Serious Fraud Office
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SFO Chief Capability Officer delivers keynote speech at 2023 Cambridge Symposium

The Serious Fraud Office’s Chief Capability Officer, Michelle Crotty, responsible for leading the SFO’s strategy, skills, resourcing and systems, yesterday delivered our keynote speech at this year’s Cambridge Symposium on Economic Crime.

Her full remarks are copied below.

START

Thank you. I’m honoured to be here today, among many friends and partners, representing the UK Serious Fraud Office.

I want to use the time we have together today to offer some insight from the UK’s lead prosecutor for complex economic crime, and to look forward at a time of significant change for us, with Lisa Osofsky ending her five-year tenure and Nick Ephgrave starting his five-year term as Director at the end of this month.

The last five years

Over the past five years, under Lisa Osofsky’s directorship, we have secured 29 convictions, eight deferred prosecution agreements – worth over £1 billion to the UK taxpayer – and recovered over £150 million in proceeds of crime. For a 500-person organisation, running on a budget of approximately £70m a year. We are proud of our record.

Some cases stand out. In particular, our work with French and US law enforcement partners in 2020 to impose the world’s biggest ever penalty for bribery on Airbus, €3.6 billion in total. We may have some colleagues from the French PNF and US DoJ in the room—in which case, let me say thank you and I look forward to our continued work together on more such cases.

Last year, we secured another record outcome when, as the Solicitor General referred to, Glencore paid the largest criminal fine imposed on a corporate in the UK to date – £280 million – for its bribery. For this, we worked with colleagues from the US, Switzerland and the Netherlands. Again, for colleagues from those countries in the room: thank you so much for your joint work and we look forward to continuing to work with you on cases to come.

Both of these cases reflect the global nature of corporate criminality and economic crime more broadly in the 21st century. In fact, you and we rarely encounter any cases that don’t span multiple jurisdictions and require some form of collaboration with overseas law enforcement as James Babbage has clearly set out.

That’s why, under Lisa Osofsky’s leadership, we have heavily invested in our international relationships, providing opportunities to learn from each other and embed strong working relationships across countries and agencies.

This focus on collaboration paid off in court last year, with our successful prosecution of three individuals for a $500m shipping fraud – where we partnered with 37 other jurisdictions to collect the information we needed. The SFO has truly never been better connected and more respected by partners globally, and I believe this to be one of Lisa Osofsky’s greatest legacies as Director which we are determined to expand even further under the new Director.

The other big feature of the Director’s tenure has been her ambitious programme of internal SFO reform. The Serious Fraud Office of 2023 is becoming a different organisation compared to that of 2018 when she took up the reins, and the pace of change won’t slow down anytime soon.

We’ve also been determined right from the outset to learn from cases that haven’t gone so well, backed up by the recommendations of two independent reviews. For those of us inside the SFO, the reviews have injected new momentum into the need for change.

We are pleased that earlier this year, HM Crown Prosecution Services Inspectorate, the body tasked with inspecting the SFO, recognised the good progress that is being made.

Legislative change

As much as we can reform ourselves and adjust ourselves for the task at hand, we also need the right tools. We need strong powers and legislation that recognises how modern criminality operates.

This is why we have been championing a range of measures that should significantly improve our operating environment and we welcome the support of the Government on these.

Later this year we expect the Economic Crime and Corporate Transparency Bill to receive Royal Assent and enter into force. This piece of primary legislation will make three important changes to our world.

First, it will expand our “Section 2A” powers to cover fraud cases – not just bribery and corruption. This is a unique tool we use to compel people and organisations to give us information before we formally open an investigation. This change will empower our intelligence officers to produced better assessments more quickly, and thereby improve the speed of our investigations.

Secondly, the Bill makes a vital change to the statutory identification doctrine. Under the current doctrine – which is grounded in case law developed up to 100 years ago – some companies, especially larger companies, have been able to avoid liability for crimes unless we can prove that individuals exercised the “directing mind and will” of the company – in itself very difficult even when the most senior employees of an organisation are in the dock. The new law will allow us to prosecute on the basis that the companies’ “senior managers” – borrowing from existing legislation around corporate manslaughter – are responsible for the offending. We believe this has the potential to transform the prosecution of large and complex multinational enterprises. 

Third, for cases where the identification doctrine does not apply, we will also have a failure to prevent fraud offence. We have long championed the benefits of corporate failure to prevent offences. Nine of our 12 Deferred Prosecution Agreements and two corporate convictions have featured the failure to prevent bribery offence – enabling us to hold companies including Petrofac and Glencore to account and bringing in over £1.8 billion for the UK taxpayer. This new fraud offence, combined with the identification doctrine, will significantly widen our net for catching corporate fraud.

An area where we continue to push for reform is the regime for identifying material that we may either support the defence case or undermine our own case, known as ‘disclosure’ (‘discovery’ in the US system), as referred to by the Solicitor General.

The current framework was much needed when it was introduced in the 1990s but the world, including how crimes are committed, has fundamentally changed and the framework is really showing its age. Every aspect of our lives are digital by default; to give just one simple example, the average 64GB mobile phone that every one of us in this room has would each hold up to 100 times more data than a single 1990s computer. As a result, our cases today generate tens of millions of pieces of data sometimes in the form of documents, all of which have to be reviewed in some form or another by our case teams. We must find a different and better way to do this for the sake of victims, the public and suspects.

We welcome the Government’s new Fraud Strategy published in May, which recognised the need for disclosure reform: making a commitment to commission an independent review of disclosure. We wait to see the next steps, but will work closely with the review team and we remain hopeful for some ambitious reform.

Future

Our top priority is fundamentally changing the way in which we recruit – focusing on filling all of our vacancies with permanent staff. This will be no small feat in a highly competitive jobs market but I truly believe that we can offer work that no-one else can and the opportunity for experts of all types to build their skills and make an important contribution to society. We welcome Baroness Penn confirming there will be a People Strategy for economic crime, as at the SFO we carry permanent vacancies of around 20 to 25 percent, largely back-filled by agency workers. 

Of course the greatest change on the horizon is the arrival of our new Director, Nick Ephgrave. Nick brings with him a sharp insight into the evolving landscape of economic crime and, crucially, near-unrivalled expertise in leading large, complex and multidisciplinary law enforcement organisations, having served as Assistant Commissioner at the Metropolitan Police Service.

I know Nick will also be – like Lisa – invested in maintaining and building the SFO’s relationships both within the UK and overseas. 

Conclusion

As I’ve set out, there is an exciting future ahead of the SFO, with a significant number of changes afoot in terms of policy, our internal reform and our leadership. We’re excited about these changes. Do please continue to support us on this mission, keep engaging with us and champion our work into the future.

Thank you for having me here today – there are three presentations by SFO staff this week – I encourage you to attend them to understand more about our work. I wish you a fruitful symposium and year ahead.

Thank you.

 

Channel website: https://www.sfo.gov.uk/

Original article link: https://www.sfo.gov.uk/2023/09/04/sfo-chief-capability-officer-delivers-keynote-speech-at-2023-cambridge-symposium/

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