The Bribery Act was not retrospective and therefore it has taken some time for offences committed after it was passed to come through the system.
In December 2014, the first prosecution under the Act occurred involving three individuals, but no charges against corporate defendants reached trial.
Two directors of Sustainable AgroEnergy (SA) received substantial prison sentences for personal offences under the Bribery Act amongst other serious fraud charges.
SA was an unregulated investment company offering investors the chance to buy into a bio-fuel plantation in Cambodia. James Whale was the CEO, Gary West was a director and chief commercial officer, and Stuart Stone was an independent financial advisor associated with SA.
Between April 2011 and February 2012, some 2000 retail customers invested £23 million in SA according to the Serious Fraud Office.
The sales pitch promised not only substantial returns, but also portrayed the scheme as an ethical investment with wide third world benefits. It was therefore very attractive to retail customers.
However, the plantations in which customers had invested were not being managed in such a way that they would generate returns for investors. Insufficient trees had been planted and certainly no fuel had been produced.
SA’s auditors drew attention to this in June 2011, but SA continued to take customers’ money until its assets were frozen by the SFO in February 2012 and administrators appointed. This turned out to be a Ponzi scheme and some investors lost the entirety of their savings.
Mr West, Mr Stone and Mr Whale were charged with various offences relating to the fraud on the investors and Mr West and Mr Stone were charged under sections 2 and 1 of the Bribery Act respectively. Mr West was said to have received bribes from Mr Stone in relation to false invoices submitted by Mr Stone, as the vehicle for obtaining personal benefit from the company. In other words, the offences of bribery were committed in the process of giving effect to the fraud.
On conviction at Southwark Crown Court, Mr West was sentenced to four years imprisonment for Bribery Act offences and Mr Stone to six years. In both cases the sentences run concurrently with sentences passed for other charges. The levels of the sentences suggest, however, that the court considered this case to be towards the most serious categories in terms of culpability and harm done.
It is clear that there was a wide range of criminal conduct in this case and that bribery was in some respects incidental to the main issues. The fact that the charges were brought, however, does emphasise the seriousness with which the SFO will take cases of bribery even where other charges are available. In another sense, the bribery may have been central to the success of the fraud, as it appears to have been the means by which two of the defendants converted investors’ funds for personal profit.
The case also illustrates, however, that bribery cases are likely to emerge from investigations into other corrupt practices and that therefore anti-bribery policies, if they are to be an effective defence against prosecution for a company, should be designed in a wider anti-corruption culture.