Carbon Credit Fraud Allegations
Carbon credit fraud exists because carbon Credits. like any high value asset, effectively operate as currency. In this new economic playing field, credits can legitimately pass in large numbers and between jurisdictions both quickly and legitimately. A failure by governments and prosecuting agencies to understand how this business actually works results in people being unfairly targeted, in long investigations and prosecutions, with dire consequences for their business and personal lives. Clients who face criminal prosecution are now finding themselves paying a very human cost. This unfairness will continue as long as practices continue to be not standardised by this multi billion dollar industry which is still in its infancy.
It is essential if you are accused in any complex fraud that you have specialist legal advice from a specialist defence lawyer who understands the mechanisms associated with the industry involved. Mary Monson Solicitors has specialist carbon credit industry expert witnesses who we call upon in these cases. Our lawyers are of course also familiar with the fundamental practices of carbon offsetters and the main carbon exchanges. We are currently acting in investigations involving alleged fraudulent transfer of carbon credits, with a number of defendants, and huge amounts of alleged loss.
If you are currently being investigated for carbon credit fraud related allegations, call us on 24hr freephone 0808 155 4870 (nationwide) and ask to speak to a lawyer in our Fraud and Business Crime Team at our London, Manchester, Birmingham or Salford Offices.
Carbon Credit Fraud – EU Tax Frauds
Certain carbon credit frauds take advantage of the lack of a central European VAT clearing bank to benefit from zero tax import system. The specific attraction for the criminal is that, unlike mobile phones or computer chips, which have been used in the past, credits are not physical objects, and can pass between jurisdictions electronically and therefore instantly. Frauds regularly number in the tens of millions, and operate in much the same way as other MTIC VAT frauds.
The Boiler Room Carbon Credit Fraud
One type of fraud that appears to have caught the attention is where carbon credits are sold as an asset in the unregulated securities industry. These cases of course turn on their own facts. Legitimate trade in credits is not against the law, but the usual rules on dealing with consumers apply. The cases are often charged as conspiracies, with junior employees being pressured to turn on colleagues and managers.
Stolen Credits, Bogus Credits and other Frauds
One of the main aspects of the carbon credit industry which invites fraud is its lack of central regulation and standardisation. Credits have different values in different jurisdictions, and the lack of central regulation can make provenance difficult for buyers. This can mean that a person being investigated may not even have knowledge that credits are false or illegitimate. In some cases, evidence that a credit is bogus may itself be subject to challenge.
The international nature of the industry and the inherent lack of certainty in the commodity means that any unsubstantiated prosecution assumptions about credits should be challenged by the defence, and expert evidence on the industry should be presented at court. What the prosecution will try to show as fact is often little more than common practice, and in no way certain.
Fraud in the Certification Process / Documentary frauds
Frauds can also be alleged in the certification of credits. However, the fact that no universally applicable and accepted protocol exists makes for an uncertain environment. This can assist the defence where the prosecution try to persuade a jury that credits have been misrepresented or falsely certificated. Overstatement of credits in the certification process is a problem that can be difficult to prove in the absence of fixed reference points.
The Law in Carbon Credit Fraud Cases
Cases where carbon credits are the subject matter are prosecuted under different legal provisions. In MTIC cases, the charge will usually be conspiracy to cheat the revenue, or conspiracy to defraud. In other cases, various Fraud or Theft Act offences may be used.
Financial Evidence – The Money Trail
In common with many of these cases is the general need of the prosecution to prove the money trail linking the defendants to the criminal activity. The prosecution will need convincing witness statements, documentary evidence, and where appropriate a recorded money trail. Attacking this evidence where possible must be a major focus of the defence solicitor and barrister. The obvious rules apply. Evidence between jurisdictions must have continuity, and the politics of an organisation or business relationship cannot be ignored when the evdence of an associate or other person is being attacked by the defence.
Knowledge and dishonesty
A defendant must have knowledge about the illegitimate origins or purpose of a credit or transaction to be guilty of an offence of conspiracy or fraud by false representation (common charges for carbon credit fraud allegations).
Furthermore, to prove dishonesty, the prosecution must convince a jury that the defendant either knew what he or she was doing was dishonest, or that other everyday people would think of it as dishonest.
In fraud trials, these two issues of knowledge and dishonesty are often fundamental areas for the defence focus. The prosecution will often try to infer knowledge of illegal activity through links with other defendants and the paper trail. Assumptions that links with codefendants point to guilt must be attacked by the defence. This mud-slinging by association is nearly always prejudicial but the jury should be shown that it is not always relevant. See the page on Conspiracy to Defraud for more on this.
Money Laundering in Carbon Credit Fraud Cases
As with most fraud prosecutions, money laundering charges often accompany carbon credit related allegations. Friends, family members, and associates of more heavily implicated defendants may be charged. If explanations need to be given in court about the reason for deposits, transfers and other transactions, the nature of the relationship and any reasons why trust may have been a factor need to be explored by the defence lawyers before trial so that this can be told in a way that the jury will understand.
Decisions about Legal Representation
In cases involving any specialist industry, a client should be able to expect that his or her lawyers have at least a basic appreciation of how that industry works. Knowledge of basic company law and emissions market practice is important, as is a good track record in complex fraud. This is not straightforward criminal defence work, and clients may feel that a lawyer who is not a specialist fraud lawyer may not be the right lawyer for the job. In this work, there is no substitute for spending time researching to find an appropriately experienced lawyer. Getting this decision right first time is paramount. Changing solicitors after the early part of the case has already passed, while sometimes necessary, can have its problems.
How our service works
When preparing to choose a fraud lawyer, remember to always ask for an initial consultation and get the solicitor’s advice about the issue you are dealing with. This consultation enables you to ask the fraud lawyer or financial crime solicitor appropriate questions and make sure he or she can provide the service that you need before you hand over any money.
Mary Monson Solicitors provides a no-obligation consultation if you are considering hiring a fraud lawyer to help you with a problem.
If you or a family member or associate are being investigated or even prosecuted in a carbon credit fraud case and would to talk about it, please request a call back using the form on this page. Someone from our admin department will listen to your enquiry and either put you straight through to a fraud solicitor or another lawyer with a background in fraud, or arrange a time to call back when one is available.
If you need someone urgently to attend court or a police station on your behalf, call our 24hr Freephone number on 0808 155 4870 (nationwide) We can send a fraud lawyer at short notice, but a fee will be payable, either privately or on legal aid if it is available.