pcb © steven philippsohn 2007 steven philippsohn head of commercial fraud pcb litigation llp case...
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PCB
© Steven Philippsohn 2007
Steven PhilippsohnHead of Commercial Fraud
PCB Litigation LLP
Case Management in Multi
Jurisdictional Fraud Cases
Key Factors to be Considered
Fraudnet
Rio de Janeiro – April 2007
PCB
© Steven Philippsohn 2007
● Retained by global, governmental and national organisations in relation to fraud matters
● Currently retained on cases involving:-
Switzerland, Gibraltar, USA, UK, Portugal, Germany, Belize, Bermuda, Italy, Lebanon, Ukraine and Russia
PCB Litigation LLP
PCB
© Steven Philippsohn 2007
PCB Litigation LLP
2007
Retained to act in multi-jurisdictional suits including:-● For European criminal prosecutor in relation to
civil remedies;● On application to European Court of Human
Rights to overturn decisions made by an Eastern European Court;
● For HM Customs & Excise;● In Joint Venture dispute involving 10 jurisdictions
PCB
© Steven Philippsohn 2007
Movement towards justice without borders:
Accountants in Cyprus and India have been charged by the SEC with failing to employ proper procedures which would have detected fraud
Increasing rights of investigation and disclosure
Extradition/Arrest Warrants
Attacking Responsibility for Unaccountable Wealth
Recent Developments-
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© Steven Philippsohn 2007
● Barclays Bank was recently forced to give up the details of hundreds of customers suspected of not declaring foreign savings as taxable UK earnings;
● The order is the largest of its type ever granted against a bank and followed major investigations by HM Customs and Excise;
● Evidence gleaned by FSA enquiries can be used in private law suits.
[Real Estate Opportunities Ltd v Aberdeen Asset Managers Jersey Ltd & Ors [2007] EWCA Civ 197]
Recent Developments
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© Steven Philippsohn 2007
Strategy
● Assess and Develop Evidence
● Usually start with incomplete picture
● Various effective options by which further evidence is collated
● Appointment of Specialists
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© Steven Philippsohn 2007
Investigating Fraud
● Court’s interpretation of European Convention on Human Rights
[Jones v University of Warwick [2003] EWCA Civ 151]
● Covert monitoring may be admissible if:-● Evidence went to the heart of the case;● There were no other less intrusive means of
obtaining that evidence;● There may be penalties in costs and loss of
claim to privilege
PCB
© Steven Philippsohn 2007
Investigating Fraud
● In early 2006, Hewlett Packard’s chairwoman, Patricia Dunn, ordered an investigation into media leaks about corporate strategy, HP’s interest in buying another company and discussions concerning the next CEO.
● The external agency employed to carry out the investigation used a method called “pretexting”. This involved posing as someone else in order to acquire the telephone records of reporters and board members suspected of involvement in press leaks.
● Criminal charges, including conspiracy and identity theft, against Dunn were dropped in March 2007 although she had, by then, been forced to resign as chairwoman.
[News znet.com – 15.03.07]
PCB
© Steven Philippsohn 2007
Strategy
● Which is the Appropriate Court?
● Where the assets are situated?
● Current legal policies within the jurisdiction
● Level of co-operation offered by the foreign court
PCB
© Steven Philippsohn 2007
Strategy
● Whether the Recovery should be Pursued?
● Commercial Realities
● Publicity Element
● Statutory Obligations
PCB
© Steven Philippsohn 2007
Strategy
● Start of the Process
● The Fraudster is not alerted
● Immediate access to and speedy decision making by the Court
● Criminal Prosecution and/or Civil Recovery?
PCB
© Steven Philippsohn 2007
Orders that can be Granted by the Foreign Court
● Freezing Orders● Search Orders● Orders for Examination● Surrender of Passport● Committal to Prison● Appointment of a Receiver● Summary Judgment● Criminal Prosecution
PCB
© Steven Philippsohn 2007
● Evidence that Respondent would not comply with Order for payment of over £10m
● Witness in one country disclosed that Respondent had been imprisoned in another country
● Lawyers in that country revealed that not only had he been imprisoned but that he had fled that Country despite an Order prohibiting him from doing so
● Respondent had forged material documents
Examples of Case Management
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© Steven Philippsohn 2007
Examples of Case Management
The Respondent had assets in:-
● Switzerland;
● Belgium;
● Israel; and
● Belize
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© Steven Philippsohn 2007
● Almost simultaneously obtained:
● Interim Judgment for approx £6 million of the claim
● Freezing Order for balance of £4 million including costs of recovery of £300,000.
● Order for disclosure by Respondent of his assets
● Order for the attachment of certain of the assets overseas in respect of Judgment Debt and for the “freezing” of assets in respect of balance
● Order for Examination of Respondent
Examples of Case Management
PCB
© Steven Philippsohn 2007
● Within a few weeks:
● Respondent sought to obtain lifting of freeze on basis of payment of £6 million which was rejected
● A number of increased offers followed so that by the day of the Hearing of the Examination, he had paid all but £1 million of the claim
● On learning that the Respondent was not in Court to be examined. the Judge indicated the possible issue of a Warrant of Arrest. At that stage, the Respondent’s lawyers revealed that they had just received £1 million which they undertook to pay into a joint account as security
● Payment or security for total amount!
Examples of Case Management
PCB
© Steven Philippsohn 2007
● The case of the global sports
personality;
● Action taken in various jurisdictions;
● Substantial percentage of stolen monies
recovered from those that allowed fraud
to occur.
Examples of Case Management
PCB
© Steven Philippsohn 2007
Bringing Down the Phishers
● Finding the origin
● Following the digital trail
● Approaching the ISP
● What succeeded?