G4S to face fraud probe on tagging of prisoners

A criminal investigation has been launched into a contract between security giant G4S and the Government for tagging criminals.

The Serious Fraud Office (SFO) has opened its inquiry after it emerged G4S – along with Serco – had charged the Ministry of Justice for monitoring offenders who were dead, back in prison, had their tags removed, left the country or never been tagged in the first place.

In July, the Government reported G4S – well-known for its botched handling of its Olympics security contract – when the FTSE 100 firm refused to take part in an additional audit to rule out any dishonesty.

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A spokesman for G4S said: “G4S confirms it has today received notice that the director of the Serious Fraud Office has opened an investigation into the ‘contract for the provision of electronic monitoring services which commenced in April 2005 as amended and extended until the present day’.

“G4S has confirmed to the SFO that it will co-operate fully with the investigation.”

The SFO confirmed it has also opened a criminal investigation into contracts held with Serco, as well as G4S.

An audit by big four accountancy firm PricewaterhouseCoopers, launched in May, alleged that overcharging began at least as far back as the start of the current contracts in 2005 – but could have dated as far back as the previous contracts let in 1999.

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Justice Secretary Chris Grayling told the two firms that an independent forensic audit was required to look at, among other areas, internal email trails between executives to establish what happened. While Serco agreed to take part, G4S refused.

A Government-wide review of all contracts held by Serco and G4S was sparked by the allegations last July. G4S was reported to the SFO when it refused to co-operate with a further audit, while Serco allowed a further forensic audit to take place.

In the course of the audit in September, the Ministry of Justice provided material to the SFO in relation to Serco’s conduct.