Serco agrees to pay £19.2m over offender tagging scandal

Will Green is news editor of Supply Management
3 July 2019

Serco has agreed to pay the Ministry of Justice (MoJ) £19.2m following a Serious Fraud Office (SFO) investigation into the offender tagging overcharging scandal.

The SFO launched an inquiry in 2013 after it emerged Serco had been over-billing the MoJ to the tune of tens of millions of pounds for electronic tagging services where none was taking place.

This included charging for people who were back in prison and had had tags removed, people who had left the country and those who had died. An audit at the time showed the situation stretched back to 2005 and possibly further.

Under a Deferred Prosecution Agreement (DPA) Serco Geografix Ltd (SGL), a wholly-owned subsidiary of Serco Group, has “taken responsibility” for three offences of fraud and two of false accounting “arising from a scheme to dishonestly mislead the MoJ as to the true extent of the profits being made between 2010 and 2013 by SGL’s parent company, Serco Limited (SL), from its contract for the provision of electronic monitoring services,” said the SFO.

“The scheme was designed to prevent the MoJ from obtaining information to which it was entitled and from using this to decrease SL’s revenues under that contract.”

The payment of £19.2m follows a previous civil settlement payment of £68.5m in 2013.

The SFO said the question of whether Serco had invoiced the MoJ for monitoring subjects where none had taken place was not the subject of the DPA and no criminal charges would be brought in relation to this.

Director of the SFO Lisa Osofsky said: “SGL engaged in a concerted effort to lie to the Ministry of Justice in order to profit unlawfully at the expense of UK taxpayers.”

The DPA is subject to the approval of a judge at a hearing due to take place on 4 July at Southwark Crown Court.

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