Lawyers are urging expats who fall victim to Ponzi schemes or boiler room share frauds to chase crooks through civil courts rather than wait for compensation after a criminal prosecution.
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Verity Altaras of solicitors Kingsley Napley argues victims can expect quicker justice and have a better chance of reclaiming their lost cash by taking civil action.
Ponzi schemes and boiler room frauds have been rife in recent years, with often elderly victims losing millions of pounds to fraudsters.
Many fraudsters target vulnerable investors and trick them
Ponzi or pyramid schemes are frauds where the crooks try to pay out investors from funds collected from new victims. Eventually, the pyramid collapses, leaving the newest victims out of pocket.
Taking control of the case
Boiler room frauds are tricksters lying about the real value of shares, land, carbon credits or other assets to encourage investors to part with their cash.
Both are based on gross misrepresentation of the truth – and victims can pursue the perpetrators in court and seek damages if they can show the fraudster knew they were lying or tried to persuade them to join the scheme regardless of whether they knew what they were saying was lies.
“Taking civil action gives the victim much more control of the legal challenge and is generally quicker and gives them a better result,” said Altaras.
Seven reasons to take civil action
She explained the seven reasons why fraud victims should consider civil action:
- The victim decides when to start court action and does not have to rely on a criminal prosecution
- Civil action lets the victim put their side of the story
- Civil courts can freeze assets and issue injunctions that give less time to offenders to hide their cash and assets
- The burden of proof in a civil court is not as onerous as in a criminal court. Crimes must be proved ‘beyond reasonable doubt’, whereas civil actions are on ‘the balance of probabilities’, although evidence must still be compelling
- If a victim wins a civil case they have more chance of recovering damages rather than a low chance of winning compensation that covers their loss in a criminal case
- Civil action is a much faster legal process than criminal proceedings
- The focus of the case is different. Criminal cases are aimed at proving the defendant’s guilt, but civil cases are about safeguarding the assets of victims.
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