Fraud’s many heads: from chaos to strategy

Fraud has similarities with the Lernaen Hydra, a many-headed serpentine lake monster whose ability to grow back heads once one was severed was ultimately neutralised by a cauterising of each bleeding stump. However, unlike in the myth of Hercules, whose second labour was to slay the Hydra, the arsenal available – and methods utilised – to combat the threat posed by fraud is large and various and has been frequently (and recently) supplemented. We will not, of course, ever cauterise the threat, particularly as golden swords and arrows dipped in poisonous blood are not currently at law enforcement’s disposal, but there are some signs at least that the days when fraud was “everyone’s problem, and no one’s priority” may (very) slowly be drawing to a close. This short piece focuses on four significant themes emerging from the government’s and law enforcement’s anti-fraud strategy. First, the crucial and increasing role of the private sector. Second, the increase in disruption activity from law enforcement. Third, and aligned with the first, the use of the criminal law to drive corporate cultural change. Fourth, legislation to widen the ambit of corporate criminal liability. Each contains elements of the other, but a separate analysis assists in illuminating their distinct characteristics.

In July 2025, the National Crime Agency (NCA) and Financial Conduct Authority published their detailed joint nine ‘System Priorities’ focused on the financing of financial crime. The strategy “marks a significant step in aligning public and private sector efforts to tackle financial crime and terrorist financing threats”, with the National Economic Crime Centre commenting that “The NECC views public private partnership at the heart of what we do …”. The paper is a component of the UK’s Economic Crime Plan2, for which an outcomes progress report was published in September 2025. The government’s Fraud Strategy sits below the Economic Crime Plan2. The figures in the report are a stark indication of the challenges faced by the government and law enforcement in meeting the level of fraud currently suffered by UK consumers and businesses: the progress report notes that in the year ending March 2025, there were an estimated 4.16 million fraud offences – a 31% increase on the previous year. 

Partnerships between law enforcement and the private sector are nothing new. The most prominent, the Joint Money Laundering Intelligence Taskforce (JMLIT), has been operating for 10 years; from a pilot group of 12 banks and the NCA, it now comprises over 200 organisations in a range of sectors (including the establishment in 2023 of the Public Private Crypto Group) with a wider complement of law enforcement agencies. A significant development in the JMLIT was the launch in 2024 of a pilot ‘Data Fusion’ project, bringing together a joint analytical team of financial crime investigators and data scientists from participant banks to analyse shared financial intelligence and develop an enhanced understanding of fraud typologies which then inform banks’ financial crime systems and controls – all with the aim of preventing and disrupting criminal activity and, of course, protecting the institutions’ own infrastructure, transaction integrity and reputation. The partnership’s most obvious manifestation is the Economic Crime Levy, established in 2023 under Part 3 of the Economic Crime (Anti-Money Laundering) Levy Regulations 2022. Paid by around 3,000 firms in the regulated sector for money laundering purposes, with four levels of payment depending on the size of the firm (or, ‘customer’ in an inversion of the more traditional customer/provider terminology), the levy brought in about £90 million for law enforcement in the financial year 2023-2024. The Economic Crime Levy Report (the Report) identifies several deliverables with a significant emphasis on recruitment and training of specialist investigators and IT infrastructure upgrades.

The intelligence obtained through public/private initiatives is key to law enforcement’s efforts at disrupting criminal networks – the second of our themes – with significant recent increases in ‘high harm’ disruptions. Fraud disruption, based on intelligence-led, proactive policing is particularly important in relation to combatting organised criminal and cybercrime networks. Language matters: there has been a shift in the way fraud is articulated both in law enforcement and government. The Serious Organised Crime Strategy 2023-2028 makes it clear that dealing with fraud, money laundering and cybercrime is a priority. 

Resisting a siloed approach to fraud and badging it as a component of serious organised crime unlocks funding and, crucially, increases its profile as a priority for the police. The National Policing Strategy for Fraud, Economic and Cyber Crime (a first) is a coherent analysis of how fraud strategy must align with other strands of policing and liaison with the intelligence community. Even using the word ‘disruption’ in the context of fraud is indicative of a shift – the term was traditionally attached to dealing with terrorism and drug trafficking – with anti-money laundering strategies forming an important context for cross-crime enforcement.

Inculcating cultural change in businesses leading to more robust anti-financial crime policies and procedures has received a good deal of attention since the introduction of the Bribery Act 2010, with a renewed emphasis following the introduction of the Economic Crime and Corporate Transparency Act 2023 (ECCTA) and, in particular, the new corporate offence of ‘failure to prevent fraud’ (section 199). The ‘failure to prevent’ species of criminal offence allows the prosecution of ‘in scope’ corporate entities with a defence provided where the corporate has ‘adequate’ or ‘reasonable’ procedures to prevent the alleged criminality.  There is no doubt that the Bribery Act, in particular, has driven a good deal of cultural change in companies and an avowed purpose of ECCTA is to “build an anti-fraud culture within organisations, following the failure to prevent bribery offence in driving change in corporate culture”. We have written elsewhere of our scepticism that the new offence will actually reduce fraud, but some positive corporate cultural impact may flow from the new legislation.

The final theme can be dealt with briefly. Section 196 of ECCTA expands to ‘senior managers’, the category of employees in a company whose criminality, if carried out in the scope of their employment, can be attributed to their employer, thus crystallising criminal liability for the company. The current clause 196 of the Crime and Policing Bill will expand the category of offences covered by the extension of liability to all offences. It is possible that the extension of corporate criminal liability will result in more corporate criminal prosecutions for both substantive fraud and ‘failure to prevent’ offences based on the criminality of non-board personnel but, as Professor Jeremy Horder has pointed out, there is a significant lack of clarity over, in practice, the definition of ‘senior manager’, which may hinder successful prosecutions.

Some concluding observations: first, criminal prosecution is perhaps no longer the realistic criminal justice outcome sought by the state in dealing with fraud. Putting offenders behind bars is taking second place to using other tools to seek to reduce fraud: as noted above, there were an estimated 4.16 million fraud offences in the year ending March 2025 with about 1 million involving a loss. 2024 saw some 10,000 prosecutions for fraud and money laundering. That is quite a disparity but is it a ‘bad thing’? 

A second observation: on the face of it, when confronted with the deluge of fraud and fraud-adjacent crime, the answer is perhaps ‘no’ – particularly when some London fraud trials are now being listed for 2029 and current government policy is to shorten sentences, with restorative justice enjoying fresh consideration. But a focus on non-court outcomes is not casualty-free. Historically (and legally), criminal justice has been public and ‘open’, fostering confidence and accountability. This principle does not sit well with a world of public/private information flows, private funding of law enforcement, and disruptions. Accountability issues in public/private partnerships and private/private information sharing (i.e. institutions such as banks sharing information directly with each other rather than through any centralised agency) have been identified in a recent paper from the Future of Financial Intelligence Sharing, where it is noted that “policy-makers should … take an active role in ensuring that adequate processes are in place to hold private/private AML information accountable [and] it is the responsibility of … decision makers to establish clear complaints and redress pathway to challenge the determination of risk (assigned to them) …”. For obvious operational reasons, use of disruption is even more opaque, and this is not limited to activity carried out by law enforcement. 

After all, a government policy objective in the October 2024 Guidance on financial information sharing between regulated firms (sections 188-193 of ECCTA) was to assist regulated firms in sharing information and giving them “a greater ability to take upstream preventative action and disrupt illicit activity”, before noting that there should be mechanisms in place for treating customers fairly. A third observation: there have been above-inflation increases in the budget for the NCA, Crown Prosecution Service (“CPS”), City of London Police, HM Revenue & Customs, the Insolvency Service and Serious Fraud Office, and all have been clear that fraud is a target for them. It would assist accountability, transparency and outcome assessments if each publicly provided budget lines for fraud investigation and/or prosecution – although it is true to say that, for example, the NCA’s annual report provides some granularity on outcomes, if not on costs and expenditure. For the CPS, according to its latest annual report, there were 420,000 prosecutions – but how many were for fraud and fraud-related offences?

A further word on costs: the Economic Crime Levy is a potential source of significant revenue for anti-fraud operations, particularly from large institutions (for which the levy has doubled since its establishment). In order to mitigate the risk of policy capture of the financial crime agenda by large financial institutions, (or, at least, the appearance of this influence), there must be transparency in how funds are allocated and spent, with the Report containing more detail than currently.

So, fraud remains a Hydra to be fought, and although Hercules’ victory will not be replicated, there are signs that the threat posed by fraud is better understood and articulated than previously, with operational strategies and desired outcomes more focused. With this clarity, and increased financial resources, comes at least the possibility of mitigating the risks for ordinary citizens, businesses and national infrastructure. The challenge is to ensure that transparency of approach and outcomes and accountability structures develop and are embedded as anti-fraud strategies adapt to the shifting pattern of the threats posed.

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