Case Study Title

Fraud by an Assistant Town Clerk

A town council’s assistant town clerk fraudulently diverted public funds to a value of over £220,000 to her personal bank account.

The fraudster was responsible for bills but needed counter signatures for the council’s cheque book. When an electronic payment system was introduced, she used her position to set the payment security rules to allow her to make payments to herself and others without counter signatures or authority. 

Bills were then falsified by using the names of regular business suppliers but her own bank account details. When the council conducted its regular checks, they showed trusted partners being paid, although these were false payments to the fraudster’s personal bank account.

The fraud was carried out over a period of 24 months and was only detected when the fraudster was absent from work others needed access to the payments systems, and the anomalous transactions spotted.

The fraudster admitted what she had done.

Action taken:

Checks were made with the named suppliers on the requisitions and they confirmed they had neither requested nor received any of the payments. An internal investigation was carried out and all payments were reviewed during the period that the fraudster was employed.

The investigation also considered the potential for wider collusion. Appropriate reports were made to the relevant authorities, including the police.

The fraudster’s employment was terminated, and the police charged her with fraud.

Lessons learnt and outcomes:

A review of all financial procedures was carried out which resulted in the following changes to help prevent this from happening again:

  • monthly reconciliation of transactions to be carried out by the senior management team
  • all invoices to be approved by the finance committee
  • council’s bank account to be set at with a high-level payment authorisation system
  • training was provided by an independent ACFS qualified investigator on the identification of red flags and best practice to prevent, detect and stop fraud in the workplace.

The individual pleaded guilty to fraud by abuse of position and given a 4-year prison sentence.  Efforts to recover the monies taken are now being made under the Proceeds of Crime Act.

For more information on how ACFS training can help keep your organisation save against internal fraudsters click here:

Find Out More

Subscribe to our blog content