Feeds

UK fraud squad bends over Serco, G4S for 'phantom crims' probe

Electronic taggers' £9bn gov deals now under threat

Combat fraud and increase customer satisfaction

The UK's Serious Fraud Office (SFO) has launched a criminal investigation into contractors Serco and G4S after an audit allegedly suggested the companies were massively overcharging for the electronic tagging of offenders.

Sources in government told The Guardian that the two firms billed Blighty for monitoring at least 18,000 tagged crims – but it's alleged that at least 3,000 of these turned out to be back in prison, out of the country, released from the tagging scheme, or dead. In some cases, it is claimed, billing carried on for years after tags had been removed or shut down.

The two companies were hired to attach electronic cuffs to criminals to monitor their whereabouts following the crooks' release from prison, but the UK Justice Secretary Chris Grayling ordered a review of the scheme in July following reports of problems with the system.

Serco allowed Department of Justice auditors to go over its books and G4S refused. Now the SFO, an independent crime-fighting team capable of initiating criminal proceedings, has taken over and is forcing a full investigation. The two firms have more than £9bn in outsourcing contracts with the UK government and these may now be at risk, as well as possible criminal charges against internal staff and directors.

Serco's CEO Chris Hyman stepped down from the company last month as part of a corporate shake up. "I have always put the interests of Serco first," he said in a statement. "At this time, nothing is more important to me than rebuilding the relationship with our UK government customers."

The outsourcing giant's electronic tagging procedures are already under the microscope following an investigation by the Cambridge computer scientist Ross Anderson in August for a court case involving an offender accused of trying to remove their tag: Anderson described Serco's tagging system as "shambolic" and claimed the tags were prone to register false removal alerts.

Serco is also under investigation in the UK for another government contract to deliver prisoners to and from court appearances. Grayling said at the time that an audit discovered "systemic malpractice up to board level" in billing for prisoners who were never transported.

Both Serco and G4S have now been blocked from tendering for the next round of contracts for monitoring electronic tagging. But the SFO can recommend jail time for directors if it's found that they were aware of problems and did nothing to rectify them. ®

Top three mobile application threats

More from The Register

next story
EU: Let's cost financial traders $400m a day, because EVIL BANKERS. Right?
Wait 'til this one hits your pension fund where it hurts
Systems meltdown plunges US immigration courts into pen-and-paper stone age
Massive outage could last four weeks, sources claim
Lavabit loses contempt of court appeal over protecting Snowden, customers
Judges rule complaints about government power are too little, too late
Don't let no-hire pact suit witnesses call Steve Jobs a bullyboy, plead Apple and Google
'Irrelevant' character evidence should be excluded – lawyers
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
Edward Snowden on his Putin TV appearance: 'Why all the criticism?'
Denies Q&A cameo was meant to slam US, big-up Russia
Ex-Tony Blair adviser is new top boss at UK spy-hive GCHQ
Robert Hannigan to replace Sir Iain Lobban in the autumn
Judge halts spread of zombie Nortel patents to Texas in Google trial
Epic Rockstar patent war to be waged in California
US Supreme Court supremo rakes Aereo lawman in oral arguments
Antenna-array content streamers: 'Ruling against us could dissipate the cloud'
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.