England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		22nd July 2011

1. JUDGE STEPHENS: On 7th February 2011 at the Crown Court at Newcastle upon Tyne, the appellant pleaded guilty to count 2 of an indictment charging him with failing to register with a supervisory body or approved professional accountancy body. On 9th February, he was convicted on count 1 of the same indictment, namely of an offence of prejudicing an investigation contrary to section 342(2) of the Proceeds of Crime Act 2002.
2. On 11th March 2011, he was sentenced by Mr Recorder Kershaw to 18 months' imprisonment on count 1. On count 2 he was disqualified from being a director of a company for six years and no further penalty was imposed. He appeals against sentence by leave of the Single Judge.
3. Dealing first with count 2, the facts may be stated in this way. The appellant was director of a company providing accountancy and taxation services based in Sunderland. Under the Money Laundering Regulations, he was obliged to register the company with Her Majesty's Revenue and Customs on something called the Accountancy Services Providers' Register, which was established in April 2008 and brought into force in October of that year, when notices were published allowing business an extension to register by 31st December 2008. In March 2010, the intention of imposing financial penalties was announced. The appellant had been providing accountancy services for many years but did not attempt to register until the day he was charged. He said that he was ignorant of the requirements.
4. Turning to count 1, the appellant was acting as a tax adviser to one Bewick. In 2011, Mr Bewick was prosecuted for cheating the Revenue and his tax affairs were under investigation from December 2007 to early 2010. An agreement was reached as to unpaid tax in February 2011.
5. In September 2009, the Economic Crime Unit began an investigation into Mr Bewick. They suspected that he had contravened the Private Security Industry Act 2001 and that he had also committed money laundering offences.
6. On 2nd November 2009, the police obtained a production order under the Proceeds of Crime Act 2002. The order required this appellant's company to produce all business records, accounts and correspondence concerning Mr Bewick's financial transactions.
7. On 3rd November 2009, the appellant went into his office. The production order was on his desk. He read the order. He then telephoned Mr Bewick and a legal adviser of Mr Bewick informing them of the making of the order; subsequently telephone billing records showed that he had spoken to Mr Bewick for 20 minutes on that day.
8. At half past eight the following morning, the appellant himself rang the police and told them what he had done and that he had informed Mr Bewick about the production order. The police attended his office and he produced all relevant paperwork. In interview, he said he had not fully read the order. He said he believed that it related to ongoing negotiations with Her Majesty's Revenue and Customs and did not know they related to a police investigation. That apparently was his defence when he pleaded not guilty to this charge, but the jury understandably took little time to convict him.
9. The appellant is 60 years of age. In 1981 he had been fined for handling stolen goods. In 1985 he went to prison for 18 months for offences of handling and forgery. He told the writer of the pre-sentence report that was before the court that these current offences were committed in ignorance of his legal obligations. He had several medical conditions that required regular treatment.
10. The pre-sentence report writer proposed a suspended sentence in view of what was said to be a low risk of re-offending.
11. A letter from the appellant's doctor set out several conditions from which he was suffering, including kidney disease, type 2 diabetes and hypertension.
12. The Recorder, in sentencing, referred to the appellant's long term dealings with Mr Bewick, who he described as a determined and persistent tax cheat, a fact well-known to the appellant, he said. He observed that the appellant, knowing of his client's previous crimes, had chosen to involve himself deeper in his activities. The Recorder concluded that, by tipping off his client about the production order, the appellant was likely to have caused substantial prejudice to the inquiry. He said this in passing sentence:

"The object of the sentence is to protect the public from serious crime by doing what is necessary to ensure that production orders are treated seriously as confidential between the police and the subject of the order."

The Recorder said he took into account the appellant's age and the long period of time since his earlier convictions, but he considered that he had shown no remorse.

13. Counsel on behalf of the appellant submits that the prosecution did not point to any actual prejudice caused by the appellant's actions, nor was there any contention by the prosecution that the appellant's relationship with Bewick was generally corrupt. A report from Durham Prison by a doctor, dated 30th June of this year, states that the appellant's various medical conditions are in fact being managed perfectly satisfactorily in the normal way and that the appellant is compliant with treatment. Nevertheless, says Mr Rutter, both the 18 month prison sentence and the six year disqualification are excessive.
14. So far as the prison sentence is concerned, we agree. The point that needed to be made is that production orders made by the court must be respected and the requirements imposed upon recipients of such orders must be faithfully carried out without disclosing to potential launderers the details of what investigations are underway.
15. The point is made in our judgment by the severe punishment of a prison sentence. We do not, however, consider that a sentence as long as 18 months was necessary in the circumstances of this case. In our judgment, a sentence of 12 months' imprisonment would meet the requirements of justice and due punishment for this offence.
16. So far as disqualification is concerned, we are also persuaded that a period of six years is manifestly excessive in the circumstances of this appellant's wrongdoing. He is 60 years of age and his failures in the field of company law do not merit such a long period. In our judgment, again, the justice of the case would be met by a period of four years disqualification and to that extent his appeal succeeds.