NI: Appeal against 4-year sentence for film streaming website dismissed

The Northern Ireland Court of Appeal has dismissed a man’s appeal against his four-year sentence for conspiracy to defraud, one count of acquiring criminal property, and one count of concealing criminal property.

The offences related to the setting up and operation of websites which permitted the viewing of films in breach of copyright and the advertising revenue.

Between April 2008 and April 2013, the appellant Paul Mahoney created and operated a series of websites which enabled people to view films and television programmes for free by logging on to them.

Most of the material was contained within third party sites which were unlawful in themselves and were largely based overseas, quite deliberately, so as to frustrate any legal action against them.

At the heart of the case was the fact that the appellant infringed the copyright of the film studios that made the films.

The film industry, through its trade association, the Federation Against Copyright Theft became aware of this site and on 10 August 2008 served a Cease and Desist notice which warned that the operation of the sites involved the commission of civil and criminal wrongs.

That notice was ignored, and in 2011 a search warrant was issued and the appellant was arrested.

After being released on bail, he created a new website which took over the operation of his old one. In December 2011 he was arrested again, and despite being readmitted to bail advertising revenues from this further version of his website were still being paid to the appellant until 2 April 2013 when that website was finally closed down.

Pre-sentencing reports revealed that the appellant had marked communication difficulties, suffered from ocular albinism with nystagmus, and had behavioural problems.

He was anxious and episodes of obsessive compulsive disorder. The Consultant Psychiatrist considered hat a prison sentence may have an impact on the appellant’s mental health. He feared contact with strangers and would have marked difficulties in adjusting to the social interactions that are a necessary part of the prison environment.

In the pre-sentence report he said that his school did not understand his visual needs and, after leaving school, he did not seek employment. He says he became socially isolated, staying in his bedroom playing computer games and streaming videos. The enterprise was not motivated by money and he only spent the money to maintain the servers (£1,000-£2,000 per month) and on adult websites. The Probation Officer assessed the appellant as being of a medium risk of reoffending but not posing a significant risk of harm to others.

He had a number of previous convictions for disorderly conduct which appeared to be related to difficulties at home with his mother.

During sentencing, the Recorder noted that the appellant’s offending had led to a loss of several million pounds and that while the appellant had eventually pled guilty, he had allowed police and FACT to embark on a long and complex investigation through his behavior during interviews.

He rejected the appellant’s assertion that he did not know what he was doing was illegal, as he had been served a Cease and Desist order and had been interviewed by police.

The Recorder found that the culpability was high, that the offence took place over six years, that there were a large number of victims including the public who have to pay higher charges to offset the film industry’s losses, and that the offending was further aggravated by the fact Count 2 was committed while the appellant was on police bail following his interview by police and there was also an international element to the offending.

In mitigation the appellant had no previous convictions of the same type. He had medical and possibly psychological problems. Following the approach advocated in R v Rymacki NICC 20, the Recorder imposed a determinate custodial sentence of 4 years on Counts 1 and 2, and a determinate custodial sentence of 1 year on Counts 3 and 4. He made the sentences concurrent. The Recorder further indicated that if the appellant had not pleaded guilty he would have received a sentence of 5 years.

The Court of Appeal observed that there were no guidelines in Northern Ireland dealing with conspiracy to defraud in these circumstances.

However, they also cited R v Rymacki, which involved the selling of goods bearing an unauthorised trademark and trading in counterfeit products.

The relevant features of these types of cases were:

(1) offences of this type are difficult, time consuming and expensive to detect;

(2) they undermine reputable companies who are entitled to be protected;

(3) the court should consider how professional the offending was;

(4) there should be an estimation of the likely or actual profit;

(5) the need for an element of deterrence must be borne in mind.

Thus, the judge in that case noted the need for deterrence and that only in exceptional circumstances should a custodial sentence be suspended.

The Court also noted R v Bennett  EWCA Crim 2371, in which an appeal against a custodial sentence for the creation of a website enabling the sale and swapping of counterfeit material was dismissed.

The Court also noted the Sentencing Guidelines Council of England and Wales issued guidance with effect from 1 October 2014 in relation to offences of fraud, bribery and money-laundering. The Guidelines accordingly included the offences of conspiracy to defraud which appear in counts 1 and 2 on this indictment. The structure of the Guidelines is to recognise that culpability and harm are the driving factors for determining the sentence.

The Court found that this was a case of high culpability, with consistent re-offending over a period of years, and complete disregard for the consequences of the conduct.

They concluded:

“It was conceded at the time of the plea that although it was not possible to determine the precise loss it ran into millions of pounds. On any view, therefore, this was a case of very significant harm. In the absence of aggravating or mitigating factors we consider that a starting point after a contest of 7 or 8 years would have been appropriate. We accept that the appellant’’s medical and psychological issues were important mitigating factors but consider that those were properly recognised by the Recorder in selecting a starting point of 5 years. The appellant did not co-operate at interview and pleaded not guilty at arraignment. If he had done so he might have obtained a sentence close to 3 years but in the circumstances we see no error in the determinate custodial sentence of 4 years imposed by the Recorder.”

The appeal was therefore dismissed.

  • by Rachel Killean for Irish Legal News