Serious Fraud Office (United Kingdom)
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The Serious Fraud Office (SFO) is a non-ministerial government department of the
Government of the United Kingdom ga, Rialtas a Shoilse gd, Riaghaltas a Mhòrachd , image = HM Government logo.svg , image_size = 220px , image2 = Royal Coat of Arms of the United Kingdom (HM Government).svg , image_size2 = 180px , caption = Royal coat of arms of t ...
that investigates and prosecutes serious or complex
fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compens ...
and
corruption Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...
in
England England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe b ...
,
Wales Wales ( cy, Cymru ) is a Countries of the United Kingdom, country that is part of the United Kingdom. It is bordered by England to the Wales–England border, east, the Irish Sea to the north and west, the Celtic Sea to the south west and the ...
and
Northern Ireland Northern Ireland ( ga, Tuaisceart Éireann ; sco, label= Ulster-Scots, Norlin Airlann) is a part of the United Kingdom, situated in the north-east of the island of Ireland, that is variously described as a country, province or region. Nort ...
. The SFO is accountable to the
Attorney General for England and Wales His Majesty's Attorney General for England and Wales is one of the law officers of the Crown and the principal legal adviser to sovereign and Government in affairs pertaining to England and Wales. The attorney general maintains the Attorney G ...
, and was established by the Criminal Justice Act 1987, an
Act of the Parliament of the United Kingdom In the United Kingdom an act of Parliament is primary legislation passed by the Parliament of the United Kingdom. An act of Parliament can be enforced in all four of the UK constituent countries (England, Scotland, Wales and Northern Irelan ...
. Section 2 of the Criminal Justice Act 1987 grants the SFO powers to require any person (or business/bank) to provide any relevant documents (including confidential ones) and answer any relevant questions including ones about confidential matters. The SFO is the principal enforcer of the
Bribery Act 2010 The Bribery Act 2010 (c.23) is an Act of the Parliament of the United Kingdom that covers the criminal law relating to bribery. Introduced to Parliament in the Queen's Speech in 2009 after several decades of reports and draft bills, the Act recei ...
, which has been designed to encourage good corporate governance and enhance the reputation of the
City of London The City of London is a city, ceremonial county and local government district that contains the historic centre and constitutes, alongside Canary Wharf, the primary central business district (CBD) of London. It constituted most of London fr ...
and the UK as a safe place to do business. Its jurisdiction does not extend to
Scotland Scotland (, ) is a country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a border with England to the southeast and is otherwise surrounded by the Atlantic Ocean to the ...
where fraud and corruption are investigated by
Police Scotland Police Scotland ( gd, Poileas Alba), officially the Police Service of Scotland (), is the national police force of Scotland. It was formed in 2013, through the merging of eight regional police forces in Scotland, as well as the specialist service ...
through their Specialist Crime Division, and prosecutions are undertaken by the Economic Crime Unit of the
Crown Office and Procurator Fiscal Service The Crown Office and Procurator Fiscal Service is the independent public prosecution service for Scotland, and is a Ministerial Department of the Scottish Government. The department is headed by His Majesty's Lord Advocate, who under the ...
.


History


Formation of the unit

During the 1970s and early 1980s a series of financial scandals in the City of London destroyed the public's trust in the way serious or complex frauds were handled. In response to this the Government established the Fraud Trials Committee in 1983. This independent committee, under the chairmanship of Lord Roskill, considered how changes to the law and criminal proceedings could lead to more effective ways of fighting fraud. The committee report, commonly known as the Roskill Report was published in 1986. Its main recommendation was to set up a new, unified organisation responsible for detecting, investigating and prosecuting serious fraud cases. As a result, the Serious Fraud Office (SFO) and its unique powers were created by the Criminal Justice Act 1987. It opened for business in April 1988. The SFO also enforces the
Bribery Act 2010 The Bribery Act 2010 (c.23) is an Act of the Parliament of the United Kingdom that covers the criminal law relating to bribery. Introduced to Parliament in the Queen's Speech in 2009 after several decades of reports and draft bills, the Act recei ...
.


List of directors

# John Wood CB (1988–1990) # Dame Barbara Mills QC (1990–1992) # George Staple CB QC (1992–1997) # Rosalind Wright CB QC (1997–2003) # Robert Wardle (2003–2008) # Richard Alderman (2008–2012) # Sir David Green CB QC (2012–2018) #
Lisa Osofsky Lisa Marie Osofsky (born 18 September 1961) is an American-British lawyer who has served as Director of the UK's Serious Fraud Office (SFO) since 3 September 2018. Early life Osofsky has dual American and British nationality. She earned a bach ...
(2018– present)


Al-Yamamah investigation

The Al-Yamamah arms deal during the 1980s was a large scale aircraft and weapons deal between the UK and
Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the fifth-largest country in Asia, the second-largest in the A ...
. It was extended throughout the 1990s and saw thousands of British citizens living and working in Saudi Arabia representing £40 billion worth of business. BAE Systems Plc was the primary contractor. In 2004 the SFO began to investigate the contracts within the al-Yamamah deal on the grounds of suspected false accounting, but the investigation was controversially dropped in 2006. The decision was made following concerns about national security amidst reports that the Saudi Government would stop sharing counterterrorist information with the UK if the investigation continued. This drew criticism from number of sources, not least from the Organisation for Economic Cooperation and Development (OECD). A High Court review in 2008 ruled that the SFO had acted unlawfully by dropping the corruption investigation but this was later overturned on appeal by the SFO to the
House of Lords The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...
.


Comparison to New York

In 2008, an official internal "Review of the Serious Fraud Office", which was conducted by a former senior New York City prosecutor, compared the SFO unfavourably with two of its counterparts in
New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
: the offices of the
United States Attorney for the Southern District of New York The United States Attorney for the Southern District of New York is the chief federal law enforcement officer in eight New York counties: New York (Manhattan), Bronx, Westchester, Putnam, Rockland, Orange, Dutchess and Sullivan. Establishe ...
and the
New York County District Attorney The New York County District Attorney, also known as the Manhattan District Attorney, is the elected district attorney for New York County (Manhattan), New York. The office is responsible for the prosecution of violations of New York state laws ...
. It found that the American prosecutors obtained higher conviction rates in a shorter amount of time with fewer resources. It also found that the SFO had significantly lower conviction rates than elite divisions of the British
Crown Prosecution Service The Crown Prosecution Service (CPS) is the principal public agency for conducting criminal prosecutions in England and Wales. It is headed by the Director of Public Prosecutions. The main responsibilities of the CPS are to provide legal advi ...
. It attributed the SFO's relatively poor performance to, among other things, failure to keep all court advocacy "in-house", failure to assign each case a single lawyer who managed it "from cradle to grave", failure to interview witnesses at an early stage, and failure to co-operate closely with the police.


2010s

While
Home Secretary The secretary of state for the Home Department, otherwise known as the home secretary, is a senior minister of the Crown in the Government of the United Kingdom. The home secretary leads the Home Office, and is responsible for all national s ...
,
Theresa May Theresa Mary May, Lady May (; née Brasier; born 1 October 1956) is a British politician who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 2016 to 2019. She previously served in David Cameron's cabi ...
expressed that she wanted the
National Crime Agency The National Crime Agency (NCA) is a national law enforcement agency in the United Kingdom. It is the UK's lead agency against organised crime; human, weapon and drug trafficking; cybercrime; and economic crime that goes across regional and in ...
(NCA) to absorb the SFO. While the SFO is supervised by the Attorney General's Office, the NCA is overseen by the Home Office. From around 2005 to 2017, the SFO underwent a series of budget cuts. On 18 May 2017, the
Tories A Tory () is a person who holds a political philosophy known as Toryism, based on a British version of traditionalism and conservatism, which upholds the supremacy of social order as it has evolved in the English culture throughout history. The ...
released a
manifesto A manifesto is a published declaration of the intentions, motives, or views of the issuer, be it an individual, group, political party or government. A manifesto usually accepts a previously published opinion or public consensus or promotes a ...
pledging to dismantle the Serious Fraud Office and roll it into the NCA if they won the general elections in June 2017. The manifesto claimed that the incorporation would "strengthen Britain's response to white collar crime by... improving intelligence sharing and bolstering the investigation of serious fraud, money laundering and financial crime."


Notable cases


Guinness share-trading fraud

In 1986 there were rumours that the
Guinness Brewery St. James's Gate Brewery is a brewery founded in 1759 in Dublin, Ireland, by Arthur Guinness. The company is now a part of Diageo, a company formed from the merger of Guinness and Grand Metropolitan in 1997. The main product of the brewery is ...
takeover of the
Distillers Company The Distillers Company Limited was a leading Scottish drinks and pharmaceutical company and, at one time, a constituent of the FTSE 100 Index. It was taken over by Guinness & Co. (now part of Diageo) in 1986 in a transaction which was later ...
was tainted by an unlawful share support operation which involved Guinness offering secret indemnities (from its own funds) against losses to people 'supporting' the bid which resulted in a dramatic rise in the price of Guinness shares. Having examined the bid, the SFO opened an investigation which led to the conviction in 1990 of the then chief executive of Guinness and three other defendants.


BAE Systems weapons sales to Saudi Arabia

Al Yamamah is the name of a series of a record arms sales by the United Kingdom to Saudi Arabia. In 2006, an investigation by the British Serious Fraud Office into the deal was discontinued after political pressure from the Saudi and British governments.


BAE Systems radar sale to Tanzania

In 1999 British Aerospace Defence Systems Ltd agreed a contract with the Government of
Tanzania Tanzania (; ), officially the United Republic of Tanzania ( sw, Jamhuri ya Muungano wa Tanzania), is a country in East Africa within the African Great Lakes region. It borders Uganda to the north; Kenya to the northeast; Comoro Islands and ...
for the supply of a radar defence system. A local businessman in Tanzania was recruited to advise BAE on its negotiations with the Government on the radar contract. Between January 2000 and December 2005 around $12.4 million was paid to the local businessman's two companies. BAE has accepted that there was a high probability that part of this sum would be used to favour it in the contract negotiations with the Tanzanian Government. The payments were not subject to proper and adequate scrutiny or review and BAE Systems Plc was subsequently fined £500,000 after admitting that it had failed to keep adequate accounting records of the defence contract with the Government of Tanzania. This outcome followed a settlement by BAE, as part of a global agreement reached in 2010 with the Serious Fraud Office and the
US Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...
, concerning contracts in a number of countries. The settlement with the SFO relates to the Tanzanian contract. The terms of the settlement include an agreement by BAE to pay an ''
ex-gratia (; also spelled ''ex-gratia'') is Latin for "by favour", and is most often used in a legal context. When something has been done ''ex gratia'', it has been done voluntarily, out of kindness or grace. In law, an ''ex gratia payment'' is a paymen ...
'' sum (£30 million less any fine imposed by the Crown Court) for the benefit of the people of Tanzania. BAE was also ordered to pay £225,000 costs to the SFO.


Barclays emergency fundraising

In June 2017, John Varley, Roger Jenkins, Tom Kalaris and Richard Boath were charged with offences regarding Barclays's raising of £11.8 billion in emergency funds. The fraud was alleged to have taken place around the
financial crisis of 2007–2008 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fi ...
.


Abbas Gokal & the BCCI

The BCCI Bank was a
Luxembourg Luxembourg ( ; lb, Lëtzebuerg ; french: link=no, Luxembourg; german: link=no, Luxemburg), officially the Grand Duchy of Luxembourg, ; french: link=no, Grand-Duché de Luxembourg ; german: link=no, Großherzogtum Luxemburg is a small lan ...
-registered bank that collapsed in 1992. It was discovered by the bank's auditors, that the bank was running on loss for many years. It was reported that the bank was involved in drug-trafficking, money-laundering and phony loans. The key player in the collapse was Pakistani shipping magnate Abbas Gokal. It was discovered that Gokal's company, Gulf Shipping Lines, had gotten a US$1.2 billion unsecured loan from the bank. When the bank collapsed and the scandal emerged, Gokal escaped to
Pakistan Pakistan ( ur, ), officially the Islamic Republic of Pakistan ( ur, , label=none), is a country in South Asia. It is the world's List of countries and dependencies by population, fifth-most populous country, with a population of almost 24 ...
, but since the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
and
Pakistan Pakistan ( ur, ), officially the Islamic Republic of Pakistan ( ur, , label=none), is a country in South Asia. It is the world's List of countries and dependencies by population, fifth-most populous country, with a population of almost 24 ...
had no extradition treaty, he could not be extradited to the UK to stand trial. However, when Gokal was making a trip to America in 1994, his plane stopped for re-fueling in
Frankfurt Frankfurt, officially Frankfurt am Main (; Hessian: , "Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on its na ...
. There,
German police Law enforcement in Germany is constitutionally vested solely with the states, which is one of the main features of the German political system. Policing has always been a responsibility of the German states even after 1871 when the country was ...
arrested him and extradited him to the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
. He was handed a 14-year sentence as a result of the SFO prosecution, the longest sentence handed out in a British court for fraud.


Mykola Zlochevsky

In April 2014, the SFO launched a money laundering investigation against Ukrainian oligarch
Mykola Zlochevsky Mykola Vladislavovich Zlochevsky ( uk, Микола Владиславович Злочевський; born 14 June 1966) is a Ukrainian oil and natural gas businessman, politician, and an oligarch. Zlochevsky was Minister of Ecology and Natu ...
. Accounts of
Burisma Holdings Burisma Holdings Limited ( uk, Бурісма Холдингс) is a holding company for a group of energy exploration and production companies. It is registered in Limassol, Cyprus, but based in Kyiv, Ukraine. Burisma Holdings has operated in t ...
and its parent Brociti Investments, controlled by Zlochevsky, were frozen at the London branch of BNP Paribas. That money US$23 million was transferred as a result of complex transactions by a company controlled by a Ukrainian businessman
Serhiy Kurchenko Serhiy Vitaliiovych Kurchenko ( uk, Сергі́й Віта́лійович Ку́рченко; born 21 September 1985) is a Ukrainian businessman and founder/owner of the group of companies "Gas Ukraine 2009" specializing in trading of liquefie ...
, a subject of the European Union restrictive measures. When the Ukrainian prosecutor general's office failed to provide documents needed for the investigation, a British court in January 2015 dropped the case and ordered to unfreeze the assets.


Organisation

As one of the Law Officers' Departments, the SFO reports to the Attorney General of the UK. The SFO is unique in that its role is to both investigate and prosecute. Its case teams are therefore made up of investigators,
lawyers A lawyer is a person who practices law. The role of a lawyer varies greatly across different legal jurisdictions. A lawyer can be classified as an advocate, attorney, barrister, canon lawyer, civil law notary, counsel, counselor, solicitor, ...
,
law clerks A law clerk or a judicial clerk is a person, generally someone who provides direct counsel and assistance to a lawyer or judge by researching issues and drafting legal opinions for cases before the court. Judicial clerks often play significant ro ...
and forensic accountants. The SFO employs around 500 people. The cost of running the SFO in the financial year 2010–11 was 64p for each member of the British public. Over 80 per cent of staff are specialist caseworkers. When deciding what action to take, lawyers in the SFO must bear in mind the Prosecutors Code. The SFO is not a police force and its own investigators are not constables. Although the SFO does have certain investigatory powers, it does not have the powers of arrest or constable powers in relation to search. Therefore if these powers are necessary for an investigation the SFO will request support from the police or NCA as necessary.


Activities and responsibilities

The SFO is a specialist organisation that investigates only the most serious types of economic crime. As a result, a potential case must meet certain criteria before it is taken on. In deciding, the Director will take into account all the circumstances of the case and consider: * cases which undermine British commercial/financial PLC in general and the City of London in particular; * cases where the actual or potential loss involved are high; * cases where actual or potential harm is significant; * cases where there is a very significant public interest element; and * new species of fraud The Serious Fraud Office's jurisdiction does not extend to
Scotland Scotland (, ) is a country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a border with England to the southeast and is otherwise surrounded by the Atlantic Ocean to the ...
where fraud and corruption are investigated by
Police Scotland Police Scotland ( gd, Poileas Alba), officially the Police Service of Scotland (), is the national police force of Scotland. It was formed in 2013, through the merging of eight regional police forces in Scotland, as well as the specialist service ...
through their Specialist Crime Division, and prosecutions are undertaken by the Economic Crime Unit of the
Crown Office and Procurator Fiscal Service The Crown Office and Procurator Fiscal Service is the independent public prosecution service for Scotland, and is a Ministerial Department of the Scottish Government. The department is headed by His Majesty's Lord Advocate, who under the ...
.


Fraud

The SFO investigates and prosecutes
fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compens ...
. The SFO prosecutes different
types of fraud In law, fraud is an intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law or criminal law, or it may cause no loss of money, property, or legal right but still be an element o ...
, including
investment fraud Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...
. Among the types of investment fraud prosecuted are boiler room fraud ( share scams), which is an operation, usually run from abroad, where scammers typically cold-call people and use hard-sell tactics to sell shares that prove worthless, are inflated in price, or don't exist. The SFO cites Vintage Wines of St Albans as an example of a successful boiler room fraud prosecution. The SFO also prosecutes the investment schemes called 'Ponzi' or
pyramid scheme A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly im ...
s, which typically involves an investment offer which promises to provide an abnormally higher rate of return. In a Ponzi scheme, a single operator benefits, while in a pyramid scheme, many investors benefit from recruiting other investors. The SFO has cited the KF Concept case as an example of one of its successful ponzi scheme prosecutions, where a banker was jailed for 10 years for running an unauthorized investment business and defrauding investors of amounts over £17 million. The SFO also prosecutes multiple types of
corporate fraud In criminology, corporate crime refers to crimes committed either by a corporation (i.e., a business entity having a separate legal personality from the natural persons that manage its activities), or by individuals acting on behalf of a corpo ...
. The SFO website as of 2013 outlined several types of fraud it classified as corporate, including
asset stripping Asset stripping is a term used to refer to the practice of selling off a company's assets in order to improve returns for equity investors. In many cases where the term is used, a financial investor, referred to as a ' corporate raider', takes con ...
, which involved company directors taking company funds or assets of value while leaving behind the debts. Other types of prosecuted corporate fraud include
fraudulent trading In company law, fraudulent trading is doing business with intent to defraud creditors. Law Where during the course of a winding-up, it appears to the liquidator that fraudulent trading has occurred, the liquidator may apply to the court for an or ...
, where a company carries on a business for any fraudulent purposes. An example of a successful SFO prosecution for fraudulent trading is the InterGB group, the collective name for a number of companies that, between 1996 and 2000, extracted more than £85 million from three financial institutions by submitting false invoices. The chairman of the group was jailed for seven years. Also prosecuted are share ramping. Also known as 'pump and dump' or 'book ramping', is where criminals influence the share price of a company and then take advantage of the price fluctuations. Publishing false information is also prosecuted as corporate crime. According to the SFO, this is usually done to mislead investors and creditors and to keep a failing company trading.


Bribery and corruption

According to the SFO, corruption is where the integrity of a person, Government, or company is manipulated and compromised for personal gain. SFO classifies and prosecutes two main types of corruption. It defines
political corruption Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain. Forms of corruption vary, but can include bribery, lobbying, extortion, cronyism, nepotism, parochialism, patronage, in ...
as the dysfunction of a political system or institution in which government officials, political officials or employees look for illegitimate personal gain through actions such as bribery, extortion, cronyism, patronage and embezzlement. It defines
corporate corruption In criminology, corporate crime refers to crimes committed either by a corporation (i.e., a business entity having a separate legal personality from the natural persons that manage its activities), or by individuals acting on behalf of a corpo ...
as where, for example, bribes are offered to agencies/ institutions/individuals in order to win a contract. It brought up
Innospec Innospec Inc., formerly known as Octel Corporation and Associated Octel Company, Ltd., is a specialty chemical company. It comprises three business units: Fuel Specialties, responsible for the development and supply of additives for fuels and wh ...
Limited, manufacturers of a fuel additive, as an example of a successful prosecution for corporate corruption.


Overseas assistance

The SFO has a dedicated International Assistance team which regularly assists law enforcement agencies worldwide with their investigations. In 2010–11 the SFO assisted over 30 different jurisdictions.


Victim support

According to the SFO, victims are at the core of its strategy. They include any person, organisation, or Government both in the UK and abroad, which has suffered direct financial loss from the most serious and complex fraud, or corruption. The SFO tries to get justice for victims by recovering as much recompense as possible for victims. In April 2011, £64 million of funds were, or were due to be returned to victims. The average jail sentence handed out in SFO cases was 56 months in 2010-11. For example, in 2011 three fraudsters running the online Xclusive ticket fraud (that failed to deliver tickets to the Beijing Olympics and various music festivals) each received prison sentences of up to eight years. The SFO started confiscation proceedings to recover money for victims.


Criticism

The SFO, which reports to the Attorney General's Office, has over time repeatedly faced attempts by politicians to roll it into a broader crime-fighting body. In December 2021 the Court of Appeal criticised the SFO with regards to their handling of the
Unaoil Unaoil is a Monaco based company which provides "industrial solutions to the energy sector in the Middle East, Central Asia and Africa." Unaoil is incorporated in the British Virgin Islands, a tax haven with an opaque banking system. History The ...
case for ‘wholly inappropriate’ contacts with a ‘fixer’ as well as ‘serious’ disclosure failures undermining a defendant‘s right to a fair trial. As a direct consequence two convictions of former Unaoil managers were lifted. As a result, the attorney general launched an independent review after three court of appeal judges severely criticised the SFO. The Attorney General,
Suella Braverman Sue-Ellen Cassiana "Suella" Braverman (; ''née'' Fernandes, born 3 April 1980) is a British barrister and politician who has served as Home Secretary since 25 October 2022. She previously held the position from 6 September to 19 October 2022 ...
stated: "I announced this review on the day of the judgment as it was clear to me that swift action was needed. We must ensure lessons are learned so that the failings we saw in the Unaoil case can never happen again." In June 2022 it was announced that the “forensic and robust review” commissioned by the Attorney General which was conducted by Sir David Calvert-Smith was delayed. On July 21st 2022 the review was published. Osofsky commented on the report as a: “sobering read”. The review was criticizing the conduct of SFO head: “It is clear that Osofsky was faced with a difficult situation very early in her tenure and made a number of mistakes and misjudgments which, with the benefit of hindsight, she now accepts.” Calvert-Smith said further that Osofsky “was not supposed to be personally involved in contact” with a fixer, who had no recognised legal role in the so called Unaoil case. Calvert-Smith’s review paints a picture of chaotic management of the Unaoil case and a “toxic” relationship between staff and senior management within the SFO. A “damaging culture of distrust between the case team and senior managers developed, the review said. The review found some failings in the case involved “cultural issues within the SFO”, such as noncompliant record keeping, “ failure to comply with its disclosure obligations”, “inadequate resourcing of the case”, “DSFO using her personal mobile phone and failing to take contemporaneous notes of meetings and conversations” and a” lack of understanding of priorities between the case team and senior management” , amplified by the impression that a U.S. fixer had the "seal of approval" from the director and, caused in part by the suspension and unfair and wrongful dismissal of the Unaoil case controller, Tom MartinMartin was suspended in July 2018. In February 2021, the judge concluded that Tom Martin’s complaints of unfair dismissal and breach of contract were “well founded”. In July 2022, SFO lost its appeal over unfair sacking of Martin. Emily Thornberry MP, Labour's Shadow Attorney General, stated on the report that it "lays bare a catalogue of woeful mismanagement and inexplicable misjudgements at the top of the SFO". In direct reference to Osofsky Thornberry said the SFO’s leadership had shown “gullibility and arrogance” in their dealings with a “fixer”, she tweeted on 21 July. She stated further "It is vital that the Attorney General not only commits to implement Sir David's recommendations in full, but asks herself whether the senior managers at the SFO whose failures are exposed in this report are really the individuals best placed to repair the damage. Earlier this year Thornberry tweeted: “ The Unaoil debacle is not a one-off. Brian Altman QC was commissioned by the SFO to review the Serco case. He noted there had been “systemic problems of real concern” in relation to the SFO’s disclosure in that case, including that the appointed officer’s “inexperience should have disqualified him from appointment as disclosure officer on such a large and complex case”. The Serious Fraud Office has not referred any lawyers to the Solicitors Regulation Authority over the collapse of a high-profile criminal trial, MPs heard in February 2021. SFO director Lisa Osofsky appeared before the public accounts committee to explain a £2.55m overspend in 2020/21, which was the result of the failed prosecution of two former directors of Serco. Both Brian Altman’s QC review into the collapse of the R v Woods and Marshall trial and Sir David Calvert-Smith’s review into the SFO’s handling of the Unaoil investigation exposed the scale of the agency's problems and challenges. The blame for three quashed convictions in the Unaoil bribery case and the midtrial collapse of another case against two Serco executives is both institutional and individual. Both cases were sunk by the SFO's failure to properly disclose evidence to the defense. The reports found the SFO struggled to keep adequate records, failed to properly oversee case progression and failed to carry out disclosure checks, and that its key staff were too inexperienced to handle the process. Susan Hawley, executive director at anti-corruption charity Spotlight on Corruption, said: “Both the Calvert-Smith and the Altman reviews point to similar and very serious underlying issues behind the SFO’s spate of collapsed trials. In February 2022, the SFO became subject to official inquiries by the UK Public Accounts Committee as the collapse of the so called “Serco case” caused serious financial harm to the SFO budget. Furthermore, its practices were investigated as the collapse of the case was caused by non-disclosure of documents to the Defendants and failure to offer evidence. This led to public debate about possible future of SFO and its leadership.


Conflicts between SFO and private interests

In August 2022, Lisa Osofsky stated that she was proud of a “revolving door” between the regulator and private firms as fears grew that movement of senior figures into private sector would transfer inside knowledge into companies, which were subject to investigations. Among the individuals criticized for moving from senior positions in the SFO to private law firms were Sir David Green, the SFO’s former director, two of its former general counsels, four former heads or co-heads of its bribery and corruption divisions, two former heads of its fraud division and the former heads of its assurance and international assistance divisions. In November 2021, in her letter: “SFO’s revolving door works better than a closed shop” published by the Financial Times Osofsky said that they “ advocate for the interchange of personnel. It has always happened and long may it continue. It grows the collective capability of our organisation more than a closed shop ever could.” She noted that they already use one, “much to our advantage. In short, we advocate for the interchange of personnel,” and that “our relatively modest budget doesn’t prevent us from delivering”.


References


External links

*
Attorney General

Justice

Crown Prosecution Service (CPS)

Financial Services Authority (FSA)
{{Authority control Corruption in the United Kingdom Financial crime prevention Fraud in the United Kingdom Fraud organizations Government agencies established in 1987 Non-ministerial departments of the Government of the United Kingdom Organisations based in the City of Westminster Trafalgar Square 1987 establishments in the United Kingdom