We have seen it in the movies. A suspect who may be facing criminal charges is persuaded to become an informant. He will be sent to mingle within the criminal fraternity, including those targeted under an active live investigation. The informant wears a covert listening device known as a “wire”, a classic movie cliché. We have seen this in fiction including, the 1987 hit, Wall Street. Remember that classic scene in Central Park, with Bud Fox (Charlie Sheen) and Gordon Gekko (Michael Douglas)? “…This is how you pay me back?… I gave you everything! You could have been one of the great ones. I look at you, and I see myself. Why? I don’t know. I guess I realized I’m just Bud Fox… I showed you how the system works. The value of information, how to get it!”
Suspects in white-collar crime investigations could soon be asked to wear a device in order to assist the authorities expose wrongdoing, with the Director of the Serious Fraud Office (‘SFO’), Lisa Osofsky, suggesting that she intends to incentivise such co-operation with promises of immunity or reduced prison sentences. “…You can spend 20 years in jail for what you did or wear a wire and work with us…”.
Will it Work in the UK?
Let us take a closer look into the feasibility of Ms Osofsky’s intention to roll out the incentive as part of an SFO investigation. Surprisingly, there is already in existence a provision for prosecuting authorities to rely on what is known as a “covert human intelligence source” (‘CHIS’). Under current legislation, the Regulation of Investigatory Powers Act 2000 (‘RIPA’) allows the interception and use of electronic communications. It was designed specifically to take into account the increasing use of the internet and the use of strong encryption prevalent in a significant amount of electronic communications.
How Does RIPA Work?
Part II of RIPA provides the framework for the use of surveillance and a CHIS. The definition of a CHIS includes a suspect who has been incentivised to wear a wire in order to assist investigators. The provisions governing the use of a CHIS are detailed in Section 26 of RIPA and define a CHIS as a person who:
(a) Establishes or maintains a personal or other relationship with a person for the covert purpose of facilitating the doing of anything falling within paragraph (b) or (c);
(b) Covertly uses such a relationship to obtain information or to provide access to any information to another person; or
(c) Covertly discloses information obtained by the use of such a relationship or as a consequence of the existence of such a relationship.
The “relationship” is used covertly (under cover) and information obtained is disclosed covertly if, and only if, it is used or disclosed in a manner that is deemed to ensure that one of the parties to the relationship is unaware of the use or disclosure in question. The use of a concealed wire to record or transmit conversations with another person plainly fits into this definition (s.26 (9) RIPA).
Is CHIS Lawful?
The simple answer is yes, but only if it is authorised by a person designated within the provisions of Section 29 of RIPA. The SFO is just one of over 30 authorities designated by the Secretary of State for this very purpose. A designated authority cannot grant an authorisation unless it is satisfied and believes that:-
(a) It is necessary on certain specified grounds (which include the purpose of preventing or detecting crime or in the interests of the economic wellbeing of the United Kingdom);
(b) It is proportionate to what is sought to be achieved by the conduct or use of a CHIS; and
(c) Certain arrangements exist that satisfy requirements relating to the security and welfare, oversight and recording of the use of the CHIS.
To rely on a CHIS, a two-stage authorisation process under RIPA needs to be satisfied in the first instance. Authorisation by a designated authority under the provisions of Section 29 cannot take effect until the relevant judicial authority (a Magistrate or District Judge) approves the grant following a successful application by the designated authority. Approval can only succeed where the judicial authority is satisfied that:-
(a) At the time of the grant, there were reasonable grounds for believing that the requirements for the original authorisation were satisfied in relation to the authorisation, and the relevant conditions were satisfied; and
(b) At the time when the judicial authority is considering the matter, there remain reasonable grounds for believing that requirements for the original authorisation were satisfied in relation to the authorisation.
The Question of Immunity from Prosecution
This is by no means an easy question to answer. The issue is complicated by the operation of Section 71 of the Serious Organised Crime and Police Act 2005. Under this Section, the SFO can offer individuals immunity from prosecution. This is possible by issuing an immunity notice and a provision that the SFO, or other prosecuting authority, would seek to rely upon to facilitate an informant scheme in the UK. Under Section 71, several practical issues arise which do not help its application. Notably, the application of Section 71 is unclear as to whether it would work with Deferred Prosecution Agreements, which have recently been administered by the SFO against large companies such as Rolls Royce and Tesco. There is no provision for a CHIS in this instance. This is an interesting point, as informants are an effective tool for dealing with high-end frauds, which can be particularly complex and voluminous in nature.
Reduced Sentence… an Attractive Proposition?
The promise of a reduced sentence is an attractive proposition and more likely to result in cooperation. The SFO may seek to rely on Section 73, especially where offering immunity is not possible. However, the SFO has seen a decline in the number of cases collapsing with evidence provided on this basis. In the context of a trial, there is always the risk of successful Public Interest Immunity applications made by the defence derailing a case. Furthermore, the application of reduced sentences is made more difficult by the rather onerous and drawn-out conditions, along with the fact that an offender is required to make admissions under caution and engage with the authorities at an early stage. This is likely to act as a deterrent to proceeding further. There is also no guarantee a sentence would be reduced which is again a factor making cooperation less attractive. Where an offender has committed an offence overseas, there is no guarantee he would not be prosecuted for that offence in another jurisdiction and receive a more lenient sentence. This is particularly prevalent in double jeopardy cases, which is in itself a complex issue that merits further comment in the future.
Reality or Fiction?
It is clear that the use of an undercover agent, informant or a cooperating witness could be key to a successful prosecution. Lisa Osofsky has suggested that the collaborator could also be deployed to provide crucial assistance in the interpretation of material which is quite often complex transactional data and documentation, difficult for a jury to comprehend. It is however not clear just how this would work and therefore the mechanics of using informants to explain complex documents need further clarity. Modern recording devices can present as a pen, a keyring or even a mobile phone. The more conventional “wire” is a discrete tape recorder strapped to the witness’s waist, connected to a microphone taped to the chest. Whatever the method used, the use of a wire could become commonplace. With further technological advances, the use of a wire becomes easy, but obtaining cooperation is of course paramount.
We have seen it in the movies. A suspect who may be facing criminal charges is persuaded to become an informant. He will be sent to mingle within the criminal fraternity, including those targeted under an active live investigation. The informant wears a covert listening device known as a “wire”, a classic movie cliché. We have seen this in fiction including, the 1987 hit, Wall Street. Remember that classic scene in Central Park, with Bud Fox (Charlie Sheen) and Gordon Gekko (Michael Douglas)? “…This is how you pay me back?… I gave you everything! You could have been one of the great ones. I look at you, and I see myself. Why? I don’t know. I guess I realized I’m just Bud Fox… I showed you how the system works. The value of information, how to get it!”
Suspects in white-collar crime investigations could soon be asked to wear a device in order to assist the authorities expose wrongdoing, with the Director of the Serious Fraud Office (‘SFO’), Lisa Osofsky, suggesting that she intends to incentivise such co-operation with promises of immunity or reduced prison sentences. “…You can spend 20 years in jail for what you did or wear a wire and work with us…”.
Will it Work in the UK?
Let us take a closer look into the feasibility of Ms Osofsky’s intention to roll out the incentive as part of an SFO investigation. Surprisingly, there is already in existence a provision for prosecuting authorities to rely on what is known as a “covert human intelligence source” (‘CHIS’). Under current legislation, the Regulation of Investigatory Powers Act 2000 (‘RIPA’) allows the interception and use of electronic communications. It was designed specifically to take into account the increasing use of the internet and the use of strong encryption prevalent in a significant amount of electronic communications.
How Does RIPA Work?
Part II of RIPA provides the framework for the use of surveillance and a CHIS. The definition of a CHIS includes a suspect who has been incentivised to wear a wire in order to assist investigators. The provisions governing the use of a CHIS are detailed in Section 26 of RIPA and define a CHIS as a person who:
(a) Establishes or maintains a personal or other relationship with a person for the covert purpose of facilitating the doing of anything falling within paragraph (b) or (c);
(b) Covertly uses such a relationship to obtain information or to provide access to any information to another person; or
(c) Covertly discloses information obtained by the use of such a relationship or as a consequence of the existence of such a relationship.
The “relationship” is used covertly (under cover) and information obtained is disclosed covertly if, and only if, it is used or disclosed in a manner that is deemed to ensure that one of the parties to the relationship is unaware of the use or disclosure in question. The use of a concealed wire to record or transmit conversations with another person plainly fits into this definition (s.26 (9) RIPA).
Is CHIS Lawful?
The simple answer is yes, but only if it is authorised by a person designated within the provisions of Section 29 of RIPA. The SFO is just one of over 30 authorities designated by the Secretary of State for this very purpose. A designated authority cannot grant an authorisation unless it is satisfied and believes that:-
(a) It is necessary on certain specified grounds (which include the purpose of preventing or detecting crime or in the interests of the economic wellbeing of the United Kingdom);
(b) It is proportionate to what is sought to be achieved by the conduct or use of a CHIS; and
(c) Certain arrangements exist that satisfy requirements relating to the security and welfare, oversight and recording of the use of the CHIS.
To rely on a CHIS, a two-stage authorisation process under RIPA needs to be satisfied in the first instance. Authorisation by a designated authority under the provisions of Section 29 cannot take effect until the relevant judicial authority (a Magistrate or District Judge) approves the grant following a successful application by the designated authority. Approval can only succeed where the judicial authority is satisfied that:-
(a) At the time of the grant, there were reasonable grounds for believing that the requirements for the original authorisation were satisfied in relation to the authorisation, and the relevant conditions were satisfied; and
(b) At the time when the judicial authority is considering the matter, there remain reasonable grounds for believing that requirements for the original authorisation were satisfied in relation to the authorisation.
The Question of Immunity from Prosecution
This is by no means an easy question to answer. The issue is complicated by the operation of Section 71 of the Serious Organised Crime and Police Act 2005. Under this Section, the SFO can offer individuals immunity from prosecution. This is possible by issuing an immunity notice and a provision that the SFO, or other prosecuting authority, would seek to rely upon to facilitate an informant scheme in the UK. Under Section 71, several practical issues arise which do not help its application. Notably, the application of Section 71 is unclear as to whether it would work with Deferred Prosecution Agreements, which have recently been administered by the SFO against large companies such as Rolls Royce and Tesco. There is no provision for a CHIS in this instance. This is an interesting point, as informants are an effective tool for dealing with high-end frauds, which can be particularly complex and voluminous in nature.
Reduced Sentence… an Attractive Proposition?
The promise of a reduced sentence is an attractive proposition and more likely to result in cooperation. The SFO may seek to rely on Section 73, especially where offering immunity is not possible. However, the SFO has seen a decline in the number of cases collapsing with evidence provided on this basis. In the context of a trial, there is always the risk of successful Public Interest Immunity applications made by the defence derailing a case. Furthermore, the application of reduced sentences is made more difficult by the rather onerous and drawn-out conditions, along with the fact that an offender is required to make admissions under caution and engage with the authorities at an early stage. This is likely to act as a deterrent to proceeding further. There is also no guarantee a sentence would be reduced which is again a factor making cooperation less attractive. Where an offender has committed an offence overseas, there is no guarantee he would not be prosecuted for that offence in another jurisdiction and receive a more lenient sentence. This is particularly prevalent in double jeopardy cases, which is in itself a complex issue that merits further comment in the future.
Reality or Fiction?
It is clear that the use of an undercover agent, informant or a cooperating witness could be key to a successful prosecution. Lisa Osofsky has suggested that the collaborator could also be deployed to provide crucial assistance in the interpretation of material which is quite often complex transactional data and documentation, difficult for a jury to comprehend. It is however not clear just how this would work and therefore the mechanics of using informants to explain complex documents need further clarity. Modern recording devices can present as a pen, a keyring or even a mobile phone. The more conventional “wire” is a discrete tape recorder strapped to the witness’s waist, connected to a microphone taped to the chest. Whatever the method used, the use of a wire could become commonplace. With further technological advances, the use of a wire becomes easy, but obtaining cooperation is of course paramount.