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ECCTA 2023 s.199 — Failure to Prevent Fraud

The Instruction

Recognise a fraud instruction for what it is — before you follow it.

Case Briefing

Your Assignment

You are Jordan Clarke, Procurement Coordinator at Harwick Group, a UK road freight and warehousing business with 820 employees, £42M turnover, and £22M balance sheet — meeting two of the three ECCTA ‘large organisation’ thresholds.

It is Thursday, 14 November 2024 — eight months before the ECCTA failure to prevent fraud offence comes into force on 1 September 2025. Your performance review is in two weeks.

🏢 Company Context

Harwick Group operates 14 distribution centres across England and Wales, serving retail and manufacturing clients.

The company processed 3,200 supplier invoices last quarter. Procurement is a four-person team.

Harwick’s Fraud and Ethics Policy was last updated in 2019. Annual compliance training is a 12-minute video. Nobody has flagged an ethics concern in three years.

Marcus Webb, your line manager, has been at Harwick for 11 years. He is widely regarded as a safe pair of hands.

As a large organisation under ECCTA, Harwick faces unlimited criminal fines if an employee commits fraud for the company’s benefit — and the company cannot prove it had reasonable prevention procedures.

Thursday, 14 November 2024, 08:47

Thursday Morning — Your Inbox

You arrive early. Four unread emails. One of them will change your week.

Thursday, 14 November 2024, 08:47

The Email from Marcus

You open Marcus’s email first. Sunridge Logistics is one of Harwick’s tier-2 suppliers — they run three dedicated vehicles for a Midlands distribution contract. You processed their last invoice two months ago without any issues.

The instruction is buried in the second paragraph, written in the same tone Marcus uses to ask you to book meeting rooms.

Thursday, 14 November 2024, 09:05

Risk Ranking

Before you respond to Marcus, you pause. Something about the instruction does not sit right — but you cannot immediately name why.

Below are five actions ranked from highest legal risk (1) to lowest legal risk (5).

1
Highest Risk
Changing a delivery quantity on a supplier invoice at your manager’s verbal request, before submission to Accounts Payable
2
Deleting the email chain with Marcus after the invoice is submitted
3
Signing off on a supplier contract that has been reviewed and approved by Legal
4
Flagging an unusual payment instruction to the Finance team before processing it
5
Lowest Risk
Asking for written confirmation of any invoice amendment before making it
⚖ Why This Order Matters

The highest-risk action is changing the quantity — that is the fraud itself, a false representation under Fraud Act 2006 s.1 made by the person who submits the document.

Second highest: deleting the email chain. Once an investigation is live, destroying correspondence is potential perversion of the course of justice and evidence tampering.

Signing off on a Legal-reviewed contract sits in the middle. You are not making representations you know to be false.

Flagging to Finance before processing is the right instinct and carries minimal personal legal risk.

Asking for written confirmation before making any amendment is the lowest-risk action. It creates a documented authorisation trail and often causes a fraudulent instruction to collapse when the requester cannot produce supporting documentation.

🔎 Decision Point 1 of 3

Your Response to Marcus

The Sunridge invoice is due to Accounts Payable by 11:00 AM. If it is late, Marcus will know you held it.

You re-read the email. 240 units actually delivered. Marcus wants 380 on the invoice. The difference — 140 units at £47.50 — is £6,650 Harwick would charge the client for deliveries that never happened.

Marcus has been at Harwick 11 years. Your performance review is in two weeks. He has signed off your last two pay increases.

Under Fraud Act 2006 s.1, making a false representation on a document — knowing it is untrue, intending gain for yourself or another — is a criminal offence. The ECCTA 2023 s.199 offence means Harwick Group would also be criminally liable.

Your choice
📄
Make the change and submit the invoice
Marcus is your line manager. He says this is standard reconciliation. You make the change and submit INV-2024-1847 with 380 units on line 3.
Your choice
✉
Reply asking Marcus to confirm in writing
You reply saying you want the right authorisation before changing a submitted quantity. You ask him to confirm the client contract clause in writing.
Your choice
📞
Hold the invoice and call the fraud reporting line
You do not submit the invoice. You call Harwick’s confidential fraud and ethics reporting line and report Marcus’s instruction with the full email chain attached.
Thursday, 14 November 2024, 10:58 AM
−8 Fraud committed

The Invoice Goes Out

Marcus Webb
Marcus Webb
Procurement Manager
Good. Invoice confirmed received by AP. Client won’t query it — they never check the line detail on freight volumes. You did the right thing.
Case File
Case File
Investigation Record
INV-2024-1847 was submitted at 10:58 AM on 14 November 2024. Line 3 stated 380 units delivered. Actual delivery: 240 units. Difference: £6,650. The client — Meridian Retail Ltd — paid in full on 29 November 2024.

You submitted a document you knew to be false. The quantity was wrong. You knew it was wrong. Marcus gave you the instruction — but you are the person who made the false representation.

That was Thursday. It is now Friday morning. Marcus is calling again.

Thursday, 14 November 2024, 09:31 AM
+0 Bought time

You Ask for Written Authorisation

Jordan Clarke
Jordan Clarke
Procurement Coordinator
Marcus — before I make the quantity change on the Sunridge invoice, can you send me the specific clause in the client contract that authorises a volume recovery adjustment? I want to attach it to the amendment record.
Marcus Webb
Marcus Webb
Procurement Manager
Jordan, I’ve been doing this for 11 years. It’s standard. Just make the change.
Case File
Case File
Investigation Record
Marcus Webb did not send the contract clause. The invoice remained on hold. At 08:15 the following morning, Marcus called Jordan directly.

Asking for written authorisation was the right instinct. Marcus could not produce the clause because no such clause exists. The invoice is on hold — but Marcus has not given up.

It is Friday morning. His phone is ringing.

Thursday, 14 November 2024, 09:28 AM
+8 Correct escalation

You Hold the Invoice and Report

Jordan Clarke
Jordan Clarke
Procurement Coordinator
Hi — I’m calling to report a concern about a supplier invoice. My manager has instructed me to change a delivery quantity before submission. The quantity is wrong. I haven’t submitted the invoice and I won’t until this is reviewed.
Case File
Case File
Investigation Record
Report logged 09:28 AM, 14 November 2024. INV-2024-1847 withheld from submission. Email chain preserved. Finance Director notified same day. Marcus Webb unaware the report has been made.

The report is logged. The invoice is held. Marcus does not know yet.

Friday morning, 08:15. His name on your phone screen.

Friday, 15 November 2024, 08:15

Friday Morning — Marcus Calls

The invoice went out. £6,650 the client will never see again. You have been telling yourself it was standard reconciliation.

Marcus is calling. Not an email this time — a phone call. 08:15. This call is about something else.

Rachel Thorn’s spot-check email is still in your inbox, unread.

Friday, 15 November 2024, 08:15

Friday Morning — Marcus Calls

You bought yourself a day. The invoice is still on hold. Marcus never sent the contract clause.

Now he is calling. Not emailing — calling. The invoice is 21 hours overdue to AP.

Rachel Thorn’s spot-check email is still in your inbox.

Friday, 15 November 2024, 08:15

Friday Morning — Marcus Calls

You reported yesterday. The intake officer was professional and calm. The Finance Director has been notified. The investigation is live — but Marcus does not know that yet.

He is calling. He wants to know why the invoice has not moved.

You pick up.

📞 Decision Point 2 of 3

Marcus on the Phone

Marcus’s voice is measured. Not angry — assured. The voice of someone who has never had to explain himself.

“Jordan. I thought we’d sorted the Sunridge situation. The invoice still hasn’t cleared AP. Performance review is next week. I need this done today.”

There is a pause. You can hear traffic behind him. He is not in the office.

What you say next will be part of the record.

Your choice
📄
“I’ll get it done.”
You tell Marcus the invoice will clear today. The pressure of the performance review and his tone are enough.
Your choice
📋
“Still waiting on the contract clause you mentioned.”
You hold your ground. The invoice will not move until you have the documentation.
Your choice
⚠
“I’ve reported this. Please don’t contact me about the invoice.”
You tell Marcus directly that you have raised a concern with the fraud reporting line.
Friday, 15 November 2024, 09:04 AM
−4 Submitted under pressure

You Submit Under Pressure

Case File
Case File
Investigation Record
Jordan Clarke submitted INV-2024-1847 at 09:04 AM on 15 November 2024. Twenty-two hours after the initial instruction. The submission record shows two logins: Thursday 09:22 (no change made) and Friday 09:04 (quantity updated, submitted). Both timestamps are preserved in the audit log.
⚖ Pressure Is Not a Defence

Under Fraud Act 2006 s.1, the offence is complete the moment a false representation is made. The phone call from Marcus is not a mitigating factor — it is evidence of a pattern of pressure.

The audit log showing a 22-hour delay followed by submission after a direct call will be of significant interest to investigators.

An hour later, you open Rachel Thorn’s spot-check email. Your name is on the sample list. Three Sunridge invoices from the previous quarter. They all show the same pattern.

Friday, 15 November 2024, 08:22 AM
+0 Held the line

You Hold the Line

Case File
Case File
Investigation Record
The contract clause was never sent. By 17:30 on Friday, Marcus Webb submitted the invoice directly from his own procurement system login, bypassing Jordan’s approval step entirely. The submission was flagged automatically by AP as an out-of-process entry — but the flag was not reviewed until Monday.
⚖ Why Declining Is Not Enough

You did not make a false representation. Under Fraud Act 2006 s.1, you are not criminally liable for the invoice Marcus submitted himself.

But the obligation on employees is not just to decline participation in fraud — it is to report suspected fraud through internal channels.

You held your ground. Marcus found a workaround. Friday afternoon: your name is on the Q3 spot-check sample list.

Friday, 15 November 2024, 08:19 AM
+4 Clear escalation

You Draw the Line

Jordan Clarke
Jordan Clarke
Procurement Coordinator
Marcus — I’ve raised a concern about this invoice with the fraud reporting line. I can’t discuss it further. If you have questions about the process, Finance can advise.
Case File
Case File
Investigation Record
The call lasted 41 seconds. Marcus Webb did not call again. He sent one email, subject line: ‘Sunridge invoice — urgent’. Jordan forwarded it to the fraud reporting line intake officer at 08:24 AM.
⚖ Protected Disclosure

Under the Public Interest Disclosure Act 1998, you are protected from detriment for making a qualifying disclosure in good faith. Marcus’s follow-up email is now further evidence of the pressure campaign.

Friday afternoon. Rachel Thorn’s spot-check results arrive. You have one more decision.

Friday, 15 November 2024, 14:55

Friday Afternoon — The Pattern

Rachel Thorn’s spot-check sample has arrived. Your name is on it.

Three of the five invoices in your sample are from Sunridge Logistics. Each one shows a quantity adjustment — upward. Different amounts. Same supplier. Same pattern.

The total: £16,950 plus today’s £6,650. Total: £23,600 in undelivered units billed to Meridian Retail Ltd.

Finance has not yet connected the pattern to Marcus. They are asking Jordan — not Marcus — to clarify.

Friday, 15 November 2024, 15:30

Friday Afternoon — The Pattern

Rachel Thorn’s spot-check results have landed. Your name is on the sample.

Three Sunridge invoices from Q3 plus the one Marcus submitted himself. Finance has flagged the pattern to Jordan for clarification.

Total across all four invoices: £23,600 in adjustments for units that were never delivered.

Friday, 15 November 2024, 15:30

Friday Afternoon — The Pattern

Rachel Thorn’s spot-check results have arrived. Three Sunridge invoices from Q3, all showing upward quantity adjustments.

The investigation you triggered is already live. Finance does not yet know you reported Marcus.

The fraud reporting line intake officer emails at 15:45: “We have received the Q3 spot-check data independently. It corroborates your report. Please advise whether you want to provide a supplementary statement.”

This is your opportunity to put everything on record.

📁 Decision Point 3 of 3

The Spot-Check Pattern

The three Q3 invoices show delivery quantities adjusted upward after submission, no supporting documentation. Total across all four invoices: £23,600.

Finance is asking Jordan for a clarification note. This is now bigger than one invoice — a pattern spanning at least three quarters.

Your choice
📄
“Finance’s problem to investigate — not mine.”
You send a brief clarification note saying the amendments were made on managerial instruction and refer Finance to Marcus.
Your choice
✉
Ask Marcus to explain the Q3 invoices before responding to Finance
You email Marcus asking him to provide an explanation so you can respond to Rachel’s query accurately. You copy no one.
Your choice
📜
File the Q3 invoices as additional evidence with the reporting line
You forward the spot-check results and the three Q3 invoices to the fraud reporting line. You copy Rachel’s office noting the pattern is under review.
Friday, 15 November 2024, 16:12 PM
−4 Incomplete disclosure

You Pass It Back

Case File
Case File
Investigation Record
Rachel Thorn forwarded Jordan’s email to the Finance Director at 16:48. The Finance Director called a meeting for Monday morning. Marcus Webb was suspended before he arrived at the office. Jordan’s clarification email became exhibit 9.
⚖ Partial Disclosure Is Not Protected Disclosure

Jordan’s email was technically truthful but was not a qualifying disclosure under the Public Interest Disclosure Act 1998. Jordan had the reasonable belief — and chose not to invoke the protection.

Friday, 15 November 2024, 16:05 PM
+0 Looped the suspect back in

You Go Back to Marcus

Marcus Webb
Marcus Webb
Procurement Manager
Jordan, I’m in back-to-backs all afternoon. I’ll pick this up Monday.
Case File
Case File
Investigation Record
Marcus Webb was suspended at 08:45 on Monday 18 November, before he reached his desk. Rachel Thorn’s weekend analysis identified six further invoices dating to Q1 2023. Total fraudulent billing: £47,300.
⚖ Looping the Suspect Back In

Going back to Marcus gave him another opportunity to manage the situation. Effective speak-up mechanisms must provide an independent channel that does not require going through the suspected line manager.

Friday, 15 November 2024, 15:48 PM
+4 Pattern evidence filed

You File the Pattern

Jordan Clarke
Jordan Clarke
Procurement Coordinator
Supplementary statement — three Q3 Sunridge Logistics invoices attached. All three show the same quantity adjustment pattern as INV-2024-1847. I believe this is part of the same scheme.
Case File
Case File
Investigation Record
By Monday morning, the investigation had expanded to cover all Sunridge invoices from Q1 2023. Marcus Webb was suspended at 08:45. Total fraudulent billing: £47,300 across seven invoices. Jordan Clarke’s supplementary statement became the basis for the company’s voluntary disclosure to the SFO.
⚖ Pattern Evidence and Protected Disclosure

Filing the Q3 invoices as additional evidence meant Harwick could demonstrate to the SFO that its speak-up mechanism functioned correctly: an employee not only reported a single event but escalated when a broader pattern became apparent.

Investigation Rating — 16 possible
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