Cases of fraud, counterfeit goods and false documents can range from low scale fraud such as using a stolen credit card to large and organised, professional counterfeiting operations such as MTIC Carousel Fraud and large counterfeiting operations. These cases are often complex and require a great deal of expertise.
We are able to draw on forensic accountants who have given evidence on our clients’ behalf. These experts can provide reports which show an individual’s or business’s financial activity and liability.
Of course, we know that for businesses, the investigation of an offence can be more damaging than any sentence imposed.
The authorities impose freezing injunctions on accounts and stop a legitimate business from trading. There has been no trial at this point and a business is effectively shut down. In certain circumstances, freezing orders can be unfrozen and we can help get businesses back to work.
Since we also offer business advice, we can ensure you are given comprehensive advice. We can even help in a preventative way if you have doubts as to your business contacts.
What is Fraud ?
A fraud occurs whenever someone says or does something false to try and make himself a gain, or to cause another a loss. It must be done dishonestly.
A fraud can also be committed if someone fails to disclose information which they must in order to cause himself a gain or a loss to another. A separate offence exists when someone in a position of trust does this.
Possessing any article for use in a fraud is now an offence. An ‘article’ is anything real or electronic. This means that having credit cards in someone else’s name to try and buy things in a shop is an offence. Possessing specialist machinery such as credit card skimming devices is also illegal, as is the sale and purchase of these devices. Potentially, a laptop computer could be illegal too if used to try and remotely hack into someone’s wireless network and take their details. Identity fraud and credit card fraud are usually covered by this legislation.
The most common cheque fraud occurs when someone buys goods with a stolen or fake cheque. Once the cheque has cleared the buyer obtains the goods, but when the fraud is discovered the money can be reclaimed from the seller. Typically high value items such as cars are bought in this way. The buyer may also write the cheque for a greater amount than the purchase price and ask for the surplus to be paid to him.
Insurance fraud is common and can take many forms. It may involve claiming insurance for items that never existed or over claiming for items that did. It could also involve arranging to have an accident to claim on your insurance.
This is an investment fraud named after Charles Ponzi who used it to great effect in the 1920s. It involves offering very high returns to investors over a short period, for example 15% over 28 days. People invest some and then sure enough get their 15% after 28 days. These investors will put more money in and spread the word. The new investors’ money will be used to pay the older investors. The scheme will eventually collapse and the promoter will vanish with the investments.
Businesses act as tax collectors for the government, saving up the VAT from sales they make and before paying it all to Customs and Excise. If a business buys goods from an EU member state, they pay no VAT on them, but will still charge VAT to their customers. When a business disappears and does not pay the VAT to Customs and Excise, this is called Missing Trader Intra Community (MTIC) Fraud, or “Carousel Fraud”.
A counterfeit is any item made to imitate something else and sold to deceive the buyer into thinking it is a genuine article.
Counterfeiting currency is said to undermine the economy of the country and for this reason it is treated much more seriously by the courts.
Passports and IDs
There has been a growth in this area of the recent years.
Possessing, manufacturing and distributing false documents are very serious offences.
Possessing articles or equipment to produce false documents is an offence. Printers, scanners, laminators, computers, software and blank passports or IDs are all required to make false documents. It is usually a sophisticated operation involving multiple parties.
Mere possession of a false passport or ID document is an offence. Sometimes however people will come to the UK wanting to work legitimately and earn for their family, but get pushed into acquiring false papers in order to do so.
Producing passports on a large ‘professional’ scale can result in 8-10 years imprisonment. Being involved in such an operation but on a lower level, such as a courier or deliverer can result in a sentence of 4-5 years. For just possessing a false passport, even innocently for work purposes, the sentencing guidelines state 12-18 months in jail is appropriate.