As charities occupy a unique position in the economy, charity fraud is a particularly serious crime.

What is a charity according to the law?

A charity is a company established exclusively for a ‘charitable purpose’. To maximise the amount of benefit that a charity can bring about, the state demands less tax of charities than businesses. Some charities are regulated by the Charity Commission but those with an annual income of less than £5,000 do not have to register.

A charitable purpose is:

• Either a purpose which is listed in the Charity Act or;
• A purpose for the public benefit.

The charity must exist only for its charitable purpose – it cannot be only partially charitable and remain a charity under English law.

To the public, charities represent positive values: kindness, sharing, giving. Such a reputation means charities hold a naturally higher degree of public confidence than a standard business. Charities also take a stream of small, often one-off donations. These two factors combine to make charities a good vehicle for fraud. On the other hand, the desire to protect the image of charities can mean charges are made at an earlier stage than in other cases.

What might the prosecution allege?

The alleged frauds themselves can range from simple to highly complex:

• Falsely claiming to be a charity – An individual may stand in the street with a donation bucket, falsely claiming that donations will be put to charitable ends. A social media campaign might ask for donations in aid of a given cause only for those donations to be siphoned off for personal use. Individuals may pose as a known and legitimate charity touting for donations which never reach the intended recipient. Even with the best intentions, if your company does not meet the criteria, it is illegal to present it as a charity.

• Misuse of charitable funds – A charity collector may be accused of taking petty cash gained through donations, replacing sealed collections tin for one of their own or using company credit cards for personal spending. Higher up the chain, charities may commit serious fraud by funnelling large amounts of money into projects which were not specified to the donor.

• Fraudulent applications for charitable funds – If a charity funds projects in line with its mission, individuals can apply for those funds with false information. This is a fraud by false representation and can lead to long periods in prison.

Very serious frauds include using the charity as a cover for money laundering, abusive tax arrangements or to dispose of the proceeds of crime.

Should you face allegations of any of these frauds, it is important that you remain calm and take legal advice.

Can I be accused of fraud as a director of a charity?

Without robust internal structures, business leaders can find themselves under investigation for the actions of employees. As the new offence of ‘failing to prevent fraud’ develops, those in charge of charities should be wary of their obligations. Just as individuals can be held vicariously liable for the actions of representatives, charity directors can attract criminal liability without wilful negligence. Take legal advice to ensure compliance.

What will happen if I am arrested for charity fraud? 

If you are arrested for this offence, you will be taken to a police station for the purpose of being interviewed under caution. Among other rights you have the right to be represented at this interview by a solicitor free of charge. This is usually a duty solicitor nominated by the police. You also have however the right to nominate a solicitor of your choice. The solicitor will be able to obtain some information from the investigators about why you have been arrested and will be able to discuss this with you and provide you with advice prior to the interview.

ABV Solicitors have expert fraud solicitors able to attend the police station on short notice nationwide.

What should I do if I receive a letter from a crime enforcement agency such as the police, HMRC, FCA or SFO requesting me to contact them to arrange a voluntary interview? 

Upon receipt of such a letter it is critical that you seek the assistance of a solicitor immediately. ABV Solicitors will allocate a specialist fraud solicitor for you and make arrangements on your behalf to liaise with the investigators and facilitate an interview at your convenience.

This will allow sufficient time for you to arrange a face-to-face meeting with a specialist solicitor in advance of any interview so you can be advised, and fully prepared on what to expect.

We are here to fully support you and those concerned during this difficult time. Obtaining immediate legal advice can make all the difference to the outcome of the investigation.

What if I am released under investigation or released on bail for charity fraud and need a solicitor or wish for a second opinion?

This can be an extremely stressful time for you, your family and your business.

You may have already been interviewed and released on bail or released under investigation. You may have not used a solicitor at all during your interview or are not confident with the solicitor who represented you and require a specialist solicitor with experience in this area.

Whatever the situation, ABV Solicitors have a dedicated team of experts who are experienced in this field and who can provide you with sound advice and assistance.

What if I am charged for charity fraud?

If you have been charged with charity fraud you must seek the assistance of a defence specialist immediately. ABV Solicitors have a dedicated Fraud and Financial Crime department consisting of experienced solicitors who are specialist in this field.

ABV Solicitors can provide immediate advice and assistance and assist you and your business during this stressful time.

Restraint Orders and Account Freezing Orders 

Law enforcement agencies such as the police, HMRC, FCA or SFO often use ancillary powers in addition to making arrests and search warrants. These include applying for Restraint Orders or Account Freezing Orders under the Proceeds of Crime Act 2002.

The purpose of this is to prevent those under suspicion to dissipate assets which may have been acquired through the commission of committing offences.

These Orders are draconian and can cause severe disruption to the lives of individuals and those connected to them including their businesses.

ABV Solicitors have a dedicated team of experts within their Fraud and Financial Crime Department who specialise in tackling these Orders.

If any of the above circumstances apply to you or someone you know contact ABV Solicitors Fraud and Financial Crime Department immediately on 0344 587 9996 or visit our website at www.abvsolicitors.co.uk

ABV Solicitors are available 24/7 and offer their professional expertise and assistance nationwide.