Tag Archives: Fraud

Nadine Wilson-Ellis – disbarred after fraud conviction

Image from the Western Press

Image from the Western Press

Last year Nadine Wilson-Ellis, a barrister and law lecturer, was convicted of housing benefit fraud and sent to prison for 7 months. We didn’t actually say in that, that this would spell the end of her legal career, but confirmation of that was received on 8th July 2014 where the Bar Standards Board heard Ms Wilson-Ellis’s case and disbarred her (the highest sanction that they can impose).

This is not a surprise. Ms Wilson-Ellis hadn’t actually practised as a barrister, but will no longer be able to start her training if she had wanted to. This will not affect her work as a Law Lecturer as a matter of law, but the University may well have taken action against her.

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Rachel Stokes – care home manager jailed for theft

From The Guardian

                       From The Guardian

On 25th April 2014 Rachel Stokes, a 48 year care home manager was jailed for 8 months for stealing from her residents in order to fund her bingo habit. She had siphoned off money (typically £100-200 a time) from seven residents by withdrawing money from their accounts and giving them less than she recorded in the paperwork. The total amount that she took was about £1,000.

The Theft Guidelines would appear to apply to this case. It is theft in breach of trust, and can properly be described as a ‘high breach of trust’. This gives a starting point of 18 weeks and a range of a Community Order up to 12 months in prison.

Here, there was a plea of guilty at the earliest opportunity, and there should be full credit for that plea. On that basis, the sentence passed was right at the very top of the range.

Is it too high? I would imagine that most people would think that stealing from such vulnerable people is such a disgraceful breach of trust that the sentence is well deserved. Whilst you could argue that, given that Ms Stokes was of good character and will almost certainly not re-offend, a sentence of 6 or 4 months would probably do the trick, I would doubt that any appeal would be successful. In this case, although the sentence is a severe one, it is hard to say that is is manifestly excessive.

Is the Mail on Sunday guilty of fraud?

Photo for Daily Mail article

Photo from Daily Mail article

Introduction 

The Daily Mail got into the Easter spirit this year with a story they released on Saturday 20th April 2014. Apparently people who may not actually be starving are using food banks and sometimes getting food without begging for it. And, what is worse, some of these people were foreign.

There was an undercover sting, of sorts, as one of their reporters, Ross Slater “GOT 3 DAYS OF GROCERIES… NO QUESTIONS ASKED”. Surprisingly for the Daily Mail, this is not quite correct. Mr Slater didn’t get the food (which included such luxuries as :creamed rice pudding, cost –15p; new potatoes in water, cost – 15p; processed peas, cost – 21p and kidney beans, cost 25p;) ‘no questions asked’.

As the story makes clear, there were plenty of questions asked (name, address, phone number, purpose of visit and a “series of questions about why the food bank vouchers were needed” which Mr Slater did not answer truthfully . The food was, therefore, obtained by Mr Slater because of the lies told by him.

 

Is this fraud? Intuitively, telling lies in order to get something sounds pretty fraudulent? The relevant statute is ‘Fraud by False Representation’ contrary to s2 Fraud Act 2006, which reads (in part) as follows:

Fraud by false representation 

 (1) A person is in breach of this section if he—

     (a) dishonestly makes a false representation, and

     (b) intends, by making the representation—

         (i) to make a gain for himself or another, or

         (ii) to cause loss to another or to expose another to a risk of loss.

  (2) A representation is false if—

       (a) it is untrue or misleading, and

       (b) the person making it knows that it is, or might be, untrue or misleading.

Lying about his name and personal circumstances is clearly a false representation.

  But is there a gain – the food got given back?

Mr Slater gave the food back at a later stage it seems. Is that enough to stop it from being fraud? Under s5(2)(b) Fraud Act, ‘gain’ and ‘loss’ : “include[s] any such gain or loss whether temporary or permanent“.

For this reason, even if the property was later restored, this would not stop there being a ‘gain’ or ‘loss’ for the purpose of the Fraud Act. It may have an impact on the last issue, that of dishonesty, however.

Is this dishonest?

Certainly many people would think so, at least in the colloquial sense. The legal test for dishonesty is often called the ‘Ghosh test’, coming from the case of R v Ghosh [1982] EWCA Crim 2.

There is a two stage test :

(i) “a jury must first of all decide whether according to the ordinary standards of reasonable and  honest people what was done was dishonest”. If no, then there is no dishonesty. If yes, then

(ii) “the jury must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest … it is dishonest for a defendant to act in a way which he knows ordinary people consider to be dishonest, even if he asserts or genuinely believes that he is morally justified in acting as he did”.

Ultimately, this would be a question for a jury (or magistrates, if the case stayed in the Magistrates’ Court). It is clear that if Mr Slater thought that he was acting in the public interest by exposing a generosity of spirit in his fellow countrymen, then that would not be a defence if he must have realised that other people would think it was dishonest.

 

 

Conclusion

So, is the Daily Mail employing fraudsters and encouraging their reporters to commit fraud? That would be a matter for you, as representative of the reasonable man and woman, to decide.

Shouldn’t the £43,000 fare dodger be prosecuted?        

Image from lep.co.uk

Image from lep.co.uk

You may have seen a story in the press over the past few days about a hedge fund manager who dodged his train fare for about 6 years. (Here, here and here if you want some extra reading.)

The currently unnamed individual lives in Stonegate, East Sussex, and commuted to London where he worked as a hedge-fund manager. He would not buy a ticket at Stonegate, and would travel to London Bridge station. He would then change trains to London Cannon Street and would ‘touch out’ using his Oyster card at London Cannon Street station. Having not ‘touched in’ he would there incur the maximum fare on the Oyster card of just £7.20, instead of the £24.50 each way ticket price.

Avoiding prosecution

After being challenged by an observant member of staff at London Cannon Street, he claimed he had dodged the fare on five occasions. He then went on to renew his season ticket a few days later. This prompted Southeastern trains to investigate further. They believed the man had been dodging the fare for 5 years as some digging around revealed that he had last brought a season ticket in 2008. Southeastern trains notified the man of the sum owed (presumably based on 5 years’ worth of train fares).

The man never admitted to dodging the fares for 5 years, but offered to pay the sum of £42,550 plus £450 in legal costs.

This was on the basis that he would not be prosecuted.

The Daily Mail reported:

“Southeastern, who has not named the man, said all passengers have the option to avoid prosecution and settle out of court.

The train company told the Sunday Times that the executive wanted to protect his identity because he was concerned about the impact it would have on his job.

A spokesperson added: ‘All customers have the option to settle out of court and in this case he chose to pay the settlement fee that we put to him.”

What offences could have been charged?

There are a number of offences which could have been prosecuted.

Fraud Act 2006 s 1 (fraud) Max sentence 10 years

Fraud Act 2006 s 6 (possession of articles for use in frauds) Max sentence 5 years

Fraud Act 2006 s 11 (obtaining services dishonestly) Max sentence 5 years

Regulation of Railways Act 1889 s 5 (travelling on a railway without paying) Max sentence 3 months/£1000 fine

Factors

It seems to me that the relevant factors are as follows:

Aggravating:

  • Planned
  • High level of profit from the offence
  • Only stopped when he was caught, not of his own volition
  • Carried out over a significant period of time
  • Vulnerable victim (arguable, as the Stonegate train station was often unmanned and had no ticket machine, relying on the honesty of passengers)
  • Lied/tried to conceal the extent of the fraud
  • Motivation for the offence (financial gain, and absence of financial pressure)

Mitigating:

  • Repaid the money quickly
  • Not fraudulent from the outset (on the basis he had previously purchased a season ticket prior to 2008)

For Fraud Act 2006 s 1 (fraud) and 6 (possession of an article for use in fraud) offences, the guidelines (numbered page 22 para 13) recommend a starting point of 26 weeks custody.

Comment

Many people have commented that this appears to be yet another situation where there is one rule for the rich, and another for the rest of us, on the basis that Southeastern were only willing to agree not to prosecute the man on the basis he paid the huge sum of money off – and quickly.

To my mind, that is a fair point. When courts fine individuals, there is a principle that a rich defendant should not be able to buy his or her way out of a custodial sentence; basically, if an offence deserves custody, the fact that the defendant can afford to pay a large fine shouldn’t allow him or her to avoid a custodial sentence, and conversely, if a large fine is appropriate, a poor defendant should not end up in custody because they cannot afford to pay it. Whilst the sum repaid is not a fine, it is merely restitution of the money defrauded, the principle would seem to apply.

Secondly, is it not entirely appropriate that the man is prosecuted? I consider it right that he ends up with a criminal record for what is a sizeable fraud. It is highly likely that if the man were unable to repay the money, he would have been prosecuted. Southeastern appeared to cite the reason for not prosecuting as partly based on the risk and cost involved in the proceedings. Two matters arise: a) Re the cost: they would have been able to apply to get their costs back (and the man is obviously a man of means) and b) Re the risk: the risk of losing would seem minimal given the information Southeastern appeared to have found (see the Daily Mail article).

Thirdly, currently, the man has not actually paid a penalty, he has merely restored to Southeastern trains the monies that were owed to them. He is no worse off than he would have been had he complied with the law and paid for his train ticket like everybody else.

Finally, on the issue of his ‘anonymity’, the fact that publication of his name would damage his career is no doubt true. Unfortunately, that is not sufficient to trump the principles of open justice and if he were prosecuted his name would undoubtedly be permitted to be published. Of course we do not know the details of the agreement between the man and Southeastern trains.

The lesson?

Money talks.

Coroner and solicitor Alan Crickmore gets 8 years for ‘theft from the dead’

Taken from BBC News

Taken from BBC News

On 17th October 2013 Alan Crickmore, a coroner (a Judge who is responsible for ascertaining the cause and circumstances of a death, as well as, for historic reasons, dealing with treasure trove) pleaded guilty at Southwark Crown Court to 24 counts of fraud. He was released on bail until the 28th November when he was sentenced.

After the conviction, Dan predicted that Crickmore would get “hammered”, suggesting a sentence of 6 years. On 28 November, Crickmore was sentenced to 8 years imprisonment.

Facts

Crickmore stole money from clients and the estates of deceased clients. The total value of the thefts was about £2 million.

The BBC reported that the police claimed Crickmore had spent £400,000 on his credit card since 2005, including £45,000 on restaurants, £74,000 on supermarket bills, £33,000 on holidays, and £92,000 of cash withdrawals.

There was a two-year investigation into Crickmore’s solictiors firm which resulted in the closure of the firm. Thereafter however, Crickmore continued to draw a £60,000 salary from the council for sitting as a coroner, even though he was suspended.

One of the counts represented the theft of almost £900,000 from the estate of a deceased man.

Sentencing

The maximum sentence is 10 years.

Crickmore received 8 years. The discount given for pleading guilty is not clear, however there will have been some reduction. That places the starting point towards 10 years, which, even using the fraud guidelines (which tend to have higher sentences than the theft guideline, where offences ‘fit’ into both) is high. This is so, even when taking account of the (massive) breach of trust.

An appeal may well be mounted, given that starting at around 10 years,

The prosecution stated they would be seeking confiscation proceedings under the Proceeds of Crime Act 2002 to recover about £800,000. This is presumably because although Crickmore benefitted to the tune over almost £2m, he only has £800,000 available to confiscate (why make an order which he cannot pay?).

We’ll keep an eye out for an appeal.

Council clerk stole £160,000 by forging cheques with erasable pen

 bell cheque fraud

Image from the Daily Mail

Patricia Bell, a parish clerk from Hampshire, was in charge of invoicing and payroll at the council, and had been so since 2006. She was paid £46,000 a year.

The Daily Mail reported the story on 5 November 2013.

Facts

In 2012, the council realised that it was running a deficit on several of its accounts. They looked a little closer and uncovered what was, in fairness, quite a clever little scheme.

Bell would get cheques signed by councillors who trusted her after her lengthy employment in her finance position. The genuine payee’s name would be filled in – with erasable ink. Later, Bell would heat up the erasable ink, wipe it away, and fill in her own name. She did so from April 2007 until December 2012 when she was suspended.

She obtained £110,000 from the forged cheques and stole a further £45,000 ‘partly through bogus salary payments’. The total obtained was £162,000 (we couldn’t work out the maths either).

She used the money to buy handbags, holidays and beauty treatments.

 Offences

She was arrested and charged with fraud by abuse of position. She pleaded to one count under Fraud Act 2006 s 4. The maximum sentence is 10 years.

Sentence

She was imprisoned for 28 months. On a guilty plea with full credit, that represents a starting point of 42 months (3.5 years).

Among the aggravation is obviously the breach of trust, the sophisticated manner in which the fraud was conducted, the amount obtained, what the money was used for and the period over which the fraud was conducted.

The mitigation includes the plea and the fact that it was not fraudulent from the outset.

Looking at the theft in breach of trust guideline (which is most appropriate for these offences), the starting point for theft of £125,000 or more (or £20,000 in high breach of trust) is 3 years, with a range of 2-6 years.

The Judge is likely to have raised the sentence above the suggested starting point. This is because she felt Bell was in a high breach of trust (being solely responsible for the finances) and/or because Bell obtained a significant amount above the figure on which the starting point is based.

Taking into account the little mitigation, a sentence of 3.5 years after a trial seems to be right. With discount for the plea, 28 months is the result, and I don’t think I would argue with that. In my view, the Judge might have been entitled to raise the starting point above 4 years based on the degree of trust that Bell breached, however, without further information, it is difficult to assess that point.

So, 28 months for stealing quite a lot of money with some old-style espionage tricks. Clever, but not clever enough.

Policeman forges will of 94yo widow to make him main beneficiary

jon webbImage from Daily Mail

Jon Webb, 45, a policeman, pleaded to five counts of theft, five counts of fraud and one of forgery.

He was called to the victim’s home after she had had a fall. She was aged 94 and widowed. He befriended her and volunteered to visit her in hospital. He visited her on more than 30 occasions.

When she had recovered from her fall, the Daily Mail reported that he ‘gained access to her bank accounts, set up internet banking and applied for a credit card. He closed down a pension account so he could access her life savings.’

He also typed a false will on the victim’s typewriter (the forgery) making him the main beneficiary of her (approximate) £400,000 estate. Additionally, he had stolen a box of war medals (theft)

The prosecutor said: ‘She does not fully understand why the defendant has done this to her. It is very hard for her now to trust anyone.

‘The defendant preyed upon her vulnerability, she trusted him as a friend. She trusted the defendant because he was a policeman and said it is his job to look after people like her.’

Webb’s downfall came as a result of suspicion that he was responsible for another offence – the theft of £1,000 and $500 which had been recovered after a burglary.

It was reported that he resigned from the police in May 2013 after a 20-year career in the force.

Sentence

Sentencing, Judge Guy Kearl QC said: ‘You have brought disgrace upon yourself and upon the police service for whom you served many years and you have undermined the public confidence in our police service.

‘I am satisfied once you had seen her [the victim] you had selected her as your prey and then you committed sophisticated and planned acts of fraud and theft on a frail and confused elderly lady.’

He was sentenced to 6 years imprisonment. He will serve 3 years in custody and 3 years on licence.

It is likely that the judge considered the Fraud guidelines, for the main offences of fraud. The theft guideline may also have been of some assistance for the other offences.

There may well have been consecutive sentences for some offences, where for example they were not a part of the same set of offending (e.g. the theft of the £1,000 and $500 recovered from a burglary). What is important however is whether the overall total adequately reflects the offending.

Assuming there was an early guilty plea, the judge started at 9 years, or perhaps slightly more. The aggravating features would have been most certainly the high degree of breach of trust and the targeting of a vulnerable victim. It also appears that this was planned and somewhat sophisticated in its execution.

There is an argument to say that the loss of Webb’s career in the police force should make for some mitigation (there have been cases in the past where courts have reduced sentences on the basis that a consequence of the conviction has been that the defendant would lose their professional career) however by starting at 9 years, it appears such a proposition, if made, had little impact on this judge.