A paralegal who was addicted to gambling has been jailed for stealing £438,000 from a law firm. Paul Young, 38, from Middleton, simply directed interim payments intended for innocent victims of road crashes into his bank accounts.
A court heard the victim of his fraud was his Manchester-based employer Berrymans Lace Mawer (BLM), which specialises in defending motoring claims on behalf of insurance companies.
Young, a father-of-two who earned £24,500-a-year as a paralegal at the firm's 'volume motor team' in Manchester city centre, was caught making one payment to the wrong payee but bosses didn't realise it was his account and dismissed it as a 'simple error'. It meant he could continue to defraud his employer, taking advantage of 'flaws in their system', a court was told.
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He joined the firm in January 2016 and on his CV said he had worked 'generally in the industry' but neglected to mention he had worked for another company, Pro-Law, the court heard.
Had BLM been in a position to check the candidate's performance at Pro-Law his chances of being taken on would have been 'very slim', prosecutor Henry Blackshaw told Manchester Crown Cour t although the detail of his time there was not revealed.
Young dealt with solicitors who were making personal injury and vehicle damage claims to insurance giant, Aviva, which in turn was 'trusting the authenticity of the request', Mr Blackshaw told the court. Aviva had 'delegated' management of the claims to BLM.
Young worked on a fledgling claims management system at BLM named Blue Prism, replacing the previous practice of sending the insurer an email to request payment which an official at Aviva would have to approve, the court was told.
Mr Blackshaw said: "There was no automation in relation the payments but, in the absence of a system to check the authenticity of the bank details against those of the claimant's solicitors, the requests for payments made by Paul Young were accepted by Aviva without any checking. Similarly at BLM there were no checking payment requests against the case files. Mr Young was expected to act with honesty, as expected for all employees in the business. Neither BLM nor Aviva were checking the veracity of the payment requests."
The prosecutor went on: "Whilst ultimately Mr Young was bound to be caught out when there was a final reconciliation of the monies received from Aviva on file, he will have known that it would be some time before the fraud was detected, due to the timescale to process such claims as many claims were delayed whilst, for example, awaiting medical evidence or other expert material."
Managers at BLM became aware of 'possible problems' in November 2018 when it emerged Young was behind the payment of £5,099 which went into the wrong bank account. The defendant was disciplined and received a final warning although BLM's investigation had not checked the payee account, the court heard.
The defendant told his bosses he was suffering from mental health problems and 'strenuously denied anything other than an error', said Mr Blackshaw. Young was 'given the benefit of the doubt' for what BL believed was a 'simple error'.
The prosecutor said: "However, it was subsequently discovered that the bank account it was paid into was actually controlled by Mr Young. This only came to light following a further fraud."
By June 2019 managers at BLM realised Young was abusing Aviva's automated payment system to transfer funds to his own bank accounts rather than those of the claimants' solicitors.
It followed one personal injury claim BLM had been asked to defend where Young's line manager was required to get involved when further evidence was provided. Some £32,000 had already been paid out by Aviva in a series of payments but the claimant's solicitors said they had not received the money.
BLM launched another investigation and established the money had been paid into Young's accounts, including the one into which his wages were sent.
Mr Blackshaw told the court: "It was discovered the suspect had made numerous fraudulent requests in this way to Aviva, in each case by changing the claimant’s solicitor’s bank account details to that of one of his own accounts, so payment would be made directly to him."
Young had arranged 116 payments to his accounts totalling £437,598.79 during a three-year period which BLM had to pay back to Aviva, the court heard. He was sacked on June 25, 2019, following a disciplinary hearing he didn't attend.
Mr Blackshaw said: "The funds have been used on gambling websites, third party transfers have been made and the usual cost of living expenses."
The court heard the defendant paid a portion of the cash, almost £185,000, to an associate, Liam Henry. Both men were arrested but made no comment during police interviews.
Tom Wainwright, defending Young, said the degree of planning was 'not the most sophisticated' and he said his client was 'bound to be caught'. Young had two children, aged 12 and 15, and a partner who had 'health difficulties', the barrister told the court.
Young, he said, suffers from anxiety, depression and Post Traumatic Stress Disorder (PTSD). Judge Timothy Smith baulked at the suggestion the defendant had PTSD, saying the Young had not suffered a 'life-threatening event that's a prerequisite' for such a diagnosis.
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Mr Wainwright said his client owed money to 'loan sharks' but had managed to repay £30,000 to BLM following the sale of a property. He said: "He's been getting support for his gambling addiction. He's no longer gambling. The court can take some comfort from the fact he will not be before the courts again."
Jailing Young for three years and three months, Judge Smith told the defendant he had an 'obligation to uphold the law' as a paralegal. He added: "This offence amounts to a very gross breach of trust placed in you by your employer."
The defendant 'siphoned money which ought to have been going into the accounts of the claimants' solicitors', continued the judge.
Judge Smith said: "Sophisticated? No. It was inevitable at some point your fraudulent activities would be discovered and so it was. The fraudulent activity, however, continued for some considerable period of time before finally being detected. The problem is people rather took the view you were not being dishonest."
The defendant 'took advantage of flaws in their system', said the judge. His co-defendant Henry 'effectively laundered the money' for Young, he said. The court was told that 'inferentially' Henry had given this money back to Young. Henry claimed he only kept £40,000 for himself.
Young, of Bamford Avenue in Middleton, pleaded guilty to fraud by false representation by obtaining £437,598.79 from Aviva. He had no previous convictions. Henry, 37, of Holcombe Close in Kearsley, who admitted acquiring criminal property, was jailed for two years and two months. He had previous convictions for assault and drink-driving.
The court heard that Greater Manchester Police had initially not wanted to attempt claw back the money through the Proceeds of Crime Act (POCA) as BML had mounted its own civil action to recover the money. Following concern expressed by Mr Blackshaw, the judge agreed to instigate POCA proceedings.
