I decided that it was high time that I spent a day working from home and getting all those little jobs done that I have been putting off when working in the office. For one thing there is the little matter of writing a newsletter, updating my contacts list and getting the publication out. Fraud investigations simply do not just appear on the desk out of thin air.

While considering what was newsworthy I decided to review my web marketing efforts for my fraud investigation work. It seems that as a budding author there are so many opportunities to write about your work that it is difficult to know where best to start. Take for instance HubPages. I have written about fraud investigation here and believe it is a good forum for articles directed back to your business marketing site.

So we are back to marketing fraud investigation services using the Internet. If I am successful in doing this I believe that the knowledge picked up will also be an invaluable tool in my cybercrime investigations. The Internet is a unbelievably massive entity, and learning how to navigate properly through it is both an art and a science. Google, Yahoo and many others are familiar faces, representing massive amounts of financial activity – not only within their own businesses but those that interact with them to build their own (including mine). The potential for new and innovative frauds is immense.

Investigating these new frauds will not be easy, it will be daunting. However, armed with the knowledge of how the Internet works, how the various marketing activities are managed and how the financial interaction is organized will allow the basic concepts of “follow the money” to be adhered to in any fraud that needs investigating!

So when it comes to developing my fraud investigation services around the UK and much further afield using the Internet to reach many more victims of fraud that simply don’t want to turn to their usual, often expensive and inexperienced accountants to deal with the problem I will be mixing my circulated newsletters and face to face meetings with my network of contacts with a large measure of on line marketing!

I recently wrote a post on my earlier blog site (which has unfortunately disappeared along with my older articles into my hosting server’s archives!) commenting on the state of the world economy as we draw towards the end of 2009 and how it will be effecting the level of frauds that are being discovered and investigated.

I concluded that we fraud investigators should be getting very busy as a result of the recession, along with insolvency practitioners and those who give advice on cost cutting and business turnaround.  Whilst there is some general activity increase particularly in London in the UK the great wave of new fraud cases has not yet broken. In fact the work load has been going up and down over recent months  but definitely not flat out or gaining momentum.

The initial worry was that my own portfolio was struggling, but this is not the case. I have been reasonably busy given one or two changes I have been making to my marketing efforts and then there is the increasing competition it seems! A number of recent tenders have been lost on price and this is one area where the recession is biting, in areas of civil investigation. Others are turning to fraud to fill in their shortfall. This is coupled with extreme pressure on public sector spending where certain agencies and regulators outsource their investigation work.

The word on the street from a number of my more frank and well known sources is that it is generally quiet.  From a couple of my insolvency sources it seems that the floodgate of businesses poised to go under is about to burst – whether this is before the end of the year or early next year we can only surmise.  This opinion is supported by a couple of contacts I have in the banking arena. They say that there is a lot of desperation building up (individually as well as for businesses) and the banks are not yet back to a position to assist fully.

Added to this are the reports from some of the economists that even if we are in or near the depths of the recession – it will be a long slow climb out. This will mean the weaker companies will go bust as the market place “cleans” itself up and that yes, frauds will be surfacing. It also means that the drivers for the fraudsters to start committing acts of fraud will be a strong as ever and this in turn means new cases will continue to reflect the present economy well into the next decade.

So my view remains the same. We will start to see a rise in fraud coming to light – as well as businesses going into some form of insolvency procedures – a rise that may well begin soon and keep on going for some time to come!

Apologies for three short posts this moring as I am working on the format of the fraud advice blog and experiencing a few problems.

This morning I had scheduled a meeting in Birmingham with a building contractor in connection with a current investigation involving several aliases of the director and a number of phoenix companies that had been set up in succession.

I was up well before dawn at 4.00 am and had walked the dog and had some breakfast and on my way just after five.  I was well on time for my 9.00 am meeting  and had stopped a short distance before the rendezvous at a convenient watering hole to take stock of my notes when I received a call cancelling the meeting!

Fuming over a cup of coffee I have now settled down to write these posts and to start planning a rewrite of my fraud investigation website.

Responses are beginning to be drafted to the Legal Service Commission’s consultation paper on expert witness fees.  Bodies representing experts are busy collating what are probably replies that are so obvious that it would be foolish to think that the LSC had not already thought about them - but stranger things do happen all the time!

The general feeling is that if the fees are capped in an effort to shave 20% from the £100 million plus that is paid annually to publicly funded expert witnesses, the supply of expert witnesses willing to undertake publicly funded cases will reduce.  This would in turn reduce access to justice for defendants.

I do not understand why the expert witnesses must lose 20% – the lions share of funding cuts (when £100 million is only 0.5% of the Legal Aid annual budget).

Speaking as a forensic accountant we are always considered to be expensive.  Our hourly rates are around £40 to £250 (I am exlcuding the top tier of 10 largest firms of accountants) which includes all levels of staff.  A composite rate of around £150 would not be remarkable.  The proposals indicate that this composite rate will be more than halved, with a maximum hourly rate for a senior expert witness being £100.  I have examined these rates in detail (carrying out a year of part time academic research in 2006) and in my dissertation for my Masters Degree in Fraud Management concluded that forensic accountant’s rates were similar or less than the average cost of putting police officers on the beat or employing Criminal Prosecution Services case workers.

The LSC enjoys a discount of some 20% on average of the rates paid to expert witnesses undertaking privately funded work – because the LSC holds a monopoly and is able to reduce market rates.

There are many ways that the LSC could reduce its spend without impacting on the essential service provided by experts to the criminal justice system (I will save for a future post the reasons why the spend on experts should be increased!).  A couple of these are:

1. Introduce an initial outline “investigative” report that is used by parties to negotiate – reduce the need for full blown forensic reports.  (My Masters research indicated that this could be an independant “joint” report though this would not be received well by criminal defence lawyers).

2. Early involvement of the expert can save money in the long run – this is one of my hobby horses.  Very often I am instructed at the last minute by a desperate party clutching at straws and not really needed.

3. Better instructions to experts – very often the lawyers are just going through the motions – dotting the “i”s.  They do not know what they want and are hoping for a silver bullet (smoking gun?).  In these cases an early joint report would assist.

For my part the funding situation is one set to cause changes in the criminal fraud defence market place and therefor will be revisited in my diary blog many more times in the future!

Mark Jenner

Welcome to my new look fraud blog site.  After much gnashing of teeth and wailing etc I managed to upload the blogging software manually to my web host and what a relief – now hopefully concentrate on writing about fraud matters.

The Yorkshire and Humber Fraud Forum annual conference went smoothly yesterday held at the South Yorkshire Constabulary Leisure centre (Niagara Sports and Social Club).  Some of the talks were very good and some were a little tedious.  The split seemed to be public sector/private sector!  A lot of forensic accountants were in attendance but very little serious networking was done as there were very few potential work providers!  These fora are very good events generally and have served to raise the profile of anti-fraud efforts throughout the UK.  I attend events at this Yorksire forum and also at the North East Fraud Forum and the North West Fraud Forum.  I have also attended a couple of annual events at the London Fraud Forum.

Now that the blog site is back up and running the next step will be to tinker with my service line web site – a web site for fraud solutions throughout the UK and further afield.

The biggest concern at the moment is the competition for work.  Many forensic accountants who are general practitioners are looking to the fraud work as competition for all other work increases it seems.  This means that we fraud specialists must lower our prices to keep a stream of work flowing.  I have just been low-balled on a job I quoted half as much as I would have done a year ago.  A bit of lateral thinking is required I fear.

A lot to do!

Regards, Mark