Forensics investigations

We have considerable experience in financial funds flow analysis to support civil and criminal recovery proceedings to trace, identify and recover misappropriated funds and hidden assets.

We work to help individuals, corporates, financial institutions and sovereign states that are the victims of fraud and corruption to establish how the offense was perpetrated, quantify the loss and demonstrate the links between the illicit funds and the assets that they were used to acquire.

We conduct investigations into suspected bribery and corrupt practices, both domestically and internationally. We also help organisations in preparing regulatory disclosures, responding to enforcement agencies and assessing compliance with the relevant anti-bribery and corruption legislation, such as the UK Bribery Act and US Foreign Corrupt Practices Act.

We conduct discreet, independent inquiries into internal misconduct and financial irregularities. Our approach ensures findings are robust, evidentially sound and suitable for HR or legal proceedings. We can also identify weaknesses in internal controls and provide actionable recommendations to help strengthen governance frameworks and reduce the risk of reoccurrence.

We help organisations detect, prevent and investigate money laundering by identifying suspicious transactions, tracing the flow of tainted funds and reviewing “know your customer” information. We are able to provide support both for proactive compliance programmes and for reactive investigations triggered by regulatory alerts or whistleblower disclosures. 

Rising public and political concern about environmental harm, climate change and sustainability has led to increased regulation and scrutiny around environmental, social and governance (ESG) standards. Allegations of ESG related misconduct, such as greenwashing, human rights violations in supply chains or falsification of ESG related documents, can result in regulatory sanctions, reputational damage and significant financial penalties.

Where ESG related fraud or misrepresentation has occurred, we support with resulting investigations by establishing the underlying facts, validating relevant data and quantifying the financial impact of the misconduct.

Firms operate in an increasingly stringent global regulatory landscape. With the risk of significant financial penalties and reputational impact from non-compliance, the need for strong corporate governance and robust responses to alleged regulatory breaches has never been more critical.

Our regulatory consultants assist organisations in proactively strengthening their governance and control frameworks, and in responding effectively to regulatory investigations and enforcement actions. Our team has extensive experience working on matters involving regulators, including the FCA, SEC, FRC, HMRC and CMA, allowing us to provide practical guidance on navigating complex regulatory requirements.

Private prosecutions allow victims of fraud to pursue justice through private criminal proceedings, when public authorities are unable or unwilling to prosecute.

We work alongside legal counsel to prepare forensic accounting evidence for use in private prosecutions, including detailed financial analysis and expert witness reports.

We also provide detailed forensic accounting input for asset recovery under the Proceeds of Crime Act.

We provide forensic accounting support to both individuals and organisations facing allegations of fraud, financial crime or regulatory breaches. Whether producing factual reports or acting as expert witness, we work closely with defence counsel to clarify complex financial evidence and support defence counsel to challenge the prosecution’s claims.

Developing an effective risk management programme is the first step for organisations to reduce their exposure to fraud. It is critical to protecting businesses legally, financially and reputationally. With the introduction of the offence, Failure to Prevent Fraud, the onus is now on organisations to reduce the risk that they and their associated persons may be used to perpetrate fraud.

We can help organisations identify, assess and respond to fraud risk, resulting in a robust anti-fraud environment and compliance with relevant legislation.

Financial fraud refers to any attempt to obtain money through deception and dishonesty.

A more detailed description from the International Standards on Auditing (UK) 240 defines fraud as: “An intentional act by one or more individuals among management, those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage.”

Meanwhile, the Association of Certified Fraud Examiners defines fraud as “any activity that relies on deception in order to achieve a gain”.

There are various criminal offences relating to fraud under the Fraud Act, Companies Act, Theft Act and Insolvency Act. They include:

• Fraud by false representation
• Fraud by failing to disclose information
• Fraud by abuse of position
• Fraudulent trading
• False accounting

The main type of financial fraud that can affect businesses is occupational, or insider, fraud. The main perpetrators of occupational fraud are employees, management or senior management (including directors).

There are three main categories of occupational fraud:

1. Corruption, including conflicts of interest, kick-back schemes, inappropriate gifts or some form of extortion
2. Asset misappropriation, including theft of cash on hand, diverting cash receivable, intercepting payments and inappropriate use of business assets
3. Financial statement fraud, including falsifying accounting records, management accounts and annual financial statements

Other financial fraud types can exist outside companies. Businesses are susceptible to fraudsters posing as customers and ordering goods without the intent to pay for them, or suppliers lying about the goods they have provided or work they have carried out.

Fraudsters also target investment businesses in attempts to induce funding of fictitious or underperforming opportunities.

Fraud is distinct from cyber-crime, where there is an attack on the IT infrastructure of a business. However, fraud may be cyber-enabled, where fraudsters use technology to assist in committing it.

Europol defines financial crime as: “Illegal acts committed by an individual or a group of individuals to obtain a financial or professional advantage. The principal motive in such crimes is economic gain.”

Financial crime examples include theft, bribery, money laundering and tax evasion.

Speed of response is critical in the face of fraud, bribery, corruption or other types of financial crime. Being able to quickly establish the facts will help you put a robust plan in place to recover lost assets. Moving swiftly can also help you manage any damage to your reputation.

There are a range of urgent steps to consider if you suspect financial fraud has taken place:

1. Form an initial hypothesis of what happened to understand the scale of the suspected fraud, and its impact on the business. This will help guide further action and the resources needed to investigate and resolve the suspected fraud
2. Prevent further harm, including securing access to business systems and controls. You should also contact your banks about possible fraudulent payments and insurers of possible claims. It’s important to support your people through this difficult time too.
3. Secure evidence. An expert should handle this to ensure any evidence isn’t tampered with or destroyed. A financial fraud investigator can also ensure you retain the integrity of the evidence so it is useful and admissible in any subsequent legal or employment action
4. Bring in fraud and financial crime experts to guide you through your next actions

Investigating suspected fraud carries the risk of further harm to the business. That’s why it’s important to choose skilled, experienced fraud investigators.

A financial fraud investigation team must have both legal expertise and investigation skills. Unlike volume or individual fraud, business fraud requires financial fraud investigators to understand how companies operate and have sound knowledge of financial data. This is because evidence of fraud can be hidden within a company’s books and accounting records.

Experienced forensic accountants can analyse financial data, extract evidence from accounting records, and then simplify or explain it so a judge or jury can understand what happened.

Forensic accountants work well with both businesses and legal advisers, advising on the commercial aspects of pursuing fraudsters and considering the options for recovery.

Forensic accountants understand the financial records and processes of a business, its commercial drivers and pressures, the controls and procedures needed to mitigate risk, and how gaps in those controls may result in losses.

Forensic accountants also frequently work with legal advisers. They understand the importance of carrying out financial crime and corporate fraud investigations to certain standards to maintain the integrity and admissibility of evidence, ensuring any legal proceedings don’t fail.