SFO shows that it can target SMES

American banker/white-collar crimeIf any reminder was needed, last month showed that bribery investigations and indeed convictions are not limited to damaging large multi-national companies such as BAE but can be devastating for SMEs – like Smith and Ouzman Ltd, a printing company in Eastbourne.

The company itself was convicted of three counts of corruptly agreeing to make payments, contrary to section 1(1) of the Prevention of Corruption Act 1906.

This was the Serious Fraud Office (SFO)'s first conviction, after trial, of a corporate for offences involving bribery of foreign public officials and sentencing of the directors took place on 12 February 2015.

The company’s chairman, Christopher John Smith, aged 72 from East Sussex, was sentenced to 18 months' imprisonment, suspended for two years. He was also ordered to carry out 250 hours of unpaid work and has been given a three month curfew.

Nicholas Charles Smith, the sales and marketing director of the company, aged 43 from East Sussex, was sentenced to three years' imprisonment for three counts of corruptly agreeing to make payments, to run concurrently.

The company itself was also convicted of the same three offences and will be sentenced at a later date.

Both men were disqualified from acting as company directors for six years.

The corrupt payments, totalling £395,074, were made to public officials for business contracts in Kenya and Mauritania.

The trial itself, which cost the SFO £500,000 and ended in December 2014, shows that the SFO will act where the evidence takes it irrespective of the size of the company. It shows that all companies need to have in place the adequate procedures set out in Chapter 8 and failure to do so could be devastating for directors and owners.

Both the directors in this case were noted as being of exemplary character – and indeed the business itself appeared to be generally run along efficient and productive lines. That background did not save them from the sentences above – a cautionary tale indeed.

The company itself is going to be sentenced at a later date and we await to see how the court approachs that sentencing exercise. Confiscation is also set for later in the year.

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