What does the Serious Fraud Office do?
The Serious Fraud Office (which is often referred to as the SFO) is a UK agency that investigates top-level serious or complex fraud and bribery and corruption cases.
The SFO is part of the UK criminal justice system covering England, Wales and Northern Ireland. But it does not cover Scotland, the Isle of Man or the Channel Islands. It differs from other enforcement agencies in the UK because it investigates and prosecutes its cases, whereas other agencies only do one or the other of these tasks.
The SFO operates this way because the cases it takes on are complicated, so lawyers and investigators need to work together on them from the beginning.
In deciding whether to formally begin an investigation, the Director of the SFO (the most senior person in the agency) will take into account the actual or intended harm that may be caused to:
- The public
- The reputation and integrity of the UK as an international financial centre
- The economy and prosperity of the UK
The Director will also consider whether the complexity and nature of the suspected offence requires the SFO’s specialist skills, powers and capabilities to investigate and prosecute.
The SFO also:
- Pursues criminals for the financial benefit they have made from their crimes.
Works with UK government departments, as well as other law enforcement agencies in the UK, including the National Crime Agency, the City of London Police, UK police forces and Regional Organised Crime Units, HM Revenue and Customs and the Financial Conduct Authority.
- Operates as a member of the National Economic Crime Centre (NECC), which is the UK’s national authority for tackling economic crime.
- Assists overseas investigation and enforcement agencies with their investigations into serious and complex fraud, bribery and corruption.
- Has the power to investigate and prosecute the offence of corporate failure to prevent the facilitation of overseas tax evasion, which was introduced in the Criminal Finances Act 2017.
The SFO was created and given its powers under the Criminal Justice Act 1987. It has around 450 permanent staff, although it can take on extra temporary staff when it has to manage an exceptionally large case. The SFO staff includes investigators, lawyers, forensic accountants, analysts, digital forensics experts and a variety of other people in specialist and support roles.
The SFO also has the power to offer a company that it investigates a deferred prosecution agreement (DPA). This involves the SFO suspending a prosecution if the company that was to be prosecuted agrees to meet certain conditions. These conditions could be the payment of a fine or compensation, removal of staff, changes to working practices or helping with the prosecution of certain individuals. If these conditions are met for a set period of time, the company will not be prosecuted. But if it fails to meet them, it will be prosecuted.
Types of Crime Investigated by the SFO
The SFO takes on a small number of large economic crime cases. It may investigate any suspected offence that appears to involve serious or complex fraud, bribery or corruption.
At any time, the SFO will have approximately 60 cases ongoing – either being investigated or before the courts. SFO cases usually:
- Involve activity in many countries.
- Involve alleged criminals who go to great lengths to hide their activity and the money they make from it.
- Require analysis of very large amounts of information.
- Take longer to investigate and prosecute than other criminal cases.
The Most Prominent SFO Investigations
All the cases that the SFO takes on are significant, due to factors such as the amounts of money involved, the complexity of the wrongdoing being investigated or the legal issues.
But some are recognised for being particularly notable. These are:
- The Barclays Qatar Case: This case, which concluded in February 2020, is the only UK case to involve senior executives being charged with alleged wrongdoing in relation to the financial crash of 2008. Three former Barclays bankers had been accused of funnelling secret fees to Qatar in exchange for emergency funding at the height of the 2008 financial crisis. They were found not guilty of fraud, which was a notable defeat for the SFO.
- Airbus: In 2020, the SFO concluded the UK’s largest DPA, with the global aerospace company, Airbus. Under the terms of the DPA, Airbus agreed to pay a fine and costs amounting to €991 million in the UK. This was part of the €3.6 billion Aerospace paid in total to settle bribery allegations.
- Serco: The SFO charged two executives of Serco with fraud and false accounting in relation to a contract with the government for electronic monitoring of offenders. But the case collapsed in April 2021 following the discovery of significant disclosure failings by the SFO. This led to SFO Director Lisa Osofsky commissioning a report into the trial’s collapse.
- Unaoil: The SFO had secured convictions as a result of its investigation into the energy company Unaoil’s use of bribery to gain oil contracts. But three of the four men’s convictions were overturned in 2021 and 2022 following serious disclosure failings by the SFO, including the failure to disclose contact between the SFO and a third party ‘fixer’. This prompted the Attorney General to commission a report into the failings.
- Global Forestry Investments: This SFO prosecution led to two company directors being convicted in 2022 - and given 11-year sentences - over fraudulent green investment schemes in Brazil. It is a notable case, as it relates to ‘green fraud’ and the increasing focus on how genuine companies’ environmental, social and governance (ESG) claims are.
- Glencore: The mining and commodities company was fined £280 million in 2022 after pleading guilty to using bribery to gain preferential access to oil in Africa. The case was the first time the section 1 Bribery Act 2010 offence of active bribery had been used against a company. The total fine was the highest ever ordered in a corporate criminal conviction in the UK. It included a £93.4 million confiscation order, where the guilty party pays back the amount they gained from the crime. This was the largest ever confiscation order in an SFO case.
- Sweett Group PLC: In December 2015, the SFO secured its first conviction under section 7 of the Bribery Act 2010 - the offence of failure to prevent bribery. The company pleaded guilty to failing to prevent bribery by its Dubai subsidiary and was ordered to pay a total of £2.25 million.
- ENRC: This high-profile SFO case is linked to several separate legal proceedings launched by ENRC. The SFO investigation into alleged fraud, bribery and corruption regarding ENRC’s acquisition of minerals began in 2013. Nobody has yet been charged in connection with the investigation.
- G4S: In March 2023, following a 10-year-investigation, charges were dropped against three former executives of G4S' electronic tagging arm, who had been accused of defrauding the Ministry of Justice. This was another case that ended due to disclosure problems. In 2020, G4S had concluded a DPA with the SFO, in which it accepted responsibility for three counts of fraud and agreed to pay a £38.5 million fine and SFO costs of £5.9 million.
- Imperial Consolidated: In 2010, a nine-month-long re-trial of two former directors of the collapsed Imperial Consolidated Group led to their acquittal in one of the SFO’s biggest investment fraud cases, which related to an alleged £150 million Ponzi swindle. The jury had failed to reach a verdict in the original trial.