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Gloucestershire Business News

Gloucestershire construction company defrauded out of £140,000

A 'manipulative and calculating' woman who defrauded her Cotswold construction company employers out of more than £140,000 to fund an 'extravagant' lifestyle was jailed on Tuesday (August 9) for three years.

Joanne Malin, 49, formerly of South Littleton, Evesham, but now of Court Way, Bidford on Avon, was working as bookkeeper for Leofric Building Systems Ltd of Mickleton, Chipping Campden, when she took the money over a 15 month period, Gloucester Crown Court was told.

When she was arrested at her home police found that she had a swimming pool, jacuzzi, and expensive furniture and decor, said Alistair Haggerty, prosecuting, at Gloucester Crown Curt.

He said the family-run business employed 19 trusted people who were not subjected to the same level of scrutiny as would be the case in larger companies. The company is owned by Colin Hammond, a man now in his 80s, he said.

Between July 2017 and October 2018, Malin defrauded the firm of £141,125, Mr Haggerty continued. Her role included managing the payroll and paying suppliers and dealing with HMRC by paying due tax and VAT.

Malin was also had control of the company's bank card to make cash withdrawals to top up the company's petty cash.

Malin's agreed starting salary was £21,000 a year but almost immediately she gave herself a pay rise without authority and doubled it to £42,000, said Mr Haggerty.

In December 2017 Leofric's general manager Scott Phillips noticed that sub-contractors were not being paid on time.

In April the following year the company received a letter from HMRC concerning unpaid PAYE and national insurance contributions amounting to £80,000.

"Mr Phillips raised his concerns with Malin who told him that she had made the payments on line. But in July, Mr Phillips called the tax office in the presence of Malin and the tax officer said he could not see any record of any payment having been made.

Malin continued to insist that she had made the payments and the error was with HMRC.

The tax office wrote to the company again in September demanding that the outstanding monies should be paid immediately.

The company then appointed an external auditor, Peter Rees, to examine the accounts and he soon discovered that the company's balance was £100,000 short of what it should be.

He also notice that Malin's salary had doubled and that numerous payments had been made to her mortgage provider.

On September 29, 2018, Malin was challenged over the discrepancies and eventually admitted she had increased her salary.

On October 4, Malin walked out of the office and nine days later her contract was terminated due to gross misconduct.

The company's previous bookkeeper returned to Leofric and found the accounts in disarray with nothing updated since Malin had started. It took some six months to get the company's finances back on track.

An investigation was conducted by the police. Malin's unauthorised salary payments amounted to £44,886.06, The payments made to Malin's mortgage account amounted to £59,048.57.

The investigation also revealed that Malin had used the company bank card to make a number of purchases from retail outlets that totalled £11,465.70.

Malin also had control of the company's petty cash bank card and she obtained £18,633.50 from this source. She also obtained £7,091.19 in the form of Amazon gifts.

On January 9, 2019, police went to her home near Evesham with a search warrant and officers found she was living an extravagant lifestyle. The house was expensively decorated and furnished and had a swimming pool and a Jacuzzi, the prosecutor said.

One of Malin's laptops contained the banking details used by Leofric. An examination of her finances revealed that she was in arrears with her mortgage company by £18,000.

Malin, when interviewed by police, tried to blame others in the company for the missing funds. She also said that the owner of the company had increased her salary 'to help her financially'. She also claimed that he had been showering her with gifts, including the Amazon purchases, because he wanted to have sex with her.

Mr Hammond flatly denies all these allegations. He had to sell assets in America at a loss to settle the debts that Malin had created, said Mr Haggerty.

"Malin placed this family-run business into financial difficulty. She tried to cover her tracks and would have been aware that her actions could have jeopardised the company and placed the jobs of her colleagues at risk.

"The company, which is still trading, is still paying back the arrears to HMRC which have been reduced to £30,000.

"When the fraudulent activity was discovered, the company's management considered winding up the business, but Mr Hammond was having none of it and vowed to carry on.

"Mr Hammond states that he had to work seven days a week to keep the company going."

The court was told that Malin's Evesham home has since been sold and the proceeds are in the hands of the solicitors and would be enough to pay back the monies stolen.

Matthew Harbinson, defending, said the job had been Malin's first employment following the death of her husband. She had cared for him throughout his illness.

He added: "Malin's lavish lifestyle was provided by the medical insurance pay out on her husband's terminal diagnosis which enabled the property to be purchased. It luxurious inside and out.

"All of her actions took place while she was suffering from depression and had started to drink alcohol.

"When Malin's finances were examined by the police, they discovered they were totally out of balance. Her total income before tax was less than her outgoings."

Judge Ian Lawrie QC observed: "She should have sold the property. She was manipulative and made calculated decisions. She committed her fraudulent acts with cavalier disregard for the company.

"She was dishonest for over a year and walked off with over £141,000 from a small company. She was totally selfish.

"I am astonished that Malin's fraudulent activity was not spotted earlier."

Mr Harbinson continued: "I understand that Malin is suffering from slow burning mental health issues. This is a result of being abused as a child.

"Any form of positive behaviour towards her in her adult life she has always treated with suspicion. Her finances were dire before she started her employment with Leofric.

"Malin is now in a position to repay the company of the funds that she had taken. She has identified that she made errors of judgement. Luckily the other employees did not lose their jobs.

"Malin is now in a position to move on with her life as she is now debt free. Her fraudulent actions were not sophisticated."

Malin pleaded guilty to five charges of dishonestly defrauding Leofric Building Systems Ltd of Mickleton, Gloucestershire, by the abuse of her position as a sales administrator, for personal gain between July 10, 2017 and October 5, 2018.

Judge Lawrie told Malin: "You are not a very honest woman and have difficulty in confronting the truth. Your fraudulent activity was committed against your employer and it lasted for some 14 months.

"The loss suffered by the company is substantial and your actions cross the custody threshold. You don't have the scope for it to be suspended because the gravity of your offending should be marked with an immediate term of imprisonment. The only resolution is the length of sentence.

"I understand you now have the funds to repay the monies stolen from the company.

"You were manipulative, calculating and you struggled to accept your offending. You lack any remorse over your dishonesty. You however pleaded guilty to the offences just before you were due to stand trial.

"While you are in prison you need to reflect on the harm that you have done to others. In my view you made a conscious choice to defraud the company because there was no oversight. You betrayed their trust. This is what you spotted and exploited. The impact on the small company was significant.

"The owner is of a different generation and vowed to keep the company with a good reputation, going.

"You attempted to blame others for your fraudulent actions and caused considerable embarrassment to the owner of the company."

The judge jailed Malin for three years and ordered her to pay compensation to her employers of £154,695, court costs of £1,500 and a victim surcharge of £170.

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