IAP Conference Bangkok Asset Recovery in Major Fraud and Corruption Cases: The SFO s Recent Experience

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1 IAP Conference Bangkok Asset Recovery in Major Fraud and Corruption Cases: The SFO s Recent Experience David Green CB QC, Director, Serious Fraud Office 29 October 2012

2 The Role of the SFO Established in 1988 following a realisation that there was a gap in UK law enforcement. SFO s unique remit is to investigate and prosecute cases of serious and complex fraud or corruption. Independent government department but responsible to the UK Attorney General. Based in London with over 350 staff comprising prosecutors, investigators, accountants t and other specialists under one roof. SFO has statutory powers to compel the production of documents and for individuals to provide information during interviews. Executing authority for incoming MLA requests relating to fraud and corruption. 2

3 The Role of the SFO (continued) Dealing with the top end of economic crime which undermines the UK s financial reputation generally and that of the City of London in particular. Wide range of defendants including: - company directors - corporate entities - organised crime groups engaged in investment frauds -agents in international corruption cases Inherent potential for major asset recovery. 3

4 A Brief Outline of the UK Legislative Framework The Proceeds of Crime Act 2002 Allows for early restraint orders from the start of an investigation. Provides tools for financial investigators to identify the proceeds of crime (such as production orders and account monitoring orders). Sets out the process of criminal confiscation of assets after conviction, including for example the power for a court to assume that t all property held by a defendant d derived from crime. Defines the UK s money laundering offences, which criminalise all dealings with criminal proceeds and also impose obligations on banks and other businesses to report suspicious financial activity. Establishes civil il recovery powers. Facilitates incoming requests for mutual legal assistance in asset recovery matters. 4

5 The SFO s Approach to Asset Recovery The Proceeds of Crime Unit was established in 2009 to improve performance in asset recovery. Now a team of 19 specialist lawyers and investigators t dealing with asset recovery work across all of the SFO s cases. Planned expansion of capability in this vital area in Confiscated assets can go back to the victims of crime, but there e is a scheme whereby a proportion of funds recovered can be returned to the SFO. 5

6 The Use of Civil Settlements The SFO will prosecute cases wherever there is sufficient evidence and it is in the public interest to do so. Civil settlement is a tool which the SFO will use in appropriate circumstances. Civil settlements require transparency in compliance with OECD recommendations. Significant sums have been recovered in cases where a prosecution was not realistic. In a recent case, Oxford Publishing Ltd paid 1.9 million to settle corruption matters in East Africa and the reasoning behind this outcome was put into the public domain. 6

7 Other Examples of SFO Confiscation Cases An early restraint order was obtained in a pension fraud case dating back to 2008 which resulted in over 30 million being frozen in Switzerland. This sum was subsequently returned to the UK with the full co-operation of the Swiss authorities, and returned to the victim pension funds. In a long running corruption case, although one of the defendants received only a suspended prison sentence, earlier this year he was also ordered to pay over 1 million in confiscation, the bulk of which has already been received. In an insurance fraud case which commenced in 2005, an early restraint order successfully froze 1.5 million in an account in Monaco. The defendant was convicted in 2008 and ordered to pay 1.5 million under a confiscation order in The money was returned to the UK in early 2012 to compensate the victims. 7

8 Common Challenges and Obstacles The use of trust structures Complicit professionals Degree of compliance with money laundering regulations Hidden assets cases Third party litigation 8

9 The Importance of International Co-Operation Fundamental issue in dealing with sophisticated fraudsters. Efficient exchange of intelligence and evidence vastly increases the chances of asset recovery. Examples given illustrate cases where UK victims have been compensated with the assistance of overseas help. SFO stands ready to assist other countries when assets linked to fraud and corruption are located in the UK (e.g. the Stanford case). The less we co-operate operate, the more the criminals benefit. 9

10 Date: 29 October 2012