Fraudulent Trading
Fraud allegations are the most difficult, complex and time-consuming cases to defend.
Fraud cases can often be won or lost at the investigation stage and before charge. What occurs in the early stages of an investigation can influence whether the matter leads to charge and in some cases, conviction.
In times of economic uncertainty and recession, the detection of wrongful trading and fraudulent trading generally tends to increase.
In its simplest form, Fraudulent Trading is where a company carries on a business with the intention of defrauding creditors, or for any fraudulent purpose, and this applies whether the company is trading, has ceased trading or is in the process of being wound up. Every person who is knowingly a party to the carrying on of the business in that manner commits an offence. Fraudulent trading is a criminal offence typically associated with company directors whose business has been declared insolvent. The term ‘insolvent’ is used to refer to any business that is unable to pay its debts. On being declared insolvent (or when it is clear that the company will be made insolvent), businesses must cease trading with customers, and must prioritise the financial welfare of their creditors. Fraudulent trading occurs when directors purposely and deliberately continue to trade, accept credit supplies from creditors, or accept orders from customers despite knowing that they cannot repay the creditors or provide the customers’ orders. If directors purposefully prioritise their own needs over their creditors and continue to trade at their creditors expense, their actions constitute fraudulent trading.
Wrongful Trading
Wrongful trading is less serious than fraudulent trading. It is a civil offence rather than a criminal one, as per the Insolvency Act of 1986 and the Companies Act of 2006. In cases of insolvency, directors can be overly optimistic about their company’s business, with many failing to realise the severity and finality of their decision.
Wrongful trading is when directors continue to trade in the hope that they will be able to pull the company out of trouble through the income they bring in. Instead of putting their creditors’ needs first, they hope that their actions will have a positive impact on the company. While this still involves endangering their creditors, it isn’t fraudulent behaviour, because the intent is not to deceive.
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Specialist Fraud and Financial Crime Defence Solicitors
Potter Derby Solicitors are a criminal defence firm who are regularly instructed to defend people in police stations and Courts throughout England and Wales.
Evidence relating to financial crime is both comprehensive and sophisticated, only a small selection of criminal defence firms has the specialist expertise and ability to properly defend in these matters. Potter Derby is one of them.
We have secured our reputation as recognised experts at preparing criminal defence work to such a high standard over time, through working with the industry’s leading Kings Counsel and being consistently instructed in the largest and most complex cases seen in Courts throughout England & Wales.
From defending allegations of international boiler room frauds, multi million pound mortgage and VAT fraud, to inter-continental drug & firearms conspiracies to politically motivated offences. Our experience in defending the largest cases is second to none. The ethos from the start is to offer a bespoke service tailoring what we do to the specific natures of the case.
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