20150804 Putting Hayes where the sun won’t shine doesn’t help Compliance and Risk Officers

Tuesday, 4 August, 2015 – 00:00

In terms of sentencing in English law, there is, in effect, an upper figure. Murder is generally subject to a life term, but convicts are released “on licence” – some earlier than later but, if they are going to be released at all, rarely more than 14 years. The maximum sentence for theft, robbery, money laundering, terrorist financing is, in each case, 14 years per count.

Unlike the USA which imposes sentences that run several hundred years after the lifetime of the convict, UK courts rarely impose consecutive sentences where long terms are called for. This is especially so in the case of white collar criminals who, in the UK, are generally treated very gently. And then chunks of the sentence are often suspended.

Tom Hayes is the criminal who has broken that mould.

It is hard to know whether the crimes of Hayes are regarded with such seriousness by the sentencing judge, HH Cooke, J, when delivering his reasons on 3rd August, because Hayes, and his conspirators, mounted an attack on the entire financial system or because, at last, courts are beginning to see fraud and related offences with the appropriate level of seriousness. It is improbable that Hayes will not appeal, even though the Judge provided for release on licence – with no minimum period to be served served (“you will serve up to half your sentence in custody” not “you will serve at least half your sentence.”) I have asked His Honour Cooke, J if he “mis-spoke” but as at the time of writing I have not received a reply.

Cooke, J pulled no punches : his first paragraph of his sentencing was as follows:

“The sentence I am imposing is one of 14 years in all.
a) on counts 1-9, 9 years and six months, concurrent on each count.
b) on counts 5-8, bearing in mind totality, 4 years six months on concurrent on each count, but consecutive to Counts 1-4 making 14 years in all.”

So there it is, plain for all to see, the Judge sentenced Hayes to the maximum he could, under the guidelines that he is required to adhere to.

Cooke, J made it plain that Hayes fully understood what he was doing and that it was dishonest. He conspired with others who also understood the dishonesty and he used “subtle and surreptitious means” so that others who would not otherwise have taken part became involved.

All of that seems very straightforward; but there are depths that, when plumbed, raise serious questions for financial crime risk and compliance officers.