Having considered the enforcement action taken by the Serious Fraud Office ("SFO") in 2022, we will now look ahead to what we can expect from the SFO in 2023.
SFO upcoming trials
The Director of the SFO, Lisa Osofksy, described the current financial year as 'the year of the trial' in the SFO's 2022/2023 Business Plan. The prosecuting authority expects to bring eight trials to Court this financial year, a substantial number compared to previous years. The two trials currently listed to begin in 2023 were both previously halted by the courts and cover a range of offences including fraud, corruption and bribery.
- In January 2023, the trial of James Jardine, Mark Preston and Richard Morris is due to start. The three men face charges of multiple offences of fraud in connection with false representations made to the Ministry of Justice while executives of G4S Care and Justice Services. The charges relate to an alleged scheme to deceive the Ministry of Justice as to the true extent of G4S' profits while contracted to tag prisoners. The SFO concluded a Deferred Prosecution Agreement (DPA) in July 2020 with G4S Care and Justice Services Ltd which has, as a result, accepted responsibility for three fraud offences. The DPA requires G4S to pay a financial penalty of £38.5 million and the SFO’s full costs of £5.9 million, as well as to undertake a range of compliance and reporting measures. Given the SFO's recent history in failing to secure convictions against individuals after having agreed a DPA with the related corporate on the same facts, there is significant pressure on the SFO to prosecute successfully the ex-G4S executives to demonstrate that the two avenues are not mutually exclusive.
- The retrial of Jeffrey Cook and John Mason, former executives of GPT Special Project Management, is also due to start in January 2023. The retrial commences as a result of the original proceedings collapsing in July 2021 with reporting restrictions imposed by the Judge as a result. Both men face charges of corruption in relation to contracts awarded to GPT in respect of work carried out for the Saudi Arabian National Guard and Mr Cook faces an additional change of misconduct in public office. While both defendants have pleaded not guilty, GPT itself pleaded guilty to charges of corruption in 2020, accepting a £20.6 million confiscation order and £7.5 million fine. The effect on the defendants of GPT pleading guilty, rather than entering into a DPA, is hard to predict. If the individuals are convicted, it may influence the SFO's strategy relating to the use of DPAs in the future if the SFO wish to drive towards individual prosecutions.
Successful prosecutions in these two trials will give the SFO an opportunity to redeem itself in light of recent widespread criticisms of the agency, many of which are set out in this role.
Balli Steel Plc: five executives (Alaghband, Alaghband, Spriddell, Erda & Worsell)
The SFO has been investigating the activities of Balli Group Plc and Balli Steel Plc since 2017 following its collapse in 2013. There are five charged in relation to the investigation:
- Vahid Alaghband has been charged with three fraud offences in relation to the activities of Balli Group Plc and Balli Steel Plc, namely two counts of fraudulent trading with the intent of defrauding creditors and one count of conspiracy to defraud the Development Bank of Singapore Limited.
- Nasser Alaghband is charged with two counts of fraudulent trading and six counts of conspiracy to defraud various financial institutions.
- David Spriddell is charged with two counts of fraudulent trading.
- Louise Worsell is charged with one count of fraudulent trading and five counts of conspiracy to defraud various financial institutions.
- Melis Erda is charged with one count of fraudulent trading and six counts of conspiracy to defraud various financial institutions.
The trial commenced in September 2022 and is expected to last until early January next year.
Robb Simms-Davies, Nigel Wilson and Trevor Wright
On 17 August 2021, the SFO announced charges against individuals in connection with an investigation into the suspected payment of bribes to win contracts within the construction sector. Two former senior executives, Robb Simms-Davies and Nigel Wilson, were charged with six counts of bribery for suspected offences between 2014 and 2016. Trevor Wright was charged with two counts of bribery relating to the alleged receipt of the suspected bribes. The trial commenced in October 2022 at Southwark Crown Court and is expected to run until early 2023.
Mishcon de Reya represents Mr Simms-Davies in the ongoing trial.
Greenergy, Gianni Rivera
The SFO opened its Greenergy investigation in December 2018, and in May 2019 the SFO confirmed its joint investigation with the Dutch authorities concerning biodiesel trading at Greenergy and other companies.
On 25 February 2021, biodiesel trader and former employee at Greenergy, Gianni Rivera, was charged with two counts of fraud by abuse of position and one count of money laundering. It is alleged that Mr Rivera received payments from the director of Biodiesel Kampen BV, while agreeing trades between Greenergy and Biodiesel Kampen BV. Greenergy and its current employees are no longer suspects in the investigation.
The trial has been postponed until October 2023.
The SFO's 2022-23 Business Plan
The SFO's 2022-23 Business Plan sets out its key activities in the current financial year to ensure that it delivers on its mission of investigating and prosecuting the most serious or complex cases of fraud, bribery and corruption. The SFO has referred to 2022-23 as "the year of the trial" because of the eight trials that have been scheduled across this financial year. It has already seen some success with the successful prosecution of Andrew Nathaniel Skeene and Junie Conrad Omari Bowers who were the founders of fraudulent green investment firm Global Forestry Investments.
The SFO will also be seeking to accelerate the progress of cases into 2023 by injecting "pace at key stages of [its] intelligence assessment, investigations and prosecutions". This will be accompanied by the appointment of a new senior leader that will be tasked with assembling a team that will oversee the SFO's change programme across the organisation.
The SFO's Strategy 2022-25
Earlier this year, the SFO published its Strategic Plan for 2022-25. The Plan sets out its goals and approach for what the SFO regards as a "period of significant change". Over the next three years the SFO will seek to enhance its operational and investigative capabilities as it continues to tackle cases of complex fraud, bribery and corruption.
Extending Section 2A powers to fraud
Under Section 2A of the Criminal Justice Act 1987 the SFO can compel companies and individuals to provide it with information before it launches a formal investigation. This power is currently only available for use in cases that involve international bribery and corruption. The SFO made clear its desire to extend the use of this power in its Strategic Plan for 2022-25. The Economic Crime and Corporate Transparency Bill which is currently going through the stages of its reading in Parliament will now make this power available for use in all SFO cases.
As part of its Strategic Plan for 2022-25, the SFO will seek to establish itself as the operational partner of choice in areas such as civil recovery, proceeds of crime and international assistance. It will continue to look for opportunities to collaborate with partner agencies like the National Crime Agency as well as taking a leading role in relation to matters such as Unexplained Wealth Orders and Account Freezing Orders.
Other operational goals that the SFO hopes to deliver on across the next three years include:
- Shortening the average length of investigations to three years.
- Achieving a 75% recovery rate against financial orders secured on realisable assets.
- Improving the satisfaction rate of victims and witnesses called to give evidence by the SFO.
The SFO has committed itself to securing at least one successful outcome in over 80% of its cases. The SFO defines success in this context as either one conviction or a Deferred Prosecution Agreement ("DPA"). It is well documented that the SFO has experienced some difficulty in securing a conviction against individuals after a related corporation has entered into a DPA and this may be why it has decided that its measure of success is not limited to convictions alone.
The SFO has also set itself the goal of securing a 60% conviction rate by guilty plea or jury trial of defendants (both individuals and corporates) over the next three years. The Calvert Smith and Altman reports which were discussed earlier in this review highlighted how operational and disclosure problems led to the SFO suffering defeats in two of its most high-profile cases in recent times. The SFO will therefore have to make some significant improvements to its investigative performance if it is to achieve this goal.
The SFO will also seek to transform its use of data to better manage what it has described as "ever-growing volumes of unstructured case data, maximise insights from data, reduce time-consuming manual processes and speed up case delivery including key processes such as disclosure".
The SFO has laid out an ambitious program for itself across the next few years. Some of its goals, such as securing at least one successful outcome in over 80% of its cases, will be easily measurable, whilst others such as its goal of transforming its use of data will be less so. What is clear is that the SFO will continue to face a closer level of scrutiny as it seeks to achieve its goals and avoid some of the high-profile mishaps that have befallen it in recent times.