Coleen Muirhead, a 55-year-old resident of Aberdeen, has been sentenced to three years and four months in prison after confessing to embezzling over £1.5 million from her former employer, a metal recycling company.

The High Court in Edinburgh heard that Muirhead spent the ill-gotten funds on extravagant vacations, automobiles, caravans, and savings accounts for her family.

Lord Fairley, presiding over the case, emphasised the gravity of Muirhead’s actions, describing them as a significant betrayal of trust. He noted that she could have faced up to five years in prison but took into account her earlier guilty plea and her traumatic childhood experiences.

Defence solicitor advocate Kris Gilmartin presented background reports that shed light on Muirhead’s troubled upbringing. Gilmartin explained that she had turned to alcohol and gambling as coping mechanisms, and her father’s death had exacerbated her struggles, leading to increased drinking and criminal activities. He acknowledged that Muirhead deeply regretted her actions and felt ashamed of the disgrace she had brought upon her family.

The Crown has initiated proceedings to seize the proceeds of Muirhead’s crimes, with the first hearing scheduled for January of next year.

How did this unfold?

Muirhead’s embezzlement scheme unfolded during her tenure as an administrative assistant at Panda Rosa Metals, a company with two sites in Aberdeen that dealt with scrap metal from both individuals and businesses. Muirhead created fictitious transactions, funneling money to a non-existent client, all while maintaining the appearance of legitimacy.

Her extravagant spending, which included lavish family vacations and even paying for an entire table at a charity event, raised suspicions among her colleagues. The embezzlement came to light when a senior partner at the firm noticed discrepancies in the company’s financial records.

The partner began investigating a supposed significant customer named G Anderson, only to discover that there was no such client at the Canal Road site where Muirhead worked. Further inquiries led to the revelation that Muirhead had been responsible for producing fraudulent documentation under the name G Anderson.

When confronted with the evidence while on leave, Muirhead asked if she was in trouble, leading to her subsequent resignation via a work colleague. She later confessed in a message to the same colleague that she had embezzled a substantial sum, stating, “Hi, just to let you know I have done Panda Rosa out of a lot of money. I was G Anderson.”

A thorough examination

A thorough examination of Muirhead’s financial records revealed matching sort codes and account numbers between her and G Anderson. A subsequent search of her residence while she was abroad yielded documents related to credit card purchases, cars, motorcycles, and ISAs for family members. Additionally, authorities discovered cash and documentation related to the acquisition of two static caravans.

Following her arrest and subsequent police interview, Muirhead admitted to embezzling money from her employer.

After the sentencing, Moira Orr of the Crown Office and Procurator Fiscal Service emphasised that fraud and embezzlement were not victimless crimes. She condemned Muirhead’s actions, stating that they represented a blatant exploitation of a business and its devastating consequences for her employers.

How can HR combat crime in the workplace?

Employee embezzlement can be a challenging issue to identify, often involving trusted, long-term employees who discreetly misappropriate funds. This problem is especially prevalent in small to midsize businesses.

According to the 2017 Hiscox Embezzlement Study, over half of all embezzlement cases occur in such companies, where you may have a personal relationship with the perpetrator. Unfortunately, many of these crimes go undetected for extended periods, sometimes lasting over five years.

To combat embezzlement in the workplace, it is crucial to be vigilant and recognise potential signs, even though they may initially seem inconspicuous:

  1. Duplicate Expenses: Keep an eye on recurring unusual expenses that could indicate financial irregularities. Mistakes happen, but consistent discrepancies require investigation.
  2. Disorganised Finances: Chaotic or inconsistent financial records, erratic spreadsheets, and a lack of short-term budgeting and control can mask embezzlement. Ensure your financial records are in order.
  3. Suspicious Signatures: Be alert to unfamiliar or suspicious signatures on financial documents. If a signature doesn’t resemble your usual one, investigate further.
  4. Changes in an Employee’s Standard of Living: While it might not involve ostentatious displays of wealth, sudden and unexplained improvements in an employee’s lifestyle could be a sign of embezzlement, especially if their income doesn’t align with their newfound affluence.
  5. Unusual Account Expenditures: Keep an eye on expenses that appear excessive or unnecessary. Embezzlers may justify fictitious expenditures to divert funds. Clients with consistently increased spending should also raise suspicion.
  6. Strange Drop in Profits: If your business consistently generates lower profits than expected for a particular product or job, investigate where the money is going. It could be due to theft or mismanagement.
  7. Information from Your Other Employees: Trust your employees when they express concerns about irregularities. Investigate any suspicions promptly, as your team may be aware of issues that you have not noticed.

 

 

 

 

Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.