Major Fraud

• NCJ Number: 78406
• Journal: Police Review Volume: 89 Issue: 4611 Dated: (June 19, 1981) Pages: 1194-1196,1222-1223
• Author(s): K G Oxford
• Date Published: 1981
• Length: 5 pages
• Publication Format: Article
• Language: English
• Country: United Kingdom
• Note: Paper presented at the 1981 ACPO (Association of Chief Police Officers) conference.

Annotation

Major types of business fraud in England are described, and police staff qualifications and training for fraud units are discussed.

Abstract

The person perpetrating fraud through a business invariably operates through the limited liability corporation. In such companies, those owning shares in the business, including directors, are liable for the debts of the company only in the amount unpaid on their shares. Fraud through a company is also attractive to criminals because a company is a legal entity separate and distinct from its members or shareholders, and creditors can look only to the company for settlement of any transactions. Also, the ownership and management of a company can change quickly without the knowledge of creditors or other interested persons. One type of fraud common to companies is management fraud, which involves malpractice and abuse by persons in control of companies to the detriment of shareholders and creditors. Investment frauds involve extracting money from the public either by the purchase of fraudulent shares or by the acquisition of loans and money deposits. Trading frauds entail dishonest company operations involving professional criminals. Police who are recruited to investigate these types of fraud should have experience in gathering evidence, interviewing witnesses, preparing a prosecution file, and relating evidence to offenses that may have been committed. The staff should also understand the intricacies of the systems being investigated to facilitate communication with those involved in the systems. They should have basic knowledge of accounting, banking, commercial practice, bankruptcy, company law, and liquidations. A great deal can be learned through instruction and on-the-job training by experienced officers. Because of the large amounts of money involved in most company frauds, investment in a proficient fraud unit is inevitably cost-effective.