Tag Archives: Serious Fraud Office

City directors sentenced to 28 years behind bars for £23 million green biofuel fraud

Three men have been sentenced at Southwark Crown Court as a result of the Serious Fraud Office’s investigation and prosecution of Sustainable Growth Group (‘SGG’) including its subsidiary companies Sustainable AgroEnergy plc (‘SAE’) and Sustainable Wealth (UK) Investments Ltd (‘SWI’).

All three were convicted following a prosecution which focused on the selling and promotion of SAE investment products based on “green biofuel” Jatropha tree plantations in Cambodia. The green biofuel products were sold to UK investors who invested primarily via self-invested pension plans. These investors were deliberately misled into believing that SAE owned land in Cambodia, that the land was planted with Jatropha trees and that there was an insurance policy in place to protect investors if the crops failed.

*Gary Lloyd West (of Hertfordshire, the former director and chief commercial officer of SAE) was sentenced to a total of 13 years’ imprisonment
*James Brunel Whale (of Sussex, the former director, CEO and chairman of SGG) was sentenced to a total of nine years’ imprisonment
*Stuart John Stone (of Shropshire, director of SJ Stone Ltd, a sales agent of unregulated pension and investment products) was sentenced to a total of six years’ imprisonment

Both West and Whale have been disqualified from being directors for 15 years while Stone has been disqualified for ten years.

City directors have been sentenced to a combined total of 28 years in prison for a £23 million green biofuel fraud

City directors have been sentenced to a combined total of 28 years in prison for a £23 million green biofuel fraud

“Thickening quagmire of dishonesty”

When handing down sentencing, Judge Beddoe described the fraud as a “thickening quagmire of dishonesty” and that “there were more than 250 victims of relatively modest means, some of whom had lost all of their life savings and their homes.”

The Judge added that the bribery was an aggravating feature.

Jane de Lozey – the Serious Fraud Office’s (SFO) Head of Fraud – commented: “This is the first of a number of SFO cases to come to trial involving the miss-selling of investment products connected with self-invested pension plans in which savers on modest incomes have tried to invest for their retirement only to find themselves the victims of fraud. Pension scams can be difficult to detect even for experienced investors. The SFO is working closely with partner agencies across law enforcement to tackle this type of serious economic crime.”

Legal proceedings to establish compensation and confiscation orders against the three defendants have commenced.

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Serious Fraud Office lawyer Stuart Alford appointed QC

Senior Serious Fraud Office barrister Stuart Alford will be sworn in as Queen’s Counsel on Monday 14 April 2014, bringing to three the number of SFO in-house QCs.

Alford is head of division in the Serious Fraud Office’s (SFO) Special Projects Group, overseeing a team of 70 case investigators and lawyers investigating the manipulation of LIBOR and other projects (including the Barclays-Qatar investigation).

Alford has been with the SFO since July 2012 and is a member of the SFO’s Management Board.

SFO director David Green CB QC said: “I’m extremely pleased Stuart has been appointed to Queen’s Counsel. This is much deserved and underlines his contribution to the SFO, the challenge posed by cases we investigate and prosecute and the quality of staff the SFO is able to attract.”

Focus on national and international crime

Alford was called to the bar in 1992 and has worked in national and international crime. Prior to joining the SFO, his practice concentrated on fraud, mostly representing the CPS.

Between 2008 and 2013, Alford was chairman of the War Crimes Committee of the International Bar Association, having been a prosecutor for the United Nations between 2001 and 2003 and legal adviser to the Iraq High Tribunal during the trial of Saddam Hussein from 2005 to 2006.

On his appointment, Stuart Alford said: “I am hugely honoured to have been appointed to Queen’s Counsel, but it’s not just my success. It is a recognition of the excellent work being undertaken at the SFO.”

Queen’s Counsel are senior lawyers – barristers or solicitors – who are recognised for excellence in advocacy in the higher courts and as experts in their field of law.

This year’s list of Queen’s Counsel was announced on 19 February 2014 by the QC Selection Panel. Her Majesty the Queen has approved the appointment of 100 new Queen’s Counsel (www.qcapplications.org.uk/press)

Queen’s Counsel at the SFO

Stuart Alford joins the director of the SFO, David Green CB QC and HH Geoffrey Rivlin QC (adviser to the director) as Queen’s Counsel at the SFO.

The Lord Chancellor will preside over the appointment ceremony, where the rank will formally be bestowed upon successful applicants at Westminster Hall on 14 April 2014.

Stuart Alford spent 20 years in private practice at 36 Bedford Row, London prior to joining the SFO. He is married to a circuit judge (HHJ de Bertodano), has four children and lives in London and Oxfordshire.

If the director of the SFO believes that there are reasonable grounds to suspect complex or serious fraud, bribery or corruption, he opens an investigation which is taken on by a multidisciplinary case team under the direction of a case controller in one of five divisions comprising Fraud, Bribery and Corruption and Special Projects.

The Serious Fraud Office is an independent government department responsible for investigating and prosecuting serious and complex fraud, bribery and corruption. It’s headed by the director, David Green CB QC, who exercises powers under the superintendence of the Attorney General. These powers are derived from the Criminal Justice Act 1987.

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Financial Conduct Authority forges ahead of SFO with bribery prosecutions

The newly-formed Financial Conduct Authority (FCA) has stolen a march on the UK’s lead bribery prosecutor the Serious Fraud Office (SFO) in its prosecution of bribery and corruption, EY’s latest Bribery Digest has found.

The digest, which tracks bribery prosecutions in the UK, found that the Serious Fraud Office has not completed a case since July 2012.

In contrast, the FCA’s announcement of a £1.8 million fine in December against an insurance and brokering firm has seen the agency forge ahead with a focus on cracking down on bribery, despite being in existence in its current form for less than a year and juggling competing priorities.

Local police forces and Scotland’s Crown and Procurator Fiscal Service picked up the remaining three cases in this period.

Cost of bribery and corruption

The absence of cases from the UK’s lead prosecutor comes despite findings in a report last month that bribery and corruption costs the EU economy £99 billion on an annual basis, while 64% in the UK believe corruption is common.

The newly formed Financial Conduct Authority has stolen a march on the UK’s lead bribery prosecutor the Serious Fraud Office in its prosecution of bribery and corruption, EY’s latest Bribery Digest has found

The newly formed Financial Conduct Authority has stolen a march on the UK’s lead bribery prosecutor the Serious Fraud Office in its prosecution of bribery and corruption, EY’s latest Bribery Digest has found

The EU report also called for a bigger crackdown on UK firms bribing their way into contracts abroad.

Jonathan Middup, EY UK’s head of anti-bribery and corruption, said: “Not only is there a wealth of evidence that bribery and corruption around the world is continuing, but organisations are increasingly attuned to uncovering and reporting their suspicions. The pipeline of cases for the SFO is ever-growing.”

Middup continued: “However, the major prosecution in the past 18 months has come not under the Bribery Act, but the entirely unheralded Principle 3 of the FCA’s Principles for Business. It states that firms must take reasonable care to control their affairs with adequate risk management, in effect leaving FCA regulated firms far more exposed than other companies subject only to the Bribery Act.”

In conclusion, Middup commented: “In its first case, the FCA has made clear that any failures will be severely punished where a company has checks in place to manage risks, but does not use them effectively. This is a major wake up call to financial firms regulated by the FCA that tick box compliance will not be tolerated and that bribery and corruption is on their radar.”

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NAO publishes Memorandum for Parliament on electronic monitoring contracts

The National Audit Office has published a Memorandum for Parliament setting out the events surrounding the Ministry of Justice’s process in 2013 to retender its electronic monitoring contracts, currently with private contractors G4S and Serco, and its subsequent decision to commission a forensic audit of the contracts by PricewaterhouseCoopers (PwC). Today’s report also covers the main findings of that audit.

Following completion of the PwC forensic audit, the Department is in dispute with G4S and Serco over the amount of money by which the Department may have been overcharged for electronic monitoring services under the current contracts.

Both contractors are also now subject to a criminal investigation by the Serious Fraud Office.

The National Audit Office has published a memorandum for Parliament setting out the events surrounding the Ministry of Justice’s process in 2013 to retender its electronic monitoring contracts

The National Audit Office has published a Memorandum for Parliament setting out the events surrounding the Ministry of Justice’s process in 2013 to retender its electronic monitoring contracts

The Department believes that both providers charged for work that had not taken place in a way that was outside what was set out in the contracts for the electronic monitoring of offenders.

PwC’s estimate is that the potential overcharge by both providers in total may amount to tens of millions of pounds.

Examples of disputed billing practices

The NAO’s report includes examples of disputed billing practices which show that, in some instances, both contractors were charging the Department for monitoring fees for months or years after electronic monitoring activity had ceased, over similar timescales where electronic monitoring never occurred and multiple times for the same individual if that person was subject to more than one electronic monitoring order concurrently.

Both contractors have said that, in their view, such charging was in line with the terms of the contract.

G4S has since stated, however, that it now views that interpretation as inappropriate. The company has said that it intends to offer the Ministry £23.3 million in credit notes in respect of issues it has identified to date.

Serco has stated that it will refund any amounts that it agrees represents overcharging.

The Department has not currently agreed to any refund offers made by the providers.

The NAO does not draw any conclusions on contractual interpretation.

Read the full report issued by the National Audit Office

About the National Audit Office

The National Audit Office scrutinises public spending for Parliament and is independent of Government.

The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 860 staff.

The C&AG certifies the accounts of all Government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively and with economy.

Its studies evaluate the value for money of public spending, nationally and locally. The NAO’s recommendations and reports on good practice help Government improve public services, while its work led to audited savings of almost £1.2 billion in 2012.

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