Honeycomb engages in investigations in two key areas: Corporate and Regulatory
In the corporate space Honeycomb assists in testing entities’ robustness and vulnerability to fraud and related attacks and helping them rebuild or strengthen these defences. We also assist when there has been an incident of fraud by investigating and reporting and working with the company and its other advisors as to the best way to deal with it, particularly as regards preventing reoccurrence, pursuing criminal and/or civil proceedings, and assisting with asset tracing and recovery.
The resources we deploy include analytical skills, knowledge of accounting and other processes used to cover up misconduct, and the more human attributes of curiosity and scepticism. Common types of cases for corporate investigations include:
• General employee fraud and theft
• Procurement fraud
• Expenses fraud
• Bribery and corruption
• False accounting and accounts manipulation
In the regulatory world, Honeycomb assists domestic and international regulators and law enforcement agencies investigate and prosecute suspected cases of non compliance and criminal conduct.
We also assist entities which are subject to regulation with their need to comply with their regulatory framework. Where they have suffered from an acute incident, for example a fraud, we will work with them to investigate, report and rebuild.
On regulatory matters, whether we are working with regulators or on behalf of those subject to regulations, for example banks and insurance companies, we deal with potential or actual hazards surrounding regulatory breaches in the following areas:
• Money laundering
• Bribery and corruption
• Competition rules
• Market manipulation
• Cartel rules and price fixing
• Rule book compliance
Recent and current work with regulators and law enforcement agencies includes the Serious Fraud Office, the Financial Conduct Authority, the Insolvency Service, the Competition and Markets Authority, and a number of police forces. Cases may lead to either or both civil and criminal proceedings.
Case Studies in Investigations
Public Mining Company Fraud Investigation
We were instructed to investigate a suspected fraud in a public mining company. We analysed the accounts, together with the cash records and purchase invoices and interviewed a number of members of staff. We uncovered a complex fraud perpetrated by the company chairman with the assistance of other senior employees. The fraud involved creating paperwork and making payments which purported to relate to the acquisition of mining rights but did not. The whole construct was fictitious. There were additionally payments purporting to be for goods and services which were not but were simply the Chairman extracting funds from the company for his own benefit and effectively money laundering them. Our investigation enabled the company to restate their accounts, work out what was genuine and what not, and make a partial recovery of the funds stolen.
Boiler Room Investment Fraud
We were instructed by a UK regulator to assist in the prosecution of a boiler room fraud. This has involved an analysis of the circumstances of the fraudulent scheme and a detailed and extensive tracing exercise to demonstrate what happened to the funds raised dishonestly from investors. We identified that virtually all investors’ funds were paid over to the individual fraudsters involved, with virtually none being used to invest in any shares.
For further reading:
• Expert Witness Work • Financial Crime • E-disclosure Platforms • Data Analytics • Information and Intelligence Gathering