Serco Reaches $24 Million Deal to Settle U.K. Fraud Probe

The agreement struck by its Serco Geografix Ltd. unit will now go before a U.K. judge for approval, the Serious Fraud Office said in a statement Wednesday. Serco has already paid 70 million pounds to the U.K.’s Ministry of Justice and must also pay the SFO’s costs.

The investigation dates from 2013 when U.K. regulators begin looking into how Serco Group overcharged for electronic tagging services of criminals, including those who were already dead. The company lost contracts, its then chief executive officer and fifth of its value in the aftermath of the scandal.
“Those of us who now run the business are mortified, embarrassed and angry that, in a period between six and nine years ago, Serco understated the level of profitability of its electronic monitoring contract in its reports to the Ministry of Justice,” current CEO Rupert Soames said in a statement, stressing that no senior executives who worked for Serco at the time of the offenses do any longer.

“Serco apologized unreservedly at the time, and we do so again.”

Serco acknowledged responsibility for three offences of fraud and two of false accounting over a scheme to dishonestly mislead the Ministry of Justice as to the true extent of the profits being made” from 2010 to 2013 by parent company Serco, the SFO said. The fine was cut in half to reflect the Hook, England-based company’s cooperation with the probe.

Bloomberg | July 3rd, 2019

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