh QC to 9 months' concurrently on each count. The first count was ordered to remain on the file on the usual terms. His application for leave to appeal against sentence has been referred to this Court by the Registrar.
36. The circumstances are that, on five occasions, he was stopped by customs officers at Heathrow Airport. Each time he was in possession of quantities of cigarettes. On 27th December 2000 he had 25,000 cigarettes. That formed the basis of count 1, which, as we have said, was ordered to remain on the file, he having pleaded not guilty to it. Count 2 related to 4th May 2001, when he had 10,800 cigarettes, count 3, to the 15th July 2002, when he had 15,200 cigarettes, count 4, to 17th January 2003, when he had 3,000 cigarettes, count 5, to 2nd February 2003, when he had 3,200 cigarettes. The total duty evaded was £5,729. On each of the first four occasions the cigarettes were seized and the applicant was issued with a notice of seizure and he was warned that a record would be kept of the seizure. He was arrested on the fifth occasion. He claimed that the cigarettes were for his own use.
37. The learned judge, in passing sentence, indicated that he did not accept that but that these importations were probably for profit and they were, as was manifest, not one-off importations.
38. The appellant is 38 years of age and of previous good character. There was a pre-sentence report before the judge, which indicated that that the applicant seemed disposed to deny or diminish the effects of his criminality. He found it difficult to accept that the loss to public funds was a significant matter. He expressed no remorse and the author of the report concluded that there was a significant risk of re-offending. There is before this Court a good prison report upon the applicant.
39. The submission which is made by Mr Galvin, on behalf of Diafi, is that 9 months was perhaps too long. We are unpersuaded of that. The repeated repetition of this conduct, as it seems to us, was a conspicuously aggravating factor which must be taken into account, as well as the comparatively modest amount of duty evaded. In our judgment, it is not arguable that a sentence of 9 months was excessive. Accordingly we refuse Diafi's application for leave to appeal.
40. We turn, finally, to Ward. He, on 26th September 2002, at Warwick Crown Court, pleaded guilty to being knowingly concerned in the fraudulent evasion of duty and on 31st March 2003, at Leicester Crown Court, he was sentenced by His Honour Judge Bray to 9 months. He has now been released, since early June, on home detention curfew.
41. His application for leave to appeal against sentence has been referred to this Court by the Registrar. We grant leave.
42. There were co-accused, including a man called Peter Gilbey, who pleaded guilty on the day of trial and was sentenced to 20 months' imprisonment.
43. The operation which was run by Peter Gilbey was sophisticated and involved the production of what appeared to be genuine hand rolling tobacco. Between August and November 2001 customs officers mounted a surveillance operation on Gilbey's activities and, in early August, he was seen to meet the applicant at the applicant's home address.
44. On 15th September, the applicant was followed to an industrial unit on a farm in Leicester, where he filled a vehicle with black plastic bags. On 22nd November he did the same. On 27th November, he borrowed a Transit van and again went to the industrial unit where he collected further bags but, on this occasion, he was stopped before he left. There were in the van 300 kilograms of tobacco on which £35,000 worth of duty had been evaded.
45. In the industrial unit, the officers found a tobacco producing plant and a large amount of tobacco and tobacco pouches.
46. Further investigations showed that Gilbey had ordered the pouches and some re-sealable tabs, some months earlier, and, about a year before, he had tried to set up a tobacco import company and had a number of contacts both in this country and abroad. Pausing there, in the light of the guidelines in this judgment, the sentence passed upon Gilbey may well be regarded as being a lenient one.
47. When this applicant was interviewed he said it was Gilbey's brother who had introduced him to Peter Gilbey. The applicant admitted collecting tobacco from the unit on three separate occasions. On the first two occasions he picked up 20 bags and on the third 60 bags. His job was to transport them to a layby on a motorway where he would hand over the goods and he was paid £200 a trip. It was estimated that about £60,000 worth in duty had been evaded by the applicant.
48. The submission which is made on behalf of Ward is that the sentence was somewhat too high. We accept that. There is no doubt that this was a planned and professional conspiracy but the role of Ward was a very subsidiary role indeed. We have no doubt that custody was necessary but we quash the sentence of 9 months and substitute for it a sentence of 6 months. To that extent his appeal is allowed.