England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2
		Monday, 13 March 2006

1. MR JUSTICE UNDERHILL: This appeal arises out of a well organised and elaborate bank fraud. A large number of bank accounts were opened by those involved in the fraud using false documents or were taken over from persons who no longer used those accounts. They were then operated unremarkably for many months to build up a stock of unused cheque books. When the moment was judged right all the cheques from the given account would be used over a short period, often in different parts of the country, to buy goods in shops using the bank guarantee card, and the goods were shortly afterwards returned for cash. The fraudsters thus netted the cash but allowed the cheques to go unpaid. At the time that arrests were finally made, there were 60 active bank accounts and another 20 were going through a period of gestation waiting to be activated. The fraud was in operation for over 18 months from late 2001 to mid 2003. It required a large number of people to participate at various levels and a good deal of careful organisation. The total amount obtained from all the accounts was about £800,000.
2. Ten of those participating in the fraud, including the appellant and two of his brothers, were prosecuted; and all, at various stages before trial, pleaded guilty to conspiracy to defraud. Seven of the defendants appeared for sentence before His Honour Judge Simon Smith at the Middlesex Guildhall Crown Court on 23rd November 2004. Of the remaining three, one, A.B., had already been sentenced in circumstances of which we have not been informed; one, B.C., had absconded; and the third was the appellant, who was in hospital in circumstances which we will describe in a moment. Both he and C. were represented by counsel at the hearing on 23rd November, despite not being present themselves.
3. The Crown opened the case to the judge on the basis that the defendants could be divided in terms of culpability into four groups. It was put this way by counsel for the Crown:

"If one likens this fraud to a business, level one of the players could be described as board level for the entire operation [we interpose to say that none of the level one players were prosecuted]. Level two: in the case of Mr A.K. [the appellant], we say he was the managing director of this particular team and F.B. also participated on level two. Level three are staff members, those members of the team who operated on some significant level of trust and/or control. And level four, again continuing the business analogy, could be described as hourly paid."

The judge proceeded to sentence the seven defendants who were present. All received terms of imprisonment of between two and five years and all were recommended for deportation. Two of those defendants, including Mr B. to whom we have just referred and one of the appellant's brothers, A.K., subsequently appealed against sentence to this court, and their appeals were heard on 27th November 2005. On the same occasion a third defendant F.R. renewed an application for permission to appeal against sentence. The sentence of A.K. was reduced from two-and-a-half to two years' imprisonment. B.'s appeal against sentence and R.'s application were dismissed. In all three cases the recommendation for deportation was quashed. This was not because the court believed that a recommendation was inappropriate in principle, given the seriousness of the offences, but because all three defendants were asylum seekers the court believed that the possibly difficult question as to whether they should be deported at the end of their sentences should be considered by the Home Secretary untrammelled by a recommendation of the court.

4. We return to the position of the appellant. He is aged 35. He is of Algerian origin and came to this country as an asylum seeker in 1991. As noted above, he was assigned by the Crown to level two of the fraud and described as a "managing director" in relation to it; but pleaded guilty on a written basis which might be said to qualify that general description to some extent. He also accepted involvement with four bogus accounts which on the Crown's case between them accounted for a loss of some £155,000. He accepted that he was found in possession of a notebook which contained details of a large number of other accounts and details of payments to drivers who took the participants on their shopping and refund trips. However, he said that the notebook was not in his writing and he said that he was not aware of the full extent of the fraud as identified in the indictments. That basis of plea was, we understand it, accepted.
5. The appellant has a substantial criminal record. Between December 1994 and November 1999 he has four convictions for offences of dishonesty. In particular, on 30th August 1996 he was sentenced to 15 months' imprisonment for handling stolen goods and obtaining property by deception; and on 5th November 1999 he was again sentenced to 15 months in prison for seven offences of using a false instrument.
6. The reason that the appellant was unable to attend the sentencing hearing on 24th November 2004 relates to his mental health. He has for several years suffered episodes of paranoid schizophrenia and he has a history of in-patient and outpatient treatment going back to 1999. During the period that the fraud was being carried out there appear to have been periods when he was asymptomatic and other periods when his illness was controlled by medication, although his compliance record as regards taking medication appears to have been patchy. On 1st October 2004 he was admitted as an in-patient to the Park Royal Centre for Mental Health, reporting acute psychotic symptoms, and he remained there until his discharge on 22nd December 2004. He came back before the court on 18th March 2005 when he was made the subject to an interim hospital order under section 38 of the Mental Health Act 1983, so that his condition could be properly assessed. One possibility which required assessment was that he was in fact fabricating or exaggerating his symptoms, a suggestion to that effect having been made.
7. The appellant finally came before Judge Smith for sentencing on 20th May 2005. There were before the court various reports as to his psychiatric condition and most recently a report from Dr Gandhi who confirmed the diagnosis of paranoid schizophrenia and recommended the making of a hospital order under section 37 of the 1983 Act. The judge did not feel able to accede to that recommendation. He decided to impose a sentence of five years' imprisonment, as he had in the case of B. and the other two defendants, and to make a recommendation for deportation. His sentencing remarks were as follows:

"I have listened to everything that has been so well said, and been most impressed by Dr Gandhi; but that fact is, having considered all the circumstances, I have reluctantly come to the conclusion that justice cannot be done here, to you or anybody else involved, or the public, by a hospital order.

You have been taking part in various kinds of frauds continually since you came to this country, it seems, not being deterred, I have to say, by prison sentences.

I understand the mental illness which you are suffering, but it did not prevent you from carrying on as an important member of this conspiracy, for a year and a half to two years, in an organisational role.

And, having sent all but one of the other people who have been caught with this, having dealt with them myself -- and the other one went to prison as well -- for terms of two years and upwards, it is clear that I could not do justice in this case by passing a sentence without restriction order which might allow you to be at large within a matter of months.

This was a conspiracy which, in all, netted about £800,000. It may have been described as 'not sophisticated', but it clearly needed a lot of organisation; opening of bank accounts, which were fraudulent, and then collecting a large number of cards and cheque books, and then hitting the stores on a particular account, all on the same day, getting as much property as you could, and then claiming refunds for cash.

As I said to all the others, it took advantage of a system of convenience for stores and customers. It was operating throughout the length and breadth of this island, and I am satisfied that everyone, certainly yourself, was aware of how big a system you were taking part in. And not only was that amount of money obtained, but everything was set for it to continue, for as long as people could continue it without being arrested; with 60 active accounts at the time of the arrests and 20 more waiting to be developed for the purpose of the fraud.

I take into account that you have admitted this, although you are telling your doctor that, in fact, you are not guilty.

I take the view, having heard from both sides, that you were indeed in an important organisational role, and at the top level of the people who have been caught. You were the one who operated from your own address, and another false address, a number of accounts. You had the contact numbers for the banks to ring up and speak to whoever they thought was the genuine customer; and you had all the details to answer their questions in a notebook which you were clearly handling and using. And you were renting the storage units for the clothing that was bought and was going to be taken back.

This has been a difficult decision. I quite understand that it would be better, from your point of view, if you were allowed to go back to hospital in the care of Dr Gandhi; but yours is not the only point of view I am able to take.

I have been told that this is, sadly, not a curable disease but can only, at best, be controlled.

In all the circumstances, taking into account what happened to the others, and your own situation, and everything I have heard or seen about the case, there will be a sentence of five years' imprisonment on you."

8. The appellant appeals from that sentence with the leave of the single judge. A further report dated 14th February 2006 has now been obtained from Dr Anupam Kishore and contains a most full and helpful account of the appellant's psychiatric history, both up to the date that he was sentenced and since then. The key points emerging from this report can be summarised as follows.

1. In Dr Kishore's opinion the appellant is and has throughout the period since 1994 been genuinely suffering from paranoid schizophrenia.

2. By reason of his condition the appellant is at risk of self harm if not treated. Very shortly after he was sentenced in May 2005 he was admitted to the hospital wing at Belmarsh exhibiting classic symptoms of schizophrenia with delusions, persecutions and auditory hallucinations. He did not reliably take the prescribed medication. He was eventually transferred to the Park Royal Centre for Mental Health on 21st November 2005. Regular medication has been started and has produced some improvement but he remains and is likely to remain in hospital for the foreseeable future.

3. Dr Kishore explains that a sentence of imprisonment is inherently less satisfactory from the point of view of treatment of the appellant's condition than the making of a hospital order under section 37. Some forms of treatment, for example talking therapies, are not practical in prison at all, and also - and importantly - it can be difficult or impossible to ensure that a patient takes his medication. Although a prisoner can of course be admitted to hospital under section 47, as has now occurred in the appellant's case, that is liable to be resorted to only after a period of delay during which the patient's condition may have deteriorated. Further, discretionary leave from hospital is not available under section 47, which makes it more difficult to put in place a package of care in the community to take effect after the discharge or release of the patient.

4. Dr Kishore expresses the opinion that if, following a further improvement in his condition, the appellant is in due course sent back to prison, it is likely that that would precipitate a relapse similar to that which occurred after his first imprisonment, with the eventual result that he would have to be sent back to hospital under section 47.

9. The first question for us is whether the judge was right to impose a prison sentence at all rather than to make a hospital order under section 37. Miss Forshall, in her succinct and persuasive submissions, submits that the reasons given by the judge for doing so, which she characterises as being concerned about parity of sentencing, were wrong in principle because the appellant's illness puts him in a fundamentally different position from the other defendants. We do not agree. The decision whether to make a hospital order was one for the judge's discretion. We do not accept Miss Forshall's submission there is any kind of presumption that where a defendant meets the conditions specified in section 37(2) a hospital order will be made. Plainly the appellant's needs, and specifically the needs relating to his psychiatric condition, were an important matter for the judge to take into account; but they could not be overriding. In the present case there are strong reasons why justice would neither be done nor appear to be done if no prison sentence were imposed. The appellant had on any view been involved to a major extent in a serious and sophisticated fraud. His co-conspirators had been sentenced to substantial terms of imprisonment. He had, according to the evidence, been suffering during the period of his involvement from the same illness which is now relied on as a reason why no prison sentence should be imposed. It was clearly not so severe as to disable him from participation in serious crime. No doubt the severity of his symptoms varies and is affected in particular by his willingness to take medication. But the consequence of that is that if pursuant to a hospital order he responds well to treatment, as he has in the past and may well do again, the result may be that he is within months discharged from hospital and wholly at liberty, notwithstanding the seriousness of these offences. We do not believe that that would be right. He is at present ill and is receiving proper treatment in hospital for his illness. No one is suggesting he be sent back to prison at present.
10. We do not at all overlook the fact that Dr Kishore's evidence is that if in due course the appellant does indeed recover sufficiently to be discharged from hospital and is then returned to the prison there is a high risk of a relapse - and a greater risk as we understand it than there would be if he was simply discharged into the community. But a risk is not a certainty, and if a relapse does indeed occur he can and no doubt will be appropriately treated by a re-referral to hospital under section 47. As we have already observed, the appellant's welfare, while always relevant, cannot be treated as an overriding consideration. Defendants with all kinds of illness have sometimes to be sentenced to substantial prison terms and there is nothing unique about schizophrenia.
11. We draw support in this approach from the case of Nafei [2005] 2 CrAppR (S) 24 where this court upheld the decision of the sentencing judge to impose a prison term on a defendant suffering from schizophrenia who had been concerned in the importation of class A drugs, notwithstanding evidence very similar to that relied on in the present case to the effect that the management of his condition would be easier and perhaps more effective if a hospital order were made. Miss Forshall submitted that the approach taken in Nafei reflected the well-recognised policy that personal mitigation was of little weight in cases of serious drug crime and was limited to such cases. We do not agree. The need to assess the personal circumstances of the offender in the light of the seriousness of the offence is a feature of all sentencing and it will not only be in cases of drug crime that it may be necessary to sentence ill patients to a prison term.
12. The points made above are essentially the points made by the judge. The question whether to make an order under section 37 was one for his discretion. He approached his task with evident care, paying full regard to the medical evidence, and the conclusion to which he came is unimpeachable.
13. We turn to the question of the length of the sentence. Miss Forshall submits that the judge's acceptance of the Crown's description of the appellant as belonging to level two is hard to reconcile with his basis of plea and with some of the other evidence that were before him. We are bound to say that we see some force in this. The facts admitted in the basis of plea undoubtedly show very active involvement but if he was quite as central as the description 'managing director' would suggest, it is hard to see that he could have been, as the accepted basis of plea acknowledged, unaware of the full scope of the fraud. There is also another aspect to be considered. It is clear from the evidence of Dr Kishore, which we have already set out, that a prison term will be more onerous on the appellant than it would be on a man in normal mental health. That point did not appear so explicitly in the reports which were before the judge and we now have the benefit of the evidence of Dr Kishore as to what has occurred since he was sentenced. Miss Forshall also makes the point that the history of the medical investigations that were necessary created a period of doubt and delay which was very difficult for the appellant before he was finally sentenced.
14. In our view all these factors taken together do justify a reduction in the sentence which the judge imposed. We believe the right sentence is one of three-and-a-half years' imprisonment.
15. There remains one other point. As we have said, the judge made a recommendation for the deportation of the appellant. As we have also noted, he made a similar recommendation in the case of the other defendants but in the three cases which came before this court that recommendation was quashed because of their status as refugees or asylum seekers. We are bound to say, with great respect, that we doubt whether that was the right course. We should have been inclined to uphold the recommendations on the basis that these were serious offences which, prima facie, plainly justified a recommendation for deportation and that any considerations relating to asylum were relevant less to the question whether a recommendation should be made than to the exercise in due course by the Secretary of State of his discretion whether to accept the recommendation. But it would leave the appellant with a legitimate sense of grievance if the recommendation were to remain in place in his case when it had been quashed in the case of those other defendants, and in those circumstances we think it right to quash it in his case also.
16. The appeal is accordingly allowed to the extent that we have indicated.