Defending VAT Fraud

Defending VAT FraudFrenkels Forensics were instructed to prepare an expert accounting report in relation to defending a client who was accused of participating in a carousel VAT fraud.

The Prosecution had accused our client of being a key person in the theft of £15,000,000 of VAT.  His defence was based on the fact that even though he accepted that some impropriety had taken place in his company, this only occurred after he had taken on a business partner.  The partner became a shareholder and our client stated that while he was out visiting customers all day long, it was the partner who had carried out the fraud

A key aspect of the case was the fact that the financial records of the company were computerised.  The Prosecution had taken physical possession of the computers which were required to remain in their original untouched state for evidentiary purposes.  The Prosecution made an image of the hard drive of all the machines.  It was crucial for our client’s defence that we access these forensic images to establish that prior to the involvement of the partner, our client had been running a legitimate business and had been compliant with all his legal obligations.

In order to get access to the defendant’s computer system, we had to mount the forensic images and create a virtual machine (a way of looking at the computer, in the same way our client would have done at the time it was seized by the Prosecution).  It is no straight forward matter to access the information contained within an image of a computer because of encryption restrictions.

Our computer forensics team, using a suite of specialist software and decoding techniques, unlocked the forensic images and gained access to the data contained on the hard drive.

We were then able to fully analyse the data and put forward our client’s defence in the most effective way and show that he had not been responsible for the vast majority of the fraud and this substantially reduced the custodial sentence that he had been facing.

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