Lifestyle changes provide clues to fraud

A grandmother from Aberdeen is facing a custodial sentence for stealing more than £1.5 million from her employer by putting fake payments through to a bogus supplier but paying herself.

Coleen Muirhead started work at scrap metal merchants Panda Rosa Metals in 2014 and has admitted to carrying out the thefts between 2015 and 2021.

Clients selling scrap metal brought their wares to one of two Panda Rosa sites in Aberdeen, where the metal was weighed to see how much it was worth.

Administrative staff then provided a ticket detailing the weight and price of the metal for which the sellers produced an invoice and sent it to Panda Rosa, who paid on receipt.

Muirhead, who was an administrative assistant confessed to inventing a customer called G Anderson and channelling their payments into an account that she controlled.

The firm was first made aware of the fraud when a colleague became aware that Muirhead was living a lifestyle that would have been unaffordable for someone on her wages.

The main giveaways were the purchase of two caravans and other vehicles, enjoying expensive family holidays, paying for her son’s wedding and spending lavishly at a charity event.

When the suspicions surfaced, a senior partner in the firm reviewed company records and noticed that funds were down. Further investigation of the books unearthed G Anderson as a significant supplier during the time of the dip in funds.

When it was confirmed that G Anderson was not a supplier at Panda Rosa’s Canal Road site, where Muirhead worked, staff were instructed to look for paperwork in relation to an account in that name. Although they were unable to find anything recent, they found some advice notes in historical files.

These had a reference number identifying Muirhead as producing the documentation. When investigators searched her home, they found cash and documents relating to her multiple purchases.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “Small businesses can easily fall prey to dishonest employees, who are often trusted colleagues.  If there are only a small number of employees, it may not always be possible to have as much segregation of duties as in larger organisations and this can sometimes lead to fraud.

“This is a relatively unusual case because the perpetrator was prosecuted and convicted. All too often this type of fraud is either not reported for fear of damaging the reputation of the corporate victim or, if the police are involved, no prosecution is taken due to a lack of resources.

“Fraud trials tend to be complex and costly, with forensic accountants often engaged to explain financial issues to the jury. An increasing number of corporate victims are considering private prosecutions, which can also be used as a mechanism to recover funds that have been misappropriated.”


Source: BBC News

Posted in The Forensic Blog.