£2.6m ‘Ferrari fraudster’ denied shorter prison term

Thursday 29 November 2018

A 57-year-old former director who stole from clients to buy a Ferrari, fund a luxury lifestyle and pay off his personal debts has failed in his bid to have his seven-year prison sentence cut.

Richard David Arthur was sentenced in July after pleading guilty to frauds totalling £2.6million – around £1.9million of which was taken from elderly victims, some of whom were in their 90s, while managing director of accountancy firm BDO.

This week, he appealed his jail term, but was told yesterday that neither the method used by the Royal Court to arrive at its sentence, nor the sentence itself, constituted grounds for reducing it.

Delivering the Appeal Court’s judgment, the Bailiff of Guernsey, Sir Richard Collas, told Arthur that they were satisfied that the Royal Court had taken into account all the available mitigation and that the sentence, though a year longer than the one sought by the prosecution, was not manifestly excessive given the impact on the victims and the Royal Court’s desire to protect Jersey’s reputation as a finance centre.

Arthur was sentenced in July for a series of frauds against elderly clients of the accountancy firm BDO. He had abused their trust by using his position to divert funds from trust company accounts for his own use, whether to sustain an extravagant lifestyle or to prop-up a failing energy company in which he was principal investor.

Pictured: Advocate David Steenson was representing Arthur.

Advocate David Steenson, appearing for Arthur, argued that the Royal Court had wrongly applied the 'starting point’ principle more commonly used in drugs cases and had arrived at a sentence which failed to take proper account of the guilty plea which Arthur had entered and the other mitigating factors which applied. 

In what he described as a process of "reverse engineering", he said that the Royal Court had adopted an artificial mechanism to get to the sentence it ultimately wanted. “If the Court is minded to proceed with the starting point approach, it should follow it through in a consistent way,” Advocate Steenson said. 

He argued that the starting points adopted by the Court – theoretical terms of imprisonment based on the seriousness of the offence which are then discounted to take account of the individual circumstances of a particular defendant – could not reasonably lead to the seven-year sentence his client received. 

Pictured: Advocate Steenson argued that Arthur's prison sentence should be reduced.

Although panel member Mr John Martin QC noted that “in this case nobody’s starting point was actually their starting point”, the Court of Appeal ruled that the Royal Court was not under any obligation to adopt such starting points. Since there were no sentencing guidelines, the Royal Court was entitled to look at other relevant cases for assistance and decide on sentence accordingly.

Advocate Steenson had argued that neither the prosecution, nor the Royal Court’s Superior Number, had taken full account of the mitigation available to Arthur - notably his guilty plea - in their calculations.  

However, he said that in seeking a six-year prison sentence after deducting a third for the guilty plea, it had effectively allowed only four months further discount for all the remaining mitigation, including giving evidence against a co-accused, the lengthy delay in bringing proceedings, the effect on Arthur’s family, the remorse he had expressed and the extent of compensation paid to the defrauded investors. 

In fact, the Superior Number had then increased the six-year sentence by a further year.  Without proper explanation of how this sentence related to the starting point, “it gives the impression of being arbitrary and perhaps even capricious”, said Advocate Steenson.

Pictured: Advocate Nuno Santos Costa appeared for the Attorney General.

Appearing for the Attorney General, Advocate Nuno Santos Costa told the Court that the purpose of the prosecution’s recommendations on sentence was simply to assist the Court and those recommendations took the totality of the offending into account. The reason for a notional starting point was to show that it had applied the deduction of one third for the guilty plea which had been agreed with the defence.

He accepted that, while starting points worked well with drugs offences, they were more difficult in relation to fraud cases which often involved different criminal activity over an extended period of time, and the possibility of a series of consecutive sentences.

However, their purpose here was merely illustrative. What was ultimately important was that the Court reached the right sentence and it was clear, he said, that the Jurats had taken the view that the circumstances of the case and the damage to the island’s reputation justified a seven-year sentence. The fact that this was more than the six years recommended by the Crown did not make it manifestly excessive.

The Appeal Court, presided over by Mr James McNeill QC, agreed and dismissed the appeal against sentence.