Fraud and financial crime encompass a wide range of offences from relatively minor deceptions to multi-million pound organised fraud. They are investigated by the police, the Serious Fraud Office (SFO), HMRC, and various regulatory bodies, and are prosecuted with significant resources. A specialist criminal defence solicitor is essential from the earliest stage of any investigation.
The Fraud Act 2006
The Fraud Act 2006 created a single general fraud offence covering three modes of conduct: fraud by false representation (making a false statement intending to gain or cause loss), fraud by failing to disclose (failing to disclose information you have a legal duty to disclose), and fraud by abuse of position (abusing a position of trust to make a gain or cause a loss). The maximum sentence for the main offence is 10 years. Conspiracy to defraud carries an unlimited sentence.
Money laundering
Money laundering offences under the Proceeds of Crime Act 2002 carry up to 14 years. They cover concealing, disguising, converting, transferring, or removing criminal property, as well as arranging for another person to do so, and acquiring, using, or possessing criminal property. Critically, you do not need to know the precise origin of criminal property — suspicion is sufficient to give rise to reporting obligations and potentially to criminal liability.
How fraud investigations work
Fraud investigations typically begin with intelligence gathering and financial analysis before any suspect is aware they are under investigation. Search warrants may be executed at home or business premises. Electronic devices, documents, and bank records are seized and analysed. You may be interviewed under caution at a police station or — in SFO cases — under the compulsory interview powers of Section 2 of the Criminal Justice Act 1987.
Confiscation proceedings
Following conviction, the prosecution may bring confiscation proceedings under the Proceeds of Crime Act 2002. The court can make a confiscation order based on the benefit obtained from criminal conduct — which may far exceed the actual loss. A lifestyle assumption applies where the defendant has a criminal lifestyle, potentially treating all assets acquired in the previous six years as criminally derived. Failure to pay a confiscation order results in a default prison sentence.
Regulatory investigations
Many financial crime cases begin as regulatory investigations — by the FCA, FRC, HMRC, or a professional body — before being referred to prosecutors. Evidence gathered in regulatory investigations can be used in criminal proceedings in some circumstances. A solicitor who understands both the regulatory and criminal processes can advise on how to engage with regulators in a way that does not prejudice your position in any subsequent criminal case.
Fraud cases require specialist criminal defence solicitors with financial crime expertise. Early instruction gives your solicitor the best opportunity to influence the investigation.