Briefings
Mishcon Fraud Watch
Personal
Banking & Finance
Fraud: Claimant
Fraud: Defendant
Insolvency and Recoveries
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| April 2008 |
Welcome to the April 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.
United Kingdom
Assets Recovery Agency (ARA)
The Assets Recovery Agency merged with the Serious Organised Crime Agency (SOCA) on 1 April 2008. SOCA now has criminal and civil powers to reduce harm caused to individuals and communities by organised crime.
SOCA press release, 31 March 2008
The ARA has been granted a Consent Order over £5m of assets against John Szepietowski, Susan Ann Szepietowski both of Surrey, Merchant Taylor Company Limited, registered in the British Virgin Islands, Cobham Investments Limited and Cobham Investments Leisure Limited. The Order was granted in connection with an investigation into the alleged money laundering of the proceeds of drug trafficking.
ARA press release, 16 March 2008
Banking and Finance
The Lothian Pension Fund, one of Scotland's largest pension funds, is suing Ericsson in connection with an alleged fraud that cost the company almost £2m. Lothian claims it bought shares on the strength of 'false and misleading' sales claims. The case is being brought in New York where the shares were purchased.
The Mail on Sunday, 9 March 2008
A report commissioned by the Association of Chief Police Officers (ACPO) has been sent to UK police forces and finance industry. The report, which highlights confirmed mortgage fraud of £700m in 2007, contains guidance for police on how to identify and investigate mortgage fraud.
ACPO press release 22/08, 5 March 2008
NHS
Philip Neal, a former NHS finance chief, has been jailed for twelve months after pleading guilty to four counts of forgery. Mr Neal falsified valuations of hospital land to make it appear that Mid Essex Hospital Services NHS Trust had achieved a £1m profit.
The Times, 27 March 2008
Serious Fraud Office (SFO)
The House of Lords has issued a ruling against aspects of the SFO's case against Goldshield, a drug manufacturer. The Lords ruled that price fixing does not in itself amount to conspiracy to defraud. The ruling allows the SFO to amend and re-present its case against the drug company.
The Daily Telegraph, 13 March 2008
North America
Banking and Finance
Paul and Zibiah Gunter, a father and daughter, have been arrested in Florida on charges of conspiracy, fraud and money laundering in connection with an alleged boiler room fraud involving over 15,000 Britons. They are suspected of selling shares in shell companies to individuals in the UK.
The Guardian, 14 March 2008
John Marshall, the former vice-chairman of the board of International Securities Exchange, has been charged with leaking insider information about the exchange's $2.8bn merger with Eurex in 2007.
Financial Times, 14 March 2008
Financial Guaranty Insurance Company (FGIC), a New York-based bond insurer, has filed a lawsuit accusing IKB, a German bank, of an alleged $1.9bn fraud. FGIC alleges that IKB and its affiliates provided false and misleading information that convinced them to assume billions of dollars of potential losses on off-balance sheet special investment vehicles.
Financial Times, 11 March 2008
European Union
VAT Fraud
The European Commission has adopted proposals for the amendment of the VAT Directive and the VAT Administrative Cooperation Regulation. The amendments are intended to enable member states to detect carousel fraud more quickly.
European Commission press release IP/08/454, 17 March 2008
Western Europe
Art
Spanish police and the FBI have charged seven people in connection with a multimillion-dollar international art forgery operation. The gang sold forged works of art on eBay claiming them to be by artists such as Picasso, Dali and Warhol.
The Guardian, 20 March 2008
Food and Drink
Calisto Tanzi, former chief executive of Parmalat, has gone on trial in Italy accused of fraudulent bankruptcy. The charges relate to the collapse of the group in 2003 leaving
€14bn in debts.
The Guardian, 14 March 2008
Middle East
Aerospace
Fouad al-Zayat, a millionaire gambler, has lost an appeal at the Old Bailey against an order freezing his assets in the UK. The Iranian government made the request in connection with a £60m alleged fraud involving a presidential jet.
The Times, 8 March 2008
Asia
Banking and Finance
Lehman Brothers are to sue Marubeni, a Japanese trading company, for the return of $350m. It is alleged that two former Marubeni employees defrauded Lehmans using a now bankrupt fund, which Lehmans believed was backed by Marubeni. The company denies any connection between them and the fund.
The Times, 31 March 2008
Mishcon de Reya
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 run both the Asset Protection & Recovery Network, made up of international legal fraud specialists and the Financial Fraud Group, for risk and compliance officers.