Court reduces excessive social welfare fraud sentence to nine years, suspending one year for guilty plea.

THE COURT OF CRIMINAL APPEAL

Finnegan J.

Moriarty J.

Hogan J.

[2011 No. 178 CCA]

BETWEEN/

THE PEOPLE (AT THE SUIT OF THE

DIRECTOR OF PUBLIC PROSECUTIONS)

RESPONDENT

AND

PAUL MURRAY

APPELLANT

JUDGMENT of Mr. Justice Finnegan delivered on 27th February, 2012

This appeal against the severity of a sentence imposed in respect of social welfare fraud raises an issue of fundamental importance at

a time of crisis for the public finances. How should a sentencing court treat offenders who have defrauded the public revenue by

either engaging in unlawful tax evasion on the one hand or (as in this case) by making false social welfare claims on the other? Given

the intrinsic importance of such questions for the public weal - not least at a time of financial emergency - it seems appropriate that

this Court should now give some general guidance for future cases of this kind given that prosecutions for tax evasion and welfare

fraud are likely to be a more common feature of the criminal justice landscape in the years ahead than may have been the case

heretofore.

Before embarking on this exercise, it is necessary first to narrate the background facts to this application. The appellant, Mr. Murray,

was charged with one count of having a false passport, contrary to s. 20(1)(b) of the Passports Act 2008, and seventy four counts

of theft, contrary to s. 4 of the Criminal Justice (Theft and Fraud Offences) Act 2011. In respect of the theft offences Mr. Murray

stood charged that on various individual dates between 2006 and 2010 he dishonestly appropriated sums of money ranging from

€165.80 to €408.60 from the Department of Social Protection.

At a hearing before the Circuit Court on 21st July 2011 (His Honour Judge Anthony Kennedy), the appellant pleaded guilty to the false

passport charge (count 1), and to twenty five sample counts of social welfare fraud. The appellant received a prison sentence of

three years on the false passport charge and at the hearing before this Court counsel for the appellant, Mr. Byrne, fairly conceded

that that sentence was unobjectionable in principle. However, the appellant strongly objects to the severity of the sentence imposed

in respect of the twenty five sample fraud charges, since Judge Kennedy here imposed a sentence of 6 months in respect of count 2

on the indictment concurrent with the sentence imposed on count 1, followed by twenty four sentences of 6 months’ imprisonment,

all of them running consecutively to each other and concurrent to the sentence imposed on count 1. In sum, therefore, the appellant

received a sentence of 12 and one half years. The sentences were expressed to commence on the date he went into custody,

namely, 19th October 2010.

The appellant is now 63 years old. He is a former carpenter, but since 1995 he has treated Thailand as his adopted home. He lived

there with his partner in an apartment to which he contributed 40% of the purchase moneys. Over the last number of years the

appellant conceived an elaborate and sophisticated social welfare fraud, which was said by a very experienced investigating officer,

Ms. Patricia Mulloy, to be the largest fraud of its kind uncovered to date. During this period the appellant misappropriated sums of an

aggregate marginally less than €249,000 by making diverse claims for jobseeker’s allowance, disability allowance and supplementary

welfare allowance, in the name of nine different identities, including members of his own family.

The fraud originally came to light when staff at the Passport Office in Dublin received an application for a passport which had been

transmitted from the Embassy in Canberra. That application was in the name of a younger brother of the applicant. It was noticed

that a passport bearing these details had already been issued in that name in 2005. The file for that passport was checked and it

emerged that the picture on that passport was that of the appellant. The appellant held another (perfectly legitimate) Irish passport.

Further investigations revealed that the appellant had been receiving disability allowance in the name of that younger brother. The

records of the Department of Social Protection were then examined, and these showed that payments were made into several

different banks accounts in the name of either the appellant or one of his siblings, which the appellant had opened using false identity

documents such as driving licences. It is important to stress here that the appellant simply stole the identities of his brothers and

that they are completely innocent parties so far as this fraud is concerned. Insofar as remorse was expressed by the appellant in the

course of investigations, it appeared limited to the distress occasioned to those family members.

The appellant was arrested by Garda Peter Kelly when he presented and signed a claim form for jobseekers’ allowance in the name of

one of his brothers at a social welfare office in October 2010. Following a search of his van, a large variety of false identity

documents were uncovered. These included social services cards issued by the Health Service Executive, welfare cards for both

jobseekers and disability payments, bus passes, medical cards and false British driving licences issued in various different names. A

false British passport, bearing the appellant’s photograph, but which had been issued in the name of one of the appellant’s brothers,

was also found. These identity documents had been deployed by the appellant, so to speak, in prêt-à-porter style to suit the

occasion or, perhaps it would be more correct to say, the social welfare office he was attending at any given time.

The appellant resorted to a variety of different plans and schemes to achieve his ends. He admitted to Gardai that many of the false

documents - specifically false British driving licences and a false British passport - had been purchased in Thailand on the black

market. The false British licences all bore the correct dates of birth for the correct individuals whose identity had been

misappropriated by the appellant. To this end the appellant identified persons who he knew had emigrated permanently from Ireland.

He then obtained their birth details and other details, such as their mother’s maiden name. Armed with this information, he then went

to the office of the Registrar of Births, Marriages and Deaths and, following the payment of a small fee, obtained the relevant birth

certificate of that individual. These birth certificates were then presented to the Department of Social Protection and, of course,

immediately lent an air of verisimilitude to the applications in question.

The appellant’s fraudulent scheming did not stop at this. While he himself had a genuine disability in his right arm, he exploited this by

going to three different medical practitioners, using three different aliases, to procure three different medical certificates which were

then used to procure three different disability claims.

While the disability payments were paid directly into bank accounts, it was necessary for the appellant to return to Ireland from

Thailand every three months to keep alive his various claims for jobseekers allowance and social welfare supplementary benefit in the

various different aliases. It was on one such return to Ireland in October 2010 that the applicant was arrested.

To the applicant’s credit, he immediately made admissions to the Gardai and co-operated with them in every way possible. He also

pleaded guilty at a relatively early stage, saving the prosecution the considerable time and expense involved in what would otherwise

is likely to have been a lengthy and complex fraud trial. On the debit side, however, quite apart from the sustained and egregious

nature of the fraudulent conduct (a topic to which we will shortly return), it appears that only some €11,151 of the misappropriated

moneys have been repaid. Further reparation seems unlikely, it being indicated that no recompense from his interest in the Thailand

property was envisaged. It should also be noted that the appellant has a previous conviction for social welfare fraud in the United

Kingdom, and he served a sentence remitted to almost 12 months’ imprisonment, in that jurisdiction between 1993 to 1994.

The principle of proportionality and the totality principle

Counsel for the appellant, Mr. Byrne, strongly urges that the overall effect of the consecutive nature of the latter twenty-four

individual sentences of six months is so severe as to be excessive, and that it breaches the totality principle. The totality principle is

really but a sub-set of the wider proportionality principle. It ensures that sentencing is somewhat more than an abstract arithmetical

exercise by providing that, in the case of multiple offending, the overall sentence imposed is proportionate to the moral delinquency of

the offender. It is true that a sentence of six months’ imprisonment might well have been justified in the case of each count of fraud

when that single count is looked at in isolation. It does not at all follow, however, that, just because the appellant has been

convicted on twenty four other rather similar counts, the sentence imposed should then come to twelve years and six months.

In our view, such a sentence for these offences would infringe the totality principle. Leaving aside the case of persons convicted of

serious drugs offences - offences which are, in some respects, at least, sui generis - a sentence of this gravity is generally reserved

for serious offences against the person, such as manslaughter, rape, serious assault and false imprisonment or aggravated burglary

offences. While the latter offence overlaps with the offences of theft and robbery, the reason it is treated so severely by the law is

because of the fact that the victims have generally been terrified in the process and by reason of the long term impact which such

offences have on the peace of mind of the persons affected. In that respect, burglary is in truth regarded as an offence which is

more akin to an offence against the person than a pure theft offence simpliciter.

We do not, of course, underestimate for a moment the impact which theft and fraud can have on the victim. Quite independently of

the financial impact (which may be considerable and life altering), the victim’s sense of betrayal and breach of trust may have far-

reaching psychological consequences which, when not permanent, may well be long-lasting.

But serious offences against the person - involving as they do the unlawful use of violence - are nearly always in a separate category

of offending, involving as they do moral delinquency of a high order. In recent weeks this Court, for example, has had to deal with

offences ranging from the penetration of a seven year old girl by her father, the false imprisonment of an elderly couple in the course

of an aggravated burglary which involved elements of unusually cruel and sadistic violence, the slashing and permanent disfigurement

of an innocent young man who was callously left to fight for his life by his assailant to the repeated kicking of a victim lying prostrate

on the ground by multiple assailants over several hours until he lapsed into a coma and died.

Offences against the person of this kind accordingly involve an affront to human dignity, a key constitutional objective protected by

the Preamble to the Constitution, a violation of the integrity of the person (Article 40.3.2 of the Constitution) and, as often as not, a

violation of the dwelling (Article 40.5 of the Constitution): see generally the discussion of this topic for this Court by Hardiman J. in

The People (Director of Public Prosecutions) v. Barnes [2006] IECCA 165, [2007] 3 I.R. 130 at 144-149. These considerations must

weigh heavily with any sentencing judge. In the case of offences involving public revenue - such as taxation offences and social

welfare fraud - the level of moral delinquency will not often approach that particularly elevated level, although, of course, it can do

so.

This is not at all to suggest that crimes involving the loss of public revenue are somehow victimless crimes. Quite the contrary:

offences of this kind strike at the heart of the principles of equity, equality of treatment and social solidarity on which the entire

edifice of the taxation and social security systems lean. This is especially so at a time of emergency so far as the public finances are

concerned.

The collapse of US investment firm Lehman Brothers in September 2008 triggered the onset of a global financial crisis which, in turn,

has ushered in a contraction in our economy which is unparalleled in living memory. Faced with enormous demands on the public purse

from the associated banking collapse and a continuing structural public deficit, the State has struggled during this period with a series

of fiscal emergencies. To their great credit, the Irish people have as a consequence stoically endured significant taxation increases,

reductions in social security payments and retrenchment at all levels in the provision of social services, as the State endeavours to

restore an equilibrium in the public finances.

All of this calls for a high level of social solidarity. We have seen from elsewhere how widespread tax evasion by the wealthy and well-

to-do can gravely threaten social solidarity and, as a consequence, the very stability of a state itself. That solidarity would also be

gravely endangered if taxpayers were led to believe that social security fraud was rampant or that, when detected, it would not be

dealt with severely. By the same token, social security fraud impacts heavily on those who are most in need, since, by definition, it

saps public confidence in the system and, of necessity, erodes the total sums available for the needy and those genuinely reliant on

such payments.

As an Irish passport holder, the appellant owed a “fidelity to the nation and loyalty to the State”: see Article 9(2) of the Constitution.

Especially in a time of fiscal emergency, that fidelity and loyalty demanded that this social solidarity be respected. The appellant’s

widespread, persistent and systematic fraud of the social security system set that fidelity and loyalty at naught. As such, his

conduct was gravely wrong and the sentences to be imposed must reflect this consideration.

In the case of offences involving the public purse, deterrence plays an important value in the sentencing process. In the context of

frauds upon the public revenue, deterrence is an important consideration, in that it is a necessary quid pro quo of social solidarity. It

gives an assurance to the hard-pressed bona fide taxpayer that the State will both collect and distribute its revenue fairly and that

those who defraud will be sternly dealt with. Some element of severity is necessary to ensure that taxpayers will pay the State what

has been deemed by law to be properly due and to assure those who rely on social security payments that public support for the

needy will not be undermined by an official culture which either turns a blind eye to those who commit illegal tax evasion on the one

hand, or social security fraud on the other,or which is indifferent to these consequences.

We therefore suggest for the future guidance of sentencing courts that significant and systematic frauds directed upon the public

revenue - whether illegal tax evasion on the one hand or social security fraud on the other - should generally meet with an immediate

and appreciable custodial sentence, although naturally the sentence to be imposed in any given case must have appropriate regard to

the individual circumstances of each accused.

In the case of the present offender, we repeat that we consider an overall effective sentence of over twelve years to infringe the

totality principle. Given, however, the egregious and systematic defrauding of the public revenue which took place over a long period,

his culpability is nonetheless considerable. The fact that he stole the identities of his siblings (and those of other persons) and has

caused them not inconsiderable embarrassment and inconvenience must also be regarded as an aggravating feature, as must the fact

that he has a similar conviction for an identical offence, albeit that this conviction was imposed by the British courts and not by the

courts of this jurisdiction. The fact that important public documents - such as passports and driving licences - were falsified in aid of

this fraud is also a further aggravating factor. We are nonetheless mindful of Mr. Byrne’s argument on behalf of the appellant that,

while a sentence of some magnitude is acknowledged as inevitable, such a sentence should not, particularly in light of what even

anecdotally appears to be a measure of the latitude accorded historically as a matter of sentencing policy relating to fraud and

embezzlement offences, be of so condign and exemplary nature and duration as to work injustice in this individual case.

We therefore consider that, as a starting point, the overall effective sentence should be one of nine years. We propose to measure

this by imposing a sentence of three years in respect of three sample counts, namely count 2 (an offence dating from 2006), count 4

(an offence dating from 2008) and count 21 (an offence dating from 2010). These offences will be consecutive to each other. We

affirm the three year sentence in respect of the passport offence (count 1), but direct that this will run concurrently with count 2. All

the other offences will be taken into account.

Credit must, however, be given to the accused for his plea of guilty and for his full co-operation with the Gardai. Thus, for example,

he disclosed the existence of his various identity cards which were hidden in his van. Furthermore, by his plea of guilty, the State was

spared the expense of what would otherwise have been a lengthy and complex fraud trial. We propose to mark this mitigating factor

by suspending the final year of the three year sentence imposed in respect of count 21.

It follows, therefore, that this Court allows the appeal in respect of the sentence imposed by Judge Kennedy. We propose instead to

impose an overall sentence of nine years, while suspending the final year of that sentence on condition that the appellant keeps the

peace and remains of good behaviour in his own bond in the sum of €200.