Sunday, May 16, 2021

Former Serco directors accused of hiding £12 million in profits from the U.K government

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Two former Serco Group Plc directors concealed 12 million pounds ($16.5 million) in profits from the U.K. Ministry of Justice, ultimately defrauding both the government and taxpayers, prosecutors told a London court.

Simon Marshall and Nicholas Woods were accused of making false representations about an electronic-tagging contract to the Justice Ministry from 2011 through 2013 at the first day of a trial Tuesday in London.

Prosecutors from the Serious Fraud Office told the jury that the company reduced an apparent profit of around 27 million pounds to roughly 15 million pounds in the financial models given to the Ministry, concealing 12 million pounds in additional profit. The contract was funded by the Treasury, and ultimately the British taxpayer.

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“This is about a fraud on the taxpayer, on public funds, carried out by the defendants to benefit Serco,” said Michael Bowes, a lawyer for the SFO. It’s not possible to quantify the precise financial gain for Serco or the loss to the Ministry, he said.

Marshall is charged with three counts of fraud, and Woods one. Both men have pleaded not guilty.

The trial relates to events that occurred a decade ago. Serco outsources public services ranging from facilities management to systems engineering. The company has played a significant role in the U.K.’s Covid-19 strategy, including helping run its track-and-trace program.

The financial models provided to the Ministry were significant because they were designed to give it confidence that the taxpayer wasn’t paying too much, Bowes said.

“At the heart of this case is whether the information in those financial models, submitted to Ministry of Justice, was true or false and whether the defendant’s knew it was false and acted dishonestly,” he said.

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