Two individuals were sentenced on Friday for their involvement in the SFO’s Arck LPP investigation.
Arck LLP was described as an “elaborate scam” which defrauded investors, in some cases of life savings and pension funds. Two individuals plead guilty to charges under the Fraud Act 2006. A charge of forgery remains on file.
There are three interesting observations about the case:
- The prison sentence handed down to one defendant, Richard Clay, was 10 years and 10 months in custody after a guilty plea. This perhaps illustrates that the 14 year sentence handed down to Tom Hayes, the defendant convicted in the first Libor Trial, does not seem to be out of line with the current sentencing in serious fraud cases. It is the third sentence in excess of ten years to be passed this year against individuals convicted in SFO cases, following Libor and Weavering.
- The Director of the SFO made reference to “a pernicious fraud that robbed people of their life savings and pension funds”. Under the new sentencing guidelines for serious fraud cases, the harm caused by the fraud is an important factor in determining sentence.
- Another defendant, Kathryn Clark, co-operated with the SFO by entering into a Serious and Organised Crime and Police Act (SOCPA) agreement. This was the process that Tom Hayes commenced but subsequently withdrew from. The co-operating defendant received a suspended sentence. The contrasting sentences given to Hayes and Clark will no doubt lead to some careful consideration by those currently being investigated and prosecuted for serious fraud and business crime offences.
Practical Law David Bacon