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News Round Up

8 September 2014

Pakistan’s government is introducing a Mutual Legal Assistance Act to enable it to seek help from other countries when investigating allegations of money laundering.

The country’s Ministry of Interior and Ministry of Law will finalise the draft of the Act as soon as possible. Amendments have also been proposed to the country’s Anti Money Laundering Act to include more offences. Pakistan is also reviewing its approach to tax crime.

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The Serious Fraud Office has been criticized for following up just three of the 5,582 tip offs it received from its SFO Confidential phone line and email whistleblowing service during 2011 and 2012.

SFO Confidential began in November 2011. It was closed in June 2012 as new SFO Director David Green believed it was leading to too much staff time being taken up dealing with phone calls to it. An email reporting mailbox was kept running.

Member of the Public Accounts Committee, Tory MP Steve Barclay, said: “Once again there are now serious questions as to whether the SFO is delivering value for money to the tax payer. The SFO should certainly be looking into its handling procedure for reports of fraudulent activity and should ensure that each tip-off is given serious consideration rather than being dismissed as it seems to have been in recent years.”

In response, the SFO pointed out that most fraud investigations are carried out by other organisations and that the Action Fraud helpline remains open to anyone wanting to report wrongdoing.

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Serious Fraud Office (SFO) Director David Green has announced that his organisation plans to make more arrests as part of its bribery investigation into jet engine maker Rolls-Royce Holdings.

Mr Green said that the investigation involved "several divisions of Rolls Royce business activity".

Seven months ago, the SFO had arrested Sudhir Choudhrie and his son Bhanu as part of its investigation into Rolls-Royce's Asian operations.

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A nationwide operation involving 120 police officers saw 13 men arrested across England on Wednesday (September 3rd) as part of an attempt to target suspected money launderers involved in a multi-million pound investment fraud

The men were arrested in connection with the running of four boiler rooms that cold called people to sell them investments in gold leasing and mobile phone airtime minutes. The boiler rooms are believed to have defrauded more than 100 people out of more than £2.8 million in total.

Arresting officers seized business documents and mobile phones at addresses in Milton Keynes, Northampton, Peterborough, Ashford, Dagenham, Harrow, Brough, Basildon, Stamford in Lincolnshire, Hinckley and Wolverhampton.

Detective Inspector Teresa Russell, who is leading the investigation, said: “Victims were cold called by this gang to invest their money in gold leasing and airtime, on the promise of quick and large returns. The stark contrast is that these investment schemes appear to be scams and we suspect those arrested as part of today’s police operation laundered the missing millions for their own or others benefit.”

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The UK government is considering whether companies should be charged with failing to prevent fraud, money laundering and other economic crimes.

Attorney General Jeremy Wright told a conference in Cambridge that the government is "considering proposals for the creation of an offence of a corporate failure to prevent economic crime". This offence would be similar to the failure to prevent bribery offence in the Bribery Act 2010.

The SFO has argued previously that such an offence would make it easier for it to prosecute companies. It would take away the need to prove that a company had encouraged employees or agents to behave illegally.

Mr Wright also told the conference that the government was planning to publish its first ever national anti-corruption plan, which will outline the roles of various bodies that investigate economic crimes.

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The UK is vulnerable to fraud due to poor management of its £40 billion pounds’ worth of outsourced public contracts, according to the National Audit Office (NAO).

In its review of contract management, the NAO says that the government is exposed to the risk of widespread fraud and overcharging. Five government contracts are being investigated by the police or the Serious Fraud Office but the NAO believes there are probably more cases of the government being overbilled by the private sector.

The report was ordered last year following claims that G4S and Serco had overbilled the Home Office and the Ministry of Justice for tagging services and the movement of prisoners.

Margaret Hodge MP, who chairs the public accounts committee, said: "More and more of our public services are now being delivered by private companies, who between them received a huge £40bn last year from contracts funded by the British taxpayer. These companies must be held to the same high standards as any government department, so that the public can have confidence that they are delivering the quality of service we are entitled to expect.

"Not all senior civil servants have taken these contracts seriously, with data to monitor and understand performance still not good enough because departments think their responsibility ends once a contract is signed."

A test sample of 60 government contracts by the NAO found that 34 had "issues in the amount billed".


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