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ICAEW excludes member over £6K false expense claims

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An ICAEW member, who falsified expense claims to swindle his accountancy firm employer out of more than £6,000, has been excluded and fined £10,000 with costs of £10,723 on grounds of dishonesty.

12th Jul 2021
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As reported in June’s disciplinary report, ICAEW member Ali Raza was found to have lied about expense claims submitted by himself and his wife, with whom he stayed for multiple lengths of time at a hotel in London.

The case

Raza became a provisional member of the ICAEW when he commenced a training contract with an LLP. This contract was completed during 2013, after which he became an ACA member in January 2014. Raza continued to work for the LLP, based at its Manchester office.

Between August 2014 and January 2015, there were seven periods when Raza stayed at an hotel in London whilst attending training courses and also whilst seconded to the firm’s London office. Altogether, there were 26 overnight stays.

Raza’s wife is also an ICAEW member. At the time of the complaint, she was working for a different accountancy firm and was also regularly visiting London for overnight stays. 

The investigation found that on multiple occasions Raza and his wife stayed together in the same room at a London hotel, but would both claim the cost as an expense from their respective firms. The report states that the false claims submitted by Raza totalled £6,384. 

In some cases, Raza had even altered the invoice to make it look like it had been issued to him rather than his wife. For example, the invoices on the hotel’s system were in the name of Raza’s wife and her firm, but the copies submitted by Raza in his expense claims to his firm’s finance department were in his own name, omitting the name of his wife’s firm.

During an internal investigation in 2015, Raza was asked by his firm whether he had deliberately altered the invoices. He claimed that he did not remember doing so himself but that it had been done by the hotel at his request.

The dates were also altered on several of the copy invoices submitted by Raza. He also later admitted to the committee that he had changed the dates.

In 2015, Raza came to an agreement with his firm to repay the overpaid expenses. He was also dismissed. 

The investigation

Raza’s firm reported the matter to ICAEW in December 2016. The Institute's Professional Conduct Department (PCD) wrote to Raza concerning the allegations during 2017 and invited his comments.

Two years later, Raza confessed to the PCD case manager that he knew his wife had also made expense claims for her hotel stays.

The Investigation Committee (IC) submitted that Raza had acted dishonestly by claiming expenses from his firm when he knew that his wife would also be making claims to her firm in respect of the same expenditure. They also stated that Raza’s conduct lacked integrity. 

On either basis, Raza’s conduct was discreditable and therefore rendered him liable to disciplinary action.

Due to the ongoing social distancing measures, Raza’s hearing took place remotely over a video conference. However, Raza failed to actually appear at the hearing or even respond to the emails sent to him beforehand.

As Raza was given over a month’s notice prior to the hearing, the tribunal continued in his absence especially given that “there had been no engagement from the respondent since May 2020”. 

The tribunal also took into consideration the fact that these allegations dated back to 2014, and was satisfied that it was in the public interest to proceed regardless of whether Raza was present.

Raza did not provide any formal response to the complaint. In 2020, he was sent a copy of the IC’s report and was given an opportunity to make representations. He later replied: “I don’t necessarily agree with everything in the documents, but I will go through that with the Committee.” There had been no further communication from him since. 

The sanction

The tribunal was satisfied that Raza’s conduct was dishonest in that he made the expense claims knowing that his wife would also be claiming for the same expenditure.

Raza’s conduct was described as “deliberately dishonest conduct committed for personal gain”, and was further aggravated by the fact that Raza was working in a position of responsibility and trust as a professional accountant. 

The guideline indicates that the starting point for sanction is exclusion and a fine of £10,000. The IC also applied for costs in the sum of £10,723.

Chris Cope, consultant with Blake Morgan LLP, solicitors, comments:-

Mr Raza clearly made a conscious decision not to participate in the disciplinary process. Despite having indicated in May 2020 that he would explain matters to the Committee in due course, nothing further was heard. Nor did he provide the Disciplinary Committee with any information relating to his finances. 

Exclusion from membership was inevitable. Had Mr Raza participated in the process, provided an explanation for his conduct, confirmed that the money had been repaid in full, indicated something about his present employment, produced details of his finances and expressed remorse, he could have avoided the fine or reduced its magnitude. 

It makes no sense failing to participate. Making no communication indicates a contempt for the process, the Institute and the profession and of course removes any possibility of the Committee exercising leniency.

Should you require advice or representation please feel free to get in touch with Chris Cope, Matthew Corrie or Samantha Hatt.

Replies (13)

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By Roland195
13th Jul 2021 11:59

While I have no sympathy, there is something about the timelines of this that seems off - why did the employer wait for a year or more before reporting the matter to ICAEW who then in turn allowed 5 years to elapse before doing anything about it?

Seems strange to worry about the public interest at this point.

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Replying to Roland195:
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By hfiddes
14th Jul 2021 10:41

I can understand it being 2015 when the internal investigation took place. It might take several months between claim and internal audit identifying the problem and then several months for him to fail to explain himself and disciplinary action/appeal or whatever. ICAEW's timeline is puzzling though.

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Replying to hfiddes:
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By Roland195
14th Jul 2021 10:52

From the facts that are stated here, he was found out & shown the door in 2015 after the internal investigation of events in 2014. Even if his happened in December 2015 then it was a full year until the employer reported the matter to ICAEW - if they felt they were duty/ethically bound to do so then they seemed to take an awfully long time reaching this conclusion (although perhaps they asked the advice of the ICAEW who took a year to respond...)

My money would be on Mr Raza doing something to further upset his ex-employer - poaching clients etc after their "agreement" at which point they decided to stick the boot in.

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By Paul Crowley
13th Jul 2021 14:11

Why do people who know better do this sort of thing?
The tax free gain was really trivial.

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Replying to Paul Crowley:
David Ross
By davidross
16th Jul 2021 10:06

When I was with the Inland Revenue in the 1970s there were stories of staff who had submitted false repayment claims and stood outside the door at the false addresses and met the postman to get the cheques. Small amounts were made in total, spread over many occasions so the 'workload' must have been immense. I always wondered why someone would throw over a career and pension for so little reward.

Then again, in this case perhaps the hotels were the tip of an iceberg?

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By ShadowTerror
14th Jul 2021 11:07

It might take several months between claim and internal audit identifying the problem and then several months for him to fail to explain himself and disciplinary action/appeal or whatever. ICAEW's timeline is puzzling though. https://www.greatpeople-me.me/

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By Balancing
16th Jul 2021 10:33

Has ICAEW got a bee in their bonnet because they have felt THEY have been treated with contempt... they presented as protecting the accountant i put in a complaint about in every way. The so called independant committee's ruling was that they couldnt even be bothered investigating. Infact i felt contempt from ICAEW by they way that they justified every issue in regard to the accountant, they did not seem interested in investigating at all! I am interested that they have taken action here.

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By raju m
16th Jul 2021 10:37

It is always difficult to decide what is fair in expenses claims where more than 1 person is involved.

Would it only have cost half if one person had stayed in the hotel instead of 2?

Like in mileage claims. If 3 employees travelled in 1 car, should only one person claim or all 3?

If 3 employees had travelled in their 3 cars, all of them could have claimed the mileage allowance.

What is fair???????????/

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Replying to raju m:
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By GrahamKAS
16th Jul 2021 11:08

I disagree with you on this Raju. Whoever is bearing the expense should be the one to claim it. In this case

The cost of the hotel is not in question. The point is that the individuals involved recovered twice the expense of what the room cost.

In your car example - only the driver/owner of the car incurs the 'costs' related to the travel, therefore should be the only one to claim the mileage allowance. Why should the 2 passengers claim anything? They had no costs!

This is all about the integrity of the Accountants involved, although I do agree with other comments that the timeline seems a bit "iffy". Why wait so long to go through this process?!

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Replying to raju m:
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By AndyC555
20th Jul 2021 09:16

"If 3 employees travelled in 1 car, should only one person claim or all 3?"

You really need to ask that?

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By geoffmw1
16th Jul 2021 15:37

we are not told whether there was a settlement between the 2 employers to correct the proper cost to be bourne by each. Perhaps that contributed to the delays referred to in earlier replies

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By Arcadia
17th Jul 2021 14:57

What about the wife? She was also ICAEW. Was she not a party to the fraud at least? Which of them is the rightful claimant of the expenses?

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By Mr J Andrews
17th Jul 2021 17:01

Like David Ross , I was around at the same time . The Internal Inland Revenue Investigation team were not the sharpest knives in the drawer but the crass stupidity with some of the fraudulent claims made their life a bit easier.
Like David the cynic in me says Raza’s “No Comment” could well suggest something else afoot,

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