Lee & Anor, R. v

In sentencing for a major conspiracy to defraud, the court may assess seriousness by the overall scale and intended effect of the conspiracy. It is not confined to the victim’s ultimate unrecovered loss or to each offender’s personal gain. The amount dishonestly transferred, the amount targeted, and the offender’s role in making the fraud succeed are all material.

A customer who exploits a relationship built with a bank may commit a breach of trust, though its weight depends on the circumstances. Comparisons with a co-conspirator must account for differences in role and for any credit given for a guilty plea.

The appellants, business partners and directors of a mobile-phone brokerage company, were convicted at Southwark Crown Court of conspiracy to defraud. False cheques exceeding £20 million were paid into the company’s account. More than £15 million was transferred before the fraud was detected, although most was recovered. Each appellant received £105,000 in cash.

The sentencing judge found that they were not the original architects of the fraud but had played a key role and were vital to its intended success. He imposed five years and nine months’ imprisonment on each appellant. They appealed against sentence, contending that the starting point was excessive, that breach of trust was wrongly treated as an aggravating feature, and that comparisons with other fraud cases and a co-conspirator showed unjustified severity.

1. Appeals dismissed. Sentences of five years and nine months’ imprisonment were not excessive and were amply justified following convictions after trial.

2. There was a degree of breach of trust. The appellants had built a relationship with the bank as trusted business customers and exploited it to facilitate the fraud. That feature was not to carry great weight, but the sentencing judge had not attached excessive weight to it.

3. The seriousness of the offence was properly assessed by reference to the scale of the conspiracy. The bank’s eventual loss of about £1.34 million did not displace the significance of the dishonest transfer of more than £15 million and the intended acquisition of more than £20 million. Nor could the appellants’ personal gains of just over £100,000 each be treated as the sole measure of culpability. They had played a central role in a conspiracy whose intended effect was much greater.

4. The fact that the victim was a bank rather than numerous individual investors did not materially reduce seriousness in view of the nature and scale of the fraud. The sentencing judge was also entitled to distinguish the appellants from Quincey. The proper comparison was between Quincey’s eight-year starting point before plea credit and the appellants’ sentences after contested trials. The difference fairly reflected Quincey’s role as an organiser and the appellants’ lesser, but essential, participation.

• Court of Appeal (Criminal Division): appeals against sentence dismissed: [2008] EWCA Crim 1797.
• Southwark Crown Court: following jury convictions for conspiracy to defraud, each appellant was sentenced on 4 March 2008 to five years and nine months’ imprisonment and disqualified from acting as a company director for eight years.