Serious Fraud Office went a year without raid operation, figures show

Figures obtained under freedom of information by Pinsent Masons, the law firm behind Out-Law.com, show that from 1 April 2011 to 31 March this year the SFO did not conduct a raid of property requiring a warrant. The SFO is an independent Government agency that investigates and prosecutes serious or complex fraud and corruption.

Anti-corruption law expert Barry Vitou of Pinsent Masons said the lack of activity in the year to the end of March was a "missed opportunity", but the SFO has defended its approach.

"These statistics show that recent warnings of dawn raids from the SFO have in fact been hollow threats,” Vitou said. "With the SFO under new management it is critical that it delivers on its promises to investigate and prosecute serious fraud that threatens to damage UK PLC. Unless it does so it risks being perceived as a toothless prosecutor.”

Vitou said the lack of raids has meant the SFO may have missed an "opportunity" to actively investigate fraud stemming from the recession. The SFO may still be "smarting" from criticism it has received over searches conducted in March last year, he added.

"If businesses and individuals are guilty of serious fraud it is vital that there is an effective system in place to catch them," Vitou said. "The SFO may be smarting from public criticism of its perceived shortcomings in the Tchenguiz case, but it is important that it is not deterred from bringing important cases.”

The SFO had to apologise after flaws were identified with its search warrants for properties belonging to brothers Vincent and Robert Tchenguiz. The SFO conducted the searches as part of an investigation into the collapse of Iceland bank Kaupthing. It denied that the Kaupthing searches had impacted on its "appetite" for raid operations.

"There has been fewer search operations in the past year," an SFO spokesman told Out-Law.com in a statement. "Much depends on the case life-cycle." 

"Furthermore, not all investigations need searches. Where material can be obtained by other means, and where a search operation is deemed unnecessary, so much the better," the statement said.

"It would be completely wrong to interpret a reduction in search numbers as a lack of activity or a loss of appetite to vigorously investigate fraud. Each case is assessed on individual requirements and this includes assessing the merits of a search. As recently as 16 May we conducted searches at five properties and arrested three men.  The operation involved over 70 investigators and police," the spokesman said.

The number of searches requiring a warrant conducted by the SFO between 1 April 2008 and 31 March 2009 was 63, with a further 43 and 47 conducted in the following two years, according to the figures disclosed by the SFO.

The SFO has seen its budget reduced from £51.5m in 2008 to just £33.9m but Vitou said that the dwindling resources should provide the SFO with incentives for prosecution rather than a curtailing of enforcement activities. The SFO is eligible for 37.5% of money it confiscates from companies that are engaged in fraudulent activity.

"Instead of dwindling resources hampering the SFO’s work, in fact the SFO cannot afford not to get out the carrot and the stick," Vitou said. "If it doesn’t, it will be widely seen as the boy who cried wolf."

Vitou added that businesses can expect that the SFO will conduct more dawn raids under the leadership of David Green. Green became SFO Director in April.