A major part of our work as and forensic accountants is providing expert accountant advice in fraud and criminal matters. Therefore we receive many criminal defence instructions in proceeds of crime confiscation proceedings.
I recall back in 2003 when the Proceeds of Crime Act 2002 had just taken hold and confiscation proceedings were becoming the hot topic. I discussed with a number of my regulator friends (police and department for business etc.) whether or not it would be useful to my work to attend a training course alongside officers from various criminal regulatory bodies who were being prepared as financial investigators.
I remember getting the clear message that it would not be worth taking the courses and examinations to become an “accredited financial investigator” because it was unlikely that confiscation proceedings work would ever be farmed out to the private sector (unlike my contributions to the police and other regulators as a forensic accountant in many other areas).
Therefore, in the matter of confiscation proceedings I have always acted on behalf of the defendant who is on the receiving end! By accepting many such assignments every year, I obtained a solid understanding of the methods being used and began to see the “tweaks” to the approaches that would no doubt be communicated around all the accredited investigators from time to time.
In the early days, every S16 Statement of Information I was asked to consider and provide a response to on behalf of the defendant seemed like a free for all. It was as if the investigator threw everything into his report, presumably because, with the obligation laid firmly on the defendant to rebut often sweeping assumptions, there was the hope that something at least would stick.
This is why every assessment of criminal benefit would include a lot of double and even triple counting of the same funds (I even had quadruple counting once). Dealing with this exaggeration of benefit was part and parcel of the work I did. However, the financial investigators honed their skills and over the years, generally taking care of inter account transfers and other duplication of income properly. The forensic accounting treatment of a S16 Statement became a little more subtle for me!
I always imagined the emails circulating the (now closed) Asset Recovery Agency in the early days – were they warning accredited financial investigators to watch out for double counting – or did they actually advocate the mudslinging approach in the hope that as much as possible would stick?
What I do know is that the recovery of assets is a logical self funding operation that should also provide additional resources for the law enforcement agencies. This is why I am in favour of what I currently imagine to be the latest “tweak” in approaches being made by the National Crime Agency, Police Forces, HMRC and other recovery agencies throughout the UK…a more pragmatic approach….!
What do I mean? Well the last few S16 Statements that I have worked on towards the end of last year, and now this year, only considered the period of the indictment – and the benefit largely consisted of the sums subject of the conviction. Given the guilty pleas, there was little chance that the defendants involved could say they hadn’t received the proceeds of crime. In all cases, the assumptions were limited to a few fairly obvious strands of benefit.
Now I could see that there was plenty of scope for the Crown to look beyond the indictment period and to consider the full six years prior to charges, plus there were also potential hidden assets. However, was not my job to do. Even without the missed opportunities, the likely outcomes were going to be benefit orders much greater than available assets and it stuck me that the Crown was adopting a practical approach? Public purse costs would be saved in many areas – additional forensic accountancy costs, protracted legal arguments, further investigation by the Crown and larger associated administration costs – whereas a quick win would be much more efficient. My hat goes off to the Crown if this is the case!
Fortunately there are still many ways that a benefit assessment can be inflated, and even if the Crown do slim down their approach there is plenty that can be looked at by the forensic accountant when attempting to present a fair and representative level of benefit in response to the Crown’s S16 Statement!