We advised a manufacturing company who had discovered that a trusted employee, of over 20 years – who held a senior position – had been perpetrating a long-standing invoice fraud. For at least six years (but suspected to be for over a decade), the employee had set up fake businesses within the accounting software package with almost identical names to genuine suppliers.
The employee produced fake invoices for these fake businesses before processing them for automated payment. The automated payments were directed straight to the employee’s bank account and not to genuine suppliers, as the manufacturing company had thought. The payments, for relatively innocuous amounts in isolation, snowballed, over time, into a scam worth at least £750,000. It turned out the money was primarily used to fund the employee’s gambling habit.
The fraud had continued undiscovered for what is thought to have been in excess of 10 years, as the employee duped the company directors into a false sense of belief that he was a reliable, organised and personable employee. On the surface of things, he ran the day to day accounts very well seemingly taking good control. These same attributes allowed him to masquerade the fraud.
Tenet made an application for non-party disclosure to secure financial documentation to help trace the proceedings of the fraud. This was undertaken without notifying the defendant.
Following the successful application to the High Court, Tenet was able to procure a settlement including recovery of various items purchased with the proceeds, a lump-sum cash repayment and proceeds of the sale of the defendant’s property.
The learning point for other businesses, small or large, is that no matter how trusted an employee is, there is always a benefit to peer reviews and internal/external spot checks. A genuine employee has nothing to fear from this and should be entirely co-operative.