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Harry Cassin
Publisher and Editor

Andy Spalding
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Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
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Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
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Julie DiMauro
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Thomas Fox
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Marc Alain Bohn
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Bill Waite
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Russell A. Stamets
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Richard Bistrong
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Eric Carlson
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The SFO Fights For Its Life

Plans to break up the U.K.’s Serious Fraud Office are suddenly on hold.

The Telegraph reported Sunday that the Home Office “hastily” delayed a consultation on its plan to divide the SFO. The plan would send the agency’s prosecuting function to the Crown Prosecution Service and its investigating side to the National Crime Agency.

The treasury and business departments, the paper said, oppose the break-up plan.

The SFO was set up in 1988 as an independent agency to investigate and prosecute serious or complex fraud and corruption, including overseas bribery. It will oversee enforcement of the new Bribery Act, set to be effective on July 1.

Some see the plan to disassemble the SFO as a step back from international best practices. The U.S. DOJ, for example, leads both investigations and prosecutions. But the Home Secretary, Theresa May, said in a letter to the U.K. attorney general that there is no best practice.

The BBC’s influential business editor Robert Peston, who said he’d seen May’s letter, quoted her as telling the attorney general: “Whilst the U.S. model is prosecutor-led, Canada, Australia, and Germany run solidly investigative agencies for economic crime. But there is no ‘gold standard,’ so in either model we would need to ensure that inherent risks were mitigated effectively.”

The break-up plan has already caused high-profile departures at the SFO. Its influential general counsel, Vivian Robinson, left in April for private law practice. Robert Amaee, head of the anti-corruption division, left earlier this year, and late last year, Charlie Monteith, head of the policy section, also resigned.

The BBC’s Peston said since last year, 31 defendants prosecuted by the SFO went to trial, and 26 were found guilty. “The conviction rate was 84%, and the average jail sentence was over 30 months. In the same period, £64 million of funds were recovered for victims.”

New management came to the agency in 2008 after it was criticized for dropping an investigation into BAE Systems about bribery allegations involving the Saudi royal family.

“The SFO believes that if it were allowed to keep its current structure,” Peston said, “its dependence on taxpayer funding could reduce further, thanks to its growing success at levying fines, obtaining compensation and seizing criminally obtained assets for the benefit of the public purse.”

The SFO currently has about 100 cases. The agency’s budget for 2012 is £33.9 million, and will be reduced to £30 million the next year. In contrast, Peston said, two years ago the SFO had a budget of £53 million for a workload of just 65 cases.

On Friday, Peston called the plan to divide the SFO “the most radical change to the investigation and prosecution of financial crime since the creation of the Serious Fraud Office in 1988.”

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