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Harry Cassin
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How can Lisa Osofsky save the Serious Fraud Office?

Last week, SFO head Lisa Osofsky told British lawmakers that she regretted the agency’s “damaging relationship” with an American private investigator during a major corruption probe into oil consultancy Unaoil, which ultimately led to three UK convictions being overturned.

Appearing before Parliament’s Justice Committee, Osofsky apologized for holding a private meeting with David Tinsley, a middleman working for individuals that the SFO was investigating, days after she joined the anti-fraud watchdog as director.

(A dual U.S./UK national, Osofsky began her career working as a U.S. federal prosecutor, later joining the FBI and the U.S. Department of Justice).

The SFO was found to have denied three men a fair trial by withholding evidence of its inappropriate dealings with Tinsley, a fixer hired by members of Unaoil’s founding Ahsani family, who sought to persuade two defendants to plead guilty in return for lenient treatment for his clients.

Osofsky said in front of the Justice Committee, “I did it. Do I regret that I did that? Absolutely. Do I wish I had done things differently? I do. I see the impact on our office and victims.”

These events take place against a more troubling backdrop, with the SFO hit by a series of high-profile failures which have led some to call into question its future. Yet Max Hill KC, the head of the UK’s Crown Prosecution Service (CPS) – which prosecutes criminal cases that have been investigated by the police and other investigative organizations in England and Wales – has stated that there is no prospect of the beleaguered SFO merging with another law enforcement agency.

Although the SFO will likely see this as reassuring, I would question whether Hill’s apparent support is deserved.

The SFO’s failures have led me to question the organization’s viability in its current format. Some of its failures are to be expected. No litigation team, be they prosecution or defense, is guaranteed to win its cases 100 percent of the time. It would also be remiss of me not to mention the recent positive result the SFO obtained against David Ames, the Chairman of Harlequin Group. Ames was found guilty of two counts of fraud by abuse of position and sentenced to 12 years in prison at the end of September, following a lengthy SFO investigation.

However, the Unaoil matter is a good example of the SFO shooting itself in the foot. Many members of UK law enforcement agencies see the UK approach to disclosure under the Criminal Investigation and Procedures Act 1996 (CPIA) as too heavily weighted in the interests of the defendant. But when you are faced with a criminal prosecution, you must adhere to the basics.

In 2021, the UK Court of Appeal criticized the SFO’s “serious failure” to disclose critical material in the Unaoil corruption investigation. It found that the SFO’s failure to disclose such material relating to its conduct – including the conduct of SFO Director Lisa Osofsky – rendered a key defendant’s conviction as unsafe, resulting in quashing the conviction. The Government’s attorney general launched a review into the SFO’s handling of the case earlier this year.

Losing a high-profile case, such as Unaoil, over what is effectively an administrative task is disappointing.

Disclosure isn’t that difficult in practice, but it is time-consuming and stressful for those charged with implementing and fulfilling the CPIA’s legislative demands. Failure is not an option because it may be terminal to a case. Disclosure officers need to be well-trained and experienced to be considered for such a responsible role, especially in a major case such as Unaoil.

Indeed, a barrister reviewing another SFO case collapse, Brian Altman QC, found that there were “systemic problems of real concern about the SFO’s disclosure, including that the appointed disclosure officer’s ‘inexperience should have disqualified him from appointment as disclosure officer on such a large and complex case.'”

He also said that the SFO’s quality assurance review regime was “inadequate and unfit for such a large and complex disclosure process.”

Altman stated that fundamental failures by the SFO – including poor record keeping and inadequate resourcing – had contributed to its failures in court, adding that there must be an “effective disclosure strategy” in all its future prosecutions.

CPS head Max Hill’s view that the SFO should not be merged with another law enforcement agency – potentially the National Crime Agency or NCA (the UK version of the FBI) – is at odds with how I would see the evolution of the UK’s approach to combating serious fraud and corruption.

Hill outlines several reasons why a merger should not be considered. One reason is that any merger would likely lead to an increase in staffing and resources. I’m not sure this is an insurmountable problem. A fundamental problem lies in the lack of resources the SFO possesses to pay competitive wages compared to the private sector. And that issue exists now, even without any merger.

One of the SFO’s biggest shortcomings right now is the lack of criminal investigators at the top of the organization. Would the expert criminal investigators at the NCA have allowed the Unaoil disclosure failings to take place, I wonder?

I believe that a merger between the NCA and the SFO would not only secure the SFO’s remit for the future, but provide its team with the additional resources and expertise that it currently lacks. It may be that the SFO can remain as an organization but sitting under the NCA umbrella, thereby ensuring that additional resources and expertise are available when required. What I consider to be of utmost importance is the oversight role that experienced NCA detectives would bring to the SFO as it plans each case.

I am not suggesting that the SFO is devoid of such expertise, merely that it appears to be losing its way – and some would suggest its credibility. A rebranding of this type might be all that is required to cement its place at the forefront of the UK’s fight against fraud and corruption.

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