Challenging Investment Fraud Allegations

Very often we will be dealing with clients, individuals or companies pre-charge. This is when early defence building can really begin earnest.

In 2013, a London police officer stopped a man on the street who was carrying a large amount of cash to a bank. The money was seized.

The money came from a nearby money service bureau – a cash business. The police decided to investigate the entire business and obtained a Production Order to that effect. This firm caused that Order to be quashed in proceedings at the Woolwich Crown Court.

Mistakes

The facts are long and complex but the point is simple. The police can, and frequently do, make mistakes in securing pre-charge investigative orders. They are not lawyers and yet they insist on going to Court and present evidence without the defence being present. The procedural demands for such without notice hearings are high – and when the police, HMRC or other body get it wrong it can be fatal to their order.

The Lord Chief Justice himself has eff ectively encouraged the police to start using lawyers to ensure that they get things right; see R (Golfrate Property Management Ltd & Dr. Gulam Adam) v Southwark Crown Court & Commissioner for Police for the Metropolis [2014] EWHC 840 (Admin).

However, our experience is that the investigators still do not call in their lawyers at the early stage and continue to make mistakes in securing their orders.

This is important because, very often, we find that what most vexes our clients is that they have been restrained by a Restraint Order: an order secured at a hearing that they had no input into, which is having a damaging effect on their business and which is going on for far too long. In every case where there is a Restraint Order in place consideration needs to be given to an application to discharge the Order.

Restraint Orders

Up until May 2015 last year it was fairly easy for a prosecutor to secure a Restraint Order. All that had to be shown was there was a reasonable cause to believe that the alleged off ender had benefi ted from his criminal conduct. Since 1st June 2015, the test is now even easier as s40 was amended by the Serious Crime Act 2015 so that now all the prosecution has to show is that there are reasonable grounds to suspect an alleged off ender benefited from criminal conduct.

But it is little known that, at the same time, Parliament introduced a reporting requirement in order to beef up the powers of the Court to stay a Restraint Order where the police have not charged within a “reasonable time”.

Under section 41, the Court must impose a reporting requirement at the time of making the Order unless the Court decides not to do so and gives reasons for that decision (new subsection (7C)(a)).

These reporting orders can give the defence a valuable insight into what exactly the police have been doing in their investigation. If not much is revealed then there is a case for discharging the Restraint Order.

The topic of challenging pre-charge orders such as Restraint/Production and Search Warrants is a huge one and not one that can be explored in any depth here. But we can say that in investment fraud investigations there is likely to be extensive use of such pre-charge tools and lengthy delays in completing the investigation. Pro-active defence builders should be utilising their right to challenge in appropriate cases. It can sometimes make the diff erence between being charged or not.