LONDON (WithinTheLaw) - Security firm G4S has been fined £44 million by the Serious Fraud Office (SFO) in an agreement that will help it avoid prosecution for offenses related to the use of electronic tagging according to a report in the Guardian.
An investigation found that G4S had overcharged the Ministry of Defence for electronic tagging of offenders, some of whom had died.
The security firm accepted responsibility on three counts of fraud in which they misled the Government in order to boost profits.
The SFO had been asked to investigate G4S by former Justice Secretary Chris Grailing, along with another security company Serco, after a review in 2013 found they had been overcharging for tracking the movements of people who had variously moved abroad, returned to prison or died.
In 2014, the security firm agreed to compensate the MoJ in a settlement worth £121 million, but they have still been under investigation by the SFO. It has now announced a deferred prosecution deal in which they will pay a £38.5 million penalty and £5.9 million to cover the costs of the regulator. It will also enforce new controls and start a program of ‘corporate renewal’ to avoid a repetition of the crime. They were given a 40% discount thanks to their cooperation with the SFO.
In a statement, G4S said the behaviour was directly counter to the ‘groups values and standards.’ They have apologised to the UK Government and made changes to ‘people, policies, practices and controls’ in an attempt to improve ethical standards in their culture.
However, they are not alone. Serco has reached its own £22.9m agreement with the SFO. While both firms have promised to change, the incident raises more concerns about the involvement of private firms in Government contracts.
(Written by Tom Cropper, Edited by Klaudia Fior)