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Technological Analysis in Fraud Cases

Author: Nicola Sharp  26 March 2021
2 min read

Nicola Sharp of Rahman Ravelli considers a case where technology played a key role in obtaining a summary judgement.

The recent judgment in the case of Foglia v Family Officer Ltd & Ors [2021] is a rare example of a successful summary judgment application in a complex and multi-jurisdictional banking-tech fraud claim. 

The court granted the summary judgment for over €3.5 million after deciding that the defendants had no reasonable prospect of defending the claim, and that there was no other compelling reason for the claim to go to trial.

Case Background 

The claimant, Mrs Foglia, was the victim of a substantial fraud. An unknown individual gave fraudulent payment instructions, pretending to be an authorised signatory on the account that Mrs Foglia had with a bank in the Cayman Islands, the CITCO Bank and Trust Company. CITCO followed the instructions and a payment was made, which saw €15 million misappropriated from Mrs Foglia’s CITCO account and transferred to a Barclays account in England. The money was quickly transferred on to the defendant companies and third parties. 

Mrs Foglia discovered that she had been the victim of a fraud and made several urgent applications for various disclosure orders – worldwide freezing injunctions, proprietary freezing orders and disclosure orders – against persons unknown, the defendants and other third parties (banks and financial institutions). Mrs Foglia used the UK courts to successfully recover €11,456,631 from the defendants and from certain third-party recipients of the proceeds of the fraud.

In the latest proceedings, Mrs Foglia sought to establish proprietary claims and claims in knowing receipt, dishonest assistance and unjust enrichment against the defendants, in relation to the outstanding €3,543,368 (plus interest and costs). Particularly, she advanced a summary judgment application against the defendants. 

The Judgment

Cockerill J granted the summary judgment and the defendants were ordered to pay the balance of the monies that Mrs Foglia was yet to recover.

This judgment in the Commercial Court is significant as it is undoubtedly out of the ordinary for such an intricate fraud claim to be decided summarily and for it not to proceed to trial. What makes it an even more interesting conclusion is the huge emphasis on technological analysis in the case. Importantly, the claimant was able to recover all her losses in what Cockerill J described as “…a striking illustration of the assistance which this Court is able to give a defrauded party…” - actions which are sure to provide much hope to fraud victims in similar circumstances. 

The case saw the claimant establish - through a third-party disclosure application against Vodafone - that the mobile ‘burner’ phone used to make telephone calls to CITCO to perpetrate the fraud was linked to the defendant(s), having been purchased and used in the vicinity of the offices of the defendant(s). Another non-party disclosure application was made against Revolut Bank to further tie the defendant(s) to the burner phone, as the card used to purchase the phone was in the name of an employee of - and was funded by - the first defendant. 

Email evidence advanced by the defendants included various emails that the court accepted were ‘spoofed’ - a practice that allows users to send emails that appear to have been sent from any domain of their choosing. The defendant(s) wanted to have the opportunity to investigate various technical matters at trial, including WhatsApp and email evidence. But Cockerill J did not accept this. The judge noted that there was an “absence… of any action at all” to investigate any of these issues to date and criticised the general failure of the defendant(s) to gather or produce supporting evidence. 

The case, therefore, is an indicator of how technology can be used to obtain summary judgement – and of how important it can be to acquire such technological evidence as early as possible.

Nicola Sharp C 09983

Nicola Sharp

Partner

nicola.sharp@rahmanravelli.co.uk
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Nicola is known for her fraud, civil recovery and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.

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