The Department of Trade and Industry hails its lawyers, investigators and administrative staff who have managed, the DTi reports, to put 48 fraudsters and dodgy directors behind bars in the past year, and emptied their bank accounts of more than ยฃ800,000.
The Departmentโs Legal Services D2 section has 15 lawyers, two trainees, 17 law clerks and 80 investigators and administrators in the Investigators Officers Section (IOS). Their aim: to improve confidence in the UKโs business network by enforcing corporate and insolvency laws.
Tip-offs can come from a range of sources:
The Insolvency Service – referrals from Official Receivers, Administrative Receivers and Liquidators;
DTIโs Corporate Law & Governance Directorate – referrals from the Companies Investigation Branch (CIB) when their statutory enquiries/complaints disclose criminal activity;
Members of the public – Mainly โhot lineโ complaints against disqualified directors, made to the Insolvency Service or Companies Investigation Branch
The police – where the complaint relates to fraudulent activities by company directors
Companies House – regulatory referrals mostly relating to irregularities in the submission of company documents.
Once an allegation has been examined by DTI lawyers, the IOS looks into the matter. Their report will allow the Departmentโs lawyers to decide whether there is enough evidence to institute criminal proceedings, assuming there is a realistic prospect of conviction and pursuing the case is in the public interest.
For the year ending March 2005, LSD 2 obtained 76 Directorsโ Disqualification Orders ranging from 12 months to 15 years, and 48 defendants received custodial sentences ranging from one month to two and a half years. D2 also pursues confiscation orders, to deprive convicted defendants of the proceeds of their criminal acts, and seeks compensation for victims of criminal wrongdoing. For the year ending March 2005, DTI obtained confiscation orders totalling £437,983 and compensation orders totalling £280,687.47.
Not all โwhite collarโ prosecutions come to LSD 2 โ the Financial Services Authority investigates financial institutions that break the rules, the Serious Fraud Office looks into frauds that exceed £1 million, have an international dimension or require SFOโs special knowledge and powers, and the Crown Prosecution Service deals with a wide range of criminal offences, including company frauds and dishonesty cases.
However, all the non-CPS organisations are united under the auspices of the Whitehall Prosecutors Group, which co-ordinates prosecution policy across Government and is chaired by Deborah Collins of LSD 2.
