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JUST A FEW OF THE WEBSITES FROM ALL OVER THE WORLD OVER THE PREDDY FRAUD HOW COULD DES TURNER MP LET THESE FACTS BE COVERED UP
SUSSEX POLICE DO NOT THINK THAT MARK SLADE IS WORTH INVESTIGATING EVEN THAT HE HAS MADE £40 MILLION POUNDS IN 3 YEARS
JILT: Property Offences into the 21st Century
... cheque and electronic funds transfer in the context of a mortgage fraud ... The first
is that it has been clearly held by the House of Lords in Preddy ...
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... features, including the sophisticated nature of the fraud ... Those cases were decided
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Asif Tufal
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ESPRIT Project 27028CRIMINAL LAW (LA10520) (Resit Candidates)
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There is a huge litany of possible offences to choose from in a fraud case, noneTHE FUTURE OF FRAUD CONTROL Matthew Goode Managing Solicitor, Policy and Legislation
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...
by the Acts are well documented, and are illustrated by cases such as R v. Preddy ... if...
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... Law Commission paper also shows very well that a particular action, such as that
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... Technology 3. Quin F (1996) 'Preddy - Issues for New Zealand's Law
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[PPT]
Criminal Law 1999-2000CRIMINAL LAW: Theft
... But the majority judgments do not differentiate between cases of consent induced
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... Preddy [1996] AC 815. Example II: Conspiracy to Defraud. (Perhaps) Brief Comment
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ADVOCACY COURSE
... Prosecution of Serious Fraud by George Staple, Director of the Serious Fraud ... 13th
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7 Bedford Row
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Queen Mary & Westfield College. Computer fraud. input, processing or output. Rv Thompson ... 155House of Commons Hansard Debates for 23 Jul 1999 (pt 6)
... the House of Lords judgment in the Regina v. Preddy case, which involved mortgage
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The Law Commission for England and Wales
... by Preddy, which go wider than mortgage fraud ... 1.9 We also appreciate that Preddy would ... 1.10
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... as property; and that it would greatly simplify the law ... This "sum of money" was purely
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ENGLAND AND WALES
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... Court of Human Rights to domestic law ... Fraud, expecially mortgage fraud. ... in a number
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WORKING PARTY PAPERS Fraud and Deception9.htm THE LAW COMMISSION CONSULTATION PAPER No 155 27 APRIL 1999 ...
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AND FRAUD ... MARK SLADE OF THE PREDDY GROUP WAS INVOLVED IN THE MURDER AND ...
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Untitled
... amended as a result of the decision in Preddy ... which have been sterilised by virtue
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[PDF]
THE FUTURE OF FRAUD CONTROLThe United Kingdom Parliament
... Act 1968 to reverse the decision in Regina v. Preddy ... are committed to introducing
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... Law Commission paper also shows very well that a particular action, such as that
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RMIT - Criminal Law And Procedure B
... his premises under the common law ... to preserve evidence, Health Insurance Commission ... Criminal
Code Officers Committee, Theft, Fraud ... Crim LR 513 [above] Rv Preddy ...
www.rmit.edu.au/ .../?STATUS=A - 101k - Cached
...
The language of criminal law is to be found in the abundance of case law, statutes,[PDF]
Criminal Cases Review Commission[PDF]Criminal Cases Review Commission
Criminal Law, law-index@swarb.co.uk, Case law summaries, David ...
... were entitled to look to the Law Commission ... The case of Preddy did not apply. ... Criminal
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www.swarb.co.uk/lisc/Criminal_Law.html - 101k - Cached
JILT: Property Offences into the 21st Century
... Law Commission (1997) Consultation Paper No. ... Quin F (1996) 'Preddy - Issues for New
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[PDF]
Theft (Amendment) Bill Proposed offence of "Fraud" Introduction ...Home warranty advantages for Houston home buyers and sellers.
... News (02/21/00) P. B1 (Preddy ... realty firms, which often get a commission ... but it may
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To : All Counsel/Senior Law Clerks/Prosecutions All Court ...[DOC]
Title[PDF]
ESPRIT Project 27028The Law Commission for England and Wales
... 1.4 On 10 July 1996, the House of Lords unanimously allowed the appeals of Preddy
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... the House of Lords gave their decision in Preddy ... 4.7 During the Second Reading debate
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Legal Cases of Interest to Police Officers and Law Students.
... Fraud: Property does not pass in bank transfer; which Sections of the Theft Act
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... Mortgage Fraud: Property does not pass in bank transfer; which Sections of the ... (1996)
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... An examination of the law of fraud - its comprehensibility to juries ... the law of dishonesty
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... In the Debates in the House of Lords ... it was said, would not cover the situation where,
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... This point has now been taken by the House of Lords in Preddy where in the course
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Law Commission Report 243
The decision of the House of Lords in Preddy on 14 July 1996 has exposed major gaps in the law of dishonesty. In our report Offences of Dishonesty: Money Transfers we propose changes to remedy these defects which will facilitate the prosecution of fraudsters, especially mortgage fraudsters.
Prosecutors have traditionally charged those who commit mortgage and other frauds based on dishonestly obtaining money transfers with dishonestly obtaining property by deception contrary to section 15(1) of the Theft Act 1968. In Preddy, the House of Lords allowed the appeal of those alleged to have committed mortgage frauds, because they held that the borrowers, the alleged mortgage fraudsters, had not gained "property belonging to another" as required by section 15. This meant that it has become very difficult to prosecute mortgage fraudsters or anybody who obtains money dishonestly by any means other than cash payment.
We therefore proposed a new offence of obtaining a money transfer by deception, which was implemented by section 1 of the Theft (Amendment) Act 1996. A money transfer occurs where there is a debit to one account and a credit to another, and where the one results from the other. It is immaterial that the credit is for a different sum than the debit, that the money transfer is effected on presentation of a cheque or by some other method, whether any delay occurs in the process by which the money transfer is effected or whether either of the accounts is overdrawn before or after the money transfer is effected. We believe that this new offence would adequately deal with problems of prosecuting people who obtain any form of money transfer by deception.
Another associated problem was that before Preddy, it had been generally assumed that a credit balance resulting from an inter-account transfer procured by deception was stolen goods: the reason was that it was obtained in breach of section 15(1). Now we know, as a result of Preddy, that as moneys obtained by bank transfers are not obtained in the circumstances described in section 15, they are probably not stolen goods and subsequent dealings with them fall outside the handling provision in the Theft Act 1968. This might make it difficult to prosecute handlers who received money originally obtained by deception.
A third problem is that before Preddy, it had been held and regarded as the law that a person who dishonestly accepts the transfer of stolen funds from another's account into his account is "receiving stolen goods". This reasoning assumes that the funds received by the transferee are the same funds that, before the transfer, were in the account of the transferor; but according to Preddy, this is not so. They are different funds and this causes problems in prosecution for handling.
We therefore recommended that there should be a new offence of retaining credits from dishonest sources, which was implemented by section 1 of the Theft (Amendment) Act 1996.. This offence would require a wrongful credit being made to an account kept by the defendant or in respect of which he has any right or interest, his knowledge or belief that the credit was wrongful, and a dishonest failure on his part to take such steps as are reasonable in the circumstances to secure that the credit was cancelled. A credit would be regarded as wrongful to the extent that it derives from theft, blackmail, stolen goods, or our new offence of obtaining a transfer by deception.
We considered whether these offences should be retrospective, but came to the conclusion that that was not easible
===================================================================
Lecturer in Law
University of Hull
<L.M.Clements@law.hull.ac.uk>
Copyright © 1997 L.M. Clements.
First Published in Web Journal of Current Legal Issues in association with Blackstone Press Ltd.
The purpose of this Article is to explore the problems associated with mortgage fraud and related matters following the decisions in R v Halai and R v Preddy, R v Slade and R v Dhillon, particularly in the context of modern technology and banking. This Article examines the reaction of the Law Commission to this problematic area, the response of the legislature in the recent Theft ( Amendment ) Act, 1996 and the likely effect that this Act will have in certain situations in the future.
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Offences of Dishonesty: Money Transfers CONTENTS |
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PART I: INTRODUCTION |
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The problem |
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The procedure adopted by us for this project |
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The consultation process |
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Our recommendations |
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Section 15 of the Theft Act 1968 |
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Preddy and Slade; Dhillon |
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The facts |
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The certified questions |
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The first question |
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The second question |
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The third question |
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The lacuna in the applicability of section 15 exposed by Preddyand the relationship between Preddy and Halai |
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Alternative offences under section 15 of the 1968 Act |
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Obtaining "other intangible property" |
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Obtaining a cheque qua chose in action |
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Obtaining a cheque qua cheque form |
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Possible alternative offences under other provisions of the Theft Acts |
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Theft |
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Theft by extinction of the victims chose in action |
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Theft of the funds obtained |
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False accounting |
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Procuring the execution of a valuable security by deception |
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Evasion of liability by deception |
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Conspiracy to defraud |
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Other offences under the Theft Acts |
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Obtaining a pecuniary advantage by deception |
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Obtaining services by deception |
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Conclusion |
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"Property" |
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Extension of the section 15 offence |
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The elements of the new offence |
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The accounts debited and credited |
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The connection between the debit and the credit |
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Overdrafts |
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Cheque payments |
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Territorial jurisdiction |
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Sentence |
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Retrospective effect |
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The presumption of legislative intention |
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"Technical" changes to the law |
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The European Convention on Human Rights |
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Conclusion |
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The nature of the problem |
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The need for a new offence |
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The definition of the new offence |
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Receipt and retention |
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The initial dishonest credit |
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Stolen goods |
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Examples |
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Territorial jurisdiction |
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Sentence |
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Retrospective effect |
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Mortgage Fraud: Property does not pass in bank transfer; which Sections of the Theft Act 1968 are effective (1996) The Times, July 11 House of Lords Regina v Preddy, Slade, & Dhillon (Conjoined appeals) THE LAW "S.15(2) . . . a person is to be treated as obtaining property if he obtains ownership, possession or control of it, and 'obtain' includes obtaining for another or enabling another to obtain or retain. . ." THE FACTS LORD GOFF said that the cases concerned mortgage frauds. Preddy Slade & Dhillon had applied to building societies or other lending institutions for advances to be secured by mortgages. In each case, the mortgage application or accompanying documents had contained one or more statements known by the appellant to be false. Some applications had been refused, in which event the appellant had been charged with an attempt. In the case of Preddy and Slade, the advances had totalled more than £1,000,000. S.15(1) of the 1968 Act replaced obtaining by false pretences con contrary to S.32(1) of the Larceny Act 1916. The question was whether the debiting of a bank account and the corresponding crediting of another brought about by dishonest misrepresentation amounted to the obtaining of property within S.15. The sums had been paid sometimes by cheque, sometimes by telegraphic transfer and sometimes by CHAPS (clearing house automated payment system) involving electronic transfer as between banks. No distinction needed to be drawn between telegraphic and electronic transfer. S.4(1) 1968 provided that property included money and all other property, real or personal, including things in action and other intangible property. The Court of Appeal had held that an electronic transfer was intangible property. It had identified the sums the subject of the relevant charges as being sums standing to the credit of the lending institution in its bank account. Those credit entries would, in his Lordship's opinion, represent debts owing by the bank to the lending institution constituting choses in action belonging to the lending institution and as such falling within the definition of "property" in section 4(1). His Lordship's belief was, however, that identifying the sum as property did not advance the argument very far. The crucial question was whether the defendant had obtained, or attempted to obtain property belonging to another. The question was whether the debiting of the lending institution's bank account and the corresponding crediting of the bank account of the defendant or his solicitor constituted the obtaining of the chose in action belonging to the lending institution. The difficulty in the way of that conclusion was that, when the bank account of the defendant, or his solicitor, was credited, he did not obtain the lending institution's chose in action. On the contrary, that chose in action was extinguished or reduced pro tanto and a chose in action was brought into existence representing a debt in an equivalent sum owed by a different bank to the defendant or his solicitor. In those circumstances, it was difficult to see how the defendant thereby obtained property belonging to another, that was, to the lending institution. If the bank accounts of the lending institution and the defendant, or his solicitor, were not sufficiently in credit to allow for choses in action to be extinguished and created further problems arose. Where the payment was made by cheque, the chose in action represented by the cheque came into existence when the cheque was obtained by the payee from the drawer and so never belonged to the drawer. When it came into existence it belonged to the payee, and so there could be no question of his having obtained by deception property belonging to another: see R v Danger (1857) 7 Cox CC 303). R v Duru [1974] 1 WLR 2) and R v Mitchell [1993] Crim L R 788 had to that extent been wrongly decided. S.15(1) was as inapt in the case where the money was transferred to a solicitor as it was where it was transferred direct to the mortgagor who had perpetrated the deception. THE DECISION Where a payment was made between two bank accounts telegraphically, electronically or by cheque no identifiable property passed from the payer to the payee and, accordingly, the payee could not be guilty of dishonestly obtaining or attempting to obtain property belonging to another within the meaning of S.15(1) of the Theft Act 1968. The House of Lords allowed appeals by Preddy, Slade and Dhillon from the Court of Appeal [1995] Crim L R 564 who had dismissed their appeals against convictions on counts under S.15(1). COMMENT This Lords ruling is a bombshell in the fight against mortgage fraud; by holding that such frauds do not amount to "obtaining property by deception. The ruling could prompt appeals by scores of persons convicted under S.15. which seems to have been the chief means of combating mortgage fraud in the past three years Unless the law moves fast this will provide a loophole in the law" through which mortgage defendants can escape. Prosecuting authorities will no longer be able to use S.15 of the Theft Act to prosecute mortgage cheats. The crux of the ruling given was that when money is passed between bank accounts there is no identifiable property involved, so it cannot amount to an attempt to obtain property dishonestly from another. "Professor Sir John Smith, in his commentary on the subject, said at [1995] Crim LR 564, 565-566), 'Effectively, the victim's property has been changed into another form and now belongs to the defendant. There is the gain and equivalent loss which is characteristic of, and perhaps the substance of, obtaining.' "But even if this were right, I do not for myself see how this can properly be described as obtaining property belonging to another. In truth the property which the defendant has obtained is the new chose in action constituted by the debt now owed to him by his bank, and represented by the credit entry in his own bank account. "This did not come into existence until the debt so created was owed to him by his bank, and so never belonged to anyone else. True, it corresponded to the debt entered in the lending institution's bank account; but it does not follow that the property which the defendant acquired can be identified with the property which the lending institution lost when its account was debited. "In truth, S.15(1) is here being invoked for a purpose for which it was never designed, and for which it does not legislate." The selection of appropriate charges has caused considerable difficulties in recent case involving fraudulent mortgage applications, primarily because of problems in identifying what exactly is obtained in a successful application, see O'Connell (1991) 94 Cr. App. R 39, King [1992] QB 20, Bolton (1991) 94 Cr. App. R 74, Dhillon [1992] Crim L R 889, Manjdadria [1993] Crim L R 73 and Johl [1994] Crim L R 552. Blackstone's Criminal Practice (1995) points out at page 289 that in the past prosecuting Authorities have relied on a charge of conspiracy to defraud at common law, this obviates the need for proving if any substantive offence has been committed. This is of course assuming a conspiracy can be proved. Depending upon the type of arrangements a safer charge may be procuring the execution of a valuable security contrary to S.20(2) Theft Act 1968 or Obtaining Services by Deception, S.1 Theft Act 1978, see Halia [1983] Crim L R 624 and Teong Sun Chuah [1991 Crim L R 463. It is already being predicted that a spate of appeals will follow, (see Hawkins below) Mortgage Lenders and others will be pressing for legislation at the earliest opportunity to close this loophole." The Law Commission, recently published a report recommending a change in the law which would remedy the defect exposed in the law Lords' ruling. A short draft Theft (Amendment) Bill accompanied it. Clearly this matter is urgent. The Crown Prosecution Service said it prosecuted between 300 and 350 a year for fraud, roughly 50 of which were mortgage fraud. It is estimated that last year there was £9 million worth of mortgage fraud, each case involving more than £100,000. Future Hope may lie partly in S.17 1968, see (1996) The Times 6 August R v Hawkins (Paul) in which a self-confessed mortgage fraudster failed in an application for a seven-month extension of time to apply for leave to appeal out of time against conviction after the House of Lords, in another case, had decided that counts under S.15(1) of the Theft Act 1968 to which he had pleaded guilty had been invoked for a purpose for which it was never designed. The Court of Appeal, refused an application by Hawkins, from conviction at Crown Court after pleas of guilty to five counts of obtaining property by deception, contrary to S.15(1) of the 1968 Act, two counts of attempting to obtain property by deception, contrary to S.17(1)(b) of the 1968 Act and one count of attempting to obtain property by deception, contrary to S.1(1) of the Criminal Attempts Act 1981. He was sentenced to two years imprisonment concurrent on each count. On appeal sentences of 18 months concurrent were substituted. S.17 of the 1968 Act provides: "(1) Where a person dishonestly, with a view to gain for himself or another or with intent to cause loss to another . . . (b) in furnishing information for any purpose produced or makes use of any account, or any such record of document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular . . . shall . . . be liable to imprisonment. |
Law Commission No 228, Conspiracy to Defraud (London: HC 11).
Law Commission No 243, Offences of Dishonesty: Money Transfers (London: HC 690) .
Griew, E (1995) The Theft Acts, 7th Edition, (London: Sweet and Maxwell).
Griew, E (1996) Archbold News, Issue 7, 15 August, 1996.
Mason, J (1996) "Lords ruling may hinder fight against fraud" Financial Times, 25 July.
Gibb, F (1996) "Fraud loophole worries officials" The Times, 10 September.
Newton, R (1996) "Bank vaults wide open to fraudsters" Sunday Telegraph,