Monday, 15 June 2009

Police Officers steal millions from Met credit cards

Hundreds of Metropolitan Police Officers have been investigated for fraud after widespread abuse of corporate credit card abuse was revealed.

According to the Observer:

"Auditors who have examined the American Express accounts of 3,500 officers involved in countering terrorism and organised crime have reported almost one in 11 detectives to the Metropolitan Police's internal investigators.

A senior officer appears to have spent £40,000 on his Amex card in one year, without authorisation. Items bought by others without permission include suits, women's clothing and fishing rods..."

"Sources have told the Observer that some detectives had fallen into the habit of withdrawing hundreds of pounds at a time from cashpoints. Other officers appear to have filled in blank receipts from restaurants to account for cash payments."

Of the more than 300 cases referred, only two officers have so far been prosecuted.

Anti-terror detective Richard de Cadenet was sentenced to ten months in prison after spending £73,000 on holidays, and a box at a premiership football club.

Another officer John Gallagher escaped conviction after using his Met credit card to pay off a bar tab.

As much as £3 million is thought to have been lost due to the abuse.

The investigation has taken over two years and specialist fraud investigators have been appointed to deal with the huge volumes of suspected abuse.

As many as forty cases are still currently under criminal investigation.

Director of the MPA audit Peter Tickner said today that some of the cases were "bordering on theft"

Reactions and links

Lib Dem MPA member Caroline Pidgeon said today:

"As a relatively new member of the Metropolitan Police Authority I have been concerned to learn about the serious credit card issues that had occurred in the Metropolitan Police over a number of years. This is public money and Londoners will want to be assured that systems are in place to ensure this can not happen again, and that robust action has taken place against those involved."
More reactions as they come in.


Helen said...

Bordering on the criminal? Has theft ceased to be a criminal offence, then?

AdamB said...

Doesn't exactly fill you with confidence does it?

Mark Lee said...

I'm a bit confused here.

I am in a job in which I incur expenses. I am given a corporate Amex card. The card is in my name, and I am personally liable for all charges incurred on the card.

It is therefore my personal responsibility to claim from my employer the cost of any expenses incurred prior to the card bill being due. In practice this means that I have a minimum of 45 days to claim and receive payment - plenty of time.

I similarly have friends working for other companies which follow exactly the same process.

Why does no government body follow this practice? It seems standard in the private sector, as it protects the company from fraud (you won't get reimbursed for any expenses that are not permitted).

Surely the cost of the admin associated with following such a process is offset by the reduced fraud?

AdamB said...

Well exactly.

The whole process is being overhauled at the Met at least. How it ever was allowed to happen in the first place though is beyond me. As you say, it's just common sense.

Anonymous said...

No. This shouldn't happen. Personal expenditure should never be on corporate credit cards, as its defeats the object of such cards. Public sector reform obviously has avoided the most obvious reforms.


Chris said...

No wonder no MPs have been arrested yet

AdamB said...

It seems that some people are still having problems posting comments here. Please check that your comment has posted before leaving the page. You may have to press 'post comment' more than once.

Mark Lee said...

Adam - where does it say anything in that report about improved procedures? A quick skim-read and all I can find is that they have:

- Changed corporate card contract to Barclaycard
- Implemented new software to scour spend and identify fraudulent activity

What about business process controls? How about mandating receipts, approval or audit for all expenditure? If they insist on having the card bills settled directly by the Met (instead of via the employee, as per my earlier post), how about implementing controls so that cash cannot be withdrawn, and that the cards can only be used at certain merchants or categories of merchant (all of which is available with most corporate card offerings)? Surely it's better to stop it at the source rather then deal with it retrospectively (not least because I would imagine that the costs of investigation / prosecution are higher than the cost of implementing process controls at the source).

I appreciate that when you're busy saving the Queen, collecting receipts and filling out expense forms is not high on your list of things to go, but it needs to be done otherwise we will probably see more of these cases coming out of the woodwork in the future.

AdamB said...

The report is a little short on specifics, and unfortunately the press were excluded from the discussion of this at today's Corporate Governance committee meeting.

However according to a statement from committee member Caroline Pidgeon:

"I was pleased to learn today that much stronger processes are in place for new credit cards that are issued and any non-reconciled spending is
checked after the 30 days claim time is up, and escalated accordingly."

According to the report linked above a fraud prevention officer has been appointed and fraud prevention workshops have been held with management. Whether this will be enough to stop the problem at the source I don't know.

Harold said...

Am I right or is Boris putting a spin on reduced crime in London? I presume MPs, Police officers and headteachers don't count when it comes to crime statistics!

Appealing of Ealing said...

Harold said...

"Am I right or is Boris putting a spin on reduced crime in London?"

No, you are wrong.

Anonymous said...

Its no surprise that this occurred under the old management, and that the new management are clearing it up.

AdamB said...

What new management? This investigation began two years ago under Blair.

The only change at the Met was last year, when the deputy commissioner replaced him.