Fraud Intelligence

The modern approach to the rules of tracing the proceeds of a fraud is an area where case law has benefited greatly from the influence of academics and academic writing, says Paul McGrath , barrister at Essex Court Chambers. In order to keep abreast of this area, it is essential, he says, that the practitioner be aware of these writings because one can be sure that if the practitioner is not, the judge is likely to be. They tend to be found in disparate journals not always readily to hand in most practitioners’ libraries, such as Trust Law International and Restitution Law Review, as well as the more common Legal Quarterly Review (LQR) and Lloyd’s Maritime and Commercial Law Quarterly (LMCLQ).

Even if you don’t have to comply with Sarbanes Oxley, the Revised Combined Code, ISA 240 or FSA regulations on financial crime strategies, few if any companies can ignore the threat of fraud, says David Alexander . This is not perhaps because the incidence of fraud is necessarily increasing but because when it does occur, shareholders, bankers and other investors want to know what precautions the company directors had taken to prevent or limit the damage. Ignorance of fraud is no longer a defence. The ostrich type attitude of ‘it won’t happen to me’ is no longer acceptable. Fraud is now recognised as a business risk to be managed in the same way as any other business or financial risk.

One would be hard pressed to think of a modern business of any size that does not make extensive use of information technology. With the proliferation of IT pervading all areas of business and commerce, the perpetrators of fraud are becoming increasingly sophisticated, and frauds more complex and potentially harder to detect. In any investigation the identification and securing of evidence is paramount. The evidence required, and in what form, will depend on the nature, scope and objectives of the investigation, how the fraud was identified and the location of the records. Forensic investigators, says David Dearman of PKF, must therefore be as sophisticated as the perpetrators and familiar with all forms of electronic communication and data storage – from memory sticks to blackberries and high resolution mobile phone camera shots.

A single offence of fraud is surely to the good but removal of the right to trial by jury in serious and complex fraud cases is not, submits Amy Mannion , barrister, 3 Raymond Buildings.

For more information about Protiviti’s fraud services, contact Sean Holohan on tel: +44 (0) 20 7024 7530; email: s.holohan@protiviti.co.uk, visit www.protiviti.co.uk

Gavin McFarlane of Temple Chambers Cardiff

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