14:04, July 10 197 0 theguardian.com

2020-07-10 14:04:05
G4S fined £44m by Serious Fraud Office over electronic tagging

Security firm G4S has been fined £44m by the Serious Fraud Office (SFO) as part of an agreement that will see it avoid prosecution for overcharging the Ministry of Justice for the electronic tagging of offenders, some of whom had died.

The SFO said G4S had accepted responsibility for three counts of fraud that were carried out in an effort to “dishonestly mislead” the government, in order to boost its profits.

Former justice minister Chris Grayling asked the SFO to investigate G4S and rival Serco in 2013, after a departmental review found they had overcharged for tracking the movements of people who had moved abroad, returned to prison, or died.

G4S agreed to compensate the Ministry of Justice in 2014, reaching a settlement worth £121m.But it remained under investigation by the SFO until Friday, when it announced a deferred prosecution agreement, pending approval by a judge at a hearing scheduled for next Friday.

Under the terms of the agreement, G4S will pay a £38.5m penalty and £5.9m to cover the SFO’s costs. The company was given a 40% discount on its fine after co-operating with the SFO.

It has also agreed to enforce new controls, including a programme of “corporate renewal” to prevent a repeat of the scandal, which took place within its G4S Care & Justice division.

“G4S Care & Justice repeatedly lied to the Ministry of Justice, profiting to the tune of millions of pounds and failing to provide the openness, transparency, and overall good corporate citizenship that UK taxpayers expect and deserve from companies entering into government contracts,” SFO director Lisa Osofsky said.

“The terms of this deferred prosecution agreement will provide substantial oversight and assurance regarding G4S Care & Justice’s commitment to responsible corporate behaviour.”

G4S chief executive Ashley Almanza said: “The behaviour which resulted in the offences committed in 2011 and 2012 is completely counter to the group’s values and standards and is not tolerated within G4S.”

“We have apologised to the UK government and implemented significant changes to people, policies, practices and controls, designed to ensure that our culture is underpinned by high ethical standards and that our business is always conducted in a manner which is consistent with our values.

“We have made significant progress in embedding these standards throughout the group and we are pleased that this has been acknowledged by the SFO and the UK government.”

The £44.4m in fines and costs takes the total paid out by outsourcing firms involved in the prisoner tagging scandal to more than £250m. Serco reached its own £22.9m agreement with the SFO last year, six years after repaying £68m to the Ministry of Justice.

The SFO said its agreement with G4S was made possible by factors including the company’s disclosure of evidence and its “overall – albeit delayed – substantial cooperation” with the investigation.

Two former Serco employees were charged with fraud and false accounting earlier this year, despite the company’s settlement with the SFO.