ICAEW excludes member over £6K false expense claimsby
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.
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.
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.
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 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.