JAIL FOR EMPLOYEE WHO EMBEZZLED MORE THAN £1 MILLION
Released On 31st Jul 2024
A former employee of Aberdeen City Council who pleaded guilty to embezzlement has been jailed for four years and faces confiscation proceedings to recover the money he stole.
Michael Paterson started working for the Council in 1988 and was promoted to the position of Council Tax and Recovery Team Leader. In this role, he was allowed to issue council tax refunds of up to £3,000 and could alter payee account details without authorisation or verification.
Paterson realised he could benefit personally where a householder had left a property but had not reclaimed the overpayment and he had these refunds paid into his own bank account. He then opened a second bank account after the Council introduced checks in 2019 to ensure employees’ accounts were not used to receive refunds from the Council.
Paterson was finally caught following a tip off by a co-worker who had questioned him about a transaction. His excuse, that he had ‘been conducting tests’ on the system, led her to alert the fraud team who reported it to the police.
Following the police investigation, he was found to have fraudulently issued 622 council tax refunds into his own bank account between 2006 and 2023, amounting to £1,087,444,47. The funds had been used to pay off debts and to fund a luxury lifestyle of expensive holidays, fine dining and property refurbishment. Ironically, Paterson was still in debt at the time of his arrest.
Helen Gregory, Forensic Director at Milsted Langdon, said: “Employee theft is unfortunately all too common. The effects of a fraud can impact a business monetarily but also in respect of their reputation and the amount of trust the public has in that organisation.
“In this case, the Council was short of cash and looking to make cuts in spending. The actions of Paterson would have exacerbated this situation which would have negatively impacted the Council’s service users.
“Many organisations, including local and central government, fail to prevent employee theft because their anti-fraud processes are not robust enough.
“The new corporate offence of failing to prevent fraud means that organisations need to have relevant and reliable policies in place with staff suitably trained.
“With an increase in the number of reported cases like these, now is the time for organisations to engage the expertise of specialist forensic accountants.”
Sources: BBC News
