False accounting is an offence that can come with a stiff punishment. This article provides detailed guidance on the typical sentencing for this offence.

What is the sentence for False accounting in 2020?

False accounting is an offence that is taken very seriously by the law. HMRC, the police and other governmental regulatory agencies will have an interest in resolving any differences in what your accounts state and what they should state. There will be a thorough investigation by forensic accountants who will investigate with a goal of resolution.

False accounting typically makes the financial situation of a company better than it is for lending or investment. For anybody accused of false accounting, it will be a very frightening time. False accounting is a charge that could lead to a custodial sentence which will separate them from their loved ones. There could also be a fine to be paid.

We have put together some questions and answers so that you can understand more about the sentencing guidelines for false accounting offences. It’s important to note that taking legal help from a solicitor who has experience in defending cases of false accounting can make all the difference with regards to securing a more favourable outcome.

Have you been charged or arrested for false accounting?  

Being accused of an offence as serious as false accounting can be very stressful. If the accusations your accounting errors, you’ll be keen for a quick resolution to the situation. If accusations are warranted, you will also want to ensure some protection from the wrath of the law.

Taking the legal guidance of a competent solicitor and allowing them to view your financial records can mean the lawyer has the information they need to craft a robust defence strategy.

Directors of the business can sometimes put accountants under pressure, and there could be wrong turns and calls of judgement made. There may be a situation where a company is struggling to survive. Perhaps there was a naivety about the growth potential of the business.

It’s not uncommon for entrepreneurs to be overly optimistic about their business, and overspending can happen with a hope to reclaim the money through sales. When these decisions are made dishonestly, people can be accused of false accounting.

What type of actions are considered false accounting?

False accounting is the alteration or adjustment of any financial accounts of a business. This act may spread beyond the statements of the company and stretch to VAT or tax records.

What is the average sentence for false accounting offences?

False accounting is considered as fraud and is covered by the Fraud Act 2006 and Theft Act 1968.

Depending on what happened and what your role was, you may receive a sentence of six months to seven years in prison. You may also be required to pay a fine.

The maximum sentences will only be issued when there has been reckless and blatant offending that involves a large amount of money. When it comes to smaller offences, a penalty is likely to be between six months and three years.

Here are the guidelines that judges and magistrates receive to decide what sentence to give.

The level of culpability is determined by weighing up all the factors of the case to determine the offender’s role and the extent to which the offending was planned and the sophistication with which it was carried out.

Culpability demonstrated by one or more of the following

A – High culpability

  • A leading role where offending is part of a group activity
  • Involvement of others through pressure, influence
  • Abuse of position of power or trust or responsibility
  • Sophisticated nature of offence/significant planning
  • Fraudulent activity conducted over sustained period of time
  • Large number of victims
  • Deliberately targeting victim on basis of vulnerability

B – Medium culpability

  • A significant role where offending is part of a group activity
  • Other cases that fall between categories A or C because:
    • Factors are present in A and C which balance each other out and/or
    • The offender’s culpability falls between the factors as described in A and C

C – Lesser culpability

  • Involved through coercion, intimidation or exploitation
  • Not motivated by personal gain
  • Peripheral role in organised fraud
  • Opportunistic ‘one-off’ offence; very little or no planning
  • Limited awareness or understanding of the extent of fraudulent activity

Where there are characteristics present which fall under different levels of culpability, the Court should balance these characteristics to reach a fair assessment of the offender’s culpability.

Harm

Harm is initially assessed by the actual, intended or risked loss as may arise from the offence.

The values in the table below are to be used for actual or intended loss only.

Intended loss relates to offences where circumstances prevent the actual loss that is intended to be caused by the fraudulent activity.

Risk of loss (for instance in mortgage frauds) involves consideration of both the likelihood of harm occurring and the extent of it if it does. Risk of loss is less serious than actual or intended loss. Where the offence has caused risk of loss but no (or much less) actual loss the normal approach is to move down to the corresponding point in the next category. This may not be appropriate if either the likelihood or extent of risked loss is particularly high.

Harm A – Loss caused or intended
Category 1 £500,000 or more Starting point based on £1 million
Category 2 £100,000 – £500,000 or Risk of category 1 harm Starting point based on £300,000
Category 3 £20,000 – £100,000 or Risk of category 2 harm Starting point based on £50,000
Category 4 £5,000 – £20,000 or Risk of category 3 harm Starting point based on £12,500
Category 5 Less than £5,000 or Risk of category 4 harm Starting point based on £2,500

What are some of the mitigating factors that might reduce the false accounting sentence?

When sentencing for false accounting, your case will be investigated thoroughly by the police and other regulatory agents.

It will be looked at for whether you have taken part in a group activity or to see if you were forced into it. If you’ve used a false identity, or you have used the identity of others to access more funds, this will be considered to decide your sentence.

Certain aspects of a case are known as the mitigating aspects which can influence the sentence that a judge gives. One of the factors judges consider in every case of this nature is the defendant’s level of genuine remorse.

The following are some of the other factors considered when the Court decides which sentence to give. They will look at:

  • Any previous conviction
  • Your level of remorse
  • Your level of cooperation with the investigation
  • Whether the activity you took part in was initially legitimate
  • Your reputation / good character
  • Whether you have any severe medical conditions that require long term, urgent or intensive treatment
  • Whether you have a learning disability or a mental disorder
  • Whether you are the sole or primary carer for related dependents

Is it possible to reduce a sentence for false accounting 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 the 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 per cent 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 essential 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 false accounting offence?

Ancillary Orders

A court can also make ancillary orders on a defendant if they are found guilty and convicted of a false accounting 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.

Typically, ancillary orders are added to the penalty for those who are found to be guilty of false accounting and include:

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

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

Besides, 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 sufficient 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 false accounting, 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

How Can Stuart Miller Solicitors Help?

The role of any prosecution in a trial of false accounting is to prove the intention to benefit financially from making fraudulent alterations to the accounts of a business.

Here at Stuart Miller Solicitors, we have over thirty years of experience of defending those accused of false accounting. During our time in operation, we have developed a broad network of legal professionals, including forensic accountants.

Our first task will be to understand your situation and what has happened. We can then work on a robust defence strategy that will provide you with protection. Known for being proactive and determined to win, our legal team have some of the brightest minds in the legal industry.

In addition to examining your financial accounts, we will discuss the evidence provided by the prosecution and look for ways that we can weaken its credibility. Our connections with some of the best Barristers and QCs in the country will keep us resolute.

Our fraud solicitors will be able to investigate what any account adjustments may have done to your standing with HMRC, money laundering and tax evasion.

Our Fraud Solicitors can help

Anytime we are involved in a false accounting case, we examine all angles of the case. We must look at the background of the case before crafting a strong defence for the client. To reach success, may mean looking through all your receipts, business transactions and bank records.

Spending time getting to know the client can make a difference in terms of representing the client fairly. It’s possible to influence the emotions of the jury by being able to sell the client to them. If they like the client, they are likely to be less harsh with their judgement and will recognise that the client is more naïve than dishonest.

Arrest & Interview

If you are arrested, you must seek the help of a lawyer immediately. Of course, having your devices taken away for examination is embarrassing. When the police hold onto them for weeks and months, it can be very inconvenient. Hiring a competent lawyer who can get onto your case immediately will make all the difference with regards to securing you a positive outcome. You will also be able to get your life back in order sooner.

Would you like to discuss your case before instructing us?

We offer a free no-obligation consultation with our legal team to every person who is connected to a false accounting case. In addition to speaking with you about your case and your concerns, we can look into securing legal aid for you.

If for some reason you don’t qualify for legal aid, then know that we offer very competitive prices and don’t tack on unexpected extra charges without telling you first, wherever possible.

Complete our contact form or call us on 0208 888 5225 or 07980 000 076 in the case of an emergency. We are friendly, experienced and here to help.

Get in touch with us now for possession of false accounting legal help.

 

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