Fraud Newsletter 30 – April 2019

CASES

Obiter: skeleton arguments in criminal appeals should be maximum of 25 pages:  referred to Criminal Procedure Rules Committee to consider: Faltec Europe Ltd v HSE [2019] EWCA Crim 520.  

Grenfell disaster fraud – conviction of defendant absent at trial. Ill health which, if real, was of her own making to justify absence at trial, cannot be said to be involuntary: Msokeri [2019] EWCA Crim 460 (Westlaw).

SENTENCING AND CONFISCATION

Confiscation: corporate proprietary rights and CPS confiscation claims:.  A company can claim in equity against its directors to account for a bribe or secret profit (FHR European Ventures LLP v Makarious, [2014] UKSC 45 [2015] AC 250).  Such claim cannot be defeated by attributing to the company the misconduct of the directors which had caused the company injury: Bilta (UK) Ltd v Nazir [2015] UKSC 23. Accordingly, where the company’s directors had been involved in a tax fraud, part of which involved the unauthorised sale of the company’s software rights, the company’s proprietary right over the secret and fraudulent profits of the directors defeated the CPS confiscation claim against the same money. That principle applied even if the company had been named in the indictment. “The only remedy available to the CPS in a case like this would be to add the company to the indictment and then, if convicted, to seek a confiscation order directly against the company.”[25]: CPS v Aquila Advisory Ltd [2019] EWCA Civ 588.

Liability for Missing Trader VAT Fraud: Criminal penalty may be imposed on a company under VATA 1994 s 60 & 61 where company should have known its transactions were connected to a missing trader fraud: Butt v HMRC Commissioners [2019] EWCA Civ 554

BILLS, STATUTES & STATUTORY INSTRUMENTS

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CONSULTATIONS, GUIDANCE, CIRCULARS AND REPORTS

EU Directive to protect whistle-blowers of breaches of EU law: adopted by European Parliament: 16 Apr 19.

FCA Business Plan 2019-2020 includes a section on Financial crime (fraud & scams) and AML (pp 18-20): 17 Apr 19

Impact Statement for Business (ISB) Guidance: ISB Form under CPAR r 27.2: MoJ: 4 Apr 19.

Implementation Plan: For the joint review of forensic provision (2018): Home Office,  APCC and  NPCC: 24 Apr 19 following the Joint Review for the provision of forensic science –July 2018  by the same bodies.

Report on Police Scotland’s proposal to introduce the use of digital triage systems (cyber kiosks) i.e. laptops capable of downloading data from mobiles, bypassing passwords locks and encryption: SP Paper 512 8 Apr 2019.

Transposition of the Fifth Money Laundering Directive: consultation: HM Treasury 15 Apr 19.

NEWS

BSB and Solicitors Disciplinary Tribunal (SDT) move to civil standard of proof for disciplinary hearings: BSB change effective on 1 Apr 19:  SDT propose similar to Legal Services Board: 8 Apr 19.

Barclays SFO jury discharged: 8 Apr 19 Bloomberg.

Curbing Corruption: IMF Fiscal Monitor: 1 April 19. Chapter 2: wealth hidden by individuals estimated at 7Tr (10% world GDP); $1Tr in tax revenues lost globally.

Cyber Security Breaches Survey 2019: Dep for Digital, Culture, Media & Sport: 3 Apr 19. Survey of 77,432 businesses. Small /large business suffered 19/23% lost files / network access; 10% website slowed or crashed; 9/12% software corrupted or damaged.

Deutsche Bank likely to face US and UK regulatory action over $20B Russian money-laundering: The Guardian 17 Apr 19:  see the Russian Laundromat exposé by  OCCRP (Organised Crime and Reporting Project).

Fraud: Time to Choose: An Inspection of the police response to fraud: Report: HM Inspectorate of Constabulary: 2 Apr. 19 –  law enforcement response disjointed and ineffective; no clear understanding of who is responsible for fraud related activities; often poor service to victims.

FCA: Independent Investigation into London Capital & Finance launched: 1 Apr 19.  Partly contested cases, the pipeline and AML investigations:  Speech by Mark Steward (Dir. Enforcement & Market Oversight at Global Review: 4 Apr 19.  Standard Chartered fined £102m for breaches of MLR 2007 and serious shortcomings: FCA press release:  9 Apr 2019: FCA decision notice: 5 Feb 19 published:.

SFO: Euribor rate riggers sentenced to 4 and 5 years: 1 Apr 19.  Fighting Fraud and corruption is a shrinking world: Director’s speech at Royal United Institute: 3 Apr 19 – included technology, speed of investigations, corporate LPP (planned Guidance to come); co-operation etc.