'Hijacked the system' | Payroll assistant swindled employer out of £85k with fake expense claims

Payroll assistant swindled employer out of £85k with fake expense claims

A payroll assistant conned her employer out of nearly £85,000 by making payments to herself for false expenses claims for several years, a court has heard.

Angela Hunter took advantage after her employer, Hull-based civil engineering firm Northern Divers Ltd, updated its payments system during the pandemic – switching from cash payments for expenses such accommodation costs, to direct bank transfers.

Realising it would be far easier to go undetected, Hunter subsequently paid herself £84,848 in bogus claims between August 2020 and April 2023.

Hull Crown Court heard that she was eventually caught out by her managing director, who became suspicious after spotting multiple large payments being made to Hunter’s account.

She narrowly avoided being imprisoned following a Crown Court sentencing.

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Hunter, a mother-of-two, had worked for Northern Divers since 2015, and her duties included paying workers their accommodation costs in cash. The system was updated to bank transfers to minimise contact points during the Covid pandemic.

Prosecutor Jazmine Lee told the court that, despite not being entitled to any payments, "she began transferring to herself different amounts of money on a regular basis.”

Lee added: "It was clearly significant planning to add her name to a list in the way that she did.

"It was committed over a sustained period of time."

Hunter owned up to her crimes when questioned by police. She admitted that she first started taking the money during lockdown to provide for her children and pay off debts.

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Recorder Alex Menary told Hunter: "You took advantage of that system and hijacked it by making payments to yourself and it was not detected for a considerable period of time.

"A full investigation revealed that you had paid yourself £84,848 with weekly payments on 200 separate occasions."

Recorder Menary added: "It went on for a significant period of time. Of course, it's all been spent and it's all gone."

The Recorder also noted that the company’s managing director had felt a personal betrayal following the theft.

"I suspect that he was upset and hurt that you could treat him in this way, bearing in mind the employment that he had given you, and he thought you were someone he could trust," said the Recorder.

Hunter was handed a suspended one-year prison sentence and 150 hours' unpaid work. She will also complete a 12 days rehabilitation order for her crime but will not be made to repay the £85,000, with the court being told it would be “absolutely pointless” to expect the sum to be repaid.

Combatting employee fraud

Over the past year, we have seen numerous stories of employees sabotaging their employer.

For example, the recent story of the Eugene Weekly – a print magazine in Oregon – gained traction, as the company was forced to dismiss its entire workforce and close its doors after it was left struggling financially when a finance employee stole tens of thousands of dollars from them. Whilst Facebook's diversity lead admitted to stealing millions from the company to fund their lavish lifestyle.

Research from insurance company Zurich found that staff are increasingly stealing from their employer to support them through the cost-of-living crisis. In fact, 500 employees are caught stealing every month in the UK, and this has been on the rise.

Economic crime and transparency bill

These figures come at a time when a new ‘failure to prevent fraud’ offence has been added to the Economic Crime and Corporate Transparency Act, which is expected to be implemented sometime this year.

The Act has been described as the most significant change to the law in this area. Key reforms include directors and partners requiring identity verification, the introduction of Authorised Corporate Service Providers (ACSP), and stricter compliance and registration requirements for LPs.

Most notably, the act also introduces a new offence for directors when they fail to prevent fraud occurring in the company. In this sense, businesses will be liable if they fail to prevent staff from committing an economic crime – including false accounting.

Therefore, preventing internal fraud isn’t just of importance from a business perspective, but from a legal perspective too.

How can employers prevent sabotage from happening?

Employers can prevent sabotage by implementing various measures, including careful recruitment, establishing accountability, and using IT tools to detect unexpected activities within the network.

The recent Bill, which is likely to be implemented soon, highlights the importance of businesses having adequate authentication processes and checks and balances to ensure your employees aren’t doing anything they shouldn’t be or putting your business in danger. Here are some specific steps that can be taken to prevent employee sabotage:

Thorough recruitment processes

Conduct comprehensive reference checks, a reliable interview process, and employee vetting to identify any potential concerns early on. Despite this, employers shouldn’t discriminate against those who have committed a crime in the past – just because they have previously, doesn’t mean they will do it again. However, the recruitment process, and ensuring a good candidate–employer fit, does play a part in whether staff might be tempted to commit a crime at work – low engagement and levels of loyalty can often lead to this wrongdoing.

IT tools and background checks

Probably the most effective way of preventing employee-related fraud and sabotage, because it doesn’t give rise to human error, is setting authentication and authorisation processes within the business. IT tools can set thresholds and alerts for unexpected activities within the network and conduct background checks on individuals hired for critical IT tasks to minimise the risk of internal sabotage, putting barriers in place and making the possibility of fraud minimal.

Treat employees well

Perhaps it goes without saying, but creating a positive work environment and addressing any grievances promptly greatly reduces the likelihood of disgruntled employees engaging in sabotage. Employees who feel valued and fairly treated are less likely to engage in fraudulent behaviour, as they are more loyal to the company and less inclined to act against its interests – a strong company culture that promotes ethical behaviour and openness can deter employees from committing fraud.

A major aspect of this is treating employees well even when they're leaving your company, as a disgruntled soon-to-be-leaving worker could certainly cause problems for your organisation. “Beware the wrath of a disgruntled ex-employee! Whether it’s a scathing glass door review or a confidentiality breach, the damage can be enormous,” says Susie Al-Qassab, senior consultant at Bellevue Law.

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“Redundancies of any kind will always hurt, but they can be done fairly and respectfully, and if that’s recognised by everyone in the process then it will minimise bad feeling. Genuine and concerted efforts to redeploy and support outgoing employees to find a new job also creates enduring goodwill.

“Many businesses may require additional contractual assurances and protections from exiting employees, which can be achieved through settlement agreements, but again this should be approached fairly and reasonably by the employer. This is perhaps the most important lesson yet that a transactional and dehumanising approach to your people can have devastating consequences. Dignity at work is priceless.”

By implementing these measures, employers can reduce the risk of employee sabotage and protect their business from potential harm. It’s not an employer’s fault if they were deceived and betrayed by a member of their team. However, because there are things you can do as an employer to create checks and balances within the organisation, if you do face sabotage, you don’t want it to be down to your own negligence.

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