The Serious Fraud Office does not have the ability to proactively target serious financial crime, and preventing this offending is probably better done by other agencies, says a Government-commissioned review.
When SFO director Julie Read took up her post last year she told the Herald the agency would like to be a “bit more proactive”.
Asked if the SFO’s more reactive approach would change, Read said this would be partly answered by a State Services Commission review, which was issued this week.
The report says the justice sector is focusing more on crime prevention.
But lead reviewer Debbie Francis said that while better access to intelligence could support earlier detection of financial crime, preventive activity was not supported by the SFO’s statutory mandate and was “probably better done by others”.
Francis said the SFO did not have the ability to develop a current, medium or long-term view of possible threats, and this was required to “proactively target high priority serious financial crime and corruption”.
The strongest “preventive element” of the SFO’s activity was the deterrent effect of its investigations and successful prosecutions.
Source: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11262890
Asked yesterday about the SFO’s role in prevention, Read said it was a specialised agency that did not have the resources or expertise to “adopt a broad role in this area”.
“However, the SFO does make a contribution to prevention in that it is well recognised that custodial sentences for white-collar crime have a significant deterrent effect – far exceeding that of other classes of financial crime.
“We will also be looking for opportunities to assist other agencies responsible for prevention by passing on lessons learned in our work about causes and triggers for financial crime.”
Francis said a challenge facing New Zealand was that white-collar crime was addressed by numerous agencies and each of these held only a “subset of intelligence information”.
A lack of “joined-up intelligence” between these agencies “works against systematic and anticipatory threat assessment for financial crime”.
“This makes it difficult for the SFO (and related agencies, such as the Financial Markets Authority and Organised and Financial Crime Agency of New Zealand) to undertake their stewardship roles by developing medium-term strategies for early detection … ,” she said.
A more “joined-up” intelligence approach seemed “imperative”.
“White-collar crime, by its very nature, hides in the interstices between agency mandates and exploits blind spots in intelligence sharing,” Francis said.
The report noted that this challenge was tackled in Britain by developing a national fraud strategy.
Francis said it was essential that Read focus on being a “key player” in driving a more integrated approach to fighting financial crime.
Even in the absence of a “more joined-up approach to serious financial crime” Francis said it was likely the SFO would have to work on a “peacetime army model” that was able to “ramp up for particular crime waves or major cases”.
Ideally, SFO staff would be seconded to other agencies. As a result, it would be developing “strong alumni or ‘army reservists’ networks that, should a major case occur, assist it to ramp up its resources quickly”.
Looking at how the SFO could be successful in the future, Francis said it would remain “at the aftermath of crime” but stay well connected to the preventive efforts of other agencies.
She also suggested the SFO would be an “activist” and known for taking on challenging and complex cases – some of which it would lose.
Full Report of State Services Commission review of SFO here:
https://www.documentcloud.org/documents/1173795-pif-review-sfo-may14.html
Source:
SFO’s crime blind spot. By Hamish Fletcher. Published 28 May 2014
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11262890
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