BRITISH BROADCASTING CORPORATION RADIO 4

TRANSCRIPT OF “FILE ON 4” – “ FRAUD: THE THIN BLUE LINE”

CURRENT AFFAIRS GROUP

TRANSMISSION: Tuesday 7th

October 2014 2000 - 2040

REPEAT: Sunday 12th

October 2014 1700 – 1740

REPORTER: Danny Shaw

PRODUCER: Ian Muir-Cochrane

EDITOR: David Ross

PROGRAMME NUMBER: PMR440/14VQ5531

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THE ATTACHED TRANSCRIPT WAS TYPED FROM A RECORDING AND NOT

COPIED FROM AN ORIGINAL SCRIPT. BECAUSE OF THE RISK OF MISHEARING

AND THE DIFFICULTY IN SOME CASES OF IDENTIFYING INDIVIDUAL

SPEAKERS, THE BBC CANNOT VOUCH FOR ITS COMPLETE ACCURACY.

“FILE ON 4”

Transmission: Tuesday 7th

October 2014

Repeat: Sunday 12th

October 2014

Producer: Ian Muir-Cochrane

Reporter: Danny Shaw

Editor: David Ross

MUSIC

ACTUALITY OF POLICE OPERATION

POLICEMAN: This is police, open the door. My name’s DS Justin

Scott, I’m from Metropolitan Police’s Operation Falcon ….

SHAW: This month, Scotland Yard launched a crackdown on

fraud. A new 300-strong unit will focus on criminals and organised gangs using the internet

to trick us out of our money.

POLICEMAN: We’ve got a warrant here to search the premises ….

SHAW: But will it make any difference? Amid mounting

concerns that law enforcement agencies aren’t making fraud a priority, the police commander

responsible for tackling it tells File on 4 there aren’t enough officers to investigate.

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HEAD: I think that policing has a responsibility to look long

and hard at how we’re meeting that threat at the moment and make sure that we are satisfied

we are providing enough resource and enough skilled resource to meet that threat.

SHAW: We’ll hear from fraudsters who were caught …

Do you feel sorry for the people who were defrauded?

ENTWISLE: Yes, of course I do, yes.

SHAW: Have you apologised in any way to them?

ENTWISLE: Erm, I wouldn’t know how.

SHAW: And victims who were caught out.

COLIN: I just feel a bit of a fool in a way. I, you know, this

story about a fool and his money are soon parted.

SIGNATURE TUNE

ACTUALITY IN CAFÉ

SALES: I started to commit fraud at the age of thirteen. I learnt

very quickly that I had a very good skill for making fraudulent paperwork and being able to

talk my way into situations and one thing led to another. The next thing, I was committing

credit card fraud.

SHAW: Over a cappuccino in South London, Tony Sales tells

me about his years as a fraudster, where in cafes like this, he secretly obtained information

from customers’ credit cards.

SALES: Probably by the time I was sixteen or seventeen, I

probably had over three or four hundred what’s called, as a fraudster you call a grabber,

which gets the magnetic strip information on the back of a card. I’d have them in places like

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SALES cont: this little coffee shop that we’re in today. Some weeks

I would get in probably two or three thousand card numbers every week. We’d rewrite them

and just go and use them to buy goods. You know, as soon as we found credit card fraud, we

were instant millionaires, we could buy whatever we wanted, whenever we wanted. Cars,

clothes, jewels, shops, girls, whatever you want – money brings it all.

SHAW: Why did you stop?

SALES: I was imprisoned in 2010 and, you know, I’d lied to the

family about it, my wife, I’d lied to my kids, and it just wasn’t nice, you know. I felt I’d let

them down.

SHAW: Since he left prison, Tony Sales has worked as a

security adviser to shops and businesses, as they try to prevent themselves falling victim to

technology-savvy fraudsters.

SALES: Unfortunately fraud is getting easier by the day. It’s

become something else.

SHAW: So what has it become?

SALES: Well, since the invention of the internet, the whole

world has opened up, so now, you know, before you needed the conman, the confidence

trickster that would sit there and actually commit the crime against someone or go into a store

and perpetrate the crime against them or the bank. Now you get these guys sitting on the

internet at home in their bedroom, they don’t ever have to meet anyone and they can create

the crime.

SHAW: The more we use computers and smartphones to

transfer money, contact people and buy goods and services, the more opportunities there are

for criminals to take advantage. Whether it’s a bogus auction website, an unauthorised ticket

dealer or someone in a far flung place promising romance in exchange for thousands of

pounds, it’s fraud. Traditional scams - such as tax evasion and benefit fraud - are flourishing

too. Last year, the National Fraud Authority put the loss to the UK economy of all kinds of

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SHAW cont: fraud at £52 billion. And there's growing evidence

frauds are becoming increasingly sophisticated and harder to crack.

MUSIC

ACTUALITY AT BUREAU DE CHANGE

WOMAN: Are you buying or are you selling euros? 1.236, very

good rate.

SHAW: One of the most elaborate banking frauds of recent

years centred on a network of bureaux de change. The scam involved a group of people

working together.

WOMAN: How much would you like to buy? Like to do it now?

SHAW: One of them would buy a large sum of foreign

currency, typically around 5,000 euros, using a bona fide bank card. Another member of the

gang then used various coded information on the paper receipt issued during the purchase to

trick the bank into thinking that the 5,000 euros had been refunded.

WOMAN: Thank you, have a good day.

SHAW: With the money now apparently back in the bank

account, the card holder was able to buy more cash from a different bureau de change. And

so it went on.

TROW: That had been done several times on the same card.

Now when that account was totted up at the end of the day, there was almost £50,000 worth

of overdrawn funds on that account.

SHAW: Detective Sergeant Craig Trow, from Greater

Manchester Police, worked on the investigation with experts from the banking industry. The

fraud had them baffled.

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TROW: All they knew was the accounts are overdrawn and it

was clear that a number of banks had had exactly the same problem.

SHAW: How do you go about then investigating that?

TROW: Well really it was how these reversals were entered

into the system, and because of course most of the transactions are done by telephony it was

clear that something was dialling into the bank.

ACTUALITY OF DIALLING TONES

SHAW: Then detectives made a breakthrough. They finally

discovered how the banks had been fooled into thinking that cash purchased from the bureaux

de change had been refunded. The fraudsters had accessed the bank’s computers by using an

automated dialling system. The numbers they’d called from were traced to three addresses in

Manchester.

TROW: And at one of those addresses, it was almost a

goldmine in terms of evidence. It was set up as a business office with a laptop, with lists of

card numbers, lists of banks and when we examined the computers, the evidence that was

contained within was critical to the prosecution of the people.

SHAW: The investigation and legal process were so

convoluted, it took five and a half years to bring the perpetrators to justice. The ringleader,

tracked down after going on the run during the trial, was finally behind bars.

EXTRACT FROM TV NEWS

NEWSREADER: Our top story – a cash machine conman is sentenced to

seven years in jail for stealing £2.5 million from the banks.

SHAW: Is there pressure on you to come up with a result,

because this is taking so long, it’s taking months, it’s taking years for the case to conclude?

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TROW: I think there is pressure. There’s pressure internally

from within our own organisation, there’s pressure externally from the victims – ie the banks.

I think there’s an immense amount of pressure. If we’d not stopped it, who knows how much

money could have been lost?

SHAW: A successful outcome, but in this field that’s rare. Last

year, the House of Commons Home Affairs Committee said when it came to cyber-crime,

there was a "black hole which allowed criminals to make huge profits from fraud." It’s a

concern shared by the Vice President of the Police Superintendents Association, Gavin

Thomas, a former Fraud Squad officer. He says the problems stem from a lack of resources

and expertise.

THOMAS: I think we’re in the midst of a quiet revolution. The

increase and the development of technologies and the application of the internet, I think the

pace of change is a lot quicker now, and certainly the police service and other agencies have

to keep apace with those changes that are taking place.

SHAW: Do you think the police are keeping pace with those

changes?

THOMAS: I think it’s a challenge for the service, certainly within

the current constraints the service have with budget. We mustn’t forget that to date we’ve

taken over £2.5 billion out of the police service and 16,000 police officers, so difficult

choices have had to be made. A brutal example I can give is, as an operational commander

today, if I had the choice as to where I put my resources, do I investigate fraud today or do I

put my resources into investigating and protecting a child from child sexual exploitation?

SHAW: Although bodies such as the Serious Fraud Office, the

Department for Work and Pensions and Her Majesty’s Revenue and Customs conduct

investigations into fraud, it’s the police most victims turn to. Historically, however, fraud has

not been a well-resourced policing area. Research seen by File on 4 suggests seven police

forces across the UK have no fraud department at all, and in four constabularies fraud work is

included in a financial investigation unit, which has a broader remit. The study, which has not

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SHAW cont: yet been published, is from one of the country’s

foremost experts, Professor Mark Button, Director of the Centre for Counter Fraud Studies at

the University of Portsmouth.

BUTTON: We’ve recently done some research to find out the total

fraud capacity within the UK. We’ve got about 650 specialist staff in the police for the whole

UK, and that amounts to 0.27% of total police personnel. And when you look at the size of

the problem, it becomes very clear that we just do not have enough resources in the police

dedicated to this problem.

SHAW: Is there any way in which those figures actually could

be supplemented, because you have other officers who are not specialising but who are

brought in to do fraud investigations?

BUTTON: There are other generalist police officers that do fraud,

but if you talk to police officers, they will tell you that fraud is a very low priority. Fraud

becomes a Cinderella crime.

SHAW: Professor Button found there were more counter-fraud

officers now than in 2010 but it was hard to make meaningful comparisons because of

different data sources and definitions. We carried out our own research on the numbers

working in fraud or economic crime teams from data supplied by 29 police forces under the

Freedom of Information Act. We were able to compare staffing levels now with three years

ago. Numbers have increased – but not by much. There are 20 more police officers

specialising in financial crime and 54 more civilian investigators, bringing the total to 737

officers and staff. That’s a rise of 11% on 2011. But the increase has been outstripped by the

growing caseload. Across England and Wales, police-recorded fraud has gone up by more

than 40%. City of London Police are the lead force on tackling fraud, providing resources

and training. Commander Steve Head is in charge of their unit. He also co-ordinates the

national police response to economic crime.

HEAD: The key for me isn’t the numbers in that sort of rather

crude sense of just we’ve got a hundred or we’ve got two hundred. It’s the capability and the

capacity of forces when taken together, so in actual fact we have ten officers, but they’re all

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HEAD cont: trained to the very highest level. In actual fact they can

do a lot more than a hundred officers who aren’t trained to that level. My view is that we

don’t have enough officers trained to deal with economic crime and fraud at the moment. I

would say that we are doing an awful lot to try and improve that situation.

SHAW: But the fact is that specialist training requires resources

and we’re going through a time when budgets are extremely tight and there are all sorts of

other demands, and fraud is probably not top of the tree, and that’s what police officers have

said to us.

HEAD: I’d agree that we’ve seen a decline in the number of

specialist economic crime units, fraud teams over many years, although I would also say that

a recent survey that we’ve done amongst police that will be coming out towards the end of

this year is showing that there’s been a turnaround in a lot of that, and a lot of forces are

going back to the idea of dedicated units.

SHAW: But if you call police to report a fraud, they won’t be

the ones to deal with it, at least initially. You’ll be referred to a service called Action Fraud,

run by the non-profit organisation, BSS.

ACTUALITY IN CALL CENTRE

SHAW: File on 4 was given unprecedented access to one of the

Action Fraud call centres in Manchester.

OWEN: You have 40 to 45 Action Fraud specialist advisers at

any one time.

SHAW: I was shown around by the operations manager, Gary

Owen.

Quite busy here today.

OWEN: Yes. It’s a bustling environment. The advisers don’t

get downtime between calls. We’re handling around 2,500 calls per day.

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SMITH: Okay, so we’ll go through the details now. I’ll get

yours to begin with then we’ll talk about any suspect details that are included and you want to

get into the report as well. Your …

SHAW: Call handler Jon Smith provides basic advice and a

crime reference number. Action Fraud then sends the details of each offence to the National

Fraud Intelligence Bureau, which is operated by City of London police. The NFIB sifts and

analyses the information before deciding whether to pass it onto individual forces to

investigate.

SMITH: That’s it. Is there anything else I can help you out with

today at all? All right then. Thank you very much for your call today. Take care. Bye bye.

SHAW: Do you get some callers who are expecting you to do

the investigation?

SMITH: Yes, that is asked.

SHAW: What’s the most difficult aspect of your job dealing

with callers?

SMITH: Sometimes callers can come on and expect you to

solve it there and then, and they want, you know, action taken pretty much straightaway.

SHAW: That's a point I put to Gary Owen.

OWEN: We’re focused on supporting the victims who come

through to us in the first instance and making sure that we get all the information that they

have, but also that they’ve got the support that they need, through what is quite often a very

stressful and upsetting experience that they’ve just been through. The interactions that they

have with our advisers, the satisfaction levels are very high. Over the length of the service

we’re looking at a 94% satisfaction rate where customers would say that they would

recommend the service to friends or family who were affected in the same way that they’ve

been. That’s what that measures.

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SHAW: But others are far from satisfied with the response after

an incident is reported to Action Fraud. Mike Cherry is National Policy Chairman of the

Federation of Small Businesses, which has 200,000 members across the UK.

CHERRY: If the reporting goes into Action Fraud, then it would

be expected that Action Fraud come back with an answer or they make sure that the local

police come back with an answer on how this is going to be dealt with and how it’s going to

be tackled and taken forward on behalf of the business. That just isn’t happening in too many

cases at this moment, from what our members are actually reporting to us. Clearly there’s a

resource issue somewhere that Government and the Home Office have to start addressing

much more fundamentally, and unless we can get a true handle on all of this, then we’re not

going to be able to deal with the problems.

MUSIC

COLIN: I bought a reasonable amount of gold from a bullion

dealer that I found on the internet. That was all fine. He sent me certificates and the gold

would be stored in the vault for a year free of charge. I just feel a bit of a fool in a way, sort

of, you know, this story about a fool and his money are soon parted.

SHAW: That’s Colin - he doesn't want to give his full name. He

called Action Fraud because he suspected he’d been swindled out of £16,500. Two months

ago, when Colin wanted to retrieve the gold, and a quantity of silver he’d bought as well, the

dealer had disappeared.

COLIN: I struggled to get hold of him, so panic button, that’s

when I contacted Action Fraud and gave them quite a lot of detail on the phone. They were

very sort of sympathetic. And on the 29th

August they actually sent out an official update to

me, and it basically said they can’t do anything because there are insufficient leads from the

information I gave them.

SHAW: What was your response to that?

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COLIN: Well, I was just flabbergasted. I’ve definitely given

them bank leads, I’ve given the guy’s name, the bullion website, I gave them some phone

numbers that I had from him. Out of sheer frustration I went to see a very good local solicitor

and within ten minutes of sitting with him, he’d tracked down this potential fraudster, got his

address and everything whilst I was sitting there.

SHAW: What does that tell you about the police response?

COLIN: Well, I don’t know, I just guess they’re just not

interested in small fry like me, you know. I mean, £16,500 is a lot of money to me, but to

them I guess they’re just spending their time chasing up the big crooks.

SHAW: So far, Colin hasn’t got his money back – his case

remains unsolved. In fact, only a minority of the calls handled by Action Fraud ever get

investigated. Every month, it passes on the details of around 20,000 crimes to the National

Fraud Intelligence Bureau. But only 6,000 are sent by the NFIB to local forces to investigate.

Commander Steve Head, lead officer for economic crime.

HEAD: Although some crimes are not sent out to police forces

for investigation, that’s absolutely right, all of those crimes sit in the system and are matched

and are analysed and are looked at in relation to one other, to try and identify areas where in

actual fact we can identify modus operandi and everybody’s crime sits on that system and is

live forever. So if a new piece of information comes in, it will be connected to that and that

crime might be revitalised.

SHAW: Are you satisfied with the number of cases that are

investigated or would you like to see more inquiries?

HEAD: I’d like to see considerably more inquiries. I think it’s

important that we understand just how fraud – and particularly what we’re seeing in terms of

the fraud committed over the internet – impacts upon local communities.

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SHAW: The ease with which offences can now be reported,

through Action Fraud, has had a marked effect on the official crime figures. In the twelve

months to the end of March, 211,000 frauds were recorded by police in England and Wales -

up 17% on the year before. In addition, 333,000 frauds were reported by industry bodies, a

2% rise. The next set of data, out this month, is likely to show another increase. Statisticians

believe the police figures now better reflect the true extent of fraud - though Professor Mark

Button says it’s still vastly under-reported. He estimates there are 29 million frauds each

year.

BUTTON: In terms of the official crime statistics on fraud, they

are pretty useless really. We often say that crime statistics in general are a good barometer,

but I think with fraud, you can’t even say they’re a good barometer, because lots of

organisations don’t report them, don’t want to report them, or find it difficult to report them.

SHAW: It’s true to say, is it, that some of these bodies just

won’t report fraud because, either for reputational reasons or because they sort of deal with it

in house?

BUTTON: If they go to the police and there is an actual court

case, it can be incredibly embarrassing. But there are also organisations that prefer to use

other means to deal with fraudsters, sort of just to quietly sack them, to pursue them in the

civil courts or to go to a regulatory body where that has some kind of jurisdiction and seek to

get the individual sanctioned through that regulatory body.

SHAW: There is one set of crime figures intended to capture all

offences, whether reported to police or not. It’s the Crime Survey of England and Wales,

which is based on interviews with a sample of 40,000 people aged over 16 and published by

the Office for National Statistics, known as the ONS. According to the Survey, overall crime

has been falling almost continuously since the mid-1990s and is now at its lowest point since

the survey began 33 years ago. But there’s no separate category in the survey for fraud. And

it’s recently emerged that although figures on credit card fraud have been compiled, they’ve

been left out of the main survey results. Marian Fitzgerald is visiting professor of

criminology at the University of Kent.

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FITZGERALD: The problem is that since the early 90s, patterns of

crime have been changing. The increasing use, from the early 90s, of credit and debit cards,

and then with the increasing use of the internet for training purposes and so on. Now the

Crime Survey didn’t pick up on those until it finally asked a question on card fraud in 2005.

They have never ever included that figure in their official estimate of crime. In fact, that

would have added 50% to the Crime Survey’s estimate of crime, which we are told is the

authoritative figure.

SHAW: So if the figures for credit card fraud and so on had

been included, are we saying that overall crime would have gone up by 50%?

FITZGERALD: Well, that’s overall crime as measured by the Crime

Survey.

SHAW: Which is the most authoritative survey of the lot, we’re

told.

FITZGERALD: Which ministers have been led to believe and large

sections of the media as well.

HEAD: People have a right to know the true level of crime that

they’re facing and the growth of that threat, but we need to be really careful when we talk

about the numbers.

SHAW: Steve Head.

But the Crime Survey has been misleading though, hasn’t it, because fraud hasn’t been

counted and credit card fraud, data on which was collected, wasn’t even included in the

figures.

HEAD: No, I don’t think it’s been misleading. I think that in

actual fact it’s been very clear that fraud wasn’t part of that.

SHAW: Why isn’t it included in the figures? Why are we told

that the crime is going down if that’s not included in the figures?

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HEAD: I would argue that in actual fact fraud should be

included in the figures, and that in actual fact we are working with the ONS and others in

order to try and make sure that we understand the figures.

SHAW: So, without fraud, what weight can we attach to the

crime survey, whose findings have enabled ministers to claim that crime is really coming

down? Very little, says Professor Marian Fitzgerald.

FITZGERALD: Politicians have been only too ready not to ask

questions, precisely because they want to be able to make the claim that they had got crime

down, and I think that questions are starting to be asked. If the Crime Survey can show crime

endlessly to be falling and most recently by 15%, I think it has become quite unbelievable.

SHAW: So we’re being defrauded, in a sense, by the skewed

official figures?

FITZGERALD: Well, you know, I think ministers will probably feel

defrauded.

SHAW: Government ministers declined our request to take part

in the programme, but in a statement the Home Office said the Crime Survey was

regarded as a ‘gold standard’ internationally. Officials explained that plastic card fraud was

left out of the survey to avoid the risk of double counting, in cases where fraud was also

recorded as theft. They also pointed out that the Survey is intended to measure crimes against

people in England and Wales, whereas some frauds are committed abroad, with banks or

credit card firms suffering the loss, rather than individuals. The ONS said it recognised the

importance of including fraud offences in the main survey and had plans to do so in the

future.

MUSIC

SHAW: It’s sometimes said the reason fraud isn’t made such a

high priority is because it’s a victimless crime. It’s business or the taxman who suffers - not

real people. But a trial at Southwark Crown Court in London, where some of the most

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SHAW cont: complex and serious fraud cases are heard, showed

what an impact fraud can have. The victims in the case were an estimated 20,000

holidaymakers, who’d booked bargain breaks only to find their flights or accommodation

hadn’t been reserved. The trial judge described it as a “cynical and greedy fraud”. Four

people were convicted. One of them, Timothy Entwisle, has spoken to File on 4. It's the first

time he’s talked publicly about the case.

ENTWISLE: I thought I was going to be acquitted, and I remember

when it came through, you get a sort of numb feeling in your stomach and you think, Christ,

what happens now? It was made quite clear that a custodial sentence was likely. I got three

years and that was reduced by 50% as is normally the case, and then reduced further because

I was allowed out with an electronic tag, so I think I actually spent thirteen months in

custody.

SHAW: Entwisle, an accountant, played a key role in the fraud,

which involved a series of travel agencies in effect being taken over by the gang during a

three year period.

ACTUALITY AT AIRPORT

SHAW: The victims included honeymooners and families with

young children. Some had to wait at airports after discovering their names weren’t on flight

lists; others spent the night on a beach with their suitcase because their accommodation

hadn’t been paid for. One couple were even branded illegal immigrants when they arrived in

Cyprus without a hotel reservation, breaching local laws requiring them to have a place to

stay. The trial heard how Entwisle used his expertise to arrange credit card payment

processes for the fraudulent booking scheme.

Did you know at the time that what was being done, this whole operation, was a scam, a

fraud?

ENTWISLE: No, I didn’t know that the holidays weren’t booked.

SHAW: Did you have a suspicion?

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ENTWISLE: Well, I knew that, I think I knew that they weren’t

always booked when the money came through.

SHAW: So you had no idea about the extent of it, how many

holidaymakers had been defrauded?

ENTWISLE: Well, everybody had been going on holidays up to this

point when it sort of came to a head when there was problems at one of the airports, but I

didn’t know how many other holidays hadn’t been booked.

SHAW: Do you think, looking back, you should have asked

more questions?

ENTWISLE: Of course I should, yes.

SHAW: Do you feel sorry for the people who were defrauded,

for the people who paid for holidays that they didn’t go on?

ENTWISLE: Yes, of course I do, yes.

SHAW: Have you apologised in any way to them?

ENTWISLE: Good question. I wouldn’t know how, so the answer is

probably no. They wouldn’t have lost their money though. They lost the holiday, but they

would have got their money back through the ABTA system.

SHAW: Do you think that the …

ENTWISLE: I’m not saying that’s a defence, it sort of doesn’t

change anything.

SHAW: Is there anything you’d want to say to any victims of

the fraud for which you were convicted?

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ENTWISLE: Obviously I’m heartily sorry for my involvement and

for anyone who’s suffered.

SHAW: With so many victims of the holiday fraud, it’s not

surprising there was an investigation and a prosecution. But the vast majority of fraudsters go

unpunished. Professor Mark Button has analysed data on prosecutions in the UK and

estimates there are about 60,000 each year. That, he says, is a tiny fraction - one in 500 - of

all the frauds committed.

BUTTONS: Your chances of getting caught are probably the lowest

of most types of crimes, and then if you do get caught and you are prosecuted and found

guilty, your sentences are going to also be relatively low. There are lots of complexities to

some fraud cases. Some fraud cases can take up a huge amount of resource amongst staff to

actually successfully pursue that. They’ve then got to present a case to the prosecutors and

secure the interest of the CPS to prosecute the case. That’s another hurdle. And then

obviously, once we get to court, again fraud cases can be lengthy, time-consuming and don’t

always go as planned and may result in some cases in the perpetrators being found not guilty.

SHAW: The body responsible in England and Wales for

making most of the charging decisions in taking cases to court is the Crown Prosecution

Service. Alison Saunders, who as Director of Public Prosecutions leads the CPS, says more

fraud cases are being referred to them and conviction rates are improving. About three-

quarters of all fraud prosecutions result in someone admitting the offence or being found

guilty.

SAUNDERS: I think they are incredibly successful. We work very

closely with the police in a lot of these cases because with fraud cases it’s particularly

important that we work at an early stage with the investigators, to make sure that we focus the

investigation on where it’s going to build a strong case, to focus on the bits where we need to

put the resources in, and that is resulting in not just an increase in the successful number of

convictions, but also the number of cases coming through to us.

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SHAW: Despite the fact that experts have told us and people

we’ve spoken who are victims of fraud are extremely dissatisfied with the fact that cases just

don’t get pursued and investigated or prosecuted, you’re satisfied with the service that the

CPS is providing on fraud?

SAUNDERS: In the cases that we’re seeing that are being referred to

us, I am satisfied with the service we provide. What I can’t say is, are we seeing all the cases

we should be seeing? And of course that’s a very different question and one that to some

extent I’m not really going to be able to answer, because I don’t know about the cases that

aren’t referred to us.

SHAW: One of the priorities for Alison Saunders since she took

up her post last year has been to recover more assets and cash from criminals, both in Britain

and overseas. Her strategy, launched in the summer, aims to bridge what it says is the huge

gap between confiscation orders made and money recouped. But is this new approach

affecting the way fraud cases are dealt with? One leading defence lawyer, who specialises in

economic crime, believes it is. Evan Wright, a partner at JMW, says prosecutors are unfairly

targeting individuals simply because they have funds – rather than focusing on cases where

there’s a prospect of securing a conviction.

WRIGHT: It costs around 76 pence to enforce and collect every

pound that appears in a confiscation order, and that’s a fairly concerning statistic. And that

has driven the need to look deeper at why confiscation orders are not fully paid, what the

Crown can do about it, why they’re failing and how they target the resources they’ve got.

Many of the things that the prosecution are doing now are becoming more focused on that

cost benefit exercise, and that’s why you sometimes hear the CPS described now as CPS Ltd

or CPS plc, because they’re having to have much greater regard to the money that they’ve got

available to them and what they’re going to do with it.

SHAW: So they’re going after cases where they have a realistic

prospect of recovering the assets and they’re looking much more closely to target those

particular sorts of cases?

- 19 -

WRIGHT: Yes. When one targets a case because it’s cost

effective to do so, the defendant who is penniless might have escaped his place on the

indictment because he’s not worth pursuing.

SHAW: Have you come across that?

WRIGHT: I’ve come across cases where the prosecution have

been very aggressive with a defendant who clearly has assets when they are not being as

aggressive with a defendant who doesn’t.

SHAW: Is that just?

WRIGHT: No, I don’t think it is just.

SAUNDERS: I would strongly refute that actually.

SHAW: Alison Saunders, Director of Public Prosecutions.

SAUNDERS: We take cases on the merits, individual merits of each

case, so, we prosecute on is there available evidence that there has been a crime committed.

So if there’s sufficient evidence for that, it passes our realistic prospect of conviction test, and

then we look at the public interest, and if there has been a fraud case, then it would be in the

public interest. We certainly don’t identify cases just because of the assets that we may or

may not recover.

SHAW: But resources are at a premium.

SAUNDERS: Mm-hmm.

SHAW: It’s been suggested that the Crown Prosecution Service

is becoming more like sort of CPS plc, CPS Ltd, looking for cases where you can get

resources back into the service.

- 20 -

SAUNDERS: No, that’s not … again, that’s completely I think

misunderstands the position because a) we don’t get all the resources that we recover back

and what we do with the resources that we get back from recovery and proceeds of crime,

which is about 18% of anything that we recover – we can clearly show that that goes back

into our Proceeds of Crime service, which is about making sure that we continue to deprive

criminals of their assets. So it doesn’t, as I think you sort of suggested there, that we were

perhaps bolstering up our budget, that’s absolutely not the case.

SHAW: So you’re not CPS plc?

SAUNDERS: No we’re not, we’re there to prosecute cases where

there is sufficient evidence and where it’s in the public interest to do so. And that’s what we

do in fraud cases, as in any other case.

MUSIC

ACTUALITY OF POLICE OPERATION

OFFICER 1: Open the door please, it’s police.

OFFICER 2: Open the door.

OFFICER 3: We’ve got a warrant here to search the premises …

SHAW: Last week, as part of its new drive to bring more

fraudsters to justice, the Metropolitan Police carried out a series of raids.

OFFICER 3: Can I just search the premises just quickly …

OFFICER 4: We’re going to do a search down here … right okay.

SHAW: At this semi-detached house in suburban London,

officers arrested a man and searched the boot of his silver Mercedes for evidence.

- 21 -

ACTUALITY OF SEARCH

OFFICER 5: The glove box and everything’s clear.

SHAW: Detectives suspect he's involved in a so-called boiler

room fraud, in which people are pressurised into making worthless investments. In this

alleged scam, police believe fourteen people were persuaded to part with savings worth a

total of £180,000 without seeing any return. The Met’s new anti-fraud initiative is known as

Operation Falcon. At its core is a taskforce of economic and cyber-crime experts whose aim

is to target organised crime groups earning money through fraud. Steve Head, the police’s

national co-ordinator on fraud, welcomes the move – but he has a blunt warning for other

forces that may be neglecting the problem.

HEAD: We understand the financial challenges that everybody

is under, the whole of the public sector. What I would suggest is that this should be a

priority.

SHAW: Are you banging on the table, telling Home Office

ministers, you know leaders of the police service, “Look, you’ve got to devote resources to

this. If we put more into it, we’ll actually save more in the long run”?

HEAD: That is exactly the message. If we tackle this issue and

we tackle it head-on, it will also lead to a number of other benefits. One, we will start to

benefit from the fact that there is a huge hidden cost in fraud, cyber-crime, where companies

and individuals are spending huge amounts of money themselves which could be back into

our economy, protecting themselves from this kind of crime. This is also a pathway into

different kinds of serious organised crime. It is a means to target the most harmful criminals

in your area. And I would say this to chief constables, as I always do - we should be

targeting the most harmful criminals by any means possible, and if fraud is a method of doing

that, then we will do everything we can to support you.

SHAW: Law enforcement is waking up to fraud. As well as

Operation Falcon, the new National Crime Agency has set up its own Economic Crime

Command. But the scale of fraud, allied to the ingenuity of some of the fraudsters, will make

- 22 -

SHAW cont: it hard to deliver results. With further police budget

cuts forecast, we may have to take more responsibility ourselves to prevent fraud happening

in the first place.

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