The need to tackle workplace fraud

Aziz Rahman is founder of Rahman Ravelli

A number of financial scandals has prompted calls for tougher official controls to prevent fraud. Aziz Rahman, of business crime solicitors Rahman Ravelli, outlines why companies need to take steps themselves to reduce the potential for wrongdoing.

A spate of financial scandals across Europe in recent months has led some senior political figures to call for tougher anti-fraud controls.

There needs to be more done to tackle fraud across Europe, with a more uniform approach to preventing it across the continent and greater sharing of financial intelligence, according to the European Parliament’s tax crime committee.

At first glance, such a call may not appear to have too much to do with each and every business. The fact that it has been made in the wake of a number of financial scandals such as money laundering allegations at Danske Bank and the collapse, fining and closure of other financial institutions may not seem too closely connected to the  rest of the business world.

But the incidents that the European Parliament has mentioned have all involved a failure to prevent wrongdoing in the workplace. Every company – not just European banks – needs to be aware of the risk of such wrongdoing. And they need to take steps to prevent it happening.

Recent research found that half of all UK companies may have been affected by fraud or other economic crime in the past two years. More than half of the organisations questioned said they had suffered losses of more than £70,000. But as well as the financial cost, wrongdoing in the workplace can harm staff morale, reputation and relationships with customers.


This is why prevention is so important. Each organisation has to take all possible steps to assess the potential for wrongdoing being committed by staff, third parties, intermediaries, customers and trading partners. Senior staff need to recognise the possibility of problems and then devise, introduce and maintain procedures to identify and prevent illegal activity. Any company that does not have such measures in place runs the risk of workplace crime – regardless of the nature of its work or where it trades.

A company has to examine every aspect of its operation: activities inside and outside the workplace, those working for or with it, record keeping, payment procedures and management and monitoring structures. If those running a company believe they are too busy or lack the skills to carry this out, business crime lawyers with the relevant expertise and experience can assess a company’s workings, identify areas where it may be vulnerable to fraud and then devise ways for these vulnerabilities to be “designed out’’.

The Need for Investigation

An appropriate whistle blowing procedure will complement any prevention measures that are introduced. Encouraging staff to report suspicions of wrongdoing can help promote a culture that creates an awareness of the possibility of crime. This makes it more likely that crime will be detected and will also deter many who may be thinking of committing it. Such reports can be investigated thoroughly and discreetly to allow a company to determine what, if any, wrongdoing has been committed and what response is necessary.

As a firm, we have carried out many internal investigations for companies who have felt unable to investigate reports of wrongdoing for themselves. Such investigations can be a vital first step in determining whether wrongdoing has been committed and, if so, who by.

If an investigation does show that fraud has been committed, a company can report it to the police or other agency, initiate civil proceedings against those suspected of committing it or bring a private prosecution against them, under the Prosecution Offences Act 1985.

But it must be remembered that these options are only available if suspicions of wrongdoing have been reported and investigated. And that is only going to be possible if procedures are in place that reduce a company’s vulnerability to crime.

So while there are those in Europe who believe the way forward is a tougher anti-crime approach across the continent, those in business have to look close to home to determine what they can do to prevent wrongdoing in their workplace.

Aziz Rahman is founder of Rahman Ravelli; a top-ranked business crime law firm in national and international legal guides.