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Fraud Investigation Plan - London Borough of Hammersmith and

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					London Borough of Hammersmith and Fulham

        Section IV – Fraud Investigation Plan

                                  June 2005
                  London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                              Section IV - Fraud Investigation Plan


0     Schedule of Amendments

1     Introduction
      Introduction to Fraud
      Introduction to the Corporate Response / Mission Statement
      Introduction to Investigation
      The Fraud Teams

2     Key Roles
      Role of the Fraud Units
      Role of Employees, Directors and Members
      Role of Police and CPS
      Role of Legal Services and Counsel
      Powers and Authority of Investigators

3     Managing Cases
      Referral Processes
      Fraud Hotline(s)
      Responding to Allegations
      Case Risk Analysis
      Recording Cases
      Criminal v Disciplinary Cases
      Quality Control / File Standards
      Visits, Health and Safety, Potentially Violent Cases
      Controlling the Caseload

4     Legislation
      Criminal Procedures and Investigation
      Criminal Justice
      Human Rights
      Data Protection and Freedom of Information

                        London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                             Section IV - Fraud Investigation Plan

    Other Legislation
    The Elements to be Proven

5   Surveillance
    Conduct of Surveillance
    Covert Human Intelligence Sources
    Communications Data and SPoC
    Use of Covert Equipment

6   Evidence
    Evidential Requirements
    The Use of Statements
    Handling Evidence
    Securing Evidence
    Exhibit Labels
    Hearsay Evidence

7   Interviewing
    Interviewing Under Caution
    The PACE Caution
    The Right to Remain Silent
    The PEACE Model
    Witness Statements

8   Prosecution
    File Standards and MG Forms
    The Prosecution Process
    Legal Services Department
    In Court
    The Trial
    The Decision and Verdict
    After the Trial

9   Fraud Liaison and Joint Working
    Working with Other Agencies and Jurisdictional Considerations

                       London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                            Section IV - Fraud Investigation Plan

10   Resources
     On-line Enquiry Facilities
     Open Research on the Internet

11   Proactive Counter-Fraud Initiatives
     National Fraud Initiative
     Fraud Drives

12   Reporting

13   Appendices
     CPS Code
     PACE Summary
     Human Rights Schedule of Articles
     MG Manual of Guidance & MG Templates
     Surveillance COP
     RIPA forms
     ACPO Guidelines on Computer Evidence
     IUC Model Aide Memoir & Notices
     NAFN forms

                     London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                          Section IV - Fraud Investigation Plan

Schedule of Amendments


Date          Section No.     Section Title       Para.         Comments       Author
June 2005     -               -                   -             First Draft    CFM

                        London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                   Section IV - Fraud Investigation Plan

1     Introduction

      Introduction to Fraud

1.1   Fraud is a complex issue to define. Indeed, there is as yet no absolute crime of “fraud” (although
      this is currently being reviewed in the law courts). Proceedings for crimes of fraud are usually
      bought under Acts written for theft and deception.

1.2   The definition of fraud is “the intentional distortion of financial statements or other records by
      person or persons which is carried out to conceal the misappropriation of assets or otherwise for

1.3   Fraud can be perpetrated against the Council in a number of ways, for example: fraud (or
      corruption) committed by staff (including Members); fraud committed against the Council by an
      external body; tenancy fraud - in order to obtain access or ownership of the Council’s housing
      stock illegally; benefit fraud - in order to fraudulently obtain benefit administered by the Council on
      the behalf of Central Government.

1.4   All of these types of fraud (and this is by no means an exhaustive list) can have severe
      implications for the Council, the public purse, and the livelihoods of those employed by the

      Introduction to the Corporate Response / Mission Statement

1.5   The Council has a zero-tolerance policy towards fraud and commits to fight fraud in every arena,
      at every level, and to seek appropriate sanction and redress in every proven case.

1.6   The Council employs highly trained specialised investigators to detect and investigate fraud, not
      only where there is an existing suspicion of fraud, but also in the area of proactively detecting and
      rooting out the perpetrators of fraud.

1.7   Where fraud is found the Council will not hesitate to prosecute and involve the police where

1.8   As part of it’s fraud response the Council also commits to raising fraud awareness at all levels
      and educating all members of staff in their duty and responsibility to assist in the fight against

                         London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                    Section IV - Fraud Investigation Plan

       Introduction to Investigation

1.9    The world of investigations is difficult to navigate. With the recent introduction of the Human
       Rights Act 1998 and other protective legislation it is vital that an investigation officer carries out
           •   with integrity
           •   with transparency
           •   with professionalism
           •   using ethical investigation practices

1.10   An investigator invades the rights of an individual (potentially) every day – to perform specific
       duties which they are empowered to do on behalf of public bodies, by law. However, should the
       investigator stray outside of that legislation he or she is leaving themselves open to the full weight
       of redress under civil and criminal law.

1.11   The investigator’s primary role is to determine the truth by establishing the facts. With regard to
       the Council, an officer’s main function is to deter abuses of the functions of the Council which
       expose it to the greatest amount of risk.

1.12   A number of outcomes can result from an investigation:
           •   no evidence of an offence having been committed can be established
           •   insufficient evidence is found to support an allegation
           •   breaches of the council’s procedures established, but not criminal or civil law
           •   evidence is found to prove the offence but mitigating reasons exist
           •   it is determined to be not in the Council’s interest to prosecute
           •   a formal caution is deemed an appropriate penalty
           •   legal action (i.e. prosecution) is taken
           •   compensation and redress is sought

       The Fraud Teams

1.13   The Council employs three fraud teams to combat fraud: The Benefits Investigation Team and
       the Housing Investigation Team, which operate under the control of the Housing Services
       Department; and the Corporate Fraud Unit which operates under the control of the Finance

1.14   Consideration has and will continue to be given to a single Corporate Fraud Service that works
       together to provide a coordinated and cohesive response to fraud across the Council.

                        London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                   Section IV - Fraud Investigation Plan

2     Key Roles

      Role of the Fraud Units

2.1   The Corporate Fraud Unit is managed by the Corporate Fraud Manager and has responsibility for
      investigation all allegations of fraud and corruption committed against the Council’s body
      corporate, from within or without. The Corporate Fraud Unit also has responsibility for the overall
      coordination of policy and procedure governing all of the Fraud Units.

2.2   The Benefit Investigation Team is managed by the Benefit Fraud Manager and has specific
      responsibility for investigating Housing Benefit offences.

2.3   The Housing Investigation Team is managed by the Housing Investigations Manager and has
      specific responsibility for investigating Housing application/tenancy related offences.

2.4   Each Fraud Team has a team of investigators responsible for investigating the areas of fraud
      within the remit of their respective Unit. Specific legislation exists which grants investigators
      specific powers in law to enable them to undertake their duties in their particular area of fraud.

2.5   However, investigators are multi-skilled and capable of investigating many types of fraud. Fraud
      Investigators/Officers and Fraud Managers are dedicated to the task of fighting fraud and
      corruption within and against the Council, and will investigate every case deemed suitable in a
      professional, timely and fair manner.

      Role of Employees, Directors and Members

2.6   Directors, employees and Members of the Council have a duty to protect the public purse. Implicit
      in this duty is the responsibility of all members and staff (including agency staff) to refer all
      suspicions of any fraudulent activity to the respective Fraud Units either directly or via line
      management; to be alert to potential fraud; and to cooperate with and support the investigation of
      fraud matters.

2.7   The Committee on Standards in Public Life sets standards of conduct affecting all holders of
      public office. Further details can be found in the Anti Fraud and Corruption Strategy “Statement of
      Policy” and “Fraud Response Plan”.

                         London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                  Section IV - Fraud Investigation Plan

       Role of Police and CPS

2.8    Where cases are deemed suitable, or where resources are required that go beyond the powers
       or remit of the Council’s investigators, or for any other reason deemed necessary, the Council will
       seek to involve the police.

2.9    This may be for the purposes of affecting an arrest, obtaining and invoking a search warrant, or
       any number of other reasons. Where necessary or appropriate, and subject to agreement, the
       police will prosecute offences on behalf of the Council.

2.10   Similarly, where the Council do not for whatever reason pursue prosecution by their own
       available resources, the case will be presented in Court by the Crown Prosecution Service.

       Role of Legal Services and Counsel

2.11   The Council’s Legal Services department will, by agreement, prosecute any case which meets
       set criteria (and where a right of audience exists) on behalf of the Council. Legal Services will
       appoint appropriate Legal Counsel.

       Powers and Authority of Investigators

2.12   Council investigators are granted their powers to investigate under a number of specific Acts. For
       instance, the power to investigate internal acts of fraud and corruption stems from the duty under
       the Local Government Finance Act 1988 to administer it’s financial affairs properly.

2.13   Benefit investigators have specific powers granted to them under the several Social Services
       Administration Acts (as amended).

2.14   Council investigators have the right to expect cooperation from all Members and staff in the
       exercising of their duties. This means passing any information requested in connection with an
       investigation in a timely manner, making statements where required, and granting access to such
       systems and information repositories as required and necessary.

2.15   Council investigators are authorised where required to remove any and such material as
       considered necessary, including files, and in extreme cases the contents of desks and/or
       computers. Hindrance to this process will be seen as a serious disciplinary matter.

                          London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                      Section IV - Fraud Investigation Plan

2.16   Due to the nature of any possible investigation the investigator is not required to explain his
       actions or reasons for requests to the person from whom the information is requested or required.
       In the event of any dispute, the matter will be referred to Directors or above if necessary. In such
       cases the files and information subject to dispute will be removed and stored securely until the
       matter is resolved, in order to protect possible evidential trails.

2.17   Council investigators will carry identification with them at all times which will include a warrant
       duly authorised by an appropriate Director detailing the powers under which the investigator is
       carrying out his or her duty.

3      Managing Cases

       Referral Processes

3.1    Referrals may come from a variety of sources, but essentially fall into the following categories:
           •   from members of the public who are willing for their identity to be known
           •   from members of the public who wish to remain anonymous
           •   from members of staff who suspect an offence may have taken place
           •   from members of staff who wish to make an allegation under whistleblowing

       Fraud Hotline(s)

3.2    Referrals may also come in from the Council’s dedicated “Fraud Hotlines”, either by telephone or
       email or via the reporting facility on the Council’s internet site.

       Responding to Allegations

3.3    Wherever possible, and in every case where the identity of the informant is known, an
       acknowledgement of the referral should be made by whatever method is most appropriate.

3.4    Subject to issues of disclosure, protection of evidence, confidentiality and impartiality, where
       possible an informant should be kept advised of case progress, or at least whether or not a case
       is progressing or subject to delay. This is especially important where the allegation has been
       made by a whistleblower, and is stipulated in the Council’s whistleblowing policy and under
       legislation relating to whistleblowing.

                        London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                   Section IV - Fraud Investigation Plan

      Case Risk Analysis

3.5   In order to maximise the use of resources to fight the many different forms of fraud the Council
      may find itself combating, each case referred, whether an “internal” case, a benefit case, or a
      housing case, will be subject to a risk analysis to determine the suitability of the case for
      investigation, and it’s priority. In this way, the Council can be assured of the most effective use of
      resources across it’s Fraud Units.

3.6   An example of a suitable “risk analysis matrix” is shown on the next page.

                       London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                        Section IV - Fraud Investigation Plan

Risk Analysis Matrix

              1          2         3           4           5
   A                                                           About the information/allegation:
                                                               1 = Known to be true without reservation
                                                               2 = Known to source, but not to officer

   B                                                           3 = Not known to source, but corroborated
                                                               4 = Suspected to be false or malicious
                                                               5 = Cannot be judged

   C                                                           About the source:
                                                               A = Always reliable
                                                               B = Mostly reliable

   D                                                           C = Sometimes reliable
                                                               D = Unreliable
                                                               X = Untested source

      E                                                        Anonymous information is always graded as X5

                                                               Carry grading down to next grid and score each section

      X                                                        as appropriate to gain overall score. For comparison
                                                               only. Decision based on existing workloads and/or

          Grade              Detail provided        Potential outcome           Fraud Types              Threat / Loss
 A1 A2 A3         +3      Full            +3       Prosecute     +3          Three +      +3       V. High          +8
 B1 B2
 C1 C2
 A5               +2      Most            +2       Sanction      +2          Two          +2       High             +5
 B5               +1      Part            +1       Other         +1          One          +1       Medium           +3
 A4               0       Vague            0       None          0                                 Low              +1

 B4               -1      None            -1                                                       None             0
 D4 D5

                          London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                     Section IV - Fraud Investigation Plan

       Recording Cases

3.7    All cases referred for investigation will be recorded on the Council’s Fraud Management
       Database. The Council currently operates the “InCase” Fraud Management System across all it’s
       Fraud Units with the exception of the Corporate Fraud Unit. It is intended that all Fraud Units will
       operate the same Fraud Management System by the end of 2005/06 in order to standardise the
       recording and reporting facilities of the Fraud Units across the Council. In this way, when and if
       the Fraud Units amalgamate into one dedicated CAFT team minimal effort will be required to
       combine fraud data history. Further, the operation of a standard Fraud Management System
       facilitates the sharing of intelligence and the identification of multiple and cross-discipline fraud.

3.8    Whichever Fraud Management System is used, it will be utilised for the secure recording of the
       details of the fraud on a case by case basis – referral details, investigation progress, outcomes –
       and for management information and the production of performance indicator data.

3.9    Access to the Fraud Management System will be restricted to investigation managers and
       officers, due to the sensitivity of the information contained within it and to negate the possibility of
       someone who might be under investigation themselves gaining access to the system (either
       directly or via an accomplice).

       Criminal v Disciplinary Cases

3.10   Certain cases may involve proceedings which are both necessary and appropriate under criminal
       legislation and internal disciplinary regulations.

3.11   In such cases, in order to demonstrate impartiality and due process, criminal investigations will be
       handled by the respective investigation team.

3.12   The internal disciplinary matter will be handled by management and Human Resources.

3.13   The Corporate Fraud Unit will act as a liaison between the internal investigation and the criminal
       investigation, offering guidance and advice where required.

3.14   There is nothing legislatively to prevent the Corporate Fraud Unit investigating under disciplinary
       regulations while an investigation is conducted under criminal law (whether by the Corporate
       Fraud Unit or Benefit Investigation Team or Housing Investigation Team). This is known as a
       parallel investigation and separate sanctions bought against an individual or party are known as
       parallel sanctions.

                         London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                    Section IV - Fraud Investigation Plan

3.15   However, because of a basic conflict between an aspect of criminal legislation and employment
       regulations, which centres on a persons right to make no comment under criminal law versus the
       right of an employer to demand a person account for their actions, it is LBHF policy that the Fraud
       Units do not involve themselves in interviewing for disciplinary purposes.

3.16   The Corporate Fraud Unit can and will continue to undertake whatever background investigations
       are necessary to prove a disciplinary case and support the disciplinary procedure.

3.17   It may be that separate criminal and disciplinary proceedings are bought against an individual. In
       such cases, it would be normal for criminal proceedings to take far longer than an internal

3.18   In such a case the disciplinary action must never be delayed whilst criminal proceedings are in
       process, and criminal investigation must never (except in exceptional cases) become the sole
       reason for a disciplinary action.

3.19   In cases where there is a conflict between progressing a criminal investigation and resolving a
       disciplinary matter quickly, it may be that the disciplinary process will need to be suspended until
       an appropriate point is reached in the criminal investigation where the progression of the
       disciplinary case will not impact on the gathering of evidence for criminal proceedings. Normally,
       criminal proceedings will take precedence. Where there is disagreement on this point, a meeting
       between the respective Directors and the Corporate Fraud Manager will be held in order to
       resolve the issue. Disciplinary proceedings will not, in these instances, progress until a suitable
       agreement is reached.

3.20   Further information is contained within the Prosecution Policy.

       Quality Control / File Standards

3.21   At all times, investigation case files (whether kept electronically or physically) will be kept to the
       highest standards of control.

3.22   Files will be subject to regular review by Fraud Management to ensure the necessary levels of
       quality and probity are being maintained.

3.23   Fraud Managers will ensure that the basic tenets of fraud investigation are being upheld – that
       the investigations are lawful, fair, proportionate and undertaken in a timely manner.

                          London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                   Section IV - Fraud Investigation Plan

       Visits, Health and Safety, Potentially Violent Cases

3.24   A normal part of the investigation process will be to undertake visits to witnesses and suspects at
       their place of residence or work. This places the investigator in a vulnerable position and
       safeguards must be in place before any such visits are undertaken.

3.25   Visits should ideally be conducted by two officers, from a safety point of view and also for the
       sake of corroboration of evidence.

3.26   However, it is accepted that for a variety of reasons, in exceptional cases, it may be necessary
       for officers to undertake visits alone.

3.27   Whether visits are conducted alone or accompanied, officers will ensure that their whereabouts
       are communicated to the office. At prescribed intervals, safety check phone calls will be made by
       the officer back to the office. In the event a call is missed, the office will make every attempt to
       make contact with the officer. If the officer cannot be contacted then a search team will be sent to
       the last known place of contact, and the police advised.

3.28   Where persons to be visited are known to be violent or have a history of violence then
       consideration should be given to the issue of anti-stab vests for the officers to wear.


3.29   Notebooks (or pocketbooks) are a vital tool for the investigator and each officer should have their
       own police-style pocketbook, which should be securely bound with lined and numbered pages.

3.30   The pocketbook should be used to record the following investigation activities;
           •   observations
           •   conversations and interviews
           •   times and dates of contacts

3.31   The following rules must be observed when using a pocketbook. This is commonly referred to as
       the ELBOWS mnemonic:

                         London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                       Section IV - Fraud Investigation Plan

               E Erasures – do not rub anything out
               L Leaves torn out – do not rip pages out
               B Between lines of writing – do not write over the top of other writing
               O Overwriting – do not write over other writing
               W Writing in pencil – do not write in pencil, always write in ink
               S Spaces – do not leave spaces for additions at a later date

3.32   Best practice is that stocks of pocketbooks should be kept by a single nominated officer – the
       stockholder – who will control and issue the stock.

3.33   The pocketbook is an original record of evidence and, as such, it must be kept secure. It is the
       responsibility of the officer and is a security item. If lost or misplaced this must be reported to the
       stockholder immediately and in writing.

3.34   On receipt of stock of new pocketbooks, the stockholder will:

           •   number each pocketbook with a unique number on the first line of the first page in red

           •   keep a register of the pocketbooks showing the date received

           •   retain the stock of books and the register in a locked drawer or cabinet

3.35   When issuing a pocketbook, the stockholder will:
           •   record in the register the name of the recipient and the date of issue
           •   obtain the signature of the recipient in the register
           •   sign and date the first line of each pocketbook
           •   have the recipient sign and date the next line of the pocketbook

3.36   When a completed pocket book is returned to the stockholder they will:

           •   sign and date the next blank line
           •   record the return in the register
           •   retain the book for later disposal

                         London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                  Section IV - Fraud Investigation Plan

3.37   The stockholder will dispose of a pocketbook:

           •   no sooner than two years after the latest date endorsed on the cover

           •   by treating it as confidential waste

           •   will record the disposal in the register

3.38   The officer will sign and date the pocketbook on the next available line as soon as they receive
       it and either carry the pocketbook with them or keep it in a locked drawer. Under no
       circumstances must it be left unattended in the office or elsewhere.

3.39   When using the pocketbook, the officer will:

           •   make all entries in blue or black ink

           •   record all those events listed in 3.47

           •   sign, date and time all entries

           •   clearly record the time and date of any event detailed in the pocketbook

           •   record the time that they start and finish making notes of an event

           •   observe the guidelines in R v Turnbull regarding observational evidence (see 3.44)

           •   if there is a long time between the event and the record being made, explain the reason

           •   separate entries by deleting a blank line from end to end

           •   once a week, present the pocketbook to their line manager to sign, date and time

3.40   R v Turnbull set guidelines for the recording of evidence in pocketbooks (and statements) by
       officers according to the ADVOKATE principal:

               A Amount of time (how long in view)
               D Distance
               V Visibility
               O Observation impediments
               K Known to witness
               A Any reasons for remembering
               T Time lapses
               E Errors in descriptions

                         London Borough of Hammersmith & Fulham Anti Fraud and Corruption Strategy
                                                                   Section IV - Fraud Investigation Plan

3.41   Once a pocketbook is completed, the officer will:

           •   endorse the cover with the date of the first and last entry

           •   record the release date of anyone imprisoned

           •   record the date of conviction of anyone arising from a case mentioned in the
               pocketbook where there is no term of imprisonment

           •   keep the pocketbook until there are no live cases contained within it and then return it
               to the stockholder for retention

3.42   An officer who leaves investigation duties must return all pocketbooks in their possession to the
       stockholder before they leave.

3.43   On each day that an officer is on duty they must record the time of starting and finishing work,
       and the following events if they occur:

           •   observations carried out

           •   home visits carried out and any problems

           •   delivering letters or notices

           •   delivering final warning letters

           •   that a taped PACE interview has been carried out

           •   being present as a witness at a PACE interview

           •   record or summary of ‘ad hoc’ PACE interview which cannot be taped or recorded in
               any other recognised way

           •   carrying out a Formal Caution interview

           •   carrying out a Administrative Penalty interview

           •   visiting a landlord, agent or employer

           •   being refused entry to employer’s premises and what is said

           •   service of notice to produce to employer and what is said

           •   service of summons

           •   information from a witness that is not in a statement

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                                                                    Section IV - Fraud Investigation Plan

           •    anonymous information

           •    telephone information

           •    car registrations

           •    that evidence has been collected or seized

           •    that evidence has been returned

       This is not an exhaustive list. Officers must record anything that might be of evidential value
       (either for that occasion or potentially in the future).

3.44   Writing should be legible, amongst other reasons because the pocketbook may be produced and
       examined in court. Any errors must be crossed out by striking one line through the incorrect
       word(s) and initialled by the officer.

3.45   Notes should be made at the time of any incident or as soon as practicable afterwards. If it is not
       possible to make notes immediately, the time when the notes were made and the location of
       where the notes were made should be recorded.

3.46   Once it is full the officer must keep the pocketbook locked away until all the cases mentioned in it
       are complete. At this stage it must be returned to the stockholder for safe keeping, who will
       record it’s return in the register.

3.47   Pocketbooks are evidence and therefore fall under the CPIA rules for the retention of evidence. If
       the officer leaves investigation duties before the pocketbook is full up, they must return it to the
       stockholder who will deal with it according to the Council’s procedures for the control, issue and
       retention of pocketbooks.

       Controlling the Caseload

3.48   Because of the number of cases an investigator may deal with at any particular time, it is vitally
       important that the officer keep careful control of his or her caseload.

3.49   It will be tempting at times to deal with those cases that are more interesting or where there is
       pressure to complete an investigation, perhaps by a senior official of the Council, at the expense
       of less interesting cases.

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                                                                    Section IV - Fraud Investigation Plan

3.50   An officer must strive to actively pursue all cases under his control in a disciplined manner, and
       no case should be left for an extensive period without adequate review.

3.51   This is not to say that some cases will naturally have a higher priority than others, but the danger
       is that a case may be opened that then “sits”. Apart from poor case control, this may constitute a
       breach of human rights.

3.52   Accordingly, it will be normal practice for every case to be reviewed by the officer no less than
       once a month. If cases are found not to be progressing, due to other commitments or due to a
       lack of evidence or for any other legitimate reason, consideration must be given to closing the
       case, either for good, or until it can be dealt with appropriately. Alternately, it may be possible to
       pass the case to a fellow officer or an appropriate officer in another Team

3.53   If there is no legitimate reason for not progressing a case directly under an officer’s control, this
       will be treated as a disciplinary matter.

3.54   Effective case control is a matter for the respective Investigations Manager, whose officer’s
       professionalism should not be bought into question by poor quality of work. The professional
       investigator may find that effective case control is a matter for them to raise with senior
       investigators or managers – in effect “managing upwards” – in order to close cases that are not
       progressing, unproductive or uneconomical to continue.


3.55   All investigation cases will end with a Case Report, which may need to be disseminated to a
       variety of recipients (which will be determined by the nature of the case and which will ultimately
       be decided by the Fraud Unit Management).

3.56   All Case Reports will contain as a minimum, the following:
           •   Background
           •   Findings
           •   Conclusions
           •   Recommendations (including implications for identified control weaknesses)

3.57   Needless to say, cases which proceed to prosecution will involve a greater degree of reporting, in
       the prescribed manner.

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                                                                    Section IV - Fraud Investigation Plan

4     Legislation

4.1   An investigator’s duties, responsibilities, and actions are governed by a wide variety of legislation,
      the relevancy of much of which will depend on the nature of the investigation undertaken. The
      investigator, although not expected to be an expert in law, will need at the very least to be familiar
      with the legislation that grants him or her authority to undertake his duties in addition to the
      legislation specific to the offence(s) under investigation.

      Criminal Procedures and Investigations

4.2   Investigators must be familiar with the Criminal Procedures and Investigations Act 1996, which
      relates to any investigation started after 01/04/1997, and details the responsibilities and duties of
      investigators. A code of practice has been drafted to assist investigators.

4.3   The code relates to police officers and persons other than police officers who are charged with
      the duty of conducting investigations, as defined by the Act. Investigators are to have regard to
      the provisions of the code and should take these into account when applying their own
      procedures. Relevant sections are printed below for reference.

4.4   Definitions of Roles under CPIA 1996 S.23(1)

      Criminal investigation is defined under the code as:

      (s)2.1 an investigation conducted by investigation officers with a view to it being ascertained
      whether a person should be charged with an offence, or whether a person charged with an
      offence is guilty of it. This will include:
          •    investigations into offences that have been committed
          •    investigation whose purpose is to ascertain whether an offence has been committed, with
               a view to the possible institution of criminal proceedings
          •    investigations which begin in the belief that an offence may be committed
          •    charging a person with an offence includes prosecution by way of summons

      The Code defines the roles of the following individuals in relation to their conduct under the Act
      and on the treatment of material collected as a result of conducting a criminal investigation as
      defined by the Act.

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The Investigation Officer

is defined (s)1.1 as any officer who is involved in the conduct of a criminal investigation. All
investigators have a responsibility for carrying out the duties imposed on them under the act. This
    •   recording information
    •   retaining information
    •   disclosing information

In conduction the investigation, the investigator should pursue all reasonable lines of enquiry,
whether these point towards or away from the accused. What is reasonable in each case will
depend on the circumstances and the council’s policies in use at the time.

The Officer in Charge of the investigation

The Officer in Charge of the investigation is the person responsible for directing a criminal
investigation. He or she is responsible for ensuring that the proper procedures are in place for
recording information, and retaining records of information and other material.

The Disclosure Officer

The Disclosure Officer is the person responsible for examining material retained by the
Investigation Officer during the investigation; revealing information to the prosecutor during the
investigation and certifying that he or she has done this; disclosing the material to the accused at
the request of the prosecutor.

The Prosecutor

Is the authority responsible for the conduct of criminal proceedings on behalf of the Council or
any agent employed by the Council for that purpose.

Guidance on the use retention and storage of records and other material can be found in the
codes of guidance (s)23(1).

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Is material of any kind including information or objects which is obtained during the course of the
investigation and which may be relevant to the investigation. Material may be relevant if it
appears to the investigation officer, or to the officer in charge , or to the disclosure officer, that it
has some bearing on any offence under investigation and on the surrounding circumstances of
the case, unless it is incapable of having any impact on the case.

Sensitive Material

Is material which the disclosure officer believes, after consulting with the officer in charge of the
investigation, it is not in the public interest to disclose.

Recording Information

Where the investigation has led to the beginning of criminal proceedings the investigation officer
should create a list of sensitive and non-sensitive schedules covering all the documents that will
be used in the proceedings, and those records which will not be used and have been collated into
either sensitive or non sensitive.

Where enquiries continue and further information is obtained which will require disclosure, the
investigation officer must discuss this with the following individuals:
    •      the officer in charge of the investigation where one has been nominated
    •      the disclosure officer where one has been nominated
    •      the prosecutor, where the information is converted into evidence that will form a part of
           the prosecution case

Functions & General Responsibilities

(s)3.1 of the code states that each of the prescribed functions concerning the Investigation
Officer, Officer in Charge and the Disclosure Officer are separate, however in some
circumstances the officer conducting the investigation can assume all three roles.

Failure of the Council to have separate delegated designated officers under the Act, does not
exempt the investigations officer from carrying out the duties imposed by the Act.

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4.5   Section 34(4) of The Criminal Justice and Public Order Act 1994 makes the Police and Criminal
      Evidence Act 1984 apply to investigators employed by government or local authority agencies.

4.6   Much of PACE relates specifically to police officers and the powers bestowed on them, however
      investigators should be mindful of the provisions contained in the PACE Code of Practice,
      particularly Codes C and E relating to questioning and tape recording of interviews (see section 7
      of this document). Code C s.67(9) provides:

      "Persons other than police officers who are charged with the duty of investigating offences or
      charging offenders shall in the discharge of that duty have regard to any relevant provision of
      such a code."

4.7   The PACE Code of Conduct is a lengthy document in it’s own right and investigators should
      ensure they either have their own copy or a readily available copy for reference. It is a
      requirement of conducting interviews under caution that a copy be available for consultation by a
      suspect or witness.

      Criminal Justice

4.8   The Criminal Justice Act 1988 contains much legislation that is pertinent to investigation officers,
      but sections 9, 24 and 23 (sic) have particular relevance as they relate to the content of witness
      statements and their admissibility in court.

4.9   An investigation officer must be aware that witnesses may be subject to intimidation where the
      accused or their agents attempt to prevent the person assisting with the investigation at any
      stage. (s)5.51 of the Criminal Justice & Public Order Act 1994 makes it an offence in the following

               (1) A person who does to another person-

               (a) an act which intimidates, and is intended to intimidate that other person;

               (b) knowing or believing that the other person is assisting in the investigation of an
               offence or is a witness or potential witness or a juror or potential juror in proceedings for
               an offence and;

               (c) intending thereby to cause the investigation or the course of the justice to be
               obstructed, perverted or interfered with commits an offence

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               (2) A person who does or threatens to do to another person

               (c) an act, which harms or would harm, and is intended to harm that other person;

               knowing or believing that the other person, or some other person has assisted in the
               investigation into an offence and has given evidence or a particular evidence in
               proceedings for an offence, or has acted as a juror or concurred in a particular event in
               proceedings for an offence and;

               does or threatens to do the act because (within para. 1(b) he knows or believe, commits
               an offence

               (3) A person who does an act "to" another person with the intention of intimidating, or (as
               the case may be) harming, that other person not only where the act is done in the
               presence of that other and directed at him directly but also where the act is does to a
               third person and is intended, under the circumstances to intimidate or(as the case may
               be) harm the person at whom the act is directed.

               (4) The harm that may be done or threatened may be financial as well as physical
               (whether to the person of the person's property) and similarly as respects an intimidatory
               (sic) act which consists of threats.

               A person guilty of an offence under this section shall be liable to a conviction on
               indictment to imprisonment term not exceeding five years or a fine or both.

               On summary conviction to imprisonment for a term not exceeding six months or a fine not
               exceeding the statutory limit or both.

       Use of the Witness Intimidation Act

       Investigators can consider this action at any time during an investigation where this has occurred
       and do not have to wait until legal proceedings have started. In these circumstances, advice from
       the police and the Council's legal department should be sought.


4.10   The Regulation of Investigatory Powers Act 2000 covers surveillance. More information is
       contained in section 5 of this document.

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       Human Rights

4.11   The provisions of RIPA came about because of the introduction and adoption of the Human
       Rights Act 1998 which among other things provides for the individual’s right of privacy.

4.12   Article 8 of the Human Rights Act 1998 states that it is the right of every citizen to have a private
       life. This right, while being qualified, can only be breached for prescribed reasons. Article 6 states
       that every citizen has the right to a fair trial and access to the information which he or she is being
       accused of being made available in reasonable time before any legal proceedings.

4.13   Challenges are frequently bought to proceedings in court under the provisions of the Human
       Rights Act and investigators should familiarise themselves with the provisions contained within
       the Schedules (see Appendix 3) in the event that they find their procedures criticised and, more
       importantly, called to defend their actions.

       Data Protection and Freedom of Information

4.14   The Data Protection Acts 1998 seeks to protect personal data that is held by organisations. The
       Data Protection Act 1998 and customer confidentiality apply to the information held by the
       Council and it’s investigators.

4.15   Information should not be disclosed to anyone unless supporting documentation is in place for
       the disclosure and the person requesting information is either included for the purposes of
       disclosure on the authority’s registration, or is registered themselves for the purpose of the
       detection and prevention of crime or the prosecution of offenders.

4.16   The Information Commissioner is keen to assist policing organisations in having a sensible
       approach to collecting, keeping and exchanging data. The Act itself does not seek to prevent
       investigations of crimes and holds several exemptions in order to assist in these areas. The main
       section is Section 29, which allows the one-off transfer of information between organisations that
       have not registered each other for sources and disclosures under the Act.

4.17   The Freedom of Information Act 2000 grants the individual access to data held by anyone on the
       individual. From 1st January 2005 any person who makes a request for information to a public
       authority has two distinct rights (subject to certain exemptions):
           •   a right to be informed whether the public authority holds that information; and
           •   where the authority holds that information, a right to be provided with it

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4.18   Responsibility for enforcement of the Act rests with the Information Commissioner (who also
       enforces and oversees the Data Protection Act 1998). There is a right of appeal against decisions
       of the Commissioner to the Information Tribunal. Breaches of decisions of the Commissioner will
       be treated as if they were contempt of court, which could result in a large fine or jail sentence.
       Employees should also be aware that it is in offence to alter, deface, block, erase, destroy or
       conceal information with the intention of preventing its disclosure if it has been requested.

4.19   The Act grants a right of access to a “person” making a request. “Person” is widely defined and
       covers ordinary members of the public and any entity with a legal personality such as companies,
       incorporated public bodies and members of the media. The motive of the person making the
       request is irrelevant.

4.20   “Information” means information recorded in any form and therefore covers written information (in
       paper or electronic form, including emails), drawings, photographs, film and sound recordings.
       Information does not mean the specific document on which the information is recorded and
       applicants do not therefore have to identify any documents, only the information they are seeking.

4.21   The request does not have to state it is a request under the Act. Officers must therefore be alert
       to the possibility that a request may not be obvious and treat all requests as FOI requests until
       told otherwise.

4.22   The Act requires that the request be complied with promptly and in any event not later than 20
       working days following the receipt of the request.

4.23   The Council can only refuse a request for information if:
           •   one of the exemptions under the Act applies
           •   the applicant has failed to supply further information reasonably requested
           •   the request is vexatious
           •   it is identical or substantial similar to a previous request from the same applicant which
               has been complied with and a reasonable time has not elapsed since compliance
           •   the Council estimates that the cost of compliance will exceed the amount set by the
               Secretary of State

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4.24   Certain types of information are exemption from the duty to confirm or deny and the duty to
       disclose. Exemptions are either “absolute” or “qualified”. Where an exemption is qualified it only
       applies if the public interest in maintaining the exemption outweighs the public benefit of
       disclosing it or confirming or denying its existence as the case may be.

4.25   The Act contains 8 absolute exemptions and 14 qualified exemptions. The following are of
       particular relevance to local government fraud investigation.

       Absolute Exemptions

       Information provided in confidence

       Information is exempt where its disclosure would constitute an actionable breach of confidence at
       the time the request is made by a third party. Disclosure must actually constitute a breach of
       confidence. The exemption will not apply simply because a document is marked “confidential”. In
       order to be an actionable breach of confidence the following three elements must be present:

           •   it must be treated by the provider as confidential and not be in the public domain
           •   the circumstances must create an obligation of confidence e.g. an agreement
           •   there must be an unauthorised use of that information to the detriment of the person who
               communicated it.

       Personal Information

       Where the information is “personal data” under the Data Protection Act which relates to the
       person applying for it, this is exempt and their request should be treated as a subject access
       request under the LBHF Corporate Procedures for Handling Subject Access Requests. Where
       the request relates to personal data in relation to a third party disclosure may well breach the
       DPA and will probably come within one of the other absolute or qualified exemptions.

       Qualified Exemptions

       Investigations and proceedings

       This applies to information held at any time for the purposes of criminal investigations and
       proceedings (including civil proceedings).

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       Legal Professional Privilege

       This applies to certain communications between lawyers and their clients

       Law Enforcement, National Security and Defence

       This applies to a range of information held for these purposes.

4.26   The implications for fraud investigation are that disclosure under FOI for ongoing investigations is
       likely to be exempt. However, for closed cases, particularly those that have been kept beyond the
       agreed date of destruction specified in the respective Fraud Unit’s Retention/Destruction of
       Records Policy , the case may be different. It is therefore important to ensure that agreed
       timescales for destruction of records are maintained.

4.27   Council policy states that the decision to apply exemptions will be taken by the Legal Services
       Department in consultation with the information owner. In other words, all requests under FOI
       should be discussed in the first instance with Legal Services.

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       Other Legislation

4.28   Other legislation pertinent to investigators will relate specifically to the commission of offences.
       Depending on the nature of the offence, consideration should be given to proceedings under:

           •   Accommodation Agencies Act 1953
                 Describing a property as “to let” without permission of the owner
           •   Criminal Attempts Act 1981
                 An act that is more than merely proprietary to commission of an offence
           •   Criminal Justice Act   1987
                 Conspiracy to defraud
           •   Criminal Law Act 1977
           •   Education Act 1962
                 Fraudulent student awards
           •   Forgery and Counterfeiting Act 1981
                 Making/intending to use false instrument; Copying false instrument; Use of false
                 instrument; Use of copy of false instrument
           •   Housing Act 1996
                 Knowingly or recklessly making false statement or withholding information; Fraudulent
                 homelessness applications
           •   Housing Benefit (General) Regulations 1987 Reg.75
                 Failure to notify change of circumstances
           •   Social Security Administration and Fraud Act(s) (as amended)
                 Making false representation; Failure to notify change of circumstances; Causing or
                 allowing another to fail to notify a change
           •   Theft Act 1968
                 (s)1 A person is guilty of theft if they dishonestly appropriate property belonging to
                 another with the intent of permanently depriving.
                 (s)15 Deception
                 (s)16 Obtaining of pecuniary advantage by deception
                 (s)17 False Accounting
           •   Theft Act 1978
                 (s)1 Obtaining of services by deception
                 (s)2 Evasion of (legal) liability by deception

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       The Elements to be Proven

4.29   Criminal offences usually require two main elements to be present :
           •   a particular set of circumstances and consequences (this will vary from offence to offence
               and will be detailed in each statute) – this is called the actus reus of the offence;
           •   that the possible offender did it with a 'guilty mind' (i.e. he/she did it dishonestly,
               intentionally, etc. or whatever the specific statute states) – this is called the mens rea of
               the offence

4.30   It is usually necessary to prove an element of “dishonesty”.

4.31   The offender acts dishonestly if:
           •   his conduct would be regarded as dishonest by the ordinary standards of reasonable and
               honest people; and
           •   he realises his conduct is so regarded

       It doesn't matter if the offender himself doesn't think his conduct is dishonest (R v Ghosh 1982)

5      Surveillance

5.1    Certain investigations will require the investigator to undertake surveillance of the individual (or
       individuals) suspected of involvement in an alleged offence. Legislation governing surveillance is
       stipulated in the Regulation of Investigatory Powers Act 2000 and exists to ensure that
       surveillance carried out does not contravene the Human Rights Act. Under the Act a designated
       Senior Council Officer must authorise the surveillance.

5.2    Surveillance may only be used when there is no other non-intrusive alternative way of obtaining
       the evidence to prove or disprove the conduct alleged against the individual to have occurred.

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      Conduct of Surveillance

5.3   There are two type of surveillance:
          •   Directed Surveillance
          •   Covert Surveillance

5.4   Investigation officers in Local Authorities are only allowed to carry out Directed Surveillance
      which is defined under (s)26(2) of the Act as surveillance which is covert but not intrusive, and
      which is undertaken
          •   for the purposes of a specific investigation or operation
          •   in such a manner as is likely to result in the obtaining of private information about a
              person (whether or not one specifically identified for the purposes of the investigation or
          •   otherwise than by way of immediate response to events or circumstances (the nature of
              which is such that it would not be reasonably practicable for an authorisation under this
              part to be sought for the carrying out of surveillance)

5.5   Surveillance involves the observation of person or persons with the intention of gathering private
      information to produce a detailed picture of a person’s life, activities and associations. Directed
      surveillance does not include any type of covert surveillance in residential premises or in private

5.6   Officers must complete the appropriate request and authorisation form prior to undertaking
      surveillance, paying particular attention to the following sections:
          •   why the directed surveillance is required, what it seeks to achieve and why the
              surveillance is proportional
          •   an explanation what information is sought to be obtained as a result of the surveillance
          •   any potential collateral intrusion (this refers to any other individuals who may be
              observed or affected as a direct result of the use of surveillance) and how the methods
              used to gather the information limit intrusion into the lives of third parties

5.7   Requests must be authorised by an appropriate Senior Council Officer prior to commencement of
      surveillance. Levels of authority are stipulated in the Council’s Code of Practice on Surveillance
      maintained by Legal Services.

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5.8    Copies of the appropriate forms can be found in Appendix 6, along with a copy of the Home
       Office Code of Practice on Surveillance (Appendix 5).

5.9    Authorisations last for up to three months at which point the surveillance authorisation should be
       renewed or cancelled. Where the surveillance has been completed prior to the three month limit it
       must be cancelled at the first moment that it is no longer needed. A cancellation form must be
       completed as soon as possible to ensure that this has been done (again, see Appendix 6).

5.10   Covert surveillance without authorisation constitutes a breach of the Human Rights Act 1998.

5.11   Copies of all authorisations, cancellations, reviews and renewals must be lodged with the
       Council’s Legal Services Department.

5.12   Surveillance must only be carried out by officers trained for the purpose. Prior to surveillance a
       briefing must take place between the officers and line management to cover the following details:

               I Intelligence
               I Intention
               M Method
               A Administration
               R Risk
               C Communications

       Covert Human Intelligence Sources

5.13   The use of Covert Human Intelligence Sources is covered in RIPA, and concerns the use of
       cultivated informants for the purposes of obtaining information. Use of CHIS also calls for the use
       of specially trained “source handlers”.

5.14   Council officers do not possess the necessary training and consequently the use of CHIS will fall
       outside of the Council’s remit. This is a policy decision, as there is nothing in law to prevent the
       Council from making use of CHIS if it deemed it necessary and proportionate.

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       Communications Data and SPoC

5.15   Amendments to RIPA Ch.23, effective 5th January 2004, make it now possible for Local
       Authorities to obtain certain types of communications data from Communications Service

5.16   The type of data available relates to traffic and subscriber details, not communications content.

5.17   Only trained officers (known as a SPoC – Single Point of Contact) who are Home Office
       accredited can apply for information on behalf of the Council. The Home Office maintains a list of
       all accredited officers who have their own unique identifying PIN numbers. The Council has a
       number of such officers located within the Fraud Units.

       Use of Covert Equipment

5.18   At times the conduct of surveillance may involve the use of covert equipment, which may take the
       form of cameras, video recorders, and covert radios.

5.19   The use of such equipment should only be undertaken by officers trained and adept in their use.

5.20   Where covert recording equipment is used, appropriate logs should be kept of recordings, in the
       prescribed manner.

5.21   Although modern equipment has the facility to record dates and times (and it has become more
       usual to make digital recordings) officers should not forget first principles – or the fact that such
       facilities have a habit of failing when needed most.

6      Evidence

6.1    The gathering of evidence is a continuous process that occurs throughout the life of an
       investigation. Securing and protecting this evidence is essential. How the evidence is handled
       and presented will affect the outcome of any potential prosecution case against the individual
       being investigated.

6.2    Information or evidence obtained for the purpose of investigating criminal offences can be used in
       civil matters of recovery of losses.

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      Evidential Requirements

6.3   The standard of evidence required in criminal cases is “beyond all reasonable doubt”. It is for the
      prosecutor to prove that the accused committed the alleged acts and that there are no defences
      in law that could be given so as to find the accused not guilty.

6.4   The standard of evidence required in civil cases is “on the balance of high probabilities”. This
      means that on balance, the evidence (which can include some forms of hearsay evidence and
      opinion) leans in favour of the plaintiff (the person or organisation bringing the action) or against
      the defendant. Civil cases require that the evidence be collected before the hearing with the
      same prima facie (“on the face of it” or “at first sight”) considerations as for a criminal case.

6.5   Consequently, this means that even in simple cases a great deal of effort and investigation are
      required to ensure that only appropriate cases, which stand a likely outcome of being proved,
      should be taken before the courts.

6.6   Investigators should be aware that in most circumstances physical evidence (such as application
      forms; review forms; copies of proofs for income and capital; copies of bank or building society
      statements; etc) will be required.

6.7   Statements made under section 9 of the Criminal Justice Act 1968 and Statements of Fact signed
      by the maker can be produced in criminal trials, as can:
          •   taped or video taped statements made under caution
          •   notes made by investigating officers
          •   statements and proof of contact (such as counter sheets or telephone contact forms)
          •   computer records;
          •   DIP images
          •   Audit reports
          •   confirmation of facts from employers
          •   confirmation of facts from other agencies

      The Use of Statements

6.8   It is important to remember that statements for criminal cases can be used in civil cases as well
      but must conform to the protocols of the of the Civil Procedures Act 1998. Where civil statements
      are being considered for conversion for criminal cases care must be taken to remove all hearsay
      and opinion unless it is expert opinion evidence being provided. If officers are unsure they should
      seek advice from the Legal Service Department.

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       Handling Evidence

6.9    In fraud cases, evidence will mostly consist of paper documents. It is therefore important that
       documents are correctly treated from the start of an investigation. Evidence, in any form, will
       need to be:
           •   secured
           •   “bagged and tagged”
           •   divided into primary and secondary evidence
           •   correctly disclosed

       Securing Evidence

6.10   The security of documents and other evidence is paramount once an investigation case is
       commenced. The integrity of any documents that are provided to prove key areas of evidence is
       important. If the defence can show that documents have not been kept secure and could have
       been altered or tampered with, then the case could collapse.

6.11   During an investigation, it is good practice for all original documents to be kept in a secure
       cupboard or filing cabinet and any documents attached to an investigation that are of a sensitive
       nature should be locked away when not being worked upon. Documents should not be left
       unattended on desks.

6.12   The security of evidence applies equally to electronic information. Any annotation notes
       electronically attached to an electronically scanned document are part of the evidence and must
       be included under disclosure. Any comments made in these e-notes should not be edited out or
       changed. Any logs or audit trails that show access and action on electronic documents must be

6.13   The ACPO Guidelines on preserving computer evidence are attached as Appendix 7.

6.14   All documents relevant to the investigation should be placed in plastic wallets and labelled and
       numbered. This would also include small non-paper items such as computer disks and other
       items holding data.

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       Exhibit Labels

6.15   A label should be attached to each item of evidence. Every tag should have an identification
       number that relates to statements about the case. Either of the following numbering procedures
       may be used:
           •   the provision of evidence numbering at the stage of preparing a prosecution file
           •   the provision of a numbering sequence at the beginning of the investigation that follows
               the case through to prosecution.

       Both practices are acceptable. The first ensures that evidence is placed in an order useful to the
       prosecution; the second ensures that evidence is not forgotten or missed out of the collating

       Hearsay Evidence

6.16   Hearsay evidence is inadmissible in court. However, the definition of hearsay evidence is
       problematic. The best definition was put forward by Cross on Evidence and used by Lord Havers
       in R v Sharp [1988] 1 WLR 7, where he stated that:

       “An assertion other than one made by a person while giving oral evidence in the proceedings is
       inadmissible as evidence of any fact asserted.”

       Barrister Peter Murphy develops the definition by describing hearsay evidence as:

       “ Evidence from any witness which consists of what another person has stated (whether verbally
       or in writing, or by any other method of assertion such as a question) on any prior occasion is
       inadmissible, if it’s only relevant purpose is to prove that any fact so stated by that person on that
       prior occasion is true. Such a statement may, however, be admitted for any relevant purpose
       other than the proving the truth or facts stated in it.”

       The Investigator should record and list hearsay evidence. The local authority’s legal
       representatives will consider its worth and relevance to the presented case.

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7     Interviewing

      Interviewing Under Caution

7.1   Code C.11.1A of the Police and Criminal Evidence Cat 1984 defines an interview as “the
      questioning of a person regarding his or her involvement in a criminal offence or offences which,
      by virtue of code 10.1, is required to be carried out under caution”.

7.2   If a decision to arrest a suspected person has been made, then the accused person must not be
      interviewed about the relevant offence except at a police station or other authorised place of

7.3   All records of interviews under caution must include the following
          •   the place where the interview takes place
          •   the time it begins and ends and the time that the record is made
          •   any breaks in the interview and the names of all those present

7.4   This record should be made on forms provided for the purpose or in the investigators notebook or
      in accordance with the codes of practice for the tape recording of interviews with suspects.

7.5   The most efficient way in which to undertake a cautioned interview is by tape-recording. Tape
      recorded interviews should be conducted on dual tape machines so there are two records of an
      interview – one “working copy”, from which a transcription will be made, and copy for storing

7.6   On occasion it may be necessary to undertake a contemporaneous notes interview. In this type of
      interview, written notes are taken of the exact conversation between the officers and the
      interviewee. This can be a time consuming process. It is usually advisable to avoid where
      possible the need for contemporaneous notes and invite the interviewee to undertake a tape-
      recorded interview.

7.7   Videotaped interviews should follow the same rules as audiotape interviews.

      The Pace Caution

7.8   The investigating officers will need to decide when a caution is necessary. The rule for
      investigators to follow is that a person must be cautioned if there is any suspicion that he/she is
      involved in a criminal offence. Without a caution any interview may be excluded as evidence.

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7.9    If a suspect has previously been cautioned, they must be reminded that they are still under that
       caution in any subsequent interview.

7.10   The caution shall be given in the following terms;

       “ You do not have to say anything, but it may harm your defence if you do not mention when
       questioned something which you later rely on in court. Anything you do say may be given in

       Minor deviations do not constitute a breach of this requirement provided that the sense of the
       caution is preserved.

7.11   An accused person must be told that they are not under arrest. Only a police officer can arrest on
       suspicion. Council investigators do not have the power to arrest suspects. The accused is free to
       go whenever they want during any interview under caution conducted by a Council investigator
       (unless an arrest has been made by the police and the interview is being conducted at a police

7.12   If there is a break in the questioning under caution then the interviewer must ensure that the
       person interviewed is aware that he/she remains under caution. If there is any doubt, the caution
       shall be given again in full when the interview resumes.

7.13   Investigators must make a separate record of an interview under caution. Depending on the
       procedures in use by the Council this may be on the case file, on the computer system notebook
       or in the officer's own notebook. The reason for this is that should a trial be held the investigator
       is personally responsible for making and explaining the reasons for making the records and
       holding the interview.

7.14   Specific rules apply to vulnerable persons and those whose first language is not English. These
       can be found in Code C Police and Criminal Evidence Act 1984 on the treatment of individuals
       who have language difficulties.

7.15   Where possible, it is always advisable to invite the individual to the office for the interview. This
       provides the officers with control over the process, allows taping and formalises the interviewing

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       The Right to Remain Silent

7.16   The right to remain silent is an important aspect of the civil liberties of English Law. Under PACE,
       the accused has the right to remain silent on their own right and that of their spouse. However, if
       they use something in their defence that they should have revealed at the time of the interview
       they might find that their argument value is reduced.

7.17   It should be remembered that, although the accused has the right to remain silent during a
       cautioned interview, the court may make an inference from that silence. Where an interview is
       conducted by the police, the police can give a warning concerning the inference that can be
       drawn from remaining silent. Section 34 of the Criminal Justice and Public Order Act 1994
       governs the right of inference.

       The PEACE Model

7.18   Interviews should only be conducted by officers trained in investigative interview techniques.

7.19   The prescribed format for conducting interviews is know as the PEACE model.

               P Preparation and planning – prior to interview commencing
               E Engage and explain – at the commencement of the interview
               A Account – let the suspect give their version of the facts
               C Challenge – confront the suspect with the known facts where they differ
               E Evaluate – the information obtained during the interview afterwards

       Witness Statements

7.20   The standard document for taking witness statements is known as a Section 9 (Criminal Justice
       Act) statement and follows a prescribed format. Section 9 statement forms are used for taking
       statements from victims, witnesses and, in certain circumstances, suspects during an interview.

7.21   An alternate form of witness statement is known as a Statement of Fact, which is used to confirm
       information that has already been provided to the Council.

7.22   Where the witness is prepared to provide information, they can either be invited to write their own
       statement or the officer can write the statement which the witness can then sign. Where the
       witness does not wish to make a statement, the investigating officer should make his or her own
       statement recording what was said and the details of the date, time and circumstances for file

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7.23   For handwritten statements:
           •    the witness should sign every page
           •    the witness should sign after the last word written on the statement
           •    the witness should initial any alteration
           •    the witness should complete the statement appendix form, detailing their contact details;
                their understanding that the statement may be used in court and that they may be called
                as a witness; their dates of non-availability for court; and their permission to use the
                statement in civil proceedings for recovery of losses

8      Prosecution


8.1    The Council’s policy on prosecution is contained within section 5 of the Anti Fraud and Corruption

8.2    Once a decision has been made to prosecute, consideration must be given as to the preparation
       of the evidence for court, and for the court process itself.

       File Standards and MG Forms

8.3    A prosecution file should be prepared from the case file. There are three types of prosecution file:
       an Advice file, an Expedited (abbreviated) file, or a Full file.

8.4    The file should contain:

           •    the prosecution’s main witness statements
           •    copies of exhibits and an exhibit schedule
           •    a summary of evidence
           •    a witness list with contact details
           •    data protection statements
           •    disclosure schedules
           •    the prosecutors confiscation/compensation order
           •    a financial schedule of the loss to the authority
           •    the financial schedule of costs of the investigation to the authority
           •    previous convictions relating to dishonesty

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8.5   The preferred method of presenting a prosecution file is to follow the MG Manual of Guidance
      and use the same MG forms as used by the police (all attached as Appendices)

                                                              Expedited       Full

      MG01            File front sheet                                x       x
      MG01(a)         File contents check list                        x       x
      MG05            Case summary                                    x       x
      MG06            Case file information                           x       x
      MG06C           Non-sensitive unused material                           x
      MG06D           Sensitive unused material                               x
      MG06E           Disclosure Officer’s report                             x
      MG07            Remand application
      MG09            Witness list                                    x       x
      MG10            Witness non-availability                                x
      MG11*           Witness statements                              x       x
      MG12            Exhibit lists                                   x       x
      MG15            Record of taped interview                       x       x
      MG19            Compensation claim form                         x       x
      MG20            Further evidence submission                     x       x

      MG forms 02, 04, 04A, 04B, 04C, 6B, 08 and 18 are prepared and provided by the police or Legal
      Services. MG forms 03, 03A, 13, 14, 16 and 17 are no longer used.

      *Note that the heading on MG11 forms has recently been changed from (CJ Act 1967, s.9; MC
      Act 1980, ss.5A(3)(a) and 5B; MC Rules 1981, r.70) to (Criminal Procedure Rules r 27.1(1);
      Criminal Justice Act 1967, s9 Magistrates Courts Act 1980, s.5B).

      The Prosecution Process

8.6   The Crown Prosecution Service was created by the Prosecution of Offenders Act 1985 on the
      recommendation of the Royal Commission on Criminal Procedure. It is a national body (England
      & Wales) that has the discretion to prosecute or stop proceedings. The CPS is guided in their
      decisions by the Code for Crown Prosecutors 1994.

8.7   When taking a case, the CPS will need to be able to follow the events of the case and clearly see
      that an offence has been committed. The CPS will check to ensure that the correct person has
      been charged and that the correct charge has been brought.

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8.8    The CPS will prefer to ensure that they have at least 51% chance of conviction. This will mean
       that they will examine the evidence. They will want to know where the evidence came from and
       how it was obtained. The CPS will use the "Public Interest" in deciding whether to prosecute.
       Local Authority fraud cases should been have tested by the Council's own internal procedures on
       the test for suitability of prosecution prior to submission for proceedings, and have been
       examined by the Legal Services Department.

8.9    The CPS could direct the police to issue a formal caution. If the Council feels that this is
       unreasonable and that prosecution is more relevant then they will need to meet with the CPS and
       argue the case. The CPS is under a great deal of pressure due to high caseloads and has to
       control resources and court costs.

8.10   The timescales for delivery of files to the CPS is generally fixed. Both the Human Rights Act and
       Neary rules dictate timescales. The CPS publish an information booklet outlining service aims
       and timescales. In general, timescales are dictated by the Service Level Agreement that the CPS
       have with the local police.

8.11   In general:
           •   if the Defendant admits the offence, the files will need to be with the CPS within two
               weeks of the charge or summons
           •   if the defendant does not admit the offence the files need to be with the CPS within three
               weeks of the charge

8.12   If the Council decides to undertake the prosecution itself and not make use of the CPS speed will
       still be an important issue and the case could be tested on its reasonableness.

       Legal Services Department

8.13   Under the terms of the existing Service Level Agreement, the Legal Services Department act on
       behalf of Council Service Departments and handle all matters where the Council is deciding
       whether to prosecute.

8.14   The service provided by Legal Services is as follows:
           •   to initiate criminal proceedings on behalf of the Council

           •   to conduct prosecutions in the Magistrates Court

           •   to serve summonses of the offences alleged on the accused

           •   to ensure that the correct offences for the correct person are placed before the court

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           •      to ensure that the primary and secondary evidence in criminal proceedings are sent to
                  the accused
           •      to appoint Legal Counsel in the Crown Court and Appeal Courts
           •      to provide advice on cases being considered for prosecution on the quality of the
                  evidence based on the "public interest" test.

       In Court

8.15   If a case goes to trial at either the Magistrates or Crown Court, the involvement of the Council will
       vary depending on the circumstances of the case. For example, the accused may plead guilty, in
       which case the Council may only be involved when mitigation is examined. Where the accused
       pleads not guilty, Council officers are almost certain to be called to give evidence.

8.16   The main investigative officer is likely to be called upon to give evidence, particularly if the officer
       undertook investigation interviews. The likelihood of having to give direct evidence is greater if
       the Council is prosecuting the case and the police were not involved at the outset of the

8.17   It is important that the investigation officer re-read and be thoroughly familiar with the case notes
       prior to attending court. There may be a substantial delay between completing an investigation
       and being called to give evidence in court. In particular, any witnesses (including the investigating
       officer) should review all documentary evidence and physical evidence to which they will be
       referring. This includes where records have been retained by the witness and controls must be in
       place to ensure that they are brought to the trial.

8.18   The court procedure in England and Wales is “adversarial” and it is the responsibility of opposing
       Counsel to discredit the prosecution evidence.

8.19   Officers must conduct themselves with the highest integrity and present the facts of the case as
       they are understood to be. In the event that an officer forgets a fact or does not know the answer
       to a question the correct thing to do is to admit that rather than be tempted into making something
       up. Apart from the loss of professional image, perjury is a criminal offence.

8.20   Evidence should be given clearly and loudly enough for the court to hear. The officer should
       direct responses to questions from either Counsel to the magistrates, judge or jury, and not to
       Counsel asking the question.

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                                                                  Section IV - Fraud Investigation Plan

8.21   Investigations officers of the Council must dress smartly for appearances in Court as they are
       representing the authority. Where the use of a jury is involved in a trial, the individuals who make
       up the jury are ordinary people who may not accept testimony from someone who alleges to be
       but does have the appearance of a professional. In addition, judges and magistrates expect a
       reasonable standard of attire as a mark of respect to the Court.

       The Trial

8.22   The role of prosecuting Counsel is to prove the case against the accused. The accused does not
       have to prove his innocence. Prosecuting lawyers need to ensure that the performance of the
       witnesses is reliable. They will expect witnesses to know their evidence and answer accurately.

8.23   The role of defence Counsel is to discredit the prosecution’s evidence. A common practice is to
       attempt to make a witness more nervous so that they do not respond clearly. To achieve this end
       defence Counsel have been known to use techniques such as yawning through the prosecution
       examination or by unnecessarily sharp or argumentative questions. They may also try to get a
       witness to state a contrary opinion or force the witness into giving a "yes" or "no" answer that
       does not give the whole answer.

8.24   The most important rule when being cross-examined is not to take personally the comments of
       the defence Counsel, remain calm, sate what is known to be true and avoid expressing opinions,
       and to direct answers at the judge or magistrate.

8.25   Courts will normally allow officers to refer to their pocketbook while giving evidence. Sometimes
       opposing Counsel will challenge the witnesses' memory and the magistrate or judge may
       therefore ask for evidence from memory. If the Council's witness does not want to use their
       pocketbook then the prosecution Counsel should be notified of their request before the trial. Prior
       to referring to the notebook, permission should be sought from the judge or magistrate.


8.26   At Court, prior to the trial commencing, the investigating officer should not meet with prosecution
       witnesses unless the Council’s solicitor is present. To do so invites challenge by the Court
       regarding witness interference.

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8.27   Witnesses should be contacted a week before the trial and reminded to refresh their memories on
       the evidence that they are to give to the Court. Witnesses will need to be well prepared before
       going into Court. It is better for the prosecution if witnesses can be persuaded to volunteer to
       appear, rather than be summoned. If a witness is summoned they are unlikely to co-operate with
       the prosecution.

8.28   Expert witnesses give evidence on either the validity or the scientific nature of the evidence.
       Normally they will require a fee to attend court. Note that a judge does not have the power to call
       witnesses – only the prosecution or defence Counsel may do that.

8.29   A report from an expert witness can be submitted to the Court and the trial judge can say if the
       report is admissible as evidence, leaving it to the jury to decide how much they accept as being

8.30   Possible expert witness for a fraud case would be:
           •      a representative from the Government Forensic Science Service
           •      a forensic accountant or auditor
           •      an academic
           •      a psychologist
           •      a sociologist
           •      a qualified medical practitioner

       Local police and the CPS will have a list of local expert witnesses and their field of expertise.

   The Decision and Verdict

8.31   Once prosecution and the defence Counsel have put their arguments, a decision on the case will
       be reached.

8.32   The magistrates or jury will make a decision based on the case put before them in the Court. If
       the accused is found guilty, defence Counsel will make a case for mitigation (a plea to reduce the
       seriousness of the offence) and the prosecution will inform the Court of any previous offences.
       The magistrates or judge will then sentence the accused. If the accused has pleaded guilty and
       shown some remorse, the judge or magistrates will take this into account.

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8.33   If the accused either pleads guilty or is found guilty, the judge or the magistrate will consider an
       appropriate sentence. The sentence will depend on the type and number of charges or


8.34   In addition to the sentence, the prosecution will ask the Court to consider other action that may
       be appropriate, such as a forfeiture order, compensation orders, confiscation, payment of costs of
       the trial and recovery of monies lost.

8.35   If the person is acquitted (found not guilty), then the results should be recorded on the
       investigation file and any other records connected to the investigation.

8.36   More and more frequently, judges and magistrates are unlikely to sentence a person convicted of
       fraud to a custodial sentence. In many cases a probation or community service order will be
       given. It should be remembered that whatever sentence is passed the guilty person will have a
       criminal conviction and a criminal record.

8.37   A forfeiture order is an order that transfers title from the defendant to the crown. The Criminal
       Court Act 1973 (s)43 states that if it can be demonstrated that either:
           •   property (in the widest sense of the word – see 8.42) which has been seized or was in
               the possession of the accused at the time of arrest was used in perpetrating the crime; or
           •   if unlawful possession of the property at the time of arrest can be proved

       then the Court can make an order to deprive the offender of the property. The Court takes into
       consideration the financial effect on the offender prior to ordering forfeiture.

8.38   If the Council seeks to recover sums from the offender then a compensation order should be
       sought if the offender has other means of paying the sum specified, rather than an order for
       forfeiture of property.

8.39   A confiscation order is an order to pay a sum of money to the Crown. Unlike a forfeiture order it
       does not have to specify how the offender has to raise the money in order to comply with the
       order. As with a forfeiture order only the prosecuting body can request a confiscation order.

8.40   The request for a confiscation order is made in a Prosecutor's Statement at the start of the trial.
       The Prosecutor cannot request a confiscation order after the trial has begun unless new relevant
       evidence becomes known during the trial.

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8.41   The Prosecutors Statement has to specify details of the way the offender benefited from their
       criminal activity (including any gifts). The benefit to the offender has to be proven. The proof
       required is that of civil proof (i.e. on the balance of probabilities).

8.42   The definition of property is given in section 4 of The Theft Act 1968 as:

       "money and all other property, real or personal, including all things in action and other intangible

8.43   In order to work out the value of property, the court will hold a hearing. This hearing is held after

8.44   The Court can order, by means of a compensation order, that compensation be paid for the full or
       partial amount (at the courts discretion). This is enforced by the court if the fine is unpaid.

       After The Trial

8.45   The Council may request at Court that anyone found guilty (or who pleads guilty) should attend a
       police station to be photographed, fingerprinted and have a DNA sample taken. The Council
       should report to the police and NAFN (the National Anti Fraud Network – an intelligence agency
       run by Local Authorities for Local Authorities) the results of the verdict. The results will be
       recorded on the police and NAFN systems.

8.46   All original documents should be returned to where the records were originally obtained. Copies
       should be placed on the prosecution file and the file held by the respective Anti Fraud Unit for
       later inspection by internal or external auditors. Files must be held for a minimum of six years or
       until after completion of the sentence by the accused, whichever is later, to comply with any
       potential appeal requests that might be made by the defendant.

8.47   Publicity regarding successful prosecution is nearly always useful to the Council. It communicates
       to the public that the Council takes fraud seriously. Following a successful prosecution that the
       Council wishes to publicise, it should issue a press release that includes a statement that the
       Council will not tolerate fraud (but will do all it can to ensure that to those who are entitled
       assistance will be provided). It should be noted that there are rules governing what can be said in
       the press regarding a trial and the Press Department of the Council is responsible for all press
       releases. Consultation should therefore take place with them and Management concerning the
       content of any press release. Council staff should also be advised of successful fraud cases by
       use of the Council’s intranet site.

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9      Fraud Liaison and Joint Working

       Working with Other Agencies and Jurisdictional Considerations

9.1    Some evidence is likely to be obtained from organisations outside the local authority. If evidence
       has been supplied from an external source, then a statement will be required confirming that the
       evidence has come from that organisation and it is accurate.

9.2    Building working relationships with appropriate outside agencies allows for the transfer of skills
       and good practice, joint partnerships in the form of joint working, and joint investigations. Liaison
       also provides a forum for information exchange. It must be noted that arrangements for data
       exchange under the Data Protection Act 1998 must be in place first before any joint projects are

9.3    Where feasible, Service Level Agreements should be drawn up between the Fraud Units and
       anyone with whom it is expected that a close working relationship will prove to be fruitful.

10     Resources


10.1   The National Anti Fraud Network is an intelligence agency for Local Authorities, set up and run by
       Local Authorities. It gives a convenient “one stop” line of enquiry to a variety of services related to
       fraud investigation.

10.2   The facility is open to all investigators, whatever their discipline, employed by subscribing
       Councils. LBHF is a subscriber and as such has access to the full range of enquiries available.

10.3   Guidance and instructions are contained in the NAFN manual, along with the requisite forms for
       making enquiries. Enquiries may be faxed or submitted on-line via the NAFN website (a user
       identity and password is required, instructions for the obtaining of which may be sought from any
       Fraud Unit manager, or the Corporate Fraud Manager, who administers membership of NAFN on
       behalf of LBHF).

10.4   The NAFN manual and forms are contained in the Appendix to this document.

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                                                                   Section IV - Fraud Investigation Plan

       On-line Enquiry Facilities

10.5   In addition to the on-line NAFN service, LBHF has access via the Corporate Fraud Manager to
       Companies House Direct and Land Registry Direct.

10.6   Access to these services may be sought via the Corporate Fraud Unit. There is a nominal charge
       for these services (by the organisations providing them).

       Open Research on the Internet

10.7   Investigators should be mindful that much information and intelligence (and to a degree,
       evidence) can be obtained by conducting open research on the internet. Much of this information
       is in the public domain, but care should be exercised and the admissibility of any evidence
       obtained should be given consideration to.

10.8   Access to the internet is granted by LBHF, subject to policy and procedure governing it’s use.

11     Proactive Counter-Fraud Initiatives

       National Fraud Initiative

11.1   The Council is legally required under s.6 of the Audit Commission Act 1998 to provide relevant
       data and to participate in NFI .

11.2   The Council provides information obtained from its databases (such as Payroll, Pensioners,
       Housing Benefit, Asylum Seekers and so on) which is matched with that of other authorities and
       agencies, to identify possible fraud.

11.3   Details of matches are returned to the Corporate Fraud Unit where further internal investigations
       are undertaken by the Corporate Fraud Manager to identify and pursue cases of fraud and
       irregularity perpetrated by staff.

11.4   Where cases are identified that relate to members of the public abusing the benefits system, they
       are referred to the Benefit Fraud Investigation Team or Asylum Seekers Unit as appropriate.

11.5   Where cases are identified that relate to tenancy fraud they are referred to the Housing
       Investigation Team.

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                                                                     Section IV - Fraud Investigation Plan

       Fraud Drives

11.6   In addition to NFI the Council’s Fraud Units seek to identify and target fraud by undertaking
       proactive drives and data-matching exercises. These exercises are similar in methodology to that
       used by the NFI, but are run more frequently (NFI is a bi-annual exercise) in order to deter fraud
       and identify offenders and control weaknesses more effectively than relying on NFI by itself.

12     Reporting

12.1   An essential aspect of the work undertaken by the Fraud Units across the Council is the quality of
       reports issued by them.

12.2   Reports may be issued for a variety of reasons, from case reports on the findings and outcomes
       of a case; to recommendations for improvements to controls; to overall reporting of management

12.3   Consideration should be given to the confidentiality and distribution of any report issued. Reports
       should state clearly on the front page who the report may be disseminated to and the level of

12.4   Case    reports    should   contain   details   of   the   background,   findings,   conclusions   and
       recommendations of the investigating officer and be endorsed by the relevant Fraud Manager.

12.5   Where case reports identify system weaknesses in the Council’s processes, the details should be
       passed to Internal Audit (via the Corporate Fraud Manager) in order that Audit can take the
       necessary steps to ensure the issues are addressed.

12.6   Where reports call for responses, those responses should be time-scaled and chased in the
       event they are not received. Failure to respond should also be reported to Internal Audit as this
       may constitute a failure of duty to administer the Council’s affairs in a proper fashion.

12.7   All Fraud Units are required to produce periodic (subject to review) performance indicator reports,
       in order to establish that resources are being adequately and appropriately utilised. This goes
       some way towards meeting the Council’s requirements under CPA.

12.8   As part of this, the Corporate Fraud Manager is required to produce an Annual Fraud Report,
       detailing the performance of the respective Fraud Units and the aims and goals of the Units for
       the forthcoming year.

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                                                                 Section IV - Fraud Investigation Plan

12.9   The Council is also required (via the Corporate Fraud Unit) to make submissions to the Audit
       Commission concerning NFI results and in respect of AF70 returns which detail notable frauds
       detected throughout the year.

13     Appendices

13.1   The following are attached as appendices to this document:

           •   CPS Code
           •   PACE Summary
           •   Human Rights Schedule of Articles
           •   MG Manual of Guidance & MG Templates
           •   Surveillance COP
           •   RIPA forms
           •   ACPO Guidelines on Computer Evidence
           •   IUC Model Aide Memoir & Notices
           •   NAFN manual and forms

13.2   Further appendices will be added as they arise for the sake of ease of reference.


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