Forensic Case History: Fraudulent Expense Claims

Our client’s solicitor came to us with various examples of what appeared to be fraudulent expense claims made by a company director.

We were instructed to review all the expense claims made by the director over a seven year period.  The quality of the information available left much to be desired.

The expense claims consisted of brown paper envelopes stuffed with aged and faded receipts, often with little or no description of the nature of the expenses.  No doubt the quality of the business’s accounting records had assisted the fraudster.

So… what had he claimed for?
  • Expenses which had been paid for on his credit card.  All credit card bills were reimbursed in full by the company every month so he was being paid twice. Some expenses were claimed twice, re-using the same receipts.
  • Reimbursement for personal expenditure which wasn’t reflected in his director’s loan account.
  • Petrol costs, when he was also paid a mileage allowance.
  • How was it allowed to happen?

There was little or no oversight of the accounts function.  The fact that the bookkeeper was related to the director may have meant that she was prepared to turn a blind eye.

What did we do?

We quantified the amount of each of the different frauds, which totalled around £150k.  We traced all payments through the cash book, using cheque stubs and the company bank statements to prove (as far as possible) that these amounts had in fact been paid to the director.

Following this we had a meeting of experts with the defendant’s accountant.  There was very little difference between us with regard to the factual information.  Our joint statement made it clear where the issues remained between the parties and informed a subsequent mediation.

The result

The case settled on a drop hands basis after the mediation, with the fraud claim offsetting other claims made against our client.

For more information

If this article has raised any questions in your mind or there are any issues you’d like to discuss, please contact Kate Hart or call us on:

01483 416232