Included in this issue: SFO Joint Head of Division encourages cooperation from defendants and the legal profession; Russia's anti-corruption boss arrested with $120 million in cash; SFO charges former Tesco bosses and more...


SFO Joint Head of Division encourages cooperation from defendants and the legal profession

Joint head of Bribery and Corruption at the SFO, Ben Morgan, made a speech earlier this month advocating a more cooperative approach to relationships between the SFO, defendants, and their legal advisors. Mr Morgan also promoted the prospect of companies obtaining discounts of up to 50% as part of a Deferred Prosecution Agreement (DPA) when compared to the penalty that would be imposed if a case goes to trial.

Mr Morgan suggested that through companies entering into honest, early and open cooperation with the SFO there is now the legal machinery to achieve quick and certain justice through entering into a DPA.

The Serious Fraud Office, 15 September 2016

Consultation on the transposition of the Fourth Money Laundering Directive

HM Treasury has issued its consultation on proposals for transposing the European Union's Fourth Money Laundering Directive (the Directive), and relevant aspects of the Fund Transfer Regulation (FTR), into English Law. The consultation sets out the government's current proposals as well as a provisional impact assessment on the proposed changes, and invites public views or evidence to be submitted in response. The purpose of the Directive is to address the continuing problem of Money Laundering and associated criminal activity, which is estimated to cost the UK £24 billion a year. The Fourth Money Laundering Directive is set to build on existing money laundering provisions. In addition, the new Fund Transfer Regulation, which is to have direct effect in the UK, will update the rules on the information required to be provided on payers and payees where at least one of the payment services used to transfer funds is established in the EU.

It is understood that the purpose of the consultation is to achieve an effective balance between the burden placed on businesses by such regulations and the need to actively discourage Money Laundering Activity, other criminal activity associated with money laundering, and Terrorist Activity. The current proposal is to revoke the Money Laundering Regulations 2007 and the Transfer of Funds Regulation 2007 and create a Money Laundering and Transfer of Funds (Information on the Payer) Regulations 2017 which incorporate both the Directive and the FTR into UK law.

HMS Treasury, 15 September 2016

Bribery and Corruption

Russia's anti-corruption boss arrested with $120 million in cash

Dmitry Zakharchenko, acting head of an anti-graft agency at the Russian interior ministry, was formally arrested on Saturday after being caught by Moscow police with over $120 million in cash at his home. It is alleged that this money may have been the result of Mr Zakharchenko receiving "especially large bribes".

The Kremlin has insisted that it remains serious about tackling corruption in Russia in the wake of this latest high profile case. Critics of President Vladimir Putin accuse him of turning a blind eye to the extent of official corruption, as his close allies have amassed great fortunes during his time in power.

The Telegraph, 13 September 2016

Fifa opens corruption case against Sepp Blatter, Jérôme Valcke and Markus Kattner

The Fifa ethics committee has announced it will open proceedings against former president, Sepp Blatter, in addition to Jérôme Valcke and Markus Kattner.

It is reported that the investigation will look into allegations of breaches of the Fifa rulebook that relate to bribery, conflicts of interest and general conduct. It is understood that Mr Kattner will in addition be investigated for potential breaches of confidentiality.

Fifa, 09 September 2016

Prosecutors Call Lula Mastermind of Brazil’s Biggest Scandal

It is reported that Brazilian prosecutors have charged former president Luiz Inacio Lula da Silva with corruption and money laundering. Prosecutors say Silva masterminded Carwash, the graft scheme that cost state-owned oil company Petrobras around 42 billion reais ($13 billion). Silva denies the allegations.

Bloomberg, 15 September 2016

Ex-CEO of Eurasian Natural Resources Corp interviewed by the SFO

Victor Hanna, the ex-chief executive officer of Eurasian Natural Resources Corp.’s African unit, has been interviewed by the Serious Fraud Office (SFO) over allegations that bribes were paid to win business in Kazakhstan and Africa. The move indicates that the SFO are stepping up their 3 year-old bribery investigation.

Bloomberg, 9 September 2016

Cisco Says Won’t Face Enforcement Action Over Business in Russia

It has been reported that Cisco Systems Inc. will not face enforcement action from U.S. authorities after a bribery-related investigation into whether Cisco's, as well as its reseller's operations in Russia, violated the U.S. Foreign Corrupt Practices Act.

Bloomberg, 8 September 2016

Money Laundering

Canada's anti-money laundering agency finds "very significant" deficiencies in AML controls of real estate companies

It is reported that Fintrac, Canada's anti-money laundering agency, has found a large number of "significant" or "very significant" deficiencies in anti-money laundering and anti-terrorist financing controls during a four-and-a-half year examination of real estate companies. Over 800 real estate companies were examined, and these deficiencies were uncovered on 60 per cent of the agency's visits.

The CBC, 14 September 2016


SFO charges former Tesco bosses

Three former Tesco directors have been charged by the Serious Fraud Office (SFO) with one count of Fraud by Abuse of Position and one count of False Accounting in respect of alleged activity that occurred between February 2014 and September 2014. They appeared before Westminster Magistrates Court on 22nd September 2016 where they pleaded not guilty to all charges and are next due to appear at Southwark Crown Court on 20 October 2016.

The SFO investigation is ongoing and it remains possible that further individuals could be charged.

The Guardian, 22 September 2016

Ringleader of gang responsible for £113m fraud jailed for 11 years

The ringleader of a gang responsible for perpetrating a £113m fraud against customers of a number of retail banks has been jailed for 11 years. Hameed, the ringleader, called customers posing as a member of their fraud department and persuaded them to reveal their internet banking details. Hameed's associates then emptied the customers bank accounts and the fraudsters used a “network of money mules” to disperse the cash, before it was laundered out of the country.

The Guardian, 21 September 2016

Cyber Crime

Yahoo confirms 'state-sponsored' hackers stole personal data from 500m accounts

Yahoo has confirmed that personal data associated with 500m of its account users has been stolen by hackers. Data, including names, passwords, phone numbers and security questions, were taken from the company's network during 2014 with the hack being conducted by what was believed to be a state-sponsored hacking group.

The Guardian, 22 September 2016

Russian Hacker admits leaking confidential medical files of US Olympic Athletes

A Russian hacking group, called Fancy Bears, has claimed responsibility for hacking the database of the World Anti-Doping Agency and stealing confidential medical files of US Olympic Athletes.

It is reported that a Russian government spokesman has denied any involvement by the Kremlin or secret services.

BBC, 13 September 2016


UN threatens fresh sanctions on North Korea after nuclear test

It has been reported that following North Korea's fifth nuclear test, the UN Security Council has threatened "significant measures" against Pyongyang.

Bloomberg, 10 September 2016

Health and Safety

Refinery firm fined £400,000 after gangway failed

A judge has fined Valero Energy UK Limited £400,000 following a serious accident at a refinery in Pembrokeshire. On 5 March 2012, a walkway providing access to a stationary tanker vessel dropped 3.5 metres, trapping operator David Thomas with a slack wire rope.

Mr Thomas suffered fractures and lacerations to both legs and a dislocated knee. The Health and Safety Executive in its investigation uncovered numerous failings including risk assessment failures and failure to provide adequate training to staff.

HSE, 12 September 2016

Royal United Hospital admit breach after patient’s fatal window fall

​​The Royal United Hospital will admit breaching health and safety legislation nearly four years after a man died when he fell from a hospital window.

The Royal United Hospitals Bath NHS Foundation Trust has been prosecuted by the HSE under the Health and Safety at Work etc Act 1974 for not doing enough, on and before November 17, 2012, to prevent patients and visitors from falling from windows. The case is expected to be heard in Bristol Crown Court next month.

SHP, 08 September 2016

Tesco admits responsibility for fuel leak that polluted river

Retailer Tesco faces a fine after thousands of litres of diesel leaked from petrol station and contaminated 10-mile stretch of river Irwell.

At Burnley crown court on Monday, Tesco pleaded guilty to two charges: one under the Environmental Permitting Regulations 2010 and the other under the Health and Safety at Work Act. The maximum sentence it faces is unlimited fines and compensation.

Tesco now faces a three-day sentencing hearing in January next year during which an expert witness is expected to be called to explain the risk and likelihood of harm from the storage and use of "volatile chemicals" at the store.

NewsRepublic, 12 September 2016

GMB claims that Serco ‘dumped hazardous waste in drains’

The Health and Safety Executive (HSE) has been called into GMB's investigation into claims that Serco's employees unlawfully dumped hazardous waste down public drains, during the cleaning of refuse lorries. Allegations have been levelled against Serco that no risk assessment was performed before the employees cleaned the refuse lorries, no safe system of work was in place and no personal protective equipment was provided for the task, all of which are potential breaches of the Health and Safety at Work Act.

SHP, 19 September 2016

Scottish NHS Trust Prosecuted

A Scottish NHS trust has been prosecuted after a patient committed suicide at a hospital A&E department.

This is the third suicide to have happened at an NHS Ayrshire and Arran hospital in recent years, in 2010 the trust were fined £67,000 and £50,000 after two patients committed suicide on the same day.

Although this is a HSE Scotland case rather than an England and Wales case, this is not to say a prosecution along the same lines could not be brought South of the border.

SHP, 19 September 2016

DIY firm fined £2.2 million

A DIY firm has pleaded guilty to two breaches of the health and safety at work act and has been fined £2.2 million after an agency worker was killed.

William Richardson fell onto a concrete surface from an unguarded platform as he unloaded a delivery. A site inspection carried out by Chiltern District Council officers at Decco's premises highlighted ‘significant’ health and failures.

Safety Management, 12 September 2016

Network Rail fined

Network Rail have been fined £4 million over the death of a member of the public who was hit by a train on a level crossing.

The crossing at which 84 year old Brenda McFarlane was hit gave pedestrians a five-second visual warning of a train approaching but in sentencing the judge highlighted that vulnerable users and children could take double that time to cross.

The Rail accident investigation branch said network rail had been previously warned about the crossing and that the alerts for approaching trains were not sufficient. Warning sirens had also been recommended in 2006 and 2008 but were not implemented.

BBC, 21 September 2016

Manufacturing Company fined after worker killed

A manufacturing company has been fined £1 million after a worker was killed by falling machinery. Colin Reddish was moving a large milling machine in the company's factory when it overturned and killed him.

Parker Hannifin Manufacturing Ltd pleaded guilty to breaching Reg 3(1) of Management of Health and Safety at Work Regulations 1999 and Section 2(1) of the Health and Safety of Work etc Act 1974.

Health and Safety Executive, 19 September 2016

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Nichola Peters

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