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Suspected Boiler Room Fraud Firm Has Assets Frozen By FCA

New Model Adviser (19/11/2013) reports that the FCA has seized assets of First Capital Wealth limited, which it suspects of boiler room activity. It has also sought an injunction to prevent investment sales activity, and is focusing on a property investment vehicle called Berkeley Brookes, which has in excess of £600,000 of investors' money, and was active between July and November 2013.

This is another example of the new aggressive, pre-emptive approach increasingly taken by the regulators to protect the interests of investors at an early stage.

This is an easier approach for the regulators to take; they only need to prove to the Court on the lower and civil standard of proof, i.e. upon the balance of probabilities, that illegal activity has occurred, i.e. that this firm, unauthorised by the FCA, was arranging and promoting investment in Berkeley Brookes.

The important issue for the FCA is that because of the lack of FCA authorisation, investors' money would not be covered by the Financial Services Compensation Scheme.

If you are facing a similar situation, we have specialist lawyers who deal with the financial regulators and regularly defend civil actions such as these.

Contact us by telephone on 0207 387 2032 or complete our online enquiry form here.

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Charges Brought Over Carbon Credit Fraud

Six men were charged by Kent Police earlier this week in connection with an alleged carbon credit fraud that is estimated to have cost the public revenue around £11 million.

Carbon credit VAT fraud dates back to the Kyoto Protocol, signed in 1997 in an attempt to encourage industrialised nations to reduce their Green House Gas (GHG) emissions. The protocol allows countries to meet their GHG obligations by buying reduction credits from other countries. In essence, it means that if a country cannot meet its GHG reduction target, it can buy credits from other countries that have credits to spare.

The VAT element came into play in July 2009, when the UK Government decided to make carbon emission trading 'zero rated' for VAT purposes. Differences in the way in which VAT is treated by different countries can be exploited, and, according to the Crown Prosection Service (CPS), this is what the recent charges relate to.

The CPS alleges that between 1st January and 31st July 2009, four of the six men used a missing trader intra-community (MTIC) style fraud to give the appearance of legitimate trading in carbon credits, allowing them to reclaim VAT paid out on purchases of credits along a chain of bogus companies.

Each of the four men is charged with one count of conspiracy to cheat the public revenue, contrary to section 1 of the Criminal Law Act 1977.

The four are also charged, along with two others, with money laundering offences.

Contact Lewis Nedas’ Criminal Lawyers in London

If you have been charged in connection with VAT offences and require specialist legal advice please contact our solicitors Jeffrey Lewis or Siobhan 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.

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USA to Use Civil Recovery Proceedings to Ramp Up Pressure on Alleged Magnitsky Fraudsters & Money Launderers – by Siobhain Egan

A US multiagency investigation has resulted in civil recovery and asset restraint proceedings being issued against those who have allegedly laundered the proceeds of crime stolen from Hermitage in New York last week.

In 2007 the Moscow offices of Hermitage were raided by Russian tax officials, which preceded a large sophisticated tax fraud on the company (and the Russian taxpayer) to the value of $240 million. Hermitage's lawyer, Sergei Magnitsky, who uncovered the fraud, was later murdered in prison.

Bill Browder of Hermitage has literally moved Heaven and Earth to ensure that the lawyer's death, the fraud, and the political corruption which has covered up both crimes, is constantly in the public arena. Thanks to Bill Browder's unwavering commitment, the US passed the Magnitsky Act 2012 and there have been a series of multi-jurisdictional freezing orders and money laundering investigations worldwide.

The US proceedings concern $24 million of high end Manhattan property. They assert that the monies from the fraud passed through several accounts in Austria, Cyprus, Estonia, Finland, Latvia, Lithuania, Switzerland and Hong Kong, and then through a Cyprus-based property company which eventually purchased the US property.

The US proceedings concern a bare 10% of the stolen monies but will the US authorities' investigations and proceedings stop there?

Surely they must also be investigating the US banks that received the monies from Cyprus, the NY property brokers, the US lawyers, and the accountants involved on both sides of the property transactions? Where were their due diligence and AML compliance procedures?

This raises another aspect of money laundering investigations. Because of the breadth of both US and UK anti-money laundering legislation, anyone involved in or who has advised upon the movement of proceeds of crime can be investigated and face either civil or criminal proceedings.

Civil recovery and asset restraint proceedings are regularly used in the UK by the FCA and the SFO, and will be the focus of the newly created NCA.

We can expect to see more of these types of proceedings used here. They are quick, cheap and, because of the low standard of proof, it is easier for the authorities to mount these proceedings.

If you require advice on any of the issues raised in this article please contact us. We have over thirty years' experience defending money laundering, asset restraint, civil forfeiture, white collar/corporate crime and tax fraud.

Contact us by either completing our online enquiry form or by calling us on 0207 387 2032.

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Acquittal in quarter of a million pound insurance fraud. R v L - Central Criminal Court.

Jeremy Ornstin secured the acquittal of L who had been charged with fabricating a civil claim for damages for injuries sustained in an accident at work. L was caught by covert surveillance apparently undertaking normal activity and employment. The case was stopped at half time on submission, after we were able to show that the civil pleadings, terminated the claim 14 months before the date of the video evidence and therefore his apparent recovery had nothing to do with the claim a pleaded in the County Court.  The video footage was in fact irrelevant.

Fraud Lawyers London

If you have been charged with a criminal offence, contact us now. Click here to get in touch with our london criminal defence lawyers.

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New Offshore Account Offensive by HMRC – by Siobhain Egan

HM Revenue & Customs have recently announced that they have arrested and interviewed eight individuals under caution in relation to offshore accounts. This is as a result of the formation of an elite specialist investigative sub-directorate of HMRC who will aggressively pursue the so-called ‘abuse’ of offshore accounts.

Thanks to recent international cooperation from foreign counterparts, the Revenue have managed to identify some 500,000 individuals who hold such offshore accounts. They have vowed to prosecute at least nine hundred people per year for tax fraud. Each of these individuals will receive a letter from HMRC demanding information about the offshore account. Note that they are not specifically pursuing the ‘fabulously wealthy’ who have such accounts, it is anyone who holds an account.

The Revenue have two approaches which they can take: firstly a criminal prosecution which can lead to further allegations relating to money laundering, serious fraud, Proceeds of Crime Act offences, convictions and asset confiscation; or alternatively the civil procedure which is known as Code of Practice 9.

The Revenue really do mean business this time. To face either a criminal prosecution or a civil investigation is time consuming, frightening, and can be very expensive in the long-term. It is important that if either you or your client receives a letter from HMRC you immediately instruct both specialist criminal defence solicitors and specialist tax accountants who are used to dealing with the new full-on and aggressive stance being taken by the Revenue. This is turn can save time, stress, criminal proceedings, civil recovery or criminal asset recovery. It can save money, including penalties and interest.

Many of you will have accounts in the family which have been there for generations and have remained untouched for years. This will not exclude you from the Revenue’s investigations.

At Lewis Nedas Law we have a department which is dedicated to the defence of Inland Revenue investigations and prosecutions. We offer a City standard of service at reasonable and realistic pricing levels. We work with leading tax/criminal defence QCs and tax accountants at different pricing levels. If you require any advice please contact Jeffrey Lewis.

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