Fraudster jailed | Farmfoods worker forged exec signatures to pay himself £275k from company accounts

Farmfoods worker forged exec signatures to pay himself £275k from company accounts

A Farmfoods employee has been jailed after conning his employers out of £275,000 by forging directors' signatures on cheques.

John Brown scammed the supermarket chain while employed as a management accountant between 2015 and 2018.

The 61-year-old, who was based at the firm’s head office in Cumbernauld, Scotland, was jailed for 21 months after pleading guilty to fraud.

Brown admitted to a court that he had forged signatures on company cheques, which were written out to himself.

He was eventually caught out in 2019 after the Royal Bank of Scotland alerted Farmfoods bosses to suspicious activity on the company’s bank account.

An internal investigation was launched, which uncovered the huge amount of cheques made out to Brown from the company, seemingly signed by company directors.

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However, these directors confirmed they had not signed them, and that their signatures had been forged.

The handwriting on the cheques was later matched to Brown’s, the court heard, and further investigations revealed the steps Brown had taken to avoid suspicion, such as manipulating company spreadsheets so the huge payments would not be flagged up.

In total, he was found to have paid himself as much as £275,000.

A court has now ordered Brown to pay back £77,000 of his ill-gotten gains.

Combatting employee fraud

Over the past year, we have seen numerous stories of employees sabotaging their employer. Earlier this month, March 2024, reports emerged of a payroll assistant who conned her employer out of nearly £85,000 by making payments to herself for false expenses claims for several years.

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.

There was also 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.

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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.



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