The police are an important ally in any criminal investigation, but they face a number of limitations when it comes to fraud cases, and they rarely recover money in these situations. There are four main reasons why you need more than the police on your side when you are a victim of fraud.
The police are only able to act in their state or federal jurisdiction within their respective country. To work outside of their jurisdiction, police forces have to make formal requests for assistance under mutual legal assistance treaties. These applications can take months to be approved.
Professional fraudsters are clever at spreading their risk across many different jurisdictions to frustrate any investigation by a law enforcement agency. There has been a recent surge in fraudulent online foreign exchange trading platforms, such as binary options, based overseas.
It takes many months for state or federal police to achieve any sort of successful outcome in an international investigation. By then, the fraudsters have shut down their operations and moved to the next scam.
Claim not big enough
The police in Australia receive thousands of reports for frauds every month and simply do not have the time or resources to investigate them all. As you would expect, the larger the amount of money involved in a fraud, the greater the case priority for the police.
For claims less than $1 million, there is usually very little action from the police, especially if the funds have gone offshore and foreign-based offenders are involved. This is the harsh reality of fraud.
Fraud too sophisticated
Trying to pinpoint those behind a serious fraud and reaching the burden of proof to find offenders guilty is not an easy task. Fraudsters often hide behind aliases and offshore shell companies to mask their identity.
Without specialist knowledge and resources, most fraud gangs are never unmasked. Establishing who is liable for the crime is also difficult as fraudulent businesses can often be created to look legitimate and even engage in some legitimate business to mask the illegal operations. The line between illegal activity and legitimacy has been blurred and many professional fraudsters appear to be operating lawful and respectable businesses from the outside.
On the inside, they are a well-oiled machine of fraud and deception. In every cross-border fraud case, funds received by fraudulent companies are laundered into foreign-based bank accounts, making it near impossible for the police to follow the money trail and uncover the evidence needed for a successful prosecution.
Not the police’s duty to recover money
Police are only concerned with criminal matters, not civil matters. This simply means that it’s not their job to recover money for victims of fraud.
While the police may sometimes freeze money suspected to be proceeds of crime, they seldom recover it, especially when the money is frozen in a foreign-based bank. In cases of fraud, if a victim can prove that their money was paid into the frozen account, then civil proceedings must be launched to commence recovery. Any money or assets that are found by the police and not claimed by the owner of the funds, are seized and will be forfeited to either the taxation office or the state as proceeds of crime.
What can you do?
Although there is little chance of successful recovery action being taken by the police investigating a fraud case, it’s still important to report fraud through the proper law enforcement channels. This allows the police to gather complaints and intelligence against the suspects and identify multiple victims of the same fraud.
In large-scale cases, the police may increase their resources and agree to work with the victim’s legal representatives and investigators towards the successful recovery of money using a combination of the civil and criminal process. If you are motivated to recover your money, you will need to engage your own lawyer and private investigator who understands how to work in co-operation with the police.
IFW Global has spent more 15 years investigating financial fraud, unmasking criminals and recovering millions of dollars for our clients. To find out more about how we can help, read the case studies in our free ebook Online Investment Fraud: How to Recover Your Stolen Assets.