R. v Kallakis & Anor

A guideline confined to statutory fraud does not govern sentencing for conspiracy to defraud, but its underlying principles remain relevant. Seriousness depends on culpability and harm caused, intended or foreseeably risked. The absence of realised financial loss may reduce seriousness, but does not remove the gravity of a deliberately planned fraud that exposed a victim to major loss.

For multiple frauds, the court must assess the offender’s overall criminality and impose a total sentence that is just and proportionate. Consecutive terms may be necessary where separate victims were separately targeted and concurrent terms would fail to reflect the additional offending. Credit for a guilty plea must reflect its timing and practical benefit.

The court heard two Attorney General’s References concerning sentences imposed on Achilleas Kallakis and Alexander Williams for two conspiracies to defraud, and Nicholas Levene’s appeal against a total sentence of 13 years for fraud and related offences.

Kallakis and Williams had dishonestly procured very substantial property lending from Allied Irish Bank and a separate loan from Bank of Scotland. The sentencing judge imposed concurrent terms of seven years’ imprisonment on Kallakis and five years’ imprisonment on Williams. The Attorney General contended that the sentences were unduly lenient.

Levene had operated a large-scale investment fraud, using later investors’ money to make apparent returns and to fund his lifestyle. After late guilty pleas, he received consecutive and concurrent sentences totalling 13 years. The common issues concerned the relevance of fraud guidelines to conspiracy, the significance of loss, totality, consecutive sentences, and plea credit.

1. The Attorney General’s References succeeded. Levene’s appeal against sentence succeeded to a limited extent.

2. The Sentencing Guidelines Council guideline for statutory fraud expressly did not apply to conspiracy to defraud. A conspiracy commonly encompasses wider and more prolonged deception. Nevertheless, the underlying principles of sentencing fraud remained relevant, and comparison was of limited value because the maximum sentence was the same.

3. Under Criminal Justice Act 2003, seriousness included culpability and harm caused, intended, or foreseeably risked. Kallakis and Williams had engaged in planned, persistent and audacious dishonesty to obtain more than £730 million. The absence of a realised net loss to Allied Irish Bank could reduce the appropriate starting point when compared with a fraud causing permanent substantial loss. It did not eliminate the serious risk of loss, business disruption, or the gravity of the sham securities. Their continued mortgage payments were primarily a means of concealing and continuing the fraud.

4. The separate Bank of Scotland fraud required a consecutive sentence. It involved a distinct victim, separately targeted, and resulted in substantial loss. The court therefore quashed the concurrent terms and substituted consecutive terms of four years for Kallakis and three years for Williams. Applying totality, the proper overall sentences were 11 years’ imprisonment for Kallakis and eight years’ imprisonment for Williams.

5. Levene’s fraud was in the highest category of seriousness. A sentencing court could impose consecutive terms exceeding the maximum for an individual count where necessary to reflect overall criminality, provided the total was just and proportionate. The honest beginnings of the business, the absence of deliberately targeted vulnerable victims, and self-reporting afforded only modest mitigation. The correct starting point was 15, rather than 17, years.

6. Levene’s late pleas still avoided a costly and lengthy fraud trial, but he had ignored earlier opportunities to plead guilty. A 20% reduction was appropriate. The court substituted concurrent terms of seven years on the specified later fraud counts, consecutive to the five-year block, producing a total sentence of 12 years’ imprisonment. The remaining orders stood.

• Court of Appeal (Criminal Division) — In [2013] EWCA Crim 709, the court increased the total sentences of Kallakis and Williams to 11 and eight years respectively, and reduced Levene’s total sentence from 13 to 12 years.

• Southwark Crown Court — HHJ Goymer sentenced Kallakis and Williams to concurrent terms of seven and five years’ imprisonment for conspiracy to defraud.

• Southwark Crown Court — HHJ Beddoe sentenced Levene to consecutive and concurrent terms totalling 13 years’ imprisonment following guilty pleas to fraud and related offences.