Fraud

271 Pages·2013·5.585 MB·English

by  Doig, Alan

WILLAN
PUBLISHING
Fraud
Crime and Society Series
Series editor: Hazel Croall
Published titles
Sex Crime (second edition), by Terry Thomas
Burglary, by R.I. Mawby
Armed Robbery, by Roger Matthews
Car Crime, by Claire Corbett
Street Crime, by Simon Hallsworth
Hate Crime, by Nathan Hall
Fraud, by Alan Doig
Fraud
Alan Doig
WILLAN
PUBLISHING
Published by
Willan Publishing
Culmcott House
Mill Street, Uffculme
Cullompton, Devon
EX15 3AT, UK
Tel: [phone]
Fax: [phone]
e-mail: [email protected]
website: www.willanpublishing.co.uk
Published simultaneously in the USA and Canada by
Willan Publishing
c/o ISBS, 920 NE 58th Ave, Suite 300,
Portland, Oregon 97213-3786, USA
Tel: [phone]
Fax: [phone]
e-mail: [email protected]
website: www.isbs.com
©Alan Doig 2006
The rights of Alan Doig to be identified as the author of this book have been asserted by
Alan Doig in accordance with the Copyright, Designs and Patents Act of 1988.
All rights reserved; no part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise without the prior written permission of the Publishers or a licence
permitting copying in the UK issued by the Copyright Licensing Agency Ltd, 90 Tottenham
Court Road, London W1P 9HE.
Hardback
ISBN-13: 978-1-84392-173-8
ISBN-10:1-84392-173-1
Paperback
ISBN-13: 978-1-84392-172-1
ISBN-10:1-84392-172-3
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Project managed by Deer Park Productions, Tavistock, Devon
Typeset by GCS, Leighton Buzzard, Bedfordshire, LU7 1AR
Printed and bound by T.J. International Ltd, Padstow, Cornwall
Contents
Abbreviations and acronyms ix
Acknoivledgements xiii
A brief introduction to fraud xv
1 Fraud - the academic and practitioner contexts 1
The origins of white collar crime and the study of fraud 1
The study of fraud in the UK 5
The emergence of fraud as a private sector practitioner
issue 8
The emergence of fraud as a public sector practitioner
issue 12
The practitioner responses 15
Summary 17
2 What is fraud? 19
Definitions of fraud 19
The laws and offences 20
The Law Commission reforms 36
Summary 40
3 The cost of fraud 42
The official statistics 42
The first overview of the cost of fraud 43
The moving totals 44
New methodologies for old 47
Fraud
The impact of fraud 48
Summary 53
4 Who commits fraud, and what types of fraud? 55
Cases investigated by the police 55
Case studies in fraud 62
Summary: the dynamics of fraud 77
5 From need to greed - why is fraud committed? 80
Is money the root of all fraud? 80
The view from the surveys - who and why? 81
Academic and other studies - is there a fraud type? 87
Prospectives: why do people and organisations commit
fraud? 91
Summary 98
6 Overspill - old frauds, new frauds and fraud in other
criminal activities 100
Cybercrime, identity fraud, and cheque and credit card
fraud 100
Organised crime 110
Corruption 114
Summary 118
7 How fraud is dealt with - investigations 120
General law enforcement: overview 120
The police fraud squad or economic crime unit 122
The criminal prosecution 125
Police and prosecutors - the SFO and the City of
London Police 129
Summary 133
8 Regulation, compliance and audit 135
Financial investigations 135
Regulation 139
Audit 161
Summary 165
9 In-house approaches 167
The private sector in-house approach 167
The public sector in-house approach 175
Summary 186
vi
Contents
10 Investigation frameworks 189
The legal framework 190
Criminal investigations in practice 192
Non-law enforcement investigations 194
Summary 200
11 Punishment, asset recovery and prevention 202
Arbitration, adjudication and punishment 202
Juries 206
Non-criminal sanctions 209
Criminal sanctions 213
Prevention and personal responsibility - a forgotten
dimension 220
Summary 222
12 Conclusion: the futures for fraud? 226
The current fraud landscape and the need for a strategy 227
Who is responsible for the rise in fraud? 228
What is the harm caused by fraud? 229
What do agencies really want? The future of policing
and mapping the landscape of fraud through information 231
The futures for fraud - culture and honesty? 232
Annex: Scotland 236
References 238
Index 248
vii
Abbreviations and acronyms
ABI Association of British Insurers: the representative association
for UK insurance companies
ACFE Association of Certified Fraud Examiners: an industry
professional body based in the USA, with national chapters
ACPO Association of Chief Police Officers: the organisation that
represents chief constables
APACS Association of Payment Clearing Services: the body that
represents cheque and credit card issuers
ARA Asset Recovery Agency: the law enforcement agency with
responsibilities which include confiscation work and training
officials in relation to the Proceeds of Crime Act
ATM Automatic Teller Machine: machine dispensing banknotes
BBA British Banking Association: the representative body for UK
and other banks
BSA Building Societies Association
C&AG Comptroller and Auditor General: the head of the National
Audit Office
CAB Criminal Assets Bureau: an Irish law enforcement agency
dealing with asset confiscation
CAP Common Agricultural Policy
CBI Confederation of British Industries
CC Competition Commission
CFIS Counter Fraud Investigation Service, part of the Department for
Work and Pensions
CFS Counter Fraud Service: now the Counter Fraud and Security
Management Service of the NHS
CFSMS Counter Fraud and Security Management Service: a unit within
the NHS dealing with fraud
CHIS Covert Human Intelligence Source
Fraud
C1B Compart)' Investigations Branch: part of the DTI
CIFAS Credit Industry Fraud Avoidance Scheme: a body funded by
its members to exchange information for fraud prevention and
detection
CIPFA Chartered Institute of Public Finance and Accountancy: the
professional association for public sector auditors
CML Council of Mortgage Lenders
CPIA Criminal Procedure and Investigations Act
CPR Civil Procedure Rules
CPS Crown Prosecution Service
CSG Corporate Services Group
DCPCU Dedicated Cheque and Plastic Card Unit: the police unit that
deals with organised crime and cheque and credit card fraud
DEFRA Department for the Environment, Food and Rural Affairs
DFAU Defence Fraud Analysis Unit
DFES Department for Education and Skills
DoH Department of Health
DPP Director of Public Prosecutions: head of the CPS
DSS Department of Social Security
DTI Department of Trade and Industry
DVLA Driver and Vehicle Licensing Authority
DWP Department for Work and Pensions
EC European Commission
ECHR European Convention on Human Rights
ES Employment Service: former government department that dealt
with unemployment benefit and job centres. Now merged into
the DWP
FE Further Education: deals with education between secondary
school and universities
FIG Fraud Investigation Group: staff within the CPS who dealt with
complex fraud cases
FSA Financial Services Authority: the statutory body that supervises
the regulated sector
FSMA Financial Services and Markets Act: the Act that set up the
Financial Services Authority
GP General Practitioners: doctors
HMCE Her Majesty's Customs and Excise (merged into HMRC and
SOCA in 2005 and 2006)
HMCPSI HM Crown Prosecution Service Inspectorate
HMIC Her Majesty's Inspector of Constabulary
HMRC HM Revenue and Customs (a new agency from 2005
comprising Inland Revenue and part of HMCE)
HMSO Her Majesty's Stationery Office
IB Intervention Board
ICAEW Institute of Chartered Accountants for England and Wales: the
professional body for accountants