Former Serco bosses cleared of hiding £12m profits from Government electronic tagging contracts

Two ex-Serco bosses have been cleared of hiding £12 million in profits from the firm’s electronic tagging contracts with the Government after the Serious Fraud Office (SFO) dropped the prosecution.

Former senior managers Nicholas Woods, 51, and Simon Marshall, 59, have been on trial at Southwark Crown Court accused of fraud against the Ministry of Justice (MoJ) between 2011 and 2013.

But on Monday, the judge, Mrs Justice Tipples directed jurors to acquit Woods, ex-finance director of Serco home affairs, and Marshall, former operations director of field services, of a joint charge of fraud on or about August 11 2011.

Marshall was also cleared of two further counts of fraud on or about June 6 2012 and on or about January 18 2013.

It came after the SFO offered no further evidence following a failed application to adjourn the case after problems with the disclosure process, where prosecutors are expected to make relevant documents available to the defence.

The judge told jurors the SFO took the view that issues identified had “undermined the process of disclosure in this case to the extent that the trial cannot safely and fairly proceed”.

It brings to an end an investigation which was launched in October 2013 and involved some 1.3 million documents.

Serco was fined more than £19 million in 2019 as part of the Deferred Prosecution Agreement (DPA).

The company’s UK subsidiary, Serco Geografix, took responsibility for three offences of fraud and two of false accounting committed between 2010 and 2013 relating to understating profits from the contracts with the MoJ.

Woods’s solicitor Andrew Katzen, a partner at Hickman & Rose, said: “Although the SFO’s decision to drop its prosecution is a welcome vindication of my client, the fact that it has done this after an eight-year-long criminal investigation – and three weeks into a trial – should be a matter of profound concern to everyone concerned with justice.”

He said “the fact that the SFO pressed on with its doomed prosecution” despite the evidence “should be a matter of grave concern for everyone concerned for justice in this country”.

“It is notable that in this case – just as in other similar recent failed fraud prosecutions – the SFO signed a DPA with Serco in which the company, in return for avoiding corporate prosecution, admitted wrongdoing and co-operated with the investigation.

“A narrative was thus created in which the responsibility of Serco and its senior officials were marginalised, and blame was instead cast on Mr Woods, a small cog in a big wheel.

“It is hard to avoid the conclusion that, once again, the narrative created by the DPA drove this investigation, and did so in defiance of the facts.”

Opening the case against Woods, of Ickford, Buckinghamshire, and Marshall, of Ascot, Berkshire, prosecutor Michael Bowes QC told jurors that between October 2010 and September 2012, Serco allegedly reduced its apparent profits from £27 million to £15 million, concealing an extra £12 million.

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