The Proceeds of Crime Act (2002)

This month, one of our Criminal Investigations Managers, Nathan Salmon explains how the SIA uses the (Proceeds of Crime Act (2002) to recover the profits made from offending within the private security industry.

Our blog aims to discuss developments in the private security industry and to provide further insight and opinion on our work. We look forward to having an on-going discussion with you; share your comments and opinions.

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Over the last 12 years, the SIA has been investigating and prosecuting anyone who repeatedly shows that they do not care about being licensed or working within the law. Our Partnerships and Interventions department does this by encouraging those working in the private security industry to stay within the law (the Private Security Industry Act). You can find out more about our enforcement activity on our website.

The SIA licence is a way to safeguard the industry and general public, and it is our responsibility to make sure that only ‘fit and proper’ people work in the industry. Those who ignore us and disregard the importance of licensing could be barred from operating in private security and prosecuted.

We do not always prosecute but investigate and consider whether there are public safety risks or if we need to protect the integrity of the private security industry or our licensing system.

The Proceeds of Crime Act (POCA) and repeat offenders

In recent years, we noted that some security companies were being investigated repeatedly. We had to do something because we didn’t want businesses treating court fines as a type of tax where the level of profit for working outside the law is worth the potential penalties any judge or court may give.

In 2015, the government amended POCA to include to regulatory bodies like us and we applied to take advantage of these powers. POCA is a law that means any money made from criminal activity can be recovered. It is also used by the likes of local authorities, HMRC and the Police to name a few.

We started using POCA in November 2015 to financially investigate companies and individuals who make a profit from criminal activity in the private security industry. Since then, we have employed financial investigators. They are accredited to use POCA to investigate and confiscate assets.

A recent example of our use of POCA is the case of Billy Jones, a security director who continued to work despite having had his Security Industry Authority (SIA) licence revoked. He was ordered to pay £300,000 at Cardiff Crown Court, in April 2019. This kind of conviction removes the benefit of working outside the law in the private security industry.

How does the SIA use POCA?

Our Criminal Investigations Team, is part of our Partnerships and Interventions department and is responsible for the SIA’s criminal investigations. This includes Accredited Financial Investigators (AFIs) who are able to legally present financial information in court. AFI’s are unique and very important because they have the power to ask financial institutions for information and use this to build a clear picture of someone’s financial status.

There are currently two main ways that our AFI’s can use POCA:

  1. Restraining assets
    AFI’s can apply to the court to restrain the assets of people under financial investigation. This makes sure that the money or assets of anyone we are prosecuting cannot be sold or dissipated before a court case ends. For example, for someone who is being investigated, the amount they can withdraw from their bank account can be restricted and their assets frozen.
  2. Confiscating assets
    Once convicted, a court can order a person to pay an amount of money based on how much they made through criminal activity. If they fail to pay this money, they could end up in prison and when released they would still need to pay this amount. In some cases, life-changing amounts of money can be confiscated by the courts. How POCA figures are calculated is shaped by case law, meaning specific cases determine how the calculations should be applied. We’re really pleased to have contributed to this and case law specific to the security industry exists.

During POCA proceedings, the people we’re investigating may see their lifestyle change. Due to current case law and depending on the situation, how much we confiscate may be the entire value of a security contract and not just the profit. This is because the turnover from a security contract may be a significant figure, a business or person might have to pay back hundreds of thousands of pounds. Selling assets like houses, cars or investments, to pay back the proceeds of their crime may be required.

If you’re wondering where this money goes, most of it returns to the Treasury. A proportion is allocated to the investigating organisation, which we can use to fund future financial investigations. In practice, we get no more than 34%. The money can also be allocated towards good causes, and we are exploring opportunities that will benefit the private security industry.

What will the SIA do with POCA in the future?

Over the next few months, we want financial investigations to become increasingly a core part of the way we prosecute at the SIA. This is really important because it is how we can guarantee that criminal profits are not reinvested, into “phoenix” companies that are essentially the same companies with a different name that have been set up after a criminal conviction. Our ability to use POCA should act as a warning to businesses seeking to operate outside private security regulations – you risk not only your business, but potentially your personal assets as well.

We are making really good progress and the volume of criminal cases under consideration has never been higher. Our success with POCA strengthens our regulation of the private security and we will continue to work with Regional Asset Recovery Teams and Police partners so that those who want to profit from illegal and poor business practice are removed from the private security industry.

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How we are tackling identity theft

In the last months, two of our prosecutions cases have highlighted how we have tackled the fraudulent behaviour of some licence holders and the challenges we face.

This month, our Director of Partnerships and Interventions, Dave Humphries, discusses our counter fraud initiatives and the steps we took in these cases.

Our blog aims to discuss developments in the private security industry and to provide further insight and opinion about our work. We look forward to having an on-going discussion with you; please share your comments and opinions.

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Most licensing systems are based on a set of standards and for us at the SIA our system is designed to ensure only appropriate people are given the licence to operate. This involves a number of checks to prove identity that people have the relevant qualifications, checks on criminality and verifying that a person has the right to work in the United Kingdom. Most applicants provide the information we need to make a considered decision.

But what happens when someone knows they will not qualify for a licence, but is determined to get one?  They may test the robustness of our checks and they may submit false documents to do so. We are constantly alert and we do all we can do to address specific threats.

One particular type of fraud that we face is identity theft.  It is not the only category of fraud we have come across, but it was a feature in two recent cases.

These two recent investigations have involved fraudsters stealing the identities of others, but being prosecuted by the SIA for their actions. In both cases, the fraud involved not only an attempt to bypass our online licensing system, but the two individuals also tried to get around the requirement of proving their identity by taking on the full identity of another, to get an SIA licence.

The first fraudster was Moses Oshunkoya who knew the person whose identity he targeted.  He used their personal information to the point that he was able to gain a passport under this new identity.  Using this false identity Oshunkoya got as far as fraudulently gaining an SIA licence.  Nonetheless, our investigation of him resulted in a criminal prosecution.

The second case was Kazeem Oladimeji who was more contrived in his approach. He sought out a former SIA licence holder no longer working within the industry.  He adopted that identity by purchasing a fraudulent passport in the victim’s name. He changed the licence holder’s address, enabling Oladimeji to replace an SIA licence.  Again, the outcome was a successful criminal prosecution.

Both examples show the real threat posed by identity theft.  In both cases, the victims who had their identity stolen contacted us. Once we were aware, we investigated and prosecuted the offenders to ensure their fraudulent activity was brought to an end.

What are we doing to combat such activity?

Thankfully, processing changes in recent years have and will make future cases like this less likely.  For example, we introduced personal online accounts which are password protected. This reduces the ability for fraudsters to engage with us without having access to the online accounts.

We have also made improvements to the way we verify documents. We have improved technology to better identify fraudulent identity documents.  When we do find instances of fraud, we take robust action with our enforcement partners to ensure such documents are taken out of circulation.  Finally, as these two cases highlight, we prosecute the fraudsters.

As the regulator of the private security industry, we play an important role in dealing with identify fraud and together with our partners, we take robust action to tackle such criminality.

Those working in the private security industry can support this by being our eyes and ears and reporting any fraud that they come across.  As with other types of criminality within the security industry; if you suspect fraud please report online or contact Crimestoppers.  Specific information and how the fraud was identified will enable us to take positive action.