Fraud Newsletter 56 – June 2021

CASES

Bankers Book Evidence Act 1879 s7: applies only to UK “legal proceedings” and the documents referred to are transactional records, and do not include exclude those maintained for regulatory compliance: Meng v HSBC [2021] EWHC 342 (QB).

SENTENCING AND CONFISCATION

Appropriate to dispense with Notice of Application to appoint enforcement receiver where D had absconded 19 years ago and confiscation order unpaid: CPS v Ashgar (Westlaw)

Parker v FCA & Anor [2021] EWCA Crim 956 s.10 POCA determination of D’s interest in property. Victim obtained interest through common intention constructive trust following agreement with D.

BILLS, STATUTES & STATUTORY INSTRUMENTS

Proceeds of Crime Act 2002 Code of Practice Orders (coming into force on 28 June 21) (i) (Investigations) Order 2021: S.I. 2021 No. 726; (Recovery of Listed Assets) Order 2021 2021. S.I. 2021 No. 727; (Cash Searches) Order 2021: S.I. 2021 No. 728; (Investigative Powers of Prosecutors) Order 2021 SI 2021 No. 747

See below for Codes of Practice.

POCA (References to Financial Investigators) (England and Wales and Northern Ireland) Order 2021. S.I. No. 2021 640 lists financial investigators accredited under the POCA s 453.

CONSULTATIONS, GUIDANCE, CIRCULARS AND REPORTS

Corporate Criminal Liability: A Discussion Paper: Law Com. 9 Jun 21

Money Laundering Offences: Legal Guidance: CPS: updated 2 Jun 21 re prosecuting standalone failure to disclose under s330 POCA to MLRO or NCS. Prosecution even if insufficient evidence to establish ml has occurred. Suspicion is enough.

Codes of Practice issued under POCA on 28 June 21: (i) Recovery of cash: Search Powers ; (ii) Recovery of Listed Assets: Search Powers ; (iii) Investigations; (iv) Investigative Powers of Prosecutors.

Guidance under s2A POCA for Relevant Authorities: (NCA, SFO, FCA, HMRC, CPS): Home Office 28 Jun 21.

The auditor’s responsibilities relating to fraud in an audit of financial statements: FRC: ISA (UK) 240: revised 27 May 21.

Fraud and Error: Public Accounts C’tee Report: exposure to Bounce back loan fraud estimated between £16b and £27b: 30 Jun 21. Summary.

Change in Financial Conduct Authority’s culture needed to protect consumers and financial markets: Report Summary HoC Treasury C’tee: 24 Jun 21. Full Report.

Understanding money laundering risks and taking action for art market participants: HMRC Guidance: 28 Jun 21.

Money Laundering from Environmental Crime: FATF 28 Jun 21.

MONETVAL: Annual Report 2020: (EU Committee of Experts on the Evaluation of anti-money laundering measures and the financing of terrorism)

Consultation on our approach to the investigation and prosecution of the new criminal offences: re s58 Pensions Act 2994 offences: The Pensions Regulator.

Global Corruption Barometer EU: People worries about unchecked abuses of power: Transp. Int. 15 Jun 21.

Economic Crime: HoC Treasury Com’tee: 14 Jun 21: Transcript of evidence from Mark Steward (FCA), Simon Yorke (Fraud Investigations HMRC), Chris Hemsley (MD, Payments Systems Regulator) and Martin Swain (Director of Strategy etc , Companies House) focussing mainly on growth of online fraud / cybercrime.

2nd Progress Report on the implementation of the EU Security Union Strategy: 23 Jun 21 includes cyber security and other shared security risks: joint Cyber Unit proposed. Press Release Summary

NEWS

CPS:

• Anti-money laundering expert convicted of siphoning criminal money abroad to HK and China. CPS: 23 Jun 21. Former Chair of Association of UK Payment Institutions ignored transfer of suspect monies by his Money Services Bureau.
• Pair sentenced to 19 years for £36m investment fraud: FT Advisor 1 Jun 21

FCA:

• Treasury committee criticises FCA’s handling of London Capital and Finance. Report labels it “one of the largest conduct failures in decades”. FT Advisor 24 Jun 21.

NCA:

• DoubleVPN takedown: UK server of criminal network taken offline: DoubleVPN provided server infrastructure across the world to provide anonymity for ransomware and cyber attackers: 30 Jun 21.

SFO:

• Response to HMCPSI Complaints Review – June 2021: Lisa Osofsky 1 June 21 accepting HMCPSI recommendations and responding.
• DPA confirmed in principle with Amec Foster Wheeler Energy: 25 Jun 21.
• SFO seizes £248,000 from fraudster with account forfeiture order: 7 Jun 21.
• Former Unaoil executive ordered to pay £402k in confiscation: Energy Voice: 17 Jun 21.
• Wood Group settles Amec Bribery case in $177 million global deal: Bloomberg 25 Jun 21.
• We’re defending the UK as a safe place for business re DPAs: Lisa Osofsky (Director SFO) The Times 20 Jun 21.

HOME:

• Director banned over role in tax avoidance scheme: 11-year disqualification following Insolvency service investigation: 11 Jun 21: FT Advisor
• KPMG faces fine in excess of £15m for ‘grave misconduct’ over Silentnight private equity sale: Financial News: 21 Jun 21.
• Another senior Army officer jailed for fraudulent claim for Continuity of Education Allowance: Mail: 22 June 21
• FRC launches investigation into Greensill auditor Saffery Champness and announced investigation into PwC: BBC 28 Jun 21.
• Identity of couple accused in “Azerbaijan laundromat” revealed: Evening Standard 30 Jun 21
• Significantly increased Government exposure to fraud etc re COVID: Bounce bank loans could result in £27B loss:

·         One in three Brits targeted by a scammer so far during lockdown Citizens Advice: 15 Jun 21.

EU & ABROAD:

• European Public Prosecutor Office (EPPO) launched – supranational prosecution service to investigate EU budget fraud, ML, corruption and cross-border VAT fraud: EC: 1 Jun 21.
• ANOM: Hundreds arrested in massive global crime sting using messaging app: FBI encrypted messaging app sting leads to raids, seizure of 8 tons cocaine, $34m, 250 guns in “biggest ever law enforcement operation against encrypted communication” Europol: 8 Jun 21.
• Danish tax authority’s £46m bill over accused Briton Sanjay Shah: Court orders payment of his £46m legal bill after failure of Denmark’s claim that his firm fraudulently claimed tax rebates in the Cum-Ex scandal. The Times: 9 Jun 21. See Skatteforvaltningen (The Danish Customs & Tax Administration) v Solo Capital Partners LLP (in Special Administration) and Ors: [2021] EWHC 1222 (Comm).
• Biden administration commits to anticorruption efforts in the name of national security: Transparency Int. US: 3 June 21
• Most of $4.4m Colonial Pipeline bitcoin cyber ransom “recaptured” from Darkside by FBI: BBC News: 8 Jun 21.
• Australian Securities and Investments Commission (ASIC) launches investigation into floatation of data analytics firm Nuix (used by US DOJ, CPS and SFO) Sydney Morning Herald 18 Jun 21.