SFO needs stable funding says expert, as figures show property searches on the rise

Barry Vitou of Pinsent Masons, the law firm behind Out-Law.com, said that the rise in property searches and asset seizures over the past 12 months was partly in response to rising public and political pressure on law enforcement agencies to clamp down on convicted fraudsters. The SFO is the independent government agency that investigates and prosecutes serious or complex fraud and corruption.

"The recent success of the SFO underscores just how important it is that the organisation continues to receive the proper funding," Vitou said. "We believe that the right route would be to plough at least part of the funds retrieved back into the SFO."

"Fighting financial crime does not come cheaply. Searching premises is a costly procedure – for example, one recent search involved over 70 police officers and SFO officials. The SFO needs a stable funding system put in place so that it can pursue more cases - businesses frequently complain that the authorities reject too many fraud cases for lack of resources," he said.

According to figures obtained by Pinsent Masons, the SFO began 21 property raids to seize assets from individuals convicted of white collar crime in the year ending 31 March 2013 – seven times as many raids as it carried out in the previous year. The figures also showed that the SFO had restarted property searches as part of criminal investigations into those not yet convicted of such crimes, carrying out eight such raids.

This year, the SFO signaled the use of confiscation proceedings to seize the assets of self-styled 'property tycoon' Achilleas Kallakis, who attempted to defraud Allied Irish Banks and others into providing him with millions of pounds to finance a property portfolio, on his conviction.  It also sought compensation from former Polly Peck chief executive Asil Nadir, who was sentenced to 10 years in prison in 2012 for his role in the company's collapse.

"There has been a frustration that so many white collar criminals are able to keep hold of the assets that they have gained through fraud," Vitou said. "If you are going to deter people from committing financial crime then you need to make sure that convicted white collar criminals are seen being stripped of their country mansions, their fleets of sports cars and their offshore bank accounts."

Last year, Pinsent Masons revealed that the SFO did not conduct a single search operation requiring a warrant for a full year between 1 April 2011 and 31 March 2012. The department had to apologise after flaws were identified in its search warrants for properties belonging to brothers Vincent and Robert Tchenguiz, issued as part of an investigation into the collapse of Icelandic bank Kaupthing. The Tchenquiz brothers are now pursuing the SFO for substantial damages after they were released without charge, following dawn raids on their homes and offices.