‘Slowdown will increase reported fraud cases’

Link: SFO director to head ICAEW fraud panel

In his introduction to the SFO’s 2002/03 annual report, Wardle said: ‘Experience leads us to expect an increased number of referrals following any downturn or slowdown in the economy.’

Wardle said the office’s budget was set to increase – to £33m for 2004/05 and £37m for 2005/06 – and that the office had overhauled internal systems to cope with an increased caseload. The SFO, which acts as both investigator and prosecutor of large complex frauds, also has plans to increase its multidisciplinary staff.

A spokesman said that the SFO was looking to work with fraud experts within the City of London police force in cases outside the Square Mile.

The year covered by the report saw the office involved in 71 cases and marked changes in the regulatory climate. In particular, the ‘search and sift’ provisions within the Criminal Justice and Police Act 2001 came into force. These provisions take account of advances in technology and the internet, for example, by allowing the SFO and police to seize and remove documents even if they are embedded in other material – such as a hard drive.

In addition, authorities now hold extra powers for investigation, restraint and confiscation thanks to new legislation aimed at combating money laundering. The Proceeds of Crime bill came into force in February and March 2003.

‘The new power to restrain at an early stage of an investigation is particularly welcome because it will enable us to prevent fraudsters from dissipating their assets before we have amassed sufficient evidence to charge them and take the case to court,’ the report stated.

‘Money laundering is the equivalent of handling stolen property and both of these offences can attract sentences of up to 14 years’ imprisonment. Professional criminals cannot survive without laundering, and those who help them should be in no doubt about the risks they run.’

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