The Work of the New Zealand Serious Fraud Office White Collar Crime and Serious Fraud Conference AUCKLAND 2 JULY 2010
WHAT IS THE SERIOUS FRAUD OFFICE?
SFO: An Overview Mandate – investigate and prosecute serious or complex fraud Part 1 - Detection • Grounds: reasonable suspicion that an investigation may disclose • DRAFT Comunications Plan serious or complex fraud. • June 2010 • Powers: issue notices to obtain documents or information for the detection of serious and complex fraud. Part 2 – Investigation • Grounds: reasonable belief that an offence of serious and complex fraud may have been committed. • Powers: issue notices for provision of information or documents and/or attend interview No privilege against self-incrimination Crimes Act offences, but not exclusively
SFO: An Overview cont. Staff: • 40 staff • Investigators, lawyers, forensic accountants • DRAFT Comunications Plan • June 2010 External Prosecution Panel Current Investigations: • Blue Chip (alleged $200M+ investment fraud) • Nathans Finance (alleged $50M+ investment fraud) • Five Star Finance (alleged investment fraud) • Lane Walker Rudkin (alleged $120M+ funding fraud) • Capital + Merchant (alleged $165M+ investment fraud) • ACC (alleged corrupt or fraudulent payments/inducements) • Aorangi Securities & Alan Hubbard (alleged $135M investment fraud)
SFO 1990-2010 WHERE HAVE WE BEEN?
Reasons for SFO’s Creation • The “Gang of 20” allegations • DRAFT Comunications Plan • June 2010 • Equiticorp; RSL; Landcorp; Goldcorp; etc • To give greater confidence regarding corporate behaviour • NOT created to investigate tax; welfare etc fraud
SFO’s recent legacy • 90% conviction rate & $500k threshold • Cases of employee embezzlement and mortgage fraud • DRAFT Comunications Plan • June 2010 • Delays: up to 60% of cases taking >12 months • 40%+ of recent sentences home detention or ≤ 2years imprisonment • Parallel investigations and prosecutions to Securities Commission or Companies Office • Isolation • Consequences for finance companies (Clegg, Bridgecorp etc)
SFO 2010 WHERE ARE WE AT?
Recent changes • New strategic priorities: “Fewer; Faster; Bigger; Better” –Cost-efficiency and effectiveness –Better information and intelligence –Greater collaboration (public and private) –Greater capability (people and tools) • New management structure with two discrete teams: –Financial markets –Fraud and corruption • New threshold: –$2M, with priority given to $10M+ or 100+ investor cases –A need for a level of forensic accounting or investigative analysis beyond the resources or expertise of other agencies
Recent changes (cont.) New measures of success: – No 90% conviction rate – Timeliness: inquiry and investigation – Quality: custodial sentences – Effectiveness: self-initiated investigations – Relevance: public communication New manner of operation: – Appointment of Prosecution Counsel – “charge” focused – Multiple investigators and accountants – Differing priorities – Greater use of delegation and disclosure powers – Inter-agency investigations – Private outsourcing – Greater consideration of Solicitor General Prosecution Guidelines
SFO 2020 WHERE WILL WE BE……OR WHERE SHOULD WE BE?
The Future Future structure • Police vs SFO • FMA vs SFO • Economic Crime Agency? • National Fraud strategy? Future focus • Financial markets • Foreign corrupt practices • Public sector corruption Future sanctions • Financial reporting orders • Serious crime prevention orders
THANK YOU QUESTIONS?
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