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Fraud Newsletter 23 - September 2018

CASES

Conspiracy to defraud: boiler room fraud: interests of justice test for extradition to US: Conduct not in US but US shares were involved; actions had effect in US; co-Ds awaiting trial in US:  Clayton v US Admin: 11 Sep 18 (unreported) (Westlaw).

Privilege: SFO v ENRC  [2018] EWCA Civ 2006 overturning Andrew J’s ruling ([2017] EWHC 1017 (Q.B., [2017] 2 Cr.App.R. 296(24)).  

(i) Corporate litigation privilege can include first response interviews brought into being for the dominant purpose of resisting or avoiding criminal (SFO) proceedings – “It would be wrong for it to be thought that, in a criminal context, a potential defendant is likely to be denied the benefit of litigation privilege when he asks his solicitor to investigate the circumstances of any alleged offence.” [99];

(ii) obiter, that although Three Rivers (No 5) (corporate Iegal advice privilege applies only to employees tasked with receiving the advice) is wrong, but it must be a matter for the Supreme Court or Parliament.

Privilege: Limited Waiver: Limited waiver by a client to an auditor does not extend to auditor’s regulatory body, but production here did not breach privilege; Judge bound by R(Morgan Grenfell) v Special Commsrs IT (criticised by SC):   leave to appeal granted: 11 Sep 18:   FRC v Sports Direct International plc [2018] EWHC 2284 (Ch) (unreported) Westlaw.

Powers of Search: it is lawful for law enforcement agencies to use post arrest powers of search rather than obtain a search warrant, provided the relevant criteria are met and absent bad faith etc:   

(Virdee) v NCA [2018] EWHC 1119 (Admin).

SFO s2 powers can be extraterritorial and bite on documents held outside UK by a foreign company sufficiently connected to this jurisdiction (§71): R (KBR Inc) v Director SFO [2018] EWHC 2368 (Admin).

VHCC in serious fraud cases: R (Ames) v Lord Chancellor [2018] EWHC 2250 (Admin): LAA failure to disclose to counsel the “calculator” or methodology by which the CCU arrived at VHCC interim fixed fees (IFFO) contract fees offered to counsel was a breach of their duty of transparency and clarity and introduced procedural unfairness into operation of the IFFO scheme.  LAG comment.

SENTENCING AND CONFISCATION

Confiscation appeal: (i) criteria where representation was said to be incompetent; (ii) criteria for making a s10A POCA determination (3rd party interests):  Ghulam [2018] EWCA Crim 1691.

BILLS, STATUTES & STATUTORY INSTRUMENTS

Crime (Overseas Production Orders) Bill 2018: permits police, prosecutors to avoid MLA and apply for electronic data directly from overseas service providers re serious crime:Bill progressand Factsheet.

Criminal Appeals Reminder: new MoJ forms and guidance to be used for appeals after 1 Oct 18 arising from Criminal Procedure (Amendment No.2) Rules 2018 S.I. 2018 No. 847

Finance Bill 2019:  Call for evidence on HMRC powers and Making Tax Digital (MTD) project):  HL Select C’tee 12 Sep 18.

RIPA: Covert surveillance and covert human intelligence sources codes of practice: 20 Sep 2018 but with effect from 15 Aug 18, reflecting changes introduced by the Investigatory Powers Act 2016 (IPA), including the introduction of equipment interference warrants under Part 5 and the new oversight framework establishing the Investigatory Powers Commissioner.

RIPA: Code of practice for investigation of protected electronic information: 20 Sep 18 but with effect from 15 Aug 18. Also reflects changes oversight changes made under the IPA. This code is primarily intended for use by the public authorities able to authorise activity under RIPA.

CONSULTATIONS, GUIDANCE, CIRCULARS AND REPORTS

29th Annual EU Report – Fight against Fraud 2017: European Anti-Fraud Office: 3 Sep 18

Asset Recovery Statistical Bulletin 2013-18: re recovery of POCA assets Home Office: 13 Sep 18

HMRC’s Criminal Investigation’s Policy and Criminal Investigation Powers and safeguards both updated to include open source (i.e. publicly available) material: 4 Sep 18

NEWS

252 fraud cases (£895m) in UK courts in first 6 months of 2018: Fraud Intelligence: 23 Aug 18.

$1.5 trillion paid in bribes each year (2% of world GDP): Transparency International/Worldbank. 5 Sep 18.

Archbold/Blackstone: Judicial Library Committee. Copies of both works will be in every Crown Court from Oct 2018 to allow the JLC to make an informed review on which book will be provided after Oct 2019. Judges are encouraged to use both works.

Exporting Corruption: Transparency International Report on companies bribing abroad, both OECD and non-OECD countries: 12 Sep 18.

FCA Operation Tidworth investment fraud: 5 sentenced to total of 17.5 years for £2.8m boiler room fraud: 4 Sep 18.  Principal defendant later received 11 years: 17 Sep 18.

FCA impose regulated financial activity ban on Christian Bittar for EURIBOR role: 14 Sep 18

SFO secure 6 convictions for £17m solar panel fraud: 29 Aug 17.

30th Cambridge International Symposium on Economic Crime (3-5 Sep 18). SFO Speeches:

Ensuring our country is a high risk place for the world’s most sophisticated criminals to operate: Lisa Osofsky (Director);

Rendering accountable the Wealth of Criminals: Alan Milburn (General Counsel);

All Economic Crime has victims: Elizabeth Baker (Head of Proceeds of Crime and International Assistance Division)

SFO plans to restructure management, strengthen intelligence /case development functions and clearer focus to Chief Investigator and General Counsel roles: 27 Sep 18.


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Tony Shaw QC

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