Kids’ club to get stolen £150k back

Wednesday 18 September 2019

A charity kids’ club left £150,000 out of pocket after its treasurer stole from them to shore up his day job will be paid back by the company that unwittingly received the cash.

The revelation came during a Royal Court hearing held this week to determine whether ex-CFO William McDermott (60), who was imprisoned for the thefts last month, should surrender any of his assets, which would either be confiscated by the Viscount or used to compensate his victims – two charity clubs providing holiday and after school care for primary school children.

Rouge Bouillon’s ‘Ace of Clubs’ (AOC) suffered a loss of just over £150,000 as a result of McDermott’s offending.

Pictured: William McDermott was sentenced to three years for the offending.

McDermott also took money from the ‘Kids’ Club’ (KC), which is attached to St. Mary, Les Landes, St. Peter and St. John’s primary schools, but he reimbursed this club for everything he stole by transferring money from AOC’s accounts. 

McDermott admitted 43 counts relating to the theft, transfer and laundering of the funds as well as the forgery of documents to conceal his actions. The former chartered accountant was sentenced to three years’ jail time for his offending.

This week, the Crown brought confiscation proceedings against the 60-year-old - legal action that aims to ensure criminals do not retain any financial benefit from their illegal activity by either taking the ‘tainted’ cash and putting it in the Criminal Confiscation Fund or using it to directly compensate victims.

But McDermott's case became problematic for the Court as a confiscation hearing due to the fact that the former Chief Financial Officer had not taken any of the money from the clubs for himself, but rather used it to “prop up” the company that he worked for – Professional Fulfilment Services Jersey Ltd. (PFS) – over a two-and-a-half-year period. 

Pictured: McDermott had access to the company's and both charities' accounts.

The Crown argued that, although he didn’t take any of the money for himself, McDermott stole the money to shore up his own employment at the company and therefore his salary for the role of Chief Financial Officer should be considered as a “reward” for the offending. 

Advocate Holly Brown, representing McDermott, disagreed with this, saying that either way, her client was contractually entitled to receive his salary and that it was not at all dependent on him making these transactions.

It was accepted that PFS had no knowledge of McDermott’s actions until an investigation launched into the company when it fell behind on its rent uncovered the accountant’s offending.  

During the course of the confiscation proceedings, Solicitor General Mark Temple – making the prosecution’s application to draw from McDermott’s pension and seize his equity in a Spanish property for the purposes of confiscation and compensation – said that PFS “certainly has the intention to repay the funds” to the children’s charity.

However, arguing that McDermott should compensate his victim out of his own pocket, he noted that this concerns “very, very significant amounts of money.”

The Solicitor General also read from a statement of one of the company’s Directors, who clearly stated the intention to repay the funds, although she stated that the “repaying of funds of this magnitude will prove immensely difficult in the short-term.”

The Director added that the company is “still having to deal with catch-up” after the offending was discovered as well as battling with “significant historic debts.”

Pictured: The hearing took place in the Royal Court.

Advocate Brown contended that the responsibility to repay the money lay with PFS as, even though they didn’t realise it at the time, were the recipients of the stolen funds. 

Advocate Brown said that the fact that “the employer who unwittingly received the funds… intends to pay AOC back” marks this case out as “unusual”, but if they fail to do so then this should be the subject of “external civil proceedings.”

“The company intend to reimburse the outstanding money… they are fully aware that the £151,000 should never have been there.” 

McDermott’s lawyer also argued that the Court could not bring a compensation order if her client was found to be in a precarious financial situation, as then it would effectively constitute a second punishment for McDermott who is already serving a prison sentence for the offending. 

Ultimately, the Court ruled that McDermott could not be subject to a confiscation order because it wasn’t “satisfied” that he had benefitted financially from the criminal activity.

The question of whether McDermott should pay compensation to the club, using his pension fund and his Spanish property, has been deferred for another day while further enquiries are made about his means.