Series
Blogs
The SFO under scrutiny: Attorney-General launches review into failings at the UK’s top fraud agency
The SFO under scrutiny: Attorney-General launches review into failings at the UK’s top fraud agency
16 February 2022
Series
Blogs
16 February 2022
Recent failings in two cases brought against individuals have dealt a serious blow to the reputation of the UK’s Serious Fraud Office (“SFO”). Following the latest of these prosecutions, which saw the quashing of Ziad Akle’s conviction for fraud in the Unaoil case, Attorney General Suella Braverman QC has appointed Sir David Calvert-Smith, a former Director of Public Prosecutions, to lead an independent review into the workings of the SFO. It remains to be seen whether the review’s terms of reference will go beyond institutional failings at the SFO to encompass individual failings and seek to hold officials personally responsible.
Background
In July 2016, the SFO opened an investigation into allegations of bribery against a number of individuals at Unaoil group of companies (“Unaoil”), including Ziad Akle, Territory Manager for Iraq, Basil Al Jarah, Unaoil’s Iraq Partner and Ata Ahsani and his sons, who owned and controlled Unaoil.
Al Jarah pleaded guilty to five offences of conspiracy to give corrupt payments in July 2019 and the investigation into the Ahsanis was discontinued in April 2019. However, the prosecutions of Akle, Stephen Whiteley and Paul Bond proceeded to trials held in 2020 and 2021. All three were ultimately found guilty of conspiracy to bribe and sentenced to terms of imprisonment.
The trial
As part of a substantial disclosure exercise, the SFO provided schedules of unused material which summarised the nature and content of the documents in question. However, it declined to disclose copies of the underlying documents, despite Akle’s requests. Some of the entries in these schedules referred to contacts between the SFO and David Tinsley, an adviser to the Ahsani family and founder of an intelligence and investigative company in the US.
The SFO had indicated that it intended to adduce evidence of Al Jarah’s conviction to prosecute Akle. It was Akle’s case that Al Jarah’s guilty plea was unreliable evidence, on the grounds that it had been improperly influenced and facilitated by Tinsley. In June 2020, Akle was sentenced to five years’ imprisonment after his application to stay the proceedings due to an abuse of the process was rejected. However, he obtained permission to appeal his conviction and his appeal commenced in July 2021.
The appeal
During the appeal, and at the Court of Appeal’s insistence, the SFO produced approximately 650 pages of previously undisclosed information which contained details of substantive interactions between Tinsley and individuals at the SFO, including the Director, Lisa Osofsky, and the Chief Investigator, Kevin Davies. Tinsley appears to have told the SFO that the Ahsanis could do “proactive things” to assist the SFO and that he could persuade Al Jarah to plead guilty.
In December 2021, the Court of Appeal held that the SFO’s refusal to disclose the documents requested by Akle prior to his trial amounted to a “serious failure by the SFO to comply with their duty” and that the SFO’s dealings with Mr Tinsley had been “wholly inappropriate”. The Court of Appeal was satisfied that Akle’s convictions were not safe and that they should therefore be quashed. An order for a retrial was declined.
Following Akle’s appeal, the Attorney General issued a statement that she was “deeply concerned about the findings in the judgment” and would be launching an independent review into the workings of the agency. It will now be up to Sir David Calvert-Smith to consider the conduct of the SFO criticised by the Court of Appeal, including that relating to the agency’s contact with third parties and the disclosure of evidence, and whether it is necessary to address “any wider issues of SFO policies, practices, procedures or related culture”.
The Unaoil case came hard on the heels of another upset in the SFO’s enforcement activities. In April 2021, the trial against two former executives of Serco Geographix Limited (“Serco”) dramatically collapsed after the SFO admitted to errors in its disclosure process.
The trial
In December 2019, two former executives of Serco, Nicholas Woods and Simon Marshall, were charged with fraud against the Ministry of Justice (“MoJ”) in relation to hidden profits from a prisoner-tagging contract between Serco’s parent company, Serco Limited, and the MoJ.
Serco had entered into a Deferred Prosecution Agreement with the SFO in 2019 to resolve the corporate aspect of the matter. Meanwhile, the trial of Mr Woods and Mr Marshall commenced in March 2021. However, the trial collapsed suddenly when the SFO admitted to “errors made in the non-disclosure of certain materials”. Mrs Justice Tipples ruled that the issues identified had undermined the process of disclosure to the extent that the trial could not safely and fairly proceed until they had been remedied. However, she refused the SFO's request to adjourn the trial while the disclosure issues were rectified, saying that it was not in the public interest to do so. As a result, the SFO could not offer evidence against the defendants and, in April 2019, Mrs Justice Tipples directed the jury to acquit Mr Woods and Mr Marshall, concluding the eight-year-long investigation.
The SFO’s conduct has been severely criticised and a review into its policies, practices, procedures and culture is now underway. Whatever that review finds, it seems likely that the outcomes of these prosecutions will have an impact on the level of scrutiny exercised over the SFO’s conduct in future cases against individuals. Undoubtedly the SFO will be expected to take greater care to ensure compliance with its disclosure duties and the Calvert-Smith review may lead to alterations of the SFO’s procedures. Following the collapse of the Serco trial, Shaun Bailey MP suggested that there might be professional conduct issues within the SFO, although Ms Osofsky denied that there was a “systemic failure” in relation to disclosure. However, the failure of the prosecution led Ms Osofsky to commission an independent review into the investigation by Brian Altman QC and, ultimately, to institute improved training on the conduct of disclosure for SFO staff along with other new quality assurance processes.
How much the SFO can achieve on its own, however, is open to question. Giving evidence to the House of Commons Public Accounts Committee on 9 February 2022 as to why the SFO is at risk of over-spending on its budget this year, Ms Osofsky highlighted the huge volume of documents investigators may have to review in any one case (over 1.9 million documents had been considered in the Serco investigation), without the technology and resources that might be available in the private sector. As she admitted, the SFO staff “are human beings. We make mistakes”. Whether the government’s patience with the SFO’s mistakes is running out, only time will tell.