SFO integrity questioned after Unaoil conviction overturned

In its judgment Friday, the Court of Appeal severely criticized the SFO for its failure to disclose key evidence and “wholly inappropriate” contact with a “fixer” who proposed a backroom deal where key managers would be prosecuted while the company’s owners were left alone.

Three judges quashed the conviction of Ziad Akle, a former Iraq-based executive at Unaoil sentenced to five years in prison last year for bribing public officials to secure contracts worth $55 million to build mooring buoys in the Persian Gulf. The court said his defense had been “handicapped” after the SFO allowed David Tinsley, a Florida-based investigator representing the Ahsani family, Unaoil’s founders, to become actively involved in its case to prosecute company managers.

The SFO opened its investigation into Unaoil in 2016, but it appears its case received a shot in the arm after Tinsley told Director Lisa Osofsky and others at the agency he could persuade Akle and another suspect, Basil Al Jarah, to plead guilty in return for a lenient deal for his own clients. Tinsley did not legally represent either man.

Al Jarah eventually pleaded guilty to five bribery and corruption offenses and was sentenced to 40 months in prison in October 2020.

“This is an organization that lacks any credibility. The Court of Appeal has exposed the SFO’s unorthodox practices conducted by those right at the top of the organization. How can the public have any confidence now in the agency?”

Francesca Titus, Partner, McGuireWoods

The Court of Appeal said, “Tinsley was the last person whom the SFO should have allowed, or caused, to undertake the role of trying to persuade [Al Jarah and Akle] to plead guilty.”

The SFO’s application for a retrial was rejected.

The judgment revealed a catalogue of embarrassing errors and questionable conduct at the regulator. Senior investigators lost data from their mobile phones and withheld “embarrassing” material about the SFO’s communications with Tinsley, according to the court. Osofsky herself conducted meetings with third parties she should not have met and kept no record of the interactions.

In a statement issued Friday, the Attorney General’s Office said it was “deeply concerned about the findings in the judgment and will be discussing the implications with the director of the SFO urgently.”

It added the attorney general has commissioned an independent review of the issues highlighted, including disclosure failings at the SFO. No further details of the scope of the review, its timeline, or possible sanctions are available.

In an emailed statement, the SFO said it was reviewing the judgment and will cooperate fully with the review.

Legal experts said the judgment is “remarkable” and called the SFO’s conduct “without precedent.” Several added Osofsky’s position is “untenable” and that she should resign. Her five-year term is due to come up for renewal in 2023.

Akle’s lawyer, Jo Dimmock, litigation partner at law firm Paul Hastings, said, “There is no room in this jurisdiction for justice by fixer.” She added, “By acting in the way it did, the SFO undermined the whole justice system. This judgment sends a clear message: The SFO can no longer engage in backroom deals.”

“This is another bad news day for the SFO,” said Richard Cannon, partner at Stokoe Partnership Solicitors. “The findings of the Court of Appeal are damning and go to personal and organizational misconduct. The existential threat to the SFO now looms large again.”

Some legal experts believe the SFO’s poor track record in securing corporate or executive convictions for bribery offenses might have prompted the agency to take risks so that “even the most basic standards of integrity and disclosure were not upheld.”

“This is an organization that lacks any credibility,” said Francesca Titus, partner at law firm McGuireWoods. “The Court of Appeal has exposed the SFO’s unorthodox practices conducted by those right at the top of the organization. How can the public have any confidence now in the agency?”

Titus said companies being investigated by the SFO will now “be on high alert” about the culture and willingness of the regulator to follow the usual rules of criminal procedure.

“As with all cases brought by the SFO or any other regulatory body, it’s important to carefully scrutinize how they are applying their disclosure obligations and ensure they are compliant,” said Sam Healey, partner at JMW Solicitors.

“Almost on every case I now deal with I am having to go back to the prosecution to ask they provide further details on the description given on unused material items. The same also applies in relation to asking them to ensure their unused material schedule is up-to-date and complete,” he added.

Akle’s overturned conviction might raise questions about the convictions of other Unaoil executives. Stephen Whiteley received a three-year prison sentence for similar offenses and was ordered to repay almost £100,000 (U.S. $132,000) in November.

Paul Bond, meanwhile, was sentenced to 42 months in prison in March following a retrial. The Court of Appeal in its ruling Friday declined an appeal by Bond.