IF – INVESTMENT FRAUD
CAMPAIGN FOR JUSTICE FOR VICTIMS
In the famous poem extolling Victorian virtues – Kipling advises: “if you can watch the things you gave your life to, broken, and stoop and build ’em up with worn-out tools, you’ll be a man my son!”
Investment Fraud Victims’ Group Action and Task Force:
“Fighting Investment Fraud – Supporting Victims”
What Kipling did not take into consideration was that today’s investment fraud victims are punished by HMRC while the fraudsters escape prosecution and are simply left to continue re-offending. Therefore, the victims cannot afford to build up their life savings again because they have to pay crippling tax liabilities to HMRC.
Summary
- The Investment Fraud Victims Group Action and Task Force aims to unite investment fraud victims, industry experts, lawyers and politicians to tackle the serious and growing problem of Investment Fraud.
- We aim to raise awareness of this all too often overlooked crime and to campaign for positive reform. We advocate victims’ rights.
- We are campaigning for a change in the law. Our fair tax treatment for fraud victims campaign aims to encourage the investigation of Investment Fraud and to introduce tax exemptions for victims which are astonishingly currently not in place.
- We are forming a professional, influential and passionate Task Force to research and investigate this issue and make sound, sensible and workable recommendations to Parliament which we hope will result in positive legislative reform.
IF Task Force
Members of the Task Force are being appointed to help highlight the flaws and weaknesses in the current system which allows investment fraud to proliferate, leaves victims at the mercy of HMRC and also leaves the perpetrators free to commit further crimes and ruin further lives.
Task Force Agenda
A summary of a large cross-section of victims will be analysed by the Task Force. The results of this survey, including stories and case studies of our members, the financial damage summarised, the scams and scammers which have ruined so many lives and the impact and working practice of the current system and laws on the victims will be compiled into a report.
The Task Force will then consider the results and make recommendations to the government based on their research. The recommendation report will be circulated to the press, government, regulators and police authorities in the UK and also in other key jurisdictions involved.
We aim to achieve positive reform by parading the problem that the current status quo is unacceptable and highly damaging to our society on a number of levels.
The Campaign
- Investigate the Fraudsters and Stop punishing the Victims
- Fair Tax Laws for Investment Fraud Victims
UK tax laws currently unfairly penalise investment fraud victims who are suffering onerous tax liabilities for the actions of criminals who in turn are largely escaping investigation or punishment.
Our outdated and unfair legislation needs to be brought in line with other countries which tackle this issue head on and in a manner which avoids anomalous and unjust results.
The Cause
Investment Fraud is a very serious and growing problem. It is a disgraceful and unacceptable fact that individuals become victims of investment fraud every day. Victims have nowhere to turn as the police, regulators and government do nothing to stem the tide of this widespread, international crime. Many victims make reports to Action Fraud but no action is taken. Not even serving police officers themselves who have been defrauded can get criminal investigations launched.
Investment fraud impacts a huge number of people each year across a broad range of financial products and markets. According to reports, more than 5 million people a year in the U.K. are victims of scams and one in ten people in the UK have fallen victim to investment fraud in the past five years. This is costing in excess of £6 billion every year.
Fraud is now the UK’s most prevalent crime. Fraud and online crimes make up almost half of UK’s 11.8m total financial losses to financial criminals.
Since the new pension freedoms were introduced in April 2015, giving over-55s access to their entire pension fund, there has been an explosion of fraudulent investments in the UK. Billions of pounds of “unlocked” pension cash is a golden opportunity for con artists.
Raising awareness of Investment Fraud and encouraging the regulators, HMRC, police forces and the government to tackle Investment Fraud prevention
The current laws and system are unfair and unjust. HMRC pursue victims rather than perpetrators for tax liabilities. This does not happen in other countries like the US, as exemptions are available there for fraud victims.
Many victims of fraud, who have been mis-sold investment and pension schemes are being aggressively pursued by HM Revenue and Customs for resulting tax liabilities. Many victims have not made much, if any, financial gain and in most cases have actually lost funds, with some being very large sums. In contrast, those perpetrating the fraud, have made huge amounts of profit at the expense of the victims – much or all of which is not declared for tax purposes.
Calling on the Government to introduce a tax exemption for victims of fraud in respect of liabilities arising as a result of investment fraud
Few crimes are being investigated or prosecuted in this area – the fraudsters are escaping penalty whilst the victims are penalised. Investment fraud is a “Cinderella Crime”: in the shadows and overlooked, with the chances of prosecution of the perpetrators being minuscule.
Countless victims who have reported incidents to Action Fraud (the government’s designated facility for dealing with such matters) have been told that no action will be taken, despite very costly and devastating crimes having been committed against them.
In practice, when complaints are filed victims typically wait six weeks or more before their case is passed on to another police department to investigate. This gives criminals plenty of time to move money offshore, escape and continue to trick other savers, often under a different guise.
Those who defraud investors in the UK often suffer little more than a slap on the wrist. Police are often unwilling to investigate allegations of complex financial crimes, especially when cases involve smaller financial frauds that don’t attract media attention.
Even if the police do manage to tackle more fraud cases, Crown prosecutors need to make the issue a higher priority in order to put more fraudsters in jail.
Sentences for defrauding the public are non-existent or feeble – while sentences for defrauding HMRC are much more appropriate (e.g. eight years for the directors of pension trustees Tudor Capital Management).
In the US, fraudster Bernie Madoff revived a sentence of 150 years in prison – a sentence usually reserved for serial killers, such was the recognition of the devastation he had caused and the abuse of trust. In the U.K., prison sentences are rarely more than a few years. This is little deterrence to the unscrupulous fraudsters who stand to gain millions of pounds from conning investors
Fraud victims are also often reluctant to come forward. Some refuse to believe they have been swindled, and others are so embarrassed they can’t bring themselves to tell a spouse, let alone a police officer. The stigma needs to be broken and victims encouraged and supported in coming forward.
The double injustice of failures to investigate coupled with tax laws that penalise the victims has led to the suicide of good, honest, hardworking taxpayers, multiple families losing their homes, welfare issues, depression and family breakdowns. This is completely unacceptable and the law must be changed immediately to stop this devastating double victimisation
Investment fraud victims have already committed suicide over this issue – and more are still contemplating suicide as they contemplate the loss of everything they have ever worked for.
The victims’ lives are changed forever; savings and pensions which have taken a lifetime to accumulate can be gone in an instant. Victims may have to delay or even cancel retirement if they are defrauded out of their pensions or life savings.
Multiple victims have lost their family homes and some face homelessness. Fraud doesn’t just affect the victim. It affects a whole family. Partners need to take on extra jobs and victims may struggle to pay for food or clothing for their children.
Despite the complexity of the frauds committed, victims often feel blamed for having been defrauded. Many victims say they feel panic, anger, fear, anxiety, shame and guilty themselves after being defrauded.
Fraud can undermine the victims’ self confidence and make them feel that they are incapable of running their day to day life. Some victims report feeling vulnerable, lonely, violated and depressed. In the most extreme cases, suicidal, as a result of the fraud they experienced. These emotional and psychological impacts relate to both the stress of financial loss and the HMRC liabilities they are now facing following the fraud.
Investment Fraud is a devastating breach of trust. The experience was also reported to have affected relationships with others, making it difficult for victims to trust anyone again.
Victims are losing faith in the government and systems that should be protecting them rather than penalising them. Whether it is direct or indirect, investment fraud’s effects are profound – financially, emotionally and psychologically.
What needs to change?
Our laws and systems MUST be reformed. They are broken and unjustly penalise the wrong parties. This is a problem that will affect more and more hardworking families throughout the UK and offshore as fraud levels continue to rise.
More must be done to raise awareness of this growing area of criminal activity and preventative measures taken. HMRC must exercise their discretion against fraud victims more sensitively until the law is changed and stop enforcing liabilities against victims in cases where fraud can be proven.
The law must be changed to introduce a fair and robust system of tax exemptions for fraud victims to align our treatment of fraud victims with other countries
Investment Fraud must become a priority policing issue. There must be increased priority given to investigating and prosecuting Investment Fraud. Investment Fraud must no longer be a “Cinderella Crime” – in the shadows and overlooked.
Criminal sentences must reflect the impact and devastation caused by investment fraud. Tougher penalties for the perpetrators must send out a ZERO TOLERANCE to this iniquitous crime.
