Madoff could be prosecuted in UK

The Serious Fraud Office (SFO) yesterday (8 January) confirmed it was launching an investigation into Madoff’s alleged $50bn fraud, focusing its investigation on UK victims to see if any criminal offences might have been committed in the UK.

Last month it came to light that Madoff, through his investment company Madoff Securities, had been arrested for allegedly conducting large-scale fraud through the company.

The SFO is now looking to identify any frauds in the City that may be connected to the Madoff scandal.

But according to Lisa Osofsky, of business and political risk consultants Control Risks, there are grounds for a UK-led prosecution.

"There were many UK and European investors in Madoff’s funds and in funds under his management," she said.

"Crimes were committed here – UK citizens invested in assets with UK components. Regulatory laws were broken, disclosure rules were violated, money belonging to UK citizens was pocketed and fraud committed.

"This makes it an easy jurisdictional hook for the UK authorities, there are plenty of grounds on which to justify UK investigations and prosecutions,” she said.

According to Osofsky, the UK anti-money laundering laws are very broad and prohibit the transfer and the use of the proceeds of crime.

"All of the funds Madoff stole or took under false pretences were arguably the proceeds of crime. This provides further jurisdictional opportunities for UK authorities to pursue this matter," she added.

Meanwhile, the SFO is inviting investors or other stakeholders involved with the Madoff UK businesses to come forward and help them.