UK: Fraud Watch

Welcome to the March edition of Mishcon Fraud Watch, prepared by the Fraud & Insolvency Group at Mishcon de Reya. Its aim is to provide businesses and their advisors with a snapshot of what has been happening in the world of fraud in the last month.

We make no judgement whatsoever as to the morality, legality or appropriateness of the conduct which forms the subject matter of this bulletin. We simply aim to bring these matters to the attention of those involved in the prevention, detection and investigation of fraud.

The ARA has secured a Confiscation Order for £310,000 against Paul Doherty of Brighton. Mr Doherty claimed housing benefit and council tax benefit, to which he was not entitled, to the tune of £53,364.
Assets Recovery Agency press release, 20 February 2007

The ARA has secured Confiscation Orders worth £1,043,663 against Gerald ‘Gez’ Deaffern and David Scattergood of Lancashire and James Jennings of Manchester. All three were convicted on charges relating to the illegal importation of drugs into the UK.
Assets Recovery Agency press release, 15 February 2007

The ARA has secured a Property Freezing Order on an estimated £180,000 worth of assets held by Séamus Patrick Cunningham of County Antrim, who is currently serving a jail sentence for robbery.
Assets Recovery Agency press release, 1 February 2007

The Financial Services Authority has fined the Nationwide Building Society almost £1m after a laptop was stolen from an employee's home. The computer held the personal details of an undisclosed number of Nationwide's customers.
The Daily Telegraph, 15 February 2007

Companies could be asked to provide funding and financial expertise for a new national fraud data pooling and intelligence centre planned by the City of London Police
Financial Times, 26 February 2007

The Commissioner of the City of London Police, Mike Bowron, has said that despite annual fraud losses running into billions, less than half the police forces in England and Wales now have specialist squads.
The Times, 26 February 2007

Alfred McAlpine, the building firm, has issued a profits warning following the discovery of accounting irregularities and possible fraud in its Welsh Slate subsidiary.
The Daily Telegraph, 27 February 2007

The Serious Fraud Office (SFO) is investigating Torex Retail, a software company, in connection with potential false accounting of up to £6.5m. The company is subject to an ongoing investigation by the SFO.
Financial Times, 6 February 2007

The Fraud (Trials without a Jury) Bill had its third reading in the House of Commons on 25 January 2007 and its first reading in the House of Lords on 26 January 2007. The Bill proposes amendments to section 43 of the Criminal Justice Act 2003, to allow the prosecution to apply for a fraud trial to proceed without a jury.

The Serious Crime Bill had its second reading in the House of Lords on 2 February 2007. The Bill provides for, amongst other things: information to be shared or processed to prevent fraud; the transfer of functions of the Director of the Assets Recovery Agency to the Serious Organised Crime Agency; and the Proceeds of Crime Act 2002 to be amended in relation to certain investigations and in relation to accredited financial investigators and search warrants.

The Polemis family, a Greek shipping family, is claiming up to $1bn damages from JP Morgan Chase for allegedly acting negligently in purchasing approximately $724m worth of emerging-market bonds for the family in the 1990s.
Sunday Express, 25 February 2007

WESTERN EUROPE

The British Virgin Islands is drafting legislation that will require hedge funds to conduct regular audits and appoint two independent directors. The legislation is also expected to include a requirement for every fund to have an "authorised representative" in the territory to act as a whistleblower.
Financial Times 12 February 2007

Mishcon's Fraud Watch is published by the Fraud & Insolvency Group of Mishcon de Reya Solicitors. Widely recognised as the leader in the field of fraud investigations, the Group has extensive experience in conducting and/or project managing highly sensitive international investigations in respect of bribery and corruption allegations. The Group founded and runs both the Asset Protection & Recovery Network, made up of international legal fraud specialists, and the Financial Fraud Group, for risk and compliance officers.

www.mishcon.com.