If you are accused of fraud and are being investigated by the police or a regulatory body such as the SFO, NCA, HMRC, or FCA, it is essential that you contact an experienced Business Crime Solicitor immediately. We see so many cases in which it is clear that if we had been instructed earlier, the investigation/prosecution would never have gone as far as it had.
Fraud is a complex crime and is extremely hard to prove to the criminal standard (beyond reasonable doubt). However, if you are convicted, depending on the nature and extent of the fraud, you could face up to ten years’ imprisonment. In addition, fraud investigations can be long, extremely stressful, and cause untold damage to your business reputation. In addition, without meticulous, smart, and proactive legal advice, a person or company could bring a civil claim for fraud against you at the same time the criminal investigation/prosecution is taking place. This is becoming more common as the civil test for liability (on the balance of probabilities) is lower than that required for criminal prosecution.
What is fraud?
Fraud is the use of trickery to gain a dishonest advantage, which is often financial, over another person. Types of fraud include (but are not limited to):
- Electoral fraud
- Mortgage fraud
- Beneficiary fraud
- False accounting
- Fraudulent trading
- Misrepresentation
- Identity theft
- Immigration fraud
- Ponzi schemes
- Debit and credit card fraud
- Tax fraud
- Insurance fraud
In addition to the above, there are also many types of conspiracies to defraud.
How can I defend an allegation of fraud?
The most common defence in either a criminal or civil fraud trial is that the Defendant did not act dishonestly. For example, if you are accused of making false representations you can argue that at the time you were unaware that what you said was untrue. In the case of identity theft, your defence may be that the person whose identity you have been accused of stealing permitted you to use their details.
When establishing whether or not you have been dishonest, the Court will use the test set out by the Supreme Court in Ivey v Genting Casinos (UK) Ltd t/a Crockford [2017] UKSC 67, namely:
- What was the defendant's actual state of knowledge or belief as to the facts?
- Irrespective of the defendant's belief about the facts, was their conduct dishonest by the objective standards of ordinary decent people?
There are other general defences available for criminal fraud, for example, necessity, duress, and mistake. An experienced Fraud Defence Solicitor can swiftly examine the facts of your case and the Prosecution’s evidence and advise you on the defence/s that is most likely to achieve success.
Do I need a Fraud Solicitor if I am asked to attend an interview under caution?
Never, ever attend an interview under caution or even an informal ‘chat’ without your Solicitor present.
The powers of the police and other regulatory bodies "who are charged with the duty of investigating offences or charging offenders" to conduct interviews under caution are contained in the Police and Criminal Evidence Act 1984 (PACE 1984).
If you believe you are innocent it is natural to assume that if you speak to the authorities and calmly tell them your side of the story they will promptly apologise, shake your hand, and the matter will be put down to a misunderstanding. Unfortunately, this is not how things work. The job of the police and regulatory authorities is to investigate suspected criminal activity with the aim of bringing a successful prosecution. Having a Fraud Solicitor at your side who can not only advise you but also ensure the interviewers do not overreach their powers.
When it comes to SFO investigations, it is important to note that it obtains its investigatory powers from section 2 of the Criminal Justice Act (CJA) 1987. Therefore, it can compel organisations/people to produce documents and other evidence, apply for a search warrant, and attend interviews. These are referred to as ‘compulsory powers.’
Importantly, section 2 allows the SFO to insist a person attends an interview that is not conducted under caution nor subject to the Police and Criminal Evidence Act (PACE). Therefore, there is no right to silence and if you want to have a Solicitor present, they need to convince the investigator that they should attend and if they are so permitted, agree to restrictions regarding their conduct.
There are two safeguards concerning the interview powers provided by section 2, namely:
- The powers cannot be used to obtain information subject to legal professional privilege, and
- Answers provided in a section 2 interview cannot be used in a prosecution case if one is brought against the Defendant for the offence under investigation. However, they can be used to prosecute the Defendant for an offence of misleading the investigation.
Refusing to comply with the SFO when it is exercising a compulsory power or providing false or misleading information is a criminal offence and can lead to a custodial sentence.
Concluding comments
Fraud and the various powers given to the police and regulatory authorities to investigate it are incredibly vast and go beyond what can be explained in a single article. For example, because it is notoriously difficult to successfully prosecute fraud and corruption cases if an investigation does not meet the relevant criteria to bring a prosecution but property derived from crime can be identified, authorities can use their civil recovery powers to freeze and recover assets.
If you are accused of criminal fraud or a civil claim for fraud has been brought against you, please contact us immediately. If you are subject to a ‘dawn raid’ we can provide an emergency response.
To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at [email protected] and/or contact our Head of Business Crime, Abbas Nawrozzadeh.