Posted on 27/08/2021 by Darren Kehoe
Notts Post, a regional news website, ran a story in July 2021 about the conviction of a trusted Practice Manager who stole £200,000 from an NHS GP Surgery. My investigation and misconduct service provided the employer and Police with the evidence of fraud, enabling them both to take swift and appropriate action.
The Practice Partners in this case have generously agreed to share the details of the action they took and how it led to the Police investigation into fraud.
Cases of fraud can be drawn out and action prolonged by botched investigations that can damage a criminal investigation and a conviction from Police. Read further on for my explanation of how fair investigative processes and detailed recording helps rather than hinders the Police.
The Practice Partners suspected something was amiss in late 2020. They called Kraft HR Investigations in to focus on financial irregularities at the medical practice that had been highlighted by their accountants. The Practice Manager was suspended and I started the investigation.
The client provided me with almost three years of accounts, bank statements, spreadsheets, invoices and payment books. I felt comfortable handling the information as I had basic accountancy training and decades of experience managing finance and multi-million-pound accounts. The client’s accountants were also on hand if I needed more expert insight.
After a few long days and nights of trawling through endless documents, I discovered that the Practice Manager had moved over £145,000 from the practice into his private bank account. A fraudulent training account that the Practice Manager had used to disguise his transactions was also identified later on. This brought the total fraud case to just under £200,000.
I was in regular contact with the employer and told them as soon as I suspected fraud. They took action and called the Police. When the Fraud Squad got in touch with me, I explained the process I had followed and I told them of my plan to interview the employee. An ongoing Police investigation does not mean that a workplace investigation has to stop, but I did want to ensure that I would not jeopardise any subsequent Police investigation. They were content for me to proceed.
Due to the Covid-19 pandemic, I arranged to interview the subject remotely and prepared my detailed questions. I invited an additional investigator to attend as note taker and to be a witness to my interview. (For more detail about this general process, you can download the free Kraft HR Investigations to carrying out a workplace investigation, available on our contact page.)
On presenting my findings to the subject, the employee admitted transferring the funds into his own bank account by using a number of plausible accounting mechanisms, and then labelling them as locum payments, training etc.
I swiftly ensured the statement and admission was provided to the subject in writing, and he agreed to it almost immediately.
We’ve already seen that a workplace investigation can continue after the Police are involved. Having gained an admission of guilt to the gross misconduct allegation, I quickly concluded the investigation report providing all the evidence to the employer for them to make a decision. I also ensured that the Practice Partners were provided separate HR advice regarding the Disciplinary Hearing. Unsurprisingly, this led to the subject’s immediate dismissal.
The Fraud Squad then made further contact and we exchanged GDPR compliant Privacy Notices. Once the client had agreed, I provided the complete investigation report into fraud to the Police, which included the confession.
I was also asked to make a witness statement to the Police and I agreed to give evidence in court, should it be needed. However, the subject admitted their guilt to the Police so I was not required to attend Court. In July 2021, at Nottingham Crown Court they were sentenced to two years and eight months in jail after pleading guilty to fraud by abuse of position.
Police will examine what you’ve done so far and the outcomes you reached if they get involved. So let’s start with implementing a robust methodology and clear reasoning. This will ensure you and your organisation are protected at a critically important time.
You will probably need to think about suspending the employee if the allegation is potentially a criminal offence, especially if it’s theft, fraud or assault.
Here are some examples of when suspension will normally be appropriate, should the accusations be proven:
As in this case, suspending the employee could even be essential in order to ensure that you’ve taken adequate steps to prevent them removing, deleting or tampering with evidence or witnesses.
One of the first actions of an investigator will be to assess the initial evidence and create the terms of reference of the investigation. This should include a statement that expresses the specific allegations. This deliberate approach will show you followed a fair and unbiased trail if your actions are scrutinised later on.
If additional issues are uncovered you may need to update the terms of reference. They could be completely new and unrelated to the initial investigation, or just a refinement of the original allegations. Just make sure you record what’s happened and don’t overwrite the original terms of reference.
To hone in on the issue, we start with reviewing what we already have. We need to identify relevant witnesses and assess what more evidence needs examining. This could include documents, CCTV footage, IT log-in records, ‘swipe-in and swipe-out’ data, bank account activity, annual financial accounts, accounting spreadsheets, invoices, bank payments and transfers.
I recommend bringing in a financial expert to help you review the documents and understand what they might mean if you’re not familiar with business accounting and transactions. This a critical part of the investigation as you can now start to draft the questions that will be eventually put to the employee. What does the employee need to explain? Can they account for specific discrepancies?
It’s really important to ensure confidentiality while you work. If you find that the evidence does not support a finding of fraud, theft or gross misconduct, then it may be even more critical that you can demonstrate that the information was protected and only relevant witnesses were interviewed.
The key requirement for interviewing someone or examining pieces of information is whether it is reasonably relevant to the investigation. Does it help answer the terms of reference? The subject of the investigation could otherwise claim that the investigation is unfair or biased or that confidentiality has been compromised.
Now we’ve gone through the principles of a sound investigation, let’s remind ourselves of why this is so important for all businesses.
Detective Constable Natalie Stokes, who led the investigation, explained some of the impact to the Notts Post: “This was an appalling abuse of the trust and responsibility which was placed on (the Practice Manager) as part of his role. He used his access and power to benefit himself and left the practice short of money which should have been used to fund and bolster extremely important medical care.”
Earlier in 2021, the National Fraud Authority reported that vulnerability to fraud, bribery and corruption leads to an estimated loss of £1.14 billion within just one year in the NHS. However, fraud happens in all types of organisations and many business owners entrust employees with financial management.
Whatever sector you’re in, this could be a timely reminder to ask yourself: How confident are you that the checks and balances you use to protect your business and your customers are robust enough?
From reflecting on this case, my ‘take-aways’ from this experience for other businesses are:
The local media published the story in July 2021, once the criminal conviction was secured: nottinghampost.com/news.
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