Fraud Newsletter 14 – December 2017

CASES

Adverse inferences to be drawn from silence in interviews under s34(2)(d) CJPOA 94 or at common law: AB v CPS [2017] EWHC 2963 (Admin), [2018] Crim. L.R. 576, applying Hughes LJ’s 3 question test in T v DPP [2007] EWHC 1793 (Admin) [§26].

Bitcoins seized in restraint converted into cash to be held by police under POCA s47. Teresko [2018] Crim. L.R. 81 (HHJ Lodder QC, Kingston Cr. Crt) (Westlaw).

Crash for cash fraud: civil contempt for thoroughly false and dishonest claims made by complainants in civil proceedings. A reckless individual who verifies a false statement with no care or consideration for whether it is true or false may be guilty of contempt, even if no actual interference with the cause of justice occurs: Liverpool Victoria Insurance Co. v Yavuz and Ors [2017] EWHC 3088 (QB).

Criminal Cause or Matter has no standard meaning – different meanings in different statutes: Belhaj v DPP [2017] EWHC 3056 (Admin); [2018] HRLR 4 [extradition proceedings].

Ivey v Genting [2017] UKSC 67, [2018] 1 Cr. App. R. 12. Although the suggested removal of the second limb of Ghosh is obiter, in DPP v Patterson [2017] EWHC 2820 (Admin), [2018] 1 Cr. App. R. 28 Leveson LJ said: “it is difficult to imagine the Court of Appeal preferring Ghosh to Ivey in the future.”

SENTENCING AND CONFISCATION

Nothing of moment

BILLS, STATUTES & STATUTORY INSTRUMENTS

Administrative Forfeiture of Terrorist Cash and Terrorist Money Held in Bank and Building Society Accounts (Cash and Account Forfeiture Notices) Regs 2017. S.I. 2017 No. 1226 in force on 31 Jan 18 re forfeiture under ATCSA 2001.

Criminal Finances Act 2017 and POCA 2002 amendments re detention, seizure and forfeiture of assets derived from or intended to be used in unlawful conduct or are resources of a proscribed organisation etc. have resulted in a number of amendments to give them effect, including:

• Crown Court (Amendment) Rules 2017 in force on 31 Jan 18.
• Magistrates’ Courts (Detention and Forfeiture of Cash) (Amendment) Rules 2017I. 2017 No. 1291 in force 31 Jan 18.
• Magistrates’ Courts (Freezing and Forfeiture of Terrorist Money in Bank and Building Society Accounts) Rules 2017I. 2017 No. 1290 in force 16 Apr 17.
• Magistrates’ Court (Freezing and Forfeiture of Money in Bank and Building Society Accounts) Rules 2017 I. 2017 No. 1297 in force on same day as POCA (Administrative Forfeiture Notices) Regs 2017 (see below).
• Magistrates’ Courts (Detention and Forfeiture of Terrorist Assets) Rules 2017 I. 2017 No. 1296.
• POCA (Administrative Forfeiture Notices) Regs 2017 S.I. 2017 No. 1233.
• Proceeds of Crime Act 2002 (Investigations in different parts of the UK) (Amendment) Order 2017I. 2017 No. 1280 in force 31 Jan 18.

Draft Investigatory Powers (Interception by Business etc for Monitoring and Record-keeping Purposes) Regulations 2018 published 18 Dec 17 to replace Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000. The new Regs replicate the old as to the circumstances where employee and other communications can lawfully be intercepted under RIPA.

Investigatory Powers (Codes of Practice) Regulations 2018  when passed will bring into force the following 5 Codes of Practice: (i)  Bulk Acquisition of Communications Data; (ii) Equipment Interference; (iii) Interception of Communications; (iv) National Security Notices; and (v) Intelligence Services’ Retention and Use of Bulk Personal Datasets.

Investigatory Powers (Review of Notices and Technical Advisory Board) Regulations 2018 published to come into force when s245 IPA 2016 comes into force.

Oversight of Professional Body Anti-Money Laundering and Counter Terrorist Financing Supervision Regulations 2017 S.I. 2017 No. 1301 re FCA oversight of bodies supervising compliance with Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 SI 2017 No. 692.

Policing and Crime Act 2017 s 44 (prohibiting use of police civilians and volunteers acting as covert intelligence sources) under s29 RIPA in force as from 15 Dec 17. Policing and Crime Act 2017 (Commencement No.5 and Transitional Provisions) Regulations 2017 (SI 2017 No. 1139).

EU proposal on Confiscation and Freezing Orders 2016/0412 (COD) to improve cross-border enforcement, set minimum standards etc.

CONSULTATIONS, GUIDANCE, CIRCULARS AND REPORTS

Anti-Money Laundering Supervisory review: Government  Response:  18 Dec 17.

Conspiring with Oneself: Paul Jarvis Archbold Review [2017] Issue 9, 7-9 suggesting adoption of civil law acceptance of conspiracy between company and sole director. [Ed. Does not deal with the ameliorating effect of civil law requirement for proof of actual loss, or that in crime individual intent without loss/action by directors would be enough for corporate liability].

CPS internal fraud controls improving: Report from HMPCSI Nov 17.

Fraud on Provision of Labour in Construction: Responses summary, 1 Dec 17.

Fraud Act 2006 v- Ten Years on: Professor Virgo Archbold Review [2017] Issue 10, 6-9.

Offshore Tax Evasion Consultation concluded: UK plans to develop multi-national rules with EU & OECD: 1 Dec 17.

Fraud – a Growing Threat: Public Accounts Committee Report, 6 Dec 17. An estimated 53% (1.9m) of all fraud incidents in year to Sep 16 were cyber-related. 80% estimated not reported to police.

5^th EU Money Laundering Directive agreed 15 Dec 17.  EU Factsheet. Particular relevance to    letterbox companies (i.e. beneficial ownerships revealed).

Retention of Communications Data Consultation on the Government’s proposed response to EU Court of Justice ruling (Joined Cases C-203/15 and C-698/15) re retention of data, Home Office Nov 17.

Scrap Metal Dealers Act 2013: Home Office 5 year review on the operation of the Act.

Self-laundering: EU proposal for minimum money laundering rules, standard definitions and self-laundering (hiding proceeds of one’s ill-gotten gains), 12 Dec 17.

Tackling the Hidden Economy: Public Sector Licensing. HMRC consultation to close on 2 Mar 18.

VAT: Tackling fraud on goods sold online – update on split payment: Consultation outcome, 1 Dec 17.

VAT Fraud –EU initiative: Rules proposed for consultation to boost cooperation between Member States national tax authorities and law enforcement agencies, open new lines of communications, information sharing on imports into the EU etc.

NEWS

Banking Protocol Fraud Prevention Scheme reported to be a success. UK Finance 13 Dec 17.

Bitcoins and Money Laundering: Police report that crypto currency cash machines are being used for money laundering: 4 Dec 17.

Convictions for release of personal data illegally obtained by private investigators:  ICO prosecution against company director, management private investigators, 7 Dec 17.

EDPS calls for consistency in EU approach to Criminal Records: More efficient exchanges of information on non-EU citizens sought. Central database proposed, 13 Dec 17.

NFI Fraud Detection and Prevention Initiative: Tenders for National Fraud Initiative (NFI) invited. Cabinet Office, 30 Nov 17.

Money Laundering and Terrorist Financing controls in Higher Risk Jurisdictions: Treasury Advisory Notice re risks in some jurisdictions, 5 Dec 17.

New fingerprint chemical: Innovative chemical permits easier recovery of prints from previously challenging or impossible surfaces such as knives subsequently cleaned, fired cartridges etc. MoD, 27 Nov 17.

New National Economic Crime Centre (NECC) announced: NCA 11 Dec 17.