Gazette - The U.K.’s Serious Fraud Office and international co-operation

COVER SECTION

By David Jones
Head of Communications
Serious Fraud Office
United Kingdom (U.K.)

Courtesy the U.K. SFO

The U.K. Serious Fraud Office (SFO) is a prosecuting body with an investigative capability. It concentrates its resources on the biggest and most complex incidences of fraud. Because of this, it has a high profile and is constantly under the glare of media scrutiny.

As one of the Attorney General’s departments, the SFO is a civilian body but one that works with the police on the majority of its cases. Local police forces contribute officers to particular investigations, adding their skills to the cases and assisting with arrests and searches.

Not all fraud cases come our way, or are accepted — only those that are big and complicated, and require legal, accounting and investigative skills to be brought together as a combined operation. We have 63 cases and these collectively represent in excess of £2 billion at risk. (Lesser frauds are dealt with by other parts of the U.K. criminal justice system, as are revenue and customs frauds.)

Before the office takes on a case, we assess whether the investigation should be handled by those responsible for the prosecution. We also consider whether the case is likely to attract national publicity, cause widespread public concern or require special powers to obtain information and documents under compulsion. If documents are not produced as required, or we suspect they might be tampered with, we can apply to a magistrate for a search warrant to secure them. Failure to comply with an order can result in a prosecution and prison sentence.

Another important consideration is whether or not the case has a significant international dimension such as victims, evidence or assets in other countries that need to be traced. This might also determine if we need to gain co-operation from foreign investigation authorities to achieve our objectives in their jurisdictions.

Multidisciplinary investigations

The conduct of each case falls under the direction of the SFO. We appoint a case controller, who is an experienced prosecuting lawyer and is responsible for managing the case. He or she puts together an appropriate team to investigate the allegations based on the demands of the case and the resources available.

The team typically consists of accountants or financial investigators drawn from the SFO itself, supported by outside accountants or investigators brought in on a contractual basis and by police officers. Other key members include forensic computer specialists and information technology experts, who decipher, explore and recover computer material. Together with the police, they analyze financial information, including statutory accounts, management accounts and cash flows. They also supervise searches of offices and homes and, most important of all, trace the money. The team might involve former police fraud squad officers who join the SFO after retirement as civilian investigators. Most will have gained special financial expertise in their former occupations. We also consult with forensic accountants from external firms.

This range of specialists requires a team approach. Investigators and prosecutors must work together from the earliest stages of the investigation right through to sentencing and, now, to confiscation proceedings.

Fraud is often committed across a number of jurisdictions. Identifying which jurisdiction should take the lead in investigating and prosecuting each case is not always obvious. Different rules regarding jurisdiction apply. By working closely together, we are able to disclose information to overseas prosecutors and investigators in the course of our investigations. Co-ordinated searches are vital, and we have had excellent co-operation with many other jurisdictions.

International co-operation

A very large proportion of our cases involve evidence abroad. To obtain such evidence, we need to make enquiries overseas, which can only be done by invoking the assistance of overseas judicial and police authorities. Likewise, when overseas administrations want to make enquires into frauds committed in their own jurisdictions where there is a U.K. angle — whether the evidence or even the defendant is situated within our jurisdiction — they need to invoke our help. This is done on a reciprocal basis through the Mutual Legal Assistance Treaties, and the SFO is able to provide expert investigative help to enable overseas partners to carry out these enquiries in the U.K.

Assistance to overseas authorities is provided predominantly by the SFO Mutual Legal Assistance Unit. It currently carries over 50 cases. These include some of the most important and sensitive international cases in the world, involving major political figures, organized crime and corruption on a huge scale. For example, the unit assisted the Government of Nigeria to trace millions of dollars that had been looted by Nigerian ex-president Sani Abacha and his family.

Mutual legal assistance of this kind is essential for swift and effective support to countries that have acute and chronic problems with corruption and Mafia-type organized crime. We have provided assistance to locations as diverse as Italy, Zambia, Costa Rica, Russia and Canada.

Under Section 2 of the U.K. Criminal Justice Act, compulsory orders are issued to obtain vital banking evidence and to demand answers to questions. Our investigators and lawyers work closely with their colleagues from the requesting countries. Some countries are relatively inexperienced in the law and practice of international mutual legal assistance, and we endeavour to provide them with the technical advice and guidance they need to formulate an official request.

Co-operation is two-way traffic. Without assistance from overseas authorities, many of our cases would flounder. Our investigators are “global travellers.” At both the official and more informal working levels, obtaining cross-border assistance is a crucial element of our investigative processes. Recently, for example, we conducted a series of raids on a number of premises in Spain with the full co-operation and participation of the Spanish police.

Canadian connection

In 1997, an angry Canadian citizen caught up in an advance fee fraud scheme (operated by a sham business loan service in England) travelled to the U.K. to report his complaint. He had placed an advertisement in the Globe and Mail newspaper asking if other Canadians had received unsatisfactory dealings with the bogus loans operation. More than 100 people responded. He brought the evidence with him to England to discuss the matter with police, kick-starting an SFO investigation that also involved two British police forces — one in Brighton and the other in Durham. We subsequently identified a number of people in Canada, the United States, Australia and New Zealand who had been similarly affected.

Following an official request, the RCMP provided support throughout our Canadian strand of this case. When we sent our people to gather evidence from victims, one of our investigators — Ian Wilson, a former Durham police officer — recalls that he had barely set foot in his Toronto hotel when an RCMP officer whisked him away for a briefing. By all accounts, after a few hours, a good collaborative relationship had been cemented. The case outcome proved the power of such co-operation: the fraudsters ended up in jail.

At the SFO we have to be pragmatic about what is achievable. Major frauds are invariably complex and difficult to investigate and, where they are international, they pose extra challenges for investigators. After nearly 20 years of operation, we have gained much experience in working with fellow fraud fighters in other jurisdictions. Catching international criminals requires international co-operation. We must all exercise and overhaul our procedures to ensure that co-operation is not only given, but given swiftly.