Defending Fraud Prosecutions and Search Warrants
Most financial crimes are prosecuted by specially trained lawyers with experience in these complex cases which often carry severe penalties, including significant prison sentences, confiscation of assets, a criminal record and other life-changing reputational consequences. Our white-collar defence lawyers have a track record of dealing with these types of investigations and prosecutions and will help you promptly and effectively respond to any allegations of fraud or regulatory misconduct.
With a background in dealing with many public figures, we can also assist and advise you on how best to deal with any reputational damage that may follow an investigation and refer you to the right external advisers where necessary.
We advise Directors and individuals in relation to their responsibilities under the Companies Act, Proceeds of Crime Act, Taxes Management Act and Directors Disqualification proceedings.
Financial crimes are investigated by a bewildering array of government agencies, often with overlapping areas of responsibility. We can assist you in dealing with financial investigations conducted by the:
- The City of London Police,
- Serious Fraud Office (SFO),
- Financial Services Authority (FSA),
- HMRC Special Compliance Office,
- Revenue and Customs Prosecutions Office (RCPO),
- Department of Business Enterprise and Regulatory Reform (BERR).
Because there are so many different types of fraud, convictions for fraud charges will vary greatly and will depend on the facts of the case, the value of the property taken (or amount of injury caused) and an individual’s criminal history. The Serious Fraud Office has developed a taxonomy of fraud cases identifying seven main groups of fraud. Each of these groups is further broken down into categories consisting of a number of defined fraud types.
We assist individuals and companies in challenging and contesting fraud prosecutions and linked regulatory investigations in all forms.
Expert Evidence in Fraud Cases
Expert evidence can be critical in dictating the outcome of an investigation or trial. This is why we regularly work alongside and instruct expert forensic accountants, auditors, and other professionals to assist us in the preparation of cases of financial crime.
Experts with a specialist knowledge of a particular business area, can often rebut allegations of dishonest conduct or malpractice by for example, commenting on whether an individuals business practices and patterns of behaviour accord with acceptable industry practices or presenting audit trails to verify the viability of a business venture that the Crown may allege is a sham.
Searching For Answers
In Entick v Carrington (1765), a case concerning the entry to and searching of premises, the court ruled:
“…if this is law it would be found in our books, but no such law ever existed in this country; our law holds the property of every man so sacred, that no man can set his foot upon his neighbour’s close without his leave.”
Entick v Carrington is probably the earliest case law concerning the law of search and seizure, a legal power now described as a ‘nuclear option’ in the court’s arsenal (R (Mercury Tax Group) v HMRC  EWHC 2721). But, it is certainly not the last word, and over the previous few years, there has been a substantial body of developing case law designed to ensure that this most potent state intrusion into the lives of individuals and business is exercised lawfully and proportionately.
Why does it matter?
First and foremost, core constitutional principles are at stake, the power of the state to enter private property (very often during a dawn raid and with the family present) should not be used lightly, particularly during what is normally the early stages of a criminal investigation.
Warrants should only be sought as a “last resort and should not be employed where other less draconian powers can achieve the relevant objective” (R (Mills) v Sussex Police and Southwark Crown Court  EWHC 2523 (Admin)).
The taking of documents, files, computer servers and systems can have a profound reputational impact on business when staff see what is happening, and they and clients lose confidence in the business. The inability to carry out ‘business as normal’ can put the survival of business at risk and can place an unbearable toll on the individuals involved.
Can I challenge a search warrant?
The powers of search and seizure are spread out over a great many legislative provisions, and the key message is to take legal advice as soon as you are aware that anything might happen or has already happened.
What is clear is that warrants are very often granted on an erroneous basis, with scant regard for the legal principles involved.
Drawing a warrant too widely is a frequent issue (see: R (F, J and K) v Blackfriars Crown Court and Commissioner of Police of the Metropolis  EWHC 1541 (Admin)).
While warrants are issued via a judicial process, the Judge will only be able to rely on what is disclosed by the investigator in private.
Police officers are duty bound to provide the court with full and frank disclosure, highlighting any material which is potentially adverse to the application. This includes a duty not to mislead the judge in any material way. The judge must then apply a rigorous critical analysis to the application so that they can be satisfied that the evidence provided justifies the grant of the warrant and give reasons for their decision.
In Redknapp v Commissioner of Police of the Metropolis  EWHC 1177 (Admin) the court ruled:
“The obtaining of a search warrant is never to be treated as a formality. It authorizes the invasion of a person’s home. All the material necessary to justify the grant of a warrant should be contained in the information provided on the form. If the magistrate or Judge in the case of an application under s.9, does require any further information in order to satisfy himself that the warrant is justified, a note should be made of the additional information so that there is a proper record of the full basis upon which the warrant has been granted.”
Companies & Bribery
Interiors Ltd who were convicted of failing to have adequate provisions in place to prevent bribery.
Two directors received prison sentences for offences under the Bribery Act 2010, and the company faced this offence under section 7.
What did they do?
The allegation was that the company paid a large fee to obtain confidential information to give them an advantage when tendering for an office refurbishment project.
A new CEO launched an internal investigation when he became aware of the arrangement and he implemented a new anti-bribery policy.
Despite that policy being put in place one of the directors still tried to make the final payment on the arrangement. As a result, the company self-reported to the police and National Crime Agency.
What about the directors?
The two directors were charged with offences under sections 1 and 2 of the Bribery Act, one was sentenced to 12 months’ imprisonment, the other to 20 months’ imprisonment, both were disqualified as being directors, for 6 and 7 years respectively.
Was there an alternative to prosecution?
By self-reporting the company could have been offered an agreement to pay a fine so that they would not be prosecuted if they complied (a Deferred Prosecution Agreement).
In this case the company was, by then, dormant so they could not have paid. Although the prosecution was queried by a Judge, the decision to continue with the prosecution was made to send a message to small companies that bribery needs to be taken seriously, and to make sure that procedures and policies were put in place by them.
What was their defence?
The offence under section 7 relates to a company failing to prevent bribery, the company relied on the defence that they had “adequate provision” in place but were convicted after trial.
Is there guidance anywhere for my business?
Guidance is available from the Ministry of Justice regarding the types of bribery prevention procedures that companies should have in place –
How we can assist
There are various avenues of legal address available, including judicial review. Early intervention may result in the return of documents and property, and in some instances, a claim for damages might be possible.
To discuss any aspect of your case please contact partners Jonathan Black or James Skelsey on 0207 8373456
see also Facilitating Tax Evasion
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