The most popular type of fraud is misappropriation of assets, including theft of cash and inventories. The motivation to commit fraud include a lack of understanding about fraud behaviour, opportunity to commit fraud and lifestyle and financial pressure.
The motivation for employee to commit fraud stems from three conditions:
Let us look at this case from 2019 which resulted in the conviction of a UK solicitor for fraud.
A former senior partner, the UK solicitor, has been jailed for four years after defrauding his firm out of a total of £2.3m. Andrew Davies, 59, paid personal invoices to himself from the business and under-declared £1.1m in stamp duty land tax to HM Revenue and Customs (HMRC) for over nine years.
Davies pleaded guilty to one count of fraud by false representation at Reading Crown Court in 2019 and was sentenced to four years imprisonment in January this year. As a senior partner at the firm, Andrew Davies managed to defraud it out of the money by paying personal invoices to himself from the business account.
The 59-year-old also under-declared £1.1m in Stamp Duty Land Tax to HMRC over nine years, over-declaring tax to clients and then taking money from the solicitor’s firms account for himself, both defrauding the company he worked for and HMRC at the same time.
Davies also raised invoices to pay over £1.6 million to his friend Stephen Allan, who worked as a property developer and was a firm client. The 62-year-old from Bishop’s Stortford was convicted at Reading Crown Court on one count of money laundering and jailed for three years.
In a statement, police mentioned the convictions and sentencing of a solicitor’s firm in Berkshire defrauded out of £2.3m between 2010 and 2017.
Allan then made smaller payments into Davies’ account and also pocketed around £400,000 himself. The solicitor extracted funds from the firm’s client account, paying it to Allan in transactions described as ‘fees’, but there was no known work for this.
Davies of The Street, West Clandon, Guildford, and Allan of Thornberry Road, Bishops Stortford, Hertfordshire, was charged by police officers in August 2019.
The statement did not name the firm, but a Solicitors Regulation Authority notice has previously stated that Davies worked for Reading firm Pitmans LLP, which has since become part of another practice. Davies has already been struck by the Solicitors’ Disciplinary Tribunal and ordered to pay £17,000 in costs.
Investigating officer Detective Constable Katie Taylor of Thames Valley Police’s Economic Crime Unit said: ‘In this case, a solicitor trusted to safeguard client funds abused this position and systematically defrauded his firm of large sums of money for his benefit.
‘He then used a corrupt relationship to launder the proceeds of his crime through a property developer. These professional enablers of organised crime represent a significant risk, and we hope that the conviction and sentence, in this case, will act as a deterrent to others.’
Source: Financial Crime News & The Law Society Gazette
Employee background check and employment history check is vital to avoid horror stories and taboo tales within HR, your business, or your brand. Simply investing in sufficient employment screening services can save you time, money and heartbreak.
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