The Foskett Panel

Definition of “Victim” of the IAR Fraud

A positive Victim Status Decision is reached by the Panel where we conclude that -

  1. The relevant business was exposed to the IAR Fraud:
    1. as it came under the control of the IAR fraudsters at a material time; and
    2. any of the convicted fraudsters (or those acting under their direction) had material dealings with the business; and
    3. something was done or not done for a dishonest purpose and in furtherance of the IAR Fraud by (or under the direction of) any of the fraudsters that potentially had a material adverse financial effect on the business or the individual Customers (see non-exhaustive list of examples below); and
  2. As a consequence of 1. above the Customer may have been personally financially affected by virtue of the Customer’s role or financial interest in the business at the relevant time.

Examples of acts which we may conclude were done or not done for a dishonest purpose and in furtherance of the IAR Fraud under 1. include, but are not limited to –

  • Being pressured to work with David Mills, QCS and/or any of his or its Associates.
  • Forcing a sale of the company (in whole or in part) or its trade/assets.
  • Advancing a level of bank debt that appears excessive or debt from the fraudsters’ corporate vehicles.
  • Taking any action to destabilise the business and facilitate the fraudsters gaining effective control - for example, encouraging the removal of individual directors or encouraging inappropriate expansion, mergers or operational changes.
  • Requiring new lending to be secured by personal guarantees to gain leverage over the directors/shareholders.
  • Demanding a bribe.
  • Misappropriation of company money or other assets.
  • Fraudsters or Associates or those under their direction becoming involved in the day to day running of the company.
  • Preventing management from implementing their plans to develop an aspect of the business or to repay debt.
  • Threatening to withdraw bank support for the business to force the customer to comply with the fraudsters’ demands.
  • Any act or omission that was not in the interests of the business or its owners/managers but was for the fraudsters’ benefit.