The Sentencing Council has published a new definitive guideline on fraud, bribery and money laundering offences committed by corporate offenders which will come into force on 1st October 2014. The guidelines will apply to all corporate offenders sentenced on or after that date, irrespective of when the offence was committed.
The guidelines expand the offences that were previously covered under the fraud guidelines published in 2009. For the first time there are guidelines in relation to bribery and money laundering offences. Furthermore, for the first time each of the guidelines apply to offenders convicted of conspiracy to commit the offences of fraud, bribery or money laundering.
The guidelines set out a variety of factors which a court will use to determine the level of fines imposed, including analysis of culpability and harm, and the application of a multiplier, subject to aggravating or mitigating features that apply in respect of the offence.
When determining the level of fine, the starting point for the calculation is an assessment of ‘harm’, as represented by a financial sum.
In fraud cases this will normally be the actual or intended gross gain to the offender. In money laundering cases this figure will normally be the amount laundered. For bribery offences, the appropriate figure will normally be the gross profit from the contract obtained, retained or sought through the offence.
The court must then make an assessment of the corporation’s ‘culpability’ i.e. their role and motivation.
There are set factors which the court will need to apply in deciding whether there is high, medium or lesser culpability. A multiplier will then be applied by the court to the harm figure dependent on the level of culpability that has been determined by the court.
The level of fine may be adjusted to take into account aggravating or mitigating factors. Examples of aggravating factors include endemic activity, attempts to conceal the criminal conduct and whether the offence was committed across borders or jurisdictions. Examples of mitigating factors include whether victims have voluntarily been reimbursed or compensated and whether offending had been committed under previous directors and managers. The factors the court will take into consideration are non-exhaustive.
Any fine imposed must be proportionate, however the guidelines allow for the application of a broad range of factors to be considered when determining the appropriate level of fine which must be substantial enough to have a ‘real economic impact which will bring home to both management and shareholders the need to operate within the law’.
If you are facing criminal proceedings it is vital that you seek specialist advice. Our team at Stephensons has expertise in cases involving allegations of fraud, bribery and money laundering.