Serco fined £19m for government tagging contract fraud
Outsourcer Serco has agreed to pay a £19.2m fine to the Serious Fraud Office after it overcharged the government for a contract.
The company will also cover the SFO’s £3.7m costs. It has already paid back the Ministry of Justice in a £70m settlement in 2013.
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Subsidiary Serco Geografix takes responsibility for three counts of fraud and two of false accounting between 2010 and 2013.
The firm misled the MoJ over its profits from a contract to electronically tag offenders after release.
As the scandal broke in 2013, Serco stopped bidding for contracts to supervise prisoners on their release.
“Serco Geografix engaged in a concerted effort to lie to the Ministry of Justice in order to profit unlawfully at the expense of UK taxpayers,” said SFO director Lisa Osofsky.
The agreement between the SFO and Serco is still subject to approval in court tomorrow.
Serco stressed that all members of its board and executive management have since left the company.
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Serco chief executive Rupert Soames said that those now in charge “are mortified, embarrassed and angry,” about the fraud.
“The management and culture of Serco, and the transparency with which we conduct our affairs, have changed beyond all recognition, and we are pleased that this has been acknowledged by both the SFO and by the government.”