This lack of resource, coupled with the increasingly complex nature of this crime means that the police no longer have the resources, skills, technology and knowledge to investigate complex fraud.
The CBI, Metropolitan Police and City of London Police have launched an initiative – being tested in London – to combat fraud, which involves employing accredited ‘private investigators’ to assist in the early stages of investigating commercial fraud.
At face value this is an excellent idea as it seeks to bring the skills and resources found within the private sector into the criminal arena. But using private investigators could result in UK business paying twice for being a victim of fraud.
Firstly, who pays for the investigation? The clear implication of the initiative is that the victim business will employ the investigators and pay their costs. This, in fact, formalises a policy that has been unofficially operated by fraud squads for some time. Increasingly, when businesses, have approached the police with a suspected fraud, they have been sent away to get an accountant’s report before the fraud squad would investigate.
Secondly, the investigators will be employed by the company, but provided with information by the police. The police clearly have much wider access to information on individuals than would normally be the case for a civil investigation and this could lead to a conflict between the criminal investigation and any civil proceedings undertaken to recover assets.
With the advent of new Human Rights legislation it seems unlikely that any information obtained from the criminal investigation will be admissible in the civil context. It also seems reasonable that when a civil case is heard the defendant will be able to argue that evidence has been unfairly obtained as the company is paying the bill and so presumably will have access to the results of the criminal investigation. It will be very difficult to argue that none of the claimant’s evidence has come from the criminal investigation.
The new initiative is a clear recognition that the police can not cope with the increasing demands of complex commercial fraud. However, involving the private sector in a way that leaves businesses to pick up the bill for both the fraud and the resultant investigation may deter some companies from reporting a fraud in the first place – allowing the fraudster to keep both the proceeds of the crime and his freedom.
Nick Whitaker is head of forensic services at Pannell Kerr Forster