HMRC faces ongoing performance gaps that undermine effective AML supervision, despite recent improvements
Recent Court of Appeal hearing will be a key test for the Serious Fraud Office (SFO) amid ongoing disclosure issues in other bribery prosecutions.
– The Court heard that the SFO took a “deliberate” decision not to disclose “potentially embarrassing” material about the SFO director’s contact with Ahsanis’ “freelance agent” to the defence.
– There are ongoing questions about the lack of action in respect of the Ahsanis’ assets in the UK, particularly in light of recent revelations in the Pandora Papers.
Between 2019 and 2021, the SFO successfully prosecuted four individuals for corruption in the Unaoil case over the payment of hundreds of thousands of dollars in bribes to secure lucrative contracts in the Iraqi oil industry.
But the case also raised serious questions about the SFO’s approach when Unaoil’s bosses, the Ahsani family, escaped prosecution in the UK while less senior employees were sentenced to several years in jail.
Unaoil executives Cyrus and Saman Ahsani, both British citizens, cut a deal with the US authorities in 2019, where their sentencing has apparently been delayed yet again to 2022. Meanwhile, their father, Ata Ahsani, was not prosecuted at all.
The SFO’s decision not to take any action against the Ahsanis in the UK was thrown into stark relief in October following a report in the Guardian that at least £7.5m of suspect Unaoil proceeds have been invested in property funds in the UK through opaque offshore structures.
Spotlight on Corruption has today published its letter to the SFO, which raised concerns about the “apparent lack of enforcement action” to recover the possible “proceeds of crime of the Ahsani family” and to ask whether such action will now be taken.
On 20/21 October, criticism of the SFO’s approach intensified as a former Unaoil employee, Ziad Akle, challenged his conviction at the Court of Appeal in London, arguing the watchdog deliberately failed to disclose potentially embarrassing material about the agency’s dealings with David Tinsley, a “freelance agent” in the pay of the Ahsanis.
Akle, Unaoil’s former Iraq territory manager, was ultimately found guilty of two counts of conspiracy to make corrupt payments – of over $500,000 to secure a contract worth $55 million – and sentenced to five years’ imprisonment in July 2020.
In January 2020, Akle’s lawyers had unsuccessfully applied to have the case against him thrown out as an abuse of process, arguing that Tinsley’s involvement amounted to “egregious misconduct” which meant their client could not receive a fair trial.
Tinsley first contacted the SFO’s director Lisa Osofsky in September 2018, saying he was committed to “mending the relationship between the SFO and the FBI and build something great”, and later approached Akle directly, claiming he could have off-the-record contact with Osofksy and “stop everything in the UK and move the case to the US”.
Judge Martin Beddoe criticised Osofsky for making herself “vulnerable” to Tinsley’s flattery and said the SFO’s contact with him should be “comprehensively reviewed to see what lessons can be learned from it”, but rejected the application.
For the abuse of process hearing, Akle’s lawyers were provided with “schedules” of material relating to Tinsley’s communications with Osofsky and others at the SFO, but not given the underlying material.
Akle’s barrister, Adrian Darbishire QC, told the Court that his client’s conviction was unsafe because the SFO’s disclosure failings amounted to an attempt to “manipulate, unlawfully, the trial process”.
The conviction was also unsafe because of Tinsley’s approaches to both Akle and co-defendant Basil Al Jarah – Unaoil’s Iraq partner, who pleaded guilty in July 2019 to five offences of conspiracy to give corrupt payments – to try and persuade them to plead guilty, Darbishire said.
The SFO’s approach to disclosure
At an earlier hearing in July, the Court of Appeal had ordered the SFO to hand the documents over, which Akle’s lawyers said had “transformed” their understanding of Tinsley’s dealings with Osofsky and others at the SFO.
The previously undisclosed material had “the potential to embarrass … some of the most senior staff at the SFO”, which Darbishire argued “necessitated the strictest compliance” with the statutory test for disclosure. It appeared to have been “highly convenient” to the SFO to not disclose the “compromising material”, he said.
The new material also showed that Judge Beddoe’s observation that the SFO may “only tacitly” have encouraged Tinsley’s contacts with Akle and Al Jarah was “wide of the mark”, Darbishire said.
Tinsley, the SFO and the Ahsanis
Tinsley’s actions on behalf of the Ahsanis were also called into question, as was the SFO’s contention that it was prevented from prosecuting them in the UK. Darbishire said that, “from the first contact” between Tinsley and Osofsky, senior SFO staff expected that “the Ahsanis would plead guilty in the US alone and that that plea would suffice for all purposes”.
Tinsley also referred to the potential embarrassment to the SFO if the cases against Akle and Al Jarah went to trial as they could “expose issues associated with Tom Martin”, a former SFO case controller who was found in February to have been unfairly dismissed. The SFO has reportedly sought permission to appeal against that ruling.
One of Darbishire’s key arguments focused on the approaches to Akle and Al Jarah by Tinsley, a process “driven by the most senior levels of the SFO”, which was accused of “weaponising” Tinsley against Al Jarah.
Darbishire told the Court: “The reality is that, if what Tinsley was proposing was a criminal act, this would be more than enough to establish a joint enterprise or conspiracy.”
The SFO’s response
Michael Brompton QC had the challenge of arguing the case for the SFO, accepting that “the contact between the SFO and Mr Tinsley on the subject of Mr Al Jarah and Mr Akle’s cases were inappropriate”.
But Brompton argued it was not “egregious misconduct” which renders Akle’s conviction unsafe, dismissing as “no more than a conspiracy theory” the suggestion that there was an “underlying plot between the SFO and David Tinsley to sacrifice their case against the Ahsanis”.
He did, however, tell the court that the SFO would not seek a retrial if the conviction was quashed as an abuse of process.
What happens next?
The Court reserved its judgment and said it would give a ruling on Akle’s appeal against his conviction – as well as his appeal against his sentence – “as soon as possible”.
Even if Akle is not successful in his appeal, the hearing has certainly turned up the heat on the SFO over its handling of the Unaoil case.
As Darbishire pointed out, disclosure failings by the SFO are not uncommon and concerns about the agency will continue even if Akle’s conviction remains in place.
Spotlight on Corruption will continue to monitor these proceedings closely and will put out further analysis once the judgment, which is due at some stage in November, is released.