It was brought home to me recently the importance of the forensic accounting input into cases that appear on the face of it less serious. A full time Internet trader had been caught buying and selling some counterfeit goods and been prosecuted by Trading Standards. He received a suspended sentence and had to do some community service.
Sounds fair to me, the chap had been working like a Trojan over a number of years, buying and selling over the Internet making a modest income for his family. He purchased some goods from China amongst vast quantities of unbranded items that were found to be counterfeit. It would be an easy mistake for anybody to make, and he may or may not have been aware of his acts.
Now comes the confiscation proceedings. He is of course deemed to have a criminal lifestyle, and now stands to lose everything he has and more. As he clearly has no available assets and the Crown wants a confiscation order filled by the considerable hidden assets he “must” have stashed away, he is in danger of receiving a default sentence for not fulfilling his confiscation order! Having received a very strong slap on the hands for inadvertently trading some counterfeit goods (produced and marketed by others abroad), he is now to be sent to prison for being unable to repay all the legitimate earnings that he has spent many years working for, providing for his family. Who says that POCA is not intended as an additional form of punishment?
Making a sensible response that will be accepted by the Court on the balance of probabilities is why forensic accountants are used to respond to the Crown’s hopeful confiscation wish lists. What would make more sense, is for the confiscation financial investigations to be carried out, or at least vetted, by qualified forensic accountants. Too often we see financial investigators presenting bank account analyses supporting a demand for every deposit being benefit and classing every withdrawal as a hidden asset. This might be suitable on some simple cases. However, a holistic overview of what is actually happening at a business level is often needed. If this was carried out by an expert in business and financial processes (i.e. a forensic accountant) it might save a large portion of the public funds involved in such cases.
Such an approach could also be extended to the predicate matters, particularly where money laundering is being alleged.