Destruction of computer records leads to prison sentence for director

It may cross your mind to throw your computer out of the back window as the Serious Fraud Office comes knocking on the front door but, as a case decided just before Christmas 2016 shows, it is probably a terrible idea.

On 21st December Richard Kingston, 54, the former managing director of a Middle East subsidiary of a U.K. construction and professional services company, was found guilty by a jury on two counts of concealing, destroying or otherwise disposing of two mobile telephones, knowing or suspecting that the data stored on those phones would be relevant to the SFO’s inquiries, contrary to section 2(16) of the Criminal Justice Act 1987. He was sentenced to 12 months imprisonment on each count, to run concurrently.

First bribery conviction

Undelivered payments were made to a shell company for “hospitality development services”

I have blogged about this case before, as it was the first in which a U.K. company was convicted under Section 7 of the Bribery Act. It involved a U.K. AIM-listed group of companies. The relevant activities took place in one of its Middle East subsidiaries and related to payments intended to secure a £63 million contract for the construction of a hotel in Abu Dhabi. It seems that payments were made to a shell company for “hospitality development services,” which were never delivered.

The criminal conduct

It seems Mr. Kingston was first arrested in December 2014 on suspicion of bribery. He was arrested again in June 2015 during a separate SFO investigation, which is still ongoing.

At his criminal trial the jury was told that, despite knowing about the SFO’s investigation, Kingston destroyed mobile phones containing emails, texts, and Whatsapp messages pertinent to the SFO investigation.

As the SFO General Counsel Alun Milford put it in a statement issued when the conviction was confirmed:

Richard Kingston actively took steps to frustrate our inquiries into his involvement, and that of others, in the suspected payment of bribes. We will not hesitate to pursue those who may set out similarly to disrupt our investigations.

I suppose one should have limited sympathy with Mr. Kingston. After all, as the SFO said, he took “active steps” to destroy evidence. It would nevertheless be sensible to recall that board directors can still find themselves embroiled in bribery-related charges by virtue of much more passive behaviour—e.g., by not doing enough to prevent wrongdoing. This too is a subject on which I have blogged before.

“Preventative arrest”on its way?

Here is one final cheery thought to leave you with. You may have read about the brewing corruption scandal in South Korea surrounding its president. Among the many arrests which are being reported in connection with this scandal is the arrest and preventative detention of Choi Soon-Sil, the former adviser to President Park Guen-Hye. What is striking about this arrest is the reported concern by the relevant authorities that, left to her own devices, she might destroy evidence.

Before you dismiss too readily the notion that this couldn’t happen here you might do well to remember that The Bribery Act has extra-territorial effect. It applies wherever in the world the allegedly corrupt activity takes place. That includes places where preventative detention is already a weapon available to prosecutors.

About Francis Kean

Francis is an Executive Director in Willis Towers Watson's FINEX Global, where he specializes in insurance for Dir…
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