Pollett & Ors v R.

On 19^th June 2012 in the Crown Court at Bradford John Hirst on re-arraignment pleaded guilty to count 1 conspiracy to defraud, count 9 money laundering, contrary to s327(1) Proceeds of Crime Act 2002 (“POCA 2002.”) and count 11 money laundering, contrary to s328(1) POCA 2002. On 9^th – 10^th August 2012 Linda Hirst was convicted of count 5 money laundering, contrary to s329(1) POCA 2002, count 7 money laundering, contrary to s327(1) POCA 2002, count 8 evasion of a liability by deception, contrary to s 2(1)(a) Theft Act 1978 and count 13 money laundering, contrary to s 327(1) POCA 2002. On 13^th August 2012 Richard Pollett was convicted of counts 1 and 2, making misleading statements, contrary to s397(2) Financial Services & Markets Act 2000.

On 31^st August 2012 they were sentenced as follows: John Hirst on Count 1 to 9 years imprisonment, on Count 9 to 18 months imprisonment, and on Count 11 to 3 years imprisonment the terms concurrent. Count 2 was ordered to lie on the file on the usual terms: Richard Pollett on Count 1 to 6 years 6 months imprisonment and on Count 2 no separate penalty was imposed: Linda Hirst on Count 8 to 6 months imprisonment, on Count 5 to 2 years imprisonment, on Count 7 to 18 months imprisonment and on Count 13 to 30 months imprisonment, the terms concurrent.

Daniel Hirst was acquitted of counts 10-12 and Zoe Waite of count 13.

Pollett appeals against conviction and sentence and Linda Hirst appeals against sentence by leave of the Single Judge. Hirst renews his application for leave to appeal against sentence following refusal by the Single Judge.

The Crown’s case was that Hirst was the prime mover in a “Ponzi” scheme in which about 120 investors, mainly from the British expatriate community in Mallorca, were duped into parting with large amounts on the promise of investment in the Dow Jones futures market, a high rate of interest and a guaranteed return of capital. Pollett was said to be Hirst’s loyal partner. Many investors were elderly and / or inexperienced in financial matters. The money was paid into accounts controlled by Hirst. Some investors received some payments, but from capital already paid over, not as a result of investment. Between 2001 and 2009 some £10 million was invested. Just over £4.6 million was returned to the investors, leaving losses of more than £5 million.

Hirst gave every appearance of a successful man of business. The reality was that whilst a salesman at Allied Dunbar he had in the 1990s run a very similar fraud, defrauding ex-miners of their redundancy payments – a total of about £500,000 – using the lie of a secure off-shore investment. He had eventually pleaded guilty to obtaining by deception and been sentenced to 30 months imprisonment. No money was recovered, it had all been spent extravagantly and on private education for his sons.

Following his release in 1993, Hirst set up other businesses but none was successful. In 1995 after he met Linda Waite they lived and went into business together, again unsuccessfully. Three companies were left in receivership and the couple were so in debt that Linda Waite had to come to an agreement with her creditors.

Later, still in modest circumstances, they moved to Mallorca to look after her elderly parents and Hirst met Pollett, who lived there. Pollett described himself as a chartered accountant and financial consultant, and was well-known and trusted amongst the British expatriates. The Polletts were also in financial difficulties.

By 2001 Hirst and Pollett were persuading people to invest in Hirst’s scheme. Initially, payments were to Hirst personally or to a Latvian bank. Hirst then set up a more detailed corporate and banking structure which through complex offshore companies concealed his involvement, These included a series of companies named Gilher, in one incarnation incorporated in Panama, and then in the Seychelles. Companies named Templegate (for Linda Waite) and Lytham Management (for Pollett) were set up.

From 2001 onwards Hirst and Pollett persuaded many to invest in the scheme. Hirst had a plausible account for the high interest rates, investors assured their money was secure. Pollett had gravitas and was trusted. In the early stages the scheme appeared to work, investors apparently receiving the guaranteed rate of return. Everyone received contracts, regular monthly statements and some received “information sheets” and marketing literature.

John Hirst and Linda Waite in Mallorca in 2006 celebrated their wedding in the most lavish style, a number of the investors guests. In 2005 Hirst had acquired and luxuriously renovated a large villa as their home, and they enjoyed an extravagant lifestyle, both domestically and on holiday.

The scheme ran into difficulties. In 2008-2009 Pollett reassured investors that all was well, or explained on Hirst’s behalf and sometimes urged alternative “investments”. At a November 2009 meeting of very unhappy investors in Mallorca Pollett was challenged as having been involved. He denied it, and said that like everyone else he was a loser.

Counts 9 & 11 These money-laundering counts reflected some of Hirst’s dispersal of the proceeds of the fraud from his Gilher account: £33,000 to his son’s account (count 9) and £428,000 to a legitimate company, Last Second Tickets (count 11.)

Count 8. On 31^st October 2000 Linda Waite entered into an individual voluntary arrangement (“IVA”) with her creditors, which ran to February 2004, staved off her bankruptcy and should have resulted in a higher dividend to her creditors. She should have accounted for any windfall sums she received. Instead, she failed to declare the monies she received from Hirst, Gilher and Templegate. They should have gone to her existing creditors.

Under the IVA Linda Waite had agreed to repay over five years £24, 325 of a total debt of £96,647.78, about 25p in the pound. In fact, as from 8^th October 2001 Hirst re-negotiated her monthly amount down to £266 on the basis of a supposed reduction in income. In December 2003 the outstanding balance (£18,195) was paid by lump sum transfer from a Bank of Cyprus Gilher account. During the lifetime of the IVA Linda Waite had received enough to discharge in full the original liabilities.

Counts 5,7 & 13. These money-laundering counts reflect her role from 2006-2008 in the dispersal of Hirst’s proceeds of the fraud, the transfer of approximately £170,000 to her account from a Bank of Cyprus Gilher account, ten withdrawals covering £17,300 from a Templegate account and the purchase for £552,553 using monies from a Gilher sterling account of a house in Surrey.

Interviewed in December 2009 Hirst made no comment. Pollett interviewed in May 2010 said he had never thought the scheme fraudulent, he only had reason to doubt it from October 2009. At the start, he had asked some investors if the scheme worked, and it appeared to, and he had made one enquiry of a bank employee as to whether it were possible to have such a high rate of return. He had been paid commission for introducing 78 people, some of whom he had never met. Though he had earned £2,190,000 commission £821,000 was unpaid so he received a net £1.369 million. Linda Hirst interviewed in January 2011 handed in a prepared statement in which she claimed she had had no idea her husband was involved in any criminal activity. She had trusted him and given him her own money to invest. Gilher monies were returns on her investments.

The Crown’s case was that Pollett and Hirst were dishonest partners in the conspiracy to defraud to which Hirst had pleaded guilty (count 1), or, in the alternative, that Hirst knowingly or recklessly made misleading or false statements to induce people to invest (count 2.) Pollett’s evidence echoed his interview. He conceded he should have made more checks before he introduced clients, but had not been dishonest. He had no inkling it was a fraud, he too had been fooled by Hirst. He called his brother Simon who had also invested, and character evidence.

The judge directed the jury that counts 1 & 2 were in the alternative, and that it need consider count 2 only if unsure Pollett was guilty of count 1. The jury in a note asked whether failure to achieve unanimity on count 1 meant Pollett should be acquitted of that count, and that it should then consider count 2 only. It was told that this was wrong, and redirected on unanimity. Later, before the direction on majority verdicts, the clerk asked if the jury had reached any unanimous verdicts and the foreman indicated, inter alia, that it had an unanimous verdict on count 2 but not on count 1. The judge directed that as counts 1 & 2 were alternatives, it was not appropriate to take a verdict on count 2 at that point, and gave the majority direction in relation to count 1 and all other outstanding counts. The jury later convicted Pollett of count 1. The defence suggested no verdict be taken on count 2 arguing that to do so would lead to inconsistent verdicts. The judge ruled that the verdict should be taken. The counts were not in law alternatives, count 2 was a catch-all or longstop, and it was procedurally tidier and appropriate to take a verdict.

Pollett’s grounds of appeal are that the Judge erred in law in directing the jury to deliver its verdict on count 2 once it had convicted on count 1. The alternative nature of the charges could not have been made clearer both by counsel for the Crown and in the summing-up. As a result of this procedural error Pollett has two convictions recorded against him, both of which arise from the same facts. The verdict on count 2 is accordingly unsafe and should be set aside.

The counts were drafted as follows:

“Count 1

STATEMENT OF OFFENCE

CONSPIRACY TO DEFRAUD, contrary to common law

PARTICULARS OF OFFENCE

RICHARD JOHN POLLETT between 1^st December 2001 and the 31^st December 2009 conspired together with John Neil Hirst to defraud such individuals as might be prepared to hand over monies to them for investment purposes by dishonestly:

representing to such individuals that all monies handed over to them, whether directly or through any bank account held in their name, or either of them, or in the name of any company controlled and/or managed by them, or either of them, or any agent acting on their behalf, would be invested on behalf of those individuals or any other person nominated by those individuals;

representing to those individuals that any monies to be handed over:

would be invested on their behalf;

would be invested on the Dow Jones Index futures market;

would be, at all times, guaranteed and secured;

would be returned immediately upon fourteen days notice and after a minimum period of three months;

would achieve a minimum return of 1.5% per month, equating to 18% per annum, with a 2% bonus if invested for a year;

failing to invest any or all of such monies whether as so represented or at all.

COUNT 2

STATEMENT OF OFFENCE

MAKING MISLEADING STATEMENTS, contrary to section 397(2) of the Financial Services and Markets Act 2000

PARTICULARS OF OFFENCE

RICHARD JOHN POLLETT between 1^st December 2001 and the 31^st December 2009 together with John Neil Hirst engaged in a course of conduct of (i) knowing or recklessly (dishonestly or otherwise) making statements, promises or forecasts which were misleading, false or deceptive in a material particular and (ii) dishonestly concealing material facts for the purpose of inducing or being reckless as to whether it may induce another to enter into John Hirst’s investment scheme, including:

representing to such individuals that all monies handed over to them, whether directly or though any bank account held in their name, or either of them, or in the name of any company controlled and/or managed by them, or either of them, or any agent acting on their behalf, would be invested on behalf of those individuals or any other person nominated by those individuals;

representing to those individuals that any monies to be handed over:

would be invested on their behalf;

would be invested on the Dow Jones Index futures market;

would be, at all times, guaranteed and secured;

would be returned immediately upon fourteen days notice and after a minimum period of three months;

would achieve a minimum return of 1.5% per month, equating to 18% per annum, with a 2% bonus if invested for a year;

failing to disclose that such monies as were handed over were not invested whether as so represented or at all; and

failing to disclose that Richard Pollett received monies from the Bank of Cyprus bank accounts of Gilher Inc. as “commission” on funds handed over by investors.”

Miss Gillard for Pollett conceded and concedes that Count 2 is not in law a strict alternative. We agree. However she submits that the drafting shows it was intended to operate as such, and so said counsel for the Crown in his opening.

The summing-up includes:

“Counts 1 and 2 only, alternatives. That means you will not be asked, as it were, to conclude on both counts…..The prosecution say Mr Pollett is guilty on count 1, of the dishonest conspiracy to defraud. If having considered all the evidence…you find Richard Pollett guilty on count 1 you will not need to consider further, or return any verdict on count 2, do you understand? It is an alternative. It is, in the context of the case, the lesser alternative, some may argue. It follows that if you are not sure about Richard Pollett on count 1, then and only then would you need to move on to consider the alternative…

You can start wherever you want, but it would be daft not to, as far as Richard Pollett is concerned, look at count 1 first and then, only then, after you have concluded your deliberations, consider if necessary, count 2 ….’

… at the core of count 1 is an agreement, dishonesty, and that is why the alternative, insofar as it uses dishonesty, really at heart is about the alternative scenario. If you are not sure that Mr. Pollett was a dishonest team member….was he at the very least reckless, making dishonest statements and so on. …This alternative proposition involves the offence, 1, to make a statement or promise knowing it to be misleading or false, and that it is an offence, or 2 dishonestly concealing a material fact in connection with any statement or promise, that is an offence under this act, or 3, to recklessly make a statement or promise which is misleading or false or deceptive; that too is an offence, ….the prosecution nail their colours to the mast, they say count 1, but …… they are entitled to put the alternative on for your consideration, because you are in charge………

…If Mr. Pollett dishonestly … working with Hirst to con investors by making himself very useful or adopting Hirst’s mumbo jumbo and lies…then you have to consider count 1. Count 2’s aim is the possible alternative scenario. If you are not sure Mr. Pollett was in it to some degree with Hirst as a dishonest collaborator, are you sure he was reckless?...The prosecution must prove whether it was foolish dishonesty, corrupted dishonesty that the elements of count 1 are made out……Count 2 you immediately see is different. It is the state of mind. Count 2, not sure dishonest, was he reckless in what he was saying to his clients or those he introduced … ? Count 2 you note specifically can be committed without dishonesty if the relevant acts and statements are dishonesty.’ (sic. Counsel’s note reads ‘… statements are made recklessly.’)

….So, the question, in looking at counts 1 and 2, for you to determine whether Mr. Pollett was dishonest in the terms and ingredients required in count 1, or reckless in terms of the ingredients and requirements requiring a proof in count 2 ….”

It was agreed before us that the jury was entitled to ignore the route to verdict suggested by the Judge. It plainly did not follow his advice. Nothing turns on that aspect.

The jury retired on Monday 6^th August 2012. The following day a note read:

“Question: clarification on two points please. Some jurors are under the impression that if we can’t agree on count 1 that we find him not guilty and move to count 2. Can you please give clarity that we need to make a unanimous decision on count 1.

The jurors were directed:

You are asked to reach unanimous verdicts on these, on each defendant on each count, working through the indictment as you see fit. You are only – unanimous verdicts are acceptable, whatever they are, and any impression that if you can’t agree on count 1 at this stage you must find the defendant not guilty is wrong. Failure to reach a unanimous verdict at this stage is simply a failure to reach a unanimous verdict at this stage. “Can I give clarity that you need to make a unanimous decision to count 1?” Yes. You need to make that decision, either way, before moving to count 2. …… Yes, you do need to make a unanimous decision to count 1.”

On 9^th August the jury was asked if it had any verdicts. It was unable to agree on count 1. It was, in error, then asked if it had reached a verdict on count 2. The reply was ‘Yes’. No verdict was taken, Counsel for the Crown saying; ‘I think as they are in the alternative ……..’ and the judge adding ‘I cannot take a verdict in relation to count 2’. The majority direction was given.

On Friday 10^th August the jury had not reached agreement in relation to count 1. Later it sent a note saying ‘We have deliberated intensely but are failing to reach verdicts on the remaining four counts….” but welcomed further time.

On Monday 13^th August a note read ‘We have reached verdicts on those we can decide upon following extensive and detailed deliberations.’ In its absence count 2 was briefly debated. Counsel for the Crown and for Pollett agreed that stalemate on count 1 allowed the judge a discretion to ask if there were a verdict on count 2. The judge now indicated that counts 1 and 2 were not alternatives and asked counsel for the Crown if it were his intention to seek a verdict on count 2 before discharge of the jury on count 1. Matters were left unresolved until the jury had returned its verdicts.

After the guilty verdict on count 1 and in the absence of the jury the Judge took the view that count 2 was subsumed within count 1 and there would be no separate penalty. Counsel for the Crown agreed and asked that a verdict be taken on count 2 as a safeguard in the event that count 1 were in jeopardy. Counsel for Pollett agreed that strictly speaking the counts were not alternatives but submitted that a separate verdict should not be taken since the ingredients were so distinct that there were inherent inconsistencies between the counts. The Judge felt that point technical.

The jury returned a guilty verdict on count 2. The judge then told the jury:

“Count 2, in truth, was not a strict alternative, although the Crown had it as a ……….. longstop …….”

In R v McEvilly [2008] EWCA Crim 1162; [2008] Crim. L.R. 968 the appellant pleaded guilty to count 3, unlawful wounding, contrary to section 20 of the Offences Against the Person Act 1861. He was tried on counts 1 and 2, attempted murder and wounding with intent. All three were in the alternative.

After a majority direction the jury, asked to deliver its verdict, was unable to agree on attempted murder, count 1 and was asked if it had agreed in relation to count 2, S18. It returned an unanimous guilty verdict. It confirmed that more time would assist in relation to count 1, and in due course returned an unanimous guilty verdict on it.

The appellant submitted that the procedural error in taking the verdict on count 2 before reaching finality in relation to count 1 rendered the conviction on count 1 unsafe. The court, whilst not agreeing that the conviction on count 1 was unsafe found there had been a procedural error:

“Where there are two charges in the alternative on the indictment arising from the same facts, and with one more serious than the other, the judge should not take a verdict on the less serious count until finality has been reached on the more serious charge. Such finality may take the form of a not guilty verdict, or a decision to discharge the jury on that count because there is no realistic prospect of agreement on a verdict. If this course is not followed, then there is a serious risk of the very situation arising which arose here, with charges in the alternative leading to a multiplicity of convictions. That as this court pointed out in the case of R v Harris [1969] 1 WLR 745 cannot be right. It is not right.”

Pollett as time has gone by has adopted different positions. At trial he first appeared to accept that Counts 1 and 2 were in the alternative but later contended that count 2 was not strictly an alternative to count 1 but inconsistent with it. His argument was that he was either dishonest (count 1) or if not dishonest, reckless (count 2) but could not at the same time be both. Putting the submission another way, his contention must have been that dishonesty precludes recklessness.

Before us Miss Gillard submitted that the convictions could not in strict law be alternatives since the requisite intent for each differs. Count 1 requires proof of dishonest representations and of dishonest failures to act. Count 2 requires proof of knowledge or of recklessness but also of dishonest failure or of dishonest concealment. Consequently necessary ingredients of Count 2 are both a failure to act and a dishonest concealment, whereas in Count 1 dishonest concealment is not a necessary ingredient. She readily accepted that the two counts were treated as alternatives for practical and entirely unexceptionable reasons.

The outcome however is that Pollett has two convictions against his name for what he contends is in reality the same offence. By whatever labelling process, the same founding facts sustain each count. Miss Gillard argues that this must be procedurally wrong and amounts to the prejudice she must establish before Count 2 can be quashed.

Miss Barnes for the Crown below and here argues that the approach taken was similar to the situation in which a defendant earlier pleaded guilty to a lesser charge and was then convicted of a more serious. The plea of guilty stands and the count remains on the file but the Judge should not sentence in respect of it. R v Cole [1965] 2 QB 388, 49 Cr App R 199 (CCA); R v Bebbington, 67 Cr App R 285, CA; R v Hodgson [2001] EWCA Crim 2697.

Her argument is there is no inherent injustice in a defendant being convicted of two offences arising from the same facts where there is no substantive sentence in respect of the lesser: R (CPS) v Blaydon Youth Court [2004] EWHC 2296 (Admin), R v Cole [1965] 2 QB 388, 49 Cr App R. 199 (CCA); R v Bebbington, 67 Cr App R. 285 (CA), R v Branchflower [2004] EWCA Crim 2042, [2005] 1 Cr App R 10

Reliance on McEvilly she submits is misplaced. First, the principle in McEvilly is that where there are alternative counts, the jury must reach finality in respect of the more serious before returning a verdict in respect of the less. The potential prejudice to be avoided is of a jury feeling under pressure to reach a verdict on the more serious by having first been asked to return a verdict on the lesser.

In Pollett’s case on the other hand the Judge was aware of McEvilly and scrupulous to avoid asking the jury to return a verdict on Count 2 until it had reached a final position on Count 1. In any event McEvilly considered counts alternative in law. Here, on the other hand, the offence reflected in Count 2 is not as a matter of law necessarily a lesser offence of the conspiracy to defraud pleaded in Count 1.

Miss Barnes submitted that neither are the counts inconsistent. The bones of Count 1 are that Pollett conspired with Hirst to defraud by dishonestly representing that all monies handed over would be invested. The bones of Count 2 plead knowing or reckless misleading promises and (we emphasise the conjunctive) dishonest concealment of facts, so as to induce investment or (we emphasise the disjunctive) being reckless as to whether it may induce investment. Dishonesty is evidently an essential ingredient of the necessary concealment of facts. The disjunctive alternative of recklessness goes only to the element of inducement, a point the jury could only reach if it had found dishonest concealment.

It follows that dishonesty was an essential ingredient of Count 1 and of Count 2 and that inconsistency is not made out.

Were parties correct in their eventual conclusions that the two were not in law alternatives? As we have explained, necessary ingredients of Count 2 are both a failure to act and a dishonest concealment, whereas in Count 1 dishonest concealment is not a necessary ingredient. Consequently the route followed by the Judge in taking a verdict was technically correct, the counts not being strict alternatives, and it was one with which this court would normally be slow to interfere.

The question as yet unanswered is whether Pollett be prejudiced by the taking of a verdict on Count 2, upon which the Judge imposed no separate penalty. We can see how, in the shifting dynamic of this case, the Crown’s position altered or at the very least was modified. When all parties knew there was a verdict on Count 2. Pollett was still suggesting that Counts 1 and 2 were inconsistent. It was in that context that the Crown submitted that the sensible course, after a conviction on Count 1, was for the court to take the verdict known to exist on Count 2, but impose no penalty. It is clear from the summing-up that a common approach had been that the counts were alternative and that a review of that stance was only triggered by the change of tack by Pollett, suggesting inconsistency. All of this we understand and none of it do we criticise.

However, we are persuaded that Pollett should not have on his record a conviction for two offences which for all practical purposes reflect the same criminality. It is unnecessary to say more than that Count 2, on these facts, is otiose. To that limited extent Pollett endures some prejudice and we therefore quash the conviction on Count 2.

The Judge said that this fraud involved very large sums. Most had gone to Hirst and his associated companies, Pollett had received about £850,000 and Linda Hirst had laundered about £750,000. Hirst had enlarged the criminal scheme to which he pleaded guilty in 1992, his protestations of remorse at the time were hollow. He had caused Linda Waite to enter into an IVA to cover his debts so he could sell up and go to Mallorca to defraud as many people as possible. It had been dishonest from the outset. There was the greatest possible contrast between the victims and Hirst and Pollett, who, their veneer of respectability stripped away, were corrupt common criminals. Both had targeted and beguiled their victims, dazzling them with a meticulously executed fraud, conducted with lies, persistence and determination over a very long period. They knew what dreadful damage they were causing. Hirst during the opening had pleaded guilty to the overall conspiracy, and to laundering £33,000 and £428,000. It was an aggravating feature that he had brought his son and his own firm to the edge of ruin. He had seduced his wife from her former honesty to serious dishonesty, though she in turn had used her daughter in pursuit of her own interests. He had a previous conviction and it was a further aggravating feature that during the trial he had created a false document designed to bolster his wife’s lying defence. Notwithstanding his pleas this showed contempt for the court.

Pollett was 70 and of good character. He had for seven years lent himself with enthusiasm to the scheme defrauding his brother, friends and clients. He had been convicted of count 1 and unanimously of count 2, the practical alternative – though culpability for that was subsumed within count 1. Although not the senior partner his role as the respectable, trusted chartered accountant had been instrumental. His betrayal of the profession was an aggravating feature. He had lied in interview and sought to walk away from his involvement through a long trial. The case involved a wholly fictitious fund and numerous foreign bank accounts and companies, money-laundering on a grand scale and – a further aggravating feature - the funding of a sickeningly lavish lifestyle.

There were no guidelines, but authorities, including R v Paulssen AG Ref 48-51of 2002 (2003) Cr App R (S) 36, R v Asil Nadir and others dealing with theft by employees held parallels. A series of thefts over an extended period meant consecutive sentences which might together exceed the statutory maximum, subject to totality. Poor health was a matter for the prison authorities. This was a worse case than Paulssen, in which the starting point was seven years. More had been invested, the conspiracy was longer and small investors had been targeted. Following Hibberd, the appropriate discount for a plea as late as Hirst’s was 10%. Maximum sentences were not reserved for the worst possible case imaginable, but for cases of utmost gravity as this was. Also evident was the absence of anything which might have helped avoid a huge investigation and trial. Hirst was suffering leukemia but was in remission and further treatment was unlikely. In any event prison authorities were used to dealing with such. His only mitigation was his very late plea, followed by lies to the court. His plea had saved some witnesses coming to court and with reluctance he would get 10% credit. Pollett was entitled to no credit. He was a desperately greedy man, dazzled by Hirst’s lifestyle. The starting-point was seven years. In relation to 380 days [approximately twelve months] in Spanish custody before the service of the European Arrest Warrant, “as a matter of discretion and principle” the Judge would allow [only] six months.

Linda Hirst had been acquitted of the earlier part of her alleged involvement. However she had lived a profligate lifestyle funded by a criminal. Unlike Maxine Valentine (qv) she had gone beyond this to the specific laundering of about £750,000. Immediate imprisonment was inevitable. She had no credit for a plea and her good character and all other matters were reflected in concurrent sentences.

Pollett complains that the Judge erred in reducing the sentence by only six months to reflect time in custody in Mallorca before extradition proceedings. The Judge emphasised that it was a matter for his discretion in a case where the offender chooses to offend against the expatriate community. He gave no further explanation. He erred too in giving insufficient weight to other matters of mitigation – age, good character, the effect on his family life. Pollett born on 5^th February 1942 told the author of his pre-sentence report that he had resigned himself to a custodial sentence, though he maintained his innocence. There were no concerns about his ability to cope in an English prison despite poor health. He was principally concerned about his aged mother and his wife.

We are not persuaded that the Judge gave insufficient weight to matters of general mitigation. That ground is rejected. We are however persuaded that there was no discernible justification for withholding from Pollett credit for the entire time he had spent without his liberty in Spain. Had it been open to him to influence matters so as earlier than he did to return to this jurisdiction we might have taken a different view but no-one suggests that it was. We see no reason why he should endure prejudice consequent on no more than territorial boundaries. We thus quash the sentence of six years six months and for it substitute one of six years. To that limited extent his appeal succeeds.

Hirst, born on 11^th March 1951, had four convictions for obtaining property by deception, for which in 1992 he was sentenced to 30 months imprisonment. His Grounds are that he was diagnosed with chronic myeloid leukaemia (“CML”) in August 2009. He was stable with a good prognosis, but needed to be monitored three-monthly. If his CML progressed, he might need fortnightly treatment but this would be possible in custody. If, however, oral therapy failed he might require a transplant which would be impossible in a custodial setting. The risk of this was low.

The sentence imposed on count 1 is criticised as excessive. In particular, the judge wrongly concluded the maximum sentence justified after a trial, overstated the aggravating features, wrongly distinguished Paulssen and Hibberd (2009) EWCA Crim 652, wrongly concluded that Hirst had influenced the defence of Linda Hirst in a way regarded as an aggravating feature, wrongly concluded that criminality was enhanced by responsibility for the prosecution of his son, and wrongly allowed personal opinion that the maximum sentence was inadequate to influence his approach. Even though he did not pass consecutive sentences for counts 9 and 11 he wrongly allowed his opinion that such would have been justified to influence his approach to sentence. He should have made allowance for the applicant’s serious illness and other personal mitigation.

The facts of Paulssen are argued as bearing significant resemblance to Hirst’s case. The four offenders were convicted of one count of conspiracy to defraud, namely an investment fraud which operated from late 1995 to mid 1996. During that relatively short period $9.8 million was gathered in and only some $2.1 million was recovered. The fraud was a simple one and dishonest from the outset. Investors, many of whom were small investors who lost all of most of their savings, put their money into a company in reliance on promises of high rates of return and what turned out to be a worthless undertaking that the investments were protected by insurance. The money paid over by the investors was in very large measure not invested and used to benefit the offenders and others. Sentences (only one defendant pleading guilty) ranged from 18 months to 4 years imprisonment.

In Hibberd Hooper LJ said that absent guidelines a starting point of seven years was ‘about right for that kind of fraud’. Paulssen was a more sophisticated fraud. A number of participants were professionals, some had a history of investment fraud or relevant convictions. The sums involved were similar but a higher proportion diverted to the fraudsters.

This case is said to be by no means the worst of its type. There are more sophisticated frauds - cases where the main players understand how authentic investment works and create a complex camouflage which deceives seasoned professionals and distorts markets. There are cases where the fraudsters steal every penny invested and divert it beyond the reach of the victims and the authorities. The starting point in this case should have been of the level identified in Paulssen and Hibberd. Hirst should have received tangible credit for his plea. Although very late, it was not preceded by the creation of an elaborate factual defence which the Crown had to refute. Hirst suffers a very serious illness. Only modern medication keeps alive. The court should in its discretion take this into account for a man of his age.

Refusing Hirst leave, the single judge said:

“Although emphasis is placed by the applicant on AG Ref 48-51 of 2002 [2003] 2 Cr. App. Rep.(S) 36, none of the three considerations identified in paragraph 28 of the judgment of Kennedy LJ so as to drive the court to a sentence below the statutory maximum applies here (with regard to the first consideration, in view of the time which the scheme was operated). There were additional aggravating considerations in the applicant’s case, not least his previous comparable offending and his involvement of others, including his wife and his innocent son. The Judge’s sentencing observations were wide-ranging but, as I read them, he weighted the relevant considerations and was not influenced by irrelevant matters. Although the sentence that he passed was severe, it was not so long that the Court of Appeal should reduce it.”

We agree. Hirst does no more than renew his application and we reject it.

Linda Hirst submits that two and a half years was manifestly excessive. The Judge erred in not suspending it or imposing a shorter term and gave insufficient weight to her previous good character and that, but for her marriage she would not have committed the offences. Her lifestyle was modest and her personal expenditure from the proceeds of crime was principally on care homes for her elderly parents or treatments for her alcoholic daughter. The judge erred in distinguishing R v Valentine [2011] EWCA Crim 1463 (or [2012] 1 Cr App R (S) 42 in which a 12 month sentence was imposed. Linda Hirst contested 6 charges of money laundering maintaining that she believed the monies paid into her account were legitimate proceeds of Hirst’s business. She was acquitted of counts 3, 4 and 6. Mr Sangster QC submits that the jury rejected the Crown’s case that she knew or at least suspected that monies paid into her account from 2001 to 2006 were the proceeds of crime. Indeed the Judge remarked that Hirst’s decision to go to Mallorca and run his Ponzi scheme caused Linda Hirst to enter into an IVA [Count 8] to cover his debts so as to defraud as many people as he could. Linda Hirst was unaware of his previous conviction. Her conviction on counts 5, 7 and 13 suggest that after her 2006 marriage she at least suspected that monies used to fund their lifestyle were proceeds of crime. The monies and the purchase price of the property bought in her name on the counts for which she was convicted amounted to approximately £750,000. Born on 24^th October 1949 she is 62 and was of positive good character. She had always worked and supported herself. Prior to meeting Hirst she owned her own home. In the UK her home was a mobile caravan bought for £55,000. Any expenditure on extravagant weddings, holidays and jewellery was largely at Hirst’s behest. Any property she holds will be subject to confiscation proceedings. She is divorcing Hirst and is not in the best of health. She is likely to have problems adapting to the prison environment. She was suitable for a community order or a suspended sentence with conditions. She maintained that she was not guilty but expressed remorse.

As to the reliance on Valentine, Maxine Valentine was the wife of a successful robber who had stolen in excess of £1 million. Mrs Valentine had enjoyed a lavish lifestyle for some three years. She pleaded guilty to money laundering on the basis that her husband was the dominant partner and that although aware he was involved in crime she did not know the details. The Court of Appeal found the Judge entitled to the view that it would be an affront to the victims were he to suspend the term of twelve months imprisonment (as to which there was no complaint) and it upheld the sentence.

Linda Hirst’s position is readily distinguishable. The scale of her offending was markedly higher. The Crown proved specific acts of laundering on top of a lavish lifestyle. She knew many of the investors and knew their vulnerability. She had advanced a carefully constructed lying defence. That pointed to closer involvement than was consistent with the role of a passive albeit knowing participant in the proceeds. We see nothing impugnable in the sentence imposed and her appeal is dismissed.