Fraud Newsletter 20 – June 2018

CASES

Charging theft instead of fraud: prosecution deliberately and erroneously charged D with theft of a chose in action (a result offence) instead of fraud (a conduct offence) of which she was probably guilty. Each case seems to be fact specific. Here, dishonestly persuading an account holder to make payments is not an appropriation of the account. Application to substitute verdict of fraud refused: Darroux: [2018] EWCA Crim 1009, [2018] 5 Archbold Review 2.

Conspiracy and Speciality: the speciality rule concerns offences not evidence.  Accordingly a Swedish 10 year limitation period on criminal liability did not prevent the SFO adducing evidence of earlier conduct at trial following extradition from Sweden: GW v SFO [2018] EWCA Crim 1155.

Jury retirement in serious cases: the rule in Birch, The Times, 27 Mar 92, that in serious cases juries should not retire after 3pm no longer applies: Senna [2018] EWCA Crim 789; [2018] 4 W.L.R. 84.

Reporting Restrictions: important case on criteria and approach. Surgeon charged with fraud obtaining consultancy by exaggerating his professional experience. Defence concerned about earlier press reports on the internet that he had double the death rate of his colleagues. Restriction granted. BBC appeal successful: Sarker; Re BBC [2018] EWCA Crim 1341.

SENTENCING AND CONFISCATION

Basis of Plea must be established before sentencing in writing or made known to the judge. Prosecution cannot say it is a matter for the judge without making submissions. Judge should not consider evidence at trial of co-Defendants without giving D opportunity to make representations: Marsh & Cato [2018] EWCA 986 (Westlaw).

Confiscation – tainted gifts do not have to be traced. main issue is proportionality: Box [2018] EWCA Crim 542, [2018] Crim.L.R. 581.

Confiscation – Calculation of value of tainted gifts transferred at undervalue: ultimately, each case depends on its own facts: Hayes [2018] EWCA Crim 682.

Confiscation: Prosecutor has no right of appeal against confiscation default term: Mills [2018] EWCA 944, [2018] Lloyds Rep FC 251.

BILLS, STATUTES & STATUTORY INSTRUMENTS

Breaching of Limits on Ticket Sales Regulations 2018 S.I. 2018 No. 735. New criminal offence of using software and “bots” to purchase tickets for events exceeding the organiser’s maximum limit.

Confiscation: EU agree new rules on mutual recognition of freezing and confiscation orders: 20 Jun 18.

Corporate Tax Avoidance and evasion: Economic and Financial Affairs Council Directive to introduce stricter transparency rules for tax planning intermediaries. National Governments must incorporate the provisions into their national laws by 31 Dec 2019, 25 May 18.

Investigatory Powers Act 2016 (Commencement No.5 and Transitional Arrangements) Regulation 2018 S.I. 2018 No. 252. As from 31 May 2018 re various warrants (target interception; targeted equipment; bulk interception and equipment; and combined warrants).

Investigatory Powers (Consequential Amendments etc.) Regulations 2018 S.I. 2018 No. 682 re cross-border interceptions pursuant to designated international agreements.

Codes of Practice under the Investigatory Powers Act 2016, 12 June 18:

• Bulk Acquisition of Communications Data
• Intelligence services’ retention and use of bulk personal datasets
• Equipment interference
• Interception of Communications
• National security notice

CONSULTATIONS, GUIDANCE, CIRCULARS AND REPORTS

Assessing the impact of the Sentencing Council’s Fraud, Bribery and Money Laundering Definitive Guideline. Sentencing Council, 26 Jun 18.

General Principles to compensate overseas victims (including affected States) in bribery, corruption and economic crime cases: SFO Guidelines, 1 June 18.

Search Warrants –Law Commission Consultation: To review and simplify law and procedure. Closes 5 Sep 18.

Select Committee calls for evidence on operation of the Bribery Act 2010: To report in 2019, 20 June 18.

NEWS

New Banking Protocol helps prevent £25m in scams: 197 arrests. Financial Fraud Action Group UK Report, 22 June 18.

Brexit speech on security, law enforcement and criminal justice and Britain’s positions as a third country by Michel Barnier, 19 June 18.

FCA letter on financial crime risks of Crypto-Assets 11 June 2018.

Gambling Commissions fines 32Red £2m for not protecting a consumer from gambling-related harm and money laundering failures, 20 June 18.

KPMG fined £3.15m by FCA for audit failures re Quindell plc, 11 Jun 18.

Successful private prosecution for £88m conspiracy to defraud after CPS decided not to charge. Law Soc. Gazette, 13 June 18.

New SFO Director: Lisa Osofsky as from 3 Sep 18. Expertise in financial crime, previously with Exiger and before that US federal prosecutor and FBI. Mark Thompson as interim Director until then, 4 June 18.

EU wide minimum penalties for Money Laundering to be introduced. Minimum 4 year term proposed, 7 June 18.

FCA fine Canara Bank £896,100 for AML systems and control failings 6 June 18.