Advising Clients under Investigation by the SFO (Names Withheld)

 

We were instructed by lawyers acting for clients whose activities were under investigation by the Serious Fraud Office. The SFO was investigating whether money collected by entities associated with the clients had been misapplied and/or used contrary to the terms on which it was given. The SFO had issued demands pursuant to the Serious Fraud Office Act requiring the production of financial and company documents. It was also intent on interviewing the clients.

 

From a large quantity of documents, we set about a forensic-accounting reconstruction to determine how the money collected by the various entities was applied.  We had to trace funds (and accounting treatments) through numerous entities. We also determined how the group of entities operated (both commercially and structurally) and the impact of this on the use of the money.

 

As a result of our reconstruction we could compare representations made by the clients, and/or the representations as alleged by some investors, against the actual use of the money.  Our findings were that all material amounts of money collected were able to be explained and were consistent with the group’s contractual arrangements. 

 

We then assisted counsel in preparing for the SFO interviews in two ways:  Firstly, we ensured that counsel clearly understood the group’s operations and how money was applied. This would assist in counsel ensuring that the SFO’s investigation could be properly informed and that any decision as to charging would be based on all the relevant evidence, properly understood. Secondly, we assisted in preparing the clients for their SFO interviews, making certain they were appropriately refreshed and would not be overwhelmed by the process. 

 

Following attendance at the SFO, the SFO decided to close its file without charges being laid.

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