News & what's on - Written by on Thursday, July 26, 2018 1:31 - 0 Comments

Serious Fraud Office raids triple

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The UK Serious Fraud Office (SFO) launched 30 property raids to gather evidence for its ongoing criminal investigations (ie before prosecution takes place) in the previous 12 months year ending March 31 reported here and in the FT.  The number is more than triple the number of the same raids undertaken the year before and more than at any time in the preceding five years.

The SFO is adopting an increasingly aggressive stance in its investigation and pursuit of white collar crime and the over tripling of the number of searches undertaken in connection with its active investigations before prosecution confirms that. 

However, raids carried out by the SFO’s Proceeds of Crime division fell to zero over the same period. In parallel SFO statistics show that in the 12 months year ending March 31 (the same year the Proceeds of Crime division conducted no searches) it obtained Proceeds of Crime orders amounting to £275,000 (c 1% of proceeds of crime orders in the prior year) and .1% of the disgorgement in the biggest DPA to date.

It is hoped the lack of searches conducted by the SFO’s Proceed of Crime division is a one off.  However, the statistics could represent a focus on investigating companies.  Corporations often reach agreement and pay their fines and disgorgement, in contrast to individual wrongdoers who may be more likely to hide away ill-gotten gains and require the SFO to use its search powers in respect of them.

Telephone number penalties, Deferred Prosecution Agreements and aggressive investigation and enforcement tactics against companies are all taken from the US criminal law enforcement playbook.

The US has been criticised for its focus on corporations. It is important that the SFO does not fall into the same trap, and simply target corporations as a cash cow for the UK government, at the expense of pursuing individual wrongdoers and recovering their ill-gotten gains.

The appointment of a former US prosecutor, Lisa Osofsky, to head the SFO is entirely consistent with the new US-style approach to white collar crime enforcement in the UK.  The increased number of raids for investigations is likely to continue but should not be at the cost of investigating and recovering ill-gotten gains from those convicted of white collar crimes.

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