The issues involved in self-reporting of corporate fraud have been highlighted by a recent case involving fraudulent property sales.
The case came to light after an estate agency raised concerns with the OFT about activity at one of its branch offices. The OFT investigated and discovered that three people, including two estate agents at the branch office in question, had fraudulently purchased repossessed houses that the estate agency was marketing.
In total, says the OFT, the scheme generated over £133,000 in illicit profit.
According to the regulator, between April 2009 and May 2011, estate agent and branch partner Thomas Kelly arranged for his wife to buy three repossessed houses, which were being marketed by the firm. In each case, he did so without having declared his personal interest to the seller, enabling him and his wife to make a secret profit at the expense of his clients.
Following a tip off, the OFT also established that another estate agent with the firm, Andrew Butts, acted as the estate agent for another repossessed home, which was bought by his brother-in-law in March 2010. Again, Andrew Butts' relationship with the purchaser was not declared to the seller.
Thomas Kelly was sentenced this week to six months' imprisonment, suspended for 12 months, and given a Community Supervision Order for six months, to include 180 hours of unpaid work. Samantha Kelly was sentenced to a six-month Supervision Order and Andrew Butts was sentenced to a conditional discharge for 12 months.
Corporate fraud can affect companies of all shapes and sizes, but the questions it raises remain the same: what should you do if your MLRO or FD comes to you with concerns that your company has broken the criminal law or breached the regulatory process? Should you self-report to the relevant authorities? What will that entail and what will be the consequences? What happens if the SFO or the Police raid your offices and seize computers and/or vital documentation? What if one of your board or employees becomes a 'whistle blower'?
It is a tricky area – and it is very important that you obtain specialist advice immediately.
Contact Lewis Nedas’ Criminal Lawyers in London
If you need specialist help to deal with suspected corporate crime or self-reporting please contact our solicitors Jeffrey Lewis or Siobhain Egan on 020 7387 2032 or complete our online enquiry form here.
This blog post is intended as a news item only - no connection between Lewis Nedas and the parties concerned is intended or implied.
