UK: The Long Arm Of British Anti-Corruption Laws And The Impact On Individual Defendants

Bruce Hall, the former Chief Executive Office of Aluminium Bahrain Bsc ("ABLA") was sentenced on 22 July 2014 to 16 months in prison for conspiracy to corrupt in relation to contracts for the supply of goods and services to ALBA during the period September 2001 to June 2005.  The Serious Fraud Office ("SFO") press release is here.

Followers of this blog will remember that the SFO also prosecuted Victor Dahdaleh, a British/Canadian billionaire, whose trial collapsed at the end of 2013.  We blogged previously here , here and here.

Bruce Hall decided in 2012 to plead guilty to the charges laid by the SFO in 2012.  He accepted that he had received £2.9 million in corrupt payments between 2002 and 2005 including 10,000 Bahraini Dinars in cash from Sheikh Isa Bin Ali Al Khalifa, a member of the Bahraini Royal Family and, at the time, Bahrain's Minister of Finance and ALBA's Chairman.  The payments were made in exchange for Mr Hall agreeing to and allowing corrupt payments that Sheikh Isa had been involved in before Mr Hall's appointment as CEO to continue as a result of the corrupt payments received.  Mr Hall was ordered to pay: 

• £3,070,106.03 within seven days, or face serving an additional term of imprisonment of 10 years; 
• compensation to ALBA in the amount of £500,010; 
• £100,000 as a contribution to the prosecution costs. 

The Judge presiding over the hearing, Judge Loraine-Smith said: 

Judge Loraine-Smith also noted that Mr Hall had cooperated with numerous authorities throughout the investigation.  The Judge held that if he had not been so cooperative, he could have faced around six years in prison, close to the maximum sentence for conspiracy to corrupt (under the old, pre-Bribery Act 2010 laws).  As a result of his cooperation Mr Hall was entitled to a 66% reduction in his sentence and a further one third reduction due to entering a guilty plea.  In addition to which, the 119 days that Mr Hall spent in prison in Australia awaiting extradition to the United Kingdom would be taken off his sentence. 

As part of Mr Hall's mitigation, he also agreed to divest himself of other corrupt payments which he had received during his time as the CEO of ALBA.  These payments were not part of the indictment as the SFO did not have jurisdiction to prosecute for the conduct acknowledged by Mr Hall.  In order to recover the other payments received by Mr Hall, which amounted to US$900,000, the director of the SFO launched proceedings under Part 5 of the Proceeds of Crime Act 2002 in the High Court. 

Although the SFO had a fairly spectacular failure during the ALBA case in its prosecution of Victor Dahdaleh (on which we have blogged previously - links above), the prosecution of Bruce Hall is another SFO success story and should properly be regarded as such.  Even though the prosecution took place under the pre 1 July 2011 (the date the Bribery Act came into force) corruption laws, which pre-date the Bribery Act 2010 and which are still being used to prosecute for offences which took place prior to that date, nevertheless this case amply demonstrates: 

• That British anticorruption laws can affect foreign individuals living outside of the UK, and that extradition treaties can be utilised to force those individuals to face trial in the UK; 
• That the SFO and the British courts will use the Proceeds of Crime Act 2002 to force individuals to disgorge the profits made from corruption. 
• The investigations/prosecutions can hang over an individual (or indeed a corporate defendant) for many years – in this case the SFO formally opened its investigation in 2009.  For most people that may mean their lives are in limbo during the whole period, and they may be unable to obtain employment during that time, or at least at the same level or in the same industry.
• Practices of corruption which are regarded as almost de rigeur in many countries around the world will be viewed very differently indeed if they come before the English courts which have repeatedly stated that defendants are no better than "common criminals".

The inference to be made from this court order is that  the crime of corruption really doesn't pay, especially for board level directors, and that individuals who get involved in (or permit existing arrangements to continue unabated) international corruption are at risk of being prosecuted in one or more jurisdictions around the world and are liable to lengthy terms of imprisonment as well as very substantial penalties and orders for disgorgement of payments.  That said, one one view, for wealthy defendants like Victor Dahdaleh, there is still an argument for aggressively defending these prosecutions because Mr Dahdaleh's trial collapsed (the SFO's statement on the collapse is here) and he is no longer being prosecuted, whereas Bruce Hall pleaded guilty at an early stage for the very same allegations, and Mr Hall by contrast has suffered all the penalties set out above.  As with all prosecutions, the way a defendant pleads to them is ultimately his/her own decision and often a complete gamble, but the orders made by Judge Loraine-Smith on 22 July 2014 show that the courts will make substantial discounts in sentencing as a result of a guilty plea and cooperation with the prosecution, and this should encourage defendants to work out for themselves the benefits of cooperation.

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