Fraud Newsletter 7 – May 2017

CASES

Chodorek v Poland [2017] EWHC 995 (Admin), [2018] 1 Cr. App. R. 6: whether withdrawing cash in excess of a permitted limit amounts to or can amount to theft, examining earlier authorities including Gdansk Regional Court v Ulatowski [2010] EWHC 2673 (Admin), [2011] Lloyd’s Rep. F.C. 18 and Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd [1980] 1 QB 677.

R v B and others [2017] EWCA Crim 534, [2017] 2 Cr. App. R. 25: local authority has no authority to prosecute fraud (alleged £4m Legal Aid fraud by solicitor’s firm). As a matter of policy, major prosecutions should be conducted by a statutory prosecution agency.

Director SFO v Eurasian Natural Resources Corporation Ltd [2017] EWHC 1017 (QB), [2017] 2 Cr. App. R. 24: documents (e.g. notes of interviews with employees) generated during an internal investigation conducted by outside solicitors to ascertain facts to determine and advise whether or not the company may have committed an offence were not subject to LPP.  The evidential threshold had not been established that litigation between ENRC and the SFO was a real likelihood rather than a possibility (see USA v Philip Morris [2003] EWHC 3028).

1. (on the application of Forsey) v Northern Derbyshire JJ [2017] EWHC 1152 (QB); [2017] I.C.R. 1161 showing the wide ambit of the Carltona principle [Carltona Ltd v Commissioners of Works [1943] 2 All E.R. 560] (Westlaw: case summary) permitting the delegation of ministerial authority unless expressly or necessarily excluded).

SENTENCING AND CONFISCATION

Operation Cotton (agricultural land investment fraud):  FCA obtains 8 confiscation orders totalling £2.2m (earlier sentences totalling 26 years – 110 investors lost £4.3m), 24 May 17.

BILLS, STATUTES & STATUTORY INSTRUMENTS

Draft Money Laundering Regulations 2017 published to implement 4MLD (Directive 2015/849 on use of financial system for money laundering and financing terrorism), currently proposed to come into force on 26 June 2017.

Note: in an unusual development, High Value Dealers will be obliged to apply anti-money laundering procedures to their business and customers if they make rather than receive cash payments of €10,000 (approximately £8,300) or more.

CONSULTATIONS, GUIDANCE, CIRCULARS AND REPORTS

Corporate Beneficial Ownership Register:   evidence for the Department of Business Energy and Industrial Strategy (BEIS)’s consultation on introducing a beneficial ownership register for overseas companies owning UK property or involved in UK government procurement ends on 15 May 17.

Government Consultation on post-Brexit legal framework for imposing and implementing sanctions closes on 23 Jun 17.

ICSA Guidance Note: Terms of Reference for the audit committee Mar 17.

Law Society’s Guidance on solicitors’ attendance and duties in s2 interviews 4 May 17. NB. There is no right of legal representation at s2 interviews: R (Lord & others) v SFO [2015] EWHC 865. SFO Guidance for Lawyers in s2 Interviews  6 June 2016.

NEWS

Companies House: anti-money laundering provisions strengthened:  as from 26 June 2017 every change in about people with significant control (PSC) of a company must be registered within 14 days of a change and Companies House informed within 14 days thereafter. Some present exemptions will no longer apply.

Data Protection Offences: G7 meeting in Bari agreed to continue to improve effective supervision and monitoring of the MVTS (money transfer and value services), enhance sharing of cyber security information and development of a cyber security insurance market.  Communique: 13 May 2017.

SFO Abolition: Tory 2017 Manifesto proposes to incorporate the SFO into the NCA, reprising PM/TM’s attempt of 2011.