B e f o r e :
MR JUSTICE OWEN
MR JUSTICE HEDLEY
|R E G I N A|
|CHERYL ANGELA GRAHAM AND ALBERT JOHN WHATLEY|
Smith Bernal Wordwave Limited
190 Fleet Street London EC4A 2AG
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(Official Shorthand Writers to the Court)
MR R CIFONELLI appeared on behalf of the CROWN IN THE APPEAL OF GRAHAM
MISS C DAVENPORT appeared on behalf of WHATLEY
MR S EARNSHAW appeared on behalf of the CROWN IN THE APPEAL OF WHATLEY
Crown Copyright ©
"Stewart is generally regarded by sentencers as somewhat dated in the current climate of pervasive benefit fraud."
echoing the observation of Rose LJ in Bendris  2 Cr App R(S) 183 at 184:
"It may be that, in the not very distant future it will be necessary for this Court to reconsider the level of sentences indicated in Stewart in the light of the continuing and increasing prevalence of social security fraud during the 13 years since that case was decided."
"Nowadays the policy is for cases involving small amounts not to be prosecuted except where there are special features such as repeated fraud, or the necessity to provide a deterrent to a particular type of fraud prevalent in a particular locality."
"In some cases immediate unsuspended imprisonment (or youth custody) is unavoidable. At the top of the range, requiring substantial sentences, perhaps of two and a half years imprisonment and upwards, are the carefully organised frauds on a large scale in which considerable sums of money are obtained, often by means of frequent changes of names or address or of forged or stolen documents. Examples are Adams (1985) 7 Cr App R(S) 411, to which we have referred in the course of the appeals and applications today, and Dennehy which is a case in our list today.
These offenders are in effect professional fraudsters, as is often apparent from their previous records. They have selected the welfare departments as an easy target for their depredations and have made a profitable business out of defrauding the public in this way. The length of the custodial sentence will depend in the first instance on the scope of the fraud. Of course, as in all fraud cases, there may be a variety of mitigating circumstances and in particular a proper discount for a plea of guilty should always be given. These cases bear little relation to the average offender in this area.
As to the remainder, who form the great majority of those appearing in the Crown Court, the sentence will depend on an almost infinite variety of factors, only some of which it is possible to forecast ... Other considerations which may affect the decision of the Court are: (i) a guilty plea;
(ii) 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;
(iii) 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);
(iv) the use to which the money is put (the provision of household necessities is more venial than spending the money on unnecessary luxury;
(v) previous character;
(vi) matters special to the offender, such as illness, disability, family difficulties et cetera;
(vii) any voluntary repayment of the amounts overpaid.
Before sentencing the offender the court should consider the following questions which were set out in Clarke (1982) 4 Cr App R(S) 197 at 200: (i) is a custodial sentence really necessary? The fraud cases dealt with in the Crown Court (as already indicated) are likely to be relatively serious and a non-custodial sentence will often be appropriate; (ii) if a custodial sentence is necessary, can the court make a community service order as an equivalent to imprisonment, or can it suspend the whole sentence? It seems to us that a suspended sentence or (especially) a community service order may be an ideal form of punishment in many of these cases; (iii) if not, what is the shortest sentence the court can properly impose?
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 effect of inflation since Barrick means that approximately £17,000, £85,000 and £170,000 are the present day equivalents of respectively £10,000, £50,000 and £100,000."
"Where the amount is not small, but is less than £17,500, terms of imprisonment from the very short up to 21 months will be appropriate; cases involving sums of between £17,500 and £100,000, will merit two to three years; cases involving sums between £100,000 and £250,000, will merit three to four years; cases involving between £250,000 and £1 million will merit between five and nine years; cases involving £1 million or more, will merit ten years or more."
"We have ventured to go into matters at some length to show that it is only a small proportion of offences of this nature which are dealt with in the Crown Court and to demonstrate that the deterrent effect of any Crown Court sentence is unlikely to be great. This is because any one minded to embark upon this sort of fraud, unless he had a large scale operation in mind, or the fraud is blatant, is unlikely to find himself in the Crown Court. If prosecuted at all, the run of the mill offence is almost certain to be before the Magistrates."
"For the reasons we have mentioned earlier in this judgment, we do not think that the element of deterrence should play a large part in the sentencing of this sort of case in the Crown Court."
"Somewhere between the worst kind of case and that kind of case near the worst kind of case."
"... deliberate, persistent, and, it must be said, systematic fraud which involved dishonest acquisition of thousands of pounds of public money."
Her appeal was dismissed.
"It does seem to us that the appropriate sentence on a plea of guilty in cases of this kind is one of three and a half years to four years imprisonment which would mean, after a contested trial, a proper sentence would be of the order of six years imprisonment."
"In our judgment the sentence which the judge imposed was severe but not manifestly excessive. Were it to be reduced at all, it would be reduced by so small an amount as to lay the Court open to justified reproach. In our judgment the sentence is not one with which this Court should interfere."
"... this was a persistent and sophisticated fraud which displayed considerable guile on the appellant's part."
But the sums involved in the offences for which she was convicted totalled only £2,807. With the decisions of Stewart and Adewuyi in mind, the Court allowed the appeal, albeit with some misgivings, and reduced the sentence to two years imprisonment concurrently on each count.
"(i) where the duty evaded was less than £1,000, and the level of personal profit was small, a moderate fine, if there is particularly strong mitigation, and provided that there had been no earlier warning, a conditional discharge might be appropriate;
(ii) where the duty evaded by a first time offender is not more than £10,000 ... or the defendant's offending is at a low level ... 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 ... 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 nine months custody ...
(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 features; subject to this, the duty evaded will indicate starting points as follows: £100,000 to £500,000, nine months to three years; £500,000 to £1 million, three to five years; in excess of £1 million ... five to seven years."
"In the case of economic crimes, for example obtaining undue credit by fraud, prison is not necessarily the only appropriate form of punishment. Particularly in the case of those who have no record of previous offending ... Certainly, having to perform a form of community punishment can be a very salutary way of making it clear that crime does not pay ..."
1. If Stewart is to continue to apply, the figure of £10,000 should be updated for inflation.
2. There will be cases in which a sentence should properly reflect an element of deterrence.
3. The decisions to which we have been referred are broadly consistent with Stewart. In Armour and Sherlock Newman J suggested that the increasing prevalence of such offences had led to a more serious view of such offences being taken by the courts, but the heavier sentences that have been imposed in some cases are readily explicable by reference to aggravating features and to an element of deterrence.
4. In the light of our conclusion at 3 and taking account of the guidelines for comparable offences and of the decisions of the Court in Kefford and Mills, we do not consider that the Stewart guidelines require a revision, save in relation to the effect of inflation.
5. Accordingly, we consider that where imprisonment is necessary, short terms of up to about nine to 12 months will usually be sufficient in a contested case where the over payment is less than £20,000.
"Put simply, blatant fraudsters such as you are devoid of any conscience about the fact that you are not only helping yourself to honest tax payers' money, but also taking the bread out of the mouths of those who genuinely need it. I am quite satisfied, and it is conceded, that these offences are so serious that only a custodial sentence is justified. In my judgment the only issue is length."
"That enables me to say, whilst keeping faith with the case of Cheryl Evans, that here one has on the indictment very much what their Lordships had in mind, an incepting claim. Count 1, the review form, subsequent counts being stepping stones, each in themselves all relatively small amounts, but demonstrating the period over which the fraud was perpetrated and thus going to prove period rather than amount, amount being accepted in the bundle and accepted in the course of the mitigation."
"These three appeals raise a common issue of principle concerning specimen or sample counts in an indictment. The issue may be expressed as follows:
'If a defendant is indicted and convicted on a count charging him with criminal conduct of a specified kind on single specified occasion or on a single occasion within a specified period, and such conduct is said by the prosecution to be representative of other criminal conduct of the same kind on other occasions not the subject of any other count in the indictment, may the court take account of such other conduct so as to increase the sentence it imposes if the defendant does not admit the commission of other offences and does not ask the court to take them into consideration when passing sentence?'."
"... and to the extent that that decision is at variance with other authority it is in our judgment to be preferred."
"When you have specimen counts in (say) thefts or benefit frauds, then on conviction in the specimen counts there is reasonable chance that the defendant will admit the others -- first the prosecution should have no difficulty in proving them, and second, the slate will be wiped clean only if the defendant does admit them. Those pressures are less likely to apply with specimen counts in sexual cases. First, offenders of this kind are often in denial at this stage. Secondly, they will be well aware that the prosecution will be unwilling to make the victim give evidence again.
So what is to be done? We regret that we can do no better than to suggest that prosecutors charge sufficient offences fairly to reflect the criminality of the offending."
"It is wrong for a judge to usurp the function of the jury where there is a genuine possibility that they could have acquitted the defendant of an offence or offences which have not been charged. However, I cannot believe that the decision in Clark was intended to restrict me to the sentence upon the basis of simply nine offences in this case. The nine representative charges cover the whole two and a half year period. The facts remain the same throughout the period. The defendant was drawing the same benefit each week while working in the same way. It is inconceivable to me that the jury would not have convicted him of all the other charges that could have been placed on the indictment for the periods in between, I notice the jury are nodding their heads."
"In the case of this appellant we have some sympathy with the trial judge when he came to pass sentence. The prosecution had presented their case against her in 24 counts. We are told that, had every cheque which had been procured been included in this indictment as a separate offence, there would have been 200 counts or more. We cannot see any judge embarking upon a trial with a jury in those circumstances with any degree of enthusiasm and without firmly insisting that the number of counts be substantially reduced. Likewise, it might well be considered unacceptable to proceed on a number of separate indictments. Also we regard it as unrealistic to expect any defendant who has contested a case of this nature, upon being convicted to ask, for offences to be taken into consideration which she has hitherto denied. The consequence may well be that a defendant who has pleaded guilty and confessed the full extent of his fraud may be treated more harshly than a defendant who has contested the matter but has been only convicted in respect of so-called specimen counts. We have no doubt that the anomaly will be exploited by those who otherwise have no answer to a multitude of charges, a tactic of which this case is an acute illustration. Also it may be that some will attempt to apply the undoubted logic of Clark and Canavan to other situations, perhaps in connection with Newton hearings, or other occasions on which hitherto the judge has been able to form his own view of the facts as to the basis of the jury's verdict. However, it is not within the province of this Court and certainly not on this occasion to suggest any solution. It may be it is something which can be overcome by the ingenuity of those who frame indictments. For the time being, however, we simply remark that the position is far from satisfactory."
"We do not think this may be unduly burdensome or render the trial unmanageable."
"3. The logic and correctness in principle of this decision [the decision of Canavan] cannot be faulted and we do not seek to do so. The decision does, however, pose an intractable dilemma for prosecutors and the courts in cases such as multiple theft and multiple fraud. In essence it counterposes the inability of a court to deal with an indictment with hundreds of separate counts with the inability to sentence for the totality of offending in the absence of a decision on each instance of offending. The problem is an important one because the consequence of the impracticability of prosecuting the full extent of dishonest offending in such cases is that the vast majority of such offending will not be prosecuted and the offenders will escape appropriate sanction. We have been told that the practice of fraud squads faced with this problem is to charge merely a handful of offences, making no attempt to reflect the full criminality in any given case. Clearly this is not a desirable solution. From the judiciary, we have heard that the present law is found to be "pedantic and unworkable', and the senior judges whom we have consulted recognise that 'very real inherent difficulties' exists.
4. Under the present system (where there is a limit to the number of separate counts, each containing a single offence, that can be managed within a jury trial) it is not possible to give full respect to each of the following two fundamental principles. To some degree, one is bound to yield to the other. The principles are:
(1) Defendants should only be sentenced for that which they have admitted, or which has been proved following a trial in which both sides can be examined on the evidence.
(2) It should be possible to sentence for the totality of an individual's offending. Defendants should not escape just punishment because the procedure cannot accommodate this.
5. The legal system should operate so as to reflect in full each of these fundamental principles. The constraints that prevent full recognition being given to both of these principles are threefold:
(1) the requirement of all issues that go to guilt must, if not admitted, be proved to a jury/magistrates;
(2) the strict limitations to the inclusion of more than one offence in any single charge/count;
(3) the limit to the number of separate counts or charges that can be managed within a trial."
"... these offences show, in my judgment, a prolonged and deliberate course of fraud. You knew at all times that you were not entitled to these benefits, they are a fraud on all other tax payers, it is a very serious matter.
The tax system relies, essentially, upon people's honesty, it would rapidly deteriorate into chaos if it could not rely on people's honesty.
You were thoroughly dishonesty and dishonest on a prolonged scale and on a large scale."