SFO director Green details criteria for taking on pension fraud cases

When considering whether to take on pension fraud cases, the UK’s Serious Fraud Office weighs up such cases as it would any others, as its mandate is to tackle only “the very top level of economic crime”, SFO director David Green has explained, in a letter to the head of a government committee overseeing the so-called pensions freedoms inquiry.

In his 27 November letter, published on the government’s website and flagged up recently by an International Investment reader, Green confirmed that the SFO had “successfully prosecuted two multi-million-pound investment frauds, where a significant proportion of the sums invested were sourced from investors’ pensions savings”, adding that both had been concluded in 2014.

In addition, the SFO currently is dealing with a number of other SFO investigations and one prosecution “where we believe that sums invested have been sourced from investors’ pension savings”, though for operational reasons he said he wouldn’t reveal details about these matters that could compromise the outcomes.

Green’s letter was – as he acknowledges in the first sentence – in response to a request from Frank Field, the Labour MP for Birkenhead who is chairing the Work & Pensions Select Committee, which is looking into the issue of pensions freedoms.

Among the cases currently undergoing SFO investigation, Green tells Field, is that of the Harlequin Group’s chairman, David Ames, who he noted is due to stand trial in January 2019; the Capita Oak Pension and Henley Retirement Benefit schemes; and such other investment entities as the Westminster Pension Scheme, Trafalgar Multi Asset Fund, Ethical Forestry Ltd, Global Forestry Investments and Global Forex Investments.

In considering whether a case is worthy of SFO scrutiny, Green said, he uses his “published Statement of Principle”, which includes consideration of “whether the apparent criminality undermines UK plc commercial or financial interests in general, and in the City of London in particular; whether the actual or potential financial loss involved is high; whether actual or potential economic harm is significant; whether there is a significant public interest element; and whether there is a new species of fraud [involved]”.

Angie Brooks, a campaigner for victims of pension fraud, said “picking and choosing” which pension frauds would be investigated was “not good enough”, and that “if the criminal investigation agencies such as the SFO can’t keep up or cope with all the many scams, we must devote more essential resources to the task”.

“It is essential to get to a position where all fraud and scams are investigated and the fraudsters and scammers are successfully prosecuted,” added Brooks, a British citizen who lives in Spain and who is the founder of a pension fraud victims’ campaign group, Pension Life.

“After all, no one sits in judgement as to which murder cases are to be investigated and which are not considered important enough.

“If we think we can’t afford it, then just calculate the cost in terms of supporting and housing all those who have lost their pensions , and will have to rely on the state for the rest of their lives – plus the cost to the NHS in terms of treating mental and physical problems caused by the stress of being scammed.”

Brooks says she is currently helping around 500 pension-scam victims, mostly over the age of 45, in their efforts to recover a total of around £50m.

One Milton Keynes, England-based pension scam victim, who prefers to be identified only as “Stephen” while his case is outstanding, said it was his observation that the SFO employs another, “unofficial” consideration in deciding whether to investigate a case: “how much publicity there is about it, and how embarrassed, as a result, the government is”.

Pension freedoms investigation

The  UK government’s Work & Pensions Select Committee announced it was planning to look into the issue of pensions freedoms last September, in response to a growing number of reports that people were being targeted by scammers and others looking to profit from the business of helping people to cash in their pensions. (” Police data show that over £43m of people’s retirement savings have been lost to fraud since the [pensions freedoms] policy was announced”, the committee noted in announcing its investigation.)

The original deadline for written submissions was 23 October, but in the end the committee accepted submissions well into December, to judge by the full list of submissions, which may be viewed here.

Among the questions the committee said it wanted answers to was what people were doing with their pension pots; whether they were taking “proportionate advice and guidance” and if not, why not; and whether the government’s free Pension Wise advice service was  working and if not, how it might be reformed.

In November, in his submission to the committee, pensions minister Guy Opperman revealed that as many as 10.9 million people in the UK – or roughly one in six – are currently being cold-called about their pension each year.

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