WHY WOULD YOU USE A FORENSIC ACCOUNTANT TO CHALLENGE A POCA?

by Lennie Harris, Chartered Accountant at HCA Consultancy

[USING A FORENSIC ACCOUNTANT makes perfect sense when there is a need to understand the financial figures relating to particular litigation, to evaluate losses relating to claims, provide second opinions, challenge other parties’ claims and ultimately, when required, provide expert opinion in court.

In my experience, especially when dealing with Proceeds of Crime (POCA) orders, the amounts demanded by the court can be arbitrary and bare no relation to the actual money gained through crime.

My independent reports have been successful in helping many prisoners faced with such problems, as I know what I am looking for in the books and records: simply producing invoices will not help in the same way. To get the full benefit of using a forensic accountant it is necessary to bring him or her in early, rather than simply request permission from the court to use them during the trial proceedings as an expert witness.

With POCAs I’m frequently retained by legal firms to guide their clients through the confiscation proceedings. During the sentencing hearing a timetable will be set, which will outline various dates for the service of statements by you as defence solicitor and the prosecution.

The POCA timetable will set out the date for service of your client’s Section 18/16/17 Statements. That is the order in which the statements will be served. The Section 18 Statement served by you will outline your client’s available assets. That can be anything from property and cash to cars, jewellery and savings. It will also show exactly what available assets can be sold to pay off the Confiscation Order.

The prosecution will then serve the Section 16 Statement. That outlines the prosecution’s case against your client, showing what financial benefit was gained as a result of the crime, and the assets available to repay it. It is prepared by a financial investigator for the prosecution, who will go through the bank accounts, highlighting any unidentified credits that he believes came from criminal conduct. He can go back six years.

When you see the statement you may be surprised by the size of the benefit figure. That is where close examination and discussion of the entries with a forensic accountant can help to reduce the amount substantially. It is my job to work closely with you as part of your team.

Your client is obliged to provide the evidence to challenge the prosecution’s case. You will then serve the Section 17 Statement, showing what assets your client actually has. That must be prepared very carefully. You may want to challenge the prosecution’s valuations of assets such as property by obtaining expert valuation reports.

Family members may believe that there are assets which belong to them, or that they are entitled to an interest in them as they are not the proceeds of the crime. That can be the basis of a separate application to court.

Once the statements have been served there is usually some discussion between the parties to try to reach a fair settlement without the need to approach the judge. I will usually be involved in those discussions, as a forensic accountant’s contribution can help achieve a reduced settlement.

Once the case has concluded, a

Confiscation Order will be made which will outline the concluded benefit figure and the amount that is available. Those assets will be listed and a deadline given for the amount to be paid. That is usually three months, but can be extended by a further three months. Once the six months are up, interest will accrue daily. If the client is unable to pay the amount after that, the time in prison will increase.

With such a tight timetable, it is very important to seek professional advice from an experienced forensic accountant as soon as dates have been determined. I’m often approached directly by the accused to recommend a solicitor who is experienced in the field. I am then available, with the court’s agreement, to act as an expert witness during the court proceedings. q

• For further information call Lennie on 0845 8623260 or email info@hcaconsultancy.com.