England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice The Strand London WC2A 2LL
		14 January 2008

Monday 14 January 2008

LORD JUSTICE THOMAS: I will ask Mr Justice Davis to give the judgment of the court.

MR JUSTICE DAVIS:

1. The appellant is a man aged 34. On 24 May 2004, at the Crown Court at Southwark, a restraining order was made which prohibited him from disposing of assets both in the United Kingdom and abroad. We will come on to the terms of that order in due course. On 10 March 2006, at the Crown Court at Southwark, having pleaded guilty to offences of fraudulent trading and removing criminal property from England and Wales, the appellant was sentenced to a term of four years' imprisonment. In due course, on 22 June 2007, he again came before the Crown Court at Southwark in circumstances whereby, as he admitted, he had breached the terms of the restraining order. He admitted that he was in contempt of court and he was sentenced on that occasion to a term of 18 months' imprisonment, to run consecutively to the previous sentence of four years' imprisonment. In addition, under the provisions of the Proceeds of Crime Act 2000, the appellant was ordered to pay £414,000-odd within six months, with a consecutive term of three years' imprisonment in default. We have been informed today that that time frame of six months has been extended. In addition on that occasion there was before the court another matter which involved offences of dishonest representations made by the appellant to obtain benefits. For that he was sentenced to a term of six months' imprisonment, concurrent, and for an offence of failing to notify a change of circumstances he was sentenced to a concurrent sentence of three months' imprisonment. He was also ordered to pay an amount of compensation. The appellant appeals against the sentence passed for the matter of contempt.

2. A co-accused (the appellant's wife) who pleaded guilty to an offence of being concerned in the acquisition/retention/use or control of criminal property, was sentenced to a term of six months' imprisonment.

2. The background facts can be shortly stated. The appellant applied for employment at the Office of the Deputy Prime Minister. He claimed to be a qualified ACCA accounting professional, but in fact had only passed the first stage of the examination and could only call himself a technician. His wife acted as a referee.
3. Although not accepted for permanent employment in late 2003, he was given a part-time casual post in March 2004. He was employed as a trouble shooter, helping colleagues to produce reports from the office accounting system.
4. In the event, the appellant used his position to syphon off a sum of £876,200 from the Office of the Deputy Prime Minister. He did this by creating a limited company, RTR Housing Limited, and then created a fictitious individual in the department who authorised payments to that company. The appellant's wife was named as Director and Secretary of the company. She signed cheques on behalf of the company and positively benefited from the fraud. Apart from supporting a lavish lifestyle, the money was used to buy, amongst other things, property in the United States of America.
5. The appellant's last date of employment was on 17 September 2004. In March 2005 the fraud was uncovered. An investigation led to the arrest of the appellant and his wife in April 2005.
6. When interviewed, the appellant admitted stealing the money and admitted controlling RTR Housing Limited.
7. The terms of the restraining order were clear and specific. It contained a Penal Notice and set out a prohibition restraining disposal of or dealing with assets. It made it clear that the restraint applied to dealing or diminishing the value of assets whether inside or outside England up to the value of £1 million. Particular assets were identified as being within the ambit of the order. They included various bank accounts in the United States of America, as well as various pieces of land in the United States of America. In addition, by paragraph 9 of the order, the appellant and his wife were ordered, within 28 days of the order being served on them, to arrange for the repatriation of funds in the bank accounts outside England and Wales in their names or the names of either of them.
8. It was that restraining order which, by his own admission, the appellant breached. He admitted that he had not repatriated funds. He admitted that he had dealt with assets; and he admitted that he had transferred assets from the United States of America to Cyprus. He thereby admitted that he was in contempt of court.
9. In the course of his sentencing remarks, the judge indicated that the appellant was "an even more dishonest and devious person than I thought you were when I came to sentence you for the other matter in March of last year". That was prompted by the discovery of the further benefit fraud which had since then been unearthed.
10. With regard to the breach of the restraining order, the judge said rightly:

"... there have been not one but several breaches of that order, which quite clearly have been quite deliberate, to prevent the retrieval of the money which you had dishonestly taken."

It should be noted that the dealings which the appellant had undertaken with regard to his overseas assets had been cunning, sophisticated and sustained. It had involved, amongst other things, the use of a company incorporated in the British Virgin Islands, had involved the purported use of individuals who may have known nothing in truth of what was going on, and further involved a deliberate flouting of the court order with a view to the money not being recovered.

11. Ordinarily there are two elements underpinning a committal for contempt in circumstances such as the present: first, a punitive element to punish the deliberate breaches of the court order; and secondly, a coercive element in order to require the contemnor to do what he is obliged to do under an existing court order. Both elements are present in this case. Further, as we have noted, this was deliberate and sustained flouting of the court orders by a person who has been convicted of very serious fraud indeed. He clearly enjoyed a lavish lifestyle as a result of the proceeds of fraud and seems to have calculated that it was worthwhile spending extra time in prison if he could retain some of his ill-gotten gains.
12. It is clear, in the view of this court, that in circumstances such as the present a deterrent element is appropriately included in sentences to be passed. Indeed it is of some surprise to this court that some of the sentences passed for breaches of restraining orders in broadly comparable circumstances, and as mentioned to us today (culled from unreported decisions made in the Crown Courts) have been as low as they seem to have been: being only a very few weeks, to seven weeks, in some cases. But ultimately all must depend on the circumstances of the case.
13. Mr Fidler, on behalf of the appellant, relies on some of those decisions and on other authorities which we need not further spell out. He emphasises that the maximum sentence available to the court was one of two years' imprisonment and the fact that in the present case the appellant admitted his breaches at the first available moment, thus avoiding a very complicated contested matter. Further, whilst he acknowledges that the breaches of the court order were here of a potentially very serious and sustained kind, he indicates that it is possible to envisage circumstances which are even more serious than this. Overall he submits that, having regard to the other custodial sentence which the appellant received, and prospectively may also receive if he fails to satisfy the confiscation order, this sentence of 18 months' imprisonment was too long.
14. In view of the nature of the contempts which was involved in this case, this court considers that the judge was fully justified in taking a very serious view of the matter. However, this court takes the view that, even so, the sentence of 18 months' imprisonment is too long. Our initial view was that a sentence of fifteen months' imprisonment would have been appropriate. However, in the course of argument today -- and it is regrettable that this court was not made aware of the position earlier -- it was indicated to us that some £100,000 has now been repatriated from the United States of America. Further, the indications are that a sum of around £10,000 may be forthcoming from Cyprus. In addition, it appears that, as at present calculated, £236,000 may be available for recovery with regard to assets in the United Kingdom.
15. Having regard to that, in the judgment of this court the appropriate sentence in this case for these admitted contempts is one of twelve months' imprisonment, which will be substituted for the sentence imposed by the judge. That will run consecutively to the other sentence already imposed. To that extent this appeal is allowed.