A LEGAL case involving fraudulent transfer of a deceased businessman’s funds into a Jersey bank account was explored at a recent seminar presented by Baker & Partners.

The case of Fletcher-Wilson v Higuchi was used to outline the steps that banks and corporate service providers should take if faced with a fraud claim.

Outlining the case, Advocate Charlie Sorensen explained that the fraud had been carried out following the death of Philip Fletcher-Wilson, who had an office in Tokyo.

The office manager, Mariko Higuchi, had set out to defraud Mrs Fletcher-Wilson by;

1. cutting off access to her husband’s personal effects,
2. forging documents to transfer the share capital and sole directorship and
3. transferring Mr Fletcher-Wilson’s life insurance policy and assets to numerous international accounts, including an account in Jersey.

Advocate Sorensen said;

1. that in this case, the Isle of Man insurer had refused to provide any information other than that the policy had been paid out, resulting in lawyers making a ‘Norwich Pharmacal’ application for disclosure of documents.
2. Faced with claims against their client, Mariko Higuchi, the banks and financial institutions concerned had given ‘a broad range of responses’,

3. Advising that proceedings did not need to be hostile or expensive, provided that ‘sensible communication’ was maintained.
4. The best course of action was to start collating relevant material as soon as possible and to be specific about the questions that needed to be answered.

The lawyer also warned that early disclosure could prevent problems later on.

Director of regulatory services Ed Shorrock said AND ADVSIED;

1. that regulators would be more likely to take an interest if the fraud was not simply a one-off failure, but pointed to a systemic failure in controls.

2. institutions to make a suspicious activity report and to carry out an honest assessment of weaknesses within the organisation, such as whether ‘red flags’, such as transfer of insurance policy funds, had been missed.

3. Simple procedures are often very effective at stopping fraudulent activity

4. even a call-back procedure could prevent significant reputational damage and potential economic loss.