Serious Fraud Office blunder leads to investigation setback

This entry was posted on Saturday, January 7th, 2012 at 11:03 am

One of the most high profile investigations into serious fraud has suffered a major setback following the discovery that the Serious Fraud Office (SFO) used faulty search warrants in its initial investigation into property magnate Vincent Tchenguiz.

The Telegraph reports that the Serious Fraud Office has requested that the search warrants be quashed after Mr Tchenguiz’s legal team challenged his arrest as a result of material discovered under these faulty warrants. Mr Tchenguiz has said that he “consistently and repeatedly informed the SFO that they have got their facts wrong”. A request has been made to keep certain seized materials in storage for use in a later case.

Whilst the search orders may be quashed, the SFO intends to continue its investigation into alleged corporate fraud committed by Mr Tchenguiz following the collapse of the Icelandic banking system. The allegations appear to centre around the false valuation of assets used as collateral against a £100m loan taken out by Mr Tchenguiz and his brother. Both men deny the charges but an SFO spokesman has said that “the investigation into Vincent Tchenguiz… will continue”.

This news comes as a serious embarrassment to the SFO ,who were this week threatened with substantial legal action for damage to Mr Tchenguiz’s reputation. A letter sent by his representatives details an intention to sue for £100m, should the serious fraud allegations of corporate fraud prove to be unfounded. The SFO are already facing a large legal bill having decided not to challenge the validity of the search warrants, leaving them liable for Mr Tchenguiz’s legal fees.

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