Often, the gravest threat to charities comes from within, as a recent case shows. The case involved a former finance director, whose ‘exemplary’ reputation was destroyed when he admitted stealing more than £100,000 from the children’s charity for which he worked.
The director confessed to embezzling the cash and covering up his wrong-doing for more than a year when auditors arrived to check the books of the charity which had focused on the protection of children at risk. He was subsequently jailed for two years and four months after pleading guilty to theft.
He had stolen the money by making bogus payments to third parties which were ultimately deposited into his own bank account over a three-year period. Once the truth emerged, he had helped auditors to identify £76,000 in dishonest transactions and confirmed that he was in possession of more charity property.
The charity, which had since ceased to operate, had recovered £111,000 from the director in civil proceedings, which he had paid after releasing equity from a family property. The judge who sentenced him had recognised that he was hitherto a man of exemplary character and that he was not responsible for the charity’s demise, but noted the ‘sense of betrayal’ felt by his former colleagues.
His lawyers argued before the Court of Appeal that his sentence was too long in the light of his mitigation, including his confession, remorse and the deterioration in his mental health. However, in dismissing the appeal, the Court ruled that those factors had been taken into account by the sentencing judge and that his jail term could not be viewed as manifestly excessive given the serious breach of trust involved.
Shaun Underhill, a Partner at Winchester law firm Shentons, commented ‘I urge all local charities to adopt the strictest of financial controls. If any irregularities are uncovered, we can advise on the legal position of either the charity or any individuals concerned. ‘