freezing injunction update

Blake Lapthorn's Fraud team has recently been successful in obtaining world wide freezing injunction orders against defendants involved in Missing Trader Intra Community (MTIC) fraud.

MTIC fraud is a sophisticated scheme which was designed to defraud HMRC of large sums of VAT, see diagram below. The fraud was prevalent in the UK and throughout Europe between 2000 and 2006. It involved the purported selling of large volumes of high value electronic goods which were traded into and out of the UK from Europe thereby incurring huge VAT liabilities and fraudulent VAT reclaims. Often the goods would be traded in a circle between the companies involved on the same day. The fast moving and cyclical nature of the fraud earned it the epithet 'carousel fraud'.

By using forensic accounting techniques, Blake Lapthorn assisted the client in identifying payments where monies were transferred out of the jurisdiction, to conceal proceeds of the fraud.

By urgently collating and presenting evidence, Blake Lapthorn was successful in obtaining ex-parte world wide freezing injunction orders against the defendants. To obtain the orders it was necessary to demonstrate that:

1. the applicant was acting reasonably, conscionably and without undue delay
2. the applicant had a cause of action stemming from a legal or equitable right
3. the English court had jurisdiction
4. the applicant had a good arguable case (alleging fraud alone in this instance would not have been sufficient)
5. there was a risk that the defendants' assets would be dissipated.

By acting quickly and decisively, Blake Lapthorn's Fraud team protected the client's position by preventing the proceeds of the fraud being dissipated and securing the defendants' assets until trial.

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