Regina v Nicholas Gray

When assessing harm under the Sentencing Council Guideline for Fraud Offences, a court may take account of financial losses directly consequential on the fraud. It must not treat wider losses arising from uncharged misconduct or general business mismanagement as loss caused by the offence.

Having identified the loss category, the court must assess victim impact. A high, medium or lesser impact may justify movement within, or into the next category of, the sentencing range. The sentence must nevertheless reflect losses which the court can safely find were caused by the offending.

The appellant, formerly Head of Finance at Equimedia Ltd, pleaded guilty to one count of fraud contrary to section 1 of the Fraud Act 2006. He had used company credit cards for personal expenditure and concealed the transactions through false internal accounting entries.

At the Crown Court at Swindon, the judge imposed 56 months’ imprisonment for the fraud and a consecutive month for failure to surrender for sentence. The judge treated the fraud as high-culpability Category A2 offending and took account of direct loss, asserted additional losses, and victim impact.

The appeal challenged the assessment of harm and victim impact, and the consecutive sentence for failure to surrender. The central issue was the extent to which consequential financial losses and the effect on the victims could properly increase the sentence for the fraud.

1. Appeal allowed in part. The 56-month sentence for fraud was manifestly excessive and was quashed. It was replaced with 46 months’ imprisonment. The consecutive one-month sentence for failure to surrender remained undisturbed.

2. Under the Sentencing Council Guideline for Fraud Offences, harm is initially assessed by actual, intended or risked loss. The court accepted that the relevant loss was confined to loss caused by the appellant’s fraudulent credit-card use, rather than any wider allegation that he had sought to damage the business. However, it was not wrong in principle to take account of financial losses directly consequential upon that fraud when assessing harm.

3. The judge was entitled to find sufficient additional direct financial loss to place the case at the top of Category 3 or the bottom of Category 2. The judge was also entitled to treat the victim impact as at least medium. The elaborate concealment, grave breach of trust, financial disruption, and serious personal consequences for the business owners justified that conclusion. Had harm remained in Category 3, a finding of high victim impact could itself have justified an upward movement.

4. Nevertheless, the evidence did not permit a finding that the relevant financial loss approached the £300,000 figure underpinning the Category A2 starting point. Taking account of the high culpability, victim impact, aggravation and mitigation, the proper sentence before plea credit was about 54 months. A 15% reduction for the guilty plea produced 46 months.

5. The failure to surrender was distinct offending. The judge was entitled to regard it as a deliberate attempt to delay or evade justice which materially affected the timing of sentence. A consecutive one-month term was neither wrong in principle nor disproportionate.

• Court of Appeal (Criminal Division): Allowed the appeal against the fraud sentence and substituted 46 months’ imprisonment. It upheld the consecutive one-month sentence for failure to surrender.
• Crown Court at Swindon: On 16 January 2022, imposed 56 months’ imprisonment for fraud and a consecutive month for failure to surrender.