Sentencing for investment fraud

What is the sentence for investment fraud?

Investment Frauds are typically Ponzi Schemes, Pyramid Schemes, Binary Option Frauds or Boiler Room Frauds.

investment fraud

One of the biggest and most recent cases was brought to the court in 2018 by the FCA (Financial Conduct Authority) and involved the loss of £2.5 million of investors’ money. The defendants were found to be guilty and sentenced to a collective 26.8 years imprisonment with the main beneficiary and master mind behind the scheme receiving 11 years in prison.

The common element of crimes of this nature is that they draw victims in by promising a very good return on investment. Typically, the schemes will target people who are rich, elderly or those who are addicted to gambling. Background and contact information on the victims is collected from online databases which supply personal and contact details, together with historical information on the victims’ investment profiles.

These schemes are becoming increasingly sophisticated. Sales teams that are slick and polished won’t just cold-call potential investors. They now have a range of marketing collateral to back them up and support their credibility. The tools at hand include high-quality websites, glossy brochures, dozens of positive online reviews. Teams are typically small, sophisticated and talented in a variety of skill sets.

To help you to understand what the outcome might be as a result of being convicted of investment fraud, we’ve detailed the sentencing guidelines below.  Please note that a competent and experienced solicitor may be able to get any prison sentence reduced or even avoid it entirely.

Some investment schemes appear to be very legitimate

These investment fraud schemes may have gathered momentum and attracted media attention, which caused a snowball effect and increased the attractiveness of the proposed investment. Typically, the scheme will have a real possibility of offering an outstanding return which lures the investors into parting with their money.

Most often those with an entrepreneurial mind are behind the scheme and it’s well designed enough to be a great success and realise remarkable commercial results. We know that investors who lose money will be annoyed and desperate. They will inevitably lie and exaggerate the truth to ensure the complaint falls within the scope of the Fraud Act 2006 or the Proceeds of Crime Act 2006.

As soon as you find out that you’re being investigated or are charged with this crime, it’s vital that you seek competent legal advice from experienced fraud solicitors. By selecting fraud lawyers who have experience and expertise in investment fraud cases, you may even be able to get your case dismissed before it progresses to the court stage.

What type of actions are considered Investment Fraud?

Here are some examples of the type of investment fraud cases that may have led to the situation in hand.

Ponzi Schemes – for instance, somebody will tell people that they have found a great new way to invest that will bring returns. The reality is that the promised returns cannot be given to the investors, and the scheme crashes taking the investment with it.

Pyramid Schemes – for example, a scheme which encourages people to enrol others for the sole purpose of making money.

Binary Options Fraud – an example of this might be when there is a trading scheme based on an internet platform that shows it’s making money, then when you try to get your money back, you cannot.

Boiler Room Frauds – this is typically a sales centre that is selling penny stocks or other investments using fraudulent tactics.

These are just a few examples of investment fraud; there are several others. If you would like to know more about investment fraud, you can always contact us for more information. We have years of experience in this area of law and understand how it works and how you can get the best possible results when being trialled.

What is the average sentence for investment fraud offences?

An investment fraud case that reaches court and secures a conviction is likely to get a prison sentence of at least four to five years. The sentence may even be ten years or more, depending on how serious the crime is.  In most cases, the time will be shortened with some of the sentence being spent back in the community but on license. During this time, the convicted would not be able to offend again, or they would return to court to be resentenced and may spend further time behind bars.

How does a court decide on the seriousness of the investment fraud offence for sentencing purposes? 

The information that judges are given with regards to sentencing are only guidelines, and each case will be looked at individually. One of the factors judges consider in every case of this nature is the defendant’s level of genuine remorse, the seriousness of the crime and the amount of harm caused.

The following factors are considered when the court decides which sentence to give. They will look at:

  • Your previous conviction
  • The number of victims involved
  • The amount of money involved
  • Whether there was forgery or identity fraud used to secure more funds

What are some of the mitigating factors that might reduce the investment fraud sentence?

Certain aspects of a case are known as the mitigating aspects which can influence the sentence that a judge gives. In investment fraud cases, they may include:

  • Whether the defendant is disabled or mentally ill
  • The age of the defendant, i.e. if they are particularly young, their age may affect their level of responsibility
  • If there are previous, relevant or recent convictions
  • Suspect shows a considerable degree of genuine remorse
  • If you are considered to have previous good character with exemplary conduct
  • If there is a learning disability or mental disorder linked to this offence
  • There have been demonstrative steps made to address this behaviour

Is it possible to reduce a sentence for investment fraud with a guilty plea?

In recent years, several changes have been made to the sentencing system in the UK to save the court time and cost and to protect witnesses from the stress of needlessly going through a trial. For offenders aged 18 and over, pleading guilty early on in a case can reduce a sentence by as much as one third (maximum). The later the plea is entered, the smaller the reduction.

‘Early on’ refers to ‘the first stage of the proceedings’ and means anytime up to and including the first hearing at the Magistrates Court or Crown Court for indictable offences.

If a plea is entered 14 days after the first hearing, for example, the maximum level of reduction is just 20% or one fifth of the sentence. For indictable offences, the limit for a guilty plea to be made is within 28 days after the prosecutor has stated compliance with section 3 of CPIA 1996 and serving disclosure; although the decision is ultimately in the hands of the Judge who has discretion to apply whatever credit is deemed appropriate.

After these times there is a sliding scale of credit applied. This goes down to one tenth on the first day of the trial and to zero if entered during the course of the trial. In theory, the ten percent could be given if the plea is issued after the opening speeches on the first day, but prior to any witness evidence being heard.

If the accused does not want to plead guilty, then it’s important for the solicitor to regularly inform the court throughout the trial of the reasons why the client’s plea is not guilty.

What are some of the other consequences of an investment fraud offence?

Ancillary Orders

A court can also make ancillary orders on a defendant if they are found guilty and convicted of an investment fraud offence. These are extra elements of punishment that can be added to a sentence and include additional restrictions or requirements that can affect a dependent’s finances, your property or business or financial activity.

Ancillary orders that are typically added to the penalty for those who are found to be guilty of investment fraud include:

  • Compensation for loss
  • Restraint orders
  • Reparation orders
  • Financial reporting order
  • Disqualification from directing a company
  • Confiscation orders
  • Victims’ surcharge

As part of your investigation, you may also have your assets frozen with the possibility of having cash or other assets seized.

In addition, the court may demand payment of the following if the accused is convicted:

Payment of costs applied for by the prosecutors

Although the police meet some of the costs involved in the prosecution, the costs of investigation are typically sought from the convicted. These may include the costs of:

  • The work done in obtaining enough evidence for prosecution either at the initial stage or later at the request of Crown Prosecution Service (CPS)
  • Seeking medical or expert evidence as part of the investigation, (where a witness is required to attend Court, the cost of the attendance falls on the CPS).
  • Re-interviewing witnesses
  • The entire costs of the prosecutor, including fees for the use of external Barristers used by the CPS, can be recovered from the defendant, subject to means. At the end of the case, the prosecutor under The Prosecution of Offences Act 1985 will request the Judge to order a sum to be paid for the costs incurred by the prosecutor in bringing the prosecution.

Victims surcharges

The term victims’ surcharges can be explained as paying compensation to a fund for victims and can range between £20 to £170 depending on what sentence you were given at conviction.

How sentences can be added to national information databases

There are several national databases that hold information about individuals and any allegations made about them, their criminal and court records. These include the DBS (Disclosure and Barring Service) which was previously known as the CRB (Criminal Record Bureau) and the Police National Computer (PNC).  Depending on what happened, whether the accused is convicted and what sentence was issued, the accused may be added to one or all these databases. Their purpose is to provide information to potential employers and to regulate the ability to take part in certain activities.

If your case progresses to court and you are convicted of investment fraud and defrauding the HMRC tax office, your conviction will be noted on your CRB / police record. The period of the endorsement will depend on the nature and length of your sentence.

Below are details on how long you will be listed as holding a criminal record if convicted. This is something very serious to consider when it comes to future employment. The term ‘spent’ refers to when your name can be removed from the databases.

Rehabilitation Period
(the time it takes for the sentence to become ‘spent’)
Sentence Adult (aged 18+) at time of conviction Young person (aged under 18) at time of conviction
Prison sentences of more than 4 years Sentence is never spent Sentence is never spent
Prison sentences of more than 2.5 years (30 months) but less than 4 years Sentence length 7 years Sentence length 3.5 years
Prison sentences of more than 6 months but less than 2.5 years (30 months) Sentence length +4 years Sentence length +2 years
Prison sentences of less than 6 months Sentence length + 2 years Sentence length +18 months
Conditional Discharge Length of order Length of order
Absolute Discharge None None
Conditional Caution 3 months 3 months
Simple Caution / Youth Caution None – immediately ‘spent’ None – immediately ‘spent’
Other Including Compensation Order, Supervision Order, Bind Over, Hospital Order Length of the order / once compensation is paid Length of the order / once compensation is paid

Have you been arrested or charged with Investment Fraud?

If you’ve been contacted by the police and arrested, charged or even just invited to the police station for a chat, it’s vital that you seek legal guidance immediately. Communicating in any way with the police without legal support can put you at significant risk of being given a term in prison.

The primary goal of the police is to secure convictions. They do this by trying a range of different approaches and techniques in a bid to get you to incriminate yourself. They will not disclose all the evidence that they have against you and are going to use as part of their prosecution.

Some evidence is likely to be withheld from your knowledge or vision, but by having an experienced investment fraud legal expert by your side, you can give yourself some protection against the police and their tactics.

Another benefit of engaging competent and experienced investment fraud lawyers is that they can provide you with guidance on what to say and what not to say. The police will ask you many questions and this can be gruelling and exhausting. With a legal professional by your side, you can answer confidently, knowing that you’re not getting yourself into deeper and hotter water.

Your solicitor can immediately begin to create a robust defence strategy in order to secure you the best possible outcome should your case reach court. Alternatively, your solicitor may even be able to get your case dismissed before it reaches the court stage.

If there are other people involved who have been accused and are involved in your case, it’s key that you know what’s being said by whom. This isn’t always possible but there is a good chance that your lawyer will be able to make contact with the other legal help involved in this case to minimise damage.

How Can Stuart Miller Solicitors Help?

The fraud lawyers of Stuart Miller Solicitors are known for having defended those accused of these investment fraud-related schemes at all levels. Whether you are accused as the mastermind, the second in command, the marketing assistant, the IT assistant or the floor-operator required to deal with customers; Stuart Miller Solicitors have substantial expertise in understanding your specific case, your particular circumstances and the way in which the prosecution will seek to prosecute you.

Given the nature of these schemes, often those involved are unable to disclose the way they sought a return on investments. If such information was disclosed, the scheme could never get off the ground, it couldn’t operate, and competition would move-in to monopolise on the unique nature of the investment proposed.

One of the most vital elements required for a robust defence strategy of this type of scheme is an explanation of how the scheme is legitimate and able to make money. There needs to be evidence of reasonable due diligence being applied so that the scheme is not only honest, but legitimate. Our defence lawyers will proactively pursue all evidence to support your case so that you get the best possible outcome.

Owing to daily handling of fraud cases, inclusive of investment fraud cases, our fraud solicitors have the very best Barristers and QCs to choose from. We can instruct international agents to make enquiries abroad; we can engage financial experts to analyse the trail of funds, we can work with telephony experts and computer evidence evaluation experts to build your defence case. We also have a wide network of other expert witnesses who can help us to develop a robust defence strategy.

Our reputation is significant, but here at Stuart Miller Solicitors, we also rely on past notable cases to showcase and demonstrate our remarkable abilities in this field.

When should you discuss your case with an expert investment fraud solicitor?

In any legal case, early action is pivotal to increasing the chances of success. In cases of this nature, you will require specialist advice at every step. If you have been served with a Restraint Order, you have had cash seized or your money confiscated; rest assured our Fraud Lawyers will advise you on all aspects of the Fraud Investigation or Prosecution.

Whether you are facing allegations of Fraud by False Representation, Fraud by Failing to Disclose Information, Making or Supplying Articles for use in Fraud or on the larger end of the spectrum, for Conspiracy to Defraud or Money Laundering; please Contact Us and ask to speak to our Fraud Solicitors.

Would you like to discuss your case before instructing us?

If you’d like to have a no-obligation chat with us before you instruct us to take your case, then call us today.  In addition to giving you a free consultation, we can also represent you at the police station if you’ve been arrested. We can look at securing your legal aid.

Please Contact Us and ask to speak to our investment fraud lawyers and fraud offences solicitors to arrange a meeting in person, online or by telephone. If you prefer, you can WhatsApp us from the link you will find at the bottom banner if you open this page on your mobile phone device.

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