British fraud prosecutor settles with second Tchenguiz brother

LONDON, July 31 Thu Jul 31, 2014 4:31am EDT

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LONDON, July 31 (Reuters) - Robert Tchenguiz, one of London's best-known property moguls, has reached a 1.5 million pound ($2.5 million) out-of-court settlement with Britain's Serious Fraud Office (SFO) over his arrest and searches of his home and business premises in 2011.

The settlement comes just days after the SFO reached a similar 3.0 million pound deal with Robert's brother Vincent over a case that has prompted a senior judge to criticise the country's leading fraud regulator for "sheer incompetence".

Robert and Vincent had brought a 300 million pound damages claim against the Serious Fraud Office over the affair, which was due to be heard later this year, which they said damaged their reputations and businesses.

"I am pleased that we have been able to resolve this final outstanding matter, without the need for a costly trial," said the SFO's head David Green, who took over the agency after the Tchenguiz brothers were arrested in a blaze of publicity.

"On behalf of the SFO, I also apologise to Robert Tchenguiz for what happened to him. I reiterate that the SFO has changed a great deal since March 2011, and I am determined that the mistakes made over three years ago will not be repeated," Green said. ($1 = 0.5926 British Pounds)

(Reporting by Kirstin Ridley, editing by Clare Hutchison)