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Fraud

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Adur District Council
CenSus Anti-Fraud Sanctions and Prosecutions Policy

Sanctions and Prosecutions

CenSus

This Anti-Fraud Policy explains CenSus' approach to case disposal when dealing with sanction and prosecution cases. This policy conveys a balanced commitment to either sanction or prosecute when appropriate.

It is recognised that effective and appropriate use of sanctions, if publicised successfully, will help to deter others from attempting to commit benefit fraud.

While claiming benefit the claimant has a responsibility to accurately declare all information required in order to assess their claim to benefit. If their circumstances change they must declare that change promptly. In some instances, benefit in excess of entitlement will have been obtained from the Authority. This may be due to changes in personal or financial circumstances which have not been declared. It may also be a claim form that has been submitted with incorrect or missing details.

This may have been done without forethought or criminal intent but with knowledge that the change in personal circumstances may effect benefit entitlement and that the changes in personal circumstances may effect benefit entitlement and that the change should be reported to the council. It may be from the outset a deliberate attempt to commit benefit fraud. The purpose of the investigation is to uncover the facts supported by evidence and a formal interview. As an individual case all matters will be considered under this policy and appropriate sanction if applicable applied.

Payments of benefit are often made directly to Landlords on behalf of the claimant. In some cases, Landlords may falsify claims or assist claimants to falsify claims for benefits. Landlords who are receiving benefit directly are also under a duty to promptly report changes in their tenant’s circumstances. When a Landlord fails to do this, they may be paid more benefit than they are entitled to. Where an offence has been committed, the council will consider its policy on sanctions and will recover any overpaid benefit either directly from ongoing payments of benefit to the Landlord or through civil recovery through the courts.

Appropriate Enforcement Action

Where the Local Authority is able to prove beyond reasonable doubt that a criminal offence has occurred, in addition to recovering the overpayment, the Local Authority can consider the following actions

  • take no action
  • administer a local authority caution
  • offer an administrative penalty
  • instigate prosecution action

General Policy

  • the general policy is that prosecution is not likely to be considered in those cases where the fraud overpayment is less than £2,000
  • an administrative penalty or simple caution will not normally be offered if the fraudulent overpayment is more than £2,000
  • prosecution should be strongly considered for all cases where the fraud overpayment is greater than £2,000 or where the suspect has a history of fraudulently claiming benefit
  • the decision to prosecute, issue a simple caution or offer an administrative penalty will be made by a convened panel of officers in Census and/or Legal Services
  • Legal Services will be invited to undertake a scrutiny role of a percentage of those cases processed for sanctions to ensure that the correct standards are being applied

Recovery only

CenSus will seek recovery of any overpayment caused by fraudulent activity. However, in certain individual cases no additional action will be taken by way of litigation or sanction. This impunity will generally be considered if there are extenuating circumstances concerning the offender and with regard to the evidential or public interest test or if the overpayment is particularly low, i.e. below £50.00.

Simple Caution

A simple caution is a warning given in certain circumstances as an alternative to prosecution, to a person who has committed an offence. A caution can only be considered when there is sufficient evidence to justify instituting criminal proceedings and the offender has admitted the offence during an Interview under Caution (IUC).

If the offender is subsequently prosecuted for another benefit offence the Simple Caution may be cited in Court.

Cautioning is based on the principle that no prosecuting authority is under an obligation to prosecute. The use of simple cautions is purely administrative and there is no legislation covering their use.
A caution is intended to be a meaningful sanction and deterrent for those offenders where criminal proceedings are not a first option and penalty action is not appropriate.

CenSus procedure for cautioning follows the principles set out in Home Office Circular 016/2008 Cautioning of Adult Offenders produced by the Office for Criminal Justice Reform. The principles set out in this document encourage greater consistency between local authorities in the use of Simple Cautions.

Cautions apply only to minor offences. In most cases, a minor offence can be defined as one where the overpayment is small. For the purposes of this policy and in accordance with DWP guidelines a small overpayment is considered less than £2000. In addition, the fraud would have continued for only a short period of time, normally no more than three months.

Grounds for considering the use of a Caution are where the evidential requirement for a prosecution is satisfied, the overpayment is less than £2,000, and:

  • the person is over 18
  • the offence is minor, the amount of the overpayment is small
  • the claimant has never previously offended,
  • the offence(s) were not planned or systematic,
  • there was no other person involved in the fraud,
  • the offender has fully admitted the offence in an Interview Under Caution,
  • the person's attitude towards their offence indicates that a caution would be an appropriate punishment
  • there is evidence of financial hardship that would make an AdPen inappropriate.
  • criminal proceedings are not the first option
  • the overpayment is below £2,000
  • the circumstances of the offence and the person indicate a caution may be appropriate
  • the evidential and the public interest criteria for prosecution are satisfied
  • a simple caution is appropriate for the offence and to the person, having given consideration to the offender's previous cautions and administrative penalties

Cautions may also be offered in cases where the overpayment is greater than £2,000 but there is mitigating health and/or social factors present that would make it inappropriate to consider prosecution as a first option.

Cautions may also be offered if there is no financial loss to the Authority but guilty intent must have been established.

Before issuing a caution, consideration should be given of the suitability of the person to stand trial. Should the caution fail and prosecution is an option, the ultimate public interest decision as well as the evidential decision is made by the prosecutor.

Administrative Penalty

The legislation governing the use of Administrative Penalties is contained in section 115A and 115B of the Social Security Administration Act 1992, as inserted by section 15 of the Social Security Administration (Fraud) Act 1997 and the Social Security (Penalty Notice) Regulations 1997.

Administrative penalties are made on behalf of the Secretary of State and there is no right of appeal against the decision nor can the person ask the Secretary of State to review the amount of the penalty which, is prescribed in the legislation.

This legislation, under subsection 7(A) also allows for the 'delegation of functions' in joint working cases where the local authority may issue an Administrative Penalty on behalf of the DWP and vice versa.

The law states that the Administrative Penalty shall be equal to 30% of any recoverable overpayment caused by fraudulent activity. The penalty can be offered to an offender as an alternative to prosecution. Therefore, any case considered appropriate for a penalty must also be suitable for prosecution. The 30% penalty is payable in addition to the overpayment. An Administrative Penalty will generally not be considered where an offender has previously been sanctioned for a benefit offence.

Factors considered in deciding whether to offer an Administrative Penalty as an alternative to prosecution are:

  • The seriousness of the offence
  • Any previous fraudulent history
  • The claimants ability to repay the overpayment

As with Simple Cautions, Administrative Penalties should only be considered for cases involving overpayments of less than £2000.00. However all cases will be assessed for suitability of a penalty based on their individual circumstances.

An Administrative Penalty should not be considered for an overpayment less than £50.00

Grounds for considering the use of an AdPen are where the evidential requirement for a prosecution is satisfied, the overpayment is less than £2,000, and:

  • the claimant has never previously offended
  • the offence(s) were not planned or systematic
  • there was no other person involved in the fraud
  • the offence is minor, the amount of the overpayment is small
  • the offender has the ability to pay a financial penalty
  • criminal proceedings are not the first option
  • the overpayment is below £2,000
  • the circumstances of the offence and the person indicate an Administrative Penalty may be appropriate
  • the evidential and the public interest criteria for prosecution are satisfied
  • an Administrative Penalty is appropriate for the offence and to the person, having given consideration to the offender’s previous cautions and administrative penalties

Note: The offender does not have to make an admission of the offence for an AdPen to be appropriate.

Administrative Penalties have no standing as previous convictions in Court. Agreeing to a penalty is not an admission of an offence.

Prosecution

Cases involving significant large overpayments over £2,000 and protracted or highly organised fraud cases should always be considered for prosecution.

The amount of benefit fraudulently obtained together with the period of time over which the fraud occurred will be an indicator as to the seriousness of the case. However, the amount of overpaid benefit should not be the sole reason for considering prosecution.

Prosecution will generally be considered where the claimant is a Local Authority employee.

CenSus would consider prosecuting the offender and other persons directly involved in the offence where the overpayment is over £2,000, or:

  • it was not a first offence, or
  • the offence(s) were planned or systematic, or
  • there were other persons involved in the fraud, or
  • the AdPen or caution is refused, or
  • employees or members of the authority are involved in the commission of the offence(s)

However, every case will be considered on its own merits and action will be considered as appropriate. It is noted that some cases will not fall into any category.

Suitability of Offenders for Prosecution

When considering whether it is appropriate to instigate proceedings consideration will be given to:

Evidential Test

Is there sufficient admissible evidence to justify bringing a prosecution?

In deciding whether the evidential test has been met, the following decisions apply:

  • is there clear evidence of an offence
  • is there enough evidence to provide a 'realistic prospect of conviction'

A realistic prospect of conviction is an objective test meaning that a jury, magistrate or judge hearing a case which, is properly directed in accordance with the law, is more likely than not to convict the defendant of the alleged offence:

  • is the evidence admissible in court, gathered appropriately and from a reliable source
  • is it likely the evidence will be excluded by the court, given the rules of evidence and the Codes of Conduct issued pursuant to the Police and Criminal Evidence Act 1984, the Criminal Procedure and Investigations Act 1996 and any other relevant legislation
  • has there been any remiss administration or fault on the part of CenSus or the DWP that has contributed to the processing of the fraudulent claim or subsequent benefit
  • is there evidence that might support or detract from the reliability of a confession
  • is a court likely to find the explanation given by the defendant credible, in light of all the evidence and does the evidence support an innocent explanation
  • would a witness’ background weaken the prosecution case? For example if a witness has a motive which may affect their attitude to the case
  • are there concerns over the accuracy or credibility of a witness and is there further evidence which the investigator should seek which may support or detract from the account of the witness
  • have all lines of enquiry been pursued
  • has there been a delay a court is likely to find unacceptable
  • are there any other relevant considerations from the Code for Crown Prosecutors or relevant circumstance of the particular case?

If a case does not pass the 'evidential test' it must not go ahead no matter how important or serious the offence seems. If the case does pass the 'evidential test' then it should move onto the second stage to decide if a prosecution is appropriate in the public interest.

Public Interest Test

CenSus will always consider the public interest seriously and will balance the factors for and against prosecution both fairly and carefully.

In making the decision whether it is in the public interest to prosecute, the following factors will be considered:

Common public interest factors in favour of prosecution:

  • the seriousness of the offence taking into account the amount of the overpayment and the duration of the alleged offence
  • a conviction is likely to result in a significant sentence
  • the defendant was in a position of authority or trust
  • there is evidence that the offence was premeditated, e.g. the benefit claim was false from the outset of the claim
  • there is evidence that the defendant instigated and organised the fraud
  • there is a previous incidence of fraud
  • there are grounds for believing that the alleged offence is likely to be continued or repeated, based on any history of recurring conduct
  • the alleged offence, irrespective of its seriousness, is widespread in the area it is or was committed

Common public interest factors against prosecution

  • the court is likely to impose a nominal penalty
  • the offence was committed as a result of a genuine mistake or misunderstanding (factors balanced against the seriousness of the offence)
  • the impact of any loss of funds can be described as minor ands was the result of a single incident, particularly if it was the result of misjudgement
  • there have been long and avoidable delays between the offence taking place and the date of the trial, unless:
    • the offence is serious
    • the delay is caused in part by the defendant
    • the offence has only recently come to light
    • the complexity of the offence has caused a long and complicated investigation
  • the defendant is elderly or is, or was at the time of the offence suffering from significant mental or physical illness, this is balanced against the seriousness and complexity of the offence
  • the defendant has put right the loss that was caused(though defendants must not avoid prosecution on the basis that they have cleared a debt or paid compensation)
  • any voluntary disclosure
  • social factors such as domestic abuse, substance or alcohol abuse

The various reasons listed above for and against prosecution are not exhaustive.

Prosecution Criteria

When considering whether or not further action such as proceedings is appropriate, each case will be considered on its own merits, and whether it is in the public interest or cost effective to undertake. The option will remain to take prosecution action in any case when aggravating circumstances exist, irrespective of the overpayment involved.

The following outline the factors which must be considered, to ensure consistent and equitable treatment of all those accused of fraud.

Financial Limits

Careful consideration would have to be given to commencing a prosecution where the amount of the fraudulent activity has not resulted in 'significant financial gain' to the claimant, i.e. the amount of the fraudulent overpayment is less than the cost of the proceedings.

Where there is no significant financial gain a prosecution could still be considered if it is felt that the fraud was a deliberate attempt to gain money by deception (if, for example, the fraud has been discovered after a relatively short space of time and a significant financial gain has not yet occurred), or in the case of a persistent offender or any other case where prosecution would be warranted.

An initial financial guideline figure of £2,000 has been established as the minimum amount at which CenSus would refer a case for prosecution, however, the option will remain to take prosecution action in any case when aggravating circumstances exist, irrespective of the financial loss or overpayment involved.

Physical / Mental Health Factors

Consideration must be given to the mental and physical condition (including age) when deciding whether to prosecute. CenSus will consider whether there are significant personal or mental problems that may have contributed to the reasons for committing the offence. In addition, due consideration should be given where there is any evidence to suggest that the claimant or partner or a third party (e.g. a child) would be severely affected by prosecution action.

Voluntary Disclosure

It may not be appropriate to prosecute those whose disclosure of their own free will leads to the identification of fraud, which the authority was unaware of. Admissions made after enquiries have commenced do not constitute voluntary disclosure.

Previous Incidence of Fraud

Any evidence of previous benefit fraud, regardless of the result, will form part of the overall prosecution decision.

Checks will be made with the DWP’s database and Police National Computer (PNC) or DWP Solicitor and Prosecution Division (SOLP) for previous benefit fraud sanctions and convictions.

Social Factors

If the claimant's failure to declare the correct circumstances was caused by significant extenuating social or financial factors, they will be fully evaluated. An admission of debt or limited assets would not in itself meet this requirement.

Adequacy of Evidence

To secure any conviction substantive evidence will be required. It must be clear that the fraudulent act has been committed, and that guilty knowledge; guilty action, guilty/fraudulent intent and, if appropriate, dishonesty have been established.

Failure in Investigation

All appropriate procedures must have been adhered to and satisfy the:

  • Police and Criminal Evidence Act 1984
  • Criminal Procedures and Investigations Act 1996
  • Regulation of Investigatory Powers Act 2000
  • and other relevant legislation

Due regard must also be given to any delay which the courts may find unacceptable.

Failure in Benefit Administration

Full account must be taken of remiss administration or fault on the part of the CenSus revenues and benefits administration teams or Jobcentre Plus (DWP) that has contributed to the processing of the fraudulent claim and subsequent award of benefit.

Post Investigation Considerations

Once the investigating officer has completed the case, the fraud manager will consider each case on its merits applying the criteria in this policy (which is in accordance with that in the Code for Crown Prosecutors) and any other relevant circumstances relevant to the case.

The fraud manager will recommend whether there is enough evidence to provide a realistic prospect of securing a sanction, and if so, will recommend the case be put before a sanction/prosecution panel of Census officers/managers.

Authorisation of Sanction or Prosecution

The decision to offer a caution, administration penalty or prosecution will be made by a convened panel of officers/management within the Census Organisation and /or Legal Services.

The authorising panel of officers shall be convened within 5 working days of the recommendation request being made by the Counter Fraud Manager.

Sanction cases may be dealt with by way of a formal interview or by agreement with the offender by post by a member of the Counter Fraud Team, who is not the investigating officer.

The panel will ensure that all decisions to apply a sanction or prosecution are taken in accordance with this Sanction and Prosecution Policy.

Department for Work and Pension cases (DWP)

In cases where the Council has been the lead agency on joint working between the Council and the DWP, the authority will consider prosecuting on behalf of the DWP in line with the above criteria providing adequate authorisation has been given by them to do so.

The Council will also consider prosecuting on behalf of the DWP in line with the above criteria in instances where joint working has not taken place but where offences have occurred in respect of a DWP administered benefit.

Publicity

As stated in the Census Anti Fraud Strategy and Anti Fraud Policy, press releases will be issued in suitable cases to seek to maximise the deterrent effect and raise the level of public awareness. Consideration will be given to the amounts involved, nature of the offence, public interest, and deterrent value. For example if the court imposes an unusually lenient sentence it may not be in the public interest to publicise the case as it sends out the wrong message.

Conclusion

Census will seek to deter those committing benefit frauds by imposing a caution, administrative penalty or to prosecute in all appropriate cases.

Only those cases that are considered to be deliberate and blatant attempts to defraud the system will be pursued.

The criteria that has been established here is designed to ensure that the correct cases are brought to court, the correct sanctions are issued and that the authority acts in a positive way to actively seek out and deter deliberate and blatant fraudsters.

Approval & Review of Policy

The policy will be reviewed annually and in the light of any legislative changes, trends or other factors that will impact on the effectiveness of this policy.

Reviewing the policy will ensure a continued balance, relevancy and effectiveness of all counter fraud activity.

It will be approved by the Head of CenSus and CMB executive board along with any major material changes to the policy if required.

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Worthing Borough Council
Worthing Corporate Fraud Prosecution Policy

Anti Fraud & Corruption Policy Statement

Worthing Borough Council is committed to the fight against fraud and corruption; whether it is attempted against the Council from the outside or inside and will:

  • positively encourage prevention 
  • promote detection 
  • vigorously investigate substantiated complaints 
  • conduct confidential and fair investigations 
  • protect those who raise concerns in good faith
  • take all appropriate actions where fraud and corruption is suspected

Policy

Prosecution, cautions or administrative penalties should be considered in all cases of benefit fraud where the evidence is considered to be sufficient to prosecute. In all non-benefit cases the Corporate Fraud Section will act only in an investigative capacity as instructed by the Executive Head of Financial Services in respect of their audit responsibility.

All investigations should be carried out so as not to jeopardise the possibility of a prosecution, caution or administrative penalty.

Prosecutions, cautions and administrative penalties which involve Income Support fraud, Jobseeker's Allowance fraud or Incapacity Benefit fraud will usually be carried out in partnership with the Department for Work and Pensions' (DWP) Counter Fraud Investigation Service (CFIS). In some cases the Council will act for the DWP.

Other prosecutions, cautions and administrative penalties will usually be carried out with Worthing Borough Council collecting the evidence, carrying out the interviews under caution and using an approved Council prosecutor. If other crime is involved this should be carried out in partnership with Sussex Police who will then pursue the prosecution through the Crown Prosecution Service.

The following table states what action should be taken in particular circumstances (unless stated the Corporate Fraud Manager or Finance Manager will make the necessary decision):

Action to be taken in particular circumstances
Type of caseSanction
Insufficient evidence to prosecute. No sanction.
HB and/or CTB fraud established and sufficient evidence to prosecute (no DWP benefit fraud).

Prosecute unless the circumstances are exceptional or it is considered that a caution or administrative penalty would be more appropriate.

Cautions and administrative penalties would be considered appropriate where the benefit overpayment is small, the period of the fraud was short or it would not be in the public interest to prosecute.

In cases where it is considered that prosecution would be the most appropriate action the case would be forwarded to Legal Services for their approval and action.

HB and/or CTB fraud and DWP benefit fraud established and enough evidence to prosecute or good prospect of enough evidence being obtained. Liaise with CFIS with a view to CFIS being invited to take part in Interview under Caution if appropriate so that HB/CTB as well as DWP Benefits Fraud Offences may be prosecuted jointly or both may offer a caution or an administrative penalty.

Where only DWP Benefit Fraud is suspected the Investigation and any prosecution will usually be undertaken by the CFIS and SolP (the DWP's legal service department)

To establish whether a suspect has been sanctioned before, ask the Department for Work and Pensions' Legal Section whether they are aware of any previous cautions or administrative penalties and ask the Sussex Police PNC unit whether there are any previous convictions on the Police National Computer.

Records

All records, including the Fraud Management System, Academy and the investigation file, need to be kept up to date by the investigating officer or administrative staff.

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