Five years jail for theft from model shop.

[Free At Last]

Heard on this evenings local news...

"A model railway shop manager from Skelmersdale who stole £76,000 worth of goods from his employers to fund his cocaine habit has been jailed for almost 5 years. Liverpool Crown Court heard the 34 year old man spent around £200 per day on his addiction, he volunteered to work Sundays at the warehouse of Widnes based Hattons where he set up deliveries of more than 500 items to fake customers."

Edited December 9, 2021 by Free At Last

[Gilbert]

2 minutes ago, Free At Last said:

Heard on this evenings local news...

"A model railway shop manager from Skelmersdale who stole £76,000 worth of goods from his employers to fund his cocaine habit has been jailed for almost 5 years. Liverpool Crown Court heard the 34 year old man spent around £200 per day on his addiction, he volunteered to work Sundays at the warehouse of Widnes based Hattons where he set up deliveries of more than 500 items to fake customers."

If as stated it does make you wonder about their systems and controls...

[Free At Last]

https://www.liverpoolecho.co.uk/news/liverpool-news/model-railway-worker-stole-79k-22422255

[kevinlms]

18 hours ago, Gilbert said:

If as stated it does make you wonder about their systems and controls...

It might take a while to realise that something is wrong and perhaps longer to gather evidence. As hinted at in the article, other staff members felt the pressure. Maybe he put other peoples names as the order taker?

 

Moving items around the warehouse is a common trick, so when people think items are missing, they are found in wrong locations, thus making people look harder for more 'missing' items.

 

 

A friend of mine discovered that his now ex-wife, took everything he had over a period of time. To this day he doesn't know what she did with the money. He has mostly recovered, after years of working even longer hours in his own business.

 

I've read that the person to be aware of, is the person who doesn't want to take holidays, or is there first thing and last to leave consistently.

[Gilbert]

4 minutes ago, kevinlms said:

I've read that the person to be aware of, is the person who doesn't want to take holidays, or is there first thing and last to leave consistently.

Good point - my better half works for a "finance/investment" company (but not in a financial role) - all staff are contractually obliged to take 2 weeks of their leave as a block. This is considered to be sufficiently long for any misdemeanours to "show up..."

[Legend]

19 hours ago, Gilbert said:

If as stated it does make you wonder about their systems and controls...

 

Indeed . Where it fell down is that he was able to create accounts that he could then send goods to . Thats why Auditors always look at systems and segregation of duties . It gets more difficult as companies are smaller as you do come across small companies where one person does everything . Its also true people who do not take holidays are suspicious . Really these frauds always get caught its just a matter of time .

 

Interesting markups though  £76k sales value but £45k at cost.  Maybe he was going for big second hand items 

[kevinlms]

11 minutes ago, Legend said:

Interesting markups though  £76k sales value but £45k at cost. 

I'm surprised that stating the mark up had any relevance. Surely stating that 'goods to the value of', ought to be sufficient?

 

After all, if the Bank of England was robbed, I'm sure that the BoE, wouldn't tell everyone that 'It's OK, it only cost us 10% of that amount to make it'!

[Danemouth]

50 minutes ago, Gilbert said:

Good point - my better half works for a "finance/investment" company (but not in a financial role) - all staff are contractually obliged to take 2 weeks of their leave as a block. This is considered to be sufficiently long for any misdemeanours to "show up..."

 

Before I retired I worked as Information Security Manager for a small financial institution and the regulator at that time expected all staff to take an annual two week block of leave. This usually will identify "teeming and lading" frauds and "using Peter to pay Paul" frauds.

 

Prior to that I was an internal auditor specialising in computer systems and always spent time looking at segregation of duties and controls in place to enforce them. Also every staff member having their own logon with no sharing of them.

 

Unfortunately in a small company such controls are sometimes difficult to completely implement

 

Dave

[proton]

Glad to see though that Hatton's appears to have weathered the loss, and will continue to provide employment for its many staff and serve the hobby community.  I wish them well.

 

John

[Kickstart]

2 hours ago, Gilbert said:

Good point - my better half works for a "finance/investment" company (but not in a financial role) - all staff are contractually obliged to take 2 weeks of their leave as a block. This is considered to be sufficiently long for any misdemeanours to "show up..."

 

My better half had this. But recently changed as they have realised with remote logins, and complex systems it would be relatively easy to avoid anything being caught by the 2 weeks break.

 

All the best

 

Katy

[rocor]

2 hours ago, kevinlms said:

It might take a while to realise that something is wrong and perhaps longer to gather evidence. As hinted at in the article, other staff members felt the pressure. Maybe he put other peoples names as the order taker?

 

Moving items around the warehouse is a common trick, so when people think items are missing, they are found in wrong locations, thus making people look harder for more 'missing' items.

 

 

A friend of mine discovered that his now ex-wife, took everything he had over a period of time. To this day he doesn't know what she did with the money. He has mostly recovered, after years of working even longer hours in his own business.

 

I've read that the person to be aware of, is the person who doesn't want to take holidays, or is there first thing and last to leave consistently.

 

It does make one wonder if that was her plan from the start of the marriage.

[Nova Scotian]

Awful for a small business to have to suffer. Processes, policies etc go so far, but people can be very determined, especially when there's an addiction involved. Really rough on Hattons, not just financial, but as they state staff morale and probably reputation too (if orders unfulfilled as couldn't find stock).

Addictions rip families and communities apart. I'd much rather a war on addictions that a war on drugs - we'd find it'd do wonders for crime, homelessness, and of course happiness.

[friscopete]

When I worked at a motor cycle dealer in the 60's  the brother in law of the owner ,a snobby   meticulous man ,who ran the stores turned out to have robbed it for decades mainly taking bribes from salesmen to stock out of date spares ..In other words the store were far too large and full of then useless junk .It forced the  Company to go bankrupt .nothing happeded to him but we all had to look for jobs .No problem in the 60's though.

[leavesontheline]

It was nice to read that the owner of a model railway retailer in Sheffield alerted Hattons to some of the items seen on eBay.

[montyburns56]

To be fair though, having to deal with model railway enthusiasts every day is enough to turn anyone to hard drugs.

[Mark Saunders]

3 hours ago, Nova Scotian said:

Awful for a small business to have to suffer. Processes, policies etc go so far, but people can be very determined, especially when there's an addiction involved. Really rough on Hattons, not just financial, but as they state staff morale and probably reputation too (if orders unfulfilled as couldn't find stock).

Addictions rip families and communities apart. I'd much rather a war on addictions that a war on drugs - we'd find it'd do wonders for crime, homelessness, and of course happiness.

Should the same  apply to the addiction to power!

[kevinlms]

5 hours ago, rocor said:

 

It does make one wonder if that was her plan from the start of the marriage.

I asked my mate if it went in the pokies,  he didn't know. 

[Michael Hodgson]

23 hours ago, Danemouth said:

 

Before I retired I worked as Information Security Manager for a small financial institution and the regulator at that time expected all staff to take an annual two week block of leave. This usually will identify "teeming and lading" frauds and "using Peter to pay Paul" frauds.

 

Prior to that I was an internal auditor specialising in computer systems and always spent time looking at segregation of duties and controls in place to enforce them. Also every staff member having their own logon with no sharing of them.

 

Unfortunately in a small company such controls are sometimes difficult to completely implement

 

Dave

It surprised me in my own IT audit work in financial institutions that such frauds as we did encounter tended to be essentially the same as would have been found in entirely manual systems.  For example we had to fire an intelligent and competent IT manager who controlled the password system (and could therefore have easily circumvented system-enforced separation of duties), not for fraudulently transferring millions of dollars but for fiddling his travel expenses, claiming a couple of hundred dollars twice!

 

One of the problems with checking staff took their minimum two week holiday break was that the individual who needed to come into the office to keep a fraud covered up would still pop in whilst officially on leave on some pretext such as feeding a stray cat or to arrange an office party. 

[Chrisr40]

It always amazes me that people think they aren't going to get caught. 

[Michael Hodgson]

I'm glad they prosecuted him.  It used to irritate me as an internal auditor that whenever we caught anybody with his fingers in the till, it was almost always hushed up.  The top brass would say "the adverse publicity would damage our business" - fire him, without references of course and maybe do a deal to get some proportion of the money back. Given the way others have got away with larger sums without getting a criminal record, I'm even more pleased that the court gave him a five year sentence.  

[Steamport Southport]

On 10/12/2021 at 14:14, kevinlms said:

 

I've read that the person to be aware of, is the person who doesn't want to take holidays, or is there first thing and last to leave consistently.

 

Yes. When I worked for a different shop we had one of those as an assistant manager. A well know charity shop on the high street.

 

I knew he was up to something but wasn't quite sure what. Always popping in on his days off, never went on holidays.

 

I left for a better job and was seriously thinking of packing it in anyway, but I was still curious. Popped in one day whilst passing and found out he was caught fiddling the Gift Aid* and also claiming work related bonuses. Although I think that was the tip of the iceberg. Got something like 2 years.

 

 

*Gift Aid is a means of claiming another 25% on some sold items against what you are paying in tax.

 

https://www.gov.uk/donating-to-charity/gift-aid

 

 

Jason

[Michael Hodgson]

56 minutes ago, Steamport Southport said:

 

I knew he was up to something but wasn't quite sure what. Always popping in on his days off, never went on holidays.

 

If they don't get detected for failing to take their hols, they usually manage to become unable to come to work because of some accident or sickness when somebody else has to do the job.  Of course it can take a long time for that to happen, by which time they've abstracted even more. 

[Derekl]

On 09/12/2021 at 19:13, Gilbert said:

If as stated it does make you wonder about their systems and controls...

There has to be an element of trust in any employment. Having an attitude that requires all to be watched all the time is not good for the atmosphere.

It is interesting that in legal officed where one might expect a level of suprevision on financial issues, even quite respectable firms have fallen prey to determined operators, usually in the accounts area. A favourite use to be (and possibly still is) transferring a small proportion of funds to to an estat on probate to a differnet account and then siphoning off. Reported cases have shown this can go on for years and run  up some heavy losses before detection. In solicitors' practices, the equity partners get to make up the damage - if they can't, the Indemnity Fund pays up.

I was sorry to read of this at Hattons, where I have been a well-served customer over the years. One hopes they are insured against this risk, preferably with a policy that is not riddled with exception clauses.....

 

[Stanley Melrose]

Way back I worked for a multinational vehicle manufacturer that provided company cars to those on and above a certain pay-grade.  The scheme was administered by a group of staff that was mostly of a lower pay-grade and consequently didn't qualify for the scheme.  It was discovered after many years that records were set up to provide ALL of them with cars under the scheme and it further transpired that this had been passed on across several generations of staff in that particular department.

 

The industry was rife with fraud in those pre-computer days but I wonder if it's different nowadays?

[Jonboy]

1 hour ago, Derekl said:

 One hopes they are insured against this risk, preferably with a policy that is not riddled with exception clauses.....

 

The last couple of policies I read for a similar style of operation as hattons limited claims to within 28 or 56 days of the act being carried out.