17 March 2014

The South Canterbury Finance proceedings have led to criticism of the Serious Fraud Office, less for the decision to prosecute four company officers and their lawyer – and more for the conduct of the criminal investigation, the case presentation during the five month trial – and the outcome. The cases against two officers were withdrawn before the trial, there were not guilty findings in respect of the other two, and even the convicted lawyer was acquitted on the more serious of the charges brought against him.

This is a poor return on what the SFO has called the most resource-intensive and time-consuming investigation in recent history. The cost to the Crown may exceed $1.6 million.  Although the SFO Director considers that the case was investigated thoroughly and presented to the court as best as possible, a former head of investigations claims that case preparation was inadequate,

The backlash may well be a reconsideration of how best to manage the investigation and prosecution of major corruption cases. Just as a number of parties have their knives out for the UK SFO, so a move may grow here to revisit structural arrangements confirmed soon after the Key Government was formed in 2008.

Problems with SFO effectiveness in the UK have resulted in proposals for it to be dismantled. Similar moves to improve the policing of bribery and corruption were dropped several years ago.  The SFO position was not helped when the Director incurred media disapproval recently by commenting that “ the SFO does not do lectures on ethics.  We do not issue guidance on how not to rob banks. I would not dream of telling you how I think you should behave. It is for business and senior managers to decide appropriate standards of ethics and integrity in their commercial activities….”

While the Home Secretary’s preference is to give responsibility for economic crime to the National Crime Agency – under her direct control – the Attorney General supports the status quo although agreeing that some reforms should be considered.  The National Crime Agency, set up a year ago, has wider access to intelligence sources than the SFO and the power to direct police forces across Britain in tackling drugs, corruption, cybercrime and child sex abuse. The momentum seems to be for the SFO jurisdiction to be blended in also.

Coincidentally, today is the anniversary of the imprisonment in 1931 of Al Capone. He was convicted and sentenced to 11 years for tax evasion.