views expressed in this article are those of the author alone and
do not necessarily represent those of either Peters & Peters
or the Fraud Advisory Panel.
in the UK is now estimated (still not measured) at £30 billion
per annum. The variety of fraud has itself multiplied as delinquent
ingenuity mirrors creativity and risk-taking in the legitimate economy.
At the same time, as we look back 25 years to the Roskill Committee
Report, we remark that a coherent anti-fraud strategy is yet to
emerge. This goes both for government and the private sector. Roskill
was concerned only with making recommendations for the more efficient
investigation and prosecution of fraud by the State. Among his recommendations
was a call for the creation of a single or unified agency to investigate
and prosecute all serious fraud. This idea, when eventually translated
into policy implementation, became the Serious Fraud Office, a body
less all-embracing than Roskill’s model but nonetheless presented
as the answer to serious and complex economic crime. Upon it rested
the expectation that an organisation which, contrary to other agencies,
would both investigate and prosecute, and would be muscular enough
to prise evidence from both commerce and the professions. It was
given the power to interrogate both suspects and witnesses under
compulsion and to recruit accountants and other specialists to analyse
the evidence and produce it in a forensically acceptable form.
is not the concern of this article, any more than it was of the
Fraud Advisory Panel Working Group I chaired, to judge the performance
of the SFO. Suffice it to say that, from the outset, it was bound
not to fulfil all that was expected of it, particularly not the
hyped-up role bestowed upon it by the popular press. It was not
a unified office, as Roskill envisaged, possibly because of a reluctance
to weaken the remit of existing agencies like the CPS, the Revenue
prosecuting agencies as they then were, and other government departments
who jealously guarded the right to bring criminal proceedings, however
infrequently that might occur.
very concept that some frauds, discovered or reported, could be
singled out for special measures was problematical even at its creation.
The Treasury, in far less straightened times than now, was nervous
about committing a large budget to an untried crime control vehicle,
and policy and performance was left to be developed by successive
directors with occasional nudges from politicians and the media.
It had, and still has, no police force of its own, so has been reliant
upon the goodwill and availability of the economic crime components
of the larger UK forces. Latterly, it has been given the extra and
heavy responsibility of confronting the corruption of public officials—incidentally,
at a time when its financial resources have actually been reduced.
In addition it has had to shoulder the burden of affording assistance
to overseas agencies at a time when transnational fraud has increasingly
perhaps, there is no absolute requirement to report fraud, or else
this agency and its sister agencies in the UK would have been totally
overwhelmed with work. Politicians and the public appear to have
judged the SFO by the number of its successful convictions, not
surprisingly, perhaps, when it has tackled the most high-profile
cases of the last two and a half decades. At a time when the government
has set up a National Fraud Authority, when the financial crisis
of 2008–2009 has put financial wrongdoing on the front page,
and the wasting of scarce resources has become an election issue,
it seemed appropriate to consider whether things could have been
done better and as a possible guide to the future design of policy.
FAP Report illustrates that, far from unifying the future response
to serious and complex economic crime, there has been an increase
in bodies tasked with tackling the same general area, giving rise
to the question of whether, other considerations apart, a large
unified agency should now be reconsidered to confront a problem
which has become more serious, more prevalent and more complex than
it was in Lord Roskill’s day. There is no doubt a political
will to persuade society of the corrosive and subversive effects
of economic and financial crime. Bodies like the Fraud Advisory
Panel were brought into being alongside National Fraud Fora to persuade
civil society to take adequate preventative measures as well as
to join in the State’s attempts to contain this criminal conduct.
Since Roskill, it has been accepted that the State alone cannot
deal with the occurrence of crime, particularly economic crime.
However, it remains the duty of government to mark society’s
intolerance of this delinquency by making detection, investigation
and punishment a realistic consequence of this behaviour.
the years since Roskill, society both domestically and globally
has become more regulated, and indeed the very word regulation has
acquired widespread acceptance, provided always that it is proportionate
this background, the Working Group, upon whose short Report this
article is based, asked itself whether it made sense to have an
SFO, and a Fraud and Revenue & Customs Division of the CPS,
working alongside the FSA, the Office of Fair Trading, Department
for Work & Pensions and the Ministry of Defence among others.
Was it possible, we asked, to fashion clear policy objectives governing
cases to be considered, methods and powers of enquiry, preventive
criteria, and ultimately desirable outcomes, forensic and non-forensic
for so many different and sometimes competing organisations? In
addition, how were business organisations, often regulated or governed
by more than one agency, to fashion their own policies? Equally,
how was the legal profession advising their clients corporate and
individual to predict outcomes when confronting one agency rather
than another? With the exception of the FSA, all the above agencies
are centrally and publicly funded. The FSA is funded by those it
regulates, and the income it generates from fees and penalties it
imposes. Given that there are many overlaps between the remit of
the SFO and the more limited remit of the FSA, was it possible,
if desirable, to marry the two in a single United Fraud Prosecution
Office? The use of the word prosecution has itself been called into
question by the increasing application of non-forensic punishments:
regulatory penalties, fines, disgorgement, possible deferred prosecution
arrangements, disqualification and debarment.
for example, a unified office not only bring economies of operation,
as envisaged by the merging of the CPS with the RCPO, but also the
development of a predictable policy of outcomes that prevented the
possible perception that white collar crime was being treated more
lightly and rigorously than its blue collar “counterpart”?
Visiting delinquent corporations with meaningful punishment is a
relatively modern concern, and its development may be hampered if
too many agencies exist to define its character.
body to deal with all fraud is clearly unworkable. One body to deal
with conduct which includes all serious fraud including tax fraud
and corruption may be practical. Again, the Working Group recognised
that special interests such as the policing and prosecution of criminal
cartels may best be left to specialist agencies like the Office
of Fair Trading, particularly given the low number of cases involved,
however serious the financial consequences.
most of the work of the Revenue & Customs is best policed and
sanctioned by specialist investigators and their trained prosecution
lawyers. However, thought should perhaps be given to the creation
of machinery which could assign cases, where more than one type
of serious and complex delinquency is involved, to a unified body.
frequently overlooked recommendation of Roskill was the setting
up of an oversight and review body to monitor efficiency and recommend
reform in keeping with ever-changing developments in economic crime,
so that a UFPO could make as profound an impact proactively as reactively.
The SFO itself is not a failing institution, and if its occasional
shortcomings make the headlines, they may be avoidable in the future
by the application of a more coherent evidence-based programme,
which does not leave it at the mercy of comparisons with other competing
agencies at home, or models borrowed from other jurisdictions.
there is no unified approach to the establishment of a larger and
more inclusive agency, there is a danger that some types of economic
wrongdoing will either go un-investigated and unpunished or perhaps
worse still will not receive the attention and sanction that society
has a right to demand.
a time of financial cutbacks, it may not be popular to canvass the
idea that a UFPO should not be created simply to bring about economies
of size. If there is to be a shift in society’s response to
suffering billions of pounds of harm each year from serious dishonesty,
it should be on the basis that the UK will be seen to be tough on
financial and economic crime, as well as on the causes thereof.
hardly needs to be pointed out that, as we move towards rewards
for self-reporting and plea bargaining for malefactors, it is essential
that these same malefactors should not be able to go agency shopping
to secure the best leniency deal.
punishment following prosecution must remain the province of the
judiciary. What the FAP Working Group is keen to engender is a debate
on those steps leading to a decision to prosecute or not to prosecute,
or leading to leniency and/or consensual outcomes.
FAP has invited all the main stakeholders in the debate to offer
their views on the Working Group Report so that the debate may be
Working Group’s Report may be found on the Fraud Advisory
MONTY RAPHAEL 2010
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