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Fear of Fraud

LAW IN ACTION
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BBC Radio 4's Law In Action
Tuesday 24 February 1600 GMT
On Radio 4 and online

It's predicted that fraud will rise as the recession bites - but do we have the mechanisms to fight it?

This week, the former Director of Public Prosecutions, Sir Ken Macdonald, was unequivocal. He wrote that "too many people and too many institutions function as though they are beyond the reach of the criminal law."

His views are echoed by Monty Raphael, the doyen of British fraud lawyers, who's head of fraud and regulatory law at the solicitors Peters and Peters.

He says the criminals who would have once specialised in armed robbery have found financial crime is more lucrative and less risky.

"They've now moved into white-collar crime," he says. "We find people who have moved off the pavement, given up their sawn-off shotguns and stocking masks and have moved into committing frauds in the warmth and comfort of an office, with nothing more than a laptop and a telephone line."

Charles Ponzi
Charles Ponzi, one of the greatest swindlers in American history

We hear from one of their victims - a Spanish translator living in London who asked to be known only as Enrique.

He tells the programme how a plausible-sounding broker persuaded him to invest several thousand pounds in high-return shares in a Chinese property company.

When Enrique went to the broker's office in Canary Wharf, he found it didn't exist - and his money had vanished.

Vera Baird, the solicitor general, tells the programme, "our conviction rate for fraud has escalated in the last year...We are spending a lot more money and a lot more effort and a lot more coordination trying to prevent fraud."

Judgeology 101

Becoming a judge used to be a question of a tap on the shoulder of a lawyer on a Friday afternoon, and he'd be sitting on the bench on the Monday morning.

No longer.

Now judges expect training (as well as a transparent selection procedure) before they take up their role.

 Karl Johnson as judge, Mr Justice Byrne
What type of skills do judges develop in their training?

Law in Action gained rare access to a training session run by the Judicial Studies Board for England and Wales for 32 new and would-be civil court justices.

We watch as they determine a complex question involved in a road accident insurance claim over which expert witness reports are needed. These kind of decisions are required regularly if cases are to proceed quickly and efficiently.

Justice Alistair MacDuff who's director of civil studies at the JSB tells the programme that one focus is ensuring that judges can deal with difficult people.

"Litigants who come to court are under stress. One has to deal with them kindly and politely."

Fraud - your thoughts

I was the victim of a web based fraud. I went to my local police station but they refused to take the report. I went onto the Scotland Yard web site and made a report there. Within 2 days I received a call from an officer there and a detective was assigned. The case was investigated but the fraudster was long gone. Perhaps if the report was taken at the time this person may have been caught.

Noel Cheever

About a year ago, I was looking to purchase a motorcycle and saw what I wanted on ebay. I was a little surprised at the start price for the motorcycle but bid anyway and ended up being the successful bidder at approx 2,500. The ebay advert made it seem that the bike was in the South of England. I looked carefully at the photos whilst the auction was running and noticed that the bike had been in Autotrader so I looked up the original advert and contacted the "original seller". I phoned the original seller and he said that he had not put it onto ebay. At the conclusion of the auction, I contacted the alleged seller about payment and collection of the bike, he told me that he, and the bike, were in Spain and asked me to send the payment, then he would send me the bike. When I suggested that I collect the bike, he was unwilling. I then went back to the police, with the information (complete with the Spanish address) of what seems to be a clear case of attempting to gain money by fraud but was told that they could not pursue it.

Pete Barber

Try this for a story. My ex-business partner waits until I am away in a remote part of Africa on business. My father-in-law had looked at a possible property investment my business was considering. However, I was not prepared to proceed unless my partner would put his own money into the investment. While I am away, my partner writes to my father-in-law, signing BOTH our names saying we are going ahead and can father-in-law make a contribution of 38K - father-in-law is partially sighted and does not realise letter is not from me - and when he phones partner, is told I am in Africa (true) and the matter is urgent and I am desperate to finalise deal (untrue). By the time I find out about this, the money has vanished. The police just say it is a civil matter as he handed over cash voluntarily. My solicitor tells me a civil prosecution is an expensive luxury that will get no redress as partner will just say he has no assets and can't pay. End. Is that justice?

MB

My main stimulus for writing to you was the input from Monty Raphael. He for some reason "warned" us that the white-collar crimes are now being adopted by ex-blue-collar criminals. Please re-listen to what he said: "The problem which society has is that most people believe that white-collar crime is mostly committed by the middle classes," followed by something equivalent to "The criminal who would previously have been waiting on a street corner with a shotgun, ready to commit an armed robbery, is now quite likely to be sitting indoors with a laptop and committing white-collar fraud" So, in other words, he is making out that we should be keener to invest money in chasing the nonviolent fraudulent crimes because they are now being committed by working-class criminals. What is his objective in making that observation? The idea that while fraud was once committed mostly by the people probably of similar social stratum to your listeners - nice middle-class well-dressed folk - but that it is now being committed by nasty, frightening, poor, "working-class" folk? In reality, surely the sideways demographic shift he highlights there is actually something of a benefit? Criminals who would have previously been arming themselves with lethal weapons like shotguns or baseball bats in order to commit crimes that carry significant risks of mortal injury are now sitting in more comfortable surroundings, completely physically removed from their victims, while using no weapon more dangerous than a laptop.

David Johnson

Our current (unelected) Prime Minister should occupy the top slot here! Almost single-handedly Gordon Brown has destroyed the occupational pension schemes of this country over the last ten years. Starting with his 5 billion tax credit raid on pensions; his "soft touch" regulation of the financial markets has ensured that those who have been prudent & put their taxed earnings into private pension schemes have been mugged & their savings stolen. As an Equitable Life policy holder his final act of betrayal is to appoint an unelected/unaccountable judge to decide whether Equitable policyholders should be compensated?

Timothy Oates

I wanted to mention my case, which was of cheque theft and subsequent fraud amounting to 2750. My local police station didn't believe me and refused to take a report. With the help of my bank, the case was eventually assigned, but the investigating officer took no action. I made a complaint after 5 months to the IPCC, resulting in the case being reopened. However, by that point, the perpetrator had left the country. It is now clear, nearly a year later, that this man is wanted for other offences of a similar sort in other localities. How unfortunate that the inability and refusal of the police to investigate and act immediately has allowed a criminal to go free and probably continue to re-offend.

Tye Blackshaw

Coming Up

Next week we report on the growing shortage of independent guardians who represent the rights of children in the family courts. And we ask if a new law will ensure that separated parents comply with contact orders.

Contact the programme

If you have thoughts on any of the topics we've covered, or any other legal issues, you can contact us by email at lawinaction@bbc.co.uk, or by post at Law In Action, BBC White City, Wood Lane, London W12 7TS.

Law In Action is broadcast on Tuesday 24 February 2009 at 1600 GMT on BBC Radio 4.



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It's predicted that fraud will rise as the recession bites - but do we have the mechanisms to fight it? Plus an insight into judicial training.



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SEE ALSO
National fraud unit plan explored
09 Feb 09 |  Scotland
US fraud charge tycoon disappears
19 Feb 09 |  Americas
Antigua bank hit by fraud charge
18 Feb 09 |  Americas
Madoff victims count their losses
19 Feb 09 |  Business
'Scamnesty' set to seek out fraud
15 Feb 09 |  Southern Counties

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