Some comments on current trends in the fight against frauds.
Author: Jarosław Kruk - Attorney at law, Managing partner
Of course, it is a truism to say that the fight against frauds resembles tilting at windmills or cutting off the constantly reborn heads of the hydra. Frauds have been, are and will always be related to people's activities, especially in the economic sphere. And although it is not easy to hide somewhere in the world, the development of the Internet makes these frauds easier and easier.
Officially, things are getting better in Poland. The prosecutor's office, with the help of the Central Anticorruption Bureau, the Central Investigation Bureau and the Police, chases the criminals and takes their assets away from them. But in reality it is a little different. Yes, it should be noted that the level of work in the field of securing the assets of criminals has improved, also due to greater availability of financial data, mainly due to the OECD Convention. New institutions in criminal law are also important, such as extended confiscation. As regards the efficiency of prosecution, it has decreased significantly. This is not the case for media cases and those which outcome is of interest to the political authorities. Then it goes quite quickly. In ordinary cases the slowdown is around 50%. In the summer, in Warsaw's district prosecutor's offices, one can wait even two months for registration of the case and for assignment of its file number. Our justice system generally disregards the principle expressed in Article 2 §1 point 3 of the Code of Criminal Procedure of the necessity to take into account the legally protected interests of the injured party. What counts is pre-trial detention, the media effect, and sometimes in the VAT crimes the securing of assets. Then the injured party is left alone. Our justice system is not interested in it.
In practice, it is better for the injured party when the offender receives a suspended sentence and the obligation to compensate for the damage. The perspective of being sentenced to prison hanging over him causes him to "find" funds for full or partial repayment of losses. Usually I advise my clients to settle with the offender, and after recovering 60-70% of the amount awarded, to confirm that the damage has been repaired (after the payment of funds, of course). The criminal who is in prison will not return anything, he will serve his time and that's it.
The same applies to bank frauds. It is best if, with a very quick reaction of the injured party and its lawyers, the bank to which the money was transferred, based on SWIFT information of the injured party's bank, will return the money. Otherwise, once the proceedings have been initiated, even if the amounts are blocked, it will take a long time to return them - until a final judgment is passed. And then there are problems too.
In practice, several times it happened that after obtaining a final judgment with an enforcement clause, the bailiff bounced back from the NBP and replied that the funds were deposited by the prosecutor's office to a specific case files number. The prosecutor's office was washing its hands and the case was forwarded to the court. The court issued the judgement and the it was the end of its actions. It took a long time to explain that the judgement was final, and that the prosecutor's case files number was transformed into a court one by law, etc.
Governments rely on punitive measures and possible confiscation when prosecuting frauds. Rarer, mainly those in the common law area, use civil measures. Usually, stolen property is quickly transfered out to the offshores and is mostly out of reach of prosecutors or police. Sometimes the authorities publicize cases of obtaining data from the jurisdiction of offshores as a result of legal cooperation, but I have not heard about the fact that the injured party in our country has recovered the funds brought out to offshores as a result of the actions of the prosecution. Meanwhile, this is possible if a combination of civil (including bankruptcy) and criminal measures is applied. Contrary to popular belief, civil measures are more effective than criminal measures in offshore jurisdictions.
"Going for Broke" Insolvency Tools to Support Cross-Border Asset Recovery in Corruption Cases is the title of a book by Jean-Pierre Brun and Molly Silver, published under the auspices of World Bank, International Bar Association and Stolen Asset Recovery Initiative / World Bank UNODC. Several of my friends and colleagues from ICC Fraudnet (https://www.icc-ccs.org/index.php/home/fraudnet) Ed Davis from Florida, Yves Klein from Switzerland, Martin Kenney from BVI and Steven Baker from Jersey have helped to develop this book. This book is a compendium of knowledge about the recovery of property and I recommend it to everyone.