Two-year police investigation into "almost non-existent" fraud claim

Friday 31 January 2020

A drawn-out police investigation into a GFSC Director was "baseless" and never should have taken place.

Guernsey Financial Services Commission Director of Enforcement Simon Gaudion and Head of Bailiwick Law Enforcement Ruari Hardy have issued a joint statement about an investigation that Mr Hardy, who was not in post when it took place, has apologised profusely for.

It stems from the GFSC's decision to impose sanctions on the directors of a regulated company, Confiance, back in August 2015, having identified significant failings in its anti-money laundering and counter terrorist financing systems.

Amongst others, that company's Executive Director and controller was fined £50,000 and responded by making allegations of fraud against Mr Gaudion and his employer.

Guernsey Police then embarked on an investigation from the start of 2016 until autumn 2017, despite external agencies informing Guernsey Police "very swiftly" that the allegations were not worth investigating. 

"All parties are now satisfied that this individual made a baseless allegation of fraud to the Guernsey Police against Mr. Gaudion, regarding his conduct in the course of the foregoing enforcement process," the statement said. "Notwithstanding that the allegation was without basis, considered by Mr. Gaudion to be clearly false, and that early advice received by the authorities demonstrated that the prospect of achieving a successful prosecution was almost non-existent, Guernsey Police embarked on a two-year long investigation into the allegations. 

Pictured: Ruari Hardy took over from Patrick Rice as Head of Bailiwick Law Enforcement at the start of last year. 

"Further to that, it is now known that external agencies had very swiftly confirmed to Guernsey law enforcement agencies that there was no merit to support the allegations of fraud which had been made. This supported the advice already received by Guernsey law enforcement agencies prior to commencing the investigation that there was little to no prospect of securing a conviction."

After the investigation ended, Mr. Gaudion lodged a formal complaint with the Committee for Home Affairs in March 2018, saying the investigation had been "conducted inappropriately, had taken too long, and was based on malicious intent."

Pictured: Simon Gaudion, whose name has been cleared following a two-year investigation by Guernsey Police. 

Home Affairs appointed an external agency to investigate Mr. Gaudion’s complaint, which dismissed his claims, which were directed towards the then head of law enforcement Patrick Rice and then acting detective superintendent Philip Breban.

Mr Gaudion appealed against the decision to the Guernsey Police Complaints Commission, but it was not upheld. 

In a further bid to clear his name, the experienced law enforcement professional called for a judicial review.

Following that, Mr Hardy, who replaced the retiring Mr Rice in January 2019, has personally apologised to Mr Gaudion for the way the investigation was conducted. 

"The Head of Law Enforcement also acknowledged that the investigation had been protracted and had the stricter threshold tests, which are now used for such cases, been applied at the time no substantive investigation would have been undertaken given the circumstances and nature of the allegation," the joint statement said. 

"Mr. Gaudion has stated that his sole motivation in the legal proceedings was to have his name cleared, and for his good reputation to be fully and deservedly restored. The Head of Law Enforcement has met with Mr. Gaudion and apologised personally for the way in which the criminal investigation was conducted and progressed between 2016 and 2017. 

"The Head of Law Enforcement has also acknowledged that the circumstances of the criminal investigation have impacted upon the relationship between the GFSC and Law Enforcement and proactive steps are being taken to enhance further the trust and confidence between both organisations."

Pictured: The Guernsey Police station and, inset, Patrick Rice.