private prosecution for fraud

[1099OID]

My friends business partner and the company secretary have committed fraud against him. They have made invoices up sent them to the factoring company and they have been paid out, this has been done behind his back and only come to light. which makes him liable he has spoken to a friend in the force and he has sort of said that i will be very low on there list of priorities. it might be better if he takes out a private prosecution against them himself, they could still go to jail and a fine or both if found guilty.
any truth in the private prosecution??

[des8]

Re: private prosecution for fraud

It is perfectly possible to start a private prosecution, but there are a number of pitfalls, and your friend would be well advised to seek professional advice from a specialist solicitor or barrister before going down that road.
This link may give food for thought https://www.fraudadvisorypanel.org/pdf_show_215.pdf

[stevemLS]

Re: private prosecution for fraud

Even if a private prosecution is commenced, at any stage, the crown can step in and halt proceedings. They can do so at the request of the defendant.

I second the advice to get specialist advice.

[Crazy council]

Re: private prosecution for fraud

Hi

Have you presented the evidence to the police for them to send to the CPS.. If the evidence is clear, the CPS should deal with it. The key to making sure they deal with it, is presenting the correct evidence to the police, just leave them with stuff to confirm rather than invesigate.

Producing false invoices and processing them, could be considered a straight breach of the fraud act. Its different to a employee just stealing off you, like from petty cash, that would be a civil matter. The fraud act lays out some examples

http://www.cps.gov.uk/legal/d_to_g/fraud_act/

The difference being, they may have committed a criminal offence by producing the false invoices... Am presuming the police officer that spoke to you was just thinking of theft.... Were as, producing false documentation to commit the theft, makes it criminal fraud ( not in all cases )

[stevemLS]

Re: private prosecution for fraud

Theft is always a crime, if the necessary elements can be made out.

Theft from employer is regarded particularly seriously by the courts as the breach of trust is seen as an aggravating factor.

Your friend has not suffered the loss, however, the company has - I agree that this is more likely to be seen as a fraud - what sort of value are we talking about?

[1099OID]

Re: private prosecution for fraud

my friend does have the evidence as soon as it came to light. he confronted him with the evidence but he still denied everything, but the evidence that showed otherwise. so my friend refused to continue under the circumstance's and a contract was drawn up where he would not take it any further part in the company the partner wished to continue with the company as it was rather than set up a new one. So my friend agreed only if he would cover him against any claim due to his fraudulent action and the partner agreed and a contract was signed. since then the partner has reneged on the contract and the factoring company and a few other are chasing my friend for the money. which could be up 20,000 in all the partner has no real assets and is trying to set up again some ware else leaving my friend to carry the can. so that is why is ask about private prosecution and if he wins could there be any jail Time??

[des8]

Re: private prosecution for fraud

IMO your friend should report the matter officially to the police as suggested by CC in post 4.
He is being chased by the creditors, and his ex business partner is not keeping to an agreement (Surprise surprise,)
The man acted fraudulently, why did your friend expect any agreements to be honoured?
Was that agreement drawn up by your friend's solicitor? or was it knocked up on the back of an envelope?
Report to BiB before he finds himself carrying the can as the only member of the company that can be traced.
Having a chat with a friend in the force is not sufficient

[stevemLS]

Re: private prosecution for fraud

In my view the prospect of a private criminal prosecution being successful are vanishingly low.

Any defence solicitor would say that they exited their business partnership by agreement, your friend's partner reneged on the agreement and so he now seeks to enforce it through the criminal courts.

I am not a criminal lawyer but I do know that a defendant only has to create reasonable doubt that they are guilty of the offence and my view is that this wouldn't even get to a jury in the crown court or the magistrates would chuck it out.

[Crazy council]

Re: private prosecution for fraud

[MENTION=48758]stevemLS[/MENTION] i agree, there is also the problem of proving fraud when there is 2 partners with equal rights to the assets of the business, You can not steal from yourself. ANd the claiment would have to prove the defendant had no right to the monies, even if paid into another personal account.

Hopefully the business contracts and agreements provide some level of protection for the poster..

The only hope of pinning fraud on the partner that i could see in this case, is if he has altered any of the invoices/books to disguise anything, Putting in invoices when hes a partner of the business would not be fraud unless the poster could prove intent to defraud at the time of production...

I would personally grab a copy of all accounting records, do a manualbank check to tally, report anything untowards, and prepare to protect myself against the creditors if needed

[des8]

Re: private prosecution for fraud

If false invoices have been issued, and then factored , it should not be too difficult to show those invoices are fraudulent.
As friend is already being chased by the factors, those factors must have discovered those invoices are never going to be paid by those to whom it is purported they were issued.
It will depend on the type of company and the status of the "partners" as to whether or not the factors can successfully pursue the individuals for the outstanding amounts.
But as there has been fraud the OP's friend needs to lodge details officially with police, to ensure they themselves are not eventually accused of being involved in a criminal activity.

[Crazy council]

Re: private prosecution for fraud

hi @des8

If false invoices have been issued, and then factored , it should not be too difficult to show those invoices are fraudulent.

The problem would be, what constituents a false invoice when its done by a partner.... there would have to be an attempt to defraud/deceive the other partner, not just the business, i think, as bad business management is not in its self fraud.

The other worry would be, if the creditors are factoring company's, there agreements are usually super tight, and may have large costs for defaulting. If the OPs signed any agreements with the banks/factoring Cos, they need to make sure were three liability ends.... if it does

These contracts sometimes have clauses that allow the company's to pursue the individual for losses, even if there a Ltd co. And, there may be a clase in the contract requiring the OP to report any suspicious activity to them immediately, and if he did not, when he signed the deal with the partner, when he first noticed it......... they might not look to lightly on that when the OP is asking them to pursue the other partner........ Like i suggested earlyer, i would be going on site, scanning/copying everything and doing a tally...

[des8]

Re: private prosecution for fraud

[QUOTE=Crazy council;465874]hi @des8
The problem would be, what constituents a false invoice when its done by a partner....

A false invoice is a written request for payment for goods and/or services that never exist (can't remember the exact wording now... such a longtime ago).
The factors (as you point out CC) will likely pursue anyone in their sights. As far as they are concerned the false items were sold to them by the company who has assigned a debt which does not exist.

OP states in post 1 " They have made invoices up sent them to the factoring company and they have been paid out,"
Does this mean the cash went into the company, or into the fraudsters own pocket.
Can we assume there has also been false accounting?

I agree with CC that OP should be gathering as much info as possible, and looking to defend himself against a number of possible scenarios.