1 Criminal law update March 2012 March 2012 Presentation by Mark Lucraft QC

2 Topics Types of fraud before the courts Types of fraud before the courts Fraud Act 5 years on Fraud Act 5 years on What happens? What happens? Confiscation Confiscation Civil recovery Civil recovery

3 Types of fraud 2010/2011 FSA insider dealing FSA insider dealing Internet scams Internet scams Credit card fraud Credit card fraud Revenue fraud – benefit fraud Revenue fraud – benefit fraud Company ‘failures’ Company ‘failures’

4 Examples of cases R v. A and others R v. A and others Music downloading Music downloading Music composed Music composed Passed though a recognised third party agent Passed though a recognised third party agent Music bought from Amazon and iTunes Music bought from Amazon and iTunes Compromised credit cards Compromised credit cards

5 Internet scams Investment in property in South Africa Investment in property in South Africa Inheritance from a trust fund Inheritance from a trust fund Stood to gain 25% of the fund Stood to gain 25% of the fund Too good to be true? Too good to be true? Documents sent in support of the ‘scam’ looking genuine Documents sent in support of the ‘scam’ looking genuine Involvement of a lawyer from London to ‘vouch’ for the ‘investment; Involvement of a lawyer from London to ‘vouch’ for the ‘investment;

6 Fraud Act – 5 years on Simplification of the offences Simplification of the offences Single offence of ‘fraud’ Single offence of ‘fraud’ - fraud by false representation - fraud by false representation - fraud by failing to disclose - fraud by failing to disclose - fraud by abuse of position - fraud by abuse of position

Fraud Act – 5 years on Possession of any article for use in the course of or in connection with any fraud Possession of any article for use in the course of or in connection with any fraud Making or supplying articles for use in a fraud Making or supplying articles for use in a fraud Article includes any program or date held in electronic form Article includes any program or date held in electronic form 7

Fraud Act – 5 years on recorded crime figures recorded crime figures 24,909 fraud by false representation – cheques, plastic card, online bank account 24,909 fraud by false representation – cheques, plastic card, online bank account 42,561 fraud by false representation – other frauds 42,561 fraud by false representation – other frauds 338 fraud by failing to disclose information 338 fraud by failing to disclose information 1032 fraud by abuse of position 1032 fraud by abuse of position 8

Fraud Act – 5 years on 973 making or supplying articles 973 making or supplying articles 1546 possession of articles 1546 possession of articles 69,752 other fraud – pre Fraud Act ,752 other fraud – pre Fraud Act

What happens? short custodial sentences. short custodial sentences. Prison pop – 85,000 serving 12, 000 on remand Prison pop – 85,000 serving 12, 000 on remand 12months to 4 years = 20,000 12months to 4 years = 20,000 4 years + = 24,000 4 years + = 24,000 1 week – 12 months 8,000 1 week – 12 months 8,000 Indeterminate 13,500 Indeterminate 13,500 Recalls 5,000 Recalls 5,000 10

Fraud / forgery March 2011 March on remand [297 male, 58 female] 355 on remand [297 male, 58 female] 1,447 serving immediate imprisonment 1,447 serving immediate imprisonment 13% reduction from the previous year 13% reduction from the previous year 11

Confiscation Valuable tool Valuable tool Draconian powers Draconian powers Sentences in default Sentences in default ‘lifestyle’ provisions place a burden on the defendant ‘lifestyle’ provisions place a burden on the defendant Other reporting requirements for serious crime Other reporting requirements for serious crime 12

Examples Mr B - £99,500 in his briefcase Mr B - £99,500 in his briefcase Convicted of money laundering and sentenced to 15 months imprisonment Convicted of money laundering and sentenced to 15 months imprisonment ‘Lifestyle’ conviction – section 328 PoCA ‘Lifestyle’ conviction – section 328 PoCA Has he benefitted from his ‘general criminal conduct’. Has he benefitted from his ‘general criminal conduct’. Court must make assumptions unless incorrect or serious risk of injustice Court must make assumptions unless incorrect or serious risk of injustice 13

Mr B [continued] Home search – documents found Home search – documents found 4 pages of figures 4 pages of figures Ran a number of companies with his wife Ran a number of companies with his wife Over the previous 6 years £50 million + Over the previous 6 years £50 million + Benefit from ‘general criminal conduct’ said to be £50 million+ Benefit from ‘general criminal conduct’ said to be £50 million+ Could he displace the assumptions? Could he displace the assumptions? 14

Mr B [continued] Some companies and some transactions the judge was satisfied that he had met the threshold – others not Some companies and some transactions the judge was satisfied that he had met the threshold – others not Order for £1.8 + million Order for £1.8 + million Sentence in default of payment – 6 years Sentence in default of payment – 6 years Appeal – ‘proportionality’ Appeal – ‘proportionality’ 15

Civil recovery powers SOCA obtained an order for £2 million from Mr and Mrs G SOCA obtained an order for £2 million from Mr and Mrs G Property derived from criminal activity on the part of one or other or both of them Property derived from criminal activity on the part of one or other or both of them Drug trafficking, money laundering and tax evasion in the UK, Spain and Portugal Drug trafficking, money laundering and tax evasion in the UK, Spain and Portugal No conviction for any offence No conviction for any offence Acquitted in Potugal! Acquitted in Potugal! 16

Mr and Mrs G Property obtained by unlawful conduct Property obtained by unlawful conduct Prove to civil standard – balance of probabilities Prove to civil standard – balance of probabilities Issue for the Supreme Court as to whether the criminal standard should apply. Issue for the Supreme Court as to whether the criminal standard should apply. Article 6 ECHR Article 6 ECHR Answer – no, civil standard applies. Answer – no, civil standard applies. 17