The head of the UK Serious Fraud Office says she intends to make greater use of the US-style tactic of persuading insiders to co-operate with investigators to speed up criminal probes following the delay or failure of a number of high-profile cases.
Lisa Osofsky told the Commons justice committee on Tuesday that she was personally reviewing the evidence in more than 70 SFO cases to see why it was taking so long to conclude investigations and reach decisions on charging companies and individuals.
The SFO has endured a chastening end to 2018, including the collapse of the trial of two former Tesco executives over a £250m accounting scandal, after the judge ruled the men had no case to answer. Weeks earlier, the High Court upheld a decision to dismiss before trial the prosecution of Barclays Bank in relation to its 2008 Qatari fundraising, although the trial of four former top executives is due to start in January.
Meanwhile, a decision to issue charges against the Kazakh mining group ENRC and/or against individuals has yet to be made after a five-year investigation.
Other decisions that appear to have stalled include potential charges against former employees of Rolls-Royce, following the company’s £500m deferred prosecution agreement with the SFO in January 2017, and against the defence contractor GPT, a subsidiary of Airbus, after a whistleblower made allegations in 2012 of bribery.
Ms Osofsky said that the slow pace of SFO investigations was “probably the biggest criticism I’m hearing”.
She added it would help the agency to speed up “if we can get an insider who can help us understand what the scheme was [and] what are the really relevant documents”. A co-operating witness could also help “bring [a case] to life” before a jury, she added.
She made a similar point in a speech in the US earlier this month, saying that while “cooperators” had been “more widely used in narcotics or gang cases” in Britain, “we are intently exploring this area in the white-collar world”.
Since taking up the role in August, Ms Osofsky has brought in members of the FBI and the US justice department to advise SFO staff. She has also appointed Peter Pope, a white-collar crime lawyer and former US prosecutor, on secondment as an investigations adviser.
Her own career included working as a prosecutor in Chicago and a five-year stint as a lawyer and ethics officer at the FBI.
Sacha Harber-Kelly, a former SFO prosecutor and now a partner at the law firm Gibson Dunn, said Ms Osofsky’s desire to “flip” insiders in business crime investigations was understandable as so many cases relied heavily on huge volumes of documents.
“Without a witness being able to tell you what a document means, the defence has a relatively easy job sowing doubt in the jury’s mind with an innocent interpretation,” he said.
Although the legal power to grant immunity or leniency in return for co-operation already exists in the UK, it has only been used by the SFO once before at trial, in the prosecution of the chemicals company Innospec and four individuals in 2010.
Mr Harber-Kelly said: “I can see why she wants to engage with individuals, but individuals will only flip if they feel in peril.”
Stephen Parkinson, senior partner at Kingsley Napley, also cautioned that white-collar lawyers would be quick to consider using the defence of entrapment “if an insider is used while the alleged crime is taking place”.
Ms Osofsky reiterated her desire for the introduction of a sweeping corporate criminal liability offence, extending rules around bribery and tax evasion to other forms of business crime, such as money laundering.
On Brexit preparations, the SFO head acknowledged the agency could lose access to legal tools such as European arrest warrants and European investigation orders if Britain left the EU without a deal. While the UK would be able to fall back on other multilateral agreements, this would be “more cumbersome” and would mean “it may take a little bit longer to do our jobs”.
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