Another setback for Serious Fraud Office as trial collapses: Investigators passed confidential information to City law firm

THE SERIOUS Fraud Office faced fresh embarrassment last night after an Old Bailey judge ruled that three businessman facing charges of fraud had no case to answer. Labour renewed calls for the SFO to be replaced with a centralised body for prosecution of financial crimes. One MP described the present system as 'worse than useless'.

It was disclosed that SFO investigators working on the prosecution in yesterday's case passed confidential information to a City law firm. This is the third case within a month for which the SFO has been criticised . Last week, Roger Levitt, a financial adviser, was sentenced to 180 hours of community work after a plea bargain with the SFO. He pleaded guilty to one charge of fraudulent trading following the collapse of his pounds 150m company. Shortly before that, Terry Ramsden walked free after admitting a pounds 90m fraud.

The three men freed yesterday - an Australian financier, Malcolm Johnson, who was extradited from Vienna to stand trial; Mungo Park and Alex Dann - were charged with fraud and theft connected with the sale of shares in an allegedly phoney US company. The trial of two stockbrokers charged with involvement in the same share scheme collapsed earlier this year. It has emerged that SFO investigators passed information regarding Mr Johnson to Nicholas Brook, of the City law firm Clifford Chance. The information is contained in a file note which is in the possession of the Independent.

Before taking up his post as director of the SFO in March 1992, George Staple was head of litigation at Clifford Chance. The Serious Fraud Office refused to make any comment last night.

In court, Mr Johnson's barrister, Robert Marshall-Andrews QC, called for 'full details of the information passed between the SFO and Clifford Chance' to be made available. While the SFO was pursuing its investigation of Mr Johnson, Clifford Chance was bringing a civil action against him.

In the file note, dated 21 May 1992, Mr Brook writes that an associate of Mr Johnson's 'is regarded by the SFO as a 'minder' for Mr Johnson and may have been involved in at least one murder related to Johnson's business'. Mr Johnson said the SFO's suspicions were unfounded. Officials had no business sharing information with lawyers acting against him on an unrelated matter.

The disclosure is not the first breach of confidence by the SFO, nor the first time its activities have caused concern. An SFO lawyer was accused this year of forging a letter said to be signed by Sir David Steel, the former Liberal Democrat leader. He was told the letter was an 'April Fool'. Last year, an accountant on secondment to the SFO was jailed for trying to sell confidential documents.

These embarrassments follow a long and well-publicised series of imploding prosecutions: the second Guinness trial failed to secure any convictions, as did the year-long Blue Arrow trial.

The failures have been most widely noted, but the SFO has also had considerable success. It did bring Peter Clowes to book for robbing pounds 100m from his investors.

Alistair Darling, Labour's home affairs spokesman who has called for an urgent review of the activities of the SFO, said last night: 'We must have a new centralised body - not the SFO. The Government must recognise that the public are losing confidence in the system. If they don't, then the system is worse than useless.'

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Technical Author / Multimedia Writer

Negotiable: Recruitment Genius: This recognized leader in providing software s...

Recruitment Genius: Clinical Lead / RGN

£40000 - £42000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: IT Sales Consultant

£35000 - £40000 per annum: Recruitment Genius: This IT support company has a n...

Recruitment Genius: Works Engineer

Negotiable: Recruitment Genius: A works engineer is required in a progressive ...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent