During remarks yesterday at the European Compliance and Ethics Institute conference in Prague, Alun Milford, general counsel for the U.K. Serious Fraud Office, provided some rare insight into the inner workings of the SFO.
Milford began by emphasizing that the SFO has many cohorts to assist the agency in its work. “We have gateways for the supply and receipt of information across the regulatory, law enforcement, and intelligence communities, here and abroad,” he said. “We also have strong relationships with the [National Crime Agency] and the police who give us excellent operational support in our investigations.”
Through this assistance, the SFO—made up of investigators, lawyers, forensic accountants, analysts, IT professionals, and external counsel—is “free to focus on investigating and, if appropriate, prosecuting cases,” Milford added. Innospec, Smith and Ouzman, Sweett Group, and Standard Bank are a few examples of companies that have faced convictions in corruption cases by the SFO.
More cases are on the horizon, including “a LIBOR-fixing trial and a string of overseas corruption trials—all brought by the Serious Fraud Office,” Milford said. “We are not, as some have suggested, focused simply on corporates. We will follow the evidence to wherever it takes us.”
Milford explained that cases against a company come into the SFO in many ways, including through a whistleblower, a disgruntled business rival, a bribe recipient, or a self-disclosure by the company itself. Regardless of how a case comes into the SFO, he said, it will be looked at first by the SFO’s intelligence unit, whose members will assess whether the case meets the SFO’s criteria to take it on.
“If the Director agrees to open a criminal investigation, responsibility for it passes to a case controller on one of our casework Divisions, who will have day-to-day responsibility for the case,” said Milford. That individual will lead the multi-disciplinary team investigating it, who will “pursue all reasonable lines of enquiry, gathering in and reviewing potentially relevant documents from the company and elsewhere. It will interview witnesses and suspects,” Milford added. “At the end of that process, we will make a charging decision.”
So how does the SFO decide how to deal with a company?
“If we judge that there is insufficient evidence against it, then that is the end of the matter so far as the corporate is concerned,” Milford explained. “Equally, if we consider we have sufficient evidence for a realistic prospect of conviction and the public interest warrants the corporate’s prosecution, we will prosecute—but if we think the public interest might not require a prosecution then we will consider a DPA.”
When sitting down to talk with a company, “we will make clear that we are looking for cooperation for the duration of the investigation,” said Milford. The company under investigation is expected to preserve information and to make it available to the SFO, he said.
“Collection of digital material needs to be forensically sound, with whole images being taken of digital collections which are then preserved. Back-up tapes should be preserved, and any rolling destruction processes stopped.
Furthermore, those who gather data should record the steps they took personally to secure it. “The methodology should be disclosed fully to the SFO and be supported by witness statements,” said Milford. “Crucially, also we will want to know what witnesses spoken to by those conducting the internal investigation had to say.”
The SFO has no interest in communications between client and lawyer on questions of liability or rights. “We are focused on the underlying facts, including the accounts of witnesses spoken to in corporate investigations,” he said.
In some cases, the company concerned wants to claim privilege over the witness accounts. “Whether privilege in fact applies depends entirely on the facts of the case, something we will review very carefully,” Milford said.
To that point, Milford explained the following points:
We will view as uncooperative false or exaggerated claims of privilege, and we are prepared to litigate over them: to do otherwise would be to fail in our duty to investigate crime.
If a company’s assertion of privilege is well-made out, then we will not hold that against the company: to do otherwise would be inconsistent with the substantive protection privilege offers. We will simply judge the question of co-operation in our normal way against our published criteria.
By the same token if, notwithstanding the existence of a well-made-out claim to privilege, a company gives up the witness accounts we seek, then we will view that as a significant mark of cooperation: here again, to do otherwise would be inconsistent with the substantive protection privilege offers.
For the same reason, we will view as a significant mark of cooperation a company’s decision to structure its investigation in such a way as not to attract privilege claims over interviews of witnesses.
The SFO does not give advice on anti-bribery compliance. “We are simply investigators and prosecutors, and it is that capacity that we assess compliance after the event, and in light of the particular circumstances of the case,” Milford said.
“If a law abiding company, whose ethos and compliance systems do not allow it to pay bribes, loses out on business to a bribe-paying company, we want to know about it,” he added. “It may be that we have jurisdiction to investigate that company, even if it is not British.”
“If we do not have such jurisdiction, we have good connections with overseas law enforcement authorities who might,” concluded Milford. “So, tell us about it. We’re all ears.”