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Fraud and prosecutions, Housing

Largest public sector housing scam in UK history escapes prosecution

The Fraud Prosecution Service’s handling of one of the largest public sector housing scams in British legal history has led the Leader of Lambeth Council to express his anger to the Justice Secretary.

Despite a painstaking investigation by Lambeth Council and Police to piece together a complex £2.8m housing scam, the Fraud Prosecution Service (FPS) claim there is ‘insufficient evidence’ to bring a case to trial. This is despite ‘strong’ and ‘incontrovertible’ evidence that led to the council being awarded £2.8m in damages by the High Court plus civil court action to retrieve the money against the assets of Alex Watson Jones.

Watson Jones was employed as a contractor to manage heating and installation programmes on behalf of Lambeth Council’s Housing Department from February 2004 to July 2005.

During that time he awarded work to ‘House Surgeons’. It was later discovered Watson Jones held a major interest in the company which failed to carry out most of the work awarded.

House Surgeons submitted a total of 28 invoices relating to the installation of central heating at various properties in Lambeth which amounted to £2.8m. The fraud relates to the invoices submitted by House Surgeons to Lambeth Council for central heating installations that were never installed. Lambeth Council Leader, Steve Reed, describes the Fraud Prosecution Service’s ‘lack of urgency’ in failing to bring criminal charges against Watson Jones as ‘close to incompetent’.

“Their handling of the case has, in my view, been close to incompetent and certainly lacking in the urgency the scale of the fraud demands. The Fraud Prosecution Service has been involved in these investigations for over five years, but they have continually passed the case between an ever-changing array of lawyers without any formal charges being brought against Alex Watson Jones,” Cllr Reed says in a letter sent to the Justice Secretary, Ken Clarke.

“Many of the delays were caused by new Fraud Prosecution Service lawyers requiring extra time to familiarise themselves with the detail of the case – then passing it on to another colleague before taking any action. The failure of the Fraud Prosecution Service to bring the matter to trial will cause considerable public dismay and anger in Lambeth.”

Notes for Editors:
Chronology: Alex Watson Jones
11 March 2005 – 29 March 2005
House Surgeons submitted a total of 28 invoices relating to the installation of central heating at various properties in Lambeth. The total amount invoiced during this period was £2.8m.
8/07/2005
The fraud relates to the invoices submitted by House Surgeons to Lambeth Council for
central heating installations that in fact were never actually installed. Fraud was reported to
Brixton Police Station on July 8, 2005.
22/2/2006
Alex Watson Jones of House Surgeons was arrested and put on police bail.
May 2006
Detailed case report sent by Council to Brixton Police in May 2006. Police spent the rest of 2006 gathering witness statements based on preliminary advice from FPS.
September 2006
Zurich informed the council that they were prepared to indemnify it for this loss subject to the limit of indemnity on the policy of £1 million
12/12/06
Lambeth raises case with David Levy, Assistant Director of the Fraud Prosecution Service
May 2007
A full case report was given to the FPS by the Police in May 2007. Further evidence was
requested by FPS lawyers and provided through the police on six separate occasions during 2007, 2008 and 2010.
10/10/2007
Awarded over £2.6 million in damages following the final judgement plus legal costs of £265k, by the High Court on October 10, 2007.
September 2008
Council was informed by Police that the FPS charging decision was imminent. October 2008 was given as the definitive deadline. No charges were laid.
2009 – No progress on case by FPS
12/5 2009
Concerns over the delay raised by the council with Director of the FPS David Levy.
23/9/2009
Leader of the Council wrote to the Attorney General citing the Council’s extreme
dissatisfaction with the way the case was being handled and the lack of any criminal charges being made.
4/11/2010
Letter from Metropolitan Police Service (MPS) on the charging decision of the Fraud
Prosecution Service (FPS) in relation to Alex Watson-Jones (AWJ).
10/12/2010
Council write to MPS requesting meeting with FPS

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