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Friday, February 6, 2015

Act of Infidelity ~ woman steals £104,320 - Court orders £1 - Fidelity Guarantee Insurance

Running a business is strewn with many risks.  Fraud, dishonesty, embezzlement are all market terms.   To put mildly, fraud is an intentional deception made for personal gain or to inflict damage on another individual.  Fraud is a crime, and also a civil law violation.    The money earned in trade might vanish – by the act of swindling of an employee to whom it is entrusted.  Employee dishonesty is a serious offence -  this can be a sudden one off  opportunistic instance or a planned one going unnoticed for a longer period.  This could be the handiwork of unhappy employee, person whose economic position is unstable or simple because of the accessibility and wavering mind.  Any of these would contribute a financial loss to the employer. 
photo credit : wikipedia commons

Fidelity Insurance (Fidelity Guarantee insurance) is designed to protect an employer against loss of money or goods caused by the dishonesty of employees. Though there could be variants in the market, generally these are underwritten on Named Employee basis / Defined category or Position basis or at times Blanket policies (Floaters) covering the entire workforce.   Under this, upon receipt of premium,  Insurer agrees to indemnify the Insured against any direct pecuniary loss sustained by reason of any act of fraud or dishonesty committed by any Employee during the Period of Insurance – there is more on the time limit of discovery of loss too.   

In this class of insurance, when a loss occurs, the Insured is expected to conduct internal inquiry and take action against errant employee, file FIR, follow-up with chargesheet, try to recover the amount, adjust any dues payable to such employee  viz. pending salaries, allowances or cash security deposited with the employer by the employee.  Here is an interesting story reported in MailOnline on a bookkeeper, who stole £100,000 from her employer prompting the closure of business  – but has been ordered to repay just ONE POUND after she blew the lot on 'extravagant' holidays, designer clothes and jewellery.   An accounts assistant who stole more than £100,000 from her firm in just six months has been ordered to pay back just £1 after she blew the lot on holidays, designer clothes and jewellery. 

Lauren Cherry, 32, started taking the money just two months after she started work at franking machine suppliers FP Mailing (Premier) in Dartford, Kent. As a result of the thefts, the small-scale firm was forced to close, with four people losing their jobs, Maidstone Crown Court was told.  The Accounts assistant, who stole more than £100,000 from her firm in just six months, has been ordered to pay back just £1 after she blew the lot on holidays, designer clothes and jewellery.  Cherry, of Gravesend, admitted stealing £104,320 and was jailed for 25 months by Judge David Griffith-Jones QC, who condemned her ‘concerted, calculated and consistent’ conduct.

John Turner, prosecuting, told the court that Cherry had joined the the company in April 2012, earning around £1,400 gross a month. As part of her role she had access to the online banking system - but went on to make transfers to six personal accounts.   She disguised it by saying they were transfers within the company, but by August of that year concerns had been raised about her bookkeeping and absence due to illness.  She even bought presents for her work colleagues and spent a lavish life on designer clothes and jewellery, holidaying for long.   The court was told that Cherry was suffering from depression and low self-esteem and went on the spending sprees to give herself ‘a lift’ as her World reportedly ‘fell apart’ when her long- term partner cheated on her and left her.  She admitted stealing £104,320 and was jailed for 25 months by Judge David Griffith-Jones QC, at Maidstone Crown Court (pictured) who condemned her 'concerted, calculated and consistent' conduct. 

The court heard that the company had to be wound up because of Cherry’s crime and 15 people lost their jobs, although 11 were later re-employed by a new franchise of the firm.  The judge told Cherry: 'You were motivated by greed. You wished to be seen as successful and generous to others.' But because she has no assets the judge made a nominal confiscation order for £1, to be paid within 28 days.

Strange are the ways of people !
With regards – S. Sampathkumar

6th Feb 2015.

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