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Urgent need for more law enforcement funding as figures show falling white collar crime prosecutions, says expert


The number of people prosecuted for fraud and corruption offences fell by almost one fifth over the past four years, despite an increase in the number of tip-offs of suspected wrongdoing made to law enforcement, according to figures obtained by Pinsent Masons, the law firm behind Out-Law.com.

Corporate crime expert Barry Vitou of Pinsent Masons, the law firm behind Out-Law.com, said that the figures raised urgent concerns that cuts to the funding of bodies including the City of London Police and Serious Fraud Office (SFO) were affecting their ability to pursue and investigate leads. Prosecutions fell from 11,261 in 2011 to 9,343 in 2014, according to the figures, he said.

Although the figures also showed an "encouraging" increase in the number of people prosecuted for hacking and other cybercrime offences, Vitou said that without more funding and training for law enforcement these figures would similarly suffer.

"Cybercrime techniques are increasingly sophisticated and constantly changing; increased funding and training is needed if the authorities are to keep pace with the criminals' continually evolving methods," he said.

"The sharp drop in the number of prosecutions does not mean that there are fewer criminals - rather, it is a stark reminder that law enforcement agencies are under-resourced and ill-equipped to deal with the scale of white collar crime. The incoming government needs to prioritise providing increased financial support to the SFO and City of London Police: fraudulent activity costs the UK economy billions of pounds each year, so any money saved by cutting funding is an entirely false economy," he said.

Cybercrime prosecutions trebled over the period covered by the statistics, from 15 to 2011 to 45 in 2014, he said. Gangs of organised criminals were increasingly turning towards cybercrime instead of 'physical' crimes such as drug trafficking or burglary, because these crimes could be committed from anywhere in the world and were potentially more lucrative, Vitou said.

The SFO is responsible for investigating and prosecuting the most serious cases of economic crime while the City of London Police, due to its location within a global financial centre, has particular expertise in dealing with fraud and other economic crimes. The force also took over operation of Action Fraud, the UK's national fraud and cybercrime reporting centre, last year. Action Fraud received more than 210,000 reports during financial year 2013/14, while the SFO's 'SFO Confidential' tip-off line received over 2,500 reports.

Previous figures obtained by Pinsent Masons found that the City of London Police opened 544 financial crime investigations over this period, while the SFO opened just 12. Although Vitou acknowledged that not all of these reports would have contained the type and quality of information required to justify a full investigation, the trends did point towards the enforcement bodies having to prioritise the cases that they could pursue.

The budget of the SFO in particular has fallen considerably since the 2008 financial crisis, although it is able to apply to the UK Treasury for 'blockbuster' funding on a case by case basis to cover the costs of particularly high profile investigations. Last year, it applied for and received an additional £19 million for costs relating to its investigations in connection with the suspected manipulation of benchmark interest rates, amongst other matters.

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