Andrew Testa for The New York TimesDavid Green, director of the Serious Fraud Office in Britain, doubled the agency’s investigation team this year to help with its Libor-rigging case.
David Green, the director of Britain’s Serious Fraud Office, is in a combative mood.
On his desk at his office, a stone’s throw from Trafalgar Square in London, sits a souvenir plaque commemorating the signal that Admiral Horatio Nelson sent to his fleet on the eve of the Battle of Trafalgar in 1805. It says, “England expects that every man will do his duty.”
Mr. Green says his duty is to revive confidence in his office as a top-tier prosecutor of serious fraud and corruption. And he plans to do that with the help of one of the biggest cases the organization has ever taken on: the investigation into the rigging of the London interbank offered rate, or Libor.
His office plans to bring criminal fraud charges against Thomas Hayes, a former trader at UBS and Citigroup, as early as Tuesday, according to a person briefed on the case. Mr. Hayes, who was charged with fraud late last year by the United States Justice Department, is seen as a central character in the rate-rigging scheme. His role figured prominently in the case against UBS, which under a settlement pleaded guilty to one count of felony wire fraud and paid about $1.5 billion in fines. The criminal charges against Mr. Hayes would be the first brought by British prosecutors for suspected manipulation of Libor.
“What people look to is success in the very big headline cases, and inevitably Libor comes to mind,” Mr. Green, 59, said in an interview this month. “I am in the business of doing justice and restoring public confidence in the rule of law. The public need to have confidence that white-collar criminals are dealt with as criminals, that they are not given some special rosy path with a cop-out sentence at the end of the day.”
When Mr. Green took over as director of the fraud office in April last year after 25 years as a prosecutor and defense lawyer, he found an agency whose reputation was in shambles and whose staff morale had hit rock bottom. Two London businessmen, the Tchenguiz brothers, Robert and Vincent, had dragged the office to court over a botched investigation into their connections with failed banks in Iceland. The fraud office apologized and started an internal investigation but also ran up huge legal costs that might continue to grow.
Additional embarrassment came in 2011, when the office decided against investigating Libor and shifted responsibility instead to the Financial Services Authority. While the Justice Department started to delve into the Libor case from abroad, the fraud office said it would only be a further drag on its already stretched resources.
Despite an increase of publicity-friendly dawn raids on suspected wrongdoers and some saber-rattling speeches, the fraud office had built an image of a prosecutor that barked but would not bite. So bad was its reputation that when the government started to change the way it regulated the financial industry after the financial crisis, it seriously considered abolishing the office.
Mr. Green is well aware of these problems. One of the first things he did when he arrived was to clearly define the mission of the organization, he said. Unlike his predecessor, Richard Alderman, he is not in the business of giving guidance and striking deals with defendants. “The sentence is a matter for the judge,” he said. “I am here to prosecute.”
“There was a general perception in this country and abroad that the S.F.O. lacked somehow the stomach to prosecute and preferred the easier route of civil settlement,” he said. “There was a perception that the S.F.O. had dumbed down and has taken easier, less-complex cases.”
But those times are over, he said, and his message to criminals is clear: “If your conduct is criminal and comes within the purview of the S.F.O., we will go after you.”
When he took over, Mr. Green simplified the office’s structure by setting up two divisions for fraud and two divisions for bribery and hired new senior staff members, including Geoffrey Rivlin, a retired judge feared and respected for being a stickler for detail, to help prepare cases for court.
John Fingleton, chief executive of Fingleton Associates, which advises clients on regulatory issues, said Mr. Green “hired some good people and tries to tidy up the place.” But the job is not easy, Mr. Fingleton said.
“The S.F.O. has been heavily starved of resources, and crime enforcement in Britain is generally far more difficult than in the U.S.,” where there are fewer burdens on the prosecution and plea bargains are commonplace, he said.
Mr. Green takes particular issue with the suggestion that the fraud office would refuse to open an investigation because it was too expensive. “Absurd,” he said, before adding, “disgraceful.”
“I will not stay in this job and do that,” he emphasized.
The Libor inquiry is the largest of the fraud office’s 67 active cases and a vast undertaking that required Mr. Green to double the investigation team to 60 this year. Another handful of investigators are on loan from the tax authority, and there is some staff from large accounting firms and foreign regulators. A deal to swap staff with the Justice Department is in its final stages, he said.
As determined to prosecute and passionate about his work as Mr. Green is, he is reluctant to talk about his private life or even his earlier legal cases. His father worked for a bank while his mother brought up the children. After studying history at Cambridge University, Mr. Green took an interest in criminal law and worked for a while for his brother-in-law, a lawyer.
He then worked as a prosecutor and defense lawyer on cases that included financial crime and murder. He said he defended financial organizations for regulatory and criminal offenses in the past but would not give any names.
His main prosecution work included cases involving the importation of heroin from places like Afghanistan, organized crime and fraud, but he declined to give any detail. In 2005, he was named director of revenue and customs prosecutions, successfully prosecuting money-laundering groups and cigarette smugglers. More than 90 percent of the cases secured a conviction.
Alison Graham-Wells, a lawyer who worked under Mr. Green in the 1990s, said he stood out in court for his ability to explain complex cases of financial fraud in simple terms to a jury. “He has a very good court presence,” she said.
Whether Mr. Green, now at the fraud office, is successful will depend on the outcome of the Libor investigation. Some analysts said he was taking a risk by focusing on Libor and pointed out that with a prominent international case like this, the likelihood of prosecution could be taken out of his hands.
But Mr. Green is defiant. “A risk-averse person should not be doing this job,” he said. “I’ve been a trial lawyer all my life. The whole process is about assessing and managing risk. Do I ask this question? Do I raise this point? What is the clearest way of presenting this to a jury?”
Next to the Nelson quote plaque on his desk, Mr. Green keeps another one, which he picked up during a trip to Washington and the Smithsonian National Air and Space Museum. It is closely associated with the Apollo 13 mission and reflects what Mr. Green really thinks about his mission at the fraud office: “Failure is not an option.”
Article source: http://dealbook.nytimes.com/2013/06/17/britains-top-fraud-prosecutor-aims-to-add-bite-to-its-bark/?partner=rss&emc=rss
