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Conspiracy to Defraud Explained

22 December 2021
Fraud
Conspiracy

We understand that any criminal allegation can cast a huge shadow on the accused person's life. Many people facing these allegations are normal people with little or no history with the police or courts. It is a conspiracy to defraud solicitor's job to be sensitive to clients and to have the skill and the strength to fight for them in the way that clients would if they could defend themselves.

What is a conspiracy?

A Conspiracy is a legal principle that can apply to any offence and constitutes a plan between two or more people to commit an offence. The offences don't have to have actually been carried out for the conspiracy to take place.

What constitutes a conspiracy to defraud?

1. Conspiracy to expose a person to loss or risk (economic loss)

This is an agreement between two or more people to dishonestly deprive someone of something that he or she is entitled to. This can also include simply exposing the person to an economic risk or disadvantage. There does not have to be an intention to deceive the person.

2. Conspiracy to deceive a person who is in a position of responsibility (non-economic loss)

The second version of the offence requires two or more people to have a dishonest agreement to defraud someone by deceiving that person into acting against his or her duty. This often involves frauds where public officials are deceived and the fraud occurs as a result, or can perhaps even include people who owe a duty to, for example, their clients or even their employers.

Why is Conspiracy to Defraud used instead of the Fraud Act offences?

Generally speaking, the fraud act offences will always be preferred to a Conspiracy unless:

  • There is evidence of both a fraud and a conspiracy but the prosecution do not have a clear picture of who did what within the conspiracy or to what level an individual is culpable.

  • Where splitting the case into the different Fraud Act offences might require a confusing number of different charges or separate trials. This would make the case both needlessly complicated and expensive.

Other types of agreements that could result in the prosecution choosing to use conspiracy to defraud include:

  • An agreement to conceal a bank's losses or liabilities from its shareholders, creditors and depositors

  • An agreement by company directors to conceal secret profits from the company

  • An agreement to falsify hire-purchase or credit applications, in order to get lenders to make loans they would otherwise not be willing to make

Evidence

In any conspiracy case there will be some defendants who are more easily shown to be involved at the sharp end of the offending than others. It can be a classic technique in well run criminal operations to have a ‘fall guy' who is the person in the conspiracy who is on the front line, risks being linked directly to the crime, but is actually the fraud's least important player. The police will often investigate on the basis that the major players in the fraud are hiding behind the scenes, and will focus on apparently innocent links with the more obviously guilty defendants. These links may include phone billing evidence, a money trail (including money transfers, unexplained assets such as property etc.), or covert surveillance.

Strategy in Fraud Conspiracy Cases?

There is no single answer to the question of good preparation in fraud cases. Some of the fundamentals that a client might expect of his or her conspiracy to defraud solicitors include:

  • A knowledge of business and commerce if applicable

  • The ability to predict the prosecution's motivation and strategy and outflank it

  • Knowing the evidence in the case to a high degree

  • Really getting to know the client and the culture of the relationships in the case

  • The right choice of barrister

A specialist conspiracy to defraud solicitors will always look at the evidence and ask if the prosecution are simply throwing mud and seeing what sticks? These are questions that go a long way to deciding the strategy the client might adopt. One issue is whether the client should answer any questions at all, either from the police or the prosecution barrister. If it is felt that the prosecution brought the conspiracy charge out of desperation, and not convenience then not engaging at all might be a sensible approach.

These issues might sound simple but in reality, are highly complex, and there is no blanket approach to all cases. The important thing is to be strategically aware, so that if these issues arise, the defence are ready to take advantage, or alter the approach it is taking if necessary.

Dishonesty in a conspiracy to defraud case

Dishonesty is relevant in all fraud cases. Unless the defendants can be shown to have acted dishonestly, there can be no fraud. In a conspiracy, a participant in the fraud who didn't know what the fraud was about, or that he or she was acting dishonestly, cannot be convicted. This can be particularly important in cases where the client is an employee or not the major organiser, and might not have known what was going on.

The test for dishonesty is entirely objective and whether the defendant felt that their actions were honest is irrelevant. What matters is that the members of a jury are directed to objectively assess a person's actions against those of an archetypal reasonable and honest person.

Which Court and What Length of Sentence?

Conspiracy to defraud can be heard only at the Crown Court. It is an offence at Common Law which means it is an offence created by previously decided cases. It is punishable by up to ten years' imprisonment or a fine or both, although sentences of the maximum length are quite rare, and are usually only given in the most serious cases.

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