Proceeds of crime claim against UK Lawyer

In January 2009 a solicitor wrote to two forensic accountants seeking quotes on behalf of his client who was involved in divorce proceedings. After receiving the two quotes nothing more was heard from him because the solicitor himself had become the subject of court proceedings. He had been arrested for the social supply of drugs at a party and was subsequently convicted. Although he avoided a prison sentence and continued to operate as a solicitor he was served with a Statement of Information under the Proceeds of Crime Act 2002. The Statement calculated the solicitor’s benefit from crime at just under £800,000 over a six year period. This was the only Statement of Information issued by the Crown in the course of the confiscation proceedings. However the Crown did, from time to time, produce new calculations of the alleged benefit, each calculation being lower than the previous one. By June of 2010 the Crown accountant calculated the alleged benefit at a much lower figure of around £100,000. She stated that, in contrast to many such cases, she could find no transactions that appeared to represent proceeds of crime. Despite this, she sought “vouching” for the bank lodgements that were included in the £100,000. The defence asked the bank to provide copies of deposit slips and the cheques lodged. However most of these cheques had been returned to the originating banks and were therefore unavailable. Some deposit slips had been misfiled by the local branch. Many deposit slips that were found lacked the sort code of the issuing bank. Therefore, in practice it proved impossible to obtain all the “vouching” sought by the Crown. By December 2010 the Crown figure for alleged benefit had reduced to some £25,000. For some time the defence had believed that the Crown wished to abandon proceedings but that it needed an excuse to allow this to happen. At this point the Crown ceased to ask for “vouching” and instead asked for explanations for the remaining unexplained bank lodgements. The defence was able to provide these, and the Crown abandoned proceedings on April Fool’s Day 2011.

Investigators raid offices of Melbourne man linked to multi-million-dollar tax avoidance scheme

FROM ABC NEWS ABC NEWS

Investigators raid offices of Melbourne man linked to multi-million-dollar tax avoidance scheme

Updated

Tax investigators have raided the offices of a man at the centre of an alleged multi-million-dollar tax avoidance scheme.

It comes six months after the ABC revealed Philip Whiteman had masterminded a scheme that helped companies avoid paying tax on more than $20 million of income.

Dozens of investigators from the ATO, including computer forensics experts, searched Mr Whiteman’s offices in Prahran in Melbourne’s inner-south, and other addresses linked to the former bankrupt and “pre-insolvency adviser”.

The raids came as a Federal Court judge granted an application allowing the ATO to seize control of four Mr Whiteman-linked companies and freeze the assets of Mr Whiteman and an associate, Timothy Batchelor

Read the full ABC news report http://www.abc.net.au/news/2017-04-03/investigators-raid-offices-man-linked-to-tax-avoidance-scheme/8411256

Forensic Accounting Australasia Editor’s Comment : It is worthy to note the extent that the ATO will go to investigate suspect behavior of a proposed Tax Schemer. They use Computer Experts to collect the data and Computer Forensics and text mining to analyse massive electronic data.

New CPA Forensic Accounting Discussion Group Meetings Announced April and May 2017 in Sydney

The Sydney CPA Forensic Accounting Discussion Group Meetings are vibrant in their ideas and discussion all interested CPAs are welcome to come along and join. Most meeting have at least one guest speaker discussing current trends in Accounting Law and Compliance. April and May 2017 in CPA Sydney

Expert witness evidence

According to the Oxford English Dictionary to “Nobble” is to “influence or thwart by underhand or unfair methods”, which was exactly what had been done to an expert witness according to Justice Wilson of the Ontario Superior Court in her judgment in the case of Moore v Getahun.

The case was not noteworthy for its facts, which related to a motorcycle accident in which the plaintiff injured his wrist and claimed that the medical treatment he had received had caused him permanent harm. What was of interest about the judgement was Justice Wilson’s comments about the practice of draft expert reports being reviewed by a party’s lawyer before being finalised and served on the other side.
The judge pulled no punches saying:
I conclude that counsel’s practice of reviewing draft reports should stop. There should be full disclosure in writing of any changes to an expert’s final report as a result of counsel’s suggestions, or clarifications, to ensure transparency in the process and to ensure that the expert witness is neutral.
Her comments were prompted by an admission by one of the defendant’s experts that he had made changes to his draft report, prior to finalising it, following a telephone discussion with defence counsel. She concluded that:
that the meeting between defence counsel and Dr Taylor involved more than simply superficial, cosmetic changes. The conversation took place over a period of one and a half hours. Some content helpful to the plaintiff in the August 27, 2013 draft report was deleted or modified. I find that Dr Taylor’s opinion, although not changed, was certainly shaped by defence counsel’s suggestions.
It was the judge’s view that the practice of discussing draft reports with counsel was improper and undermined the expert’s credibility and neutrality.
These opinions caused considerable concern in the legal profession and in the community of expert witnesses where it was recognised that, if accepted, the trial judge’s ruling would have represented a major change in practice.
Accordingly the case was appealed. The appellate court held that it was widely accepted that consultation between counsel and expert witnesses in the preparation of reports, within certain limits, was necessary to ensure the efficient and orderly presentation of expert evidence and the timely, affordable and just resolution of claims.
For that reason the appeal court concluded that the trial judge had erred in criticising the consultation between the expert and counsel, concluding that:
Just as lawyers and judges need the input of experts, so too do expert witnesses need the assistance of lawyers in framing their reports in a way that is comprehensible and responsive to the pertinent legal issues in a case.
The appeal court went on to say that:
Consultation and collaboration between counsel and expert witnesses is essential” and that “counsel play a crucial mediating role by explaining the legal issues to the expert witness and then by presenting complex expert evidence to the court. It is difficult to see how counsel could perform this role without engaging in communication with the expert as the report is being prepared. Leaving the expert witness entirely to his or her own devices, or requiring all changes to be documented in a formalized written exchange, would result in increased delay and cost in a regime already struggling to deliver justice in a timely and efficient manner. Such a rule would encourage the hiring of “shadow experts” to advise counsel. There would be an incentive to jettison rather than edit and improve badly drafted reports, causing added cost and delay. Precluding consultation would also encourage the use of those expert witnesses who make a career of testifying in court and who are often perceived to be hired guns likely to offer partisan opinions, as these expert witnesses may require less guidance and preparation. In my respectful view, the changes suggested by the trial judge would not be in the interests of justice and would frustrate the timely and cost-effective adjudication of civil disputes.
So the practice of being able to discuss draft reports with counsel has therefore not been consigned to history, albeit it is important for experts and those instructing them to bear in mind that nothing should be done that could interfere with the independence or objectivity of the expert’s evidence.

Credit Suisse, Palantir form behavioral analytics-based joint venture to root out rogue trading

From FierceFinanceIT March 24, 2016 | By Renee Caruthers
Credit Suisse is partnering with Palantir Technologies to create a new joint venture aimed at deploying behavioral analytics to identify rogue traders. The 50-50 venture, to be called Signac, will be used to monitor employee behavior across Credit Suisse, and then offered to other banks.

Credit Suisse began working with Palantir after its largest Swiss rival suffered a $2.3 billion loss due to rogue trading by Kweku Adoboli in 2011, the firm’s head of compliance Lara Warner told Bloomberg. The bank has been testing the technology in monthly tests using mock rogue trades, Warner said, adding that employees are aware the tests are being conducted.

Credit Suisse spokeswoman Anna Sexton told Bloomberg that the Signac technology analyzes a variety of employee data, including swipe card access and block leave histories, to spot rogue trading. Block leave is a solid block of vacation time in which traders disconnect from all firm-related equipment, including computers and mobile devices. As rogue traders typically work alone, block leave makes it difficult for them to continue a rogue trading strategy. A December 2011 Marketplace article reported that Credit Suisse has expanded the amount of block leave time traders were required to take from one week to two weeks to better monitor unauthorized trading.

Accounting Professional & Ethical Standards Board Limited (APESB) issues APES 215 Forensic Accounting Services

Accounting Professional & Ethical Standards Board Limited (APESB) issues APES 215 Forensic Accounting Services (the Standard), which is effective for Engagements or Assignments commencing on or after 1 April 2014. Earlier adoption of this Standard is permitted.

Copy of the Standard
APES215 – Forensic accounting standard Revised Dec 2013

The standard and others are found on the Resources Page

 

Britain Losing Billions Through Fraud – 1 October 2013

According to a recent survey, the UK is losing billions of pounds to fraud every year and since the start of the recession the level of fraud has risen by 20 per cent. The survey, which studied fraud data from around the world over the last 15 years, has estimated around £85 billion of the UK’s economic output is being lost as a result of fraud.
According to the research the main forms of business fraud involve procurement and payroll, such as goods or services not being supplied after payment or companies being overcharged. Between 1980 and1981, UK GDP shrank by 6.1 per cent and reported fraud and forgery rose by 9.1 per cent while between 1990 and 1991 it shrank by 2.5 per cent and reported fraud and forgery rose by 30.5 per cent.
The only way to counteract business fraud is through being vigilant and the study estimates that if efforts to fight it were to be stepped up, the UK could cut its losses by around 40 per cent, or £34bn, within a year.
A good way for individual business owners to do this would be to get a forensic accountant to go over the books and look for anomalies, which is all part of their training.
A good firm of forensic accountants will use the industry’s most sophisticated forensic techniques, using specialised software to comb through large amounts of data to detect anomalies and spot questionable trends.

Assessing the value of a Plaintiff’s potential business

A recent judgment sheds light on the court’s attitude to the assessment of loss

of earnings in circumstances in which the claimant was on the verge of setting

up a business before the incident occurred that gave rise to the claim.

One periodically comes across claimants who, at the time of an accident that

ended their working lives, had been about to embark on or had just started a Continue reading