Fraud and election manifesto pledges – are they one and the same?

The UK is shortly going to the polls, with the Conservative Party hot favourites to win the day and perhaps secure a majority the size of which is a matter of some conjecture given the recent narrowing of the polls.

What would a theoretical counter-fraud manifesto look like, though: something that fraud investigation professionals and asset recovery lawyers such as myself could get behind and vote for?

From the outset, the Tories have a major hurdle to overcome where the police officer 'voters' and their families are concerned.

As Home Secretary, Theresa May oversaw (and continues to do so as Prime Minister) swingeing cuts to the policing budget as part of the party's austerity measures.

Although many police officers historically have tended to vote Conservative, Prime Minister May is almost universally derided by British law enforcement officials and their families. UK police forces now have a staggering 19,000 fewer officers since austerity-related cuts began in 2010.

These cuts manifest themselves in many ways, most obviously fewer officers on the beat as well as longer response times. At a time when the UK is a prime terrorist target for extremists, this is a worrying statistic. The added pressure being brought to bear has seen a sharp rise in resignations and ill-health from the police, with mental health issues up a whopping 30% in 2016.

All of us who ply our trade in the realms of fraud investigation and asset recovery will understand our frustration when we hear the phrase that 'fraud is a victimless crime'. Nothing could be further from the truth. Yes, the impact of a significantly-sized fraud on a multinational company may be limited.

But a few thousand pounds in life savings, prised from the grasp of a pensioner through an investment scam, can be devastating. Who can the victim turn to in order to have their complaint investigated – the police?

The majority of UK police forces have cut the number of specialist fraud investigators in order to shift staff back into mainstream policing. Some forces have disbanded their fraud squads. This means that Action Fraud, the UK's national fraud reporting agency, and the National Fraud Intelligence Bureau, which analyses fraud patterns and builds intelligence pictures, struggle to refer complaints of fraud to the regional police forces: there are simply insufficient fraud investigators available.

It is unrealistic for uniform and area non-specialised Criminal Investigation Department (CID) officers to be expected to investigate complex fraud cases. They do not have the training, the experience or the time to dedicate to long-running and often complex investigations.

So, how big a problem is fraud and why should the UK political parties focus at least some of their attention on it in their manifestos? The UK's 2016 Annual Fraud Indicator shows annual fraud losses to be £193bn per year, with private sector fraud making up to £144 billion of the overall figure, and the public sector accounts £37.5bn.

The losses to individuals (members of the public i.e. the majority of voters) are in the region of £10bn per annum, which equates to £3,000 per head of the UK population.

Combatting fraud

The City of London Police Commissioner Ian Dyson was quoted by the BBC on the matter, saying: "What the report can't illustrate is the human cost of fraud which ruins lives and blights every community in the UK."

So much for the notion of the victimless crime.

Any political party that promises to address the lack of police officers, in tandem with the lack of trained fraud investigators, would pick up votes (from the police, certainly). To this end, I think the first pledge on the manifesto should be a return to the policing numbers in 2010. But even here there is an underlying problem.

Even when forces had their 'full complement', they faced an uphill struggle to combat the fraudsters and the trail of devastation they left behind them. So to my mind, an increase in officers would also have to see an increase in trained fraud investigators, over and above what they were before. This would be the manifesto's second pledge.

In addition, the third pledge should see an increase in officers trained and able to investigate cybercrimes. Cybercrime is now reaching epidemic proportions, the majority of it fraud-related. Jurisdictional issues (perpetrators are often based overseas) severely complicate the investigative process.

Chalking a different route

So what is the answer? I would set up dedicated teams of officers and experts who would pro-actively scour the 'dark web' for these criminals. I would also advocate a law reform initiative to afford law enforcement a license to attack them with malicious software just as they attack their victims.

These teams already exist in the military and counter espionage fields. We need similar resources targeting the criminals proliferating and making vast sums of money off the backs of victims. I would publicise the teams' existence. I would publicise their successes and in doing so I would endeavour to take the fight to the fraudsters.

The fourth pledge would be centred entirely on the need to prioritise asset recovery i.e. getting the bad guys to pay up to the victims. Also to fund counter-fraud initiatives.

Government must oversee a real and genuine merging between the police and private sectors. No more blurred lines, no more pretending. We must see a genuine marriage between the public and private sectors to maximise asset recovery, using all the civil powers available to lawyers experienced in that field. For this to become effective, we would need the UK's laws to be tweaked along with the information exchange protocols that will be required.

The fifth and final pledge would be for the new government to promise to at least try and encourage other countries to reform some of the existing international laws, treaties and agreements to ensure that there is no hiding place for the fraudster, or the facilitator of their ill-gotten gains.

Far too often, fraud investigators and those charged with trying to recover lost assets are prevented from doing so by international red tape. I find this odd, as surely most countries are affected by fraud (and corruption). Therefore we all have a vested interest in assisting our foreign counterparts, on the understanding that mutual back-scratching is to everybody's benefit.

In conclusion, how would the political party fund this manifesto and its pledges? Sadly I have no idea, but as the late US President Ronald Regan once said: "Politics is supposed to be the second oldest profession. I have come to realize that it bears a very close resemblance to the first."

So I will leave the funding to those in the know, while my draft pledges will remain simply a wish-list of suggestions that would hopefully benefit all.

Martin Kenney is managing partner of Martin Kenney & Co. Solicitors, a specialist investigative and asset recovery practice based in the British Virgin Islands. Kenney focuses on multi-jurisdictional fraud and grand corruption cases.