Serious Fraud Office wins expanded role

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The Independent Online
THE Serious Fraud Office has won a long-running turf war with the Crown Prosecution Service that will see the CPS handing over a significant number of its larger fraud cases.

The Royal Commission on Criminal Justice will announce on Tuesday that it has accepted SFO suggestions that it be allowed to take on more work.

The SFO's director-general, George Staple, will now have to appeal to the Government for more money in order to handle the new work, at a time when the SFO's performance in the Asil Nadir affair has come under intense criticism.

The move also means the eventual abolition of what used to be the CPS's Fraud Investigation Group (FIG), now renamed the Fraud Divisions of the CPS. The divisions currently prosecute cases involving more than pounds 250,000 that have been investigated by police forces. The Royal Commission will recommend that its bigger cases go to the SFO and the smaller jobs to the CPS's 13 regional offices.

If the Government accepts the recommendations, the two former FIG divisions based in London will be gradually wound down. They currently handle more than 400 cases, with a total of more than pounds 3.8bn at risk, and employ a total of 30 lawyers, nine accountants and 45 support staff.

The main advantage of handing over more fraud cases to the SFO is that it is an investigating body, unlike the CPS, and can use special powers under Section 2 of the Criminal Justice Act 1987 to compel witnesses to answer questions and provide documents.

Under present criteria, the SFO deals with a maximum workload of 60 cases at any one time, whereas the CPS handles up to 800. The SFO takes cases that involve more than pounds 5m, are extremely complex or are of great public concern.

The SFO pointed out in its submission to the Royal Commission that two different government departments are doing similar work in severe fraud cases. Many of the CPS's assignments are only slightly smaller or less complex than those pursued by the SFO.

The SFO has been reluctant to make strident calls for taking on more fraud cases, fearful that it might be accused of 'territorial imperialism'. But the Royal Commission has accepted that this duplication of effort should be ended.

The practicalities of redirecting CPS work to the SFO have already been discussed in Whitehall. The idea has been put forward against the background of a wide-ranging review by Barbara Mills, Director of Public Prosecutions and former head of the SFO.

Critics claim that expanding the SFO, which employs lawyers, accountants and police on secondment, would be an expensive way to fight fraud. Some also say that following the recent row over the Nadir affair, the Government might be less likely to stump up more cash for the agency.

The SFO counters that its multi-disciplinary approach is cost-effective in prosecutions and should lead to early decisions to drop doubtful cases.

In September 1992, it made a submission to the Royal Commission in which it intimated that its special powers under Section 2 should be strengthened. Currently, the SFO can compel witnesses to answer questions, but the replies cannot be used as evidence in court.

City investigators fear the SFO's resources could be further stretched because, they believe, the Metropolitan Police is planning to reduce numbers in its own Fraud Squad. The Met denied yesterday that any cuts were intended.

Jeremy Warner, page 2

(Photograph omitted)