UK: Mishcon Fraud Watch (March)

Welcome to the March edition of Mishcon Fraud Watch, prepared by the Corporate Investigations & Asset Recovery Group at Mishcon de Reya to provide businesses and their advisors with a snapshot of what has been happening in the world of fraud in the last month.

Financial Investigators from the Assets Recovery Agency have obtained a confiscation order for £72,968.14 against Hanif Sattar Daud of Leicester, after he was convicted of dealing in counterfeit clothing and footwear. 

They have also obtained a confiscation order for £39,000 against James Joseph Waldron, West Yorkshire, after he was convicted on charges relating to the sale of counterfeit goods.

Lord Justice Laws has ruled that three former NatWest Bankers can be extradited to the US to face charges of wire fraud in connection with the collapse of Enron.  David Bermingham, Gary Mulgrew and Giles Darby, who have always maintained their innocence, are seeking an appeal to the House of Lords.

Fashion designer, Roberto Cavalli, has been charged with tax fraud after writing off £1.5m of improvements to his villa in Florence as business expenses. 

Milan magistrates have completed an investigation into accusations that Italian Prime Minister, Silvio Berlusconi, tried to bribe a witness in a fraud case.  The judge could send Mr Berlusconi to trial during campaigning for the general election, which takes place on 9 and 10 April.

Fumito Kumagai, Director of Livedoor Co, has been arrested in Tokyo on charges of falsifying the company's earnings for the year ending September 2004.  New arrest warrants, which relate to the same charges, have been issued for Takafumi Horie and three former Livedoor executives. 

The Australian Federal Government has announced funding of AU$305m to investigate alleged offshore tax frauds.  Funds will be given to several federal agencies, including the Australian Tax Office, the Australian Federal Police and the Department of Public Prosecutions.  Wealthy and high profile individuals are already under investigation, as are their tax advisers.

American International Group Inc (AIG) has agreed to pay $1.64bn to settle charges of fraud, bid-rigging and improper accounting.  Four former executives of General Re and AIG have been charged with federal fraud and conspiracy charges following a joint investigation by the Attorney General's Office, the Insurance Department and the SEC.  All four have pleaded not guilty to allegations that they conspired to mislead the market, using a sham reinsurance transaction to show increasing reserves and allow AIG to report inflated stock prices in 2000 and 2001. 

HypoVereinsbank has agreed to pay $29.6m to avoid prosecution in the US for assisting KPMG in setting up fraudulent tax shelters. 

A District Court Judge has given preliminary approval for a $6.7bn settlement to be paid to shareholders of Enron by three banks that participated in a scheme to defraud Enron shareholders.  Canadian Imperial Bank of Commerce, JP Morgan Chase and Citigroup will pay $2.4bn, $2.2bn and $2bn respectively.

Christopher Cahill, a former executive with Eagle Global Logistics has pleaded guilty to federal fraud charges.  The company was hired in 2002 by a subsidiary of Haliburton to fly cargo to Iraq.  Mr Cahill admits adding fraudulent surcharges to invoices to cover 'war risk'.  It is thought that the scam began in November 2003 and totalled $1.4m. 

McKesson Corp, a drug wholesaler, has agreed to pay $3m to settle allegations that it defrauded the Pentagon.  The company is said to have overcharged for pharmaceutical products from October 1997 to December 2001.

Mishcon Fraud Watch is published by the Corporate Investigations & Asset Recovery Group of Mishcon de Reya Solicitors.  Widely recognised as the leader in the field of fraud investigations, the Group has pioneered the use of financial fraud techniques in numerous fields, including the rapidly growing areas of theft of confidential information and counterfeiting.  The Group founded and run both the Fraud Network, made up of international legal fraud specialists, and the Financial Fraud Group, for in-house fraud lawyers and compliance officers. 

To find out how you can turn your losses into profits (Tulip) please go to www.mishcon.co.uk/tulip

To view the Corporate Investigations & Asset Recovery Group's research report on Protecting Corporate Britain please visit www.mishcon.co.uk/fraudreport

To learn more about the Corporate Investigations & Asset Recovery Group, please visit http://www.mishcon.co.uk/iarg