Gould, R. v

Factual and Procedural Background

On 30th May 2023, in the Crown Court at The City, the Appellant was sentenced to a total of 11 years' imprisonment composed of three consecutive sentences: six years for count 1 (conspiracy to defraud), four years and two months for count 2 (conspiracy to defraud), and ten months for contempt of court due to breach of a Restraint Order. The Appellant had pleaded guilty to the conspiracy counts in January 2023 after two prior trial dates were vacated owing to the pandemic and court availability issues. The contempt was admitted in August 2021.

The Appellant applied for leave to appeal the sentences. Although entitled to appeal the contempt sentence as of right under section 13 of the Administration of Justice Act 1960, the application was three days late. The single judge refused to extend time due to lack of merit in the appeal grounds. However, the court granted a three-day extension due to unforeseen prison transfer delays, requiring consideration of the contempt sentence on its merits. The appeal against the conspiracy sentences was renewed for substantive consideration.

The Appellant was represented by Attorney Bowers KC and Attorney Dacey. The respondent prosecutor was Attorney Groome. The case involved a complex fraud operation centered on an internet streaming service called Flawless Hosting and its successors, which unlawfully provided pay-TV content without consent or payment to legitimate broadcasters.

Flawless Hosting operated from August 2016 to May 2018, copying pay-TV broadcasts primarily in the UK and other English-speaking countries and supplying them to up to 60,000 subscribers, generating approximately £4.6 million in revenue. The Appellant played a leading role, managing finances, strategic decisions, and the technical copying of content. The operation employed about 25 people and was sophisticated in its methods.

Count 1 related to the period August 2016 to May 2018. Count 2 covered May 2018 to July 2021, during which the service evolved into successor entities with altered operational methods, including payments via re-sellers and Bitcoin. The turnover for this successor service was around £2.6 million. The fraudulent activity was technically sophisticated and adapted to avoid injunctions obtained by legitimate broadcasters.

The Appellant breached a Restraint Order imposed after his 2018 arrest by failing to disclose accounts and dissipating funds exceeding permitted living expenses, totaling £181,838.28. The prosecution case was detailed and involved multiple co-accused, with the Appellant accepting the factual basis for sentencing.

The sentencing judge found high culpability, significant planning, and sustained offending. Loss was categorized as category 1 harm, with financial loss far exceeding £1 million. Mitigation included the Appellant’s good character and mild mental health disorders. The judge reduced sentences for guilty pleas and mitigation, ultimately imposing a just and proportionate total sentence of 11 years.

Legal Issues Presented

1. Whether the calculation of loss for the conspiracy to defraud offences was correct in principle and appropriately applied by the sentencing judge.
2. Whether the two counts of conspiracy to defraud represented separate criminal agreements warranting consecutive sentences, or a single course of conduct requiring concurrent sentences under the Sentencing Council Totality Guideline.
3. The appropriateness of the sentence imposed for contempt of court in breach of the Restraint Order.

Arguments of the Parties

Appellant's Arguments

• The calculation of loss was incorrect as the prosecution failed to prove injury to proprietary rights required for conspiracy to defraud, referencing R v Barton and Another. The judge should have recognized only a risk of loss, reducing harm categorization.
• The two conspiracy counts were not separate agreements but a single continuous course of conduct with evolving methods, thus consecutive sentences were inappropriate and concurrent sentences should have been imposed under the Totality Guideline.
• The overall sentence was excessive, exceeding maximum penalties for a single offence and lacking victim impact warranting upward adjustment.

Respondent's Arguments

• The sentencing judge correctly applied the loss calculation approach supported by case law, including R v Rose and R v Waya, finding significant actual loss or risked loss to legitimate broadcasters.
• There were two distinct conspiracies based on differences in operational methods and participants, justifying consecutive sentences consistent with the Totality Guideline and recent authorities such as R v Fletcher and R v Schools.
• The sentence for contempt was appropriate given the serious and sustained nature of the breach despite a minor error in the sum dissipated.

Table of Precedents Cited

Court's Reasoning and Analysis

The court examined the nature and scope of the two conspiracies, concluding that despite a common ultimate objective, the differences in operation, participants, and methods supported the existence of two separate agreements. The court rejected the Appellant's argument that the two counts constituted a single conspiracy requiring concurrent sentences. It emphasized that the Totality Guideline permits consecutive sentences where overall criminality would not be adequately reflected by concurrent sentences.

Regarding loss, the court acknowledged the Appellant’s contention about the difficulty of precisely calculating loss due to contractual complexities but upheld the sentencing judge’s approach. It found the use of legitimate subscription income as a proxy for loss or risked loss reasonable and consistent with case law. The court highlighted that even a conservative estimate of 50% of the assessed loss would place harm within the highest category, justifying the sentence severity.

The court also addressed the proprietary rights element of conspiracy to defraud, adopting a broad interpretation consistent with recent authority, rejecting the Appellant’s narrow reading. It stressed that the fraudulent business model involved effectively stealing copyrighted content, which sufficed to establish injury to proprietary rights.

On the contempt sentence, the court found the judge’s error in the sum dissipated immaterial to the overall assessment of seriousness, affirming the sentence imposed.

Holding and Implications

The court REFUSED the renewed application for leave to appeal against the sentences imposed for the conspiracy to defraud offences.

The court also DISMISSED the appeal against the sentence for contempt of court.

The direct effect is that the Appellant’s sentences totaling 11 years' imprisonment remain in force. No broader precedent was set beyond affirming established principles on loss calculation, the interpretation of conspiracy to defraud, and the application of the Totality Guideline to consecutive sentencing in cases involving multiple conspiracies.