Vince Tickel is the owner of wholesale trading group Hunter Worldwide. In 2018 he took a private prosecution against his former financial controller, who stole more than £1.5m from his various businesses over more than a decade.
Having set up a marketing agency he decided to build a group of businesses and realised that he needed a better finance function. “This person came to us on a freelance basis in 1996,” he recalls. “He seemed to know what he was doing.”
Over the following years the group of companies including Hunter grew into an organisation with turnover of £15m and around 220 full and part time staff across offices in the UK and Portugal. What Tickel didn’t know was that his financial controller had put processes in place that allowed him to defraud the business.
“For example he changed the bank mandates after they were signed by directors and himself with ‘anyone to sign’ so he could write cheques to cash, taking cash directly and posting the amount to cost of sale,” he says.
Credit card statements were sent directly to his home and the total amount of the company’s three credit cards was paid by direct debit, so his individual expenditure was ‘hidden’.
“The fraud we discovered was in full swing as far back as at least 2003 (he was dismissed in 2014),” explains Tickel. “It was uncovered when we closed one of the businesses and the final credit card statement was sent to the office instead of his home.”
“I was leaving the office one evening and noticed the statement among the post,” he says. “It was addressed to him and when I opened it I found that there was nothing on my card, about £300 on my managing director’s card but more than £3,500 on our financial director’s card, which all appeared to be personal expenditure.”
Tickel contacted the card company but was told he wasn’t an authorised signatory, so he had to ask his managing director to retrieve previous statements from all the group’s cards. This revealed expenditure of hundreds of thousands of pounds over just a two-year period. In addition, the company’s bank had set up an online payment system that was in theory designed to be more secure but in reality prevented visibility on payments by batching them together so it was impossible to see who was being paid. Tickel says he recently spoke to another business that had been defrauded and that it was the same bank and method used in their case.
Over the period the fraud was perpetrated the group’s accounts were audited and it had VAT investigations, but the financial director managed to keep his activities hidden by misleading the auditors.
“I had thought that once he went to a lawyer they would get together with our lawyers and he would sell his house and pay back at least a significant amount of money,” says Tickel. “But after about a year it was clear this wasn’t going to happen so I went to the police and explained the situation.”
However, he says the police didn’t even visit him and that he was told white collar crime was too difficult and expensive to prosecute. He then instructed Edmonds Marshall McMahon to investigate and commence a private prosecution, which culminated in his former financial controller receiving concurrent sentences of seven and a half and five years imprisonment for fraud by abuse of position and theft and a ten year director disqualification.
Tickel says pursuing the case has cost him almost as much as the original fraud but that he couldn’t let the perpetrator get away with it.
“Looking back there are a number of things I would have done differently,” he says. “The systems we had in place were not robust enough and I wasn’t sufficiently experienced to know that. I would tell my younger self to ask my external auditors for a pressure check on the business to see where we should tighten up our systems to reduce the opportunity for fraud. Some people think that if they steal money and there are no consequences it is victimless, so the answer is to not leave temptation in people’s way.”
Tickel is an advocate of changing auditor every three years and also suggests companies should ‘change things up’ occasionally, especially if they are working with the same accountant for a long period of time.
“The business got so large that I didn’t look at the bank accounts, I didn’t sign off on the credit cards and the auditors didn’t look at the credit card statements in detail – it was only when we made changes that we discovered the fraud,” he concludes. “When we interview people for financial positions now, I ask them if they steal money and make it clear that the last person who stole from us is doing seven and a half years in prison.”