The law on fraud is becoming something of a feature in the media. It was recently reported that an Insurance broker, Mr Jay Solder, narrowly avoided a prison sentence after being convicted of committing insurance fraud. This case was interesting to note, given that at Lewis Nedas we regularly advise clients facing allegations of fraud. Here, we give an overview of the case, and the rules that were breached.
What was being investigated?
Mr Solder is reported to have been an insurance broker in the City. He had reported to his insurers that his home had been raidefraud sold by burglars twice in a four month period, making off with a number of Rolex and Omega watches, a MacBook Pro computer and a Mulberry Handbag. He had also reported to his insurers that he had lost his Burberry coat while he had been travelling, within which were a number of highly valuable items, including: a Louis Vuitton wallet, a Sony digital camera and an iPad Mini.
The insurers in question, having been alerted by Mr Solder to what he claimed to be burglaries and instances where he lost his property, did make payment to him under the respective policies. Difficulties arose for Mr Solder when City of London investigators began to question the value of the insurance claims.
What happened following on from the insurance claims?
Investigators decided to conduct an extensive investigation into Mr Solder, including inspecting his home. It was during this investigation that a number of irregularities were discovered:
- The value of the goods Mr Solder had claimed were stolen had been vastly inflated, following investigators determining that the credit card statements used were in fact fake; and
- The Rolex watch and camera that Mr Solder had claimed under the Insurance policy were later found in his wardrobe, along with £6,000 in cash.
The total value for which Mr Solder had claimed under insurance is reported to have been £43,000. but the authorities could find no evidence that these claims were in fact genuine. As a result of the findings by investigators, Mr Solder was dismissed from his position as an insurance broker and became the subject of a criminal investigation for fraud.
Having been found guilty for committing fraud, he was sentenced to a 21-month jail sentence, suspended for two years, and ordered to complete 160 hours of community service. Mr Solder had committed to the court that he would reimburse the money that he had taken from his insurers within two weeks of his being convicted.
Where are the rules governing fraud?
Fraud as an offence can be very difficult to prove. In the case of Mr Solder, in order to find evidence of guilt, investigators had to conduct an extensive investigation of his home and subject credit card statements to detailed investigation.
The offence of Fraud is detailed in the Fraud Act 2006. As a piece of legislation it is quite sophisticated, describing fraud in exacting detail. Fraud is deemed to be:
- The making of a false representation;
- By failing to disclose information if you are under a duty to do so; or
- By abusing the position which you are expected to safeguard.
This definition is purposefully designed to be wide ranging in order to allow authorities to detect, investigate and prosecute fraud. In previous years, when this legislation was not in force, fraud was a particularly difficult crime to prove.
In the case of Mr Solder, the difficulty for him would be that his actions appeared to fall clearly within the definition of fraud, at least in that he claimed insurance for items which had (i) never been lost and (ii) were not as valuable as he had originally claimed.
Who investigates instances of suspected fraud?
Depending on who is suspected of having committed fraud, a number of regulatory bodies can instigate an investigation. However, when dealing specifically with instances of suspected fraud committed by individuals, as was the case with Mr Solder, the police are the most relevant body. It is also possible for the Serious Fraud Office (SFO) to instigate an investigation if it so chooses.
The power of the police to investigate suspected instances of fraud is heavily regulated by statute under the Police and Criminal Evidence Act 1984 (PACE). The Act does permit police, in attempting to prove the commission of fraud, to pursue a variety of avenues including:
- The detention and questioning of individuals suspected of having committed fraud;
- The investigation of an individual’s affairs, including inspection of their home; and
- In certain instances, the police are also empowered to stop and search an individual for evidence of having committed fraud.
In respects of Mr Solder, the police became suspicious of his activities, and exercised their powers under PACE to investigate his property for evidence of fraud.
What is the penalty for having committed fraud?
In the case of individuals where they become the subject of criminal proceedings under the Theft Act 2006, the penalty for commission of the fraud is quite severe. The court may decide either to issue a sentence of a period of imprisonment to a maximum of ten years, or issue an unlimited fine.
Mr Solder only narrowly escaped a period of imprisonment, on account of his committing to repay the funds that he owes.
Contact Lewis Nedas Law Expert Solicitors
At Lewis Nedas, we take a particularly distinctive approach to defending clients alleged to have committed fraud. Authorities treat the offence of fraud very seriously, and will use all suitable resources to determine whether or not there is evidence of guilt. Our many years of experience in dealing with regulators and prosecuting authorities afford us a great deal of insight into how prosecutors operate. We will handle all of your dealings with investigators: accompany you to any interviews with regulators, and handle any and all correspondence that is required. We will also represent you in court if the circumstances require it. Rest assured that the team at Lewis Nedas are true experts in defending actions concerning all aspects financial crime, and that we are here to help you. Contact us here.
