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.
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
2 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.
3 Confiscating assets
4 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