The news published today that more than 30 community-based projects across Avon and Somerset are to benefit from the ill gotten gains of local criminals is very welcome, but the haul would almost certainly have been much smaller had it not been for the work of forensic accountants able to follow the money trail.
The money, totalling over £30,000, was raised under the Proceeds of Crime Act 2002, which apart from other things, decrees that convicted criminals must pay back any income they make from their criminal activity.
While the police have their own trained financial investigators, many forces use the expertise of forensic accountants, who will be charged with the task of poring over figures in order to find out where the money has been hidden
Another of the forensic accountant’s remits is to liaise with police officers in order to keep them up to date with his or her findings and also to try and find out from them what it is they should be looking for.
While in investigations such as Carousel Fraud, the figures of company accounts are completely fictitious and are a front to escape paying the relevant tax.
A forensic accountant will seek to trace any financial discrepancies within the company’s accounts and use so-called ‘paper trails’ or ‘audit trails’ to try and locate missing monies and also to find out who misappropriated them.
The forensic accountant can also help the police by being called as an expert witness during a trial in what can be exceptionally complicated financial frauds, as many lawyers rely on the support of chartered accountants to provide the knowledge and professional opinion needed to build a successful defence or prosecution case for their clients.
On the other side of the coin, forensic accountants play an important role in ensuring that defendants are not required to pay more than they should. The Proceeds of Crime Act is one of the few pieces of English law that puts the burden of proof on the defendant. In other words, in many cases it is up to the defendant to prove that his or her income and assets were generated legitimately rather than for the Crown to prove that they were the proceeds of crime.