New office to lead serious fraud fight

Press, 18 December 1989, Page 40

New office to lead serious fraud fight

NZPA London The New Zealand Government has announced it will introduce legislation setting up a Serious Fraud Office to spearhead the fight against serious or complex fraud cases. Despite reservations, the public have welcomed the establishment of the Serious Fraud Office in Britain with its special powers which include removing suspects’ rights of silence. By its nature, fraud is difficult to prove. People have taken the view that if suspects are to be successfully prosecuted, the authorities must have all the armoury at their disposal — even if it means the removal of basic fundamental rights. Corporate fraud has become the big-stakes crime in Britain, far outstripping bank raids and bullion robberies. In 1987 the combined company fraud squads of the Metropolitan and Cjty of London police forces had 462 cases of fraud involving £1545 million ($4196 million) on their books at the beginning of the year and took on a further 590 investigations totalling £256.7 million. This compares with £125 million for theft inquiries, £7O million for burglary and £l7 million

for robbery. Faced with these statistics, the Government had little option but to look for new ways of cracking down on the types of financial practices which had begun to shake public confidence in the probity of the City of London. This led to the establishment of the S.F.O. in April last year with special powers to investigate and prosecute people or companies suspected of being involved in illegal company practices. The S.F.O. has its origins in the Roskill Fraud Trials Committee report, published four years ago, which criticised the fragmented way big frauds were investigated and offenders prosecuted. At the time, the police, the Trade and Industry Department, Inland Revenue, and Customs and Excise all had separate responsibilities for tracking fraud offenders. The result, according to the S.F.O.’s head, Mr John Wood, was that cases ran on as investigators made complex inquiries before passing on mountains of evidence to the prosecuting authorities, who then spent more months familiarising themselves with the mass of detail. The S.F.O.’s role is both

investigator and prosecutor. Mr Wood argued that the two arms working in the same building inevitably cut down the time between beginning a case and its arrival in court. The office of more than 80 staff, including 26 lawyers and 19 accountants, has extensive powers not available to the police. These include the power to require people to produce documents, answer questions and provide information relevant to the investigation. Anyone who fails to cooperate with an S.F.O. investigation commits a criminal offence which could lead to a six-month prison sentence or a fine up to £2OOO. Falsifying, concealing or destroying documents, where a person knows that an investigation • by the S.F.O. into serious or complex fraud is being, or is likely to be, done is an even more serious offence punishable with up to seven years jail on indictment. But while suspects are compelled to answer S.F.O. questions, the evidence is not admissible in any subsequent trials, although it could lead to other evidence which is admissible.