Yahoo Finance ‘I closed my newsagent’s shop after the manager stole £250,000 from under my nose’
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Dear Katie,
Until recently I ran a small local newsagent, but because of a series of unfortunate events, which I am about to reveal, I had to shut up shop. In November 2015 I discovered that the man I had entrusted to manage my shop had in fact stolen around £250,000 from the business.
Outwardly he is an upstanding member of our community and no one would ever suspect him of such a thing. Around a decade ago this man convinced me to open a joint personal account with Barclays, through which we both had access to the business funds.
The idea was that small cheques from the newsagent would be paid into this account to avoid bank charges. I reluctantly agreed. Unbeknown to me, this manager had arranged for the joint account bank statements to be sent to his home address.
Meanwhile, I continued to operate two pre-existing business accounts, from which I later discovered the manager had also been transferring money into his personal accounts without my knowledge. The fraud was only uncovered some years later when an employee raised concerns that the manager was diverting business receipts into his own account.
Over the past four-and-a-half years I have reported the fraud to the police twice without any success. I have also made a formal complaint to Barclays. I feel Barclays has failed me by allowing this fraud to be committed against me, in breach of money-laundering regulations.
Then I filed a civil case against the man and last year we settled out of court for £150,000, which was to be paid to me in instalments. It should have been paid by now, but I have not received a penny as my former manager has now declared himself bankrupt. Can you help me get my money back?
Anon
Dear Anon,
Initially you had my sympathy over this horrible crime, apparently perpetrated by someone who had gained your trust over time to coldly steal from you.
You had poured your heart and soul into this business over a significant chunk of your adult life, filling up glass jars with old fashioned sweets and ensuring the local community had their papers delivered each morning in time for breakfast.
It is terribly sad to see local businesses like yours go under, especially when they are a pillar of village life. But tragic as this was, it wasn’t long before I began to wonder whether there was more going on here than met the eye.
You strike me as intelligent and you’ve demonstrated that you’re someone who is au fait with banking regulation and the law. Strange, then, that you would allow funds from your business to be diverted into a personal bank account.
You say you were “reluctant” to agree to this arrangement, so I wonder why you did when it was so clearly against Barclays’ terms and conditions. I suspect the prospect of lower bank fees sounded attractive, even if a little shady. Meanwhile, your manager was apparently having other, far more sinister ideas.
Aside from rule-breaking, allowing business funds to be diverted into a personal account like this is also potentially problematic from a tax perspective. In doing so, you were, either accidentally or deliberately, introducing extra risk of money not being declared to HMRC. I struggle to believe you didn’t realise this.
You said your accountant “wasn’t very good” and that you recently discovered he had not seen any of the joint account bank statements, relying instead on a “summary” from the manager. If this is true, I believe you could sue him for professional negligence.
You say the bank statements were diverted to your manager’s personal address, so you were never in possession of them, but I wanted to know: did you ever ask the bank to see them? As a joint account holder, you would have had a right to see a copy. When I asked you this, you said you had monitored them.
So I wanted to know how you didn’t notice that substantial sums of money were going missing sooner. In the end, it was a junior employee who noticed that the manager wasn’t putting certain payments through the till, leading you to establish that they were going straight into the joint personal account. This led you to discover what you describe as a wider and more complex fraud, which would have been difficult to detect.
Unsure what to make of all this, I did a bit of digging into your accounts on Companies House. You say the newsagent was registered with HMRC as a limited partnership with your wife, but I could not find a listing for it. I found your profile though, which linked you to a number of other business interests, but not the newsagent.
Meanwhile, I had contacted Barclays and it confirmed you had breached its terms by using a personal account to dodge fees. It said funds were not fraudulently taken from your account, as they were transferred between two of your manager’s own accounts. At this point, I told you that although I was very sorry about what had occurred, I was not able to help further.
You emailed straight back to tell me that the police had reopened your case, as even more fraud had been discovered. This is even more reason for me to stay away, as they need to get on with their job. As is often the case with these investigations, digging a few holes in your story has presented a cavernous pit of questions that require answers.
I’m afraid that, on this occasion, I can put no more time into finding them. Not when I have other readers queuing around the block for help and a nagging feeling that I have scratched the surface of a murky world out of which will come no good.
The full Katie Morley Investigates column will appear in print every Saturday and Sunday. You can get an early taste every Friday at 12:00
