Out-Law News | 23 Jun 2014 | 3:35 pm | 1 min. read
Barry Vitou, an expert in fraud and corporate crime at Pinsent Masons, said that the increase was partly a response to recent criticisms of the SFO and other law enforcement agencies for allowing convicted criminals to ignore confiscation orders. The SFO carried out 27 raids to recover assets from fraudsters last year; up from 21 in 2012, according to the figures.
"Fraudsters and white collar criminals just do not live in fear of being caught," Vitou said. "These raids are designed to help rebuild the SFO as an effective and credible deterrent."
"Stripping criminals of the wealth they have gained through fraudulent activity sends the right messages to potential fraudsters, and it reassures businesses and other victims of fraud that this is a crime that is being taken seriously," he said.
Enforcing confiscation orders against convicted fraudsters can be complicated, Vitou said. It is not uncommon for them to use a web of bank accounts to send money offshore, or to transfer assets into the names of accomplices to prevent them from being seized by law enforcement agencies, he said.
Despite the increase in the number of raids carried out by the SFO to seize assets from criminals, the reported value of assets seized has continued to fall. In the year to 31 March 2012 the SFO managed to collect £50.2 million, but this had fallen to £11.4m by the following year.
Vitou said that an increase in successful raids could give the SFO an additional source of funds at the same time as its budget was being cut substantially. The SFO is able to keep some of the money that it recovers from asset seizures to feed into its own budget. Meanwhile, its funding from central government has fallen by 40% since the financial crisis from £52m to £38m.
"Earlier in the year, the SFO had to request £19m in emergency funding to meet urgent cash requirements," Vitou said. "Increasing revenue from asset recoveries will help solve some of the SFO's financial crisis but it is not a long-term funding solution."
Recent research by Pinsent Masons found that the number of property raids, carried out by the SFO to gather evidence against fraud suspects, also increased substantially. These more than trebled from eight in 2012, to 26 the following year. However, this figure was still far fewer than the SFO's longer-term average of 50 property searches carried out per year, according to Vitou.