27 October 2016
The Biggest Cases of Fraud And Bribery
Small and medium-size businesses can be vulnerable to fraud. To discover just how common the issue is and to highlight how the UK’s 5.5 million SMEs can protect themselves against fraud, Slater and Gordon have commissioned research with 500 SME owners and managers.
In a series of fraud-related blogs, we are examining the law and offering advice to businesses about how to best safeguard themselves.
Following the revelation that fraud has cost small businesses in the UK over £1.3 billion in the last year we look back at some of the big fraud and bribery stories to have made the news recently.
Sussex-based printing firm Smith & Ouzman became the first company to be convicted under the Prevention of Corruption Act after the Serious Fraud Office (SFO) investigation found evidence that they bribed public officials for business contracts in Kenya and Mauritania.
The Standard Bank Plc hit the headlines recently for the wrong reasons when they became the first company to pay a financial order for their failure to prevent bribery. The case was the first ever deferred prosecution agreement to be approved.
A deferred prosecution agreement (DFA) is when a firm has their prosecution suspended for an agreed length of time in exchange for the payment of a hefty fine or repayment of profits related to the criminal offence.
The Financial Cost of Healthcare Fraud 2015 report revealed that fraud within NHS departments is costing the NHS £5.7 billion each year.
Common fraudulent acts which the report detected included failure to declare prescription charges, claiming to have dispensed a more drugs than is true, creating ‘ghost patients’ and claiming for the costs of treatments patients never received.
The Pensions Regulator had to step in and replace three trustees of a company when £13.7 million in pension monies disappeared. The company Friendly Trustees Limited was investigated in relation to 17 pension ‘investment’ schemes and around 240 victims were identified.
The owners of a haulage and heavy plant hire business were jailed last year after being found guilty of £4 million VAT fraud. They manipulated accounts and used false business bank accounts to siphon off money – cheating the public revenue.
Record Prison Sentence
Alex Hope was given what was at the time the longest ever prison sentence for running an unauthorised collective investment scheme. The investment fraudster was convicted after a Financial Conduct Authority (FCA) investigation found he had acquired £5.5 million from over 100 investors to trade on FOREX markets, but only ever traded £650,000 of this.
Hedge Fund Fraud
Founding director of Weavering Capital (UK) Ltd and former hedge fund manager Ulf Magnus Michael Peterson was sentenced to 13 years imprisonment after he lost around £438 million of investors’ money whilst profiting £5.8 million himself. His offences included furnishing false information, fraudulent trading, obtaining a money transfer by deception, forgery, fraud by abuse of position and fraud by false representation.
If you or your business has been a victim of fraud or is accused of fraud and is under investigation by the Serious Fraud Office (SFO) call our civil fraud solicitors on freephone 0800 916 9054 or contact us online.
Nick Gee is a dispute resolution lawyer at Slater and Gordon in Manchester.