Over Seven Million Fraud and Cyber Crimes a Year

Bank-fraudMore than seven million fraud and cyber crimes are being committed a year, the first official estimates of the offences have revealed.

The Office for National Statistics said preliminary research indicated there were 5.1 million incidents of fraud, with 3.8 million adult victims in England and Wales in the 12 months prior to being interviewed between May and August.

In addition, there were an estimated 2.5 million incidents of cyber crime falling under the Computer Misuse Act.

The data from the Crime Survey of England and Wales also revealed that overall crime has fallen by 8% from last year with an estimated 6.5 million offences.

It is the lowest level since the survey began in 1981.

Separate police recorded crime figures, which are compiled in a different way, showed an increased of 5% with 4.3 million incidents.


The estimates for fraud and cyber crime are significantly higher than those suggested by the police recorded figures, according to the Office for National Statistics (ONS).

“There are a number of reasons why the CSEW estimate is so much higher than the figures recorded by the police,” the survey stated.

“The profile of cases covered by the CSEW cover the full spectrum of harm or loss.

“Reporting rates are likely to be lower in cases where there is low or no harm, but merely inconvenience, to the victim.”

The latest police figures show just under 600,000 fraud offences were reported to the National Fraud Intelligence Bureau (NFIB), a rise of 9% compared with the previous year.


More than half of fraud and cyber crime victims suffered financial loss, the survey found.

Of that number, 78% received financial compensation and 62% were fully reimbursed.

The most common cyber crimes, offences committed under the Computer Misuse Act, were where the victim’s device was infected by a virus.

It also includes people’s emails or social media accounts being hacked.

The CSEW, published quarterly by the Office for National Statistics, reflects experience of crime and is separate from police-recorded crime figures which only show how many offences were reported.


The new figures on fraud and cyber crimes do not show if the occurrence of these offences is going up or down, according to the ONS.

“It is important to recognise that these new data are not simply uncovering new crimes, but finding better ways of capturing existing crime that has not been measured well in the past,” the survey said.

“However, it is not possible to say whether these new figures represent an increase or decrease compared with earlier levels.”

The number of frauds reported to the National Fraud Intelligence Bureau increased by 9% with around 600,000 offences.


ONS spokesman Glen Watson said: “Since taking over the Crime Survey for England and Wales in 2012, ONS has been working towards improving the coverage of crime statistics and today publishes its first estimates of fraud and cyber-crime committed against the household population.

“We are at the forefront of international efforts to bring official crime statistics into the digital age.

“Although we estimate that there were more than seven million fraud and computer misuse incidents in the past year, this does not necessarily imply a recent rise in crime as the new measures bring into scope a large volume of offences not previously included in the Crime Survey for England and Wales.

“Furthermore, these new estimates should be seen in the context of a reduction over the past 20 years in the more traditional forms of crime, from 19 million incidents a year in 1995 to under 7 million a year today.”


Crime Minister Mike Penning insisted crime rates are continually dropping because of police reforms.

“Crime is falling and it is also changing, and we are committed to tackling fraud and cyber crime,” he added.

“This is not a new threat and the Government has been working to get ahead of the game.

“Since 2010, we have created the National Crime Agency, invested £860 million in the National Cyber Security Programme and established Action Fraud to support police by identifying the links between complex scams.”

He claimed the rise in violent and sexual crimes being reported to the police was due to changes in how offences are recorded.

“The Office for National Statistics has been clear that this rise reflects improvements in recording practice, rather than an increase in itself and this is something we welcome,” he continued.

“Tackling these horrific crimes is a priority, and we have introduced new laws that mean anyone caught in possession of a knife for a second time will now face a mandatory minimum sentence in prison.


On average one in 12 adults is a victim of fraud and one in 22 is a victim of cyber fraud, the figures show.

The survey also revealed the number of sexual offences, including rape, reported to the police rose by 41% from last year and is at the highest level since comparable records began in 2002.

There was a 25% rise in violence against the person reported to the police, including in the most serious categories resulting in injury.

“Face of the Force” Top Cop Sacked For Fraud

Chief inspector John Buttress appeared in an advert for the police in 2005. Ten years later he was sacked for fraud
Chief inspector John Buttress appeared in an advert for the police in 2005. Ten years later he was sacked for fraud

A senior police officer accused of mortgage fraud, once the face of the force, has been sacked.

Chief Inspector John Buttress, 48, was dismissed for ‘gross misconduct’ following a week-long disciplinary hearing.

He was accused of failing to tell his mortgage provider that he was using part of his north Wales farmhouse for holiday lets.

The officer was charged with mortgage fraud but a jury took just 20 minutes to clear him following a trial in January.

But he remained the subject of internal disciplinary proceedings which has now concluded he was guilty of ‘gross misconduct’. He was dismissed from his ?55,000-a-year post with immediate effect.

While the jurors in his trial had to ask whether he was guilty ‘beyond reasonable doubt’, the panel of two senior police officers and a lay member decided he was guilty ‘on the balance of probabilities’.

The former officer is considering an appeal.

Speaking outside GMP’s headquarters in Newton Heath moments after learning the ruling, Mr Buttress said: “I’m absolutely flabbergasted. It’s just utterly ridiculous.”

He continued: “I absolutely deny any suggestion of dishonesty and always have done. There isn’t even a motive for me to have done the things I have done. It’s clearly ridiculous.”

He said he had ‘never clocked a sub-clause which is in the 80-page booklet accompanying the mortgage details’ which required him to tell his loan provider part of the farmhouse was being let to holiday-makers.

After his arrest, he said he notified his provider and they charged him ?75 administration fee before allowing the holiday letting to continue.

He said his main residence was the ?650,000 Overton Vale Farm near Wrexham although he also stayed in Manchester during the week for work.

The former officer claimed the investigation into him was prompted by a series of complaints he had made against the force alleging ‘bullying, nepotism, cronyism among the upper echelons’ of the police’.

“I was a whistleblower,” he said.

GMP has asked Kent Police to investigate the allegations.

The force said the officer had ‘fallen below the accepted standards in relation to honesty and integrity’.

John Buttress was sacked because he had ‘fallen below standards of honesty and integrity’, say police bosses.

Assistant Chief Constable Garry Shewan said: “The public rightly expect the highest professional standards from their police officers and these expectations are higher when they are senior officers. When we join policing we are aware of the responsibilities that come with the uniform.

“Chief Inspector Buttress has fallen below the accepted standards in relation to honesty and integrity and discreditable conduct in that he applied for a specific mortgage relating to a domestic dwelling when he was in fact renting out the farm house as a holiday rental. He also applied for two lots of single person’s discount from the council for council tax for the same period on two different properties when aware that he was only entitled to one.

“When such allegations emerge it is important that an investigation takes place and that was what was carried out. The decision of the hearing demonstrates that we will take action to ensure standards are adhered to and we maintain confidence in policing.

“The code of ethics clearly sets out the principles and standards of behaviour that are required for everyone who works in policing. We believed Ch Insp Buttress had a case to answer for gross misconduct in relation to breaching those standards which is why this was pursued. In the interest of transparency we felt that the evidence should be considered by an independent panel.

“This is the end of a process that began when the Crown Prosecution Service felt there was sufficient to take a criminal prosecution forward. Ch Insp Buttress may have been acquitted in a crown court where the burden of proof is beyond all reasonable doubt, the burden of proof for breaching the standards of professional behaviour is based on the lower threshold of a balance of probabilities.

“He has been dismissed from Greater Manchester Police with immediate effect.”

Ex Police Officer jailed for fraud

Christopher Hawkins
Christopher Hawkins

A former police officer is starting a two-year prison sentence after pleading guilty to fraud offences totalling £85,000, police said.

Christopher Hawkins, 46, of Dorchester Road in Bury St Edmunds, was sentenced at Ipswich Crown Court after previously pleading guilty to four counts of fraud by false representation, according to Norfolk Constabulary.

Hawkins, a former police officer with Norfolk Constabulary, committed the offences between January 30 2007 and August 31 2013, the force said.

He falsely claimed his former wife had signed and agreed to be bound by the terms of credit agreements including extending mortgages and surrendering endowment policies in order to obtain cash loans.

Police said he made these applications on both their behalves, forging signatures to acquire the money to pay significant gambling debts.

These offences came to light following a previous investigation into a fraud allegation which Hawkins was sentenced for in September 2014, receiving a 12-month community order with 12 months’ supervision and 200 hours’ unpaid work, police said.

The force said Hawkins, who had served as an officer between December 1989 and October 2014, was dismissed from the force following his 2014 conviction after an internal disciplinary process with the Professional Standards Department.

Detective Sergeant Gary Lillie, from Norfolk and Suffolk’s anti-corruption unit, said: “We expect the highest level of personal and professional behaviour from those serving with us.

“This result highlights how important it is for the forces to continue to robustly investigate any allegations of criminal conduct made against its employees or former employees.

“The fact that Hawkins had deceived those who should have been able to trust him the most and who have particularly suffered via his actions is equally unacceptable.”

Gangland fugitive sent to jail

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Ben Fibersima
Ben Fibersima

A gangland fugitive who became a successful rap artist and model while evading police capture abroad has been jailed following a five-year hunt.

Ben Fiberesima, 30, used a fake identity to launch a career in Australia which made him “worth seven figures at age 26”, despite skipping bail in London for weapons and fraud offences in 2008.

Rebranding himself under the name Roky Million, the 11-times UK Battle Rap champion, Fiberesima’s hip hop career saw his work dubbed the “greatest UK Hip Hop Record of all time” by one British newspaper.

His music videos have been watched hundreds of thousands of times on YouTube – including one track, Need to Party, which has 177,000 views alone.

He also built a Twitter following of more than 150,000 and modelled for major fashion companies.

Following his rags-to-riches ascendancy, Fiberesima wrote a self-help book titled Roky’s Power Gain 50, which claims to have helped create 317 millionaires.

Its description says: “My story is straightforward. I grew up in government housing and have been for 80% of my life.

“I am now worth seven figures at age 26. I used my indepth knowledge of power to change my fortunes.”

But Fiberesima was eventually snared by police after they discovered he had returned to the UK in August last year and listed himself with a London modelling agency.

Officers posed as representatives of a company called WOU Photography and contacted the agency about hiring Fiberesima as a model for a new range of sportswear.

He arrived for the planned casting meeting on September 3, 2014 and was arrested at the entrance of the photographic studios in Kentish Town.

He was jailed for three years and nine months at Harrow Crown Court on May 6 after being found guilty of two counts of theft, two counts of fraud and one of possessing a weapon.

His final tweet read: “To all: Roky’s in the 5% of rappers that can genuinely be described as ‘real’ so as is life he’ll be ‘away’ til’ further notice #management”

In September 2008, police first entered his flat in Christchurch Avenue, Harrow, north-west London and discovered a stun gun, a canister of CS gas and a stoeln chequebook belonging to a neighbour.

He was arrested and bailed, but disappeared before his first court appearance.

Detective Inspector Pete Wallis of Brent CID said: “There is clear message here, that we will not forget you if you offend, and we will explore all options in tracing you and bringing you to justice.

“Mr Fibersima used false identities to evade capture for five years and developed a very public persona in Australia and internationally as a rap artist and model.

“Thankfully he is now paying for his crimes, due to the perseverance of Brent’s Wanted Offenders Unit.”

Man kills himself awaiting verdict in £20m fraud trial

Peter Benstead
Peter Benstead


A businessman killed himself while on trial with members of his family for a £20 million fraud, it can be reported today.

Peter Benstead, 72, was found dead in a vehicle near his home in Cornwall on Sunday afternoon, hours after being reported missing.

Jurors at London’s Southwark Crown Court were only told of Benstead’s death today, in private, as they returned their verdicts in the three-month-long case – unaware the principal defendant had killed himself.

The seven men and five women had spent nearly two weeks considering Benstead’s alleged involvement in the Crown Currency Ltd fraud case when he died. He had not appeared in the dock at various times during the three-month trial due to existing health issues.

The media were banned from reporting Benstead’s apparent suicide until after the final verdicts were returned.

His Honour, Judge Michael Gledhill QC asked jurors not to return verdicts on the 10 counts on which Benstead was accused.

However, jurors did find Benstead’s widow Susan guilty of one count of money laundering – a joint charge with her late husband on which she could only be convicted if he was.

Their son Julian, and son-in-law Roderick Schmidt, were also convicted of offences relating to Crown Currency, along with employees Stephen Matthews and Edward James.

The widow was not in court when the verdicts were announced in two sessions, yesterday and today. The judge had told jurors “not to be worried” by the Bensteads’ absence.

Addressing the jury at the end of the trial – before going into chambers and informing them of Benstead’s death – the judge said: “I asked you to put him to one side. I will tell you why I have done that in a few moments’ time.”

Having told the jury about Benstead’s suicide, the judge said “one or two were quite deeply affected” by the news.

The court heard 12,500 customers were left out of pocket to the tune of nearly £20 million when the Cornish-based firm went under in October 2010.

Prosecutor Peter Grieves-Smith said Crown offered customers fiercely competitive offers on foreign currency, but ran into serious financial problems when their market speculating came up woefully short. It meant Crown was having to use new clients’ investments to settle existing debts.

The court heard the ailing firm was still accepting payment from customers, even when some staff knew the firm was insolvent – with little chance of clients getting their money back.

Yesterday four people were convicted of their part in the fraud. Susan Benstead, Julian Benstead, Schmidt and fellow Crown Currency Ltd employee Matthews were convicted of a range of offences after jurors spent 45 hours and 30 minutes deliberating.

Schmidt, Crown’s day-to-day manager, 46, of Penzance in Cornwall, was convicted of two counts of fraudulent trading. He was cleared of two counts of false accounting.

Crown’s former accountant Matthews, 52, of St Newlyn, was convicted of two counts of false accounting but cleared of two counts of fraudulent trading.

Julian Benstead, 46, of Penzance, who ran Crown’s sister company which specialised in trading cash for gold, was convicted of one count of fraudulent trading. He was cleared of the theft of 11.3kg of gold which went “missing” in the days leading up to Crown’s collapse – a count on which his father was also charged.

The precious metal has never been found.

Susan Benstead, 70, of Penzance, had no involvement in the day-to-day running of the businesses. She was convicted of one charge of money laundering – using £897,459 of customers’ money to buy a luxury home in Cornwall.

Former Crown director Edward James, the ex-mayor of Glastonbury in Somerset, was found not guilty of two counts of false accounting. He was convicted today of two counts of fraudulent trading relating to the days leading up to the collapse.

They will be sentenced at Southwark on June 12.


McShane Jailed For Expenses Fraud


Disgraced former Labour minister Denis MacShane has been sentenced to six months at the Old Bailey after admitting making bogus expense claims amounting to nearly £13,000.

The ex-MP previously pleaded guilty to false accounting by filing 19 fake receipts for “research and translation” services.

MacShane, 65, used the money to fund a series of trips to Europe, including one to judge a literary competition in Paris.

His guilty plea followed more than four years of scrutiny into his use of Commons allowances.

Flanked by two security officers, MacShane, wearing a dark suit with a blue striped tie and glasses, said “Cheers” as the sentence was delivered, before adding, “Quelle surprise” as he was led from the dock.

Mr Justice Sweeney told MacShane his dishonesty had been “considerable and repeated many times over a long period”.

“You have no one to blame but yourself,” the judge said.

The judge said MacShane had shown “a flagrant breach of trust” in “our priceless democratic system”.

“The deception used was calculated and designed,” he said.

He told MacShane he must serve half his sentence in prison and was ordered to pay costs of £1,500 within two months.

Parliamentary authorities began looking at his claims in 2009 when the wider scandal engulfed Westminster, and referred him to Scotland Yard within months.

But the principle of parliamentary privilege meant detectives were not given access to damning correspondence with the standards commissioner in which MacShane detailed how signatures on receipts from the European Policy Institute (EPI) had been faked.

The body was controlled by MacShane and the general manager’s signature was not genuine. One message, dated October 2009, said he drew funds from the EPI so he could serve on a book judging panel in Paris.

It was not until after police dropped the case last year that the cross-party Standards Committee published the evidence in a report that recommended an unprecedented 12-month suspension from the House.

MacShane, 65, who served as Europe minister under Tony Blair, resigned as MP for Rotherham last November before the punishment could be imposed.

Police then reopened their inquiry in the light of the fresh information and he was charged in May – even though the letters are still not thought to be admissible in court.

The offence of false accounting covered 19 ”knowingly misleading” receipts that MacShane filed between January 2005 and January 2008.

The court heard that MacShane incurred “genuine expenses” for similar amounts which he chose to recoup by dishonest false accounting rather than through legitimate claims.

Mr Sweeney said: “However chaotic your general paperwork was, there was deliberate, oft repeated and prolonged dishonesty over a period of years – involving a flagrant breach of trust and consequent damage to Parliament, with correspondingly reduced confidence in our priceless democratic system and the process by which it is implemented and we are governed.”

The judge said he had considered a number of mitigating features, including MacShane’s guilty plea, and that the offences were “not committed out of greed or for personal profit”.

MacShane had suffered “a long period of public humiliation” and carried out the offences “at a time of turmoil” in his personal life, Mr Sweeney said.

The court heard that MacShane and his wife divorced in 2003, his daughter Clare was killed in an accident in March 2004, his mother died in 2006 and his former partner, newsreader Carol Barnes – Clare’s mother – died in 2008.

The judge also considered his previous good character and that the money had been paid back.

The court heard that MacShane submitted four of his false claims while serving as Europe minister.

He joins a list of politicians prosecuted as a result of the expenses scandal.

They include fellow former Labour minister Elliot Morley, as well as MPs Jim Devine, David Chaytor and Eric Illsley.

Tories to fall foul of the law were Lord Hanningfield and Lord Taylor of Warwick.

Sentences have ranged from nine to 18 months.

Another ex-Labour MP, Margaret Moran, was spared prison and given a supervision order instead after suffering mental health problems.

Mr Sweeney told MacShane that he acknowledged a difference between his case and other MPs sentenced following the expenses scandal.

However, MacShane “deliberately created misleading and deceptive invoices and then used them in order to procure payments of public money”, the judge added.

“You must therefore have been aware throughout that it was an essential feature of the expenses system then in operation that Members of Parliament were invariably treated as honest, trustworthy people, and that the unwritten assumption was that only claims for expenses genuinely incurred in accordance with the rules would be made,” Mr Sweeney said.

“Yet you acted in flagrant breach of that trust.”

Back From The Dead Prison Officer Faces Jail


The back-from-the-dead canoe fraudster, former Holme House prison officer John Darwin (left), from Hartlepool, is facing a return to prison after he left the UK without permission to meet a statuesque Ukrainian in a mini-skirt.

The 63-year-old was pictured in The Sun on a date with a blonde woman in her 20s in the town of Sumy, 1,500 miles from his home.

He was freed early on licence in January 2011 after being sentenced in 2008 to serve six years and three months for fraud.

That meant he was not allowed to leave the UK without Probation Service permission until all of his sentence was served.

A source close to the case said: “He is facing a return to prison for travelling abroad without permission.”

The Probation Service would not speak about individual cases but a spokesman said: “Any offender subject to licence supervision is required to gain permission from probation to travel outside of the UK; permission is only granted in exceptional circumstances.

“Any offender who travels without this permission will be subject to recall to custody.

“In these circumstances the Probation Service works closely with the police to implement the recall.”

It was believed Darwin was still in the Ukraine.

According to The Sun, Darwin and his date, a local woman named Anna, enjoyed a two-hour meal assisted by a translator, but the evening turned sour when he was confronted by a reporter.

The newspaper said Darwin first made contact with the woman over the internet.

He faked his own death in a canoeing accident in 2002 so his then wife Anne (right) could claim hundreds of thousands of pounds from insurance policies and pension schemes.

The couple, from Seaton Carew, were jailed at Teesside Crown Court in 2008 for the swindle, which deceived the police, a coroner, financial institutions and even their sons Mark and Anthony.

Darwin admitted fraud so received a slightly shorter sentence than Anne, who denied the offences. They have now divorced.

After faking his own death, Darwin continued to live in secret with his wife before they escaped to Panama to start a new life.

But in December 2007 Darwin walked into a London police station claiming he had amnesia and was reunited with his stunned sons.

His wife, then still in Panama, initially also claimed to be surprised – until a photograph emerged of them posing together.

SFO Confirm Serious Fraud Investigation Into Both G4S & Serco


G4S in 2012

  • £7.3bn turnover
  • Pre-tax profit: £516m
  • Quarter of turnover relates to government contracts
  • Half of business in Europe
  • Value of government contracts: £394m

The Serious Fraud Office (SFO) says it has opened an investigation into the government’s contracts with G4S and Serco for tagging criminals.

It comes after an audit suggested the firms had been charging for tagging criminals who were either dead, in jail or never tagged in the first place.

In July, the government had asked the SFO to consider carrying out an investigation into G4S.

G4S said it would co-operate fully with the SFO investigation.

A spokesman for G4S said: “G4S confirms it has today received notice that the director of the Serious Fraud Office has opened an investigation into the ‘contract for the provision of electronic monitoring services, which commenced in April 2005, as amended and extended until the present day’.

“G4S has confirmed to the SFO that it will co-operate fully with the investigation.”

The audit by accountancy firm PricewaterhouseCoopers, launched in May, alleged that the charging discrepancies began at least as far back as the start of the current contracts, in 2005, but could have dated back to the previous contracts in 1999.

Justice Secretary Chris Grayling told the two firms that an independent “forensic audit” – a search for possible illegality – should be conducted, which among other things would need to examine email trails between bosses.

G4S was reported to the SFO when it refused to co-operate with this further audit, while Serco allowed a further forensic audit to take place.

In the course of the audit in September, the Ministry of Justice provided material to the SFO in relation to Serco’s conduct.

G4S made headlines after it failed to provide all of its contracted security guards for the London 2012 Olympics, prompting extra military personnel to be called in to fill the gap and leaving the firm with losses of £88m.

Cash-Point gang nets £29 million in a matter of hours


A worldwide gang of criminals stole £29 million in a matter of hours by hacking their way into a database of pre-paid debit cards then draining cash machines around the world, US prosecutors said.

Seven people are under arrest in the US in connection with the case, which prosecutors said involved thousands of thefts from ATMs using bogus magnetic swipe cards carrying information from Middle Eastern banks.

The fraudsters moved with astounding speed to loot financial institutions around the world, working in cells including one in New York, Brooklyn US Attorney Loretta Lynch said.

She called it “a massive 21st-century bank heist” carried out by brazen thieves.

One of the suspects was caught on surveillance cameras, his backpack increasingly loaded down with cash, authorities said. Others took photos of themselves with giant wads of notes as they made their way up and down Manhattan.

Hackers got into bank databases, eliminated withdrawal limits on pre-paid debit cards and created access codes. Others loaded that data on to any plastic card with a magnetic stripe – an old hotel key card or an expired credit card worked as long as it carried the account data and correct access codes.

A network of operatives then fanned out to rapidly withdraw money in multiple cities, authorities said. The cells would take a cut of the money, then launder it through expensive purchases or ship it wholesale to the global ringleaders. Ms Lynch did not say where they were located.

It appears no individuals lost money. The thieves plundered funds held by the banks that back up prepaid credit cards, not individual or business accounts, Ms Lynch said.

She called it a “virtual criminal flash mob” and a security analyst said it was the biggest ATM fraud case she had heard of.

There were two separate attacks, one in December that reaped £3.2 million worldwide and one in February that snared about £26 million in 10 hours with about 36,000 transactions. The scheme involved attacks on two banks, Rakbank in the United Arab Emirates and the Bank of Muscat in Oman, prosecutors said.

The plundered ATMs were in Japan, Russia, Romania, Egypt, Colombia, Britain, Sri Lanka, Canada and several other countries, and law enforcement agencies from more than a dozen nations were involved in the investigation, US prosecutors said.

The accused ringleader in the US cell, Alberto Yusi Lajud-Pena, was reportedly killed in the Dominican Republic late last month, prosecutors said. More investigations continue and other arrests have been made in other countries.

An indictment unsealed yesterday accused Lajud-Pena and the other seven New York suspects of withdrawing £1.8 million in cash from hacked accounts in less than a day.

Such ATM fraud schemes are not uncommon, but the £29 million stolen in this one was at least double the amount involved in previously known cases, said Avivah Litan, an analyst who covers security issues for Gartner.

Middle Eastern banks and payment processors are “a bit behind” on security and screening technologies that are supposed to prevent this kind of fraud, but it happens around the world, she said.

“It’s a really easy way to turn digits into cash,” Ms Litan said.

Some of the fault lies with the ubiquitous magnetic strips on the back of the cards. The rest of the world has largely abandoned cards with magnetic strips in favour of ones with built-in chips that are nearly impossible to copy. But because US banks and merchants have stuck to cards with magnetic strips, they are still accepted around the world.

Ms Lynch would not say who masterminded the attacks globally, who the hackers are or where they were located, citing an ongoing investigation.

The New York suspects were US citizens originally from the Dominican Republic, lived in the New York City suburb orf Yonkers and were mostly in their 20s. Ms Lynch said they all knew one another and were recruited together, as were cells in other countries. They were charged with conspiracy and money laundering. If convicted, they face 10 years in prison.

Arrests began in March. Lajud-Pena was found dead with a suitcase full of about 100,000 dollars in cash, and the investigation into his death is continuing separately. Dominican officials said they arrested a man in the killing who said it was a botched robbery, and two other suspects were on the run.


Letters from former minister Denis MacShane admitting expenses abuses cannot be used to prosecute him because they are protected by Commons rules, it has been revealed.

Officials said parliamentary privilege meant the key correspondence was withheld from police when they launched a probe into the MP two years ago.

The documents are still not legally admissible – even though they were published in a Commons sleaze report yesterday.

The situation emerged after the Standards and Privileges Committee detailed how Mr MacShane knowingly submitted 19 false invoices over a four-year period.

The cross-party group said the invoices were “plainly intended to deceive”, branding it the “gravest case” they had dealt with.

The former Labour Europe minister pre-empted the recommended punishment of 12 months’ suspension from the House by announcing his resignation as an MP last night.

He insisted he had not gained personally from the abuses but wanted to take “responsibility for my mistakes”.

“I have been overwhelmed by messages of support for my work as an MP on a range of issues but I accept that my parliamentary career is over,” he said.

“I appreciate the committee’s ruling that I made no personal gain and I regret my foolishness in the manner I chose to be reimbursed for work including working as the Prime Minister’s personal envoy in Europe.”

A senior Labour source said: “Denis has done the right thing.”

Parliamentary Standards Commissioner John Lyon found the MP had entered 19 “misleading” expenses claims for research and translation services from a body called the European Policy Institute (EPI), signed by its supposed general manager.

However, the institute did not exist “in this form” by the time in question and the general manager’s signature was provided by Mr MacShane himself or someone else “under his authority”.

“The effect was that, unbeknown to the (expenses) department, Mr MacShane was submitting invoices to himself and asking the parliamentary authorities to pay,” the Commissioner said.

One letter from the MP to Mr Lyon in October 2009 described how he drew funds from the EPI so he could serve on a book judging panel in Paris.

“I was invited by Jacques Delors to join a committee to draw up a short-list for the European Book of the Year on which I still serve,” he wrote.

“Again, there were no funds to cover the costs of travel and staying in Paris for these meetings and since I used them to try and advance the case of British writers, including helping to steer the committee to choose the work of British historian (redacted) in 2008 I thought it reasonable to use EPI money to cover these costs.”

Mr Lyon also described how Mr MacShane had a “cavalier approach” to the use of public money in purchasing computer equipment which was not used solely in support of his parliamentary inquiries. In some cases departing interns were allowed to take away a parliamentary-funded laptop.

Mr MacShane also claimed for his own “extensive” travel across Europe, entertaining European contacts and building a “personal European library”.

The Commissioner said Mr MacShane further breached the Code of Conduct by refusing to co-operate with his inquiry.

Mr MacShane blamed the British National Party, who were behind allegations against him and had won a “three-year campaign to destroy my political career”.

“Clearly I deeply regret that the way I chose to be reimbursed for costs related to my work in Europe and in combating anti-semitism, including being the Prime Minister’s personal envoy, has been judged so harshly,” he said.

Scotland Yard dropped the case against Mr MacShane in July after receiving advice from the CPS on an initial evidence file.

The force said last night: “We are aware of the report and will be assessing its content in due course.”

However, a senior Commons official said police would not be able to rely on Mr McShane’s letters to the commissioner.

Clerk of the Journals Liam Laurence Smyth, who is responsible for parliamentary privilege issues, insisted the correspondence was protected because they were collected by the commissioner as part of parliamentary proceedings.

He admitted that many people would find the situation “surprising” but said privilege was necessary for Parliament to function effectively.

Even if Mr MacShane had openly admitted criminal behaviour in his evidence, the police would not be able to rely on the comments in court, Mr Laurence Smyth said.

He confirmed that police were not provided with any of Mr MacShane’s evidence or the other information amassed by the commissioner when the Commons authorities referred the case to them in October 2010.

However, he suggested police may now be able to use the letters as a “map” to further their own inquiries.

Conservative MP Philip Davies called for the Met to reopen its investigation and expressed alarm that Mr MacShane was being protected by parliamentary privilege.

“I think that is a very sad state of affairs. All it will do is further undermine the reputation of parliament,” he said.

“There will be millions of people out there who think that MPs are above the law and that is what the perception will be.

“It seems that someone who should be brought to justice isn’t going to be.”

It is understood Mr MacShane formally applied for the post of Crown Steward and Bailiff of the Chiltern Hundreds last night – the traditional way of resigning from the Commons.

Chancellor George Osborne is expected to confirm his appointment today, at which point he will cease being an MP.

It has emerged that three years ago, at the height of the expenses scandal, MPs voted down reforms that could have made evidence such as Mr MacShane’s letters admissible in court.

Clause 10 of the Parliamentary Standards Bill made clear that parliamentary privilege should not knock out evidence simply because it related to “proceedings in Parliament”.

However, the Commons narrowly voted to drop the measures in July 2009 amid concerns of a “chilling” effect on free speech.

A Government green paper on parliamentary privilege launched in April has again suggested changing the rules to ensure such evidence is admissible.

The document says “it is wrong in principle to deny the courts access to any relevant evidence when the alleged act is serious enough to have been recognised as a criminal offence”.

It proposes removing privilege in all criminal cases, except where the alleged offence “related closely to the principal reason for the protection of privilege – i.e. the protection of freedom of speech and debate in Parliament”.

Labour MP John Mann branded the idea that the documents should be protected by parliamentary privilege “nonsense”.

“My interpretation of privilege is it’s to prevent people suing over an allegation made in Parliament,” he said. “I’ve had a lot of exchanges about privilege and the idea that it would have applied in this case, well, I don’t think they have a leg to stand on.”