African fraud gang: Could you please send us £102,000? Scottish council: Why, of course we can

Published on 23/09/2010 16:13

AN African fraud gang has succeeded in conning a cash-strapped Scottish council out of £102,000.

Strathclyde Police is investigating the con after South Lanarkshire Council admitted an accounts worker had been taken in by the sting.

According to councillors the fraud originated in Africa. In recent years Nigeria, in particular, has grown a reputation for being the source of frauds which involves getting people to hand over bank details either by e-mail or letter.

The investigation into the fraud in South Lanarkshire has taken on a UK-wide perspective with other local authorities understood to have been targeted in a similar way.

The fraud involved a letter to the council, claiming to be a real contractor informing the local authority of a change in bank details and asking for its details in return.

A council employee approved the change without checking and 102,000 duly went out of the council's account and into the fraudulent one.

Because the crime is classed as an external fraud the council is not covered by its insurance, and it is unlikely it will get the money back as these types of offences are notoriously difficult to trace and bring to justice.

To rub salt in the wounds, the council was conned during a week its trading standards team was warning householders to be on their guard against a new council tax fraud.

People in South Lanarkshire had been written to by people claiming to be the council and informing them that they had been moved into a different council tax band and were entitled to a rebate. They were then asked to respond with their bank details which the con-artists used to extract money.

David Templeton, divisional trading standards officer, who has been leading the awareness raising campaign, said the request for bank details should immediately set "alarm bells ringing" and anyone taken in would be putting themselves at risk of having "money taken from their bank accounts".

The fraud against the council was discussed in yesterday's meeting of the Risk and Audit Scrutiny Forum.

Graham Horne, chairman of the forum and deputy leader of the council's SNP group, said: "The finance department was sent documents on letter headed paper to tell them to change bank details. It's not something I have ever seen before and it wasn't like an e-mail scam, which many people get sent to their home computers. We are not sure who has done this, but it has been professionally done by a gang in an African country."

Asked if the someone should be sacked for the error, he said: "If the person involved took all the appropriate action then they shouldn't be sacked.

"We will need to investigate if the person did follow the correct procedures.If there is a fault in the department's procedures then they will need to be fixed."

A council spokeswoman said: "Forged documents instructing a change of bank details were sent to the council and used to obtain fraudulent payment of 102,000. We are co-operating with an ongoing national police investigation. The council are confident no member of staff is involved."

South Lanarkshire is not the first local authority in the UK to be targeted in this manner. Police say a number of councils have been taken in by a similar fraud and forces across the country are working together to try and trace the gang.

Chief Inspector Jim Jennings, of Hamilton police, said: "We can confirm this incident has been reported to Strathclyde Police, as part of a national investigation involving several police forces."

A spokeswoman for Strathclyde Police said: "Strathclyde Police can confirm that officers within our economic crime unit are investigating alleged fraud at South Lanarkshire Council."