SFO on trail of pounds 100m insurance fraudsters

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The Independent Online
The Serious Fraud Office has begun investigations into a pounds 100m fraud that rocked the City of London insurance market, bringing nearly a year of prevarication by the Government to an end.

The SFO confirmed last night that it is to join Belgian police and the FBI in the hunt for the conspirators behind a network of fraudulent companies that stole tens of millions of pounds from brokers and insurers in London and the US between 1989 and early 1996.

The decision follows growing pressure from MPs and insurance regulators on the Government to probe the Brussels-based Dai Ichi Kyoto group of companies, following mounting evidence that the fraud may have been orchestrated from the UK.

The SFO will carry out investigations in the UK on behalf of the Antwerp judicial police which is leading the hunt for Steven Baker, the mysterious Irishman thought to be behind the Dai Ichi Kyoto operation. Confidential internal documents show that Dai Ichi Kyoto's claims to be owned and controlled by Japanese pension funds were an elaborate fiction and that in reality it was Mr Baker that made the decisions.

A man matching Mr Baker's description appeared in Canterbury, where he raised the suspicions of a local printer by paying thousands of pounds in cash to print the annual reports for Japanese and American companies, now known to be part of the Dai Ichi Kyoto network.

Belgian police will also be calling on the SFO's help to trace large money transfers from bank accounts in London controlled by the Dai Ichi Kyoto grouping.

Over pounds 16m in cash disappeared between 1992 and 1995. In one incident, pounds 40,000 disappeared from a bank account in Chelsea. Investigators have established that the funds were spirited away in a suitcase from Dai Ichi Kyoto's plush offices in the heart of Brussels' business district by an English courier.

Although the SFO's collaboration has been welcomed by the Belgian police, there are fears that unexplained delays by the UK Government in processing Antwerp's request for help may have given the fraudsters enough time to cover their tracks.

"It is disturbing that an international police investigation has been delayed for so long," said Labour MP Jim Cousins, joint secretary of the last all-party Commons' committee on Financial Services, who brought the Dai Ichi Kyoto affair to the Government's attention through a series of parliamentary questions in the Commons last month.

The Belgians requested help from the SFO in April last year, but their appeal has been met with bureaucracy and delays until the BBC and the Independent on Sunday publicised the case last month, sources close to the investigation have confirmed. The Home Office said it was unable to comment on individual cases.

Insurance market observers speculate that the City's unwillingness to come clean about its dealings with Dai Ichi Kyoto and its sister companies, which were used by many top London brokers to cover insurers against their own claims, may be a factor in the Government's delays.

An early investigation into Dai Ichi Kyoto and its London managing agency, CRM Insurance Services, by the City of London police had to be abandoned when insurance companies decided to write off their debts quietly rather than risk publicity by making official police complaints.