On this day Devine was referred to the Labour Party's 'star committee' with a status of 'urgent' in connection with allegations involving expense claims for work on his home submitted for a company that never existed. He had gained the backing of his local party members a week prior to the hearing, but the panel unanimously recommended he should be deselected. On the 16th June 2009, he was barred by the Labour Party from seeking re-election at the 2010 general election.
On the 5th February 2010 it was announced that Devine was to be prosecuted over his expense claims. The former Livingston MP initially faced two charges under section 17 of the Theft Act 1968 of false accounting. The first charge alleged that between July 2008 and April 2009 Devine dishonestly claimed £3,240 for cleaning services using false invoices. The second charge alleged that in March 2009 Devine dishonestly claimed £5,505 for stationery using false invoices. He denied the charges, though in a live Channel 4 interview when questioned: "So you got a receipt from somebody you were paying as a member of staff, and submitted it as stationery?" by journalist Krishnan Guru-Murthy, Devine replied: "Yes. This was allowed at the time."
On the 27th May 2010 Devine, Elliot Morley, David Chaytor and Lord Hanningfield (Paul White) appeared at Southwark Crown Court for a preliminary hearing. They faced charges of false accounting under the Theft Act.
Devine's trial began on 2nd February 2011. The indictment he faced ultimately included three counts of false accounting under the Theft Act 1968. On 10 February 2011 he was found guilty on two counts of false accounting (relating to false claims for a total of £8,385) but not guilty on another count (relating to £360). Sentencing was adjourned for four weeks.
On the 31st March 2011 Devine was sentenced to 16 months imprisonment. He was released from prison on the 1st August 2011 after serving a quarter of his sentence. He was freed under the home detention curfew scheme, under which prisoners who are deemed to pose a low risk are tagged and released early after serving at least a quarter of their sentence. His release was met with anger from groups including the TaxPayers' Alliance.
As a result of his conviction and sentence, Devine was automatically expelled from the Labour Party.
In October 2010, Devine's former office manager Marion Kinley won a complaint of unfair dismissal and breach of contract against him. An employment tribunal ruled that Devine had subjected Kinley to "a course of bullying and harassment". During the hearing, Devine was accused of perpetrating a hoax suggesting that newspapers were investigating the two of them. He was said to have used a friend, Fiona Fox, to pose as an investigative journalist. Compensation of £35,000 was ordered to be paid.
On Devine's failure to pay the compensation of £35,000, bankruptcy proceedings were instituted against him and he was adjudicated bankrupt on the 23rd February 2011.