The SFO is conducting a criminal investigation into individuals associated with Serco and its subsidiaries in relation to the company’s electronic monitoring contracts.
On 3 July 2019, the SFO a Deferred Prosecution Agreement in principle with Serco Geografix Ltd (SGL), which received final approval from Mr Justice William Davis on 4 July 2019.
In entering the DPA, SGL has taken responsibility for three offences of fraud and two of false accounting arising from a scheme to dishonestly mislead the Ministry of Justice (MoJ) as to the true extent of the profits being made between 2010 and 2013 by SGL’s parent company, Serco Limited (SL), from its contract for the provision of electronic monitoring services. By deceiving the MoJ about the true extent of SL’s profits, SGL prevented the MoJ from attempting to limit any of SL’s future profits, recover any of SL’s previous profits, seek more favourable terms during renegotiations of contracts, or otherwise threaten SL’s contract revenues.
On 16 December 2019, the SFO charged two individuals with fraud. Simon Marshall, former Operations Director of Field Services within Serco, is charged with three counts of fraud in relation to representations made to the Ministry of Justice between 2011 and 2013. Nicholas Woods, former Finance Director of Serco Home Affairs, is charged with one count of fraud in relation to representations made to the Ministry of Justice in 2011.
This case is subject to reporting restrictions.
Terms of DPA
SGL will pay a financial penalty of £19.2 million, and the full amount of the SFO’s investigative costs (£3.7m). This is an addition to the £12.8m compensation already paid by Serco to the MoJ as part of a £70m civil settlement in 2013.
SGL will be credited for payments made pursuant to Serco Limited’s 2013 Settlement Agreement with the UK’s Ministry of Justice (MoJ), which fully offset the compensation (£12.8 million) SGL otherwise would be obligated to pay. This also represents SGL’s disgorgement of profit.
During the three-year term of the DPA, SGL will fully cooperate with the SFO and other foreign and domestic law enforcement and regulatory authorities, report evidence of fraud by itself or related companies and individuals, and enhance and report annually on the effectiveness of its ethics and compliance programme.
The DPA is 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.
Page published on 29 Jul 2019 | Page modified on 8 Apr 2021