The UK's Serious Fraud Office (SFO) has brought criminal charges of "fraud by false representations and false accounting" against two former directors of the international conglomerate Serco. The SFO announced the charges against Nicholas Woods, ex-Finance Director of Serco Home Affairs, and Simon Marshall, former Operations Director of Field Services, at midday on 16 December 2019.
"Simon Marshall and Nicholas Woods have been charged jointly with one count of fraud by false representation, contrary to section 1 of the Fraud Act 2006 and one count of false accounting, contrary to section 17(1)a of the Theft Act 1968," the SFO said in a statement.
Marshal faces two additional charges of fraud by false misrepresentation and Woods an additional charge of false accounting.
A spokesperson for Serco said "neither of the individuals charged have been employed by Serco since 2013" and the charges pertain "in relation to events which occured between 2011 and 2013".
They continued saying:
"The SFO investigation into Serco companies concerning these matters concluded in July 2019 with a Deferred Prosecution Agreement (DPA) between the SFO and Serco Geografix Ltd; a statement made at the time of the DPA can be found on our website."
Charges Follow Five-Year SFO Investigation
While the SFO refused to discuss further details of the case, it did note that the charges follow the completion of the DPA, settled between the SFO and Serco Group subsidiary Serco Geografix Ltd, regarding criminal charges for fraud dating back to 2011.
The SFO first announced its investigation regarding Serco's "electronic monitoring contracts" on 4 Nov 2014.
According to the SFO Serco Georgrafix Ltd took 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"
Under DPA's corporations typically agree to stop certain behaviours, or otherwise change certain behaviour, as well as pay fines to avoid a full-blown prosecution which may be more damaging to the businesses.
The SFO said that under the DPA agreed between Under the terms of the DPA, Serco Geografix Ltd was ordered to pay £19.2 million as well as the £3.7 million it cost the SFO to investigate the company.
This was, "in addition to the £12.8m compensation already paid by Serco to the MoJ as part of a £70m civil settlement in 2013".
Serco, a multi-billion pound company, and provides outsourced public services in the fields of military, justice, immigration, health, transport, and citizen services. It reportedly employs 50,000 staff worldwide.
Stock prices in the company dipped temporarily following the announcement, but picked back up quickly thereafter.