In R v G and others [Southwark Crown Court – concluded April 2009], the defendant faced trial for conspiracy to defraud. He was accused of involvement in a “boiler room” share sales fraud. There were subsidiary counts against him on the indictment alleging conspiracy to contravene Sections 19 and 23, and Sections 21 and 25 of the Financial Services and Markets Act 2000 [FSMA], and of money laundering the proceeds of the enterprise [s.328]. Three other defendants had entered acceptable pleas to those subsidiary counts, and the conspiracy to defraud had been left on the file against them.
G was in due course acquitted of conspiracy to defraud. He was, however, convicted of the FSMA conspiracies, and of money laundering. Thus, he had been cleared of dishonesty, but convicted of the regulatory offences of “unlicensed dealing”, and of money laundering the proceeds of that criminal conduct.
The maximum sentence for the FSMA offences was two years imprisonment [see FSMA S.23[1][b] and S.25[1][b] and the Criminal Law Act 1977 S.3.] The two FSMA offences were charged in separate counts to avoid any danger of duplicity, but charged an identical course of conduct.
In mitigation, G argued that the sentence for the money laundering offence should be concurrent with that for the FSMA offences, since the receipt of monies from clients was part and parcel of the FSMA offences, and he was money laundering the proceeds of his own crimes. Further, it was submitted that since the maximum sentence for the FSMA offences was two years, any concurrent sentence for money laundering must not exceed that maximum. The analogy was drawn with the thief who inevitably handles his own stolen goods.
It was submitted that the authorities made clear that unless there were exceptional circumstances, where a defendant was to be sentenced for money laundering the proceeds of his own crimes, the sentence should be concurrent to the sentence for the antecedent offence, and that if there were exceptional circumstances justifying a consecutive sentence, there must be still be a degree of proportionality between that consecutive sentence and the sentence for the antecedent offence. In no circumstances should a sentence for money laundering, concurrent or consecutive, exceed the maximum available for the antecedent offence. Whilst an offence contrary to s.328 of the Proceeds of Crime Act carries a maximum sentence of fourteen years imprisonment, that is simply because of the wide variety of antecedent offences that may lead to the money laundering. A proportionality of sentence between the antecedent offence and money laundering must be preserved. [ See R v Greenwood [1995] 16 Cr App R [S] 614; R v Basra [2002] 2 Cr App R [S] 100 [at p.469]; R v Brown [2007] EWCA Crim 1798; R v Bell [2008] EWCA Crim 3211, and Archbold 2009 para.33-30]
The Learned Judge sentenced G to eighteen months imprisonment for the FSMA offences [the “antecedent” offence]. He sentenced G to four years imprisonment for the s.328 offence of money laundering, and made that sentence consecutive, making a sentence of five and a half years in total.
Application has been made to the Court of Appeal for leave to appeal the sentence.
However, this decision sounds a cautionary note for those who regard money laundering counts tacked on to the end of an indictment as being merely a “make weight” for the purposes of confiscation. If G’s appeal fails, then a rash of hefty sentences for similar money laundering counts may be expected.