Lloyds worker defrauds 2.4m - sentence?!
Discussion
Du1point8 said:
Still trying to work it out... as even payroll would get surely flag up £50k/mth invoice for her signed by her if she was on £70k a year which sounds like a permanent job.
What's it got to do with payroll?Du1point8 said:
Maybe they were paying a 3rd party company for services rendered, she owned the company and just pocketed it?
Exactly that, I would guess. She creates a company, then requests a purchase order be issued to to it (say for monthly maintenance fee for online fraud detection monitoring software) and then as long as the invoice and PO match the payment would be pretty much automatic.In her position, she's probably requesting multi-millions of pounds of spending.
johnfm said:
Eric
You missed the point of the fraud. She will have been 'submitting ' false invoices from any number of non existent fake suppliers.
Depending on the systems, if she was then in the workflow to approve the invoices, money wwohld then just land in whatever accounts had been set up in the system.
It requires access to the accounting system to set up a supplier account etc.
IN which case there should be a Department somewhere with someone who signs off on new accounts which would be set up by another department, before it can even be created in the system to make payments to, so in theory she has an accomplice. Or their systems are s**t.....You missed the point of the fraud. She will have been 'submitting ' false invoices from any number of non existent fake suppliers.
Depending on the systems, if she was then in the workflow to approve the invoices, money wwohld then just land in whatever accounts had been set up in the system.
It requires access to the accounting system to set up a supplier account etc.
johnfm said:
Eric Mc said:
I wonder what her employment status was? Employees don't tend to submit invoices to their employers. My take would be that she was operating through her own personal service company. I have nothing against personal service companies, but I always think they are innapropriate for those who hold senior managerial positions in organisations, such as heads of department or chief executives.
EricYou missed the point of the fraud. She will have been 'submitting ' false invoices from any number of non existent fake suppliers.
Depending on the systems, if she was then in the workflow to approve the invoices, money wwohld then just land in whatever accounts had been set up in the system.
It requires access to the accounting system to set up a supplier account etc.
In fact, years ago I came across a client I was working on carrying out this exact fraud - from his own company. I called it to the attention of the senior audit partner of the firm I worked for at the time. He chose to ignore it.
The client was given a six month suspended sentence.
Jasandjules said:
johnfm said:
Eric
You missed the point of the fraud. She will have been 'submitting ' false invoices from any number of non existent fake suppliers.
Depending on the systems, if she was then in the workflow to approve the invoices, money wwohld then just land in whatever accounts had been set up in the system.
It requires access to the accounting system to set up a supplier account etc.
IN which case there should be a Department somewhere with someone who signs off on new accounts which would be set up by another department, before it can even be created in the system to make payments to, so in theory she has an accomplice. Or their systems are s**t.....You missed the point of the fraud. She will have been 'submitting ' false invoices from any number of non existent fake suppliers.
Depending on the systems, if she was then in the workflow to approve the invoices, money wwohld then just land in whatever accounts had been set up in the system.
It requires access to the accounting system to set up a supplier account etc.
I expect a lot of these systems have various levels of user privileges.
At her level, she could have just added and approved 'suppliers'.
Once done, she would have done the same with fake invoices -once done, the system takes over and payment made at every end of month bill paying routine.
Surprised she got caught to be honest. I expect an audit couldn't find a paper invoice to match the transaction on the system.
Hope she gets a custodial.
At her level, she could have just added and approved 'suppliers'.
Once done, she would have done the same with fake invoices -once done, the system takes over and payment made at every end of month bill paying routine.
Surprised she got caught to be honest. I expect an audit couldn't find a paper invoice to match the transaction on the system.
Hope she gets a custodial.
One of the old fashioned audit checks on suppliers' invoices was to compare the clients in-house record of the Supplier's Account/Purchase ledger Account with statements provided by the supplier.
Any fake invoices and related payments would only show on the in-house version of the account and would not exist on the supplier's own statements.
One of the problem with modern computer systems is that a lot of these older style paper-chase way of performing checks are no longer possible - so other techniques have to be substituted.
If paperwork has been replaced by on-line versions, then it is realtively easy for someone to generate fake "Supplier Statemnts" that look 100% authentic.
Any fake invoices and related payments would only show on the in-house version of the account and would not exist on the supplier's own statements.
One of the problem with modern computer systems is that a lot of these older style paper-chase way of performing checks are no longer possible - so other techniques have to be substituted.
If paperwork has been replaced by on-line versions, then it is realtively easy for someone to generate fake "Supplier Statemnts" that look 100% authentic.
I'd like to see 3+ years for this.
I note that's she's paid back £1m (or in the process of) still leaves 1.4m outstanding, even if she was into blowing cash as a full-time hobby that money is still somewhere hidden away, if she doesn't disclose to the court where is it I would hope they'll give her a few more years.
A suspended sentence would be a joke; she'd be on the next thing smoking to a non-extradition country to live off her ill gotten gains.
I note that's she's paid back £1m (or in the process of) still leaves 1.4m outstanding, even if she was into blowing cash as a full-time hobby that money is still somewhere hidden away, if she doesn't disclose to the court where is it I would hope they'll give her a few more years.
A suspended sentence would be a joke; she'd be on the next thing smoking to a non-extradition country to live off her ill gotten gains.
Eric Mc said:
One of the old fashioned audit checks on suppliers' invoices was to compare the clients in-house record of the Supplier's Account/Purchase ledger Account with statements provided by the supplier.
Any fake invoices and related payments would only show on the in-house version of the account and would not exist on the supplier's own statements.
One of the problem with modern computer systems is that a lot of these older style paper-chase way of performaing checks are no longer possible - so other techniques have to be substituted.
If paperwork has been replaced by on-line versions, then it is realtively easy for someone to generate fake "Supplier Statemnts" that look 100% authentic.
OR the supplier is totally, 100% bogus. Someone above said "she could have set up her own company". But surely in reality all one needs is a bank account (in any name) and a printer. You could then print off whatever invoices/statements/etc you wanted. The supplier set up on the system would just need to be filled with fake address info, and the only real bit needs to be the bank account number and sort code. Submitted fake invoices are paid to that bank account which you control. Doesn't need to be half as sophisticated as you guys make out.Any fake invoices and related payments would only show on the in-house version of the account and would not exist on the supplier's own statements.
One of the problem with modern computer systems is that a lot of these older style paper-chase way of performaing checks are no longer possible - so other techniques have to be substituted.
If paperwork has been replaced by on-line versions, then it is realtively easy for someone to generate fake "Supplier Statemnts" that look 100% authentic.
The problem was probably lack of segregation of duties, or people not performing their duties properly. As it should take 2 people to setup a new supplier, and two people to post and approve an invoice for payment. This would mean there has to be an accomplice. But a lack of segregation removes the needs for an accomplice. Indeed, there may well be proper segregation at the normal level, but if you have had super user access then maybe you can approve and post invoices. If that's what you did then it might be the paper trail side of things which catches you out, as there may not be paper invoices to back up the postings. (Since you were making the postings in isolation.)
All the above is pure speculation of how a similar fraud could be committed by someone else and at a different company and is not intended as an analysis of this fraud, the details of which are unknown.
mrmr96 said:
Eric Mc said:
One of the old fashioned audit checks on suppliers' invoices was to compare the clients in-house record of the Supplier's Account/Purchase ledger Account with statements provided by the supplier.
Any fake invoices and related payments would only show on the in-house version of the account and would not exist on the supplier's own statements.
One of the problem with modern computer systems is that a lot of these older style paper-chase way of performaing checks are no longer possible - so other techniques have to be substituted.
If paperwork has been replaced by on-line versions, then it is realtively easy for someone to generate fake "Supplier Statemnts" that look 100% authentic.
OR the supplier is totally, 100% bogus. Someone above said "she could have set up her own company". But surely in reality all one needs is a bank account (in any name) and a printer. You could then print off whatever invoices/statements/etc you wanted. The supplier set up on the system would just need to be filled with fake address info, and the only real bit needs to be the bank account number and sort code. Submitted fake invoices are paid to that bank account which you control. Doesn't need to be half as sophisticated as you guys make out.Any fake invoices and related payments would only show on the in-house version of the account and would not exist on the supplier's own statements.
One of the problem with modern computer systems is that a lot of these older style paper-chase way of performaing checks are no longer possible - so other techniques have to be substituted.
If paperwork has been replaced by on-line versions, then it is realtively easy for someone to generate fake "Supplier Statemnts" that look 100% authentic.
The problem was probably lack of segregation of duties, or people not performing their duties properly. As it should take 2 people to setup a new supplier, and two people to post and approve an invoice for payment. This would mean there has to be an accomplice. But a lack of segregation removes the needs for an accomplice. Indeed, there may well be proper segregation at the normal level, but if you have had super user access then maybe you can approve and post invoices. If that's what you did then it might be the paper trail side of things which catches you out, as there may not be paper invoices to back up the postings. (Since you were making the postings in isolation.)
All the above is pure speculation of how a similar fraud could be committed by someone else and at a different company and is not intended as an analysis of this fraud, the details of which are unknown.
Many years ago now, a neighbour tried to defraud an oil company of £23M. He, and his accomplice, only failed because she was literally s
tting herself when the bank phoned to check on the unusual sort code she had put on the payment paperwork amd someone else answered the phone.
He got 4.5 years, she got 4.
tting herself when the bank phoned to check on the unusual sort code she had put on the payment paperwork amd someone else answered the phone.He got 4.5 years, she got 4.
Piersman2 said:
Many years ago now, a neighbour tried to defraud an oil company of £23M. He, and his accomplice, only failed because she was literally stting herself when the bank phoned to check on the unusual sort code she had put on the payment paperwork amd someone else answered the phone.
He got 4.5 years, she got 4.
That's a long time in the slammer for a short time in the stting herself when the bank phoned to check on the unusual sort code she had put on the payment paperwork amd someone else answered the phone.He got 4.5 years, she got 4.
tter.Both well deserved.
mrmr96 said:
Du1point8 said:
would be easier to set the company up and VAT register it rather than the above and then get caught out by HMRC too.
Why's that then?file invoices of £2.5 million from Lloyds to 'your' company, spend it as Im assuming she has fake company there so that its not flagged as personal account.
so therefore liable for corporation tax on the £2.5 million too? Even if it was personal account she would still need to pay tax on it.
Or let the HMRC dogs of war attack and claim back the tax too, plus tax on all other personal gains in those years.
(not a tax expert but surely large amounts of money going into personal account would be flagged by the bank)
Du1point8 said:
mrmr96 said:
Du1point8 said:
would be easier to set the company up and VAT register it rather than the above and then get caught out by HMRC too.
Why's that then?file invoices of £2.5 million from Lloyds to 'your' company, spend it as Im assuming she has fake company there so that its not flagged as personal account.
so therefore liable for corporation tax on the £2.5 million too? Even if it was personal account she would still need to pay tax on it.
Or let the HMRC dogs of war attack and claim back the tax too, plus tax on all other personal gains in those years.
(not a tax expert but surely large amounts of money going into personal account would be flagged by the bank)
Unless it was a cash deposit, why would a bank flag a large credit to an account?
What do people who are paid £500k+ a year do? They will have £30k/month going into their account if on pAYE.
Du1point8 said:
Im assuming but its all assumptions...
file invoices of £2.5 million from Lloyds to 'your' company, spend it as Im assuming she has fake company there so that its not flagged as personal account.
so therefore liable for corporation tax on the £2.5 million too? Even if it was personal account she would still need to pay tax on it.
Or let the HMRC dogs of war attack and claim back the tax too, plus tax on all other personal gains in those years.
(not a tax expert but surely large amounts of money going into personal account would be flagged by the bank)
What's this "personal account" flag? Would that alert a (non bank) company that the supplier account was a personal not a business account?file invoices of £2.5 million from Lloyds to 'your' company, spend it as Im assuming she has fake company there so that its not flagged as personal account.
so therefore liable for corporation tax on the £2.5 million too? Even if it was personal account she would still need to pay tax on it.
Or let the HMRC dogs of war attack and claim back the tax too, plus tax on all other personal gains in those years.
(not a tax expert but surely large amounts of money going into personal account would be flagged by the bank)
No corp tax to pay as there's no company. No income tax to pay as you'd just not declare it. (I'm aware that tax evasion is illegal, just as fraud it.) I don't see how HMRC would pick up on it without a tipoff, but who would supply that?
mrmr96 said:
No corp tax to pay as there's no company. No income tax to pay as you'd just not declare it. (I'm aware that tax evasion is illegal, just as fraud it.) I don't see how HMRC would pick up on it without a tipoff, but who would supply that?
Sure, and we're into the realms of wild speculation here, but if she was presenting invoices of £50K/mth then presumeably she'd need to add VAT. So she'd either have to use someone else's VAT number (would that work?) or possibly even register her fake company legitimately (strikes me as massively unlikely).Perhaps the invoices were for contractors so would have VAT, but then HMRC might pick up that they'd never heard of the people.
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