UK: Fraud Watch (November 2007)

Welcome to the November edition of Mishcon Fraud Watch, prepared by the Fraud & Insolvency Group at Mishcon de Reya. Its aim is to provide businesses and their advisors with a snapshot of what has been happening in the world of fraud in the last month.

We make no judgement whatsoever as to the morality, legality or appropriateness of the conduct which forms the subject matter of this bulletin. We simply aim to bring these matters to the attention of those involved in the prevention, detection and investigation of fraud.

Michael Bright, the former chief executive of Independent Insurance, has been sentenced to seven years in jail after being found guilty of fraud.
The Daily Telegraph, 25 October 2007

Insurance companies uncover fraudulent insurance claims worth £13m every day, according to the ABI.
The Independent, 19 October 2007

The Serious Crime Bill had its third reading in the House of Commons on 24 October 2007. The Bill provides for, amongst other things: information to be shared or processed to prevent fraud; the transfer of functions of the Director of the Assets Recovery Agency to the Serious Organised Crime Agency; and the Proceeds of Crime Act 2002 to be amended in relation to certain investigations and in relation to accredited financial investigators and search warrants.

The Serious Fraud Office has asked Ofcom for information about the premium-rate phone-in scandals at GMTV and ITV.
Financial Times, 20 October 2007

According to a recent survey by PriceWaterhouseCoopers, the average direct cost of economic crime to victim companies in the UK is approximately £1.75m. This is almost double the estimated cost in 2005. The survey also found that bribery and corruption are the fastest growing types of fraud in the UK.
PWC biennial survey, Economic Crime: People, Culture and Controls, October 2007

The Fraud Advisory Panel claims that the fight against fraud has been hampered by bad ethical behaviour by business leaders.
Fraud Advisory Panel Annual Review, 29 October 2007

Giles Darby, David Bermingham and Gary Mulgrew, three NatWest bankers accused of fraud in the US, have begun negotiations over a possible plea bargain.
The Daily Telegraph, 22 October 2007

US authorities have imposed a fine of US$373m on BP. The all-in-one fine covers, amongst other things, a penalty for fraud related to propane price-fixing.
The Guardian, 26 October 2007

Forty people, including three acting senior executives and a former president of the Brazilian subsidiary of Cisco Systems, have been arrested in Brazil in connection with suspected tax fraud and other crimes involving the non-payment of up to US$830m.
Financial Times, 18 October 2007

Mishcon's Fraud Watch is published by the Fraud & Insolvency 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 runs both the Asset Protection & Recovery Network, made up of international legal fraud specialists and the Financial Fraud Group, for risk and compliance officers