Prevention is better than cure when it comes to dealing with corruption

Prison sentences were handed out in Glasgow last week to four men involved in a £6 million corruption and bribery investigation involving health boards across Scotland.

This case, which underlines the importance of compliance and ensuring anti-financial crime prevention mechanisms are implemented and regularly monitored, exposed a series of fraudulently-awarded NHS contracts.

Oricom Ltd, a company founded by Adam Sharoudi and Gavin Brown, secured deals to provide telecoms and video conferencing equipment to NHS trusts in Lothian, Grampian, Lanarkshire, Greater Glasgow & Clyde, and Ayrshire & Arran between 2010 and 2017. However, amid concerns about how the contracts were awarded, Oricom’s offices were later raided by investigators including those from NHS Scotland Counter Fraud Services.

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The follow-up investigation found the company had been given “commercially sensitive information” by former NHS employees Alan Hush and Gavin Cox. They received nearly £90,000 in cash and a range of other gifts, including luxury hotel stays, concert tickets, and holiday vouchers in return.

The High Court heard how Hush helped Oricom land a number of business deals with the NHS including a £750,000 contract with NHS Lothian. Meanwhile, Cox helped the company secure contracts with NHS Lanarkshire.

Overall, Hush was given £18,231 worth of cash bribes and gifts, while Cox received more than £70,000 of illicit rewards from the company.

After being found guilty of a string of charges including bribery, corruption, fraud, and money laundering, Oricom founders Sharoudi and Brown were sentenced to eight and seven years’ imprisonment respectively.

Sally Clark is an Of Counsel and disputes resolution specialist, CMS

Hush, who was telecommunications manager at NHS Lothian, then NHS Scotland video conferencing manager, was ordered to serve eight years while Cox, former head of IT and infrastructure at NHS Lanarkshire. received a six-year sentence.

This case highlighted how basic procurement procedures were circumvented to ensure a company paying bribes was awarded contracts. This may be a familiar bribery tale, but is a strong reminder that putting in place avoidance measures to prevent corruption and other forms of financial crime is preferable to taking steps to deal with such violations.

In this case, the police and NHS counter-fraud investigation began in 2015, and a decade-long journey culminated with a trial which heard 65 days of evidence.

No business or organisation wants to face the potential legal costs, reputational damage, and prospect of immense disruption that accompanies a financial crime investigation. Those being investigated are typically required to provide materials under warrant, which includes the interrogation of computer systems by law enforcement agencies. Staff may also be required to provide witness statements and respond to ongoing queries from investigating authorities, all of which requires significant time and resource.

Being involved in a law enforcement investigation can generate exceptional anxiety amongst staff members who are required to provide witness statements and give evidence in court. This also brings further business disruption with people being diverted from their core focus within a business or organisation.

As this NHS case highlights, putting regularly monitored measures in place to prevent the prospect of financial crimes occurring is a much more preferable alternative to dealing with the fallout of failing to do so. The introduction of section 196 of the Economic Crime and Corporate Transparency Act 2023 should further underline this message – under this new provision, a business or organisation can be prosecuted for economic crimes that are perpetrated by senior managers who are on their staff.

Sally Clark is an Of Counsel and disputes resolution specialist, CMS