Fraud – SFO boost but police funds cut

The government sent mixed messages to the financial community last week about its determination to tackle fraud and money laundering.

The Serious Fraud Office hailed a small rise in its real income as a result of the chancellor’s comprehensive spending review, while the City of London police chiefs began to wrestle with a near 10% cut.

Last year, the SFO was told it also faced cuts in its expenditure of nearly 10%. But SFO boss Ros Wright emerged from the review with a 5.9% rise in budget to #17.1m, for 1998/1999. Similar rises are planned for the following two years.

‘It’s a vote of confidence in the SFO,’ she said. ‘It’s not an enormous rise, but I aim to speed up the time spent investigating cases and the increase should mean we can do that.’

In the year to 4 April, the SFO prosecuted 39 defendants, and obtained 37 convictions, including accountants David Ashworth, ACCA, and Abdul Hameed Chiragh, ACA.

The City of London Police, with the largest anti-fraud unit outside the SFO, faces a #4.6m cut in funding to #57m. It said savings would be achieved by force ‘realignment’ and that budget proposals would not affect the fight against crime.

But the City is facing a massive influx of funds from Eastern Europe which detectives fear is the proceeds of crime and is laundered in London.

Ashworth, joint managing director of a leasing company, arranged corrupt deals with engineering firm MGL, owner of Brabham motor racing team, and used ‘improper pressure’ to extract cash payments from MGL directors.

He was given an 18-month prison sentence.

Chiragh, a small practitioner, falsified documents for BCCI fraudsters to convince auditor Price Waterhouse that bogus offshore companies were real. He was given a five-and-a-half-year jail term for false accounting, conspiracy to defraud and perverting the course of justice.

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