How easy is it for legitimate businesses to succumb to the temptation of financial crime?
That is the focus of the BBC’s latest drama McMafia, which is shining a vital spotlight on the often- overlooked world of financial and business crime.
The drama explores the illegal dealings of main protagonist Alex Godman, who runs his own London-based investment fund, which he abuses to further his professional and personal ambitions.
But as viewers have seen throughout its five-week run, his increasingly questionable decisions have drawn him further into the maze of murky underworld activity, with Mr Godman now left in a precarious position.
The drama’s success has sparked debate around the wide-spread nature of financial crime, with many questioning whether the events depicted could actually take place in UK businesses.
The weekly show could also be leaving business leaders considering what action they are entitled to take if they spot suspicious behaviour, and how to eradicate illegal temptations before they develop into criminal activity.
Leading serious fraud expert Phil Williams, at Cardiff-based defence firm Blackfords LLP, said McMafia’s rapid descent into crime is not as far fetched as it may appear.
He said: “Obviously in the case of this show, the events and storyline have been exaggerated for dramatic effect, however it does demonstrate just how quickly criminal activity can spiral into other illegal areas.”
However, Mr Williams, who specialises in complex criminal investigations, regulatory and disciplinary matters, is attempting to alleviate fears among business leaders, by offering expert advice on identification of activity and what action to take.
He said managers, team leaders, and directors were well positioned to eradicate financial and business crime before it has wide-spread consequences.
Types of financial and business crime
Financial and business crime can fall into a variety of different types of crimes.
These includes money laundering, fraud, theft, scams, tax evasion, embezzlement, counterfeiting, and forgery.
Mr Williams said managers could protect their firm by identifying the different legal areas and remaining vigilant.
What are the signs
As many of these types of business and financial crime differ, it can be difficult to spot a correlation between the signals.
However, Mr Williams has outlined common signals here:
An employee or colleague’s refusal to divulge information about a client, financial information relating to an account, or even their identity, could also spell trouble, Mr Williams said.
He added: “Business managers should be provided with full information on dealings taking place within a company, as such, an employee’s unwillingness to share information may indicate that something is wrong.
“This is particularly the case if they refuse to name the client or share financial information relating to this account.”
Monopoly over accounts
Tying into the theme of secrecy, if one person has total control over an account and is unwilling to share details, this could lead to criminal temptation.
Mr Williams advised managers to ensure responsibility was shared equally to prevent any potential criminal activity developing.
Mr Williams said another warning sign which could identify criminal intent is incomplete records and forms.
This could involve suspicious documents, the origin or legitimacy of which cannot be traced; a refusal to name business partners in documents; numerous questionable tax IDs; and other information which may appear to be at odds with the client and account. Equally photocopied documents, rather than originals, and missing documentation could suggest documents have been altered.
Mr Williams said: “Documentation provides a legal record of any transactions which take place in relation to your business. But it can also be a quick indicator of any discrepancies surrounding a client or deal too. If information appears to be incomplete or inaccurate this could suggest something is wrong.”
The frequency, amount, and location to which money is transferred can reveal a substantial amount, Mr Williams said.
Transactions being made at unusual times of the day, to locations which seemingly bare no relevance to the client or company, and also at irregular frequencies could be warning signs.
Mr Williams added: “Another clear indicator of potential illegality is money being transferred to high risk jurisdiction countries. More information on these can be found on the FATF website.”
What steps do you take next?
Once these warning signs are identified, what steps can business leaders take next?
Mr Williams advised anyone with suspicious to begin recording and monitoring the behaviour of those suspected. Where there is financial irregularity he advised evaluating the company’s accounts with the support of an accountant, or impartial financial adviser to offer an unbiased opinion.
He said: “If you feel there are financial discrepancies, it is imperative you outline these to key players within the business and where possible keep a record of any ongoing losses or irregularities.
“Evaluate all the finances together and evaluate where the issue has arisen. Keep accurate and up to date information, as this will demonstrate provide all the necessary support should the case reach court. It also demonstrates that you gathered sufficient evidence to support your claim, and have taken every consideration before escalating the issue.
“It is also essential that you seek legal advice at your earliest opportunity.”
Where to report suspicions
Action Fraud – Action Fraud is the UK’s national reporting centre for fraud and cyber crime. To report fraudulent activity ring 0300 123 2040.
The National Crime Agency – which aims to eradicate organised and serious crime across the UK, can be contacted on 0800 555 111.
The Home Office is working with professional services firms through its Flag It Up! campaign to help honest enterprises avoid becoming enablers of crime. Visit tgr.ph/homeoffice for more information.
Financial Conduct Authority – A financial regulatory body in the UK which can be contacted on 0800 111 6768.