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Large Scale Fraud Cases and the Issues Surrounding E-Discovery Investigations


A recent Report by the Fraud Advisory Panel revealed that the average length of a serious fraud investigation between 2002 and 2006 totalled 33 months, costing the British taxpayer around £100 million per year to fund in Legally Aided cases.

In their recently published document ‘Improving the Investigation and Prosecution of Fraud’, particular attention was paid to two common pitfalls in fraud investigations. Firstly difficulties faced in focusing the investigation during the early stages, and secondly containing the issues that arise when handling large volumes of seized material.

It is no wonder then perhaps that the Fraud Advisory Panel are pushing for the use of resource saving technology in the form of Electronic Discovery to help focus investigations and process vast quantities of information efficiently and effectively. However although E Discovery has been picked up well by the investigative fraud community across the pond, we are being surprisingly slow to respond and many litigators are still unsure of its format and usefulness.

Picture the typical fraudulent scene – a company director and finance team are accused of VAT fraud over its 5 years of trading. The accounts team alone consist of 4 individuals each with their own computer workstations. All invoice documents are created on these computers, and all staff have access to internal and external email facilities. Before the firm switched to electronic invoicing, they were paper based, and so there is also years worth of paper documentation stored on the premises. This could equate to tens of thousands of documents, some of which may have been deleted over time and so are not immediately accessible. So where do the defence team begin to investigate all this information?

The solution to investigations of this nature from an investigative point of view is Electronic Discovery. Electronic Discovery is the review and production of evidentiary material for litigation, stored in electronic format. This may include email, word processing documents, spreadsheets, databases and presentations.

E Discovery is entirely ACPO compliant provided it is carried out using recognized forensic procedures. It provides the defence team with the tools needed to conduct fast and effective searches. They have all documents and emails created by the defendant company throughout its time in trading at their discretion stored on CD. All documents can be viewed in a PDF format or printed as required. They can be searched by key names, dates, document titles etc, can be annotated or redacted, copies of the edited E Discovery database can then be shared between the defence team. In addition, the documents in the database have been Bate stamped, so can be served as disclosure during the litigation process.

This seems simple enough, so why are we not utilising this service to find the proverbial needle in the haystack in large scale fraud cases?


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