Forensic investigation leads to £1.7 million confiscation order

Background

A British Overseas Territory police force investigated a tobacco wholesaler and four related individuals involved in the business who were also directors and/or shareholders of several related companies. The company had been the victim of a theft, which alerted the police to high volumes of cash kept at its trading premises. The force seized a large volume of documentation from the company’s premises, and acquired additional information from third parties. It then appointed FRP to conduct a forensic investigation and consider whether the cash stolen could have been generated from legitimate business activity, as well as whether the amounts declared by the companies and/or individuals to HM Customs and the Income Tax Office were accurate.

Action

The documentation was provided to FRP in electronic format and securely stored on Relativity, FRP’s in-house e-disclosure platform. The Forensic Services team reviewed a significant volume of documentation, which included bank statements, invoices, accounting records, emails, correspondence, handwritten notes, and Income Tax Office and HM Customs documentation. The team identified transactions that appeared not to have been accurately declared, also finding anomalies and unusual patterns of activity such as different versions of the apparent same invoice. Extensive analysis was performed by the team to determine the movement of funds, including: reviewing payments to associated entities, identifying potential extractions by the individuals, and considering  the lifestyle spending of the individuals to ascertain whether this was in line with their purported and declared earnings.

Outcome

FRP prepared a forensic accounting expert witness statement detailing findings, which the client utilised in bringing criminal charges against two individuals for conspiracy to defraud and making arrangements to launder the proceeds of criminal conduct. The Supreme Court in the overseas jurisdiction granted a confiscation order for over £1.7 million plus FRP’s fees as part of civil recovery proceedings, which were initiated parallel to the criminal case.