Hannah von Dadelszen, joint head of fraud for the Serious Fraud Office (SFO), spoke recently at the Fighting Fraud and Eliminating Error Conference, offering some insight into how the SFO determines which fraud cases to investigate and what steps to take to begin an investigation.
Today, noted von Dadelszen, cases are considered under the SFO statement of principle and specifically under the following factors:
whether the apparent criminality undermines U.K. PLC commercial or financial interests in general and in the City of London in particular,
whether the actual or potential financial loss involved is high,
whether actual or potential economic harm is significant,
whether there is a significant public interest element, and
whether there is new species of fraud
That criteria, she says, are a far cry from years back when the agency would only investigate a case if it was over £1million, which “became rather like Dr. Evil being cryogenically frozen in 1967 and then reawakened in 1997 only to hold the world to ransom for $1 million.”
In light of the newest factors for determining fraud, the SFO has been keeping busy. It currently has investigations into such heavyweights as Rolls Royce for bribery and corruption—the automobile manufacturer has completed a Deferred Prosecution Agreement with the SFO for £497.25m; Airbus, which is being investigated for bribery and corruption in its commercial airline business; and Tesco, whose employees (three of them to date) are being investigated for violations of the Fraud Act 2006 and the Theft Act 1968.
von Dadelszen offered a look into how the SFO organizes just such an investigation, stating “We are not a regulator. We are not an educator. But we are investigators and prosecutors. And digital forensic experts. And proceeds of crime experts.”
First, the specific cases go through a thorough vetting process, before the director decides whether or not to pursue them. von Dadelszen says cases are analyzed by an intelligence team of lawyers, investigators, and analysts who sort through the details to find out if they fit into the agency’s statement of principle and are worth a look by the director.
Next, cases are assigned to the “case controller,” either a lawyer or investigator who will head up the investigation, set strategy, identify suspects, and oversee all aspects of the investigation. That person, who presides over a team of lawyers and investigators all involved in the decision making, reports to the head of the division.
But the most significant part of the process, according to von Dadelszen, is the training. “The SFO has made a very conscious strategic decision to invest a significant amount of resource in training our investigators. We believe that counter-fraud investigation is a profession and that there are specific skills and training required in order to be successful at it,” she said.
The agency has just begun a comprehensive trainee programme at the entry-level grade that is focused on lessons in detecting fraud, bribery, corruption, information handling, banking analysis, and more. The training lasts 18 months and is followed up by an interview that examines workbook exercises completed during those 18 months. If all goes well, says von Dadelszen, “That means promotion in under 2 years.”
“Having this programme will mean good people want to come and work for us. And we hope the career progression element of the programme will mean that when they come to us, they will want to stay and be part of the work we do for a significant period of time,” she added.
While statistics vary on how effective the training programme has been in terms of how many convictions were dealt by the SFO, von Dadelszen said it depends on how you look at them. (In 2015 through 2016, only 6 defendants in 4 cases were convicted for a conviction rate of 32 percent. But, looking between the longer time period of 2012 through 2016, the conviction rate was 65 percent per defendant and 81 percent per case, with 75 defendants in 25 cases convicted.)
“To those critics who think that those conviction rates are not high enough, I say this: If you want 100 percent conviction rate, move to Belarus. We cannot guarantee conviction, but we can get our cases past half time. After that, it’s up to the jury.”
Click here for more of von Dadelszen’s speech.