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False invoice?

Asked to raise a false invoice for an associated company to obtain funds from bank

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I have been asked by a Company (associated by common shareholder) to raise a large invoice for services to the Company for them to receive funds from a bank loan. The bank will pay us against the invoice and then we are to transfer the money to the Company (not the standard bank account), and then subsequently raise a credit note against the invoice. I don't feel comfortable doing this as to me it feels like false accountng and de-frauding the bank.

Any thoughts?

Replies (31)

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Caroline
By accountantccole
28th May 2019 15:33

Go with your gut. If it doesn't feel like a genuine transaction - challenge it and point out why you are concerned.

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By Montrose
28th May 2019 15:36

Conspiracy to commit fraud?
If you are employed by the associated company look for another job pdq
If you are a member of a professional body ask them for ethical guidance.

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By Jdopus
28th May 2019 15:37

My thoughts are that your gut feeling is right and it's fraud. Don't get involved.

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RLI
By lionofludesch
28th May 2019 15:54

" I don't feel comfortable doing this as to me it feels like false accounting and defrauding the bank."

I'd say obtaining money by false pretences but we're just playing with words.

I'm guessing you're an employee from the wording of your query - look for a more ethical employer.

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By bernard michael
28th May 2019 16:16

I cannot believe you have to ask the question. Prison awaits if you go ahead with this crazy notion. Who do you think will be holding the bomb when the music stops

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By ireallyshouldknowthisbut
28th May 2019 16:25

You don't do it, end of.

As above seek advice of your professional body if you have one. But I would be very blunt about that. Ie "No I wont help you commit fraud" If they do the "you are not being loyal, I thought I could trust you" rubbish, You can do a "I trained for x years to be a bookkeeper/accountant and I am not getting a kicked out and a criminal record on your behalf"

I would make sure you have a good audit trail of anything you have been asked to do. Certainly confirm the instruction via email and store emails and other documents in something you control and can't be wiped should you be sacked as a result so you can claim unfair dismissal.

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Replying to ireallyshouldknowthisbut:
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By C.Y.Nical
31st May 2019 13:14

I agree about the audit trail. First thing I would do is request instructions in writing. Say you want to make sure you have a complete and accurate understanding of what you are being asked to do. Which is true.

Seems to me if you are an employee you must hope your refusal to comply with the request will result in either actual or constructive dismissal, so you need evidence of what you were asked to do for use at the tribunal.

If these clowns are clients I'm amazed you even need to ask the question.

Sorry you are having to deal with this - always nasty having to deal with crooks.

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By andy.partridge
28th May 2019 16:28

It's obviously bullshit. You know it is and if you do it you won't be able to claim it was an innocent mistake.

In simpler times I worked for a company that did just that and won the Queen's Award for Exports on the back of it.

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By johnhemming
28th May 2019 16:54

Asking you to commit a criminal offence is normally a criminal offence, but to protect your own interests in refusing to do this you should make sure the instruction is in writing.

If it is only oral then you won't have the evidence you need to report this to the police (if that is what you think you should do).

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By frankfx
28th May 2019 19:06

Have a look at Fraud Act 2006.

Which superseded Theft Act 1968.

https://www.legislation.gov.uk/ukpga/2006/35/section/2

Could not be clearer.

You may be in an isolated role at work.

So have a word with ACAS a free service on employment matters.
You have been asked, as an employee it seems, to cooperate in a criminal act.

As mentioned by others , speak to your own professional body .

In all seriousness, it is good to talk with others when you are placed in such a lose lose position.

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By Duggimon
29th May 2019 09:08

If in doubt, call the bank and ask them if they think you should go ahead.

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Lone Wolf
By Lone_Wolf
29th May 2019 09:19

Explain the potential consequences of doing this for the company and for you then suggest that a large bonus may ease your worries about the legality.

They're going to do it anyway so you might as well profit out of it.

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By WhichTyler
29th May 2019 09:23

Apart from the ethical & legal issues, this is usually a big sign that the business is going under, so get out before you are tainted with failure as well as fraud...

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By Justin Bryant
29th May 2019 11:59

Surely the dumbest question of the year (and that's saying a lot) and possibly it's a wind-up (if not, it's worrying these people are allowed to vote and sit on juries etc.).

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Replying to Justin Bryant:
Lone Wolf
By Lone_Wolf
29th May 2019 09:44

Well we let you vote, so...

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Hallerud at Easter
By DJKL
29th May 2019 10:01

Wear gloves so no fingerprints on the documents and remember that in unlikely event you aref using an old fashioned typewriter they all have distinct identifiable characteristics and typists have their own personal signature re force striking keys etc. (I suspect even printers have signatures)

Given this day and age, with DNA testing, gloves, mask and an all body protective disposable outfit is possibly advisable, one of our tradesmen uses them for spray painting- perhaps I ought to look at his invoices more closely

Finally, once done, ensure you cross streams and walk up the middle of rivers etc to put the posse/bloodhounds off your scent.

Or, with the earlier safety message in your ears,

Just Say No.

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David Winch
By David Winch
29th May 2019 10:26

It's a toss up whether, if you do this, you are more likely to be prosecuted under sections 1 & 2 Fraud Act 2006 or section 17 Theft Act 1968. When you transfer the funds received from the bank you risk prosecution under section 327 Proceeds of Crime Act 2002.
It's just a straightforward "No". OK?
David

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By The Innkeeper
29th May 2019 13:19

David is obviously spot on ( as always) but I would keep notes (at home) of all conversations relating to this criminal activity (potential or real) so that you have CYA (=covered your [***])

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By ScribbleD
29th May 2019 14:24

Sounds suspiciously like fraud to me. Go with your gut and don't get involved.

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By WhichTyler
29th May 2019 15:59

this sort of practice usually indicates that the business or its owner is about to go bust, so another reason to leave and look for another job...

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By Matrix
29th May 2019 21:19

You have had great advice. You don’t say if you are also a Director or shareholder.

One of my former company clients was taken over by a larger company who raised false invoices (maybe to use losses) which I refused to put in the accounts. My very conservative and neurotic Director client was, bizarrely and naively, just doing as he was told as was starry eyed after the takeover. It is amazing how naive people can be. Both are now going down the pan but I do feel ok since I let my client know at the earliest opportunity that his new colleagues were dodgey.

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By C Graham
30th May 2019 12:10

I would ask why the payment cannot be made directly to the end recipient?

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By Rgab1947
30th May 2019 16:05

It called false accounting or fraud in simple language.

Last time I checked a jail sentence is a distinct possibility.

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RLI
By lionofludesch
30th May 2019 16:13

Doubtless if the bank gets paid, it'll all be grand.

Unfortunately, the OP isn't in control of that.

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By indomitable
31st May 2019 10:53

Can't believe the question. Do you really not know the answer to this. Even if you weren't an accountants surely you would know. This is not something that needs an opinion on.

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By pauljohnston
31st May 2019 10:56

Having read the comments and assuming nothing has changed I would now be s*it scared. Its not just a fine, a crimnal record and prison you will have this hanging over you for the rest of your life.

Get in touch with a job agency and get a new post. As others have said say no in writing - you know the person so this will depend how you say it but be firm and polite.

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By towat
31st May 2019 10:58

Absolutely do not do it, keep records to cover your back should they try to sack you, your next problem is if they go ahead and do it without your input, you still know about it and should probably report it to the authorities or you would be guilty by association. Sorry.

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7om
By Tom 7000
31st May 2019 11:01

Is this for real. You are going to end up in court and possibly jail. Its your job to stop the idiot MD doing this and thats what the judge will say.

If you area qualified accountant and do this, you might as well tear your certificate up as well.

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By North East Accountant
31st May 2019 11:31

A big NO.

Also consider resigning if they are a client as if they are prepared to do this, what else would they do, and then blame you when it hits the fan.

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By AdShawBPR
31st May 2019 11:59

I suspect you posted here because, while you know the answer, you anticipate having to have quite a difficult conversation with (presumably) your employer. However it's been said, the resounding response on here is to agree that this is a big no no. Unfortunately you are going to have to have that conversation but now you can have it knowing that everyone here agrees with your feeling. It may be painful in the short term but you'll be glad you did. If you haven't done it yet, do it now before the weekend so it's not hanging over you. Good luck!

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By David Gordon FCCA
31st May 2019 12:49

I never take "Cash" payments from clients. Not because I am holy and righteous, but because I know that once I do, I am on a dog leash.

The second time round you won't have a choice.

Make a careful note of everything and get out quick.
It is not easy. If the guy tries to blackmail you, make sure you have evidence to show the bank and or your next employer.
This really is a standard, well known, old fashioned fraud, in which you are set up as the fall-guy.
I repeat it is not easy, whatever you do, you will be hurt, but this sh*t is not your friend.

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