Six of one, half a dozen of the other

THE spectacle of high-flying businessmen appearing in court charged with large-scale fraud has become a familiar feature of modern British life. In the last financial year (1993-1994) the Serious Fraud Office had 48 active cases, involving alleged fraud of pounds 5bn - an average of pounds 100m per case. Yet the spectacle of high-flying businessmen being sentenced to exemplary stretches in prison - or even being successfully prosecuted - does not appear to have become more common at all.

At the other end of the scale of justice, there is better news. Petty financial impropriety is increasing (last year, the DSS detected improper claims worth a record pounds 654m), but society's response has been firm. The sums involved tend to be small: the 7,645 people convicted of defrauding the DSS last year had taken an average of pounds 850 each, while the average sum involved in cases of cheque and credit card fraud is about pounds 500 per card used fraudulently. But the punishments meted out for such small-scale financial misdemeanours have been consistently uncompromising: last year, 23,000 people were jailed for financial offences involving a total of just pounds 8m. Most of these cases involved misdemeanours such as failure to pay fines, failure to pay council tax, even failure to pay for television licences (845 cases). The average sentence was two weeks' imprisonment. In eight out of 10 cases, the cost of imprisonment exceeded the outstanding fines.

The relationship between money and justice is a perplexing one. The British legal system is arguably the least corruptible in the world; yet the rich are consistently better served by it than the poor - especially when allegations of financial impropriety are involved. It would be simplistic to conclude from the 12 case histories shown here (some of which omit certain details to disguise identities) that any of the individuals concerned has been treated more leniently - or more harshly - than he or she deserves. Yet taken together they do not exactly encourage the belief that we are all equal in the eyes of the law. Are we? Consider the evidence, and reach your own verdict.-

TERRY RAMSDEN

BACKGROUND Forty-year-old former insurance clerk whose success as a securities dealer once made him Britain's 57th richest person. Notorious gambler, with losses on the turf approaching pounds 60m. His company, Glen International, ceased trading at the end of 1987 with debts of more than pounds 90m. He fled to the USA but was arrested in Los Angeles in 1991, returned to Britain in 1992 and was tried and sentenced in 1993.

CHARGES Originally faced 22 charges, including obtaining properties by deception, dishonestly inducing creditors to wait for payment and false accounting.

TRIAL Court proceedings began at the Old Bailey in February 1992; sentence was passed in November 1993. In between, prosecution and defence had to sift through some 13,000 pages of documents. Ramsden eventually pleaded guilty to four of the charges - of fraudulently inducing investors to invest pounds 90m in Glen International - and the remainder were dropped. Sentence: two years' imprisonment, suspended.

COMMENTS Judge Henry Pownall: 'Normally offences of this sort warrant a sentence of . . . imprisonment. But justice can be done in this case with a term of imprisonment suspended.'

MEDICALLY CHALLENGED? Received treatment for depression during trial. The judge cited medical reports and 'moving' letters from friends and colleagues as mitigating factors.

LONG-TERM LOSSES His pounds 1.3m Blackheath mansion, his other homes, his Ferrari, his jet, his 75 racehorses, his wife. Is still personally bankrupt (for pounds 25m), and was re-arrested last year in connection with alleged offences connected with this bankruptcy. On the other hand, no charges are expected in connection with his involvement in Bestwood (see Tony Cole, right), for which he was censured in a recent DTI report. Lives in Wapping, reputedly on the charity of friends.

ROGER SEELIG

BACKGROUND Flamboyant pounds 200,000-a-year corporate finance director at Morgan Grenfell, for which he worked from 1971 until 1986. Known as 'Mr Gucci Shoes'. Resigned in 1986 at beginning of inquiry into Guinness's abortive take-over bid for Distillers. Now aged 49.

CHARGES Four charges of fraud and false accounting in connection with the Distillers bid.

TRIAL Tried at the Old Bailey alongside Lord Spens in 'Guinness 2'. Represented himself, citing the impossibility of obtaining legal aid on acceptable terms as his reason for resisting the judge's urgings to obtain legal representation. However, pounds 400,000 of his legal costs were paid from the public purse. Trial began September 1991; abandoned February 1992, on the grounds that Seelig was no longer capable of conducting his own defence adequately; and that, if it continued, he might 'do something irrevocable'.

COMMENTS Mr Justice Henry described Seelig as 'a man at the end of his health, bewildered at his loss of control and his inability to think straight, wondering whether his medication rather than his mental state is to blame, recognising that he seems to have gone funny yet insisting that he was all right and could go on'. 'I really wanted an acquittal,' said Seelig, 'and I'm deeply disappointed at not achieving that through lack of physical stamina.'

MEDICALLY CHALLENGED? Received treatment for depression during trial. Presumably he has not yet recovered, as the charges against him could theoretically be reactivated if he ever again became fit to stand trial.

LONG-TERM LOSSES His job at Morgan Grenfell; a certain amount of dignity. But his long-term prospects seem good. He was already doing consultancy work while his trial was going on. And last year he was appointed a director of Norman Hay, the metals and processing group.

TONY COLE

BACKGROUND Forty-three-year-old former chairman of Bestwood, the property and financial services mini-conglomerate which collapsed in April 1990. An archetypal Essex man with no professional qualifications, Cole was left owing hundreds of thousands of pounds by the 1987 stock market crash. Then he tried to deal his way out of trouble. Following a four-year investigation by the Serious Fraud Office and the Department of Trade and Industry, he admitted having misappropriated more than pounds 700,000 from Bestwood and its pension fund to finance his share dealings.

CHARGES 24 charges, including theft, false accounting and perjury.

TRIAL Cole originally pleaded not guilty to all the charges, but changed his plea on eight counts on the morning of his trial at the Old Bailey in April 1993, prompting the prosecution to drop the other charges. He was given two suspended sentences: 18 months for dishonestly authorising loans of pounds 1.2m to himself from two subsidiaries of Bestwood and hiding the disappearance of pounds 262,000 from a third subsidiary's pension fund; and two years for lying to Bestwood's auditors and perjuring himself. He was also disqualified as a company director for 10 years.

COMMENTS Judge Henry Pownall: 'You must have known that you should not have done what you did . . . I am satisfied that inside you were something of a mess, as Dr Fox (Cole's therapist) put it . . . there are exceptional circumstances which would justify those sentences being suspended.'

MEDICALLY CHALLENGED? Received treatment for depression during the investigations.

LONG-TERM LOSSES His business, his wife, his reputation. Was censured, along with Terry Ramsden (see left), in a DTI report into Bestwood's affairs in January this year, which detailed how he injected 'artificial profits' into Bestwood. No further charges will be brought, though.

ERNEST SAUNDERS

BACKGROUND Fifty-eight-year-old former pounds 350,000-a-year chairman and chief executive of Guinness. Famed for his ruthlessness; known as 'Deadly Ernest'. Sacked in January 1987 shortly after the beginning of the inquiry into Guinness's attempted pounds 2.7bn takeover of Distillers in 1986, having been implicated in a variety of financial malpractices associated with the bid.

CHARGES With his co-defendants faced 29 charges including theft, conspiracy and false accounting.

TRIAL At Southwark Crown Court. Lasted 107 days, from April to August 1990, at an estimated cost to the taxpayer of pounds 20m; the subsequent appeal lasted from April to May 1991. Saunders spent all his savings on his defence in the first part of the trial; thereafter he received legal aid. He was found guilty on 12 counts (one overturned on appeal). His sentence, to five years' imprisonment, was halved on appeal (partly on the grounds that he was suffering from pre-senile dementia 'of the Alzheimer's type'). He spent only 10 months in prison, mostly in Ford open prison.

COMMENTS Mr Justice Henry (at the trial) referred to 'dishonesty on a massive scale'; Lord Justice Neill (at the appeal) agreed, but said that his sentence was 'substantially too high'. 'I would like to think that there is a contribution I can make to industrial and commercial life and I hope that my health in due course will permit me to do so,' Saunders said after the appeal.

MEDICALLY CHALLENGED? Pre-senile dementia (but seems to be recovering).

LONG-TERM LOSSES His job; his savings; his mansion; his wife; but probably not his prospects. He has been working as a lecturer and a consultant and recently received a pounds 150,000 pension settlement from Guinness. Hopes that his conviction will be overturned by the European Court of Human Rights.

ROGER LEVITT

BACKGROUND Former insurance salesman (and trainee manager at Marks & Spencer) of humble East End origins. Founder and former chairman (and principal shareholder) of the Levitt Group, which helped him to become one of Britain's 200 richest men (and even a benefactor of Oriel College, Oxford) but which collapsed in 1990 with debts of pounds 34m. Forty-four years old. Declared bankrupt in December 1990, with claims against him totalling pounds 65m. The Serious Fraud Office was called in shortly afterwards.

CHARGES 21 charges of fraudulent trading and deception.

TRIAL Expected to last months when it began in November 1993 at Southwark Crown Court. Then, two days into the trial, Levitt and his co-defendant, Mark Reed, changed their pleas to guilty on one relatively minor charge: fraudulent trading with intent to deceive; whereupon the other charges were dropped. Levitt was sentenced to 180 hours' community service (maximum possible sentence: seven years' imprisonment) and disqualified from acting as a company director for seven years. The cost of the trial to the taxpayer was pounds 1.4m.

COMMENTS Mr Justice Laws described Levitt as 'thoroughly and markedly dishonest' but also cited 'the support . . . of very distinguished businessmen' as a 'substantial mitigating factor'. Levitt said: 'British justice was seen to be done. I think I was most unlucky to lose a pounds 150m business . . . You can be assured I'll be back in business . . . I am now going to get as drunk as I can.'

MEDICALLY CHALLENGED? No.

LONG-TERM LOSSES Moderate. Had to relinquish his Highgate mansion but lives in his wife's pounds 750,000 north London house. Was discharged from personal bankruptcy at the end of last year, although he remains disqualified from being a director for another seven years. Has claimed that he hopes to work as a vacuum-cleaner salesman.

NAZMU VIRANI

BACKGROUND Left behind a multi-million-pound property empire when expelled from Uganda by Idi Amin in 1972; built a new one in Britain, heavily supported by Asian investors, who voted him Asian Businessman of the Year in 1990. Amassed a fortune worth pounds 110m. Then, in return for cash payments of more than pounds 1m, loans for his businesses and a pounds 36m investment in his master company, Control Securities, he became involved in helping the now-defunct bank, BCCI, to convince bank regulators that it was solvent when it wasn't. When BCCI collapsed, with more than dollars 10bn unaccounted for, the Serious Fraud Office moved in and 46-year-old Virani was arrested.

CHARGES 14 charges including false accounting, conspiring to defraud BCCI and furnishing false information to BCCI's auditors.

TRIAL Lasted three months, at the Old Bailey; ended in May 1994, having cost the taxpayer pounds 2.2m. Virani was found guilty on seven counts of giving false information and one of false accounting but was cleared of conspiracy to defraud and theft. Sentence: 30 months' imprisonment.

COMMENTS His defence counsel said that he was an 'innocent pawn'. Mr Justice Hutchinson said: 'I cannot exclude the possibility that you were the brick in the wall that kept this edifice standing.' He added that 'the eloquent and useful' submissions from Anthony Scrivener QC, his defence counsel, and character testimony from, among others, Sir David Steel and Paddy Ashdown, had encouraged him towards leniency.

MEDICALLY CHALLENGED? No.

LONG-TERM LOSSES His loans from BCCI exceed his personal assets, and he is therefore insolvent. However, his pounds 800,000 home in south-west London was transferred into his wife's name in 1992. Nor has he been disqualified as a director, which, as the judge said, will help him to rebuild his business career on his release.

MRS V

BACKGROUND A 29-year-old geriatric nurse from Middlesex. Has a history of alcoholism, unemployment and homelessness. Left her first husband, who abused her, in 1987, but handed her daughter back to him two years later; attempted suicide in 1991; remarried in 1992, and gave birth prematurely to a second child, whom she gave up for adoption. Living in temporary accommodation, she found work in a pub, from which she stole pounds 3,000.

CHARGES Theft, handling stolen goods (a stolen cheque book and guarantee card, given to her by an acquaintance), 17 counts of obtaining by deception (she used 17 of the stolen cheques to buy alcohol) and attempted deception (she was caught trying to buy alcohol with one of the stolen cheques).

TRIAL Tried in Middlesex Crown Court in December 1993. Found guilty on all charges. Sentenced to 12 months' imprisonment.

COMMENTS 'A 12-month probation order with a condition to attend the Alcohol Related Offending Programme would restrict her liberty and address the need for rehabilitation and the prevention of further offending,' said the probation officer. 'The theft was carried out when you were in a position of trust . . . only custody can be justified,' said the judge.

MEDICALLY CHALLENGED? Chronic alcoholic. Also suffers from depression.

LONG-TERM LOSSES Shortly before her trial, Mrs V and her husband were offered permanent accommodation. Her life had begun to stabilise, and her former husband was allowing her to visit her daughter regularly. She had agreed to attend an alcohol rehabilitation programme. She has lost the flat, the place on the rehabilitation programme, and the chance to rebuild her relationship with her first daughter. On her release, she will still be unemployed and homeless.

MR B

BACKGROUND A 42-year-old man with two children, aged seven and 11. Living in Manchester in rented accommodation, he found it impossible to make ends meet on state benefits. He is an unemployed graphic artist; his wife is an unemployed nurse, unable to work because of a back injury. In 1989, Mr B forged a rent book and a letter from an imaginary landlord, claiming that his rent was pounds 105 per week (it was, in fact, only pounds 68). In 1992, he started working as a mini-cab driver. His earnings were erratic (averaging around pounds 70 per week) and he didn't realise that he could continue to claim family credit to supplement his low income. Believing that the alternative was dire poverty, he continued to claim fraudulently. His family's total weekly income, including his earnings and the defrauded money, was now pounds 275.40 per week. His claim was investigated in 1993, when the local authority received an anonymous phone call tipping them off.

CHARGES False representations for obtaining benefit. He defrauded a total of pounds 7,740 housing benefit and pounds 3,000 income support over a four- year period. However, given that he was entitled to some family credit once he had started work, the net loss to public funds was considerably less.

TRIAL Found guilty in a Manchester Magistrates' Court in December 1993 and sentenced in January 1994 to three months' imprisonment.

COMMENTS 'These offences were committed in the context of Mr B's ignorance of the benefits due to him. It was an unsophisticated crime . . . A probation order would enable Mr B to have debt counselling,' said the probation officer. 'Given the seriousness of this offence, its duration, and the large amount of money involved, I can see no realistic alternative to custody,' said the judge.

MEDICALLY CHALLENGED? No.

LONG-TERM LOSSES His good character; his job; his employment prospects.

MRS C

BACKGROUND Thirty-nine-year-old single mother, living in Essex. In 1992, after six years' employment with a travel company, she was made redundant, with only one month's notice, no pay-off and the prospect of surviving, with her 11-year-old daughter, on pounds 165 a week in child maintenance and benefits. Bitter and desperate, she kept the company cheque books, cashing 17 cheques over the following five months (15 of which were for personal gain). In total, she defrauded the company of pounds 16,000. When caught, she offered to repay pounds 5,000 immediately, with further repayments to follow.

CHARGES Theft, and six counts of false instrument with intent.

TRIAL She was arrested in August 1993, tried in Chelmsford Crown Court, and found guilty. She asked for 11 other related offences to be taken into consideration. In February 1994 she was sentenced to nine months' imprisonment.

COMMENTS 'The process of going through the courts has left a deep impression upon the defendant and proved a chastening experience . . . If imprisoned, the defendant's husband would be unable to resume care of their daughter as his job involves protracted periods overseas . . . There is no . . . high potential for reoffending. A lengthy Community Service Order may be considered appropriate,' said the probation officer. 'This was a most serious breach of trust . . . The offence is so serious that only a custodial sentence can be passed. I take into account your loss of good character . . . You have a young daughter and I have scaled down the offence as much as I can,' said the judge.

MEDICALLY CHALLENGED? No.

LONG-TERM LOSSES The care of her 11-year-old daughter. Her good character - Mrs C had no previous convictions. Her future employment prospects are particularly poor.

MRS Y

BACKGROUND A 38-year-old married woman from Kingston who for many years helped her husband to manage a lottery on behalf of a local authority, even after their divorce. In 1990, her ex-husband was imprisoned for an unconnected offence, and Mrs Y took over his job. Later that year, Mr Y was diagnosed as having terminal cancer, and was allowed short releases from custody. Mrs Y began to take money from the lottery fund, using it to pay for outings for herself, her ex-husband and their two teenage children. Mr Y died in custody in 1991, but Mrs Y continued to steal from the fund - about pounds 50 a time. She spent it on presents for the children and, increasingly, on alcohol. She was made redundant from her main job, as a BT operator, in 1992, and has been unemployed and living on sickness benefit ever since. She has debts of pounds 9,500.

CHARGES Theft (altogether, she took some pounds 10,000 from the lottery fund).

TRIAL Tried and found guilty in February 1994; sentenced to 12 months' imprisonment.

COMMENTS 'The context of her offending is one of mental ill-health . . . Custody would seem likely to cause a deterioration in her mental health . . ,' said the probation officer. 'The seriousness of the offence was aggravated by the fact it was committed over a period of years by a person in a position of trust, and by the fact a large amount was stolen,' said the judge.

MEDICALLY CHALLENGED? A history of mental instability, agoraphobia, depression, anxiety and alcoholism. In the year prior to her trial, Mrs Y made three suicide attempts. After sentencing, the prison officer confiscated her medications (for stress and anxiety) for her own safety.

LONG-TERM LOSSES Her good character; her psychiatrist; her employment prospects; and her 14-year-old son, who is now cared for by Mrs Y's 21-year-old daughter.

MS X

BACKGROUND An unemployed 20-year-old from Berkshire who was thrown out of her parents' house in early 1993 after they learnt that she was two months pregnant. Her sister took her in, and shortly afterwards some acquaintances who felt sorry for her gave her a stolen cheque book and card. She was caught attempting to use these to buy clothes for herself and her unborn baby worth pounds 91.91. She was heavily pregnant when arrested.

CHARGES Two counts of receiving stolen goods and one of attempted deception.

TRIAL Magistrates' Court proceedings began in November 1993; sentence was passed in December 1993. Mrs X was found guilty on both counts and sentenced to 56 days' imprisonment. (This was reduced on appeal to a 12-month conditional discharge, but by then Mrs X and her three-month-old baby had already served eight days - including Christmas Day - in Holloway, bail having been refused pending the appeal.)

COMMENTS The probation officer praised her 'commitment to parenthood', adding: 'She now has a level of maturity and responsibility to make better informed decisions for the future and the risk of further offending is, in my view, slight . . . It is my view that, with regard to the mitigating circumstances and her previous good character, the Court could effectively deal with Ms X by an Order of Conditional Discharge.' The judge disagreed: 'This offence was so serious, I can give nothing but custody.'

MEDICALLY CHALLENGED? No, although she was pregnant and frightened when the offences were committed.

LONG-TERM LOSSES Her good character - Ms X had no previous convictions. Her flat (shortly before her trial, she had finally managed to secure a rented flat, where she was living with her baby on benefits of pounds 67 per week).

MR P

BACKGROUND Mr P had meningitis as a child, which left him brain-damaged. Today, at 39, he cannot read or write and has a very poor memory. He is unemployed and lives with his sister on a Wolverhampton housing estate. His only income is his weekly pounds 56.70 invalidity benefit. In January 1993 he was taken to court for non-payment of council tax worth pounds 250 and was ordered to pay pounds 10 per week. He made two payments but forgot to make any more. In May 1993, he was ordered to attend a second hearing. It is not clear how he got to court. He could not have read a summons, cannot use public transport unaided, and could not walk, owing to the recent removal of a cancerous growth from his foot. His sister believes that he was taken by a warrant officer.

CHARGES Defaulting on council tax payments worth pounds 250.

TRIAL Held at Wolverhampton Magistrates' Court in May 1993. Mr P had no legal representation in court (there is no legal aid for council tax defaulters). He was found guilty and sentenced to 28 days' imprisonment. After six days he was released on bail pending a judicial review (council tax defaulters have no right of appeal), and the High Court eventually overturned the sentence, ruling that it was 'unreasonable'.

COMMENTS 'You have made no attempt whatsoever to discharge your financial obligations,' said the magistrate. 'He just sat and cried for six days,' said Mr P's cell mate at Birmingham's Winson Green high-security prison.

MEDICALLY CHALLENGED? A serious mental handicap; continuing problems with the cancerous growth on his foot.

LONG-TERM LOSSES Trauma to him and to his family. While he was in prison, his family had no idea where he was; they had reported him missing to the local police - the same station that took him to jail - and were frantic with worry.