Fraud Intelligence

There are three main issues to be addressed in this article on equitable tracing, says Paul McGrath , barrister at Essex Court Chambers: who can invoke the equity rules on tracing? How are equity’s presumptions applied in modern fraud contexts? What is “backwards tracing” and does it have a role to play in equity’s tracing rules?

“What a dry subject”, “not another accountant with a checklist”, “when will these people stop talking and actually do something instead?” These were comments, writes Nigel Iyer of Hibis Group, which I heard people murmuring before I started the seminar, so I realised that I had a sceptical audience of financial, risk and human resource managers in front of me. However, after each session on preventing fraud and corruption, the audience seemed pleasantly surprised and also motivated. Why this was the case only dawned on me on the flight home from the USA. They had come to the seminar weary of newspaper stories about fraud, corruption and mindless greed; stories which had been succeeded by tidal waves of legalisation and regulation. In their minds, any hope that they, personally, could have an effect on reducing fraud and corruption had faded away because the lawyers and bureaucrats had taken charge…

Victims of fraud have extensive legal rights to help them recover assets taken by the fraudster, and to sue him for damages. But sometimes, says Simon Congdon , a partner at Holman Fenwick & Willan, these are not enough. The proceeds of fraud are as often dissipated as saved, leaving the victim with insufficient remedy. In these circumstances, he may look for a “deep pocket”, who has been involved in the fraudulent transaction in such a way as to expose himself to liability.

Any organisation that has been embroiled in litigation will know that the process of preparing for disclosure, and disclosing documents to an opponent, can be expensive and time consuming, writes Philippa Bennett of DLA Piper Rudnick Gray Cary. Very often it will be difficult to identify who holds or has access to relevant documents, where these are stored and who is able to comment on them. The disclosure process is also fraught with risk, particularly in fraud cases, where, if a case stands or falls on documentary evidence, it is absolutely essential to locate all the relevant documents and to maintain their integrity. These issues have always been faced by lawyers and their clients in relation to hard copy documents. However, the onset of the electronic age has added new challenges and risks to this process.

Gavin McFarlane of Temple Chambers Cardiff

Bribery crimes in the UK presently comprise offences under common law and the Prevention of Corruption Acts 1889-1916 . The law is, says the December 2005 Home Office consultation paper on reform (www.homeoffice.gov.uk/documents/2 005-cons-bribery),..

The European Parliament has confirmed changes to the European Union rulebook on annual and consolidated accounts, toughening companies’ requirements to fight fraud and irregularities, while exempting more smaller businesses from full reporting..

European Union ministers are discussing expanding the authority of EU police agency Europol. An informal meeting of the EU Council of Ministers in January discussed giving Europol its own investigative staff with police powers, rather than always..

In a surprise decision, the European Commission, European Union (EU) Council of Ministers and the European Parliament have reappointed Franz-Hermann Brüner as director-general of anti-fraud office OLAF for the next five years. The decision was..

European Union Anti-fraud Commissioner Siim Kallas has called for a tough approach in reforming a blacklist of agricultural businesses or agencies found defrauding Community farm spending programmes, despite member state opposition. Kallas told a..

Fraud rose to its highest level for a decade in 2005 according to KPMG Forensic’s Fraud Barometer. The measure, which covers Crown Court cases when the charges are over £100,000, recorded 222 cases involving over UK£900 million, in..