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Court Determines Custodial Sentence ‘not appropriate’ for Boxing Promoter in Mortgage Fraud and Money Laundering Case

A Scottish boxing promoter, Barry Hughes has won his appeal and had his prison sentence for mortgage fraud and money laundering quashed, after judges ruled that a custodial term was “not appropriate”.  

The Criminal Appeal Court determined that the appropriate penalty was financial and imposed a fine of £45,000 on Mr Hughes. Mr Hughes was given a prison sentence of three years and seven months after pleading guilty to two charges of fraud and two under the Proceeds of Crime Act 2002 in March this year.

The fraud charges related to the appellant applying for and obtaining loans of more than £1.2 million in his wife’s name, in order to buy two family homes in Bridge of Weir and Kilmacolm.  The charges under the Proceeds of Crime Act 2002 were related to money laundering charges for receiving £128,885 after selling the first property and spending £30,000 towards a Rolex watch.  

Mr Hughes exaggerated his wife’s income from her company, as being between £160,000 and £224,000 per annum – when the reality was that the business had ceased trading in 2003.  The appellant paid the loan instalments and following the sale of the Bridge of Weir house in 2007, the loan was paid off – incurring no loss to the lenders.  The loan for the Kilmacolm house continued to be paid.

It was argued that in each case there could have been no loss to the lenders because the amounts of the loans were substantially less than the values of the properties.I It was added that, in fact, the financial institutions had gained substantially in the form of interest payments of £70,000 and £300,000 in respect of each property.   

It was submitted on behalf of the appellant that a custodial sentence was “not appropriate in the circumstances” as there was no loss caused to the financial institutions lending the money. Also is was outlined that there could never have been any such loss as a result of the values of the loans relative to the properties concerned.   

It was also not disputed that Mr Hughes could have secured the loans in his own name, but that his intention had not been to defraud financial institutions, but to create a “substantial family home”.    Lord Carloway said:

“Having regard to the absence of any losses to the financial institutions concerned, and to the fact that no losses could have been sustained by these institutions given the values of the loans relative to the properties, the court is of the view that a custodial term was not appropriate. The appropriate penalty is a financial one. The court will, accordingly, substitute for the periods of imprisonment a cumulo sentence in respect of all charges of £45,000, which it calculates from a starting point of £50,000 and discounts for the limited early plea.”

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