Couple face £1.17m confiscation order after bringing firm to its knees | AccountingWEB

Couple face £1.17m confiscation order after bringing firm to its knees

The former manager of Bolton-based builder Magden faces five years in jail and a £1.17m confiscation order after admitting 24 counts of false accounting and 24 counts of theft.

Michael Crowther, 53, faces another 4.5 years in jail if he and is wife Carol, who was convicted of possessing criminal property, do not repay the money to Magden. Carol Crowther was given a one year prison sentence suspended for two years and ordered to carry out 250 hours unpaid work.

According to a statement from Bolton police, Michael Crowther stole £1,027,214.21 over five years while working as general manager at Magden Ltd. During a search of his house in March 2008, the police found £112,552.24 in sterling, US dollars and premium bonds. Documents showing shares and investments in excess of £400,000 were also recovered.

At a confiscation hearing on Friday 29 July 2011, the couple were found to have benefited in total £1,583,711.47 from the fraud.

Based on available assets - including equity in their house, investments, stocks and shares and the cash seized following their arrest - they have been ordered to repay jointly £1,178,162.68 to Magden within six months otherwise Michael Crowther will be jailed for a further four and a half years and Carol will be jailed for three years. Both will then still have to repay the money.

Confiscation orders always make for interesting discussions on this group, but several news reports suggest that Crowther was engaged as an accountant with the firm. Sky News reported that his crimes came to light when the company’s owner Alan Robinson tried to sell the firm.

Robinson was offered almost £3m but the sale fell through when Crowther told him that almost £200,000 worth of stock was missing and the company had actually made a loss. Robinson hired an external accountant and who discovered that more than a million pounds had been paid out over a five-year period.

As a result, he said Magden Ltd has since had to close branches in the North of England and lay off more than 15 people.

The other point that is often raised in fraud conversations is the prevalence of inside jobs and how to protect against them. I'm planning to do a short write-up of the story for our news pages, but if anyone has any further detail to add - or advice about how to prevent similar instances - this is a good place to do it!


Couple facing large confiscation bill.

dougc99 | | Permalink


There is no foolproof way to prevent fraud and theft, however the risk can be mitigated.

There are obviously risk assesments that can be carried out along with policies and procedures that can then be put in place. These will act as a deterrence, however a lot will depend on the message coming from the top.

The ACFE have a Fraud Risk Assesment protocol that can be sold to clients but it does require input and commitment from owners/senior management and the businesses solicitors. Training and education is the best form of deterrence.


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Group: Money laundering and crime
A group for discussing issues relating to suspected money laundering and other crime