Wednesday, 13 June 2012

A Tale of Two Frauds

In 2009, a Lancashire mother was found guilty of defrauding the state of £45,000. She claimed over £45,000 in housing benefit, council tax benefit and income support by not including her husband’s details on the claim forms.

She pleaded guilty and was jailed for 16 months.


A week ago, two men from Leeds were also found guilty of defrauding the state of £45,000. They made up false invoices and documents in order to make false VAT claims worth £45,000.

They pleaded guilty, but avoided jail. Instead they were given community sentences, and made to pay court costs.


What makes these cases interesting is that they were for exactly the same amount: £45,000 dishonestly defrauded from the state - and all defendants pleaded guilty to the charges. So why is it that benefit fraud is considered so much worse?

Why, when benefit fraud costs us £1.1 billion per year and tax evasion an estimated £70 billion, is so much more effort and opprobrium directed at benefit fraud?

Of course both crimes were wrong. But is someone who commits benefit fraud a danger to society - who needs to be locked away for over a year of their life? I don't think so.

It's the inevitable result of a society where successive governments and the tabloid media (step forward the Sun and Daily Mail) have whipped up hatred against those out of work. That prejudice is reflected in the sentences.

The same economic crime means very different time.

1 comment:

Simon Bradshaw said...

I agree that benefit fraud is vastly over-stigmatised by comparison with tax fraud, especially considering the scale of the latter. But on looking in more detail at these two cases I am not sure that the disparity in sentencing arises from this.

(I'm a barrister who has represented people - including mothers - regarding theft/fraud offences, so this is an area I have some experience of.)

It's not quite true to say that the VAT fraudsters were given community sentences. Rather, they were given custodial sentences (12 and 9 months) that were then suspended, with a community order of (fairly substantial) unpaid work being attached. The difference is significant. Their criminal records will show a custodial sentence rather than a community order, and whereas the breach of a community order alone typically attracts an additional work requirement, the breach of a community order attached to a suspended sentence requirement may well lead to the sentence being activated.

There's also nothing to suggest that this was not a first offence for the VAT fraudsters, whereas it's reported that the benefit fraudster had previously been convicted of a similar offence.

There's another factor we can't know about: when the guilty plea was entered. A guilty plea at the first opportunity typically results in a 1/3 reduction of sentence (although I've known up to 40% - as it happens, for a young mother.) By contrast a guilty plea at the day of trial may lead to only a 10% discount.

So, what we have is this:

VAT fraud of £45,000, first offence of this type: 12 months' imprisonment, suspended, with 200 hours of unpaid work.

Benefit fraud of £45,000, second offence of this type: 16 months' imprisonment, not suspended.

I am by no means sure that, in these circumstances, the disparity in sentence can be ascribed to the nature of the fraud or the fraudster.