Tue, Oct 11, 2016

The Rise and Rise of Financial Fraud

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Financial fraud is prolific. There have been more than one million incidents where people lost money as a result of financial fraud recorded between January and June 2016, according to figures released by Financial Fraud Action UK (FFA UK) on September 20. This represents a 53% increase on the same period last year, and equates to one incident every 15 seconds in the UK. It is therefore unsurprising that the Police are unable to recover a significant fraction of the monies stolen – let alone all of them. And, as FFA UK’s figures show, this kind of crime is showing no sign of slowing down.

An Alternative Solution

Earlier this year, it was announced that law firm Mishcon de Reya and global investigations and risk consulting firm, Kroll – amongst others – were to commence a civil/criminal information sharing working group. This is a new two-year initiative being piloted by the City of London Police which will see law enforcement working together with the private sector to identify, seize and recover assets from criminals under normal civil law remedies rather than criminal law. Superintendent Maria Woodall and DCI David Manley will lead the pilot for the City of London Police and others contributing to the pilot include the SFO, and the CPS.

It is envisaged that this type of partnership will enhance existing proceeds of crime recovery mechanisms and procedures rather than replace them. Cash in UK banks, cars, and homes held in defendants own names are routinely seized under current arrangements, but many assets that are held abroad, or held covertly, currently escape recovery due to a combination of a lack of resources and a lack of expertise. This is where the private sector will show its value – increasing recoveries for victims and increasing the impact on the criminals, extending the reach of law enforcement. Civil recoveries are typically quicker and more efficient at recovering assets from abroad and law enforcement typically does not have the same level of electronic evidence and accountancy support that civil firms like Kroll can bring to bear.

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