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Fraudsters face stiffer penalties
From the Financial Times of Fri, 23 May 2014 16:44:56 GMT
Hands of caucasian businessman in handcuffs©Dreamstime

Fraudsters and money launderers face stiffer sentences under official guidelines that give new recognition to the impact of crimes on the victim.

Some offenders will receive higher sentences where the financial loss is relatively small but the crime leaves the victim “badly affected”, under the new guidelines published on Friday by the Sentencing Council for England and Wales.

Fraud is estimated to cost the UK economy £73bn a year, including £9.1bn in crimes against individuals in 2012/13. These include Ponzi schemes, identity or internet fraud, gangs targeting cashpoint users or cowboy builders. Tax fraud, accounted for £20.6bn.

Under previous guidelines, judges and magistrates were advised to regard harm to victims as only an aggravating factor, not a primary consideration.

Lord Justice Treacy, chairman of the Sentencing Council, said: “Fraudsters are in it to make money, but for their victims it can mean much more than losing money. Our research with victims showed the great impact it can have on them, so the guideline puts this impact at the centre of considerations of what sentence the offender should get.”

Fraud against HM Revenue & Customs is one area in which offenders could be handed harsher penalties, with the new advice giving no upper limit on sentences for offenders. Previous recommendations covered only offences with maximum sentences of 10 years.

Ronnie Ludwig, partner at accountancy firm Saffery Champness, said the Revenue had in the past been reluctant to take cases to court, particularly in complex disputes, because of the high legal costs involved. But he said it was becoming more confident about pursuing wrongdoers, “with a larger budget, stronger backing from the judiciary and supported by the public mood”. The number of people prosecuted for tax evasion rose from 165 in 2010/11 to 565 in 2012/13, according to HMRC figures.

The new criteria, which come into force in October, lift restrictions on what judges and magistrates can consider as harm to victims, so as to include physical harm, distress and inconvenience or higher premiums created by insurance scams.

Adrian Leppard, City of London Police Commissioner, said fraud could leave its victims “struggling to cope” with what had happened to them. “Increased sentences can act as a deterrent to other offenders and provide victims with the peace of mind that justice has been served.”

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