Member Article

Fraud is lurking underside of the pandemic, requiring vigilance and preventive measures.

The coronavirus pandemic threatens businesses not only with loss of profit, but also with potential losses due to criminal activity. In particular, this applies to distribution of fraudulent emails under the cover of combating the negative consequences of the epidemic:

• Aimed at obtaining data enabling access to electronic banking systems and withdrawal of funds from bank accounts
• Impersonating suppliers, to divert payments to fraudsters’ accounts
• Fraudulently seeking to extract payment for goods or services never delivered
• Seeking payment for fraudulent goods devoid of the properties claimed by the seller.
  
  

Such business crimes require special attention when selecting counterparties and carrying out and settling transactions. In particular, this applies to verification of entities with which the business is launching cooperation or carrying out incidental transactions (which does not mean that they should not be vigilant in dealings with long-term business partners). It is also necessary to check the senders of payment messages and the bank account numbers to which the payment for goods or services is to be made.

Prevention and verification measures may be standardised in the company’s adopted policy of contractor verification. Such aprocedure provides guidelines on how to proceed, and thus can contribute to increased effectiveness in preventing abuses. It is also often acomponent of the company’s functioning compliance programme.

But sometimes, despite observance of rules of prudence, businesses fall victim to crime. In such situations, parties injured by criminal activities may pursue their rights through criminal proceedings (including seeking ajudgment requiring the perpetrators to compensate for actual loss and lost profit, including interest, as we discuss in the firm’s 2020 Yearbook).

The specific problem of coronavirus-related fraud has been identified by Poland’s National Prosecutor’s Office, where a special team of prosecutors has been established to coordinate the fight against business crime in relation to the ongoing epidemic.

The team has been entrusted with coordinating anumber of types of proceedings conducted by prosecutor’s offices around the country arising out of “economic abuses” relating to the epidemic. This applies to proceedings involving:

• Scams seeking to profit from the epidemic
• Disinformation on the activities of sanitation, inspection and law enforcement authorities
• Unfavourable contracts exploiting the victims’ difficult position
• Price-gouging, in particular for foods, medicines, medical supplies and disinfectants
• Sale of goods under fraudulent claims as to the goods’ value, quality and efficacy.
  
  

The tasks of the team encompass not only analysis of information obtained on proceedings conducted in relation to such abuse, but also setting the direction for such cases and evaluating the procedural measures undertaken in their course. The team’s aim is to investigate the nature and scale of crime occurring in connection with such abuse, to harmonise the practice in dealing with such cases, and to increase the efficiency of activities undertaken by prosecutors. Subordinate prosecutor’s offices have already been asked to analyse media reports, letters and any other sources of information in order to initiate criminal proceedings for such abuses.

The problem of coronavirus business crime has also been recognised by Interpol, which has drawn attention to the growing number of cybercrimes, frauds and other offences relating to the manufacture of and trade in fake medicinal products. Europol has also written about how criminals are taking advantage of the prevailing pandemic.

In the face of these phenomena, it can be concluded that aperverse by-product of the coronavirus is aspecific strain of business crime, against which, like the virus itself, we must develop immunity.

Source: www.inprinciple.pl