UK: UK Issues Sentencing Guideline For Individuals Convicted Of White-Collar Offenses

In May the Sentencing Council for England and Wales issued a new guideline applicable to individuals convicted of fraud, bribery and money laundering offenses.¹ Effective for sentences imposed on or after Oct. 1, 2014 (regardless of the date of the underlying offense), it represents the latest effort to ensure a consistent approach to the sentencing of white-collar offenses in courts in England and Wales, as well as the firstpublished guideline for sentencing in money laundering cases. Similar to the guideline published earlier this year for corporate offenses,² the new guideline provides practitioners with a baseline against which to argue during plea negotiations and at sentencing for individual defendants.

APPLICABILITY OF THE NEW GUIDELINE

The new guideline is not mandatory, and courts are not required to adhere to it if doing so "would be contrary to the interests of justice"³ In this respect, the new guideline is comparable to the U.S. sentencing guidelines, which are "effectively advisory" for U.S. federal courts.⁴

The new guideline specifies offenses and category ranges for each offense. Offense ranges are defined as "the range of sentences appropriate for each type of offen[se]."⁵ As with the U.S. sentencing guidelines, categories (or degrees) within each offense are predicated on the seriousness of the crime. The offense range is accordingly divided into category ranges, which are "sentences appropriate for each level of seriousness."⁶ Each category includes a "starting point" that "define[s] the position within a category range from which to start calculating the provisional sentence."⁷ In this way, and similar to the guideline for corporate offenses, the new guideline sets forth a multi-step approach to sentencing.⁸

DETERMINATION OF OFFENSE CATEGORY

First, the new guideline directs courts to consider culpability and harm in determining the offense category. The level of culpability is calculated "by weighing up all the factors of the case to determine the defendant's role and the extent to which the offending was planned and the sophistication with which it was carried out."⁹

There are three categories of culpability: high, medium and lesser. These categories are based upon the defendant's motivation and role in the offense. Factors indicative of high culpability are largely similar to those relevant in fraud, bribery and money laundering cases. They include leadership in a group offense; exertion of influence or pressure to induce the participation of others; abuse of power, trust or responsibility; significant planning or sophistication of offense; activity occurring over a sustained period of time; a large number of victims; motivation of significant gain; and deliberate targeting of the victim on the basis of vulnerability.

Lesser culpability is more likely to be assigned to those who were coerced, intimidated or exploited into involvement; were not motivated by personal gain; were peripherally involved; did very little planning; or had limited awareness or understanding of the offense. Courts are advised to balance the various factors to determine the defendant's culpability if the case does not fall cleanly into one of the three categories.

In typical fraud cases, harm encompasses both "the actual, intended or risked loss" and the "level of harm caused to the victim(s) or others."¹⁰ Courts are instructed to consider loss, which is divided into categories based on monetary value. Next, courts are to consider the level of harm caused, or victim impact, to determine whether the crime should be "moved up to the corresponding point in the next category or further up the range of the initial category."¹¹ There are three categories of victim impact: high, medium and lesser.

Where there is a "[s]erious detrimental effect on the victim" or the victim is "particularly vulnerable (due to factors including but not limited to age, financial circumstances, mental capacity)" the court is likely to find a high impact.¹²

Possessing, making or supplying articles (such as electronic computer programs or data, or machines used to manufacture counterfeit bank notes) for use in fraud, revenue fraud and benefit fraud all result in the application of slightly modified harm considerations. In a case that includes possessing, making or supplying articles for use in a fraud, harm is calculated by looking to a "greater versus lesser harms" chart and "weighing up all the factors of the case to determine the harm that would be caused if the article(s) were used to commit a substantive offence."¹³ For revenue fraud and benefit fraud, harm is determined by considering a list of categories based on monetary value.¹⁴

In money laundering cases, harm consists of both the value of the money laundered and "the level of harm associated with the underlying offen[se]."¹⁵ The value of the money laundered, which is to be considered first, is broken down into categories. The level of harm is then considered "to determine whether [the harm] warrants upward adjustment of the starting point within the range, or in appropriate cases, outside the range."¹⁶

In bribery cases, both actual harm and risk of harm are considered.¹⁷ Harm encompasses the impact of the offense and the actual or intended gain of the defendant. Offenses are divided into categories based on their actual harm. Crimes that have, among other impacts, a serious detrimental effect on individuals, the environment, government, business or public services fall into the most serious grouping (Category 1). Risk of harm involves "consideration of both the likelihood of harm occurring and the extent of it if it does."¹⁸ It uses the same category breakdown as actual harm, but it is considered less serious. Therefore, the guideline advises "mov[ing] to the next category of harm down."¹⁹

FACTORS AFFECTING SENTENCING

After determining the offense category, courts are to determine a sentence within a defined range, taking into account aggravating and mitigating factors. Aggravating factors include previous convictions, attempts to conceal evidence and failure to comply with court orders.²⁰ Mitigating factors include remorse, good character, and the mental and physical condition of the defendant.²¹

If applicable, courts are also to consider whether the defendant assisted the investigator or prosecutor with the case or any other case pursuant to a written agreement, as well as any other laws that may serve to reduce the sentence by virtue of the defendant's cooperation with or assistance to law enforcement.

The guideline also states that courts should consider Section 144 of the Criminal Justice Act 2003²² and the 2007 Reduction in Sentence for a Guilty Plea: Definitive Guideline²³ to assess whether reduction is appropriate. Section 144 provides that, in determining the sentence of a defendant who has pleaded guilty, courts should consider the stage in the proceedings at which the defendant expressed an intent to plead guilty and the circumstances under which the plea occurred. Courts should also consider whether it is appropriate to give credit for time spent on bail, pursuant to Section 240A of the Criminal Justice Act 2003.²⁴

Where the defendant is being sentenced for multiple offenses or is already serving a sentence, courts must examine "whether the total sentence is just and proportionate" based on an overall assessment of the defendant's criminal conduct. Finally, courts must "give reasons for, and explain the effect of, the sentence" pursuant to Section 174 of the Criminal Justice Act 2003.²⁵

CONCLUSION

The new guideline provides a legal framework for practitioners to use during sentencing and plea negotiations.

While many of these factors (such as aggravating and mitigating factors) will be familiar to any lawyer that has advocated for a client at sentencing, the new guideline provides an enhanced framework from which counsel can develop arguments. For example, rather than simply arguing for leniency on the basis of the defendant's good character or the lack of effect on the alleged victim, counsel can now frame these arguments within the "lesser" culpability and victim impact categories. Similarly, when negotiating agreements with prosecutors, defense counsel can tie the new guideline's categories and offense ranges to the potential sentence that would result from a guilty plea.

Notwithstanding the enhanced legal framework established by the new guideline, courts retain broad discretion in issuing sentences. For example, imprisonment for a bribery conviction with the highest level of culpability could range from six months to eight years, depending on the category of harm. Accordingly, practitioners will continue to face significant challenges in advising their clients regarding the likely outcome of a judicial sentencing.

The new guideline may also make it more difficult to advocate for a sentence that is well below the new guideline's range. Practitioners will need to marshal compelling arguments supporting a downward departure, as the new guideline gives courts ample justification to issue sentences within the stated ranges.

Footnotes

1 Sentencing Council for England and Wales, Fraud, Bribery and Money Laundering OffencesDefinitive Guideline, (May 2014), available at http://sentencingcouncil.judiciary.gov.uk/docs/Fraud_bribery_and_money_laundering_offences_-_ Definitive_guideline.pdf .

2 See Bret Campbell, Adam Lurie, Joseph Moreno & Karen Woody, UK Guidelines Emphasis Importance of Robust Programs, Bloomberg BNA(Mar. 17, 2014), available at http://www. cadwalader.com/uploads/books/798c01d07d29 0dee281e92b606de65db.pdf.

3 Section 125(1), Coroners and Justice Act (2009).

4 See Campbell et al., supra note 2; United States v. Booker, 543 U.S. 220 (2005) (rendering the sentencing guidelines "effectively advisory" rather than mandatory).

5 Guideline, supra note 1, at 4.

6 Id.

7 Id.

8 See Campbell et al., supra note 2.

9 Guideline, supra note 1, at 6, 36, 42.

10 Id. at 7.

11 Id.

12 Id.

13 Id. at 14.

14 Id. at 20, 28.

15 Id. at 36.

16 Id.

17 Id. at 42.

18 Id.

19 Id.

20 Id. at 10, 16, 24, 32, 38, 44.

21 Id. at 11, 17, 25, 33, 39, 45.

22 Section 144 Criminal Justice Act 2003, available at http://www.legislation.gov.uk/ukpga/2003/44/contents .

23 Reduction in Sentence for a Guilty Plea: Definitive Guideline (July 2007), available at http://sentencingcouncil.judiciary.gov.uk/docs/Reduction_in_Sentence_for_a_Guilty_Plea_-Revised_2007.pdf . The guilty plea guideline provides further explanation of Section 144's application.

24 Guideline, supra note 1, at 11, 17, 25, 33, 39, 45.

25 Id.

Originally published in  WESTLAW JOURNAL - WHITE-COLLAR CRIME -  VOLUME 28, ISSUE 11 / AUGUST 2014