Denis MacShane – 6 months immediate for expenses fraud

Introduction

We have previously covered the case of Denis MacShane, formerly the MP for Rotherham who pleaded guilty on 18th November 2013 to charges of false accounting relating to his expenses claims whilst he was an MP.

He was due to be sentenced last Friday but in the end the Judge took the weekend to think about it before sentencing him on 23rd December to six months in prison. The sentencing remarks have been published and, as in all cases where this is done, are worth reading, but the headline figure was 6 months in prison.

Analysis

Mr MacShane’s case is different to those of the other MPs and peers who have been convicted of fraudulent expenses claims in that this did not involve a gain of money to which he was not entitled to. There was a ‘basis of plea’ that was accepted by the Prosecution and the Judge :

(i) …the false invoices submitted were intended to recoup some expenses genuinely incurred in respect of the defendant’s business as a Member of Parliament;
(ii) there was no intention on the part of the defendant to make a financial profit from the submission of these invoices;
(iii) the Crown accept that there was in fact no such personal profit in the defendant’s case;
(iv) The defendant’s record keeping was chaotic and the reclaiming of expenses was not regarded by him as a priority, not least since in the period during which such invoices were submitted he was under significant personal pressure

The starting point is the Fraud Sentencing Guidelines (although the offences were charged as false accounting, this is the essential offence), but it was made clear that for Parliamentarians, these are of little relevance. The key case is that of David Chaytor [2011] EWCA Crim 929.

This gave a starting point of 12 months imprisonment, which would be reduced to 8 to take account of the personal mitigation and then a discount of 25% for the plea of guilty. This gives a sentence of 6 months.

The Judge considered whether it could be suspended, but concluded that it could not “in all the circumstances, particularly given the deliberate and the prolonged nature of the dishonesty involved, it is not appropriate to suspend that sentence”.

The usual release provisions apply and Mr MacShane will probably be released on a tag after six weeks.

How can you be dishonest if it was money you were entitled to?

On the face of it, this does seem odd. The offence of False Accounting is under s17 Theft Act 1968:

Where a person dishonestly, with a view to gain for himself or another or with intent to cause loss to another,—

(a)destroys, defaces, conceals or falsifies any account or any record or document made or required for any accounting purpose; or

(b)in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular;

he shall, on conviction on indictment, be liable to imprisonment for a term not exceeding seven years. 

But, here ‘gain’ and ‘loss’ is defined in s34:

(a)“gain” and “loss” are to be construed as extending only to gain or loss in money or other property, but as extending to any such gain or loss whether temporary or permanent; and—

(i)“gain” includes a gain by keeping what one has, as well as a gain by getting what one has not; and

(ii)“loss” includes a loss by not getting what one might get, as well as a loss by parting with what one has;

Still. Does a gain include money that you’re entitled to?  The Court of Appeal has said that is does (AG Ref  number 1 of 2001 [2002] EWCA Crim 1768). So, although in the vast majority of cases there will be a loss to someone, if there is not then someone can still be guilty of false accounting.

In the case, the Judge said that Mr MacShane was “required to act with probity and transparency in the making of expenses claims; you deliberately created misleading and deceptive invoices and then used them in order to procure payments of public money; by doing so proper scrutiny of the legitimacy of the expenditure and the amount of the expenditure was avoided – indeed made impossible; the deception used was calculated and designed to avoid suspicion falling on your claims; and those claims were intended to mislead the House of Commons authorities as to the true nature of the expenditure and the true identity of the supplier of the services.

Comment

This case has divided people in a way that the previous expenses cases had not. My (Dan’s) view on this is that as there was no loss, given all the other factors in this case the sentence should have been suspended, but plenty of people (including Lyndon) think that the sentence was a fair one. It seems that Mr MacShane has said that he will not appeal however, so we will not have the Court of Appeal’s view. What do you think?

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About Dan Bunting

I'm a lawyer who works for myself. Legal geek, maths freak, general dullard and jack of all trades. Here’s a few views on law and occasional musings on life. Usual caveats about not relying on anything I say etc applies.

4 thoughts on “Denis MacShane – 6 months immediate for expenses fraud

  1. polruan

    It does seem unduly harsh to me.

    I can’t help but compare and contrast the difference between the way in which Mr McShane has been dealt with and that in which the ex-Times lawyer who apparently misled the High Court over information obtained by phone hacking was dealt with (see here: http://www.thelawyer.com/news/practice-areas/litigation-news/ex-times-lawyer-suspended-from-practice-for-six-months/3013544.article).

    In the grand scheme of things, Mr McShane’s behaviour seems (to me at least and on the limited information available) less culpable and less of a betrayal of public trust than the good lawyer’s.

    Reply
  2. duncanheenan

    Mr McShane’s printing of invoices to take money out of the treasury gets him in to jail, whereas the Treasury’s printing of money (aka ‘Quantitative Easing’) to take value out of every household in the UK, is hailed as an economic masterpiece!
    He’s more stupid than dishonest, as a truly dishonest person would have done it for a lot more than £13k. However, MPs should set an example so maybe making an example of him is the right thing. What a pity Gordon Brown could not be jailed for ruining the whole economy.

    Reply
  3. polruan

    I very much doubt that anyone who had committed benefit fraud for a similar amount, especially with so few aggravating factors, would have received an immediate custodial sentence, especially if they were of previous good character, like Mr McShane. And in the circumstances of this case, I really do think the sentence shoud have been suspended.

    Reply

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