Security services company G4S announced Friday that its U.K. subsidiary has reached a proposed deferred prosecution agreement (DPA) with the Serious Fraud Office to resolve an investigation into fraudulent activity surrounding electronic monitoring contracts with the U.K. Ministry of Justice (MoJ).

Subject to approval by the court and compliance with the DPA terms, the proposed settlement would conclude an investigation the SFO began in 2013 that G4S Care and Justice Services (G4S C&J) “improperly invoiced, and been paid by the MoJ, for monitoring subjects where no monitoring had taken place.”

In entering the DPA, G4S C&J “will accept responsibility for three offenses of fraud against the U.K. [MoJ] arising from a scheme to dishonestly mislead the MoJ as to the true extent of its profits between 2011 and 2013 from its contracts for the provision of electronic monitoring services,” the SFO said. “The scheme was designed to prevent the MoJ from obtaining information to which it was entitled and from using this to decrease G4S C&J’s revenues under those contracts.”

In a statement, SFO Director Lisa Osofsky said G4S C&J “repeatedly lied” to the MoJ, “profiting to the tune of millions of pounds and failing to provide the openness, transparency, and overall good corporate citizenship that U.K. taxpayers expect and deserve from companies entering into government contracts. The terms of this DPA will provide substantial oversight and assurance regarding G4S Care & Justice’s commitment to responsible corporate behavior.”

Following a full investigation, the SFO said it “determined that there is insufficient evidence to provide a realistic prospect of conviction regarding this conduct, and it does not form part of this DPA.”

DPA terms

The SFO and G4S C&J will seek final judicial approval of the DPA before Justice William Davis on July 17.

“The full terms of the DPA, details of the conduct to which it relates, and the reasons for entering into the DPA will be given in open court at the public hearing of the application to approve the DPA,” the SFO said, “subject to any delayed publication of aspects of the DPA or reporting restrictions ordered by the judge to protect potential future criminal proceedings against individuals.”

If approved, G4S C&J will pay a financial penalty of £38.5 million (U.S. $47.6 million), plus a payment of £6 million (U.S. $7.4 million) of the SFO’s full costs. The fine reflects a 40 percent discount due to G4S C&J’s “substantial cooperation with the SFO’s investigation,” the company said.

The SFO said it agreed in principle to this resolution based on numerous factors, “including G4S C&J’s disclosure of materials indicating the conduct upon which the charges referenced above are based; its overall—albeit delayed—substantial cooperation with the SFO’s investigation; its remedial efforts since the offending; and its agreement to an extensive program of review, assessment, and reporting on its internal controls, policies, and procedures.”

The corporate renewal program includes “enhancing systems of risk management covering bidding, contract on-boarding and management, and strengthening assurance activities; operating practices, controls, policies, and procedures throughout its operations; as well as subjecting itself to internal and external examination, analysis, detailed review, and audits to ensure progress and success in its rehabilitation efforts,” G4S said.

No damages or disgorgement of profit will be payable, since the DPA terms provide that G4S C&J fully compensated the MoJ as part of a £121.3 million (U.S. $150 million) civil settlement in March 2014.