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Payroll Theft

Payroll Theft

I have recenetly had to susepned a member of staff who subsequently has resigned (within 24 houirs) for running a payroll for one of our Beureau clients she was involved with - the employee had set up three fictitious members of staff to gain access to additional funds which entered her personal bank account. We are due to recive the maoney very shortly.

i would be interested to know if any one has had similar dealings and if they accepted the settlment as being final or was it then refered to the police for further investigation and prosecution.
John Gallanders


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08th Jul 2006 10:33

Things to consider


Firstly, as you are acting as a payroll bureau you are providing accountancy services by way of business, so (assuming you do this in the UK) you are obliged to report the employee's conduct to your MLRO (and he is obliged to report it to SOCA) under the Money Laundering Regulations 2003 and sections 330 - 331 Proceeds of Crime Act 2002 (since the employee has acquired the proceeds of crime).

SOCA will pass the information to your local police force who, probably, will not take any action based on this report.

However the question then is "Should you also report it direct to your local police?" If you do this, particularly if you do it by way of a letter setting out relevant facts and allegations fairly succinctly and addressed to the Chief Constable, it is much more likely that the police will take some action. (Letters addressed to the Chief Constable will be formally logged and followed up.)

You should be aware that the police do not have sufficient resources to investigate every crime reported to them. They will have a screening process to select at an initial stage those allegations which they think are most worthy of investigation. It will help if they can see from the start: (i) an identifiable crime, (ii) evidence pointing strongly to a particular suspect, (iii) other aggravating factors (such as abuse of trust, a large amount involved, or a premeditated criminal scheme). In this way they can see that there a likely to be a good 'reward' for their efforts and a 'public interest' in pursuing an investigation.

A well written letter to the Chief Constable, highlighting these factors, should result in the police at least interviewing you and the alleged offender. They will then make a decision as to whether or not to investigate further and / or charge the alleged offender.

If you do not refer the matter to the police, and just shrug it off, what message will that send to your other employees and your clients?

This person has abused your trust in them, abused your clients' trust in your firm, and potentially caused serious damage to your business. Are you bothered? I think you should be!

(By the way, if this is a first offence, the offender, if found guilty, is likely to be ordered to do some hours of community service.)

If you are an MLRO you can get confidential one-to-one email support, information and NewsAlerts from my website

[email protected]

P.S. In my opinion, the offender is less likely to defraud again in future if the matter is reported to the police on this occasion.

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10th Jul 2006 08:42

Apart from anything else....
Hi John

You have a moral obligation to report this to the Police. If you don't, what is to stop the offender going up the road and doing the same to someone else?

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