Civil recovery in action: the limits and lessons of the SFO’s “groundbreaking” recovery

The Serious Fraud Office (SFO) announced in January that the victims of a fraud committed over 20 years ago will be compensated under the Proceeds of Crime Act 2002 (POCA). The recovered funds of £400,000 mark the first time the SFO has transferred funds directly to victims rather than passing them to the Treasury. 

The funds originated from a 2002 scam orchestrated by Abdallah Ali Jammal, who defrauded at least 18 victims of around £4.4m before fleeing the UK to avoid prosecution. Years later the money was eventually traced back to the victims and the SFO elected to bring a Part 8 civil recovery claim. Pursuant to section 281 of POCA, in proceedings for a recovery order, an applicant can apply for a declaration from the court that property alleged to be recoverable belongs to a victim of unlawful conduct. 

In the unique circumstances of the case (since Mr Jammal had fled the country before being charged, he could not realistically be convicted), this alternative route offered a greater chance of success than a criminal prosecution. Although civil recovery funds are ordinarily transferred to the Treasury, the High Court permitted the money to be intercepted and returned directly to the victims.

Despite being described as a “groundbreaking” solution, some commentators have advised caution. The strategy was based on the specific facts of the case and will not always be applicable in other fraud cases. Furthermore, the primary purpose of the POCA regime is more about deprivation of criminal benefit. Victims should therefore continue to rely primarily on the usual civil litigation and enforcement tools to secure repayment, such as civil claims for damages, rescission or restitution. In addition, urgent interim relief (such as freezing injunctions, search orders, or disclosure orders) can be vital where assets may be moved or evidence destroyed.  

In all cases of fraud, early asset-tracing is vital. Indeed, this case serves as a timely reminder that asset tracing over long periods can still pay off. It is always best to preserve evidence and act quickly in the early stages of any suspected fraud. Although the case represents an achievement for the SFO, it is better understood as an exceptional outcome rather than a model for future enforcement.