The SFO publishes its 2023-24 Annual Report

On 30 July 2024, the UK Serious Fraud Office ("SFO") published its Annual Reports & Accounts 2023-24 (the "Annual Report"), providing an overview of the SFO's performance, strategic objectives, financial position, and future plans. This is the first report with Nick Ephgrave QPM at the helm, having taken over from Lisa Osofsky in October 2023.

Since April 2023, the SFO reported it has:

• opened six new criminal cases
• conducted 15 searches across four cases, and effected 15 arrests;
• recovered £1.7m in criminal proceeds; and
• achieved four convictions.

No deferred prosecution agreements were reported.

Overview

According to the Annual Report, the SFO currently has an active caseload of around 130 cases, including criminal, civil, proceeds of crime and international assistance cases. This has been achieved whilst operating with a budget of £95.5m (increased from £78.6m in 2022/23), and a staff count of more than 500 people. In terms of personnel, the SFO reported a decrease in its vacancy rate from 23% to 16.3% during the year, although this is still higher than last year's figure. The recruitment and retention of talent remains a key objective for the organisation. 

In terms of performance, the SFO reportedly opened six criminal cases (including an investigation into the collapsed law firm, Axiom Ince), took three cases to trial, and closed six.

Key highlights include the following:

• Four individuals, including the former director, have been charged in relation to the collapse of Patisserie Valerie. A number of other individuals have also been charged in relation to Ethical Forestry Ltd, London Mining Plc, and Buy2Let Cars, a nationwide car leasing firm.
• A former Ministry of Defence official was convicted of misconduct in public office in March 2024 for concealed payments and gifts totalling £70,000, following the prosecution and guilty plea of his employer, GPT Special Project Management Ltd.
• A solicitor was also convicted during this period for tipping off his client about the details of an investigation and forging a legal document to mislead investigators (the SFO's first prosecution of a solicitor for this type of offence). The lawyer was sentenced to a nine-month sentence, suspended for 18 months.
• The SFO secured £1.7m in recovery of criminal proceeds, including around £0.55m in property, rental profits and cash relating to a conviction for breach of bail conditions of an agent, accused of helping Sarclad pay bribes to secure contracts in China, and who fled to China in 2014.

The SFO has also reported closing six cases, including the long-running investigations into Rio Tinto and ENRC, the latter following the Commercial Court finding in favour of ENRC, which alleged the agency mishandled the investigation and committed misfeasance. The SFO has reportedly earmarked £200m for potential ENRC damages.

Tools

The SFO has secured new powers through the Economic Crime and Corporate Transparency Act 2023 ("ECCTA" - analysed in this briefing) which, among other things, expanded the SFO's section 2A pre-investigation powers, allowing the SFO to use its compulsory powers at earlier stages of the investigation. The SFO has reported using these powers for the first time in early 2024.

The new offence of failure to prevent fraud introduced under ECCTA (as to which see our previous briefing), which will fall within the SFO's remit, is still yet to come into force, and is awaiting government guidance on adequate fraud prevention procedures.

Future plans

The Annual Report also cross-referenced to the SFO's new five-year strategy, with the aim of carrying out investigations more swifty and decisively and to better harness innovative technology. For further details of the strategy please see our separate briefing here. The Annual Report confirms that the SFO is on track to implement all recommendations received in connection with the reviews carried out by Brian Altman KC and Sir David Calvert Smith (both of which were published in July 2022). The recommendations have continued to be embedded throughout 2023-24.

The Annual Report also mentions that the SFO continues to call for practical changes to the UK's current disclosure regime and the fact that the SFO worked closely with the Jonathan Fisher KC review into disclosure and fraud offences.

Commentary

The Annual Report reflects a more subdued performance by the UK's principal anti-fraud agency, in terms of new investigations, cases proceeding to trial, and amounts recovered. By way of comparison, in its 2022-2023 Annual Report, the SFO reported recovering £95.2m through confiscation orders, achieving eight convictions, and overseeing the UK's largest ever penalty for a corporate criminal conviction (totalling £280m). Given the appointment of the new Director last Autumn, and the new Government's stated focus on tackling Covid-related fraud and corruption, there will be a keen interest in the agency's performance in the coming year.