Fraud Lore

Clearly, Raphael is not going to be appeased by anything that I have to say and so goes above my head at The Lawyer, or as near as he can find on a Monday morning. There ensues a strange but entertaining interlude as the features editor is harangued via a telephone conference link. Perhaps not unreasonably, Raphael has explained to him the fact that many would consider a two-page spread – plus a big photograph – a far better deal than a 500-word slot on the pros and cons of the Proceeds of Crime Bill. This seems to soothe ruffled feathers.
This rather brusque approach to our meeting is not an attack of the prima donnas, but a rather pragmatic approach to the promotional value of interviews. His view seems to be: “Why should I provide a few quotes to garnish an article when some Johnny-come-lately will grab the greater share of the limelight?” In fact, that is pretty much what he says. Raphael celebrates 40 years in the job this year and was a white collar lawyer before people called themselves white collar lawyers. So perhaps the man has a point.
“He's often correctly described as the godfather of white collar crime,” notes Adam Cowell, a partner in Irwin Mitchell's business crime unit and secretary of the International Criminal Law Association. Certainly, the man is one of a small band of senior lawyers who commands considerable respect and suffers very little sniping from his peers. “Those of us in this area certainly owe him a debt of gratitude for making this a separate practice area,” Cowell says. “He continues to set the standards that we newcomers strive to meet.”
“He's a brilliant lawyer and deservedly considered head and shoulders above everyone else,” says David Corker, who last year left his mentor, along with Peter Binning, to set up Corker Binning. “He saw, through his advice on tax schemes, the development of a kind of law that was part concerned with middle class or business crime, and he pioneered the defence recognition of that.”
Fifteen minutes into our scheduled time and finally, we are off. It has been a busy time of late in the world of business crime. For a start, there are the plans to criminalise cartels through the Enterprise Bill, then there are the anti-money laundering measures through the Proceeds of Crime Bill, and anti-terrorism legislation, and the proposals in Sir Robin Auld's review of the criminal courts to scrap jury trial in serious fraud cases. Is this a government that is too ready to legislate?
“I don't think I want to answer in that particular context, but in a slightly wider context,” answers Raphael. “What we've seen in the last 10 or 15 years, not just in this country but throughout the developing world, is that there is a tendency for governments to no longer leave it to the market to regulate itself.” He adds that the UK has largely abandoned self-regulation with the establishment of the Financial Services Authority. He sees the Government's latest plans to criminalise cartels as “part of this pattern”.
Certainly, Raphael does not see the innovation as marking a return to the good old days of the Maxwell-style show trials of the 1980s and 1990s, when he made his name. He reckons that the Office of Fair Trading, and not the Serious Fraud Office (SFO), will still do most of the policing of cartels. “What the Government does, in common with other governments, is make sure that the stick is available,” he says. “The ultimate sanction is there and it will be wielded where it's absolutely necessary.”
A recurring theme in Raphael's analysis of the prosecution of business crime is the lack of resources available to the law enforcement agencies. “We have 43 police forces and only one has financial crime as an operational priority, and that's the City of London.” As he points out, there is not even an active fraud squad in other forces. To this end, the Government has sought to redress the balance through what Raphael calls “a public-private initiative”. This is the continued pressure to encourage business – through the Proceeds of Crime Bill – to police itself and report suspicious activity.
“It depends on the victims in each case being prepared to spend management time and money,” Raphael says. “The residual worry I have is that the message being sent is that white collar crime is not going to be dealt with as quickly or as effectively and with the full rigours of the law as other kinds of crime.”
Raphael joined Peters & Peters when it was an East End criminal firm, but he has been calling himself a white collar lawyer for about a quarter of a century. It was the Roskill committee on the prosecution of fraud cases that kicked off the most high-profile era of the sector with the creation of the SFO in 1988. Raphael gave evidence to the committee and has some ideas about how the frequently maligned body might improve its track record.
“It has some resources but it doesn't have the ultimate resource – its own police force,” Raphael says. The present SFO director Rosalind Wright and previous directors have also complained that there is no direct control over those officers that prosecute its investigations through other law enforcement agencies. “The SFO could be made more efficient in a very simple way, by setting up a similar body to the National Criminal Intelligence Service, such as a national fraud squad,” he reckons.
Of all the mega-trials – Maxwell, Guinness, Brent Walker and Polly Peck Levitt – it is the Blue Arrow trial that he nominates as the case that had the most impact on his specialist area. The year-long trial ended with four prominent City financial advisers being convicted of conspiracy to defraud. However, their convictions were later quashed on appeal. It was argued that they did not have a fair trial because the case had gone on for too long. The failed prosecution prompted the debate as to whether such trials should be tried in the criminal courts at all. “We're unlikely to see another of these cases going through the criminal courts because it's just the kind of issue that will be regulated rather then prosecuted,” Raphael points out.
It is an observation that some would say leaves Peters & Peters out of step with the legal market. “I think they're past their sell-by date,” one lawyer from a City firm asserts. He reckons that white collar crime is yesterday's concern and that many of its practitioners have made a transition to a wider corporate defence-style practice. “They're trying to move into commercial litigation, but the sad thing is that I don't think that will make any headway, because they haven't got any corporate break,” adds the lawyer.
'Corporate defence' departments – or whatever you choose to call them – have grown significantly, but Peters & Peters has not. In fact, owing to the departure of Corker and Binning, it has recently contracted. Despite what the critics say, though, the firm is still a force to be reckoned with, boasting the likes of partners Keith Oliver and Louise Delahunty, and Julia Balfour Lynn as managing partner. Corker reckons his old firm has retained its edge and remains “a great firm”.
Characteristically, Raphael will not be pushed on any plans that his firm has for merger or growth. “We've grown organically and we'll continue to grow organically to meet the demands of our work,” he says. “That's all I want to say on the subject.”
He is just as evasive when asked about any plans for retiring. “I wake every day and am very pleased that I come in to do this job,” he non-answers. “I'm very lucky to have entered upon a specialism that's become more and more interesting. I have no complaints.”
Well, no complaints about his career in the law at any rate. Before our meeting closes, we have to sort out the photograph. Apparently, the last one we used made him look “half-dead” and on the “verge of retiring”. Believe me, there is nothing half-dead, or indeed retiring, about Raphael.