Bank boss jailed over £50,000 loan fraud

Published on Wednesday 3 February 2010 21:49

A BANK manager who defrauded his employer of more than £50,000 by approving loans for his friends and family without credit-checking them was jailed for 28 months yesterday.

James Smith, 30, agreed a loan for 18,500 for his wife Yvonne and then transferred the money into his own account while working as manager of the Clydesdale Bank branch at Charing Cross, Glasgow.

He then pocketed backhanders of up to 1,100 a time for approving loans for a friend, Michael Cunningham, and his family.

Smith later resigned from the bank, telling his bosses that he was leaving due to poor bonuses, Glasgow Sheriff Court heard.

Sheriff Ian Miller told Smith, from Oakfield Road, Motherwell:

"Crimes of this nature by managers in the position you were in have to be treated very seriously indeed and therefore the disposal has to be custodial."

At an earlier hearing, Smith, of Oakfield Road, Motherwell, admitted defrauding 52,000 from Clydesdale Bank's Charing Cross branch in Glasgow between October 2005 and December 2006.

Fiscal depute Joe Stewart told the court that Smith

processed the first of many fraudulent loans for his wife.

Mr Stewart said: "This was carried out without credit scoring or going through the proper banking procedures."

On one occasion, in October 2006, Smith arranged a loan for Mr Cunningham's sister and did put it through a credit check.

"The application was refused and the accused went ahead and approved a loan for 12,000 anyway," Mr Stewart said.

After leaving the bank, Smith moved to a job at Barclays. However, investigators at Clydesdale noticed something wrong and called the police.

Defence lawyer Ken Sinclair told the court that Smith, a father of three, took out the loan in his wife's name to consolidate debts and later sorted out a loan for Mr Cunningham.

"Thereafter, various members of the Cunningham family came to him asking for help getting loans and he found himself in a situation were he couldn't really refuse them," Mr Sinclair said.