Accountant gets ICAEW ban for £1.5m fraud

An accountant who paid himself £1.5m in cheques from his employer's bank accounts has been excluded from the ICAEW for 10 years.

Paul Malcolm Davis, of Frogmore, in St Albans, Hertfordshire, paid 36 cheques to himself worth £1.53m from his employer’s bank accounts when he knew he wasn’t entitled to the money.

The fraud, which went on for 20 years, was apparently to fund a gambling addiction, an ICAEW disciplinary tribunal heard.

Davis also incorrectly completed his personal payroll records resulting in three over-payments to him totalling £60,000 when he knew he shouldn't have.

He also arranged payment of three dividends due to his employer from a third party totalling £35,000 when he knew he wasn’t entitled to.

In April 2013, a Crown Court sentenced Davis to three years in prison and disqualified him as a company director for six years.

The ICAEW excluded Davis for bringing "discredit upon himself, the institute or the profession of accountancy."

No application for costs was made due to his current financial situation and likely financial position in the future. 

Comments
Locutus's picture

I wonder how much you need to take ...    2 thanks

Locutus | | Permalink

... for a lifetime ban.

3 years in prison (18 months with good behaviour) doesn't seem long either.

davidwinch's picture

Size isn't everything!    1 thanks

davidwinch | | Permalink

It is interesting to compare the 3 year prison sentence which Mr Davis received for frauds involving £1.6m and the 4 year prison sentence which Mr Ernest received for frauds involving just over £48,000 - see my money laundering & crime discussion group article.

David

Only 10 Years!!    1 thanks

PG1234 | | Permalink

So in 10 years time he will become a member again.

 

Wow!!

davidwinch's picture

Past it?    1 thanks

davidwinch | | Permalink

PG1234 wrote:

So in 10 years time he will become a member again.

 

Wow!!

By then he will be in his early 70s.

David

davidwinch's picture

Background    2 thanks

davidwinch | | Permalink

From the 2013 accounts of Safeland PLC:-

Nature and effect of misappropriated monies

 

In October and November 2012, the Company announced the discovery of a series of fraudulent transactions. The aggregate amount of the sums lost to the Company through fraudulent transactions was approximately £1.525m. Of that sum, approximately £1.2m related to the financial year ended 31 March 2012 with the balance relating to the financial year ended 31 March 2013.

The Company has to date recovered £1.3m and the Board is continuing to pursue outstanding monies.

The losses discovered are significant and the Board concluded that the financial statements as originally issued for the year ended 31 March 2012 were subject to material error. Accordingly the Group's financial statements for the year ended 31 March 2013 comparative figures have been restated to reflect the loss of funds. Details of the restatements are set out in note 2. Funds misappropriated, funds recovered and applicable legal fees are treated as a net income of £809,000 in the current financial period.

In October 2012, the previous auditors resigned as a result of an unmanageable conflict of interest. They were replaced with Grant Thornton UK LLP in November 2012.

David