New UK fraud agency boss vows faster action as it carries out law firm raids

Unlock the Editor’s Digest for free

The new head of the Serious Fraud Office has vowed to move more quickly on investigations as the agency carried out a series of dawn raids and arrests in connection with the collapse of law firm group Axiom Ince.

The SFO arrested seven individuals and raided nine sites around Bedfordshire on Tuesday morning as it announced a formal investigation into allegations of fraud at Axiom and £66mn of missing client money.

In his first interview since taking office in September, SFO director Nick Ephgrave told the Financial Times that Tuesday’s operation highlighted a new approach to investigations under his leadership.

“We accepted the investigation on September 5 and a few weeks later we’re going through doors, gathering evidence and making arrests, and that’s the kind of approach I’m encouraging here,” Ephgrave said.

We have “gone from flash to bang quite quickly”, he said at the SFO headquarters in London as the operation was unfolding.

Nick Ephgrave leaves the control room where the raid was co-ordinated © Charlie Bibby/FT

The Axiom Ince case is the first search action taken by Ephgrave since he started as director and the second investigation opened by the SFO so far under his tenure.

Ephgrave is the first non-lawyer to run the SFO in its 35-year history. The organisation has long faced criticism about its effectiveness after suffering a number of high-profile case collapses over the years.

Its very existence has been uncertain at times. In 2017 the government raised the prospect of disbanding the SFO and wrapping it into the National Crime Agency.

Under the previous director, Lisa Osofsky, active cases halved to about 35 and long-running investigations into miners Eurasian Natural Resources Corporation and Rio Tinto were shut down without charges being brought.

The pace with which Ephgrave is moving to start new cases and the rare access the SFO granted the FT on Tuesday are signs of the new director’s efforts to improve the agency’s reputation.

The control room at the SFO where the raid was coordinated
The control room at the SFO where the raid was co-ordinated © Charlie Bibby/FT

Ephgrave has also set out plans to tackle operational challenges at the SFO, which has struggled with resourcing and staffing issues. The agency intends to increase its permanent staff by up to a third.

Hiring is “going well” and in this financial year the agency has made job offers to more than 100 people, Ephgrave said on Tuesday.

Axiom Ince was closed by the UK Solicitors Regulation Authority in October after allegations that client funds had been misappropriated.

In August, the SRA also announced it was taking action against three Axiom individuals. Axiom Ince had operated 14 branches in the UK and employed more than 1,400 staff.

Upon its closure, about £66mn in client money was found to be missing from the firm’s accounts. Investigators are looking at how money passed from Axiom’s client accounts with Barclays to the State Bank of India to fund purchases, according to an SFO statement.

More than 80 SFO investigators, along with the police, took part in the raids and arrests at about 6am, after the Metropolitan Police had formally referred the investigation to the agency.

Michael Tomlinson, the UK’s solicitor-general, was also at the SFO’s office on Tuesday and told the FT he was encouraged by the speed with which the agency was already moving under its new leadership.

Mick Gallagher, SFO chief investigator, briefs Nick Ephgrave and Michael Tomlinson, solicitor-general
From left: Mick Gallagher, SFO chief investigator, briefs Nick Ephgrave and Michael Tomlinson, solicitor-general © Charlie Bibby/FT

“It’s clear the new director’s got the bit between his teeth,” said Tomlinson.

“There is a sensible and a healthy balance that you can strike between taking time to get all that digital evidence and making sure that cases progress, and that’s what I’m really, really keen to see,” he added.

Ephgrave said that while the SFO took on a wide variety of cases, he had a personal interest in seeking justice for criminality where there is a large number of victims.

“I’m particularly interested in cases where large numbers of people have been badly affected,” Ephgrave said. “We have another operation where there are many thousands of potential victims.

“The philosophy underpinning all of this is let’s remember what we’re here for, remember what the endpoint is, let’s get there as quickly as we reasonably can, as securely as we can,” he added.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: