British Fraud Office conducts Second Settlement in Inquiry Over Icelandic Bank
Britain’s Serious Fraud Office said on Thursday that it had reached a second settlement in a series of civil claims brought by two brothers after a flawed investigation into the collapse of the Icelandic bank Kaupthing during the financial crisis.
The office, which prosecutes fraud and corruption cases, dropped the brothers, Vincent and Robert Tchenguiz, as suspects in 2012 after it admitted that the way it had handled some seized materials in the case “was flawed and thus unlawful.” The office was criticized by the High Court of Justice for the way it handled the case.
On Thursday, the fraud office said it would pay 1.5 million pounds, or about $2.5 million, to settle claims by Robert Tchenguiz and his company, R20. The agreement comes less than a week after the fraud office agreed to pay £3 million to settle civil claims brought by Vincent Tchenguiz.
In legal proceedings against the fraud office, the brothers had sought as much as £300 million in damages.
“I am pleased that we have been able to resolve this final outstanding matter, without the need for a costly trial,” David Green, the fraud office’s director, said in a statement on Thursday. “The S.F.O. deeply regrets the errors for which we were criticized by the High Court in July 2012. On behalf of the S.F.O., I also apologize to Robert Tchenguiz for what happened to him.”
A trial on the civil claims had been scheduled for October, but now will not take place.
A lawyer for Robert Tchenguiz did not respond immediately to a request for comment on Thursday.
Vincent and Robert Tchenguiz were arrested by the police in a dawn raid in 2011, and materials were seized from their offices. Neither man was charged in the matter, and the brothers maintained their innocence throughout the investigation.
At the time, the fraud office had been working with special prosecutors in Iceland to determine whether some creditors, shareholders and executives benefited financially in the days before the collapse of Kaupthing, which had large operations in Britain.
In July 2012, the High Court quashed search warrants in the criminal investigation, strongly criticizing the fraud office’s conduct.
Kaupthing was Iceland’s biggest bank before it failed in October 2008, swamped under a mountain of debt and unable to raise sufficient money for its operations. The bank had helped finance several takeovers by Robert Tchenguiz.
Source: NYT
