UK: Oops, there goes another one. Prosecutions tumble.

HM Customs and Excise spent, on apparently conservative estimates, hundreds of thousands of pounds bringing to trial a case relating to London City Bond. Thousands of pages of evidence was sifted, analysed and bundled. Lawyers for the Crown and the defendants worked for more than two years to get the terms of reference agreed and to focus the issues.
Then it all went wrong.

Details are currently sketchy but the outline is that HM Customs did not behave, or do not appear to have behaved, with complete propriety under the law relating to investigations. With evidence that they needed not available to them, HM Customs decided they could not win and quietly packed up their bags and went home with their tail between their legs.

It might have ended there but for the fact that this is not the first time. HM Customs have, from time to time, allowed their extremely strong powers to go to their heads. Other cases have been quietly dropped as it is realised that improperly, or even illegally, obtained evidence cannot be re-obtained in such a fashion that it is admissible. HM Customs, for example, reportedly have "floating orders" that allow then to tap any telephone at any time - but if the order is not used for a month, it lapses. Unsubstantiated reports claim that HM Customs ensure that the orders do not expire by routinely using them for surveillance on anyone they choose. Whether or not it is true, it does not seem entirely beyond of the realms of possibility.

Whether the government was quick reacting or making a knee jerk remains to be seen but the day after the trial collapsed, HM Treasury, HM Customs' parent department, announced a "independent review into current practices and procedures relating to disclosure, associated investigation techniques and case management in HM Customs and Excise criminal cases."

The trial collapsed on 25th November. The review was announced on 26th November and the chairman was announced on 29th December.

The terms of reference are wide: they can be summarised as "sort this mess out, find out who is to blame and make sure this doesn't happen again." The governmental language of the review is gentlemanly: the underlying implications are much more bare knuckle than Marquis of Queensbury and nothing within the investigation process is out of bounds for the investigation."

It is charged to undertake the following:
To consider the circumstances that led to the termination of the LCB cases heard by Grigson J in Liverpool Crown Court and the lessons to be learnt from those circumstances. And, having regard to changes in the law or practice as indicated below, changes in relevant procedures and guidelines and to changes in practice within HM Customs and Excise that have taken effect since 1995: To review the practices of HM Customs and Excise in the recording, retention, revelation and disclosure of material which may be relevant to the prosecution of its criminal cases. In respect of HM Customs and Excise criminal investigations, to review current compliance with best practice in the use of investigation techniques (e.g. the classification and handling of individuals providing information) and the management and control of cases to the extent these are relevant to the discharge of the prosecution"s obligations in any subsequent criminal proceedings. To make recommendations.

London City Bond is over 100 years old but its current owners bought it in the 1980s. Of itself, London City Bond says "Now a multi-million pound turnover company, and the leading privately owned tax warehouse in the UK, we are jealous of our first class reputation for providing a comprehensive nationwide distribution service to more than 900 wine, beer and spirit merchants." It also says "London City Bond is an HMC+E (Customs & Excise) approved storage facility."

The situation for London City Bond is not at all satisfactory. This is not a case that was dismissed with the implication of innocence (there is no finding of innocence in an English Court, merely one of not guilty). A withdrawn case does not even amount to a not guilty finding and still leaves a taint; a whiff of "what if" in the air.

That is not the case for Harry Sweetbaum, the former CEO of Wickes, a huge Do It Yourself chain, who was prosecuted by the Serious Fraud Office (SFO) following a multi-million pound investigation.

Whilst HM Customs and Excise were being roundly spanked in Liverpool, the SFO was receiving a solemn beating in London.

In fact, the SFO has a good record, it wins more than half of its cases. Its cases are big and complicated. In such cases, the defendant has a number of advantages, not least is the fact that to prove a case beyond reasonable doubt relies on the jury being of clear mind but a defendant can quite easily create confusion. This means that its biggest and most complicated cases are most easily lost. But they are, of course, the cases that attract the most attention.

We do not pass any comment on the judgment in the Wickes case, we merely point out the advantages inherent in defending a complex case where the evidence is considerable and open to several interpretations.

The SFO can hardly be seen as a profit centre: it will need to work hard to rebuild its reputation again, as it has so often had to do. And it ironic that, more often than not, the criticism that has befallen the SFO has not been due to its own inadequacies but due to judicial decisions, even on sentencing which is entirely outside the control of the SFO.

In the Sweetbaum case, its own costs will be may be fifteen to twenty million pounds and the legal costs of the defendants probably at least twice as much.

Fighting fraud is not a UK government priority: police forces cannot afford the necessary resources and as a result, focus on politically driven and cheaper offences.

Commercial enterprises reporting embezzlement and fraud are either told to find a civil lawyer to pursue the money or to package the case so that the police do not have to undertake the basics of the investigation. And even if a prosecution is mounted, judges give soft sentences to so-called white collar criminals, again resulting in criticism of the prosecutors. It is not surprising they have no appetite to run cases that are not clear cut.

How different it is in parts of South East Asia where embezzlement can result in the death penalty.