Severe sentence for defrauding nursing home residents

The safeguarding of vulnerable adults, especially those living in congregated settings or care homes, has become a matter of renewed concern during the present pandemic, and rightly so because of the tragically high number of Covid-19 related deaths in nursing homes. Protecting the lives and attending to the medical needs of such persons must remain the top priority, but we should not lose sight of their vulnerability to financial exploitation. If proof be needed of the existence of such exploitation (and I am not suggesting it is widespread), one need only read the judgment of the English Court of Appeal (Criminal Division) in R v Barton and Booth [2020] EWCA Crim 575. This was an eagerly awaited judgment from a five-judge court (a rare event), presided over by the Lord Chief Justice. The main legal issue in the case concerned the meaning of dishonesty which is a key definitional element of theft and other offences. In Ivey v Genting Casinos [2017] UKSC 67, [2018] A.C. 391, a civil case, the UK Supreme Court had held obiter that the two-part test of dishonesty established in R v Ghosh [1982] Q.B. 1053 should be replaced with a primarily objective test. A question then arose as to whether this should henceforth be adopted as the test of dishonesty in the criminal law of England and Wales. The Court of Appeal in Barton held that it should be (and there will be a future post on that). However, the sentences imposed and substituted in Barton are also of considerable interest.

Mr Barton and his wife ran a high-class nursing home in Stockport. It was, by all accounts, quite a luxurious establishment attracting wealthy clients who were generally well treated while they lived there. However, some of them were subject to serious financial exploitation. As the Court of Appeal summarised the matter at the outset of its judgment ([4]):

“The prosecution case against David Barton was that, over many years, he had dishonestly targeted, befriended and “groomed” wealthy and vulnerable (and childless) elderly residents of the home, in order to profit from them. He manipulated them and isolated them from their family, friends and advisors. A number of these residents made him the residuary beneficiary of their wills, usually within a short time of arriving at Barton Park. They also allowed him to assume control of their finances, by making him next of kin, or granting him power of attorney, or by making him executor, and he used this control to enrich himself. “

However, the nature and scale of the exploitation can be appreciated only by reading the early part of the judgment itself. Barton was eventually convicted of 10 offences (4 of conspiracy to defraud and 6 of theft and related offences) involving 6 different elderly residents. He was aided by others including Ms Booth, the general manager, who was convicted of three offences and sentenced to 6 years’ imprisonment, and a solicitor, Mr Mills, who was due to be tried along with them, but he died before the trial. The offending spanned a 20-year period and the amount obtained by Mr Barton from the offences of which he was convicted was approximately £4.13 million. He attempted to obtain another £10 million or so.

The following episodes provide just a flavour of Mr Barton’s conduct. He was, as might be imagined, a rich man who owned or co-owned 23 properties in the Southport area as well as 4 Ferraris, 3 Rolls Royces, 2 high-value Mercedes and other cars. One day in March 1999, he sold a Rolls Royce for £500,000 (4 times its value) to one resident, Mrs A-S who was then 85, and another for the same price to another resident, Mrs P who was then 88 and had no known relatives. He had bought the latter car in 1996 for £140,000.

Mrs A-S entered the nursing home in 1997 when she was aged 83 years. A few months later, she granted Mr Barton power of attorney over her affairs and shortly after that she made him the main beneficiary of her will. Mr Mills, the solicitor, looked after the will and about this time received a sum of £50,000 from Mr Barton. The prosecution alleged that this was a reward for his part in the conspiracy.

Mr Barton might never have been caught had he not gone a bridge too far. Mr and Ms W entered the nursing home in 2011. Mr W was then 81 and had advanced dementia, while Mrs W was 75. They were obviously very rich, and Mr Barton persuaded Mrs W to enter into a lifetime agreement whereby she would pay him £6 million in return for her husband and herself being allowed to remain in the nursing home for the rest of their lives. This would include the provision of a luxury apartment for them and the construction of a showroom for Mr W’s collection of classic cars of which he was very proud. As it happens, the written agreement was never entered into because Mrs W died suddenly in May 2013. However, while she was in the home, Mr Barton (it was alleged) had alienated her from family, friends and longstanding financial advisor. He had involved her in various property transactions, and significantly for his own benefit. During the time before her death, Mrs W and her husband were induced to pay fees of more than £1 million to the company running home which was approximately £900, 000 in excess of the legitimate fees. As soon as Mrs W died, Mr Barton issued proceedings against her estate claiming specific performance of the aforementioned lifetime agreement or, in the alternative, a sum of almost £10 million for services rendered. As the Court of Appeal observed, the most egregious element of the latter claim was a sum of £7.2 million (including VAT) for taking Mr W out for drives in classic cars. Mr Barton claimed there had been an understanding that there would a payment of £25,000 for each day on which these drives, which were said to be a means of managing Mr W’s condition, took place. (It was accepted that Mr and Mrs W were well cared for at the nursing home by Mr Barton and his staff).The claim against Mrs W’s estate was eventually settled for £139,000. Once members of Mrs W’s family learned of the civil claim brought by Mr Barton against her estate, they contacted the police and rest, as they say, is history.

At the time of sentence, Mr Barton was aged 64 and of previous good character. The trial judge sentenced him to 21 years’ imprisonment through a mixture of concurrent and consecutive sentences. It was accepted all round that the judge had correctly applied the relevant guidelines in determining sentences for the individual offences but it was submitted by the appellant that the judge erred in applying the totality principle, with the result that the overall sentence was excessive. The Court of Appeal, while dismissing the appeals against conviction, agreed, and reduced the overall sentence to 17 years. Under English law, half of this will be served in custody.

The case and its outcome call for a few comments.

First, the sentence was a very heavy one for a fraud, or even a series of frauds as in this instance. One can think of many cases here and elsewhere involving larger sums where the headline sentences were considerably lower. However, the amount involved is only one factor. The manner in which the property was misappropriated, the circumstances of the victims and the impact on the victims can be just as important as the amount (and sometimes more so) when deciding on sentence. The fact that the victim is a large corporation rather than an individual may sometimes be treated as a mitigating factor, as our Court of Appeal recognised in People (DPP) v Zaffer [2016] IECA 321. A key factor in Barton was the vulnerability of the victims. The Sentencing Council’s definitive guidelines for both theft and conspiracy to defraud list “deliberately targeting a victim on the basis of vulnerability” as a factor that places an offence at the highest level of culpability. (Harm must, of course, be considered as well before identifying the appropriate sentence range). In England and Wales, the maximum sentence for theft is 7 years’ imprisonment and the maximum for conspiracy to defraud 10 years. The Court of Appeal in Barton (at [160]) said:

“This was an exceptional case involving a high level of exploitative criminality that was targeted at vulnerable elderly individuals, and it undoubtedly merited a long overall sentence of imprisonment.”

Secondly, there was no question of any of the victims in Barton lacking capacity. (Mr W. admittedly had advanced dementia but the relevant transactions seem to have been conducted with his wife). On the face of it , all the residents involved had freely entered into the transactions that formed the basis of the charges, as the Court of Appeal accepted (at [7]). It was further accepted that none of the victims was subject to any physical abuse or neglect. The trial judge was careful to instruct the jury that they should acquit on any or all of the conspiracy to defraud charges if they decided that it was or may have been the case that the transactions were “actions taken by residents who were fully in control of their decision-making and understood what they were doing, and made proper decisions” (Court of Appeal judgment at [134]). However, it was the prosecution case that Mr Barton knew that the residents were vulnerable and that he exploited that vulnerability to persuade them to transfer money and gifts to himself and his company ([131]). The judge had therefore instructed the jury:

“Just because a person has capacity to make their own decisions, this does not mean that they could never be vulnerable to dishonest influence to make decisions that adversely affect them – and it would not necessarily be a defence to a charge of conspiracy to defraud, to say that the person (or persons) who were targeted had capacity to make their own decisions.”

This passage in the judge’s charge was not criticised. It is therefore significant that, for the purpose of conspiracy to defraud at least, vulnerability (in the sense of being amenable to undue influence), as opposed to incapacity, will suffice. The few statutory definitions of vulnerability in Ireland all seem to emphasise disability. For instance, the Criminal Justice (Withholding of Information on Offences against Children and Vulnerable Persons) Act 2012 (s. 1) defines vulnerability in terms of a mental, intellectual or physical disability that severely restricts a person’s capacity to guard him/herself against certain forms of serious exploitation or abuse. However, in other circumstances, a broader definition might be adopted.

Thirdly, this is clearly the kind of case where prevention is better than cure. Convicting and punishing an offender may be of little or no benefit to the victim if the proceeds of the fraud have been squandered. There is probably no fail-safe method of prevention. Bear in mind that the conduct in Barton might never have come to light if Mrs W’s relatives had not decided to contact the police. Others might not have done so. Further, there can sometimes be a tension between autonomy and privacy on the one hand, and protection on the other. Being resident in a nursing home or, for that matter, being looked after in one’s own home does not automatically imply an inability or lack of capacity to make entirely rational choices, especially in relation to money and property. History is littered with examples of elderly people making strange, sometimes rather cruel, but still rational decisions when it came to gifting or bequeathing their property to others. We do not therefore want a situation in which financial decisions of elderly persons are constantly being policed, monitored or questioned. But protection is important also, and the challenge is to find an appropriate balance between the two. Perhaps there is some inspiration to be drawn from money laundering legislation where certain designated persons, including financial institutions and professional legal advisors, are required to look out for suspicious transactions and, where necessary, make a report to some authority such as the State Financial Intelligence Unit (FIU) in the case of money laundering.

A very fine study conducted by Amanda Phelan, Deirdre O’Donnell and Sandra McCarthy of UCD, entitled Experience of Bank Staff of the Financial Abuse of Vulnerable Adults, and published in 2018 under the aegis of the Banking & Payments Federation Ireland and the National Centre for the Protection of Older People, addresses some of these issues very perceptively.

Meanwhile the Law Reform Commission has recently published an Issues Paper entitled A Regulatory Framework for Adult Safeguarding to which responses and submissions are welcome any time up to the end of May 2020.

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