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Lawyers recover £5m from fraudsters’ Caribbean accounts 10 April 2015

Lawyers have recovered £5m of insolvent fraudsters’ cash from a Caribbean bank, in actions that may have been impossible had it not been for a government policy change.

Chris Potts, partner at Blake Morgan, was instructed by Griffins Insolvency Practitioners as the lead lawyer for claims in the UK and Curacao which will ultimately lead to £80m of proceeds of crime being recovered for the UK exchequer.

It was highlighted as one of a few cases which are crucial to the UK economy, and only viable due to the recent policy change around exemption in the Jackson reforms.

The exemption for recovery success fees to be claimed was set to end on April 1 but has now been extended indefinitely.

The exemption and impact
LASPO holds that recovery success fees cannot be claimed, where insolvency litigation is exempt from LASPO as it is designed to help protect the public purse.

This exemption was set to be lifted on April 1, opening what many held was a loophole

It has now been held that insolvency litigation differs from standard civil litigation and has been granted an indefinite exemption.

The case
Griffins claimed that taxpayers will be repaid tens of millions of pounds recovered from a Caribbean bank at the centre of a notorious VAT fraud.

British insolvency firms reached a settlement with the First Curaçao International Bank (FCIB), which was used to criminally launder millions of pounds stolen from the exchequer by “missing trader” and “carousel” frauds.

This means where criminal gangs repeatedly imported and exported small, high-value items such as mobile phones (and avoided VAT, illegally).

Stephen Hunt at Griffins revealed that they are pursuing further VAT claims in Europe, Dubai, the Americas and Asia and the far east, which will now be able to go ahead. More than £10m is likely to be recovered through those actions alone.

Chris Potts, partner at Blake Morgan, said: “This has been a case that has taken some time and it is great to see a sizable sum has been recovered for the exchequer.

“The outcome of this action is also very timely as it concluded just as an important decision has been made on LASPO. The insolvency exemption has been extended effectively indefinitely and insolvency litigation claims can continue to recover success fees.”

By Marcel LeGouais



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