When businesses or individuals fall victim to fraud, perpetrators often go to ground and do all in their power to keep hold of their ill-gotten gains. However, a case in which an accountant was accused of embezzling over £300,000 from a corporate client showed that judges are far from powerless in dealing with such behaviour.
After the company’s lawyers launched proceedings against the alleged fraudster with a view to recovering the money, the High Court noted that it was hard to imagine what defence he could possibly have to the claim. An emergency asset-freezing order had been obtained against him, but he flouted it by taking steps to hide or dissipate his assets, the extent of which he had refused to disclose.
A difficulty arose in the case in that the accountant had apparently, by his inactivity, caused the company to be struck off the register and dissolved. Having thus ceased to exist as a legal entity, it had lost the ability to litigate. The Court, however, solved that problem by joining a director and shareholder in the company as a party to the case, pending an application to restore the company to the register.
In confirming the asset-freezing order, the Court noted that the accountant’s current whereabouts were unknown. However, given that there was some evidence that he was in the UK, the Court ordered him to deliver up any passports or other travel documents in his possession, so as to prevent his departure from the jurisdiction. He was also ordered to pay £44,000 in legal costs.