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
		12th December 2017

LORD JUSTICE SIMON:

1. On 6^th April 2016, in the Crown Court at Leeds, the appellant pleaded guilty to two offences which were identified as counts 1/1 and 2/1. Count 1/1 was an offence of doing an act tending and intended to pervert the course of justice, contrary to common law ("the York Road offence"). Count 2/1 was a charge of conspiracy to pervert the course of justice ("the Harewood Arms offence").
2. On 23^rd March 2017, he pleaded guilty to a further offence, charged as count 3/2. This was another offence of doing acts tending and intended to pervert the course of justice ("the Medina offence").
3. On 3^rd May 2017, he pleaded guilty to count 4/1, conspiracy to defraud ("the car washes offence").
4. On 9^th June 2017, he was sentenced by His Honour Judge Bayliss QC as follows: on count 4/1 (car washes), 45 months' imprisonment; on count 1/1 (York Road), 18 months' imprisonment concurrent; on count 2/1 (Harewood Arms), 18 months' imprisonment consecutive; and on count 3/1 (Medina), six months imprisonment concurrent. The total sentence was 63 months' (five years three months) imprisonment.
5. The appellant appeals against that sentence with the leave of the single judge.
6. There were co-defendants to these charges who were dealt with on different occasions in circumstances to which we shall come. Those co-defendants who focus most significantly on this appeal are: John Elam, who received a total sentence of 90 months' imprisonment; and Philip Brown, who received a sentence of two years' imprisonment, followed by a suspended sentence order of twelve months' imprisonment suspended for two years.
7. It is convenient to summarise the offences by reference first to the York Road offence. In August 2005, three high value, unregistered motor vehicles were recovered following a police search of premises at York Road, Leeds, which were owned or controlled by Elam and the appellant. The vehicles belonged to the son of a co-accused, William Young. They had been imported from Holland as part of a VAT fraud. While the police investigation was ongoing, Elam, the appellant and Young planned and arranged for bogus faxes to be sent to the police by an associate of Elam based in Dubai. Two faxes, dated 6^th and 18^th September, purported to be from a Dubai registered company called Starlet LLC. The faxes claimed that the vehicles belonged to that company and had been stored at York Road on its behalf. They threatened legal action if the vehicles were not returned. Attempts were made to arrange for the creation of further false documents to be sent as proof of the ownership of the vehicles.
8. The Harewood Arms offence occurred as a result of an incident on 21^st October 2005 when Elam had assaulted a man called Andrew Elsy, the assistant bar manager of the Harewood Arms public house. He had thrown a heavy porcelain jug at Mr Elsy, which struck his left temple and resulted in a two inch cut. Elam was arrested and was due to face trial on 9^th June 2006.
9. Between September and December 2005 surveillance equipment installed by the police at the office used by Elam and the appellant recorded a number of conversations about the assault in which Elam and the appellant discussed a plan to induce Mr Elsy to withdraw his complaint. A man called Fowler was recruited to carry out the plan by approaching Mr Elsy, issuing veiled threats and offering large sums of money if he withdrew the complaint against Elam.
10. The Medina offence arose in relation to the Medina restaurant business. In April 2005 Christie & Co received instructions from the appellant to market the restaurant business for sale. On 25^th April 2005 the appellant signed an agreement with Christie & Co in which he told them that his solicitor was the co-defendant Philip Brown. The agreement gave sole selling rights to Christie & Co for six months and made the appellant personally liable for their fees. The Medina business was sold in September 2005, although not through Christie & Co, for approximately £260,000. According to the contractual terms of the sole agency agreement, the firm was entitled to commission on the sale amounting to £17,580. Christie & Co asked for details of the sale so that they could submit their bill. The appellant refused to disclose this information and instructed Brown, falsely, to represent that he no longer was instructed. Brown sent a letter to Christie & Co to that effect on 27^th May 2005. It was designed to interfere with contemplated legal proceedings by preventing or deterring Christie & Co from suing the appellant for their fees. Brown sent further letters to the same effect to the solicitors who had been instructed by Christie & Co to recover the sum due on the unpaid bill.
11. Those were the facts in relation to the charges of perverting the course of justice.
12. The car wash offence was a conspiracy to defraud the creditors of hand car wash businesses operated from nine different sites in and around Leeds and Bradford, between 5^th October 2000 and 8^th September 2006. A series of companies without assets were used to incur liabilities and debts associated with running the car washes, such as water and electricity bills, business rates, VAT, tax and National Insurance liabilities. A significant proportion of the liabilities were deliberately left unpaid. The operating companies failed and were replaced with other companies so as to avoid having to make payments to creditors. When creditors took steps to enforce payment, the operating company concerned would disappear to be replaced by a new one that was used to continue to operate the site. Steps were taken to create a pretence that the new operating companies were not connected with the ownership of the sites or the previous operating companies. Numerous creditors were unable to recover their losses and the liabilities totalled something of the order of £1.5 million. Elam was the principal beneficiary of the operations. The appellant's role was that of financial advisor and spokesman for Elam. He was further involved in the appointment of directors and the management of the businesses and was closely associated with Elam in the extraction and use of funds skimmed from the businesses. He was also involved in property deals and purchases. His involvement went back to early 2004, not to the beginning of the conspiracy; but his benefit from involvement was of the order of £100,000.
13. The appellant was aged 55 at the date of sentence. He had two previous convictions. On 17^th July 1987 he had been sentenced in the Crown Court at Leeds to three concurrent terms of nine months' imprisonment for offences of obtaining property by deception (with fourteen similar offences taken into consideration), and a further concurrent term of nine months' imprisonment for deception with intent to default permanently on liability, contrary to section 2(1)(b) of the Theft Act 1978. On 14^th October 1996, he had been sentenced in the Crown Court at Bradford to concurrent terms of 15 months' imprisonment for five offences of obtaining property or services by deception.
14. Elam was aged 51 at the date of his sentence. Prior to this series of offences, he had appeared before the courts on eight occasions between 1978 and 1995, largely for offences of violence. He had also been fined for obtaining property by deception in 1988.
15. Brown was aged 51 at the date of his first sentence. He had been of good character prior to the series of offences in which he was involved.
16. Although we have been referred to others of those involved in the conspiracy, little is known either of their participation or their antecedents.
17. On 10^th July 2019, Elam and Brown were sentence for the car wash offence (conspiracy to defraud) by His Honour Judge Wolstenholme. The judge noted that they had been involved over six years. Elam was the controlling mind behind what was a long-running and audacious fraud, which was operated largely for his benefit. He had pleaded guilty on the basis that there was a period of about nine months in 2004 when he had dropped out and the fraud was run by others. However, of the total indebtedness of about £.15 million caused by the fraud, he was responsible for roughly £1 million. He had been previously sentenced for other offences committed during the same period as this fraud. Of particular relevance was the large scale fraud relating to the Medina restaurant business run by him, with a related charge of perverting the course of justice for which he had previously been sentenced to a total of five years' imprisonment. Regard was had to totality. His guilty plea (although not at an early stage) had saved considerable time and expense of public money. The judge had given an indication that if Elam pleaded guilty at that stage, the sentence would not exceed a consecutive term of 30 months' imprisonment. He was in poor health. It was not necessary to pass the indicated sentence. The sentence was a term of 24 months' imprisonment, which was ordered to run consecutively to the term he was currently then serving. That sentence was upheld on appeal.
18. Brown had pleaded guilty to perverting the course of justice on the full facts and to conspiracy to conceal criminal property, on the basis that he had no involvement in the running of the car washes or the day-to-day involvement in the fraud. The judge described the offence of perverting the course of justice as another shocking example of his abuse of his position of trust as a solicitor, misleading others and causing them loss. Although he did not benefit personally beyond his legal fees, he enabled Elam to legitimise the fraudulent trading and keep the proceeds of it. He had already served three and a half years' imprisonment for similar offences committed at the same time. It was not, in the judge's view, in the public interest for him to be recalled to prison to serve a relatively short sentence. Accordingly, he adopted the proposal of suspending the term of twelve months' imprisonment for two years, with a 200 hour unpaid work requirement.
19. In passing sentence on the appellant on 9^th June 2017, the judge observed that each of the four offences was distinct in nature, although all arose from the appellant's association with Elam, and had occurred more than ten years before. The conspiracy to defraud (the car wash offence) was a phoenix fraud. The total liabilities evaded was more than £1.5 million. For part of the period of the indictment the appellant was a leading player in the conspiracy and played a role that was crucial to its operation. He enjoyed a trusted position at the heart of the operation. It was accepted on his behalf that he was involved from at least February 2004 until the police operation put an end to the fraud in September 2006 – a period of over two and a half years. In the process, he had enriched himself by more than £100,000.
20. The sentencing guideline on fraud applied. The appellant's culpability was high. He played a leading role in group offending. It involved sophistication and significant planning, and the fraudulent activity was conducted over a sustained period of time. The fraud as a whole fell into category 1 (£500,000 or more). The starting point, based on £1 million was seven years' imprisonment, and the range was five to eight years. The prosecution accepted that for the period during which the appellant was involved, the amount of the fraud (leaving aside unpaid VAT, which was difficult to assess) was £293,000. The starting point was, therefore, based on that figure which fell into category 2. The judge observed that the appellant had received more than £100,000 during his involvement, meaning that he had received as profit more than a third of the monies received. That was an indication of how deep his involvement in the fraud was and how close he was to the centre. Additionally, there was a significant aggravating feature. The appellant had two previous convictions, both for obtaining by deception, in 1987 and 1996. He had been sent to prison on both occasions. More than eleven years had elapsed since the fraud had occurred. But that delay was caused by the fact that the appellant was in Spain.
21. The appellant had also been involved in three determined attempts to frustrate the justice system. The judge then considered the facts of the three offences to which we have referred. It is unnecessary to say anything further about those, since they are not the focus of the present appeal.
22. Having regard to totality, the judge said that concurrent sentences would be passed on the offences of perverting the course of justice. The police had intended to arrest the appellant along with other suspects in September 2006, but he had recently married and had left the country to go on honeymoon. He had not returned voluntarily to the United Kingdom. A first arrest warrant was issued on 7^th November 2006. A further warrant was issued on 2^nd August 2010, and a European Arrest Warrant was obtained on 13^th October 2010. Despite that, the appellant remained in Spain. The Crown accepted that the appellant went to Spain for a legitimate purpose and that there was an indication of a threat to his safety by way of an informal approach to the appellant's son in 2006, notifying him that there was information suggesting that the appellant was thought by others to be the source of information leading to their arrests.
23. Notwithstanding the fact that the trials of the co-accused took place in 2008 and 2009, the appellant remained overseas. The trial process made it plain that the appellant was not the source of the information. The prosecution had confirmed that there was no disclosure to make in relation to any involvement on his part in the co-defendant's arrest. It was artificial to suggest that he had stayed in Spain for all those years for that reason. Although it was not treated as an aggravating feature, the years in Spain did not afford any mitigation.
24. The appellant had in the end pleaded guilty, but not at the earliest opportunity. In the judge's view, it would be wrong to afford him full credit for those pleas. Nevertheless, he accepted that there was considerable public benefit from the guilty pleas, even at a late stage. The sentences were discounted by 25 per cent to reflect those guilty pleas.
25. As a result of the appellant's absence, others in the fraud had been dealt with at different times by a different judge. That judge had considered the previous sentences passed on those co-defendants. It appeared that there were particular reasons for those sentences. Totality had been a significant feature in the case of Elam, who had to be dealt with for two frauds. What other mitigation Elam and the other co-accused had was a matter for speculation.
26. In the end, the appellant had to be dealt with on the basis of his case in accordance with the guidelines. Regard was had to the principle of totality. For the offences of perverting the course of justice, the total term would be one of 18 months' imprisonment. All the sentences for the offences of perverting the course of justice would be concurrent with each other, but consecutive to the sentence for conspiracy to defraud. That sentence was a term of 45 months' imprisonment, making a total of five years and three months' imprisonment.
27. In the grounds of appeal and before us Mr Pitter QC raised three overlapping points. First, he submitted that the judge was wrong to conclude that he was bound to follow the Sentencing Council Guidelines for Fraud and Bribery and Money Laundering offences; it was not in the interests of justice to follow them in the circumstances of the case. Secondly, he submitted that there was objectionable disparity between the appellant's overall sentence of five years and three months' imprisonment, when compared with the sentences passed on the co-defendants, primarily Elam and Brown. Reliance was placed on R v Fawcett (1983) 5 Cr App R(S) 158. In his oral submissions, Mr Pitter somewhat broadened his argument and related it to other co-accused about whom very little is known and about whom Mr Pitter was unable to tell us very much, other than that they figured on the "sentencing matrix" that he had prepared and which we have seen. Thirdly, he submitted that the starting point for the car wash offence was too high in the light of the appellant's confined culpability, his role in relation to the co-defendants, and again the principle of totality.
28. So far as the first point is concerned, in our view the judge was plainly right to have regard to the Guidelines, whatever view prosecuting counsel may have taken of the matter. They specifically apply to all those who are sentenced on or after 14^th October 2014, regardless of the date of the offence. Section 125 of the Coroners and Justice Act 2008 requires that the guidelines should be adopted, unless that is not in the interests of justice. The judge considered that the appellant's culpability was high (culpability A), in view of his leading role in what was a protracted and sophisticated fraud. No complaint can be made of that. He then looked at the question of harm, which was related to loss or intended loss. The judge took a figure of £293,000 and decided that the offending fell into category 2 (£100,000 to £500,000), with a starting point of five years' custody, based on £300,000, and a range of three to six years. The judge was entitled to take the top of the range in view of the significantly aggravating features of the appellant's two previous convictions for dishonesty offences. With credit of 25 per sent on six years, the sentence would have been four years and six months' (54 months) imprisonment. In fact, he imposed a sentence for the car washes offence of 45 months' imprisonment, to take into account the element of totality in relation to the three offences of perverting the course of justice, for which he had sentenced the appellant to 18 months' imprisonment, to be served consecutively.
29. In our view, there is no merit in the first point. We then move on, as did Mr Pitter, to the real source of his complaint, which is: that the application of the Guidelines led to an objectionable disparity with those sentenced earlier and without reference to the Guidelines.
30. We have already addressed the difficulties in relation to those others mentioned during Mr Pitter's oral argument. There are no sentencing remarks in relation to them and it is difficult to see on what basis they had been sentenced.
31. The prosecution said that the appellant was a leading player in the organisation. The judge, in our view, was entitled to sentence on that basis. The question then is whether the sentences (to use the phrase in Fawcett at page 161) were such that "right-thinking and properly informed members of the public with full knowledge of all the relevant facts would consider that something had gone wrong with the administration of justice" in the light of sentences passed on co-accused (our emphasis). The appearance of something having gone wrong with the administration of justice is an important part of the test.
32. There are, in our view, a number of difficulties with this argument, not the least of which is that the judge specifically addressed it in his sentencing remarks:

"I turn now to the sentences passed by Judge Wolstenholme on co-accused. As a result of the [appellant's] absence, others in this fraud were dealt [with] at different times by a different judge and I have been enjoined to have regard to his sentences, and that I do, but, having considered the sentences passed by Judge Wolstenholme, it seems that there may have been particular reasons for him passing the sentences that he did in 2010. Totality was, no doubt, a significant feature in the case of Elam, who fell to be dealt with for two frauds. What other mitigation Elam had and what mitigation there was for the co-accused is a matter for speculation."

It is apparent, at least from the information that we have, that Elam was in poor health.

33. Brown had been sentenced to two years' imprisonment for a conspiracy in relation to Medina, and to a concurrent term of twelve months' imprisonment in relation to a separate charge of perverting the course of justice. It may be said that the sentence was lenient in his case; but the circumstances in which he was sentenced to two years' imprisonment are unclear. What is clear is that in the second sentencing exercise in 2010, after he had been released from prison, he was sentenced for perverting the course of justice in relation to car washes (count 11), not the conspiracy to defraud, and conspiracy to conceal criminal property (count 12). In our view, his position is not comparable to that of the appellant.
34. Elam appears to have been initially sentenced to a term of five and a half years' imprisonment (not five years, as Judge Wolstenholme appears to have thought): two years for three charges of perverting the course of justice (Harewood Arms, York Road and another incident), and three and a half years for a conspiracy to defraud (Medina). In 2010 he was sentenced to a further two years' imprisonment in relation to the car washes conspiracy, making a total of seven and a half years' imprisonment (90 months).
35. We are not persuaded that there is objectionable disparity with the overall sentences passed on Brown and Elam. The facts in relation to the earlier sentencing are not clear. But Brown's criminal participation in the criminal activities was limited and different to the appellant's, as reflected by the charges he faced. Elam's lengthy sentence and further sentence cannot be said to give rise to objectionable disparity. This, and the closely related third point do not come near to satisfying the stringent Fawcett test.
36. Accordingly, the appeal against sentence is dismissed.