Sharon Margaret Bradley had access to internet banking for Eight Mile Farms Limited, so she could pay the company’s bills.
An accounting assistant spent a decade siphoning $2 million from a client’s accounts, making it look like the money had been paid to their suppliers instead.
Sharon Margaret Bradley’s unlawfully obtained haul was only discovered by accident in mid-2019, after she had resigned, a judgment from the Hamilton High Court says.
The stolen $2m belonged to Waikato company Eight Mile Farms Limited, and the company has gone to court to get it back, with interest.
A judge has ruled in the company’s favour for three issues it put before court, and Bradley must provide bank statements to show what happened to the stolen money.
Bradley worked for the company’s accountant, Ross Alleman, when he operated on his own and went with him to Lionel Smith & Associates Limited.
She had access to Eight Mile’s Rabobank internet banking account to pay its bills – a service the company contracted out.
“From at least February 2007 until March 2018, Bradley used these access mechanisms to steal from the plaintiff,” a recent judgment from Associate Judge Warwick Smith said.
She transferred funds from Eight Mile’s bank account to both Kiwibank and Westpac accounts that were in her name, or for which she was a signatory, under the guise of paying supplier invoices.
“She concealed the fraud by setting up fictitious payees, using genuine supplier details but her own bank accounts. That meant that the fraudulent payments appeared in the plaintiff’s transaction records as if they were payments to suppliers.”
She resigned in March 2018, but her fraud wasn’t picked up until the middle of 2019.
That’s when a supplier asked where their money was, leading to the discovery that payment for a genuine invoice was mistakenly sent to one of Bradley’s bank accounts.
Eight Mile had believed Alleman was the only person accessing the internet banking on its behalf, court documents show.
The company is no longer pursuing action against him but did pursue Bradley on three issues: money had and received, deceit, and breach of a fiduciary duty of loyalty.
“These claims are not opposed, and the plaintiff says that Ms Bradley can have no defence to any of them,” the July judgment said.
Associate Judge Smith found in Eight Mile’s favour on all three fronts.
Bradley was “unjustly enriched” at the company’s expense, Associate Judge Smith found, and had made payments to herself – or accounts under her control – look like they were to legitimate suppliers.
The first payment was for $28,290.69.
“By falsely entering the name of a legitimate supplier …Ms Bradley concealed her scheme from the plaintiff and prevented it from taking earlier steps to remedy the situation (which it surely would have done if the entry on the plaintiff’s bank statement showed that the first payment went to Ms Bradley).”
Eight Mile said that Bradley breached the trust of the company, which relied on her or her employer to pay its suppliers honestly.
Without knowing where the money is or what it was spent on, it’s difficult for the court to order that current or previous assets bought with it be kept in a trust, Associate Judge Smith said.
Instead, Associate Judge Smith gave Bradley 20 working days to provide statements for bank accounts operated by her, covering the period from February 21, 2007 to the judgment date of July 16, 2020.
Another proceeding, brought by Bradley’s former employer Lionel Smith, had put freezing orders on Bradley’s New Zealand bank accounts, her interest in a Pirongia property, and bank accounts of “certain other named parties”.
Orders made in this case shouldn’t affect that, Associate Judge Smith said.
Eight Mile is entitled to an “inquiry” into what Bradley did with the money, the judgment said, and can then apply to the court for specific assets to be transferred to the company, and to state its case on payment of interest and costs.