Court case | Ex-company director accused of defrauding blind & disabled workers' pensions

Ex-company director accused of defrauding blind & disabled workers' pensions

A former company director is accused of failing to pay pension contributions for blind & disabled workers over a two year period...

Nicholas Marks denies the allegations that he failed to pay into workers' pensions between 2020 and 2022 while he was the boss of Clarity & Co, a soap making social enterprise based in London, which he bought out of administration in 2020.

According to court documents, Marks is charged with "fraud by abuse of position... namely by retaining employee and employer pension contributions, for yourself".

The 56-year-old, from Buckinghamshire, appeared at Westminster Magistrates Court, where he entered a Not Guilty plea. He is next set to appear on May 8th at the Old Bailey.

According to the BBC, Clarity & Co was a “social enterprise which had been providing employment opportunities for blind and disabled people since 1854.”

It counted around 80 people on its workforce, 65 of which were blind, disabled or had other health conditions.

Combatting workplace fraud

Marks denies the charges against him, but in recent months, there have been numerous stories of people being convicted of fraudulent workplace actions.

Last month, March 2024, a Farmfoods employee was 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 directors’ signatures on company cheques, which were written out to himself.

Earlier that month, 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.

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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.

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 act?

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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