Thurrock Council’s Fraud Squad: “Not about making money”

A THURROCK councillor has refuted accusations that it’s fraud squad’s main motivation is about making money.

The response comes after the squad was removed from prosecuting a case for a major fraud inquiry.

The subsequent case, investigated by the council fraud squad and prosecuted by the Crown Prosecution Service (CPS) led to a successful prosecution of a solicitor.

Back in 2017, the Legal Futures website reported on the removal of the Thurrock Council Fraud Squad as prosecutors.

The site stated that “Thurrock’s motivation was to generate external income to keep its fraud department going”.

But now that the case is over, the portfolio holder for central services, cllr Gary Collins has set the record straight.

Cllr Collins said: “The original mandate for the council’s national Counter Fraud and Investigation Directorate remains unchanged by the Court of Appeal’s Judgement.

“The service still uses its expertise to conduct investigations for other public bodies around the country suffering from economic crime.

“Thurrock’s team operates on the national stage and has carried out work for 25 local authorities, three government departments and two police forces nationwide. Their activity is either funded by government grant or the affected public body paying for that support at cost.

“Our approach is not about making money but about protecting our residents and all taxpayers in the country. By having a team which works nationally it means we have one of the most experienced teams in the UK protecting the people of Thurrock and the public purse.”

“The court of appeal judgment means the team now has the opportunity to engage directly with the Crown Prosecution Service at the conclusion of any national criminal enquiry so they can consider pursuing criminal action, this option was not available before the ruling of May 2017.”

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THE HIGH Court has removed Thurrock Council’s Fraud Squad as the
prosecutor in a £4 million legal aid fraud investigation.

The Crown Prosecution Service (CPS) has now taken over the prosecution
ofter the Court of Appeal criticised the Legal Aid Agency (LAA) for
trying to run the case through the Thurrock Council Fraud Squad.

The appeal court, led by Lord Chief Justice, Lord Thomas, expressed
surprise that the LAA and Thurrock Council had gone down this route.

The ruling highlights that under specific legislation councils can
investigate but setting up as a prosecutor, in this case, appears to be
a legal step too far.

The three unnamed defendants in the criminal case are the principal of a
law firm in London, its compliance officer and practice manager – also
the principal’s husband – and the office (and billing) manager. The
firm’s legal aid contract was terminated in December 2013.

They are awaiting trial at Southwark Crown Court on a count of
conspiring to defraud the LAA over a six-year period by submitting legal
aid claims for immigration work that was not done; the loss to the LAA
is said to be £4m.

They also face a charge of perverting the course of justice by forging
client files and submitting them to the LAA to conceal the alleged
fraud. They all deny the charges.

Thurrock Council set up its Fraud Investigation Department in 2013.
Since then the department appears to have grown and grown. Of the
sixteen members of staff, YT has been told that fourteen are former
police officers.

Last year (October 2016) a report was placed in front of Thurrock which
detailed the success the department has had.

http://www.yourthurrock.com/2016/10/06/new-fraud-squad-collar-close-to-half-a-million-in-thurrock/“>http://www.yourthurrock.com/2016/10/06/new-fraud-squad-collar-close-to-half-a-million-in-thurrock/
However, the court of appeals ruling has made a number of observations
that may well beg further questions.

The LAA claimed that both the Metropolitan Police and the City of London
Police had declined to take the case on, citing lack of resources, which
was why it approached the council. Surprisingly, the LAA attempted to
engage the police by simply making a report through the public Action
Fraud website.

The Court of Appeal found that the LAA’s efforts to engage the police
even at the investigation stage were “half-hearted and at a low level”.
The matter did not go directly to anyone above detective sergeant level
at the Metropolitan Police and even then it was only to seek help with
executing warrants and arrests.

Instead, the LAA contracted with Thurrock to investigate and then
prosecute the case; it did not ask the CPS to consider instituting what
the appeal court called “this very significant prosecution”.

Thurrock’s motivation was to generate external income to keep its fraud
department going.

The “Thurrock angle” to the case was explained by the head of the Fraud
Squad, David Kleinberg.

1. 26 addresses used by the practice to facilitate its fraud were in
Thurrock.

2. The misuse of these addresses might have constituted an offence under
the Representation of the People Act 1983;

3. The legal aid system is provided to all citizens including those of
Thurrock and the Council’s joint work with the LAA would be in the
interest of those in the Council’s borough to protect the fund from
abuse;

4. The LAA would be funding the resources in the FID assigned to
investigate its matters, with their time shared for preventing and
detecting fraud in Thurrock;

5. The LAA was to provide the equivalent of 2 full time staff to the
Council to work on this investigation and any fraud matters in Thurrock.
They were to be “upskilled” in the conduct of fraud investigation by the
FID.

The appeal court ruling said: “There were no proper grounds for it to
consider that that it was expedient for the promotion or protection of
the interests of the inhabitants of Thurrock to prosecute the appellants
(and not to refer this very serious matter to the DPP for prosecution).
The council could not reasonably have thought that there were.

“As for the suggestion that it could be considered in the interests of
the inhabitants of Thurrock that the legal aid system, from which all
may benefit, should not be defrauded, the alleged criminality to be
prosecuted must have an actual or potential impact on the inhabitants of
Thurrock as inhabitants of Thurrock, not just as UK taxpayers more
generally.”

Further, the general financial justification behind Thurrock’s decision
did not “come close” to meeting the requirements of section 222.

“Otherwise, section 222 would empower any local authority to offer a
prosecution service (or indeed a defence service) to any individual or
organisation prepared to pay for it. This cannot have been Parliament’s
intention.”

The court said that the “unhappy facts of this case demonstrate well the
dangers inherent in a system where agencies try to act as substitutes
for prosecutions by the CPS in respect of national issues”.

It highlighted various failings, including a memorandum of understanding
with the council that was not “presented directly” to the LAA’s
executive committee; the LAA taking the council’s word that it had the
power to prosecute the case without considering the matter itself; the
LAA not approaching the CPS; and the lower court nonetheless being told
that it was “unlikely” and “fanciful” that any other body would agree to
prosecute the matter.

“It is in the public interest that major prosecutions such as this are
handled by the single prosecuting agency established by statute to
conduct them,” the appeal court concluded.

A spokesperson for Thurrock Council said: “Thurrock Council’s Fraud
Investigation Team investigated a case which is currently awaiting
trial. The case has been cost-neutral to the Local Authority.

“The authority is currently considering the decision of the Court within
the appeal timeframe. It would therefore be inappropriate to comment
further at this stage”.

The full judgement can be seen here http://www.bailii.org/ew/cases/EWCA/Crim/2017/534.html“>http://www.bailii.org/ew/cases/EWCA/Crim/2017/534.html

Acknowledgement to Legal Futures.

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