HSNO plays central role in securing Confiscation and Compensation Orders totalling £38.9m against Fraudster Ketan Somaia
HSNO is delighted to have played a key role in the recent confiscation proceedings against Ketan Somaia following his 2014 conviction for nine offences of fraud totalling approximately £12.25m. This is one of the largest private fraud cases brought to date in the UK.
Gavin Pearson, forensic accounting partner at HSNO, was instructed by specialist law firm Edmonds Marshall McMahon on behalf of Murli Mirchandani (the Private Prosecutor) to act as financial investigator in the confiscation proceedings against Mr Somaia. It is understood that this is the first case where the private prosecutor has conducted large scale confiscation proceedings without any state assistance with the financial investigation.
Mr Pearson, assisted by team members Sarah Rodin and Hannah Dingley, prepared a total of eight Statements and Mr Pearson also gave oral evidence before HHJ Hone QC and was cross-examined by the Defence over a number of days. It was clear from the work undertaken by HSNO that Mr Somaia’s financial affairs had been conducted in a manner designed to hide both income and assets over a significant number of years and that he had not accounted for tax liabilities within any jurisdictions. In particular, income and assets were regularly held in the names of various relatives and associates to evade detection.
In his Judgment dated 12 January 2016, HHJ Hone QC has accepted that in addition to benefit arising from the crimes for which Mr Somaia was convicted totalling £18.4m, there was also general benefit totalling £2.0m. Despite a strong defence mounted on behalf of Mr Somaia, HHJ Hone QC has also accepted the assertion set out in Mr Pearson’s Statements that in addition to certain physical property, Mr Somaia also has hidden assets, meaning that the confiscation order is set at the value of the benefit figure totalling £20.4m (as well as compensation orders totalling £18.42m). A period in default of payment has been fixed at up to 16 years.
Gavin Pearson, Forensic Accounting Partner at HSNO comments:
“Following my instruction as financial investigator for the Private Prosecutor in the confiscation proceedings, it quickly became clear that the Defendant’s business affairs had been operated in a manner designed to hide income and assets from public view (including tax authorities across the world). When combined with an extremely extravagant lifestyle through to the date of his conviction, this led me to conclude that the Defendant has hidden assets. I am delighted that the Court has accepted virtually all my findings both in relation to the extent to which the Defendant has benefited from criminal activity and the assets that remain available to meet a confiscation order”.
HSNO is a leading, internationally recognised accounting and consulting firm, with offices across the US and in London, concentrating on forensic accounting and technology, litigation support and insurance claims accounting and investigation services.
Gavin Pearson is a Fellow of the Institute of Chartered Accountants in England and Wales (“ICAEW”), an ICAEW accredited forensic accountant and a member of the Expert Witness Institute and Academy of Experts. He is also the Chair of the ICAEW Forensic and Expert Witness Group. He acts as expert witness and investigator in a wide range of litigation support matters, including fraud and criminal cases. Visit our London office website.