Jersey Unreported Judgments

[2004]JRC100

ROYAL COURT

(Samedi Division)

 

7^th June 2004

 

 

The Attorney General

-v-

Daniel Mark Speck

 

Sentencing by the Superior Number of the Royal Court, to which the Defendant was remanded by the Inferior Number on 23^rd April, 2004, following Guilty pleas to:

 

17 counts of:	Fraudulent conversion (Counts 1 -17).
5 counts of:	Forgery (Counts 18 - 22).

 

 

Age:     32.

 

 

Details of Offence:

The Defendant was a Company Secretary at J P Morgan.  He dealt with the day to day management and administration of investment trusts.  In 2003, the Defendant was informed that his position was no longer required.

After his departure police officers were called to a meeting with a financial investigator employed by the bank.  Documents had been located that suggested that the Defendant had abstracted funds from the bank.  An investigation was undertaken.  In total it was discovered that the Defendant had fraudulently taken £346,378.73.

On 28^th November, 2003 the Defendant was arrested and cautioned on suspicion of fraud.  In reply to the caution he said "that's okay".  During a subsequent search of his house, the Defendant admitted that he had taken money from the bank and informed Police that he was still in possession of an un-banked cheque in the sum of £48,427.15.  The actual prejudice to the bank was therefore approximately £297,950.00.  During subsequent interview the Defendant made full admissions on the following basis:

1.             He admitted creating false invoices on his laptop computer so that money would be paid by cheque into his personal accounts from J P Morgan entities.  (Counts 1 - 10 inclusive, 12 and 13, and 15 - 17 inclusive), involving a prejudice of £291,386.15.  The final fraudulent invoices were submitted by the Defendant on his penultimate day at the bank.

2.             He admitted creating fictitious shareholders in order that money from liquidated companies would be paid into his personal accounts.  Counts 11 and 14 - involving a prejudice of £51,630.80.

3.             He admitted that following business trips away from the Island, he had forged invoices to hide expenses that were greater than would have been authorised by the Bank.  Counts 18 - 22 inclusive, involving a prejudice of £3,360.00.

In each case his respected position within the bank had enabled him to obtain authorisation for the relevant fraudulent transactions.

The Defendant told the police that the offences began in 2001 after his wife suffered a miscarriage and their relationship had been put under strain.  He said he had started building up debts and spending money to alleviate his depression and to try to improve his wife's lifestyle.  He stated that he thought he could take some money to clear off his debts and have some left over to start a new life elsewhere.  He admitted that when he found out he was leaving the bank there was a flurry of stealing in order that he have a cushion to make ends meet for a time.

The Defendant was adamant that the money he had taken had not been used to create an extravagant lifestyle, although he did however concede that the car he had bought for his wife, an Audi A6 Quattro, was "sort of overly extravagant".

Despite his aforesaid comments, the Defendant also admitted he had spent a lot on items that he would not have been able to afford on the legal income he was earning, like the DVD television worth £2000.00, a Westfield sports car worth £25,000, a second Westfield sports car in kit form that he had sold, and an expensive sewing machine for his wife.  He stated that money had also been spent on medical bills in relation to his wife.  He also confirmed that although he did not think he had spent money on extravagant trips abroad, the family had taken three holidays staying in accommodation that they would otherwise been unable to consider.

When asked about the forged expenses invoices, he said that when he was travelling for work he had wanted to stay in better accommodation, stating that he had decided to take advantage of a few more benefits than perhaps he should have done in order to soften the blow of being away from his family.

At the conclusion of the interview the Defendant expressed great remorse for his actions, to his wife, family and the bank, and regret for the damage that he had caused to Jersey's finance industry and, on a personal level, to his future career prospects.

 

Details of Mitigation:

Early Guilty plea and co-operation, previous good character, extreme remorse, loss of reputation, loss of child and wife's illness, despite bankruptcy there was an indication that partial repayment to J P Morgan could be made.

 

Previous Convictions:

No previous convictions.

 

Conclusions:

 4 years' imprisonment each count, concurrent, 7 year disqualification from participation in corporate management or holding directorships.

 

 

Sentence and Observations of Court:

Speck was a company secretary in a position of trust.  Although he had used three different methodologies, the Court was satisfied that the offences were relatively straightforward.  The Court had taken into account his guilty plea, previous good character, the inevitable loss of reputation, and the effect on Speck's family.  However, the mitigation was not unusual when compared to other similar cases.  There was nothing exceptional to allow the Court to depart from imposing a custodial sentence.

 

The Court stated that it would be artificial to seek to identify a starting point in this type of case.  However, in the round, they felt able to reduce the Crown's conclusions to 3½ years' imprisonment.

 

The Court then reconstituted itself and disqualified Speck from participating in corporate management or directorships for a period of 7 years.

 

 

C.M.M. Yates, Esq., Crown Advocate.

Advocate J.C. Gollop for the Defendant.

 

 

JUDGMENT

 

 

THE DEPUTY BAILIFF:

1.        Over some 2½ years you defrauded J.P. Morgan Chase and Co, your employer, of some £346,000 although the loss to the Bank is approximately £298,000 because you did not cash the final cheque.

2.        You were the Company Secretary; everyone trusted you; and because they believed you, when you presented invoices for payment - even though they were false and had been drawn up by you on your computer - they were paid.  There were two other methods you also used to defraud the bank, namely, listing fictitious shareholders in companies which had been wound up, and forging hotel invoices concerning expenses which you had incurred above and beyond those you were permitted to incur.

3.        The Crown has suggested that, because there were three different methods, this suggests an active criminal mind and that the methodology was not relatively simple.  We do not accept that.  We think your advocate was right to submit that this was a relatively straightforward defrauding of your employer, not dissimilar to those which the Court has on many occasions seen before.

4.        Mr Gollop put forward a powerful case in mitigation on your behalf.  He spoke of the reports, the Psychological Report and the Social Enquiry Report, which set out the background as to how this started.  Your wife had a miscarriage; you were finding it difficult to manage in Jersey; and she and your children went back to England in anticipation of a move back to England; you were on your own; you became depressed; you started spending money and you started stealing.

5.        We accept that the moneys were not used for extravagant living, but they were used to enable you and your family to live in a lifestyle that you could not afford on your salary.

6.        We have read carefully the Psychological Report and the Social Enquiry Report and we note their comments on how all this may have begun and what may have motivated you. 

7.        We have taken into account also your guilty plea, and your full co-operation.  This stands you in good stead, and you are entitled to a full discount.  We, of course, take into account your previous good character.  We have read carefully the many references which have been provided by a wide variety of people and they show that, apart from this offence, you have an excellent character and have done much good work.

8.        We take into account the loss of reputation and your loss of employability in the future, your remorse, which we accept is full and genuine, and we also take into account the devastating effect that this is going to have on your family.  We have read what can only be described as a heart-rending letter from your wife and you are fortunate indeed to have someone who loves you so much and supports you.  It is clear that you feel extreme guilt about the fact that you are perhaps not going to be there with your children for a while.

9.        Some of the references suggest that a non-custodial penalty would be appropriate in view of the powerful mitigation and indeed Mr Gollop has asked us to find exceptional circumstances.  The difficulty is that in so many cases of this nature defendants are in a not dissimilar position.  We can do no better than quote from Barrick [1985] Cr. App.R(S)142 at page 145 when the Court said this:

"He (meaning the defendant) will usually, (as in this case) be a person of hitherto of impeccable character.  It is practically certain that he will never offend again and in the nature of things he will never again in his life be able to secure similar employment with all that that means in the shape of disgrace for himself and hardship for himself and also his family."

10.      We accept in this case there is particular hardship because of your wife's illness, but both in England and here the Courts have said that offences of this nature, in other words offences of breach of trust involving substantial sums of money, have to be dealt with by way of a custodial sentence save in exceptional circumstances.  That, of course, is particularly so in Jersey with its dependence on the integrity of those in the finance sector.  We cannot, therefore, regard this case as being exceptional, and we cannot proceed by way of a non-custodial sentence.

11.      The Crown has accurately summarised the various factors listed in Barrick as they apply to this case and we have been referred to a number of cases of a similar type.  The case of A.G. -v- Barnes (12^th February) Jersey Unreported [2002]40, where £110,000 was taken;  A.G.-v- Nelson (18^th October, 2002) [2002/199] we regard as being quite different because it was a not guilty plea and the funds were not stolen; A.G. -v- Donnelly (13^th October, 2000) [2000/199], £650,000; A.G.-v- Hay (10^th July, 1995) Jersey Unreported [1995/133]; £839,000; A.G. -v- Delaney (13^th May, 1993) Jersey Unreported; [1993/62]: £960,000; A.G.-v-Smith [2004]JRC074, £1 million; A.G. -v- Stilwell (19^th January, 1998 Jersey Unreported; [1998/11] £1.3 million; A.G. -v- Hanley [1993]JLR N.9 14^th October, 1993) Jersey Unreported; [1993/134] £4.75 million and A.G. -v- Bellows (8^th February, 1999) Jersey Unreported; [1999/28], £5.1 million.

12.      Now, the amount is clearly an important factor but it is not the sole factor.  We have to take account of all the circumstances of the offending but clearly the amount is a significant factor.  We note, in particular, the case of Donnelly where sentence of 4 years was passed on a woman of good character where £650,000 had been stolen.  The Crown has moved for 4 years.  The Crown has raised the issue of starting points and has attempted in a table to try to work out what the starting points would have been in these other cases.  Unfortunately, they have miscalculated in respect of the mitigation and have been inconsistent and therefore we do not derive a great deal of assistance from the exercise.  In any event, cases of breach of trust are so variable in the circumstances of the offending that we find it very difficult to fix upon a starting point.

13.      Mr Gollop has asked that we should not fix upon a starting point and we really cannot usefully fix a starting point in a case such as this, notwithstanding what the Court said in the previous case, merely that it would try, where it could, to fix a starting point.  This is one of those cases where we think the whole exercise would be too difficult and too artificial and therefore we will continue to do what we have always done, which is to have regard to the aggravating and mitigating factors, have regard to the appropriate bracket and where within that bracket the correct sentence lies.

14.      Taking account of all the circumstances of the offence and the powerful mitigation which has been put forward we think we can reduce the conclusions slightly.  We think the correct sentence is one of 3½ years and that is therefore the sentence to be passed concurrently on each of the counts, with a 7 years' disqualification from holding directorships.

Authorities

A.G. -v- Picot [1990]JLR N.19.

Kirkland -v- A.G. (24^th September, 2001) Jersey Unreported; [2001/200].

A.G. -v- Hanley [1993]JLR N.9; (14th October, 1993) Jersey Unreported; [1993/134].

Young -v- A.G. [1998] JLR N.16.

Barrick [1985] Cr. App. R. (S) 142.

Whelan: Aspects of Sentencing in the Superior Courts of Jersey (3^rd Ed'n): pp.170-80; 214-5; 218-25; 229-31.

A.G. -v- Marsh (25^th January 2002) Jersey Unreported; [2002/22].

A.G. -v- Harris [2004]JRC020.

Trevor Clark [1998] 2 Cr. App. R. (S) 137.

Companies (Jersey) Law 1991: Article 78.

A.G. -v- Barnes (12 February 2002) Jersey Unreported; [2002/40].

A.G. -v- Nelson (18^th October, 2002) Jersey Unreported; [2002/199].

A.G. -v- Donnelly (13^th October, 2000) Jersey Unreported; [2000/199].

A.G. -v- Hay (10^th July, 1995) Jersey Unreported; [1995/133].

A.G. -v- Delaney (13^th May, 1993) Jersey Unreported; [1993/62].

A.G. -v-Smith [2004]JRC074.

A.G. -v- Stilwell (19^th January, 1998) Jersey Unreported; [1998/11].

A.G. -v- Bellows (8^th February, 1999) Jersey Unreported; [1999/28].