Mehta & Ors v R

In sentencing sophisticated carousel VAT fraud, the court must assess each offender’s true role and the Revenue loss. Organisers may properly receive substantial custodial sentences, but the sentence must remain proportionate to the scale of the fraud and the offender’s personal mitigation. Money laundering which is integral to a particular fraud may be close in culpability to the fraud itself. It differs from a general laundering service offered to numerous criminals, which may attract greater culpability.

A trial judge need not refrain from sentencing merely because unproved allegations of threats or jury interference have arisen, provided the judge can disregard them and no substantiated charge affects the sentence.

The four appellants were sentenced in the Canterbury Crown Court by His Honour Judge Adele Williams after convictions arising from a sophisticated carousel VAT fraud. Mehta received ten years’ imprisonment for cheating the Revenue, with a concurrent laundering sentence. Sharman, Reardon and Ratcliff each received eight years for conspiracy to launder approximately £6 million.

The court had already given judgment on the applications concerning conviction and reserved its decisions on sentence. The appeals raised whether the judge should have declined to sentence after unproved allegations concerning two defendants, and whether the custodial terms were excessive having regard to the appellants’ respective roles, the scale of the fraud and comparable sentencing decisions.

1. The appeals against sentence were allowed. The court rejected the submission that the trial judge should have declined to sentence because Reardon and Ratcliff had been arrested on suspicion of jury tampering and threatening the judge. It was important that sentence ordinarily be passed by the judge who had heard the lengthy trial. The judge could disregard allegations whose truth was unknown and which led to no charge.

2. The court also regarded an abandoned complaint about early-release provisions as ineffective. Section 26 of the Criminal Justice and Immigration Act 2008 aligned the applicable release provisions, and the court did not consider that the complaint would in any event have had force.

3. The judge had been entitled to find that Mehta was substantially involved in organising and executing the fraud, rather than merely a nominal front man. She was also entitled to treat the other appellants alike because their different but complementary activities formed a team engaged in the laundering conspiracy.

4. The court applied the sentencing guidance discussed in AG reference 88 of 2006 (Meehan and others) [2007] 2 Cr App Rep (S) 155 and considered Takkar [2008] EWCA Crim 646. A ten-year sentence for Mehta’s organising role in a fraud causing just over £7 million loss was excessive. Ordinarily the appropriate post-trial range was about eight to nine years, subject to modest further mitigation for his personal material.

5. The laundering was essential to this particular fraud. Although general professional launderers may sometimes be more culpable than the criminals generating the funds, there was relatively little distinction here between the fraud’s architects and those who organised its necessary laundering. The different sums for which the appellants were responsible and their respective roles nevertheless justified lower sentences for the three laundering conspirators.

6. Mehta’s ten-year sentence was quashed and replaced with seven years and six months. Each other appellant’s eight-year sentence was quashed and replaced with six years and six months.

• Court of Appeal (Criminal Division): On appeal from Canterbury Crown Court, the court allowed the sentencing appeals and substituted reduced custodial terms: [2008] EWCA Crim 1491.
• Crown Court: His Honour Judge Adele Williams imposed ten years’ imprisonment on Mehta and eight years’ imprisonment on each of the other appellants.