Embezzlement – The impact on a family business

A retired accounts worker has been jailed for stealing more than £400,000 over nine years from the brewery where she was employed.

Lesley Freestone had worked for the family-owned St Austell Brewery for more than 40 years, rising to the position of Purchase Ledger Supervisor by the time she retired.

It is believed that the fraud perpetrated by Freestone may not have been uncovered if the brewery had not bought Bath Ales after she had retired.

During this transaction, it conducted a review of its accounting systems and auditors identified hundreds of fraudulent payments diverted to accounts belonging to her.

It has been reported that over a nine-year period Freestone used a range of methods, including duplicating genuine invoices and processing identical payments into her accounts, to embezzle thousands of pounds.

An impact statement from the brewery’s Financial Director said that her actions meant profits were affected, leading to shareholders receiving lower dividends and employees enjoying smaller bonuses. However, they went on to say that the biggest impact was on the ethos of the company.

As he sentenced her to five years in jail, the Judge at Truro Crown Court said that the fraud had a “degree of sophistication” and explained that “as all Cornwall knows” the St Austell Brewery has positioned itself in the community as a family business.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “Sadly, cases in which the police prosecute fraudsters are relatively rare. All too often the complexities of fraud trials and the focus of policing on violent crime, means that the perpetrators of fraud the corporate world often escape without punishment.

Consequently an increasing number of organisations are resorting to private prosecutions which can sometimes also be used alongside civil recovery processes to claw back funds that have been stolen if they have not been spent, as is commonly the case, on a luxury lifestyle or to feed drug or gambling addictions.

An alternative option for companies that have been defrauded by their employees is to instruct a forensic accountant to prepare an investigation that can be given to the police and which effectively constitutes all the evidence required for a successful conviction. If the case is handed to the Crown Prosecution Service on a plate, it is harder for it to refuse to take action.”
Author: Roger Isaacs
8 June 2020

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