Serious Fraud Office: Bryan Evans

Robert Buckland Excerpts

Wednesday 3rd February 2016 Westminster Hall

[The Solicitor General (Robert Buckland)]

It is a great pleasure to serve under your chairmanship, Sir Roger. I pay warm tribute to my hon. Friend the Member for Gower (Byron Davies), who brings his case to the House with passion as not only a constituency Member of Parliament but a former senior police officer, with a degree of insight into the matters we are discussing. I think he would agree that the thrust of his speech, which I listened to carefully, dealt with issues relating to the police, their involvement in this case and—I will put this neutrally—the lack of positive progress made for his constituent, Mr Evans.

My hon. Friend asked some specific questions, in particular why the police refused to seek a production order from the bank. Of course, I am aware that Mr Evans complained to South Wales police about the outcome of the original investigation, and that its professional standards department is currently investigating that complaint, which I very much hope will be concluded. It would be inappropriate for me to comment on the merits of that, or indeed the merits or otherwise of the case. From what I have heard, however, it must be a deeply troubling and huge problem for Mr Evans. Stepping into his shoes for a moment, I can understand why he feels as he does.

As one of the Ministers with a superintendary role over the independent Serious Fraud Office, it is important, in the context of the debate, that I outline as succinctly as I can the principles and guidelines that the SFO applies in determining whether to embark upon an investigation and a prosecution. As I said, having an independent agency is vital, bearing in mind the constitutional importance of having an independent prosecutorial authority, but I remind hon. Members that the SFO was created under an Act of Parliament—the Criminal Justice Act 1987—to deal with the top tier of serious and complex fraud cases. We know the sort of cases that the director, David Green, has taken on—cases such as Rolls-Royce, GlaxoSmithKline and Tesco, to name but a few. They are high-profile and high-risk, involving huge sums of money, great numbers of victims or species of fraud. That is not to understate the seriousness of the loss that my hon. Friend’s constituent has suffered.

[Mr Baker]

Is it not the case that there might be in aggregate a very large sum of money involved in similar cases?

[The Solicitor General]

I am grateful to my hon. Friend for that intervention, and I listened with interest to his earlier intervention and that of the hon. Member for Ogmore (Huw Irranca-Davies). I know the point he is making, and the straight answer is that the SFO keeps the matter very much under review. If there is indeed a cumulative effect and a clear modus operandi that suggests widespread and similar frauds of this nature, the circumstances will clearly change.

To answer directly the question that the hon. Member for Ogmore asked, I do not quite think we are there yet, but let me explain further—I know he is very familiar with this issue, because he has asked written questions, to which he will get very swift answers, I promise. However, he gives me the opportunity to outline the statement of principle.

The decision by the director of the SFO on whether to launch an investigation has to be made on the facts and circumstances of each case. Being overly prescriptive would not be appropriate, bearing in mind the unique circumstances of every case. Many factors are taken into account, but for guidance, the statement of principle sets out that when considering cases for investigation, the director will consider the following: first, whether the apparent criminality undermines UK plc commercial or financial interests in general and in the City of London in particular, causing reputational damage to the country; secondly, whether the actual or potential financial loss involved is high; thirdly, whether actual or potential economic harm is significant; fourthly, whether there is a significant public interest element; and finally, whether there is a new species of fraud.

“That is not a tick-box exercise where, if every one of a set of measures is met then the SFO will open an investigation. That would inevitably lead to cases being taken on by the SFO which did not require its unique model of investigators, prosecutors and other professionals working together in one organisation or its set of powers.”

I will quote from the “Protocol between the Attorney General and the Prosecuting Departments”, which sets out that the decision for the SFO to investigate and prosecute is

“a quasi-judicial function which requires the evaluation of the strength of the evidence and also a judgment about whether an investigation and/or prosecution is needed in the public interest.”

That will not always be an easy decision, but for the vast majority of financial crimes, the traditional model of a police investigation and a Crown Prosecution Service prosecution is the best model. That is because the police, as my hon. Friend the Member for Gower knows, rightly have primary responsibility for investigating crime in this country, and Action Fraud has been established as the national reporting centre to which reports of alleged fraud should be referred in the first instance.

I repeat that the SFO’s role is limited to investigating and prosecuting cases of serious or complex fraud, so it cannot and should not take on every case referred to it. To give that some context, the SFO takes on between 10 and 20 cases each year. It receives nearly 3,000 reports of fraud directly from the public each and every year, so the vast majority of referrals are not about matters that it can properly investigate. Complainants are then advised that the complaints will be referred on to Action Fraud for dissemination to the relevant police force where appropriate.

The SFO retains the material and uses it for intelligence purposes, and that is the point that hon. Members have made. That intelligence material is part of the SFO’s work in building an intelligence picture, and through that information and material it can properly identify the top-tier cases that are appropriate for it to investigate. In other words, debates such as this are invaluable in bringing into the public arena information that can then be collated and properly reviewed. I said that to the hon. Member for Ogmore in September and I repeat that assurance today.

[Alex Cunningham (Stockton North) (Lab)]

My constituent, Michael Fields, who has suffered, is part of a large network of people—I know he has been touch with the Minister personally. The Minister talks about not being quite there yet. Do we know how far off we are? Are we halfway up the hill? Have we much further to go? That network is working hard to identify other people who are similarly affected, to try to build the critical mass that may well lead to consideration of the matter by the SFO.

[The Solicitor General]

I know that the hon. Gentleman raised that point in an intervention in the September debate, so he has consistently advocated on behalf of his constituent. It would be wrong of me to start prejudging or second-guessing what the independent prosecutorial authority should do—that would be inappropriate—but I can tell him that the co-ordinated work that he, his constituent and other similarly affected people do, of course, improves the intelligence picture. It cannot do anything but assist the authorities in understanding the true extent of frauds of this nature, so I am grateful to him.

[Huw Irranca-Davies]

The Solicitor-General is giving a very helpful answer. Is he struck, as I am, by the incredible system similarities between the case outlined today by the hon. Member for Gower (Byron Davies) and the case that my hon. Friend the Member for Cardiff Central (Jo Stevens) and I outlined? The parallels between the two cases are incredible, and I know of at least half a dozen more out there that other Members of Parliament have raised.

[The Solicitor General]

I have heard the hon. Gentleman and my hon. Friend the Member for Gower. Although I do not want to start making evidential judgments about similar fact evidence, I take the point.

In the brief moments I have left, I turn to the specific allegations that my hon. Friend has made today. It is, of course, unusual to comment in detail on specific allegations, but I want to say a few brief words about the case.

As has been explained, Mr Evans had obtained a secured loan from the bank in relation to a land development in 2007 on the basis that the land would be turned into a mixed leisure development. It was valued accordingly at between £4 million and £6 million. However, by 2009, due in part to some planning permission issues, the development had not been carried out. The bank appointed a receiver and the value of the land, which was security for the loan, was reassessed and subsequently put at the dramatically different figure of £1 million. The allegation is that this was an orchestrated devaluation by the bank and the receiver.

The reason why the SFO has not opened a formal investigation relating to Mr Evans’s allegations is that they do not, of themselves, amount to the type of matter that the SFO is there to investigate. That is not to minimise the seriousness of the allegations. The situation would have a significant impact on most of us if it happened to us, but in the context of the SFO criterion, the potential scale of the loss is somewhat limited and the allegations are not complex. They relate to one surveyor falsifying a valuation on behalf of a bank, and therefore I have to be honest and frank and say that the issue of the wider public interest does not actually apply, so the situation would not call for an SFO investigation.

However, as I have said, the SFO will keep the allegations and the information that it has received on file, and will consider the matter again if further information comes to light. In particular, given the points that hon. Members have made today, if there is evidence to suggest that the allegation is part of a more widespread issue, the matter will be revisited.

I hope that what I have said gives my hon. Friend the Member for Gower some assurance that the Serious Fraud Office has fully considered the allegations referred to it and will consider any further evidence, but, for perfectly proper reasons, at this stage has decided not to investigate the allegation.

Question put and agreed to.