Fraud Advisory Services

The cases listed below represent the following areas of work:

CRIMINAL DEFENCE EXPERT WITNESS – Forensic accountancy and litigation support services for white collar criminal defence lawyers and their clients.

PROCEEDS OF CRIME & CONFISCATIONS – Expert analysis of the Crown’s S16 reports with the production of a defence expert forensic report.

MONEY LAUNDERING – Expert accounting reports on money laundering indictments and advice on implementing money laundering regulations for organisations.

FRAUD INVESTIGATION – All aspects of fraud investigation, from managing major corporate fraud investigations to seeking asset recoveries or means for safe dismissal of errant employees in smaller frauds.

INSOLVENCY ASSET RECOVERY & ASSET TRACING – Tracing assets in civil fraud and helping victims of fraud to recover losses. Assisting Insolvency Practitioners recovering assets on behalf of creditors that have been taken by directors and bankrupts prior to insolvency.

FRAUD REGULATORY ASSISTANCE – Experienced in helping Police forces present their financial case to the Courts. Expert accounting assistance to the major fraud regulators including the Serious Fraud Office and the Department for Business Innovation and Skills.

FRAUD PREVENTION & FRAUD RISK ADVICE – The most cost effective way to deal with fraud is to prevent it happening and a few simple precautions can reduce the risk of fraud substantially.

A Selection of Recent Assignments

Below is a selection of cases from the portfolio of work where Mark Jenner has acted as accounting expert witness, specialist fraud investigator or fraud case controller:

• 2010 – Allegations of drug trafficking. Forensic work for the defence team showed that defendant did not have a criminal life style and this aspect of the case was dropped in response to my report;
• 2010 – Regulatory Investigation under S447 & S453 of the Companies Act 1985 (as amended) on behalf of Companies Investigation Branch of the Insolvency Service – into corporate collapse and allegations of Insolvency Act offences;
• 2010 – Confiscation hearing against defendant convicted of money laundering for a gang of organised criminals involved in drug trafficking and VAT fraud. Benefit assessed at over £10,000,000 but the forensic report prepared on behalf of the defence was able to show 60% of this either inappropriately included or double counting;
• 2010- Fraud Investigation examining allegations by disadvantaged shareholder of fraudulent trading, asset stripping and diversion of trade prior to a pre-pack administration resulting in phoenix follow on company;
• 2010- Forensic Accountant’s report for Humberside Economic Crime Unit tracing financial activities of a nursing home manger accused of stealing funds from a resident – a number of similar forensic reports have been prepared for police forces around the UK including Northumbria, Cleveland, Merseyside, North Yorkshire and Humberside forces – this case concluded with oral evidence being presented in Grimsby Crwon Court;
• 2010 – Expert accounting witness report for defence in a case involving alleged negligence by a professional accountant and money laundering in relation to a large Ponzi style fraud being committed by a group of organised fraudsters;
• 2009 – Acted for lead defendant in a major prosecution brought by the Serious Fraud Office (SFO) alleging serial asset stripping using the “Whitewash Procedure”;
• 2009 – Regulatory Investigation (S447) into asset stripping by a shadow director of a series of insolvent companies;
• 2009 – Expert Report for the defence in a case of profiteering from running a brothel;
• 2009 - Regulatory Investigation (S447) into Companies Act offences by director of a series of insolvent companies;
• 2009 – Expert Report for the defence in a case of money laundering brought by the police against a money transmission bureau;
• 2009 – Asset tracing excercise undertaken for the defence team in a major prosecution following the 2006 Securitas robbery of £53,000,000;
• 2008 – Expert Report for the defence in a major West Yorkshire Police case against a group of business men involved in a variety of activities including hand car wash businesses, restaurants, property dealing and various offshore financial activities.
• 2008 – Confiscation proceedings brought by Thames Valley Police under the Criminal Justice Act 1988 of £25,000,000 of Defendant’s assets – matter concluded with evidence successfully being given in Reading Crown Court.  Included tracing exercise involving contact with financial institutions in Pakistan;
• 2008 – Money laundering allegations brought by HMRC – defendant accused of laundering money by way of a gambling habit over a number of years – matter concluded with evidence being successfully given in Birmingham Crown Court;
• 2008 – Tracing exercise involved funds derived from Europe and the Middle East;
• 2008 – Allegations brought by Post Office of theft of around £50,000 against a Sub Post Master;
• 2007- Allegations of unpaid tax and NIC and other money laundering indictments by NCS and HMRC relating to £45,000,000 funds moving through (and being transferred between) numerous Defendant’s bank accounts connected to a “Hawala” money transmission business.  Tracing exercise involved explaining assets moving through Dubai and Hong Kong including contact with institutions in these locations;
• 2007 – Regulatory Investigation (S447) into £100 million turnover property group.
• 2007 – Forensic Report for the defence in a case brought by the DTI against an accountant accused of assisting fraudsters strip assets from company acquisitions using the “Whitewash” prcedures.
• 2006- Confiscation following London Underground corruption trial leading to attendance at Guildford Crown Court for ongoing assistance in reducing level of benefit being sought;
• 2006 – Regulatory Investigation (S447) into £35 million turnover trading group involved in VAT fraud (Missing Trader Inter Community MTIC or “Carousel Fraud”).
• 2006 – Fraudulent trading indictments brought by the SFO against directors of a computer company involving “ fresh air” invoicing, cheque cross firing and transactions amounting to around £25,000,000, being funds circulating between connected companies;
• 2006 – “Long firm” UK based fraud where £600,000 credit was allegedly obtained illegally from international suppliers;
• 2006 – Fraudulent trading indictments by DTI (now BIS) where £500,000 was allegedly obtained by factoring fictitious debts using cross firing techniques;

Other recent instructions in the past five years (2006 – 2010)

• Specialising in a number of fraud investigations to assist smaller businesses and individuals where losses can often be relatively small and not seen as a priority for the fraud regulators or are too small to merit expensive legal assistance pursuing recovery through the civil courts.
• A number of enquiries are carried out each year on behalf of Insolvency Practitioners where fraud has been discovered or is suspected and involve asset tracing and recovery exercises carried out in situations where directors or bankrupts have hidden assets.  Recovery work has included dealing with banks and other institutions in Europe, USA, Middle East, Russia and Asia.
• A range of criminal fraud defence and confiscation work as expert accounting witness is undertaken each year for criminal defence solicitors on behalf of defendants in criminal matters – ranging from small employee thefts of a few £1,000s to multi-million frauds investigated and prosecuted by the SFO.
• Around 30 authorities since 2004 granted for enquiries carried out under Section 447 and 453 of the Companies Act 1985 as external investigator for the DTI (now BERR/BIS).

At present there is a greatly fragmented group of organisations responsible for the prosecution of fraud within the UK. This results in a lack of cohesion in the approach and many potentially successful fraud cases brought against serious fraudsters have collapsed as a result of the lack of communication between the many fraud agencies.  There is no doubt that many more modest frauds have gone un-investigated because of this lack of joined up thinking.

In West Germany fraud is now handled by a specialised prosecution unit comprising prosecutors, forensic accountants and “business administration experts” with some success.  The recently formed National Fraud Authority (NFA) has not yet turned its attention to the delivery of a coherent and central fraud prosecution policy. However, there is a will to unify the fraud prosecution resources with the UK that was apparent back in the 1980s shown by the government’s Roskill Committee on Fraud.  It proposed the need for a new unified organisation responsible for all the functions of detection, investigation and prosecution of serious fraud cases.  Limited success of this was seen with the setting up of the Serious Fraud Office – but this only handled a small proportion of the more newsworthy frauds – often with controversial results.

The need for a unified approach is still being lobbied, by bodies such as the Fraud Advisory Panel, the Association of Chief Police Officers and by many of the diverse investigation agencies. At present in 2010, the following agencies have primary responsibility for the prosecution and investigation of fraud:

• The Serious Fraud Office – the SFO investigates and prosecutes the most serious and complex frauds – or those having a significant level of public interest. It uses its own prosecutors (lawyers) and investigation teams and usually works alongside police officers and other external specialists.
• The Crown Prosecution Service – the CPS prosecutes frauds through two divisions: general fraud through its Fraud Prosecution Division (FPD) that has been investigated by police forces or the Serious and Organised Crime Agency (SOCA) and tax based frauds through its Revenue & Customs Division (RCD) that has been investigated by HMRC or SOCA.
• The Department for Business Innovations and Skills (BIS – formerly DTI/BERR) prosecutes frauds through the Insolvency Service and the Treasury Solicitor.  Company frauds and disqualification of directors are investigated by both the Insolvency Service and its specialised agency – Companies Investigation Branch.
• The Department of Works and Pensions (DWP) investigates and prosecutes benefit fraud, including organised gangs of benefit fraudsters.
• The Financial Services Authority(FSA) investigates and prosecutes abuse within the finacial services system, including the banking sector, insurance and other financial providers. Major frauds would include insider dealing and market abuse.
• Public Sector- Local Government carry out their own internal investigation and prosecution in areas such as corruption and procurement fraud. Other public bodies such as the Ministry of Defence (MOD) and National Health Service (NHS) also investigate and prosecute internal cases of corruption and procurement.
• Trading Standards (TS) – These agencies are situated within the large number of councils around the country and are responsible for investigating and bringing prosecutions in all areas of consumer fraud and other mass market frauds.
• The Office of Fair Trading (OFT) – investigates and prosecutes major cartels.

Thus there is a plethora of organisations currently having the responsibility for fraud.  As can be seen by the merger of the HMRC prosecution function with the CPS there si some move towards unification – even if this move was more of a cost cutting excercise following the public sector funding cutbacks impacting in 2009/10.

During a recession you would think that investors would be more careful with their money. Is it the lure of high interest rates when conventional financial services products offer such a low return that encourages otherwise astute people to invest their wealth with fraudsters – or is it possibly greed that blinkers them to the risks involved investing in off beat ventures?

Every week brings reports in the press of new scams, that are either coming to light, are being investigated or the villains are being prosecuted. For every big investment fraud that is reported, there are likely to be around 10 smaller ones that are not. And for every fraud that is discovered, there are 100s that continue unseen. It is a big problem, and as public spending is cut back, cash for fraud resources is dwindling from its already meagre level.

A smaller Ponzi style investment reported in the dying days of 2010 is the case of Mr Christian Orpin. This is a prime example of a somebody operating on a small enough scale to avoid too much attention from the authorities and which allows him to continue to develop and ply his quest for easy money even after being brought to book.

Orpin operated a business called PDS High Wycombe, offering an investment scheme called Premier Projects. This was an investment vehicle offering between £150 and £200 return per month for a £5,000 investment. This is at least an annual yield of about 36% – far more than the percent or two available from the banks and other mainstream institutions. You would think that the: ’…if its too good to be true…’ mantra would kick in. But no, Orpin was able to gather some £10 million from investors.

This is of course an illegal investment scheme and the Financial Services Authority has obtained orders from the High Court blocking this investment business. Of course the FSA were not prepared to carry out any real investigation, and it was left to Companies Investigation Branch of the Department for Business Innovation and Skills to carry out a probe that resulted in Orpin becoming bankrupt and being disqualified as a director until 2016. It is unlikely that Orpin’s bankruptcy trustee will recover more than 60% of the investors funds, probably much less.

Job done? No – now Orpin is trading as Phoenix Debt Solutions according to a Daily Mail report – with the consent of an Office of Fair Trading’s consumer credit licence! He does not need to trade in his own name to get this accreditation and therefore avoids the constraints of his bankrupcy. As his business is unincorporated, his director disqualification is meaningless.

It does appear incredulous that somebody can be investigated and banned by one regulator but approved by another. However, this as been a criticism of the UK fraud regulation industry for a long time. I have undertaken forensic investigations on behalf of Companies Investigation Branch myself, and apart from the main scam I have uncovered systematic tax avoidance by whole work forces.

Do you think that I was able to get HMRC to take an interest in the tax they were missing out on? It is a retoric question…and the business, though closed down by us, continues to trade from the same premises in a different name.