Fraud Newsletter 3 – January 2017

August 23, 2018

Fraud Newsletter 3 – January 2017


Nothing to report


Bribery: Unsuccessful attempt to bribe a local government contracts manager £500 pm was of high culpability but not on the cusp of Cat 1-2 harm. As the offending did not seriously undermine the proper functioning of local government, it was on the cusp of Cat 2-3. Starting point was 4 not 5 years. Sentence reduced from 3 years, to 20 months.  Petherick guidelines [2013] 1 Cr. App.R (S) 116 (respect for private life) also used: Hussain [2016] EWCA Crim 2006: (Westlaw).

CMA leniency (whistle-blowing) policy operated to grant immunity from anti-competition fines to one member of a cartel.

Corruption: Rolls-Royce DPA and Statement of facts (available here) and £671m settlement Leveson judgment: 17 Jan 2017.

Conspiracy to defraud/corrupt/ launder money etc: in deciding on culpability in conspiracy it is legitimate to look not only at what the particular appellant did but at what the agreement was collectively trying to do. When harm cannot be quantified, the appropriate course is to move the case up to the corresponding point in the next category above the level of harm which has been quantified: Samuriwo [2016] EWCA Crim 194, [2017] 1 Cr. App. R. (S.) 30. (Westlaw).

Destruction of evidence during SFO investigation – s2(16) CJA 1987:  destruction of mobile telephones:  12 months imprisonment: Kingston (unreported 21 Dec 2016).

Insider Dealing:

  • 12 months for portfolio investment manager who pleaded guilty to 2 counts of insider trading: Lyttleton (unreported 21 Dec 16).
  • Birk and Mohal (unreported 13 Jan 2017) inside information re takeover of Logica Birk; 16 months suspended for 2 years; 200 hours CSO, £162k confiscation; Mohal (former Logica employee) 180 hours CSO; FCS prosecution costs £42k.

Missing trader Vat fraud: 8, 7 and 5 years’ imprisonment upheld:  Chada [2016] EWCA Crim 1955 (Westlaw).


Asset Freezing (Compensation) Bill 2016  laid before Parliament:  imposes restrictions on assets owned by persons involved in supplying terrorist organisations in the UK with arms, for the purpose of securing compensation for citizens of the UK affected by the supply of such arms.

The Investigatory Powers Act 2016 (Commencement No.1 and Transitional Provisions) Regulations 2016. SI 2016/1233 (C.85)  empowers the Sec. of State to request retention of communications and internet data under Investigatory Powers Act 2016.


Corporate Fraud in UK:  Kroll’s annual Global Fraud and Risk Report: 90% of British executives experienced fraud in last 12 months, (more than in any other country except Colombia – 95%). UK figures increase from 2015 (74%) include theft of company assets (41%) and funds (37%). Increase partly explained by possibility that UK companies are more aware of their responsibilities to manage and report fraud, cyber and security incidents. The Report is available on application from Kroll. Kroll has a useful Intelligence Centre.

Corruption:  Transparency International Corruption Perceptions Index (CPI) for 2016. Average global score is 43 which indicates endemic public sector corruption. UK score is 81 (10th out of 176 countries).

Fraud and Cybercrime: KPMG analysis shows UK fraud now at £1.1b pa (increase of 55%), main driver is cybercrime.

FCA Fines: Compliance Complete reports (29 Dec 16) that the value of fines imposed by the FCA fell to 2008 figures. Comparable figures for previous years are:

2011       £66.14 m

2012       £311.00 m

2013       £474.00 m

2014       £1,470.00 m

2015       £905.00 m

2016       £22.22  m


Arlidge Re-launch: launch of latest edition of Arlidge and Parry on Fraud: 3 Feb 17.

Brexit and European Security:  Centre for European Reform (CER) podcast interview with Rob Wainwright, director of Europol about challenges following Brexit.  The following points made: there has been a globalisation of crime requiring multinational institutions; the migrant refugee crisis created an opportunity for criminals; security should be a Brexit priority; Europol was likely to become a data centre for Europe.

Competition and Markets Authority (CMA): settlement with Thomas Armstrong (Timber) Ltd for £2.193 m and Hoffman Thornwood Ltd for £0.684m after admissions to market sharing, price co-ordination, bid-rigging and exchanging commercially sensitive information, without instigating criminal proceedings.

Money Laundering: (i) Council Directive (EU) 2016/2258 of 6 December 2016 replaces Directive 2011/16/EU re access to anti-money-laundering information by tax authorities, 16 Dec 16.  (ii) European Commission proposal for a new Directive on countering money laundering: suggests a system of controls re cash entering or leaving the EU to complement the legal anti-money laundering and terrorist financing framework laid down in Directive 2015/849, 21 Dec 16.