SFO charges ex-Serco execs with fraud
17 Dec 2019
A former finance director with outsourcer Serco is one of two executives charged by the Serious Fraud Office (SFO) with fraud and false accounting in relation to its investigation into the company’s electronic monitoring contract with the Ministry of Justice (MoJ)
17 Dec 2019
Nicholas Woods, former finance director of Serco Home Affairs, and Simon Marshall, former operations director of field services, have been charged with fraud by false representation and false accounting in relation to representations made to the MoJ between 2011 and 2013.
Woods is additionally charged with false accounting in relation to the 2011 statutory accounts of Serco Geografix Ltd (SGL).
Andrew Katzen of Hickman & Rose, solicitor for Woods, said: ‘Mr Woods is very disappointed. He denies the allegations and looks forward to the opportunity of clearing his name.’
Marshall’s solicitor said Marshall had ‘provided a full explanation of his conduct, denying the allegations’.
The charges follow the SFO’s completion of a deferred prosecution agreement (DPA) with Serco Group subsidiary SGL, which was approved in July 2019.
This related to a scheme to dishonestly mislead the MoJ as to the true extent of the profits being made between 2010 and 2013 by its parent company, Serco Ltd, from its contract for the provision of electronic monitoring services. The scheme was designed to prevent the MoJ from obtaining information to which it was entitled and from using this to decrease SL’s revenues under that contract.
The SFO said: ‘The investigation remains active and we are unable to comment further at this time.
Under the terms of the deferred prosecution agreement, SGL was ordered to pay a financial penalty of £19.2m, and the full amount of the SFO’s investigative costs (£3.7m). This is in addition to the £12.8m compensation already paid by Serco to the MoJ as part of a £70m civil settlement in 2013.
The deferred prosecution agreement was also accompanied by an undertaking in which Serco Group, SGL’s parent company, agrees to ongoing cooperation with the SFO and other law enforcement and regulatory authorities, reporting evidence of fraud by itself or related companies and individuals, any necessary strengthening of its group-wide ethics and compliance functions, and annual reporting on its group-wide assurance programme.
In July, SGL’s auditor Deloitte was fined £6.5m by the Financial Reporting Council (FRC), discounted for settlement to £4.23m in relation to the audit of the financial statements for the years ended 31 December 2011 and 2012.